rieport - airports company south africa in 1993 as a state-owned company under the companies act of...

2013

Integrated

RepoRtForward thinking, embracing change

Mission: To develop and manage world-class airports for the benefit of all stakeholders

Vision: To be a world-leading airport business

Strategy: To build an efficient and customer-focused business

Values: PRIDE

Passion - Living our values and pursuing our goals

Results - Being customer and partner focused

Integrity - Enabling trust and respect in all our actions

Diversity - Promoting our African heritage in a global context

Excellence - Continuously improving and innovating our business

1

Contents

Introduction

CompanyProfile 3

GroupStructure 4

OperatingStructure 5

AirportStatistics 6

AirportLocations 7

BoardofDirectors 8

ExecutiveCommittee 12

Chairman’sReview 16

ManagingDirector’sReview 18

Strategy 20

StrategicPositioning 21

DeliveringonourObjectives 22

StakeholderEngagement 23

integratedRiskManagement 26

CorporateGovernanceandCompliance 28

Financial and Operational Review 36

FinancialReview 37

AirportOperations 48

Environment 58

Employees and Communities 66

HumanResources 67

SocialImpact 76

Financial Contents 80

StatementofResponsibilitiesandApproval 81

CertificatebyCompanySecretary 81

ReportoftheBoardAuditandRiskCommittee 82

ReportoftheIndependentAuditors 83

Directors’Report 85

StatementofFinancialPosition 88

StatementofComprehensiveIncome 89

StatementofCashFlows 90

StatementofChangesinEquity 91

NotestotheFinancialStatements 92

StatisticalReview 149

Administration 152

Note: The convention used in this integrated annual report for

annotatingRandbillionvaluesisasfollows:amountsaredecimalised,

i.e.R1,234billionisequivalenttoR1234000000.

Airports CompAny south AfriCA Integrated report 2013 3

FORmatIOn

Createdin1993asaState-ownedcompanyundertheCompanies

Actof2008,asamended,andtheAirportsCompanyActof1993,

as amended,AirportsCompany SouthAfrica SOC Ltd is legally

andfinanciallyautonomousandoperatesundercommerciallaw.

OuR mandatE

In terms of the Airports Company Act (No 44 of 1993),

Airports Company SouthAfrica is mandated to undertake the

acquisition,establishment,development,provision,maintenance,

management,controloroperationofanyairport,anypartofany

airportoranyfacilityorserviceatanyairportnormallyrelatedto

thefunctioningofanairport.

OwnERShIp

The company is owned by the South African Government

(74,6 percent), the Public Investment Corporation SOC Ltd

(20 percent), empowerment investors (4,21 percent) and the

Staff Share Incentive Scheme (1,19 percent). The company is

accountabletotheDepartmentofTransport.

aIRpORtS

SouthAfrica’snineprincipalairports:O.R.Tambo,CapeTown,King

Shaka(Durban),PortElizabeth,BramFischer(Bloemfontein)and

Upington International Airports, and East London, George and

KimberleyAirportsareownedandoperatedbyAirportsCompany

South Africa. The airports are major generators of direct and

indirect employment and business opportunities, providing the

coreofdevelopmentnodes.

REvEnuE

Thecompanyhastwodistinctrevenuestreams.One,definedas

aeronauticalincome,isderivedfromregulatedtariffs,consisting

of aircraft landing and aircraft parking charges, and passenger

servicecharges.Regulatedchargesdifferforinternational,regional

anddomesticairtrafficmovements,andpassengers.Aeronautical

incomegenerated64percentoftheGroup’srevenuefortheyear

underreview.

The balance of 36 percent is classified as ‘non-aeronautical’

incomeand isgenerated fromcommercialundertakings,which

includes retail operations, car parking, car rental concessions,

advertising, property leases and hotel operations.The balance

is from international undertakings through Airports Company

SouthAfrica’spartnerships intwoconsortiums.Thepartnership

todevelopandmanageChhatrapatiShivajiInternationalAirport

inMumbai,India,hasbeeninplaceforsixyearsandhasproved

tobeaworthwhileundertaking.

Thesuccessofthisventureencouragedamorerecentpartnership

inaconsortiumtodevelopandoperateGuarulhosInternational

AirportinSãoPaulo,Brazil.Thisisthebusiestinternationalairport

in LatinAmerica and will be pivotal to the success of Brazil’s

forthcoming hosting of the 2014 FIFA World Cup and 2016

Olympic Games. The successful facilitation of the 2010 FIFA

WorldCupbyAirportsCompanySouthAfricawasanoutstanding

referenceforthecompanyinsecuringinvolvementinthisproject.

Ongoing focus on service excellence has resulted in further

awardsforthecompany’snineairportsandwillremainanareaof

unrelentingattentioninthefuture.

Thecompanycontinuestodemonstrateitsroleasaresponsible

corporatecitizenthroughitsenvironmentalprogrammes.Thisis

clearlydemonstratedthroughthefiveairportsthathaveachieved

ISO 14001 accreditation, with programmes in place for the

remainingfourairportstoalsoqualifyforaccreditation.Corporate

social investment initiatives are ongoing, with increasing

participationincommunityprojectsinareassurroundingairports.

Company profile

4

Group struCture

managIng dIRECtOR

FinanceDirector

GroupExecutive:AviationServices

AssistantGroupExecutive:AirportPlanning

GroupExecutive:CommunicationsandBrandManagement

GroupExecutive:CommercialServices

GroupExecutive:HumanResources

GroupExecutive:GovernanceandAssurance

GroupExecutive:Operations

GeneralManager:O.R.TamboInternationalAirport

GeneralManager:CapeTownInternationalAirport

GeneralManager:KingShakaInternationalAirport

GeneralManager:RegionalAirports

BOaRd OF dIRECtORS

CompanySecretary


operatinG struCture

aIRpORt OpERatIOnS

O.R.TamboInternationalAirport

CapeTownInternationalAirport

KingShakaInternationalAirport

PortElizabethInternationalAirport

EastLondonAirport

GeorgeAirport

BramFischerInternationalAirport

KimberleyAirport

UpingtonInternationalAirport

avIatIOn SERvICES

AirportPlanning

Environment

GeographicInformationSystem

Projects

ResearchandQualityManagement

COmmERCIal SERvICES

Retail

CarParking

CarRental

Advertising

Property

AirportManagementSolutions

SuppORt FunCtIOnS

FinanceandIT

InternalAudit

CommunicationsandBrandManagement

HumanResources

Strategy

RiskManagement

CompanySecretariat

Legal

6

2012/13 2011/12

O.R. tamBO IntERnatIOnal aIRpORt Passengerthroughput 18 621 259 19004001 Totalairtrafficmovements 199 803 212448 Internationalflightdepartures 30 903 30903 Hourlyrunwaycapacity(airtrafficmovements) 62 62 Annualpassengerhandlingcapacity 28 000 000 28000000 Publicparkingbays 16 300 16300

CapE tOwn IntERnatIOnal aIRpORt Passengerthroughput 8 434 799 8576709 Totalairtrafficmovements 89 073 97935 Internationalflightdepartures 2 454 2925 Hourlyrunwaycapacity(airtrafficmovements) 30 30 Annualpassengerhandlingcapacity 14 000 000 14000000 Publicparkingbays 6 080 6080

KIng ShaKa IntERnatIOnal aIRpORt Passengerthroughput 4 668 467 5040094 Totalairtrafficmovements 49 673 55194 Internationalflightdepartures 869 702 Hourlyrunwaycapacity(airtrafficmovements) 24 24 Annualpassengerhandlingcapacity 7 500 000 7500000 Publicparkingbays 4 500 4500

pORt ElIzaBEth IntERnatIOnal aIRpORt Passengerthroughput 1 311 553 1364976 Totalairtrafficmovements 62 912 68893 Hourlyrunwaycapacity(airtrafficmovements) 32 32 Annualpassengerhandlingcapacity 2 000 000 2000000 Publicparkingbays 900 900

EaSt lOndOn aIRpORt Passengerthroughput 644 520 681529 Totalairtrafficmovements 30 501 32587 Hourlyrunwaycapacity(airtrafficmovements) 30 30 Annualpassengerhandlingcapacity 1 200 000 1200000 Publicparkingbays 550 550

gEORgE aIRpORt Passengerthroughput 544 306 575799 Totalairtrafficmovements 39 664 33479 Hourlyrunwaycapacity(airtrafficmovements) 20 20 Annualpassengerhandlingcapacity 900 000 900000 Publicparkingbays 415 415

BRam FISChER IntERnatIOnal aIRpORt Passengerthroughput 411 655 441954 Totalairtrafficmovements 17 515 20088 Hourlyrunwaycapacity(airtrafficmovements) 24 24 Annualpassengerhandlingcapacity 600 000 600000 Publicparkingbays 370 370

KImBERlEy aIRpORt Passengerthroughput 151 405 140248 Totalairtrafficmovements 11 556 12347 Hourlyrunwaycapacity(airtrafficmovements) 12 12 Annualpassengerhandlingcapacity 200 000 200000 Publicparkingbays 90 90

upIngtOn IntERnatIOnal aIRpORt Passengerthroughput 55 726 52224 Totalairtrafficmovements 8 072 7826 Hourlyrunwaycapacity(airtrafficmovements) 12 12 Annualpassengerhandlingcapacity 100 000 100000 Publicparkingbays 100 100

airport statistiCs


CHINANEPALPAKISTAN

AFGHANISTAN

INDIA

CHHATRAPATISHIvAjIINTERNATIONALAIRPORT,MUMBAI

NAMIBIA

BOTSWANA

ZIMBABWE

MOZAMBIQUE

O.R. TambO INTERNaTIONaL

aIRPORT

CAPETOWNINTERNATIONAL

AIRPORT

KImbERLEY aIRPORT

KINGSHAKAINTERNATIONALAIRPORT

EASTLONDONAIRPORT

GEORGEAIRPORT

Atlantic Ocean

Indian Ocean

SOUTHAFRICA

BRAMFISCHERINTERNATIONALAIRPORT

PORTELIZABETHINTERNATIONALAIRPORT

UPINGTONINTERNaTIONaLaIRPORT

Internationalairport

Nationalairport

Concessionedairport

airport loCations

BRAZIL

GUARULHOSINTERNATIONALAIRPORT,SãOPAULO

ARGENTINA

BOLIvIA

PARAGUAY

PERU

COLUMBIA

vENEZUELA

8

Busisiwe (‘Busi’) mabuza Non-executiveChairman

InvestmentExecutive:vulindlelaHoldings

Qualifications

BA(MathematicsandComputerScience)

MBA(FinanceandInformationSystems)

directorships

DevelopmentBankofSouthernAfrica

AfgriLtd

Bongani maseko ManagingDirector

Qualifications

BScAviationBusinessAdministration

Appointed15May2013

Kenosi moroka Non-executiveDirector

ManagingDirector:MorokaAttorneys

Qualifications

LLB

B.Iuris

directorships

CentlecSOCLtd

Appointed1December2012

Roshan morar Non-executiveDeputyChairman

FoundingandManagingPartner:MorarInc

Qualifications

BComm

BComptHons

CA(SA)

CertifiedFraudExaminer

directorships

PublicInvestmentCorporationSOCLtd

SouthAfricanNationalRoadsAgencySOCLtd

SACorporateRealEstateFund

Board of direCtors


Elias masilela Non-executiveDirector

CEO:PublicInvestmentCorporationSOCLtd

Qualifications

BA(EconomicsandStatistics)

MSc(EconomicPolicyandAnalysis)

tryphosa Ramano Non-executiveDirector

ChiefFinancialOfficer:PPC

Qualifications

BComm

CA(SA)

directorships

LandandAgriculturalDevelopmentBankofSouthAfrica

mohlakore (‘mohla’) matsaba AlternateNon-executiveDirector

PortfolioManagerforSocialInfrastructure:

PublicInvestmentCorporationSOCLtd

Qualifications

DiplomainArchitecture

BTech(QuantitySurveying)

MBA

directorships

OakleafInvestmentHoldings:Non-executiveDirector

SchoolsandEducationInvestmentImpactFundofSouthAfrica:

(TrusteeandInvestmentCommitteeMember)

NozaloHealthPartners

ADRInternationalAirportsSouthAfrica(Pty)Ltd

EthembeniHealthcare(Pty)Ltd

Chwayita mabude Non-executiveDirector

Independentbusinessventures

Qualifications

BCompt

directorships

EskomHoldingsSOCLtd

PebbleBedModularReactor(Pty)Ltd

MolloHoldings


10

maureen manyama-matomeFinanceDirector

Qualifications

BComHons(Taxation)

CA(SA)

MBA

directorships

SouthAfricanReserveBank

Appointed1April2013

priscillah mabelane Non-executiveDirector

ChiefFinancialOfficer:BPSouthernAfrica

Qualifications

BCom

BCommHons

CA(SA)

DiplomainTax

Appointed1August2012

John lamolaNon-executiveDirector

PrincipalConsultant:BajiAviationServices

ResearchFellow:DepartmentofPhilosopy,Universityof

FortHare

Qualifications

BTh(SA)

PhD(Edin)

MBA(Embry-Riddle)


Board of direCtors (Continued)

Skhumbuzo macozoma Non-executiveDirector

ManagingDirector:johannesburgRoadsAgency

Qualifications

BSc(CivilEngineering)

MSc(CivilEngineering)


Bajabulile luthuliNon-executiveDirector

ChiefFinancialOfficer:MarchfirstEngineering

Qualifications

BCom

BComptHons

CA(SA)

directorships

EskomHoldingsSOCLtd

NUMSAInvestmentCompany(Pty)Ltd

AWCAInvestmentHoldings

PetroleumAgencyofSouthAfrica

SouthAfricanDiamondsandPreciousMetalsRegulator


martie Janse van Rensburg Non-executiveDirector

IndependentConsultant

Qualifications

BComm

BComptHons

CA(SA)

directorships

johannesburgWaterSOCLtd

HeadstreamWaterHoldings

NMIGroupofCompanies

DenelSOCLtd

FirstRandBank:CreditCommittee(Africa)

Retired12November2012

tracy gwatkin CompanySecretary

Qualifications:

BA(Law)LLB(Wits)

PostGraduateDiplomainManagementPractice(GSBUCT)

CertifiedFinancialPlanner

Resigned31March2013

Company Secretary

12

andre vermeulen ActingGroupExecutive:AirportOperations

AndrequalifiedasaMechanicalEngineerin1994andthenjoined

Airports Company South Africa as an ‘Engineer-in-Training’.

HewasappointedasheadofMechanicalMaintenanceatO.R.

TamboInternationalin1997andtothepositionofMaintenance

andEngineeringManagerin2001.

HewaspromotedtoGroupManager:AirportOperationsin2005

andandtookresponsibilityforstandardisingoperationalsystems

fortheGroup,specificallydeliveringthenewAirportManagement

CentreforO.R.TamboInternational.Andrehasexperienceinall

disciplinesofairportengineering,airportoperations,developing

integratedITplatformsandgeneralmanagement.

Andre assumed the role of Acting Group Executive: Airport

OperationsinOctober2011andiscurrentlystillactinginthis

position.

pieter du plessis GroupExecutive:HumanResources

Pieter, registered industrial psychologist, has extensive experience

instrategichumanresourcemanagement,includingtransformation

andchangemanagement,humancapitaldevelopment, talentand

successionmanagement,employeerelationsandengagement,and

remunerationandrewardmanagement.Hecommencedhiscareer

as Human Resources Manager at O.R.Tambo International for a

periodofsixyears,afterwhichhemanagedtheoperationsportfolio

for more than three years in the capacity of Assistant General

Manager:Operations,thuscombininghishumanresourcesexposure

withoperationexperience.

Pietertookuphiscurrentpositionin2003,withresponsibilityforall

areasofHumanResourcesmanagementacrosstheGroup.

exeCutive Committee

haroon Jeena

GroupExecutive:CommercialServices

Haroon is a chartered accountant and has a Higher Diploma in

TaxLaw.

HejoinedAirportsCompanySouthAfricainAugust1999asGroup

Manager: Property Administration, Investments and IT, and then

moved to Commercial, Finance and Asset Management. Haroon

tookresponsibilityfortheGroup’spropertyportfolio in2003and

wasthenappointedtothepositionofGroupExecutivein2008.

goran vracar AssistantGroupExecutive:AirportPlanning

GoranhasadegreeinAirTrafficandTransportationEngineering

and 32 years’ experience in airport operation, planning and

design. He worked at Belgrade International Airport before

joiningAirportsCompanySouthAfricain1994.

Inhiscurrentcapacity,Goranisresponsibleforplanningforall

theGroup’sairports.

13

william tlou ActingFinanceDirector

William holds an honours degree in Accounting Science from

theUniversityofSouthAfrica;he isacharteredaccountantby

profession. He joined Airports Company South Africa in 2008

asGroupSpecialist:Finance.PriortohisappointmentasActing

FinanceDirector,hewasGroupManager:Finance.Hepreviously

heldpositionsasSeniorManager:FinancialAccountingaswellas

SeniorAuditManagerbeforejoiningthecompany.Hecurrently

servesontheboardofjIAPiazzaPark(Pty)Ltd,asubsidiaryof

AirportsCompanySouthAfrica.

Resigned24May2013

deon Cloete GeneralManager:CapeTownInternationalAirport

Deonholds twodegrees: aBachelor’sDegree inCommerceanda

Master’sDegreeinBusinessLeadershipfromtheUniversityofSouth

Africa.Hehas26years’experienceintheaviationindustry.

Hehas servedat all nineof the company’s airports andwasalso

secondedtoSouthAfricanAirwaysin2000/2001,whereheservedas

GeneralManger:SupportServices.

DeonisaBoardmemberofWESGRO,theWesternCapeEconomic

DevelopmentAgencyresponsiblefortourism,tradeandinvestment.

tebogo mekgoe GeneralManager:O.R.TamboInternationalAirport

TebogohasaBScinMechanicalEngineeringfromtheUniversity

ofCapeTown,aDiplomainAdvancedAirportOperationsfrom

IATAandanExecutiveMBAthroughtheUCTGraduateSchoolof

Business.

HestartedhiscareeratAirportsCompanySouthAfricainjune

2000asaMechanicalMaintenanceEngineeratO.R.Tambo

International.Duringhis13-yeartenurewiththecompany,

Tebogohasheldvariouspositions,includingHoD:Surface

Maintenance,AirportManager:EastLondonAirportandAssistant

GeneralManager:O.R.TamboInternational,duringwhichtime

hewasProjectLeaderofthe2010FIFAWorldCupOperations

(2008-2010).Tebogowasappointedtohiscurrentpositionin

October2012.

John neville GroupExecutive:AviationServices

john’sworkingcareerstartedintheUKin1968asabuildingsurveyor

forjohnLaingConstruction.HeemigratedtoSouthAfricain1974,

wherehiscareerprogressedintoprojectmanagementandproperty

development.

HejoinedAirportsCompanySouthAfricain1999asGroupManager:

Projects,responsiblefortheexpansionandimprovementprojectsat

thecompany’sairports.johnwasappointedtohiscurrentpositionin

2006.

HeisChairmanoftheCorporateCapitalExpenditureCommitteeand

is a standing member of the CorporateTender Board and the IT

SteeringCommittee.

14

yvette Schoeman GeneralManager:RegionalAirports

YvettehasaBachelorsDegreefromtheUniversityoftheNorth

West,majoringinpsychology.

She joined Airports Company South Africa in 1994 as a Client

ManageratO.R.TamboInternational,progressingtoDepartment

Head.In1999YvettewassecondedtoSAAforsixmonthsand,on

herreturn,tookupthepositionofTerminalManageratO.R.Tambo

International.In2005YvettewasappointedasAirportManagerat

GeorgeAirport from where she took over responsibility in 2008

fortheNationalAirportsasanAssistantGeneralManager.Yvette

wasappointedasGeneralManager:RegionalAirportsinNovember

2012ontheformationofthenewbusinessunit.

terence delomoney GeneralManager:KingShakaInternationalAirport

TerenceisacharteredaccountantbyprofessionandjoinedAirports

CompanySouthAfricain2000.Heinitiallyheadedtheportfolios

of Finance andCommercial at Durban InternationalAirport and

then progressed to the position of Assistant General Manager:

Support,whichincludedresponsibilityforprojects,engineeringand

IT.ThiswasduringtheperiodwhenthesixNationalAirportswere

managedandsupportedthroughDurbanInternational.

HewasappointedGeneralManager:DurbanInternationalAirport

andNationalAirportsinAugust2008.Terencesubsequently

managedthedevelopmentandtransfertoKingShaka

Internationalon1May2010.Inaddition,heisChairmanofthe

company’sCorporateSocialInvestmentCommitteeandisalso

aBoardmemberoftheiLembeChamberofCommerce,Industry

andTourism.

exeCutive Committee (Continued)

Airports CompAny south AfriCA Integrated report 2013 15AIRPORTSCOMPANYSOUTHAFRICA IntEgRatEd REpORt 2013 15

16

This year will mark a momentous occasion in the history of

AirportsCompany SouthAfrica: twenty years in business since

inceptionofthecompanyon23july1993.Thismakestheclosing

ofthe2013financialyearanappropriatetimetocelebratethe

successesofthepasttwentyyearsandlookforwardtowhatthe

futuremaybring.AtthisproudmomentforallofusatAirports

CompanySouthAfrica,weacknowledgeourstakeholdersfortheir

supportandtheirimmeasurablecontributiontooursuccesses.

This year, SouthAfricahosted theBRICS summit,whichwas a

very important event for us, given our continued involvement

and investments in India and Brazil.Our participation in these

concessionswasundoubtedlysecuredthroughtheleveragingof

thedepthofskillsandexperiencethatAirportsCompanySouth

Africahasaccumulatedovertheyears.

We acknowledge the City of Ekurhuleni, which successfully

hosted the Airport Cities Expo and Conference this year. The

company’s involvement in this conference has reconfirmed

that, inordertohavetherequisite impact,thedevelopmentof

airportsisnotsupposedtohappeninisolation,butinconjunction

with those partners that will contribute to the success of the

‘aerotropolis’and‘airportcity’models.Consequently, theBoard

takesstakeholdermanagementandengagementveryseriously.

Good corporate governance will always play a major role in

ensuring the sound management of Airports Company South

Africa’sbusiness.Inlinewiththisimperative,theSocialandEthics

Committee was established and the other Board committees

strengthened during the period under review. In addition,

initiatives to enhance procurement processes through new

supply chain management systems were implemented during

theyear.

During the period under review, the company achieved higher

thananticipatedfinancialreturnsandmadesomeprogresswith

respect to our objective to contribute to job creation.Whilst

the company has a pleasing employment equity profile within

senior management, the Board has noted areas that require

improvement within the executive level and for people with

disabilities. In this regard, Airports Company South Africa has

achieved67percentof itspredeterminedobjectivesas setout

intheshareholders’compact,inlinewithS55(2)ofthePFMA.

The sterling financial results that the company has reported

areattributabletotheefficiencygainsrealisedfromoptimising

the infrastructure developed during the 2006-2010 capital

investmentprogramme.Thiswasfurtherpositivelyimpactedbya

reductioninnetfinancingcost,duetoanearlydebtredemption

strategythattheGrouphasadopted.Furthermore,therehasbeen

a change in the customer mix, whereby there was an upward

movement in internationalpassengertraffic,whichcontributed

positivelytoourtotalrevenue.

Chairman’s review


The company’s future objectives have been clearly defined in

therecentlyadoptedten-yearplanfortheperiodfrom2014to

2024.Thefocuswillcontinueondeliveringagainstourmandate

through effective corporate governance and stakeholder

management,withtheaimofestablishingandmaintainingwin-

winpartnerships.IhaveeveryconfidenceintheabilityofAirports

CompanySouthAfricatocontinuetodelivertoexpectations.

Let me take this opportunity to welcome four new additional

non-executive directors who were appointed to the Board of

AirportsCompanySouthAfricaon1December2012foraperiod

of three years.The new members areAdv Kenosi Moroka, Ms

Chwayita Mabude, Dr john Lamola and Ms Bajabulile Luthuli.

The appointment of these directors has already enhanced

the effectiveness of the Board and brings a further spread of

experienceforthebenefitoftheGroup.

You would be aware that Mr Bongani Maseko was appointed

as Managing Director for the Group, with effect from

15 May 2013, following approval by the Cabinet. In addition,

MsMaureenManyama-MatomewasappointedFinanceDirector,

with effect from 1 April 2013. I wish to congratulate both

Mr Maseko and Ms Manyama-Matome on their appointments.

TheBoardofDirectorslooksforwardtocontinuingtoworkwith

themboth in taking theGroup forward,particularlywithin the

contextoftherecentlyapprovedten-yearbusinessplan.Wewish

them success in their endeavours to chart a new chapter for

theorganisation.

Finally, I would like to thank Mr Dikobe Benedict Martins,

the Minister ofTransport, and his Deputy, Ms Lydia Sindisiwe

Chikunga,fortheirkeeninterestinAirportsCompanySouthAfrica.

Theirsupport,guidanceandengagingmannerhelpedpropelboth

theBoardandmanagementforward.MsRuthBhengu,Chairman

of the Parliamentary Transport Portfolio Committee and her

committeememberscontinuetoplayakeyrolebykeepingthe

Boardandmanagementfocusedontheirdeliverables.

Atthetimeofpublishingtheseresults,wehadreceivedthenews

oftheappointmentofMsDipuoPetersasthenewMinisterof

Transport.WewouldliketocongratulateMinisterPetersonher

appointment,aswellasonbeingthefirstwomenministertolead

thetransportportfolioinSouthAfrica.Inclosing,andonbehalf

of theBoard, Iwould like towishMrDikobeBenedictMartins

successinhisnewportfolioastheMinisterofEnergy.

Busisiwe mabuza

Non-executiveChairman

18

Companiesundoubtedlyprogressfromonephasetoanother,and

I am happy to report thatAirportsCompany SouthAfrica has

movedconfidentlyintoaperiodofconsolidationandpreparation.

Consolidationthatfollowsanextraordinaryroundofbuildinga

suite of airports that compares with that of any developed

country in the world. Consolidation that recognises the

importanceofmaintaining infrastructure inpremiumcondition

to continue providing safe and secure facilities to service our

passengersandallofourstakeholders.

However, the most important aspects of consolidation are the

ways through which we optimise the facilities we own and

operate,andourdeterminationtoimproveourcustomerservice

levels. Efficiencies will flow from improved service facilities

providedtoourairportpartners,includingourtakingadvantage

of the latest technologies, such as the use of faster and more

sophisticatedX-rayequipmentat security checkpointsand the

inevitableadvancesininformationtechnology.

The business has achieved a degree of maturity, enabling the

Group to look forward with the benefit of having a successful

track record for reference purposes. This has resulted in the

preparationthisyearofaten-yearplantoguideusinastructured

andconfidentmannerintothe2014to2024period.Thisplanhas

beenapprovedbytheBoardandgivesusaroadmapforthenext

tenyears.

Clearlydefinedinthisten-yearplanistheneedtomakeadequate

preparationforthenextroundofinfrastructuredevelopment,but

onlywhentheaviationindustryhasthenecessaryappetite.

The slow recovery in departing passenger numbers clearly

demonstratesthelethargicgrowththatthreatensthehealthof

the industry and even the viability of some of its players.The

statistics for the 2012/13 financial year are still four percent

belowthoseforthe2007/08year,andforecastsforthe2013/14

yearareforminimalgrowthatbest.Projectionsforthefollowing

tenyears,inextricablylinkedtothehealthoftheglobaleconomy,

areforminimalgrowthforthefollowingtwoyears(2014/15-16).

Itisthenexpectedthatgrowthwillaccelerateto26,5millionin

2024,oragrowthof52percentovertheperiod.

Whatever the argument, there is no doubt that the aviation

sector continues to suffer from the uncertain recovery of the

worldeconomy,anover-supplyofseatsandconsistentlyhighfuel

prices. Airports Company South Africa fully recognises its

responsibility to contribute to the best of its ability to an

environment that encourages healthy growth in the sector.

Plannedtariffincreases,implementedafterconsultationwiththe

industry and projected to remain fairly constant, will assist

airlinesinmanagingtheircosts.

The newly implemented ten-year plan plays a clear role in

definingexactlyhowthiswillbeachieved.Furthermore,itclearly

identifiestheimportanceoftheR991millionprofitthatAirports

Company SouthAfrica has reported for the 2012/13 financial

year.This is a significant increase over the R188 million profit

recordedinthepreviousyearandisaclearreflectionofreaping

thebenefitsoftheR17billioncapital investmentsmadeinthe

2006to2010period.

TheEconomicRegulator’srulingthattariffstocoverthecostof

infrastructure development may only be implemented once

facilities have been brought into operation resulted in the

34,8percenttariffincreaseinthepreviousfinancialyearandone

of6,5percentinthereportingyear.Thisincreaseinrevenuewas

supportedthroughanalmost28percentreduction infinancing

coststoR1,462billionthroughastutefinancialmanagement.

Thislevelofprofitabilityshouldbeconsideredaspreparationfor

the future of infrastructure development, which comprises of

bothinvestmentsthatareinevitableandthosethataredependent

uponmarketconditions.

ThecompanyplanstoinvestR39billionincapitaloverthenext

tenyears,dividedbetweenfourcategories,asfollows:

• Maintainingthecurrentassetbase–33percent

• Efficiencyandtechnologytoimprovefunctionaleffectiveness

–sevenpercent

• Keeping pace with statutory and compliance obligations

–threepercent

• Increasingtheairports’capabilitytohandlegrowingvolumes

ofpassengers,cargoandaircraft,aswellasprovidingcommercial

facilitiestocaterforincreasingvolumes–57percent.

Someofthemajorinfrastructureprojectsincludeadditionalfuel

storagetanks,remoteapronstands,additionalparking,andbulk

earthworksandservicesforthemidfieldterminalatO.R.Tambo

International. It must be noted, however, that if capacity

manaGinG direCtor’s review


requirementprojectionsindicateaforeseeablecapacityconstraint,

itmaybenecessarytobringforwardthedeliveryofthemidfield

terminal. This is an investment of approximately R27 billion.

Projects at Cape Town International include a new, realigned

runway,andadditionalparkingandcarrentalparkingbays.

AirportsCompanySouthAfricawill continuewith itsefforts to

enhancetheGroup’sincomefromnon-aeronauticalrevenue.The

organisation’svaluable,non-aviationrelatedpropertyassetswill

be unlocked through a new property development strategy.

Furthermore, successes in India and Brazil will inform Airport

Management Solutions’ (AMS) new focus on opportunities in

emergingmarkets.AirportsCompanySouthAfrica,incollaboration

withtheSouthAfricanGovernmentwill,intheforeseeablefuture,

pursueviablebusinessopportunitiesinAfrica.

Hand-in-glovewithimprovedefficienciesisperpetualattention

topassengerandairline servicedelivery. Providinghighquality

servicewillonlybepossibleiftherightpeopleandfacilitiesare

there to deliver it. Consequently, training of both Airports

CompanySouthAfricaandairportstakeholders’staffwillreceive

ongoingfocus.

Airports Company South Africa joined the Airports Council

International’s (ACI)AirportsServiceQuality (ASQ)programme

in2006andhasseenqualityratingsimprovefromanaverageof

3,67thento4,08bytheendof2012.TheASQratingsfallwithin

arangeofone(worst)tofive(best). Inthenexttenyears it is

planned to improve ratings further throughquicker connection

times, better baggage handling, shorter waiting times and

generallyimprovedcustomerservice.Inaddition,theuseofsocial

media will be extended to improve two-way passenger

interactions.

On 23 july 2013, Airports Company South Africa celebrated

having been in business for twenty years.This is an important

chronological milestone. It is an anniversary that will be

extensively recognisedwithin the company for thedurationof

2013 and the creative style of this annual report clearly

demonstratesoursenseofachievement.

Acatchphrase,‘FromStatetostate-of-the-art’,clearlyepitomises

our twenty-year journey. At inception, the company inherited

nine very basic airports from the government, with minimal

passengercomfortsandservices.Twentyyears laterwearethe

proudownersofanetworkofairportsthatisashiningexampleof

whatcanbeachievedoverarelativelyshorttimespan.

Inthisreportingyearwehaveseenanimportantevolutioninour

management structure with the implementation of a new

businessunit,‘RegionalAirports’.Thishasenabledthedevolution

of an overburdened responsibility for King Shaka International

Airportmanagementandsupportstructuresintoanentirelynew

structure.Ithasalreadyenabledfocustobeplacedonsupportfor

the six regional airports (East London, Port Elizabeth, George,

BramFischer,KimberleyandUpington).Particularemphasiswill

beplacedonthepropertydevelopmentandretailportfolios.

Asasignoftheever-changingfaceofSouthAfrica,Bloemfontein

InternationalAirport was renamed‘Bram Fischer’ in December

2012inhonourofaBloemfontein-born,Afrikanerpatriotlawyer

whodedicatedhislegallifetotheanti-apartheidstruggle.

Economicregulationcannotbeaddressed in isolationfromthe

businessasawhole.ThePermissionApplicationmustbedeveloped

andmaintainedinalignmentwiththeGroup’sbroadercorporate

strategy.Thereareveryfewmajorcorporateinitiativesthatcould

be successfully implemented without supportive economic

regulatoryoutcomes.Examplesthatimmediatelycometomind

areenhancedqualityofservice(requiringadditionaloperational

expenditure) and major capital expansion projects needing

fundingandafairreturnoninvestment.

Obtaining greater clarity on the regulatory framework is

fundamental toallAirportsCompanySouthAfrica’splans,both

shortandlongterm.Thecompanyhasaleadingroletoplayin

engagingwithkeyindustryplayersandcontributingtothedebate.

A clear understanding has emerged that the single most

important driver of the economic regulatory framework is

the quality of Airports Company South Africa’s constructive

engagement with industry. Improving the quality of the

consultativeprocessincludesaspectssuchastheappropriateness

oftheinformationprovidedtotheindustryandourpreparedness

in amending assumptions, developing options and considering

alternatives. Furthermore, it isessential thatwecreate the link

betweencapitalexpenditureprogrammesandtariffincreases.

Inconclusion,Iwouldliketorecordmythanksandconfidencein

notonlytheGroup’sexecutiveteambutalsototheentirestaff

complement.Without their commitment to the furtheranceof

theGroup’sidealsthroughdedicatedandprofessionalapplication

totheirindividualresponsibilities,wewouldnotbeinthestrong

positionthatwearetoday.

Bongani maseko

ManagingDirector

strateGy


strateGiC positioninG

Thisreportingyearprovidedtheplatformforthepreparationandapprovalofa ten-yearplan for theperiod from2014 to2024.Itcomesatatimewhenexternalfactorslargelygoverntherateatwhichinfrastructuraldevelopmentcanbeundertaken.

There was a drastic reduction in passenger numbers after theworld economic crisis in 2008 and the number of departingpassengersfromourairportshadstillnotreturnedto2008figuresbytheendofthe2013financialyear.Infact,thefigureisstillfourpercentbelowthatforthe2007/08financialyear.

Projectionsforthenexttenyears,inextricablylinkedtothehealthoftheglobaleconomy,arefornogrowthinthe2013/14financialyear (17,4 million) and minimal growth for the following twoyears. It is then expected that growth will accelerate to26,5millionin2024,oragrowthof52percentovertheperiod.

Thehealthoftheworld’sairlineindustryandgrowthinpassengernumbersaresynonymous.Anover-supplyofseatsinthepastfewyears,coupledwithhighfuelprices,hasplacedhugepressureonairlines’profitabilityand,insomecases,theirviability.

ThesefactorsdictateverysimplythatAirportsCompanySouthAfricacannotinvestheavilyinnewinfrastructureforthenextfewyears.Thecompanyisinthefortunatepositionofhavingasuperbsuiteofairportsandexpansioncanbedelayed.Thisdoesmean,however, that the most has to be made of existing facilitiesthroughtheoptimisationofefficiencies.

It is planned to invest R39 billion in capital over the next tenyears,dividedbetweenfourcategories:• Maintainingthecurrentassetbase–33percent• Efficiencyandtechnologytoimprovefunctionaleffectiveness

–sevenpercent• Keeping pace with statutory and compliance obligations

–threepercent• Increasingtheairports’capabilitytohandlegrowingvolumesof

passengers,cargoandaircraft,aswellasprovidingcommercialfacilitiestocaterforincreasingvolumes–57percent.

Someofthemajorinfrastructureprojectsincludeadditionalfuelstoragetanks,remoteapronstands,additionalparking,andbulkearthworksandservicesforthemidfieldterminalatO.R.TamboInternational.Itmustbenoted,however,thatifanunexpectedlyrapidgrowthinflightandpassengernumbersoccurs, itmaybenecessarytobringforwardthedeliveryofthemidfieldterminal.ThisisaninvestmentofapproximatelyR27billion.AtCapeTownInternational, projects include a new, realigned runway, andadditionalparkingandcarrentalparkingbays.

Hand-in-glovewithimprovedefficienciesisperpetualattentiontopassengerandairline servicedelivery. Providinghighqualityservicewillonlybepossibleiftherightpeopleandfacilitiesarethere to deliver it. Consequently, training of both AirportsCompanySouthAfricaandairportstakeholders’staffwillreceiveongoingfocus.

Airports Company South Africa joined the Airports CouncilInternational’s (ACI)AirportsServiceQuality (ASQ)programmein2006andhasseenqualityratingsimprovefromanaverageof3,67in2006to4,08bytheendof2012;theratingsrangefromone(poorest)tofive(best).Inthenexttenyearsitisplannedto

improve further through quicker connection times, betterbaggagehandling,shorterwaitingtimesandgenerallyimprovedcustomer service.The use of social media will be extended toimprovetwo-waypassengerinteractions.

Continued focus on commercial activities has increased thisincome to the extent that it contributed 36 percent ofGrouprevenueinthe2012/13financialyear.Thishasactuallyshownareduction in percentage contribution over the past two yearsbecauseofthelargetariffincreasessincethenewinfrastructurehasbeenbroughtintooperation.

Efforts to increase this contribution will continue. Theorganisation’svaluable,non-aviationrelatedpropertyassetswillbe unlocked through a new property development strategy.Successes in India and Brazil will inform Airport ManagementSolutions’newfocusonopportunitiesinAfricaand,subsequently,thoseinemergingmarkets.

Obtaining greater clarity on the regulatory framework isfundamental toallAirportsCompanySouthAfrica’splans,bothshortandlongterm.Thecompanyhasaleadingroletoplayinengagingwithkeyindustryplayersandcontributingsubstantiallytothedebate.

The key drivers of economic regulation and GDP growth willdetermine the speed at which new infrastructure capacity isdelivered. If there is no meaningful economic growth newcapacity will be deferred; if passenger growth recovers,infrastructureprogrammeswillbeaccelerated.

The Group will continue to promote airport excellence byretaining focus on safety and security, enhancing customerservice,drivingairportefficiencies, improvingsatisfaction levelsforbothpassengersandairlines,andpromotingtransformationinallaspectsofthebusiness.

Staffcapacitywillcontinuetobebuilttodeliveragainsttheten-yearplan,growingthepipelineofcriticalskills,monitoringstaffsatisfactionandfurtherpromotingemploymentequity.Equally,Airports Company South Africa is committed to making itscontribution to the government’s National Development Plan2030 through such aspects as economic development, jobcreationandsocialtransformation.ThekeyriskstodeliveringthisplanareGDPgrowthandeconomicregulation.

Inconclusion,keyrequirementstodelivertheplannedoutcomesoftheten-yearplanare:• Managinganddevelopingahigh-performingandcontinuously

engagedworkforce• Finalising economic regulation legislation and the funding

framework• Acceleratingasustainabilityandtransformationprogramme• Strengtheningbusinessexcellence• Identifyingandsecuringnewbusiness• Buildingwin-winpartnershipswithstakeholders• Deliveringshareholdervalue.

These seven imperatives are the essence ofAirportsCompanySouthAfrica’slong-termstrategy.

22

Delivering on our objectives

The table below reflects the company’s strategic deliverables and the extent to which they have been achieved.

Strategic

objective Strategic objective definition Measure Definition

2012/13

Target

2012/13

Actual

Financial perspective

Grow shareholder

value (Group)

Growing shareholder value to

deliver sustainable returns in line

with expectations, to balance

investment in infrastructure and

to contribute to the development

of South Africa’s economy at

large.

ROCE

(company)

Return on capital

employed, as

reported in the

financial statements.

8,2% 7,68%

EBITDA

(company)

Earnings before

interest, tax,

depreciation and

amortisation, as

reported in the

financial statements.

R4,303 billion R4,493 billion

Customer perspective

Passengers Airports Council International

(ACI) manages the Airport Service

Quality (ASQ) programme, which

is the world’s leading airport

customer satisfaction benchmark

programme, with over 190

airports in more than 50 countries

surveying their passengers every

month of the year. All airports

use the same questionnaire and

follow the same methodology.

The programme’s highly

detailed sample plan, tailored

to each airport’s traffic, ensures

comparable results.

ASQ rating ASQ survey scores

presented by ACI

(weighted average).

International

3,9

Domestic

3,8

4,0

4,1

Internal process perspective

Diversified work

force

Transformation Diversified

workforce as per

Board- approved

EE plan

Employment

equity score as

per the approved

Empowerdex

scorecard

11,51 11,73

Learning and growth perspective - transformation and employee engagement

Employee

engagement and

readiness

Building the Airports Company

South Africa culture: PRIDE

Employee

satisfaction index

Assessment of

the organisational

employee

satisfaction

3,0 3,2


COntExt

AirportsCompanySouthAfrica recognises that indeliveringon

the key business imperatives, the Group has to have a robust

stakeholder management strategy that clearly identifies its

stakeholderbase.Thisstrategymustunderstandthekeyinterests

andconcernsofitsstakeholderbaseandhaveaclearprogramme

ofactioninrespectofhowthoseconcernsaretobeaddressed.

Additionally, the strategy has to identify key platforms of

engagement with stakeholders and audiences that will enable

relationship building.These platforms incorporate key industry

eventssuchasconferences,sponsoredandnon-sponsoredevents,

hostingof stakeholders in keycalendarevents, including social

andsportingevents,allofwhichallowourbusinesstoeffectively

engagewithstakeholdersbothformallyandinformally.

In November 2011, key strategic interventions were identified

that were needed to reposition the business to optimise

opportunities for growth and long-term sustainability.One was

the development of a comprehensive stakeholder relationship

managementstrategy.Inthiscontext,astrategicframeworkfor

themanagementofourrelationshipswithkeystakeholdershas

nowbeendeveloped,settingthetoneforkeymessagingforour

engagementswiththem.

Keystakeholders,aroundwhichcommunicationandengagement

shouldbecentred,havebeenidentifiedandareasaroundwhich

stakeholdersupportwouldberequiredorisofcriticalimportance.

Indevelopingthisframework,theobjectivewassettoprovidea

consistentplatformthroughwhichitwouldbepossibleto:

• Position Airports Company South Africa and its leadership

withinkeyidentifiedstakeholdergroupscriticaltoourbusiness

• Lobbysupporttoenhancethecompany’sbusinessobjectives

atdifferentplatforms

• Prioritise relationship development and relationship building,

andwork towardsminimisingdisruptive inputs into realising

theorganisation’sbusinessobjectives

• Successfullyestablishanemotionalbondwithstakeholdersat

corporateandbusinessunitlevels.

Havingset theseobjectives, itwas recognisedthat relationship

buildingwithAirportsCompanySouthAfrica’skeystakeholders,

especially those that directly impact the business, needs to be

integratedintoalllevelsofthebusinessto:

• Entrench the accessibility and credibility of the company’s

leadershipandvoice

• Gain an intimate understanding of stakeholders’ areas of

interestandkeyconcerns

• CultivateinterestinAirportsCompanySouthAfrica’sbusiness,

andbroadlyinthedevelopmentoftheaviationindustry.

stakeholder enGaGement

Stakeholder group matters of potential interest Page reference

Passengers •Servicequality

•Customercare

•Aviationsecurity

48-56

53-54

54-55

Airlines •Costofdoingbusiness

•Aviationsecurity

•Airqualityandnoise

•Infrastructure

43

54-55

61-62

48-49

Employees •Corporatesocialinvestment

•Employmentequity,trainingandwellness

76-78

67-74

Government(local,provincialandnational) •Infrastructure

•Procurement

•Environmentalimpact

•Corporatesocialinvestment

•Governance

48-49

46

59-64

76-78

28-35

Investors •Environmentalimpact


•Economicimpact

•Riskmanagement

•Governance

59-64

76-78

38-39

26-27

28-35

StaKEhOldER gROupS and IntEREStS

24

InlinewithAirportsCompanySouthAfrica’sstakeholderstrategy,

the following key activations were managed during the year

under review togive theGroup theopportunity toengage the

industryatlarge.

air Cargo Conference

Held in South Africa for the first time, in February 2013, the

Air Cargo Africa 2013 Conference and Exhibition provided a

platform for global and local cargo industry players to exhibit

their products and services for potential partnerships, with the

aimofimprovingtraderelationsintheindustry.Thisconference

and exhibition provided Airports Company South Africa, and

O.R. Tambo International in particular, the opportunity to

promote the various facilities and services that our gateway

airporthastooffer,whilealsopromotingthebrandholistically.

ItalsocreatedanopportunityforAirportsCompanySouthAfrica

toventureintoaglobalmarketingplatformtonotonlyintroduce

itselfasacompetitivecompanybuttotestindustryperception

asawhole.

Air CargoAfrica 2013 enabled various organisations in the air

cargo industry toaccess investmentand tradeopportunities in

theAfrican market.The event is specifically conceptualised to

tapopportunitiesintheAfricanmarket.Theconferenceallowed

significant industryplayers todiscuss issues concerning theair

cargo fraternity, and present possible solutions, while it also

affordedvariousformalandinformalnetworkingsessions.

airline associations

Amongstthecompany’svalued,keypartnershipsarethosewith

theAirlineAssociationofSouthernAfrica(AASA)andtheBoard

of Airline Representatives of South Africa (BARSA). Airports

CompanySouthAfrica took theopportunity to sponsorAASA’s

annual general meeting and conference held in Mozambique

in October 2012.This provided the opportunity to strengthen

relationshipswithAASA’sconstituentairlines,andtorespondto

industryconcernsonavarietyofissues,includingthepermission

application.Thispartnershipisongoing.

Similarly, the organisation continues to engage with BARSA

throughdifferentplatforms,despiteitnothavinghelditsannual

generalmeetingduringtheyearunder review,agatheringthat

AirportsCompanySouthAfricahasalwayssponsored.

zulu 200th anniversary Cultural Festival

KingShakaInternationalAirporthostedtheZuluCulturalFestival

‘UmgidiWeLembe’ inSeptember2012.Thisprestigiousevent is

abuild-uptothe200thanniversaryoftheformationoftheZulu

NationbyKingShakakaSenzangakhonain2016andwasattended

bydignitaries,includingmembersoftheZuluRoyalFamily.

stakeholder enGaGement (Continued)

RegulatingCommittee •Servicequality

•Economicimpact

48-56

38-39

Tradeunions •Governance

•Wellness


•Training

•Remuneration

•Employmentequity

28-35

73

76-78

71-73

73

74

Utilitysuppliers •Energyandwaterconsumption

•Wastemanagement

59-60

61

AirTrafficandNavigationServices •Safety

•Airqualityandnoise

52-53

61-62

Retailersandpropertytenants •Growthandeconomicimpact

•Energyandwaterconsumption

•Wastemanagement

37-46

59-60

61

Securityserviceproviders •Consistentregulationandoversight 54-55

SouthAfricanCivilAviationAuthority •Safetyandsecurityregulations 52-55

Non-GovernmentalOrganisations •Wildlifestrikes 62-63

StaKEhOldER gROupS and IntEREStS (COntInuEd)

Stakeholder group matters of potential interest Page reference


The festivity started with a welcome tribute to KingGoodwill

Zwelithini and his wives that accompanied him, byAmabutho,

TraditionalDancersandPraisePoets.TheKing’sspeechcentred

on unity and the importance of the preservation of the Zulu

Heritage,andemphasisedtheplacethatthisfestivaloccupiesin

thecalendaroftheZulupeople.

Renaming of Bloemfontein International airport

The renaming of Bloemfontein International Airport to Bram

Fischer InternationalAirport tookplaceon13December2012.

Theeventcoincidedwith theunveilingof theNelsonMandela

Statueinthecity.ItwasofficiatedoverbyPresidentjacobZuma

andhostedbytheMinisterofTransport,thePremieroftheFree

State,andtheChairpersonoftheBoardandtheActingManaging

DirectorofAirportsCompanySouthAfrica.

International Civil aviation day

InternationalCivilAviationDayisobservedannuallyon7December

to raise awareness of the importance of civil aviation and the

role that the International Civil Aviation Organisation (ICAO)

plays in international air transport. ICAO, with support from

governments, organisations, businesses and individuals, actively

promotes International Civil Aviation Day through various

activitiesandevents.

TheNorthWestProvincehosted2012’s celebrations.The joint

Aviation Awareness Programme members (including Airports

Company South Africa) participated in a career exhibition for

school learners. Proceedings on the day included an airshow,

messages from the NorthWest ProvincialGovernment as well

as theDeputyDirectorGeneral:Aviationat theDepartmentof

Transport.

Future Stakeholder-related Events

OneofAirportsCompanySouthAfrica’skeymissionsistowork

with identified stakeholders in industry and government to

position South Africa as a preferred host country for industry

events.These high-profile events give SouthAfrica recognition

in the global market place as a cutting-edge, global player,

contributingtotheorganisationbeingabletofulfillitsvisionof

beingaworld-leadingairportbusiness.

Working with our partners,AirportsCompany SouthAfrica has

securedthefollowingmajoreventsforthecomingyears:amajor

achievementforourbusiness.

airport Cities Expo

Airports Company South Africa has partnered with the City

of Ekurhuleni to host theAirportCitiesWorldConference and

Exhibition in April 2013. This is the first time in its eleven-

year history that the conference has been held on theAfrican

Continent.Ashostairportauthority,representedbyO.R.Tambo

International Airport, the company is one of the sponsors of

theevent.

This conference provides an annual one-stop, global forum to

facilitatediscussiononkeyissuesregardingmacrodevelopments

that incorporate airports. A new strategic approach to airport

planning and associated commercial development is gaining

prominence around the world. This is the airport city and

aerotropolismodel.Itconsistsofanairport-centredcommercial

core (the airport city) and outlying corridors and clusters of

aviation-linkedbusinessesthatmakeupthegreateraerotropolis.

virtuallyallcommercialfunctionsfoundinamodernmetropolitan

downtownareestablishingthemselvesinairportcitiesandtheir

surroundingaerotropolises.EkurhuleniMetropolitanMunicipality

andO.R.TamboInternationalAirportareworkingtogetherasthe

nucleusofanaerotropolis.

International air transport association

The International Air Transport Association (IATA) held its

annual general meeting and World Air Transport Summit

(WATS)inCapeTowninjune2013.Theeventattractedthetop

leadershipoftheairtransportindustry.Theseeventsprovidedan

idealopportunity forAirportsCompanySouthAfricatonurture

existing relationships with stakeholders, especially the world’s

airlines,andtoestablishnewindustrypartnerships.

airports Council International africa annual general

assembly 2014

TheroleandsignificanceofAirportsCouncil International(ACI)

in the global airport community cannot be underestimated. It

has 573 members, operating 1 751 airports in 174 countries,

representingmorethan95percentofglobalairporttraffic.

world Routes 2015

InMarch2013,SouthAfricawasannouncedashostofthe21st

WorldRouteDevelopmentForum(WorldRoutes).Itisscheduled

totakeplaceinDurbaninSeptember2015.

This marks the first time in its history that the event will be

heldinAfrica.WorldRoutesistheglobalmeetingplaceforevery

airline,airport, tourismboardandgovernmentstakeholder,and

attractsattendeesfromover110countries.Theeventisfocused

aroundthedevelopmentoftheworld’sairservicesandhosting

WorldRoutesprovidesauniqueopportunityforadestinationto

showcase its airport, its city and its country to the air service

decision-makersoftheworld.

26

Asaworld-classairportoperator,AirportsCompanySouthAfrica

acknowledgesthateffectivemanagementofriskiscentraltothe

achievementoftheGroup’svisiontobeaworld-leadingairport

business. By understanding and managing risk, the Group can

providegreatercertaintyandsecurityforemployees,customers

andstakeholders.

TheGroup’sintegratedriskmanagementprocessaimstoachieve

anappropriatebalancebetweenrealisingopportunitiesforgains

while minimising adverse impacts. Assurance of good corporate

governance is achieved through the regular measurement,

reportingandcommunicationofriskmanagementperformance.

RISK managEmEnt gOvERnanCE StRuCtuRE

The Board is responsible for the Group’s risk management

performance.KeyBoardaccountabilitiesincludetheidentification

ofmajorrisks,andthatappropriatesystemsandprocessesarein

placetomanagethe identifiedrisks,sothattheGroup’sassets

andreputationaresuitablyprotected.

Furthermore,theBoardensuresthattheriskmanagementprocess

isaccuratelyalignedtothestrategyandperformanceobjectives

oftheGroup.TheBoardalsoprovidesstakeholderswithassurance

that key risks are properly identified, assessed, mitigated and

monitored.

Management is accountable to the Board for designing,

implementing andmonitoring theprocess of riskmanagement

andintegratingitintotheday-to-dayactivitiesoftheGroup.The

effectivenessof the integrated riskmanagementprogramme is

measuredonanannualbasisbytheInternalAuditfunctionand

reportedtotheAuditandRiskCommittee.

StRatEgIC RISK REgIStER

AirportsCompanySouthAfricamaintainsastrategicriskregister,

whichcontainskeyrisksfacedbytheGroupthatrequireExecutive

CommitteeorBoardattention.Theregisterisregularlyupdated

and reviewedby theBoard’sAudit andRiskCommittee. In the

yearunderreview,theBoardAuditandRiskCommitteemetfive

times,wheretherewererobustdiscussionsonthestrategicrisk

register.

BuSInESS COntInuIty managEmEnt

The nature of Airports Company South Africa’s business

necessitates stringent business continuity and, in particular,

emergency management and crisis management plans. During

thisperiod,acontinuedfocuswasplacedonthe integrationof

businesscontinuitymanagementthroughouttheorganisation.

managIng RISK

In the pursuit of its corporate strategy of building an efficient

and customer-focusedbusiness,AirportsCompanySouthAfrica

continuedtofeeltheimpactoftheadverseeconomicconditions,

bothdirectlyandindirectly.Inparticular,theCompanyfacedthe

followingkeyrisks.

Key risks Impact on airports Company South africa

the financial instability of airlines

Theriskofunsustainablelow-costairlinesbecamearealitywhen1timeAirlinewasliquidated.Thisriskhassincespreadtoother,non-low-costairlinesandhasnecessitatedthefurthertighteningoftheGroup’scollectionprocessestominimisetheexposuretobaddebts.Thisriskalsohaswider-reachingimpactintermsofpassengernumbersandpassengergrowth,whichisakeydriverforbothaeronauticalandnon-aeronauticalrevenue.

delays in permanently filling key executive positions

WhilstnewBoardmemberswereappointedearlyintheyearunderreview,whichresultedinAirportsCompanySouthAfricahavingafullBoardcomplement,thedelaysinfillingkeyleadershippositionsonapermanentbasiswasakeyconcern.

Thisexposedtheorganisationtopossibledelaysinmakingkeybusinessdecisions,potentiallycompromisingtheGroup’sabilitytoefficientlydeliveronitsstrategy.However,thiswascounteractedbytheexistenceofgoodgovernancestructuresfordecision-makingandthefactthathighlyexperiencedandstrongindividualswereformallyappointedinactingcapacities,withtheappropriatedecision-makingauthority.

Fuel supply shortage or disruption

Duetothecontinueddependenceonalimitednumberofrefineriesforaviationfuel,andthefragilityofsupplymechanismstotheairports,thisremainedachallenge,notonlyforAirportsCompanySouthAfrica,butalsoforthecountryasawhole.Asthemajorfuelconsumer,O.R.TamboInternationalhaspartiallyaddressedthisriskthroughthecommissioningofadditionalstoragefacilities.However,furthertreatmentofthisriskisbeingaddressedatacountrylevel,whereafuelmasterplanneedstobedeveloped.

InteGratedRiskManaGement


Key Risks Impact on airports Company South africa

Inability to deliver on commitments for brazil

Aspreviouslyreported,thecontinuedsuccessfulgrowthofAirportsCompanySouthAfricaislargelydependentonthecreationofnewrevenuestreams.OneofthekeyinitiativesinthisregardistheGroup’sparticipationintheconcessiontomanageGuarulhosInternationalAirportinBrazil.

Akeydeliverablefortheconcessionisthecompletionofcritical,identifiedinfrastructureintimeforthe2014FIFAWorldCup.Duetotheextremelytightdeadlines,itmaybedifficulttocompletethisinfrastructureonschedule.

TheconsequenceforAirportsCompanySouthAfrica,astheairportoperatorintheconcession,maybeintheformofanegativeimpactontheGroup’sreputationandontheabilitytodeliverAirportManagementSolutions’strategyinthelongterm.Thisriskisbeingaddressedinthemainthroughtheallocationofadditionalresourceswithkeyprojectmanagementexperienceandspecialisedskills.Inaddition,contingencyplansarebeingdeveloped.

EmERgIng RISKS

Airports Company South Africa regularly reviews internal and

external environments for factors that may cause risks for

the business. Major emerging risks with a wider, potential and

systemic impact on the company in the forthcoming financial

yeararedescribedbelow.

1. Regulatoryregime

Whilstthepromulgationofnewtariffsin2012gaveAirports

CompanySouthAfricasomereliefintheshortterm,thelack

of an enabling, stable and predictable regulatory regime

remainsoneoftheGroup’skeychallengesinthelongterm.

SuchalackmaycompromisetheGroup’sabilitytomakethe

necessaryinfrastructureinvestmentstomeetfuturedemand.

2. The growth of Lanseria Airport and ending the exclusive

Kulula.comdealisallowingotherairlinestoenterthatmarket.

3. Thegrowthofotherhubs,suchasthoseintheMiddleEast

andotherAfricancountries,could reducetransfer trafficat

theGroup’smajorhubofO.R.TamboInternational.

4. ThegrowthofGulfcarriersdirectlyintootherAfricanmarkets.

28

Corporate GovernanCe and ComplianCe

The composition of the Board for the year under review is as

follows:

Director appointment date

MsBusisiweMabuza(Chairman) 2012.03.01

MrRoshanMorar(Deputychairman) 2012.01.01

MsPriscillahMabelane 2012.08.01

MsChwayitaMabude 2012.12.01

MrSkhumbuzoMacozoma 2012.03.01

MrEliasMasilela 2012.01.01

MsMohlaMatsaba(alttoMrMasilela) 2012.01.01

AdvKenosiMoroka 2012.12.01

DrjohnLamola 2012.12.01

MsBajabulileLuthuli 2012.12.01

MsTryphosaRamano 2012.03.01

MsMartiejansevanRensburg Retired2012.11.12

MrBonganiMaseko(ExecutiveDirector) 2013.05.15

MsMaureenManyama-Matome

(ExecutiveDirector)

2013.04.01

IndEpEndEnCE OF thE BOaRd

The independence of the Board is maintained by adhering to

certainkeyprinciples:

• The shareholders at the Annual General Meeting ratify the

appointmentoftheBoardmembersforafixedterm

• The positions of Chairman and Managing Director are kept

separate

• BoththeChairmanandtheDeputyChairmanarenon-executive

membersoftheBoard

• Boardcommitteesarechairedbynon-executiveBoardmembers,

with the exception of the Executive Committee, which is

chairedbytheManagingDirector.

BOaRd ChaRtER

TheBoardCharterandtermsofreferencedefinetheframework,

authorityandparameterswithinwhichtheBoardoperates.For

ease of alignment and business interface with the Group, the

Boardinvitesselectedexecutivemanagerstoitsmeetings,whilst

specifically reserving its right to meet without management’s

presence,whenrequired.

The Board is fully committed to maintaining the standards of

integrity,accountabilityandopennessrequiredtoachieveeffective

corporategovernance.TheBoardCharterandtermsofreference

confirmtheBoard’saccountability,fiduciaryduties,thedutyto

declare conflicts of interest, the constitution of the Board

committeesand the relationshipwithAirportsCompanySouth

Africaemployeesandmanagement.

AirportsCompanySouthAfricaSOCLtdisregisteredasa‘State-

ownedCompany’asdefinedintheCompaniesAct,2008andis

listedasamajorpublicentityintermsofSchedule2ofthePublic

FinanceManagementAct,1999(PFMA).TheGroup’sgovernance

andassuranceframeworkincludestheguardianshipofstandards

andintegrity,aswellasadedicationtoprotectingtheinterestsof

allstakeholders.

TheGroupiscommittedtocontinuallyenhancingitscorporate

governanceprocessesinlinewithbestpracticeinamannerthat

facilitates the development and management of world-class

airports.Thisisdonewhilstensuringthatoperationsareethically

conductedwithintheapplicableregulatoryframework.

Theapproachtocorporategovernanceisbasedonsixfundamental

principles: accountability, transparency, responsibility, indepen-

dence, ethical fairness and social development.These principles

enhance the Group’s values expressed in the acronym PRIDE

(Passion,Results,Integrity,DiversityandExcellence).

Furthermore, there is a Code of Ethics and Business Conduct

approved by the Board and monitored by the Audit and Risk

Committee, as well as behavioural standards specified in an

employeemanual.

BOaRd OF dIRECtORS

TheBoardisresponsibleforsettingthedirectionandstrategyof

the company, as well as overseeing the planning, optimal

allocation of resources, the maintenance of ethical business

practices,effectiveriskmanagementandcommunicationwithall

stakeholders.


Furthermore,theCharterdefinestheBoard’sresponsibilityto:

• Reportonintegratedsustainability

• Promoteastakeholder-inclusiveapproach

• Monitoroperationalperformanceandmanagement

• Confirm that the risk management process is accurately

aligned to the strategy and performance objectives of the

Group

• Ensurethatallmaterialrisksareidentifiedandthatappropriate

systemsandprocessesare inplacetomanagethe identified

risks,inordertoensurethattheGroup’sassetsandreputation

areprotected

• Providestakeholderswiththeassurancethatallmaterialrisks

areproperlyidentified,assessed,mitigatedandmonitored

• Determine appropriate policies and processes to ensure the

soundcorporategovernanceofAirportsCompanySouthAfrica.

Remuneration of the Board

Thenon-executivedirectorsareremuneratedonabasisasagreed

by the shareholders at the annual general meeting, with the

specificapprovaloftheMinisterofTransport.Thesedirectorsare

remuneratedonthebasisofamonthlyretainerandBoardand

committeemeetingattendancefees.

Detailsofthedirectors’remunerationareincludedinthenotesto

the annual financial statements.The Board meets formally at

leastfourtimesayeartodeterminethestrategicdirectionofthe

Group,aswellasitsbusiness,operational,socialandenvironmental

objectives.

The Board sets broad policy, approves significant projects and

deliberatesonmaterialaspectsofthebusiness.Italsomonitors

theimplementationoftheobjectivesbyexecutivemanagement,

inlinewiththeGroup’sstrategicobjectives.

TheBoardhasfinance,audit,corporategovernance,legalandrisk

managementskillsandexperience.Italsoincorporatesskillsand

experienceinproperty,commerceandgeneralbusiness,whichall

fittheGroup’sscopeofoperations.

Thecompositionandnumberofnon-executivedirectorsensures

thattheirviewscarrysignificantweightinBoarddecisions.The

directors have unfettered access to company information and

mayseekindependentprofessionaladvicewhenrequired.

the Company Secretary

TheCompanySecretary,whoisappointedbytheBoard,ensures

thatthedirectorsareawareofalllawsrelevantto,oraffectingthe

Group, as well as sound corporate governance practices.

The Company Secretary also offers the directors guidance on

their duties and responsibilities and provides secretarial and

administrative support to the Board and its committees. The

directorshaveunrestrictedaccesstotheCompanySecretary.

Board Efficacy Review

TheBoardoperateswithanestablishedstructure,whichensures

that there are adequate processes in place to monitor its

operations. The assessment of the effectiveness of both the

structureandprocessesoftheBoardensurestheachievementof

AirportsCompanySouthAfrica’sobjectives,aswellasmaintaining

soundcorporategovernance.

Board meetings

Special Special

Name of Director 2012.05.04 2012.06.01 2012.07.19 2012.09.03 2012.12.03 2013.02.25

MsBusisiweMabuza(Chair) * * * * * *

MsPriscillahMabelane ^ ^ ^ a A A

MsChwayitaMabude n/a n/a n/a n/a n/a *

MrSkhumbuzoMacozoma * * * a a *

MrEliasMasilela a * * * * *

MsMohlaMatsaba(alttoMrMasilela) * * * * * *

MrRoshanMorar * * * * * *

AdvKenosiMoroka N/A N/A N/A N/A N/A *

DrjohnLamola N/A N/A N/A N/A N/A *

MsBajabulileLuthuli N/A N/A N/A N/A N/A *

MsTryphosaRamano * A A A * a

MsMartiejansevanRensburg * * * * R R

*:AttendanceR:RetiredA:ApologyN/A:Appointed2012.12.01^:Appointed2012.08.01

30

findings of external and internal auditors.This committee also

monitorsgovernanceandethicalstandards,andfocusesonthe

managementofenterprise-wideriskswithintheriskmanagement

framework.

Allmembersofthiscommittee,includingthechairman,arenon-

executive directors. Both external and internal auditors have

unrestrictedaccesstothechairmanandmaymeetprivatelywith

thecommitteewhenrequired,butformallyatleastonceayear.

TheAuditor-Generalalsoratifiestheappointmentorreappointment

(asthecasemaybe)oftheexternalauditorsonanannualbasis.

jointexternalauditors,PricewaterhouseCoopersandNgubane&

Co,werereappointedattheannualgeneralmeeting.

TheAuditandRiskCommitteetermsofreference,whicharticulate

themandateof thecommittee, isupdatedonanannualbasis.

In particular, the inclusion of monitoring of the Group’s

performance,asitrelatestoinformationtechnologygovernance,

wasincludedinthemostrecentreviewofthetermsofreference.

Board Committees

Six committees, which report directly to the Board, have been

established to focus on key functional areas where specialist

expertise is required. With the exception of the Executive

Committee, which is chaired by the Managing Director, all the

committees are chaired by a non-executive director and their

members are non-executive directors. Executives who are not

membersofaspecificcommitteeattendmeetingsbyinvitation.

Toensurethatthetermsofreferenceofthecommitteesremain

current and comply with best practice, they are periodically

reviewedand,wherenecessary,amended.

TheBoardcommitteeswerereconstituted,withtheappointment

ofadditionalBoardmembers,on25February2013.as follows.

Newappointmentsareshowninthefirsttable,below.

audit and Risk Committee

The Audit and Risk Committee meets at least quarterly to

consider annual and interim financial statements, accounting

policies and the safeguarding of assets, audit plans and the

Corporate GovernanCeand ComplianCe (Continued)

audit and Risk Committee meetings Special

Name of Director

Date of appointment to the

Committee 2012.05.16 2012.07.13 2012.08.13 2012.11.07 2013.02.13

ms Tryphosa Ramano (Chair) 2012.05.04 * * * * *

MrRoshanMorar 2012.05.04 * * A * *

MsMartiejansevanRensburg 2012.05.04 * * * * R

MrSkhumbuzoMacozoma InterimreplacementforMsMartiejansevanRsensburg,subsequenttoherretirementon

2012.11.12

*:AttendanceR:RetiredA:Apology

Committee appointments

Name of Director audit and Risk

Tresury and

Economic Commercial

Remuneration

and Nominations Social and Ethics

ms bajabulile Luthuli † † – – –

MsChwayitaMabude † – † – –

DrjohnLamola – †(Chair) – † –

AdvKenosiMoroka – – † – †(Chair)

MrBonganiMaseko

(Managingdirector)

– – – – †

MsBusisiweMabuza – – † – †

†Appointedtocommitteeon2013.02.25–Notamemberofthecommittee


treasury and Economic Regulatory Committee

TheroleofthiscommitteeistoassisttheBoardindischargingits

responsibilitiesrelatingtomeetingPFMAandtreasuryregulations

andrequirements inperformingthetreasuryfunction.Also,the

committee assumes corporate accountability and associated

risks in terms of treasury and oversees the development and

implementationoftheeconomicregulatorystrategy.Inaddition,

itensurescompliancewitheconomic regulatoryand legislative

requirements. The committee also applies specialist skills to

investment,fundingandbudgetingrequirements.

Commercial Committee

The Commercial Committee provides oversight of the Group’s

property and commercial business, including the retail and

advertising portfolios, as well as B-BBEE and transformation

aspects, in order to deliver customer service and increase

shareholdervalue.Thecommittee’smainresponsibilityistoreview

and monitor the role, objectives and strategic plans of the

commercialbusinessunit,whichcontributestoAirportsCompany

SouthAfrica’sprofitability.

Name of Director


Committee 2012.08.08 2012.12.10 2013.02.20

MrEliasMasilela# 2012.05.04 A A A

MsMohlaMatsaba(alttoMrEMasilela) 2012.05.04 * *

MsTryphosaRamano(ActingChair) 2012.05.04 A * *

MsMartiejansevanRensburg 2012.05.04 * R R

MsPriscillahMabelane 2012.05.04 * A A

*:AttendanceR:RetiredA:Apology

#:InterimreplacementforMsMjvRensburgsubsequenttoherretirementon2012.11.12

treasury and Economic Regulatory Committee meetings

Commercial Committee meetings

Name of Director


Committee 2012.08.10 2012.11.16 2013.02.13

mr Roshan morar (Chair) 2012.05.04 * * *

MrEliasMasilela 2012.05.04 * * *

MsMohlaMatsaba(alttoMrEMasilela) 2012.05.04

MrSkhumbuzoMacozoma 2012.05.04 * * *

*:Attendance

32

• Toreport,throughoneofitsmembers,totheshareholdersat

the Group’s annual general meeting on matters within its

mandate.

Social and Ethics Committee meetings

Name of Director

Date of appointment to the Committee 2012.10.24

MsPriscillahMabelane 2012.05.04 A

MsMartiejansevanRensburg(ActingChair)

2012.05.04 *

MrEliasMasilela 2012.05.04 *

MsMohlaMatsaba(alttoMrEMasilela)

2012.05.04

*AttendanceN/A:Appointed2013.02.25A:Appology

Executive Committee

Thecommittee is accountable to theBoardand theManaging

Director,andassiststheManagingDirectortoguideandcontrol

the overall direction of the business. Furthermore, it acts as a

medium of communication and co-ordination between the

variousbusinessunitsandtheBoard.

Other governance-related matters

The Board also considers matters relating to procurement

that are above the delegated levels of authority of executive

management.

Compliance Function

The main focus of the function is to ensure compliance with

Airports Company South Africa’s compliance and regulatory

universe.Itsworkisongoingandgearedtowardsensuringthatthe

Groupisnotadverselyexposedtolegalandcompliancerisks.

No material non-compliance of legislation or regulatory

requirementshascometotheattentionoftheBoardintheyear

underreview.

Remuneration and nominations Committee

This committee was constituted in May 2012, following the

Board’sdecisiontomergethefunctionsoftheDirectors’Affairs

Committee with that of the Human Resources,Transformation

andRemunerationCommittee.

Theobjectivesofthecommitteearetoenabletheimplementation

ofaformalprocessofreviewingthebalanceandeffectivenessof

theBoard, identifyingtheskills required,andto recommendto

the Minister ofTransport those individuals who possess these

skillsforappointmentasexecutiveandnon-executivedirectors.

Thiscommitteealsoensuresthatanadequateandappropriate

successionplanisinplacefordirectorsandexecutives.

Inaddition,thecommitteeprovidesguidelinesandproceduresto

ensure that human resourcing and remuneration strategies are

aligned to the Group’s objectives, including addressing past

workplaceinequalities.

Social and Ethics Committee

ThiscommitteeisanewrequirementundertheCompaniesAct

2008,andtookeffectfrom1May2012.

The primary functions of the committee are to monitor the

Group’sactivities,havingregardtoanyrelevantlegislation,other

legal requirements or prevailing codes of best practice with

regardto:

• Socialandeconomicdevelopment

• Goodcorporatecitizenship

• Theenvironment,healthandpublicsafety

• Consumerrelationships

• Labourandemployment

–TheGroup’s standing in terms of the International Labour

Organisationprotocolondecentworkandworkingconditions

–TheGroup’s employment relationships, and its contribution

towardstheeducationaldevelopmentofitsemployees

• To draw matters within its mandate to the attention of the

Boardasoccasionrequires


Remuneration and nominations Committee meetings

Name of Director


Committee 2012.07.13 2012.11.09 2013.02.18

ms busisiwe mabuza (Chair) 2012.05.04 * * *

MrRoshanMorar 2012.05.04 * * *

MrSkhumbuzoMacozoma 2012.05.04 * * A

*:Attendance


public Finance management act, 1999 (pFma)

TheBoardistheaccountingauthorityintermsofthePFMA,in

whichAirportsCompany SouthAfrica is listed as a Schedule 2

publicentity.ThePFMAfocusesonfinancialmanagementwith

relatedoutputsandresponsibilities.

Directors comply with their fiduciary duties as set out in the

PFMA.The responsibilities of theBoard, in termsof thePFMA,

includetakingappropriateactiontoensurethat:

• Economic, efficient, effective and transparent systems of

financial and risk management and internal controls are in

place

• Asystemismaintainedforproperlyevaluatingallmajorcapital

projectspriortomakingafinaldecisiononeachproject

• Appropriateandeffectivemeasuresareimplementedtoprevent

irregularorfruitlessandwastefulexpenditure,expenditurenot

complyingwithlegislationorlossesfromcriminalconduct

• AllrevenuesduetoAirportsCompanySouthAfricaarecollected

• Availableworkingcapitalismanagedeconomicallyandefficiently

• The objectives and allocation of resources are defined in an

economic,efficient,effectiveandtransparentmanner.

King Report on Corporate governance for South africa 2009

(King III)

AirportsCompanySouthAfrica complies substantiallywith the

provisions of King III, where possible, in light of the broader

regulatory framework in which it operates.The results of such

reviewsarereportedtotheAuditandRiskCommittee.

promotion of access to Information

AirportsCompanySouthAfricacompliedwiththerequirements

ofthePromotionofAccesstoInformationActof2000,andthe

information manual is available on the Group’s website and

intranet.

airports Company act and Companies act

Fortheperiodunderreview,AirportsCompanySouthAfricahas

substantially complied with both the Airports Company Act,

1993,andtheCompaniesAct,2008.

Code of Conduct

AirportsCompanySouthAfricahasupdateditscodeofconduct

forallemployeesandconsultantsandithasbeenrolledout.

34

Risk management

Anintegratedriskmanagementstrategyandprocessisoneofthe

Group’skeyfocusareas.Risksandopportunities,againstbusiness

objectives,areidentifiedduringriskassessments.Riskintegration

between airports and business units is reviewed by various

committeestoensureaco-ordinatedapproachtoriskmitigation

measures.

Airports Company South Africa’s philosophy regarding risk

managementisconservative,withalowappetiteforrisk,aswell

aslowtolerancelevels,intheinterestsofpreventingshareholder

valueerosion.

TheExecutiveCommitteeisaccountablefortheimplementation

ofriskmanagementanditsaccountabilitiesinthisregardare:

• Tosetanddirectriskmanagementframeworksandstandards.

• Toreinforceaccountabilityforriskcontrols.

• Toevaluatetheeffectivenessoftheriskmanagement

framework.

• Toparticipateinstrategicriskassessments.

• ToestablishtheAirportsCompanySouthAfricariskprofile.

• Toevaluateriskmanagementperformance.

TheGroupcontinuestoeffectivelymanageallmaterialriskswith

frequentreportstotheBoardandcommittees.

Internal audit

Internal controls comprise the methods and procedures

implemented by management to achieve the objectives of

safeguardingGroupassets,efficientandeffectiveemploymentof

resources, the prevention and detection of errors and fraud,

ensuring the accuracy of accounting records and the timely

productionofreliablefinancialandoperationalinformation.

The Board is responsible for the design, implementation and

maintenanceofappropriateinternalcontrolsinmitigationofthe

inherentrisksoftheGroup.

TheInternalAuditfunction,theindependenceofwhichisensured

throughafunctionalreportinglinetotheChairmanoftheAudit

and Risk Committee, examines and evaluates the Group’s

activities,withtheobjectiveofassistingexecutivemanagement

andtheBoardintheeffectivedischargeoftheirresponsibilities.

Theothermajorareasofactivityaremonitoringofthesystemof

internalcontrolsaselaboratedabove, identifyingand reporting

on error, fraud and discrepancies, and monitoring corporate

governance.

The mandate of the InternalAudit function, which is captured

holisticallyintheInternalAuditCharterandreviewedannuallyby

theAuditandRiskCommittee,includesindependentlyappraising

theappropriateness,adequacyandeffectivenessoftheGroup’s

systems of internal controls and reporting on these to

managementandtheAuditandRiskCommittee.

Thethree-year,risk-basedauditplancoversmajorrisksemanating

fromAirportsCompanySouthAfrica’sintegratedriskmanagement

process.The plan covers an equal balance of operational and

financialrisksand,inparticular,coversoperationalriskspertaining

totheenvironment,aviationsafetyandaviationsecurity,among

others.TheauditplanisapprovedbytheAuditandRiskCommittee

and reviewed annually, based on changes to the Group’s risk

profile. This ensures that the audit coverage is focused on

identifyinghigh-riskareas.

Onanannualbasis,the InternalAuditunitreviewstheGroup’s

assessment against its predetermined objectives through the

review of the adequacy of management’s key performance

assessmenttoolandtheverificationofmanagement’sassessment.

TheInternalAuditmandateincludesthedesignandimplementation

of a combined assurance framework within the Group. This

frameworkisexpectedtobedefinedandapprovedbytheAudit

and Risk Committee within the next financial year, with the

rolloutprogressingwithintheyearsfollowingthereafter.

TheInternalAuditfunctionprovidesanannualwrittenassessment

on the effectiveness of the internal controls, and the internal

financial controls, to the Audit and Risk Committee, for

recommendationtotheBoard.

NothinghascometotheattentionoftheBoardtoindicatethat

there are any material breaches in controls in the year under

review.



Ethics

AirportsCompany SouthAfrica employs a number of tools to

ensurethatthebusinessoperatesinanethicalenvironmentand

isabletoeffectivelycombatfraud.Theseare:

• AnestablishedCodeofEthicsandBusinessConduct.

• AFraudPreventionPolicyandaFraudResponsePlan.

• Ananonymoustip-offhotline,availableforusebyemployees

andstakeholderstoalerttheorganisationtoanyfraudulentor

unethicalconductoranybreachesoftheCodeofEthicsand

BusinessConduct.

Thesetoolsareenabledthroughacontinuousawarenessprocess

towhichallareasofthebusinessareexposed.

Anorganisation’scomplianceandethicsprogrammemustevolve

asthebusiness’sregulatoryandeconomicconditionstransform.

Oneofthetoolsemployedtomonitorthisprogressistheannual

assessmentbytheInternalAuditfunctionontheeffectivenessof

theethicsand fraudpreventionprogrammeswithin theGroup.

Airports Company South Africa is now progressing to more

evolvedprocesseswiththematuringoftheprocessthatprovides

ongoing training to enable the assessment of the proficiency

levels of the organisation relating to ethics. Furthermore, it is

pursuingthekeygoalofenhancingthecurrentFraudPrevention

Programmethroughtheestablishmentofastrategicproject.This

aimstoprovideimprovedstructuresandprocesses,suchasthe

establishment of an optimised Fraud Prevention Committee,

whichwill includemembersofabargainingcouncilandanon-

bargainingcouncil.

finanCial and operational review


of 34,8 percent, implemented during the 2012 financial year

(i.e.from1October2011)andafurtherincreaseof6,5percent

implemented during the 2013 financial year. The profit line

was further enhanced by a reduction in net financing costs to

R1,462billion (2012:R2,034billion).The reduction infinancing

costsislargelyduetothesettlementofborrowingsthatmatured

inthe2013financialyear,aswellastheclosingoutofinterest

rateswapsduringthelatterpartofthe2012financialyear.

OvERvIEw

The Group posted a R991 million profit for the financial year

ended31March2013.Thisisasignificantincreaseinprofitwhen

comparedtotheprioryear’sprofitofR188million.Theincrease

inprofit isan indication that theGroup is starting to reap the

benefits of the 2006 to 2010 capital investment programme.

Theresultsinthe2013financialyeararedrivenprimarilybyan

increaseinaeronauticalrevenueasaresultofthetariffincrease

finanCial review

ThesluggishGDPgrowthhasanegativeimpactonbothpassenger

andairtrafficperformance.Asaresult,thecompanyexperienced

adecrease inoverallpassengernumbersofsomethreepercent

whencomparedtotheprioryear.

REvEnuE and tRaFFIC tREndS

The Group revenue comprises both aeronautical and non-

aeronautical revenue streams. The aeronautical revenues are

derived from regulated income, which includes a passenger

service charge, and aircraft landing and parking charges. Non-

aeronautical revenue is derived from the Group’s commercial

activities and comprises mainly of property rentals, retail

concessionaires,carrental,carparkingandadvertising.

Total revenue for the year ended 31March 2013 increasedby

16percenttoR6,660billion(2012:R5,739billion).Thisrepresents

a27percent increase inaeronautical revenuetoR4,246billion

(2012: R3,350 billion) and a one percent increase in non-

aeronauticalrevenuestoR2,414billion(2012:R2,389billion).

total revenue (R billion)

7000

6000

5000

4000

3000

2000

1000

0

Aeronautical Non-aeronautical

2011 2013

36%

64%

6660

2010

52%

48%

353148%

52%

4658

2009

54%

46%

3167

2012

42%

58%

5739

Thenon-aeronauticalrevenueincreaseofR25millioncontinues

tostrengthenthepositivecontributionofcommercialactivities

to the revenue of the Group. In the 2013 financial year,

however, the contribution from non-aeronautical revenue to

total revenue decreased to 36 percent (2012: 42 percent).The

decrease inpercentage contribution is as adirect result of the

disproportionatestep-upincreaseoftheaeronauticalrevenue.

non-aeronautical revenue

Retail

Carrental

Carparking

Advertising

Propertyrentals

Airportconcessions

Othercommercial

29%

6%

13%

17%7%

18%

10%

Profit/(loss) after tax (R million)

1000

800

600

400

200

0

(200)

(400)2009

444

2010

901

2011

(221)

2013

991

2012

188

EbITDa (R billion)

4500

4000

3500

3000

2500

2000

1500

1000

500

02009

1806

2010

2747

2011

2615

2013

4493

2012

3565

38

non-aeronautical Revenue

The Commercial Services division is responsible for generating

revenuefromnon-aeronauticalsources.Thisisachievedthrough

retail, car rental, advertising concessions, car parking, property

development income and on-going leases, investment and

consultancy feesderived fromAirportsCompanySouthAfrica’s

airportmanagementexpertise.

Non-aeronautical revenue continues to serve as a stable and

growing source of revenue. The increase in non-aeronautical

revenue is driven by customer spend and new lease contracts,

whichareunderpinnedbystrongminimumrentalstoprotectthe

Groupfromdownsideriskassociatedwithlowertrafficvolumes.

In the year under review, this revenue contributed 36 percent

(2012:42percent)ofGroup revenueandgrewbyonepercent

(2012:22percent)toR2,414billion(2012:R2,389billion).

valuE addEd

The Group continues to create value for its stakeholders.The

valueaddedbytheGroupisthemeasureofwealththeGrouphas

createdinitsoperationsbyaddingvaluetothecostofservices

itprovides.Thestatementoppositesummarisesthetotalwealth

createdandshowshow itwas sharedbyemployeesandother

partieswhocontributedtoitscreation.Alsosetoutistheamount

retained and re-invested in the Group for the replacement of

assetsandthefurtherdevelopmentofoperations.

aeronautical Revenue

Theincreaseinaeronauticalrevenueof27percent(R896million)

is dueprimarily to the increase in tariffs of 6,5 percent (2012:

34,8percent).Theincreaseinrevenuecomesdespitethedecrease

in the overall traffic numbers and mixes for both departing

passengers and aircraft landings of domestic, regional and

internationaldepartingpassengers (70%,27%and3%in2013

respectivelyvs69%,27%and3%in2012)andaircraftlandings

(61%,39%and15%in2013vs58%,42%and17%in2012)..

Whiletherevenueincreaseisattributabletotariffincreases,the

tariffs implemented are as per the regulatory approval of the

2011-2015permissioncycle.

traffic trends

TheGroupexperiencedadisappointingdeclineintotaldeparting

passengersfortheperiodunderreview,withtrafficforthe2013

financialyearendingthreepercentlowerthanthepreviousyear.

To date, 17,4 million passengers (2012: 17,9 million) departed

fromtheGroup’snetworkofairports.Aircraft landingsdeclined

by sixpercent to271250 (2012:272320).Both International

passengertrafficandaircraft landings increasedbyonepercent

whencomparedtothatoftheprioryear.Domesticpassengers,

whoconstituteapproximately70percentofthetotalpassenger

traffic, decreased by five percent and related aircraft landings

decreased by 11 percent as compared to the previous period.

Regionaldepartingpassengersdecreasedbyonepercent,while

relatedaircraftmovements (landings) remainedthesameas in

the2012financialyear.

finanCial review (Continued)

departing passenger traffic

14000000

12000000

10000000

8000000

6000000

4000000

2000000

0Domestic International RegionalandOther

2012 2013

12535016

11963082

48450204914163

567059560641

aircraft landings

160000

140000

120000

100000

80000

60000

40000

20000

0Domestic International RegionalandOther

2012 2013

142555

126388

92740 92489

35955 36146


To improve the Retail Airport Service Quality rating, retailer

employeetrainingwillbefocusedoncustomercarebehavioural

standards, sales etiquette and product knowledge. Positive

improvementintheratingwillresultinincreasedconcessionaire

turnoverandrentalrevenuetotheairports.Inanefforttoprovide

improved passenger convenience, the provision of limited free

Wi-Fiaccesswillbemadeavailable.

Anewservicecalled‘BuyonDeparturesandCollectonArrivals’

is being discussed with the South African Revenue Service’s

Customsdepartment.Thisservicewillallowpassengers topre-

purchasedutyfreeproductswhentheydepartandtocollecttheir

goodsintherestrictedzonepriortothecustomsinspectionarea

upontheirarrivalbackintothecountry.

For the year ahead, the economic climate in Europe (i.e. the

destination for the vast majority of international departing

passengers)remainsaconcernwithregardtothegrowthofthis

passengersegment.Onthepositiveside,theweakSouthAfrican

Randmakesthecountryanattractivedestinationfortheleisure

andtouristtraveller.

31march 31March

2013 %increase/ 2012

R’000 (decrease) R’000

valuE addEd

Value added by operations 5 099 079 4183677

Salesofgoodsandservices 6 660 261 5738543

Less:Costofgoodsandservicesprovided (1 561 182) (1554866)

valueaddedbyinvestingactivities 414 402 249135

Financeincome 124 728 47133

Otherincome 289 674 202002

total value added 5 513 481 24,1% 4432812

valuE dIStRIButEd

Distributedtoemployees (873 954) (769481)

Distributedtoprovidersofcapital–financecosts (1 587 054) (2081460)

Distributedtogovernment (485 421) (25682)

Incometaxexpense (485 421) (25682)

valuereinvested (1 575 986) (1368616)

Depreciationandamortisation (1 411 432) (1463804)

Deferredtaxation (164 554) 95188

total distributions (4 552 415) 7,2% (4245239)

valuE REtaInEd

Incomeretainedinthebusiness (991 066) (187573)

Retainedprofit (991 066) (187573)

Minorityinterests – –

total retained for investment (991 066) 428,4% (187573)

total value distributed and retained (5 513 481) (4432812)

REtaIl

Retailrevenue,adjustedfornegativeR29million(2012:positive

R32million)straight-liningofleaseincome,grewbyeightpercent

(2012:sevenpercent)toR817million(2012:R758million).The

growth in retail revenue is attributable to the annual rental

escalation from on-going leases, a moderate increase of

2,4percentininternationalpassengersatO.R.TamboInternational

andtheincreasedspendingpoweraffordedtoforeigndeparting

passengersbythedepreciationoftheSouthAfricanRand.

Trading conditions continue to be tough with the European

economic climate still in crisis and the disposable income of

SouthAfricanpassengersunderstrain.Thespendperpassenger

in the international airside duty-free mall at O.R. Tambo

InternationalshowedresilientgrowthofsevenpercenttoR390

perpassenger.Therevampedandimprovedcoreduty-freestores

atO.R.TamboandCapeTown InternationalAirports,aswellas

theintroductionofthepremiumfashionbrand,Burberry,assisted

inmaintainingthisspend.TheBRICSsummit,heldinMarch2013

inKwaZulu-Natal,resultedinapositivegrowthinretailspending

atKingShakaInternationalAirport,withmostdelegatesutilising

thisairport.

40

Car Rental

Car rental revenue grew by nine percent (2012: six percent)

toR168million(2012:R154million)afteradjustingforstraight-

liningofleasestotallingR4million(2012:R8million).Thisgrowth

wasassistedbythecarrentalbusiness,whichchargesfortimeand

kilometres,growingbytenpercenttoR1,4billion,notwithstanding

the2,8percentdeclineinpassengers.Animprovedandincreased

fleetofvehiclessupportedthisimprovement.

Carrentalcapacityatmostairportsissufficientfortheshortto

mediumterm.AtO.R.TamboInternationalAirportplansarebeing

initiated to consider consolidating the car rental business into

a singleoperationoff-sitewhen the futuremidfield terminal is

anticipatedtobecommissionedin2022.Aspartofthisplanning

processleaseexpirydatesforthegrouparebeingconsolidatedto

terminateinlinewiththelastexpiringdate,whichisMay2015.

The challenge facing the car rental industry is the anticipated

increase in its operating costs. High energy, labour and motor

vehiclecost increaseswilleitherresult in increasedrentalrates

beingabsorbedbyusers,orcarrentaloperatorshavingtolower

theirmarginsandimproveefficiencies.

Car parking

Parkingrevenueincreasedslightlybyfivepercent(2012:fivepercent)

toR456million(2012:R435million)againstanoveralldeclineof

2,8percentindepartingpassengernumbersandastressedglobal

economyoverthereviewperiod.

O.R.TamboInternationalmanagedtoimproveits2013financial

year performance by three percent to R241 million (2012:

R235million)despitethe1,8percentdeclineinpassengers.The

Gautrain has adversely affected the parking revenue by an

estimatedfourpercent,whichhasstabilisedsincetheopeningof

allitsstations.Itstillremainsuncertainwhateffectthetollingof

the access routes to O.R.Tambo International will have, once

implemented. During the year, a partnership with a‘previously

disadvantaged’entitywasdevelopedforacarwashbusiness in

theparkinggarages.

CapeTown International achieved an eight percent growth in

revenuetoR120million(2012:R111million),despiteadecline

indepartingpassengersof1,8percent.Theimprovedrevenueis

attributed to reconfiguredproductofferingsmeetingpassenger

needs and a moderate tariff increase linked to product tariff

restructuring.

KingShakaInternationalpostedasixpercentgrowthinrevenueto

R70millionyear-on-year(2012:R66million),againstadeclinein

departingpassengernumbersof7,4percent.Theintroductionof

reconfiguredproductofferingsandtrafficmanagementcontrols,

whichresultedinadditionalparking,weremainlyresponsiblefor

theimprovedperformance.

Regional airports performed well, with a revenue growth of

14percenttoR24million(2012:R21million),whilstpassenger

numbersdeclinedby4,4percentoverthereviewperiod.Improved

parking management measures and moderate tariff increases

reflectintheresults.

Parking revenue growth has been largely achieved through

very moderate tariff increases, management interventions and

productreconfigurations.

Strategiestoimprovecustomercommunication,thecustomers’

parkingexperiencethroughmoreconvenientpaymentmethods,

focusedcustomerserviceprogrammesandenhancingmanagement

efficiencies will be introduced in the forthcoming year. These

interventionsareanticipatedtoimprovefinancialresults.

advertising

The group advertising portfolio has achieved total annual

revenueofR195million(2012:R187million)intheyearunder

review.This showsayear-on-yeargrowthof sixpercent (2012:

18percentdecline).

Inthecurrentfinancialyear,theportfoliohasshownsatisfactory

recoveryin linewithglobalmediagrowthandwithKingShaka

InternationalAirport showing stronger results.The growth was

spurredbythedivisionfocusingondisplaysandactivationsasa

majorindustrygrowtharea.

advertising Strategy

Theadvertisingstrategyistwo-fold.Firstly,itistoincreaseairport

advertising awareness by the creation of a portal calledACSA

MEDIAwebsite.Throughthiswebsite,airportadvertisingistaken

tothemediabuyers’desktop.Thewebsiteenablestheviewerto

interrogatetheairportandpassengerprofiles,advertisingsiteson

offerandtheconcessionairesthatcanbecontactedtopurchase

spaceontheadvertisingsites.

Thesecondpartofthestrategyistocreatevaluebyconsolidating

manyofthesmalleradvertisingsitesintolarge, impactfulsites,

therebycreatingwell-definedadvertisingzones.

Future growth

Future growth for advertising is anticipated to come from

displays and activations. The brands are seeking channels to

receive feedback in order to respond to market needs.This is

achievedthroughdirectinteractionwiththeconsumerbywayof

activations,samplinganddisplays.



The results have been overwhelming, with this section of the

business growing from a R1 million per annum income into

R4,5millionperannuminthe2013financialyear.

Digitalmigrationremainsahugeareaoffocusfortheadvertising

portfolio.Intheyearunderreview,theportfoliolaunchedAirport

Tv.Thismediumseekstocompeteforthetelevisionadvertising

spend, which constitutes about 46 percent of the total South

African, as well as global, advertising spend. This medium is

leveraging the ‘dwell time’, which is one of the key drivers of

advertising.Themarketuptakewasverypositiveafter thefirst

threemonthsofoperationandtheoutlookisoptimistic.

property

The Group Property income, excluding the straight-lining of

leases of R10 million, (2012: R24 million), remained flat at

R618million(2012:R617million).

Threefactorshavecontributedtothelackofgrowth.Foremost

isthe lossoftherevenue-generatingpropertiesattheprevious

DurbanInternationalAirportsite.Incompliancewiththetermsof

thesaleagreementwithTransnet,allriskandrewardemanating

from these properties passed toTransnet upon transfer, which

occurredon1October2012.Thedisposedpropertiescontributed

R22millioninthecurrentyear(2012:R17million).

Thesecondcontributingfactoristhestagnanteconomyandits

resultant effect on the domestic property market.The current

market favours tenants as landlords scramble to retain quality

tenants or lure new tenants with lucrative enticements to fill

vacancies. Airports Company South Africa has also not been

shieldedfromcompetinglandlordsinthesurroundingcommercial

nodes,andhashadtoadoptalessaggressiveapproachinrental

negotiationswithtenantsinordertowardoffthecompetition.

The third contributing factor may be ascribed to the expiry of

the leaseentered into in2007withDenel.AlthoughDenelhas

beensuccessfullyretained,theyhaveshrunktheiroperationsinto

asmallergrosslettablearea.Theresultantrentalhasaccordingly

diminishedtoR32million(2012:R39million).

Resulting from the new lease with Denel, approximately

40000m²oflettablepremisesandabout100haofdevelopable

land reverted to Airports Company South Africa. During this

financial year the process of enabling this land has progressed

andproclamationofphasesoneandtwoisexpectedbythelast

quarterof2013.Marketdemandhasimprovedinthisareaand

this is substantiated by the strong flow of enquiries that have

been received. This has culminated in the year under review

for the proposed development of a 17-hectare industrial park

withintheprecinct.Thisshouldprovetobecatalyticforfurther

developmentopportunitiesmaterialising.

It is testimony toa conscientious approach innegotiatingand

crafting new leases for existing space, as well as successfully

retaining preferred tenants, that vacancies in the terminal

buildingsapproximate toabout sixpercent, and in comparison

this is less than the market average of ten percent. A major

contributor to vacancies is existing space adversely affected

followingthedevelopmentofthenewterminals.Ingeneralthe

newterminalshavehadapositiveimpactonrentalrevenue,but

in their wake they have diminished the locations (previously

regardedasprime)ofsomeolder,previouslyoccupiedspace.

Industrial vacancies comprising hangars, workshops and

warehouses have experienced vacancies of about six percent.

Thesevacanciesarebeingmarketedbytheairportviaitsbroker

networkandAirportsCompanySouthAfrica’swebsite.

Reviewingthecommentarybyvariousauthoritiesandinstitutions,

itisapparentthattheinternationalanddomesticeconomiesare

unlikelytoimproveinthenearfuture.Consequently,itisessential

to value the existing tenant base by offering competitive

tenant retention strategieswith respect to tenant installations,

improvingthequalityofexistingstockandimprovingourcustomer

relationships. In this respect a major refurbishment of the East

andWestWing offices atO.R.Tambo InternationalAirport has

beenapprovedandwillcommenceinthenewfinancialyear.

TheInterContinentalHotel,atO.R.TamboInternationalAirport,

grew revenue to R99 million, a 13 percent increase over the

previousfinancialyear(2012:R88m).Thehotelisstillrankedthe

best (number one) InterContinentalGroup Hotel inAfrica and

numberthreefor‘BestinClass’fortheentireAfrica,MiddleEast

andAsian regionand is ranked23outof170 InterContinental

Hotelsworldwide.

Theprocess tounbundleAirportsCompanySouthAfrica’snon-

aviationpropertyassetsintoanewsubsidiary,‘PropCo’,beganin

theyearunderreview.Itisanticipatedthatitwillbeoperational

bythebeginningofthe2014/15financialyear.

CommercialpropertyentitiessuchasPropCohavealreadybeen

establishedtooptimiseairportlandassetsatleadinginternational

airportslikeSchiphol(Amsterdam),CharlesdeGaulle(Paris)and

Incheon in South Korea. Such subsidiary entities have proven

tobeveryprofitable; theyhelpgeneratecommercial landuses

that complement aeronautical functions and mitigate against

negativegrowthinpassengerandcargotraffic.

In addition to having a solid financial and governance model,

PropCo, by aligning itself to the ‘aerotropolis’ and ‘aerocity’

national imperatives, can bring broader benefits to Airports

CompanySouthAfricaandtheregionsitsairportsserve.

42

airport management Solutions

During the current financial year, Airports Company South

Africareceivednumerousrequeststoparticipateinpublic/private

partnerships, mainly within the African continent. These were

in the form of airport concessions, management contracts

and technical consultancy services. African countries currently

involvedinairportmodernisationandgreenfieldprojectsinclude

Mozambique, Angola, Zambia, São Tomé en Principe, Kenya,

Ghana, Nigeria, Benin, the Democratic Republic of the Congo

(DRC)andothers.

Giventhesub-optimalnatureofmanyoftheseAfricanairports,

oneofthekeychallengesfacingmostprojectsisfunding.Other

challengesincludetheadoptionofenablinglegalandregulatory

frameworks,especiallyasitrelatestothetariffregime.

In partnership with various development funding institutions,

Airport Management Solutions recently developed a limited

recoursefundingapproachforunlockingtheseprojects.Thiswould

enableAirportsCompanySouthAfricatobeinstrumentalasalead

ormastertechnicalconsultantand,totheextentpossible,asan

airportoperator,albeitforalimitedperiod.Asanairportoperator,

AirportsCompanySouthAfricawouldbeinvolvedinskillstransfer

and the implementation of business processes and supporting

systems aimed at ensuring compliance to ICAO and local

regulations, aswellasexploitingcommercialopportunities for

thebenefitoftheairport.

However, infrastructure or redevelopment capital requirements

wouldbebasedontrafficforecastsasakeyvaluedriver,thereby

eliminating the possibility for over-investment. This approach

wouldseeanumberofairportsonthecontinentbeingupgraded

incompliancewithsafetyandsecuritystandardsorrequirements.

Following from this would be the improvement of service

standardsandultimatelythatofthepassengertravelexperience,

aswellasimprovedconnectivitywithintheAfricancontinent.

Inlinewiththisapproach,thecompanyiscurrentlyinvolvedina

greenfieldairportprojectinBenin,wherethegovernmentwishes

to build a new airport in its capital city, Cotonou, earmarked

tobecomeahubinWestAfrica.Asaleadtechnicalconsultant,

AirportsCompanySouthAfricaiscurrentlyinvolvedintechnical

reviewstudiesthatwillinformthesizeandcostoftheproject.

IntermsofthePublicFinanceManagementActandtheAirports

Company Act, Airports Company South Africa is required to

pursue airport opportunities outside South Africa through a

separate special purpose vehicle in order to minimise financial

risktoitslocalbalancesheet.

Thecommercialrationaleforpursuingtheinternationalstrategy

ispromotedbyforecastgrowthrateswithinthecompany’sSouth

Africanairportsexpectedtobe low,whilstthoseoutsideSouth

Africaarebuoyantand,insomeinstances,doubledigit.Airports

Company SouthAfrica possesses the expertise and experience

tounlock theseprojects,whichwouldprovideexcellentequity

returnson investments.Todate,thestrategyforsettingupthe

stand-aloneentityhasbeenapproved,whilstsupportingbusiness

plansaredueforapprovalearlyinthenewfinancialyear.

The new entity will develop an investment framework and

mandate,andanindependentboardofdirectorsthatwillprovide

guidanceintermsofairportinvestmentopportunities.

guarulhos International airport, São paulo, Brazil

The twenty-year concession for the expansion, maintenance

and operation ofGuarulhos InternationalAirport, concluded in

the previous financial year, is divided into two phases. Phase

one activities will be undertaken until 2016 and have to date

includedtheapprovaloftheOperationalTransition/TransferPlan

byANAC, theBrazilianAirportsAuthority, inAugust2012.This

wasfollowedbyanobservationperiod,whilethepreviousairport

operator,Infraero,continuedtooperatetheairport.

Activities associated with airport certification included the

updatingoftheAerodromeManualofOperationsandtheAirport

Security Plan. In addition, the Fire and Rescue services were

evaluatedandsecuredfromthepreviousserviceprovider.

A wide-ranging series of projects to effect minor and visual

improvements in infrastructure has been implemented and

coversareassuchasinformationtechnologyimprovements,the

provisionofadditionalparkingbays,improvedway-finding,new

securityscreeningequipmentandotherupgrades.

The construction of a new, 180 000m2 passenger terminal

building is in progress, with the foundations completed ahead

of schedule. The commissioning and integration of processes,

people, infrastructure and systems is scheduled to take place

from january 2014 as part of the Operational Readiness and

AirportTransitionProgramme.

Aplanforre-markingtheapronsandlayoutchangestosomeof

theapronserviceroadstoincreasethestagingandparkingareas

forbaggagedolliesbyapproximately2500m2hasbeenstarted.

AllbaysareplannedtoberemarkedinlinewiththeACIstandard

andisscheduledforcompletionbytheendofjune2013.

TheoperationofGuarulhosInternationalAirportwastransferred

totheconcessionaire,ofwhichAirportsCompanySouthAfricais

apart,on15February2013.



Financial Contributions

Todate,AirportsCompanySouthAfricahasinvestedR77million,

withR244milliontobeinvestedinthe2013/14financialyearand

afurtherR140millionbetween2014and2017.Intotal,equity

investment by Airports Company South Africa, approximating

BrazilianRealsR$105million(equivalenttoaboutR461million),

isexpectedtoberealisedoverthenextfivetosixyears.

A performance bond of R$884,8 million, of which Airports

CompanySouthAfrica’sexposureistenpercent,willbeduefor

furtherrenewalon6April2014.

Chhatrapati Shivaji International airport, mumbai, India

During the year ended 31 March 2013, air traffic movements

decreasedsevenpercentto244499,passengersdecreasedfrom

30,7 million to 30,2 million and cargo handled directly by the

company decreased from 349 363 tons to 342 626 tons.The

mainreasonsforthesedeclinesweretheshutdownofKingfisher

AirlinesandlowgrowthinIndianGDP.

Profitaftertaxfortheoperatingcompany,MumbaiInternational

AirportLimited,decreasedby14percenttoIndianRupeeRs1,54

billion(approximatelyR240million).Increasedexpensesincluded

payingagriculturaltaxesbackdatedto2006,baddebtprovisions

andincreasedpowerandmaintenancecosts.

The new integrated terminal is progressing satisfactorily, with

theinternationalsectiontobecommissionedinthelastquarter

of2013andthedomesticterminalcompletionoccurringinthe

lastquarter2014.Withtheairportcurrentlytradingwellabove

capacitythiscommissioningwillbewellreceivedbypassengers

and airlines. Other development is progressing satisfactorily,

including themultilevel car park, the elevatedaccess roadand

thecompletionoftheairtrafficcontroltower.

TheIndianRegulatorannouncedatariffincreaseof164percent,

effectivefromFebruary2013,andgrantedtheairportaseparate

developmentlevyofIndianRupeesRs34billion,collectableover

aperiodoftimeasaseparatepassengercharge.Thesechargesare

thefirstregulatedincreasessincecommencementofoperations

in2006.

Major objectives for the forthcoming financial year are the

increase in hourly runway capacity from 40 to 42 air traffic

movements,thecommissioningofthenewinternationalterminal

andachievingprofitabilityofrealestatedevelopment.

mthatha

Inaddition,AirportManagementSolutionsprovidedconsultancy

to the Department ofTransport.This included a guidance and

oversightrolefortheconstructionofanewrunwayandassociated

taxiwaysatMthathaAirport,aswellasthedevelopmentofanew

terminalbuilding.Thisconsultancyisongoing.

OpERatIng ExpEnSES

TotaloperatingexpensesincreasedbyfivepercenttoR2,435billion

(2012:R2,324billion),inlinewithinflation.TheGroupcontinues

to focus on managing discretionary expenses and processes

areconstantly reviewedto reducecostandenhanceefficiency.

The company realised some savings in operational costs due

totheseinitiatives.However,thepositivegainswereerodedby

the unusually large impairment expense pertaining to one of

the company’s major customers, 1timeAirline, which filed for

liquidationduringthe2013financialyear.Themajorcategories

ofcostsarereflectedinthefigurebelow.

Operating expenditure (R’million)

Other

Baddebt

Cleaning

Informationsystemsexpense

Administration

Security

Professionals

Ratesandtaxes

Electricityandwater

Repairsandmaintenance

Personnel

0 1000800600400200

2012 2013

111425

7896

8453

10097

1195

137179

14433

155188

217237

226249

817874

44

debt and Financing Costs

Total interest-bearing borrowing debt for the Group at the

endof thefinancialyearwasR14,8billion (2012:16,7billion).

The decrease in interest-bearing borrowings is mainly due

to the repayment of R606 million of the FirstRand loan,

which matured in September 2012. In addition, due to its

favourable cash position, the company negotiated an early

settlementoftheDBSALoanofR1,3billion.Theloanwassettled

on28March2013,whichisnineyearsearlierthanthematurity

date of 1 March 2024.At least 61 percent of the outstanding

interest-bearingborrowingshavefixedinterestrates(aftertaking

interest-rateswapsintoaccount);whilst19percentis linkedto

inflationandtheremaining20percentislinkedtojIBAR.

The significantprofits in the2013financial year improved the

Group’s credit metrics with net debt to EBITDA improving to

2,74x (2012: 4,1x) and EBITDA interest coverage increasing to

2,8x(2012:1,8x).

Thenetfinancingcostassociatedwith theborrowings to fund

the capital expenditure programme continues to have a major

impactonearningsbeforetax.Thenetfinancingcostfortheyear

ended31March2013wasR1,462billion,whichisadecreaseof

28percentcomparedtothatoftheprioryear.Thedecreaseisdriven

largelybythequarterlycapitalrepaymentoftheloansthatare

amortising,aswellassettlementoftheloansthathavereached

maturity.Inaddition,thecompanywasabletoinvestthesurplus

cashbalanceincall,termdepositsandmoney-marketfundsto

earnahealthyinterestincomeofR125million(2013:47million).

ThecurrentoutstandingdebtoftheGroupismainly longterm

and in line with the maturity profile of the assets that were

constructed during the period from 2006 to 2010. More than

55 percent of the debt has maturity periods greater than five

yearsandtotaldebtredemptionislessthanR2billionperannum

in any given year.While theGroup has a fairly stable balance

sheetandverystrong liquidity,at leastR4,5billionofthedebt

outstanding isduewithin thenext threefinancialyears. In the

short term,noadditional funding is requiredbytheGroupand

thefocuswillbeonimplementingthedebtredemptionplanto

dealwiththematuringobligations.

Capital Expenditure

Following the completion of the major capital investment

programmeinthe2011financialyear,thecapitalexpenditurefor

the2013financialyearcontinuedtobelimitedtorefurbishment

and replacement projects, with no true new capacity projects.

This limitation was also cognisant of the uncertainties with

respect to the economic regulatory framework. However, the

increaseincapitalexpendituretoR996million(2012:431million)

ismainlyduetothecompany’sproportionateshareofthecapital

expenditureincurredontheBrazilconcessionarrangement.

Financial position

non-current assets

TheGroup’snon-currentassetsincreasedbylessthanonepercent

toR24,8billion(2012:R24,6billion).Thisisduetoanincreasein

theinvestmentproperty,aswellasinvestmentsinassociates.

Current assets

The Group’s current assets decreased from R3,622 billion to

R3,409billion.ThedecreaseofR213millionismainlyduetoan

decreaseintradeandotherreceivablesofR110million,aswell

as an increase in short-term investment of R605 million.The

increase in short-term investments resulted in a corresponding

decreaseincashandcashequivalentsofR719million.


Net debt to EbITDa

10.0

8.0

6.0

4.0

2.0

0.0

8,1

6,1

2,74

6,0

4,1

20132010 20112009 2012

EbITDa interest coverage

3.0

2.5

2.0

1.5

1.0

0.5

0.02009

2,0

2010

1,4

2011

1,7

2013

2,8

2012

1,8


Current liabilities

The Group’s current liabilities increased by 15 percent to

R3,885billion(2012:R3,383billion).Theincreaseismainlydue

toincreasedcurrentinterest-bearingborrowings.

Cash position

AirportsCompanySouthAfricaretainsastrongcashposition,well

abovetheminimumrequiredlevelfordebtservicecoverratios,

asdefined in the loanagreements, especiallywhen taking into

account the short-term investments,whichare inhighly liquid

instruments.

The Group generated cash from operations of R4,221 billion

(2012: R2,955 billion), mainly as a result of the increased

revenue.Thecashgeneratedwasmainlyusedtopayinterestof

R1,548billionagainstadditionstoproperty,plantandequipment

ofR990million,aswellastorepaymaturingdebtobligationsof

R2,095 billion.The balance, which represents surplus cash, was

invested in call, term deposits, unit trusts and money market

fundsforatotalamountofR2,466million.

RatIngS

TheFitchRatingAgencyaffirmedAirportsCompanySouthAfrica’s

long-term local currency ratingat‘BBB’,with a stableoutlook.

Fitch also affirmed the Group’s national long-term rating and

theR30billiondomesticmedium-termnoteprogrammerating

at‘AA-(zaf)’,andrevisedtheoutlookfrom‘positive’to‘stable’.

ECOnOmIC REgulatIOn

In the 2013 financial year, the company has put its efforts

intoassisting theDepartmentofTransport todevelopa funding

model that will ensure predictability and transparency of the

economicregulatoryframework.Theseeffortsareslowlybeginning

tobearfruit.

Cash position development (R million)

5000

4000

3000

2000

1000

0

-1000

-2000

-3000

Openingcash Cashgenerated

Incometaxpaid

Interestreceived

Investingactivities

Debtrepaid Interestandotherfinancecostspaid

Endingcash

1980

4221

(2095)

(1547)

1261

(404)

125

(1019)

non-current liabilities

TheGroup’s non-current liabilities decreased by 22 percent to

R13,3billion(2012:R16,9billion).Thisismainlyattributabletoa

decreaseofR3,727billionininterest-bearingborrowingsdueto

maturingloansanddebtinstruments.

Capital expenditure

7000

6000

5000

4000

3000

2000

1000

02010

5241

2011

505

2013

996

2009

5997

2012

417

Total assets (R million)

35000

30000

25000

20000

15000

10000

5000

02010

27891

2011

29157

2013

28188

2009

23598

2012

30067

46

The company firmly believes that regulatory decision making is

one of the key uncertainties that need to be addressed before

the next permission cycle commences. The discretion that the

Regulating Committee had assigned itself over the years has

led to an unexpected outcome from tariff applications. These

unexpected outcomes impacted on Airports Company South

Africa’s ability to plan for capital projects with an acceptable

degree of certainty. The company’s economic regulatory strategy

therefore set as objectives the improvement of predictability,

transparency and a balance of risk and reward within the

economic regulatory framework.

The Department of Transport and the industry have united to

resolve the issues of economic regulation, as it ultimately has

a negative impact, particularly on airlines and passengers. The

company welcomes and commends the Department of Transport

for establishing a process of robust review of the economic

regulatory framework. With this process, it is envisaged that the

primary legislation will be amended in time for the next tariff

application, due in March 2014.

The company recognises that the quality of our constructive

engagements with the industry forms a solid foundation for

the economic regulatory strategy, and that this will receive the

necessary focus in the 2014 financial year.

DIVIDEND

The Board proposed an ordinary dividend of R99,1 million, based

on the Group’s dividend policy, taking into consideration the

Group’s financial position at 31 March 2013, future requirements

and the need to maintain an optimal capital structure.

Supply ChaIN MaNagEMENt

Airports Company South Africa will see a complete transformation

of its business, from its people to its business partners, over the

next few years. The Supply Chain Management department is

going through major restructuring in order to be well positioned

to effectively and efficiently deliver on the Group’s Supply

Chain Management requirements. The restructuring is aimed at

transforming the department from being mostly service delivery

and business support focused to one that is value adding and a

strategic partner to the business.

Supply Chain Management has embarked on robust transformation

imperatives, which include employment equity, preferential

procurement, enterprise development and corporate social

investment initiatives. These transformation initiatives will not be

done in isolation but will be aligned with national procurement

legislation and the National Development Plan. A formal

transformation strategy has been adopted and will govern these

initiatives within the company on an ongoing basis.

In the financial year under review, Airports Company South Africa

made a concerted effort and channelled approximately R2 billion

of its controllable spend to support transformation. Current

policies, procedures and the overall Supply Chain Management

strategy are being reviewed with the objective of increasing

this figure.

Initiatives to improve data purification, category management

and supplier management are also under way. Implementation of

these initiatives has begun and will continue in the forthcoming

financial year to ensure clear identification and categorisation

of the company’s procurement spend, thereby crystallising the

focus areas, especially with regard to transformation.

To ensure improved efficiencies within the procurement value

chain, local tender committees will be introduced in the latter

part of 2013. Members of these committees will undergo rigorous

training, including governance and ethics. Efficiencies will include

improved turnaround times in tender approvals, increased speed

in tender executions, improved supplier payment cycles, and

management of localisation and transformation.

Training and development of Exempt Micro Enterprises (EMEs)

and Qualifying Small Enterprises (QSEs) has begun and will be

continued as an ongoing undertaking to equip suppliers with the

necessary skills to effectively manage the ramifications of doing

business with a large organisation.

The Supply Chain Management department will begin developing

a new reporting tool in the forthcoming financial year. This

will provide holistic reporting of procurement activities within

the business and provide full visibility, for management and

governance purposes, up to Board level. This reporting will also

enable consistent monitoring and measurement of efficiencies

within the department.

Financial Review (continued)

Airports CompAny south AfriCA Integrated report 2013 4747AIRPORTSCOMPANYSOUTHAFRICA IntEgRatEd REpORt 2013

48

airport operations

aIRpORt plannIng

Due to low traffic growth during the financial year, Airport

Planning, in line with Group strategy, continued its efforts to

ensure that utilisation of assets is optimised before significant

investmentcanbemadeinnewinfrastructure.

To this end, Airport Planning established several internal and

externalinteractionsandforumswithbusinessunitsandexternal

stakeholders,which includedairlineassociations.Theseresulted

in the exchange of operational information, survey work and

the standardisation of modelling efforts to obtain a better

understandingofthecapacityandthroughputofairportsystems

andfacilities.AirportPlanningalsospearheadedajointstudywith

AirTrafficandNavigationSystems(ATNS),fundedbytheUnited

StatesTradeandDevelopmentAgency(USTDA),tocraftajoint

roadmapbetweenthetwoorganisationsfortheenhancementof

airsideandairspacecapacity.

Inaddition,anumberofstudieswerecompletedatO.R.Tambo,

CapeTownandKingShaka InternationalAirports that included

landside, terminal and airside traffic surveys. These indicated

that some operational and infrastructural initiatives could be

implementedtoachieveincreasedthroughputs.Theseinformed

capacity and demand models, resulting in the update of the

capacityoutlookforthebusiness.

The environmental impact analysis (EIA) process for the

realignmentoftherunwayatCapeTownInternationalAirporthas

commencedanddetailedstudiesare inprogressaspartof the

extensiveapprovalprocess.Itisestimatedthatthisprocesswill

beconcludedwithin24months ifnosignificant issuesdevelop

duringtheprocess.

Atastrategicplanninglevel,theunitwasinvolvedwithanumber

of initiatives over all spheres of government to ensure that

planning efforts are co-ordinated and integrated to ensure the

sustainabledevelopmentoftheGroup’sairports.

Atanational level, theAirportPlanningdepartment isproviding

inputintoanumberofaviationandtransportpoliciesandprojects,

such as Strategic Integrated Projects that are currently being

developed.Ataprovincial level, thedepartment is involvedwith

Gauteng’s25-yearIntegratedTransportMasterPlan.Morelocally,

Airports Company South Africa is intensively involved with the

EkurhuleniMetropolitanMunicipality’s‘aerotropolis’initiative.

In the next financial year, in conjunction with users, Airport

Planning will focus on the assembly of a revised optimum

development programme for the Group’s airports.This is as a

direct resultof significantenhancementsbeingexpected tobe

broughtintooperationonlyinthelastquarterofthedecade.


pROJECtS

During the reporting period, Airports Company South Africa

expendedR990milliononcapitalprojects.Thefocuswasmainly

onrefurbishmentandmaintenanceofinfrastructuretomaintain

ahighqualitystandardofinfrastructureandtoextendtheuseful

lifespan to enable on-going, safe, operating conditions for all

stakeholders.

O.R. Tambo International Airport saw the completion of re-

furbishmentworktoaircraftstandsonthemainaproninfrontof

theterminalbuildingsattheendof2012,atacostofR76million,

workthatcommencedinthepreviousreportingperiod.

Furtherrefurbishmentworktovarioustaxiwaysandairsideroads

atO.R.TamboInternationalAirport,tothevalueR50million,was

completed, whilst refurbishment work on the landside ingress/

egressroadsystemcommencedandison-going.

Designplanning commenced for the refurbishmentof the Fuel

StorageDepotatO.R.TamboInternationalAirportandthiswill

beimplemented,inaphasedmanner,overthenextthreeyears.

TheEnvironmental ImpactAssessment(EIA)processassociated

withthedevelopmentofanew,realignedrunwayatCapeTown

InternationalAirporthascommenced.

Substantial refurbishment work to the runways at CapeTown

International and East London Airport continued through the

review period at a combined capital expenditure during the

reviewperiodofR204million.Thedesignfortherehabilitationof

therunwayatGeorgeAirportwascompleted.

KimberleyAirportsawrunwayandtaxiwayrefurbishmentworks

commenced, with the bulk of the work completed during the

reporting period, whilst at Bram Fischer International Airport,

rehabilitationoftaxiwayswascompleted.

At Port Elizabeth International Airport, the design phase was

concluded and the procurement has commenced for the

rehabilitationofthesecondaryrunway,aswellasfortheupgrade

ofthemainstormwatersystem.

airport Financial year

Total air traffic

movementsTotal

passengersOn-time

targetOn-time

performanceTotal

load factor

O.R.TamboInternational 2009/10 178388 17501932 80% 83,03% 69%




CapeTownInternational 2009/10 73200 7799252 85% 86,08% 75%




DurbanInternational 2009/10 48291 4396411 89% 90,29% 74%

KingShakaInternational 2010/11 49725 4886552 89% 84,21% 75%

KingShakaInternational 2011/12 55194 5040094 89% 87,74% 78%

KingShakaInternational 2012/13 49673 4668467 89,62% 89,22% 74%

OpERatIOnal StatIStICS

50

O.R. tambo International airport

TheairportremainsthebusiestinAfrica,handlingover18,6million

passengersandalmost200000aircraftmovementsinthepast

financial year. Both these statistics have decreased in the past

yearasaresultofairlinesexperiencingfinancialdifficultieswith

highfuelcostsandtheglobaleconomicsituation.

Airporton-timedepartureperformanceimprovedfrom83,79percent

to 85,9 percent, mainly through effective collaboration with

stakeholdersandprocess improvements in theareasofpassenger

facilitation,baggagehandlingandaircraftmanagement.

Asixteen-monthprojecttopartiallyreconstructandrehabilitate

Alpha and Bravo aprons, together with their related taxi lanes,

was completed during the year. While taking into account

operationalconstraintsintermsofaircraftparkingcapacityand

safety requirements in a live airport environment, this project

wascompletedontimeandwithinbudget.Theconcretedebris

from the site was recycled and used during the construction

process,resultinginasignificantcostsavingandareductionin

theenvironmentalimpactoftheproject.

In what was described as a ground breaking partnership, O.R.

TamboInternationalAirportofficiallyaffirmeditssupportforthe

aerotropolis concept.Gauteng Province, theCity of Ekurhuleni

and O.R.Tambo International (on behalf of Airports Company

South Africa) have all pledged their support to transform

Ekurhuleniintoanaerotropolis.

O.R.Tambo InternationalAirport participated in theAir Cargo

Africa 2013 exhibition and conference in February 2013.This

annualeventattractsmorethan600executivesfromtheworld’s

aviationsector.Thehighlightoftheeventwastheairportbeing

awardedtheprestigious2013AfricanAirportoftheYearawardfor

AirportCargoExcellence.

Over recent years, O.R. Tambo International Airport has

successfullyproveditselfasamajorroleplayerinthefacilitation

of large-scale event processing. During the 2012/13 financial

year, the airport played a significant role in the processing of

hundreds of sporting greats and thousands of fans during the

2012OlympicandParalympicsGames,aswellastheAfricanCup

ofNations(AFCON)soccertournament.

In a historic milestone, O.R. Tambo International welcomed

thefirsteverBoeing787DreamlinertolandinAfrica,flownby

EthiopianAirlines.Thefirstmid-sizedairplanecapableofflying

long-range routes, the 787 Dreamliner seats between 210 and

290 passengers, depending on configuration. For the third

consecutiveyear,O.R.Tambo Internationalcontinues tobe the

only airport inAfrica to facilitatedaily, scheduledA380flights.

Furthermore, twoBoeing747-800cargo freighters (the second

largestfreighters)arefacilitatedtwiceaweek,demonstratingthe

airport’sabilitytohandlelargeamountsofcargoatanyonetime.

Cape town International airport

Onceagain,CapeTownInternationalAirporthasbeenacclaimed

bybothAirportsCouncilInternational(ACI)andSKYTRAXasthe

‘BestAirport inAfrica’, this time for the thirdconsecutiveyear.

While this is a laudable achievement, the team is not resting

on its laurels, recognising that this has created an appropriate

platformtolaunchtheairporttothenextlevel.

CapeTownInternational isanairport largelyservedbyasingle

runway,whichpreviouslyunderwentanextensiverefurbishment

in 2007. Within the context of the decision to delay the

realignmentoftherunwayitbecamenecessarytoagaindoafull

refurbishmentofthecurrentrunway.Thiswillensurethatthere

will beno structural defects that coulddisruptor compromise

continuedoperationsandsafetyforthenextfivetosevenyears.

The refurbishment of the current runway was commenced in

August2012andisdueforcompletioninmid-2013.

Lookingforwardtofutureexpansionrequirements,itisinevitable

that the existing runway will have to be realigned. Rapid-exit

taxiways and other associated improvements on the realigned

runway will increase the hourly flight capacity by as much as

45percent.This isan important improvementconsidering that

the current airport is already running at maximum capacity

duringcertainpeakperiods.Inadditiontothat,therealignment

of the runway is also informed by the need for expansion of

key infrastructure capacity such as aircraft parking bays and

manoeuvringtaxilanes.

Thecurrentrunwayposition,relevanttotheterminalbuildings,

doesnotallowanyefficientexpansionoftheterminaltowards

therunway. Inthecurrentconfiguration,expansionwouldhave

tobeparalleltotherunway,resultinginanextremelyinefficient,

elongated terminal. A realigned runway will permit better

utilisationoftheairportfootprintandmoreefficientexpansion

oftheterminal.

TheEnvironmentalImpactAssessment(EIA)fortherealignment

was initiated during the period under review. Due to the

complexity of the process, it is not expected to be completed

beforetheendof2014.AsuccessfulRecordofDecision(ROD)

wouldnotmeanthattheprojectwouldautomaticallyproceed;

thiswillonlyhappenatsuchtimethatAirportsCompanySouth

Africaandtheaviationindustry,bywayoftheairlineassociations,

haveagreedonthefundingmodelfortherealignedrunway.

airport operations (Continued)


During2012,theCityofCapeTownexperiencedalargenumber

of,attimes,violentservicedeliveryprotests,whichhadadirect

impactontheairport.Therewereoccasionswhenfreeandsafe

access to the airport was compromised. In response to these

risks,and incollaborationwithallsecurityagenciesandairport

stakeholders,theairporthasdevelopedrobustcontingencyplans

forsucheventualities,includingalternativeroutinginandoutof

theairport.

In2009ajointprocesswasembarkeduponwiththeCityofCape

Towntoprioritiseandrelocateinformalsettlementsonandaround

theairportprecinct.During2012,thefirstinformalsettlerswere

successfullyrelocatedintolong-termpermanenthousing:some

350familieswererelocated.Tocontinuetherelocationprocess,

aMoUwassuccessfullyconcluded inDecember2012between

the City of Cape Town and Airports Company South Africa.

This details the key principles agreed between the two parties

onthesolutionforpermanenthousingfortheremainderofthe

informalsettlers:some2200households.

Continuedemphasisisplacedonthemanagementoftheairport’s

relationship with the surrounding communities, and generally

healthyandcordialrelationshipsexist.However,theproximityof

theinformalsettlementsdoesposeaseriousriskandduringthe

periodunderreviewtheairporthadonemajorsecurityincident

resulting in a stowaway.The airport responded to the incident

withtheutmostseriousnessandahostofmitigationmeasures

was put in place. Nevertheless, the relocation of the informal

settlementsisakeypriority.

An acquisition plan for the land required to provide for the

ultimate development of CapeTown International, as per the

AirportMasterPlan,hasbeencommenced. Initialengagements

withtherespectivelandownershavetakenplace.

King Shaka International airport

Opened on 1 May 2010, King Shaka InternationalAirport has

now been operating for three years and is encouraging more

internationalflightsforDurban,supportingtourismgrowthand

givingKwaZulu-Nataldirectaccesstotheworld.Thisworld-class

facilityisamajoreconomiccatalystintheregionandhasbeen

recognisedthroughitswinningofawards.In2012,theairportwas

votedtopintheRegionalAirportcategoryforAfricaintheSkytrax

WorldAirportAwardsfor2012andSecondBestAirportinAfrica

byAirportsCouncilInternational.

Durban is renownedasaneventscityand theairportplaysan

important facilitationrole inensuringtheirsuccess.KingShaka

InternationalAirport has made significant progress in terms of

stakeholder collaboration with its local, provincial and tourism

partners,andwaspartoftheteamthatwonthebidtohostthe

WorldRoutesConferencein2015.

The BRICS Summit, held in Durban in March 2013, resulted

in some impressive statistics for the airport. During the ten-

day period, the airport facilitated 149 aircraft arrivals and

149 departures, all five BRICS heads of state and 26 heads of

statefromothercountries.Inaddition,180governmentministers,

2500 foreigndelegatesand400membersof the international

mediapassedthroughKingShakaInternational.

During the year under review, the airport’s international air

traffic and passengers reflected a growth of 24 percent and

14percentrespectively.ThiswasasaresultofEmirateschanging

their aircraft to anAirbus 777-300 with additional capacity of

150passengersperflight,witheffectfromjune2012.

SA Express introduced two new routes in the financial year:

Lusakainjune2012andHarareinNovember2012.Fourflightsa

weekareoperatedandloadfactorshavebeenincreasingsteadily.

Duetorationalisation,AirMauritiuswithdrewallflightsthrough

KingShaka International inOctober2012.However, theairline

hasindicatedthatitwillresumeitstwoflightsperweekthrough

theairportinjuly2013.

REgIOnal aIRpORtS

new Business unit

Durban International Airport provided support for the six

‘domesticairports’from2004.However,overtheensuingyears,

major changes required that this situation be revisited. Of

greatest significance was that King Shaka InternationalAirport

wasbuiltandbroughtintooperation,requiringdedicatedairport

management focus on this major undertaking.This made the

provisionofsupportforthedomesticairportsfarmorechallenging

andmadeareviewofthestructureanecessity.

EarlyintheyearunderreviewtheExecutiveCommitteeapproved

thecreationofanewbusinessunit,‘RegionalAirports’,together

with its structure and functions. Support functions such as

humanresources,commercialandtechnicalsupportareprovided

centrally, together with consolidation and representation of

regionalairportsatanexecutivelevel.

Establishment of the Regional Airports structure and function

will reach completion by the end of 2013, ensuring that the

regionalairportscanoperateautonomouslyandthateachairport

improvesonprofitability.

A focus area for the RegionalAirports office is the growth of

commercialrevenueattheairports.Propertydevelopmentisan

importantcomponentofthisthrustandtheBoulevardPrecinct

projectatBramFischerInternationalisshowingpositiveprogress

andfurtherinterest.Theenvironmentalimpactassessmentfora

52

fillingstationatGeorgeAirport iscompleteandconstructionis

expectedtostartin2013.

Retail businessat the smaller airports remainsa challengeand

thereisaconcerteddrivetosecuretenantsforvacantspace.It

haslongbeenassumedthateachairportservesapredominance

ofpassengers,beitleisure,generalbusiness,mining,politicalor

thejudiciary.Consequently,asurveyhasbeencommissionedto

gainabetterunderstandingofthepassenger‘mix’ateachairport

andsobeabletodesigntailor-maderetailandfoodandbeverage

offeringstobetteraddresstheindividualmarketateachairport.

Renaming of Bloemfontein International airport

The process to rename Bloemfontein InternationalAirport was

startedinDecember2011,withpublichearingsandconsultations

at which the new name ‘Bram Fischer’ was endorsed. Abram

LouisFischer,‘Bram’ashewascommonlyknown,camefroma

prominentAfrikaner familyandwasan importantfigure in the

apartheidstruggle.Asalawyer,heservedaslegaldefencefora

numberofstruggleheroes,includingNelsonMandela.

At a function on 13 December 2012, President jacob Zuma

officially renamed Bloemfontein International Airport as Bram

FischerInternationalAirport.

upington International airport

Solar farm

Theundoubtedbenefitsof independentpowerproducers(IPPs)

generating electricity and‘selling’ any excess requirement into

the Eskom national grid prompted an investigation into the

opportunitiesofsuchaprojectintheNorthernCape.

TheprecinctatUpingtonInternationalAirportpresentsanideal

combinationofthealmostidealsolarconditionsoftheNorthern

Capeandasecurelocationforthelow-profilephotovoltaiccell

arraysadjacenttotherunwayinareaspreviouslyconsideredto

beunusable.

Theprojecthasbeenapprovedandasuccessfulbidderselected

through a tender process. It is expected that construction will

start injune2013andtakeabouttwelvemonthstocomplete.

Therewillbetwosites,onegeneratingabout2MWandtheother

about10MW.

Square Kilometre array (SKa)

The location of this globally important radio telescope in the

Northern Cape positions Upington International as its nearest

airport.Thismassiveprojectwillhaveadirecteffectonthetown

andtheairport.

Storage, maintenance, repair and overhaul (mRO) facility

Upington International isan ideal location foraprojectof this

naturebecauseof itsaridclimate,abundantavailabilityof land

andlongrunway.Thereisproveninternationaldemandforsucha

facility,bothfromEuropeandthroughoutAfrica,withanumber

ofaircraftoperatorsalreadyhavingexpressedinterest.

Abusinessplanhasbeenconcludedandaprocurementprocess

willbepursuedtowardstheendof2013.Thecurrentestimation

isthattheprojectwillcreate180permanentjobs.

avIatIOn SaFEty

The founding principles of the International Civil Aviation

Organisation (ICAO), contained in the Chicago Convention of

1945, require states to ensure the safe and orderly growth of

internationalcivilaviation.Thisisachievedbymeansofstandards

andrecommendedpracticesprescribedbyICAOtoensurethat

all aerodromes have compliant runways, taxiways, navigational

aids,lighting,civilinfrastructureandprocedurestoensuresafety.

InadditiontotheSouthAfricanCivilAviationAuthorityoversight

role,AirportsCompanySouthAfricaensuressafetythroughthe

followingmodel:

Themanagementof safety includesa combinationof reactive,

proactiveandpredictivemethodologies,whichareallembedded

inaSafetyManagementSystem(SMS)prescribedbyICAO.This

approach includes safety performance and measuring targets

over and above regulatory compliance.The SMS is comprised

of four core pillars, namely: safety policy, data collection and

analysis,safetyriskassessmentandsafetypromotion.

Airports Company South Africa’s Safety Management System

requires a continuous process of hazard identification and risk

assessment,whichisembeddedasaregularactivity.Hazardsare

regularlyidentified,analysed,consequencesassessedintermsof

severity and probability, and mitigation measures and controls

areputinplace.

Safety Campaigns

Overandabovelocalsafetycampaignsintheyearunderreview,

a national campaign involving approximately 3 000 staff and

stakeholderswasheldatournineairportsundertheinnovative

theme‘SnakesforSafety’.

The snake metaphor was used to describe various hazards in

theworkplace.Forinstance,ahazardthatgivesclear,advanced

warning by visual or audible warning is compared to a cobra.

Airside examples are clear signage, warning lighting, reversing



alarms and traffic cones. Each example was reinforced with a

demonstrationofalivesnake.

local Runway Safety teams

SouthAfrica was the first sub-Saharan state to establish Local

Runway SafetyTeams (LRST), as recommended by ICAO.The

primarypurposeofanLRST ispreventionofrunway incursions.

However, a secondary purpose is to advise on potential issues

andtorecommendmitigationstrategiesthattakeintoaccount

mattersthatinvolverunwayortaxiwaysafety.

FunctionalLRSTsareestablishedatO.R.Tambo,CapeTown,King

Shaka, Bram Fischer and Port Elizabeth International Airports.

Teammeetingsareattendedbyairlinepilots,airtrafficcontrol,

ground handlers, fire and rescue services, maintenance service

providers,airlinesandairportdepartmentalrepresentatives.

Birds and wildlife

Bird and wildlife are managed in a manner that goes beyond

ICAO recommendations. Airports Company South Africa has

successfullyadoptedascientificallybasedapproachinpartnership

with wildlife non-governmental organisations. In doing so, bird

and wildlife management is conducted in an environmentally

sensitiveandsustainablemanner,reducingtheneedforelimination

tactics.

Aninnovativewildlifemanagementprogramme,whichhasbeen

in place for ten years, involves the use of dogs to chase birds

awayfromrunways.Ahighlightoftheyearunderreviewwasthe

introductionofasecondSpringerSpaniel,‘Griffon’,totheteam

atO.R.TamboInternational.

A variety of approaches is adopted, including wildlife habitat

management,grasscutting,othervegetationmanagementand

species behaviour. Each airport has a comprehensive wildlife

managementplan,consistingofeveryaspectoftheaerodrome

relatingtotheriskofbirdandwildlifestrikes,includingdetailed

species lists,behaviourandmitigationstrategies.Anincrease in

thenumberofaircraftstrikesthroughcollisionwithAfricanScrub

Hares and Helmeted Guineafowl resulted in some elimination

exercisesbeingconducted.

The use of night vision camera traps has resulted in the

identification of various nocturnal species.Whenever possible,

thesewerecapturedandreleasedintoacontrolledenvironment

inconjunctionwithlocalconservationorganisations.

Presenceof snakesonairportprecincts isa regularoccurrence,

and safeandeffective capture, followedby release intoanother

acceptableenvironment,isanessentialpartofwildlifemanagement.

InAugust2012, thirteenairside staffmemberswere trained in

theidentification,handling,firstaidandotheraspectsofsnakes.

aerodrome Rescue and Fire Fighting Services

The company’s fire services play a vital role in ensuring that

ouraerodromesarecompliantwith ICAOstandardsandare in

a stateof readiness foranyemergencies.Major refurbishments

commenced at Bram Fischer and Port Elizabeth International

Airportsduringtheyearunderreviewandwillbecompletedin

2013.State-of-the-artemergencycrisis centresare included in

theupgrades.CapeTownandO.R.TamboInternationalAirports

willeachreceivetwooftheverylatest8x8crashtendersduring

thecourseofthe2013.

The Aircraft Training facility at Upington International Airport

was implemented in late2011.During thecourseof2012and

2013, rescue and fire fighting teams from theGroup’s airports

visitedUpingtontopracticeforcibleaircraftentrytraining.This

istheonlyfacilityinAfricathatprovidesthistypeoftrainingon

real aircraft fuselages.One aircraft is kept intact and used for

evacuation training by fire fighters.The fuselage is filled with

harmlesssmokeandbreathingapparatushastobeusedtorescue

life-sizedmanikins.

Future plans for the facility are to continue training Airports

CompanySouthAfricafirefightersandtomarketittoaerodrome

firedepartmentsintherestofSouthAfricaandAfrica.

CuStOmER CaRE

Airports Company South Africa continues to strive to deliver

an efficient and seamless experience.However, it is clear from

surveyedpassengersthatwearestillsomewayofffromachieving

thisgoal.Frustrationstillexistsaroundparking,check-in,security

andbaggage.Mostfrustrationsexperiencedbypassengersstem

fromalackofinformationandpoorcommunicationbetweenthe

airline,theairportandthepassenger.

Thegrowthofpersonalmobiletechnologyisusheringinanewera

ofpassenger-centric servicesatAirportsCompanySouthAfrica.

Customers expect to be constantly informed by connecting to

avarietyofsources,whilemaintainingcontactwiththeirsocial

networks.Tokeeppacewith theexpectationsof thecustomer,

theGroupwillcontinuetotakeadvantageofemergingdevices

and technologies.As personal technology continues to evolve,

AirportsCompany SouthAfrica is keeping pace with customer

expectationsandutilisingnewplatformstoimproveloyaltyand

travelefficiency.

54

Inthelastfinancialyear,13627customerscommunicatedwith

the Customer Care department. Of these, five percent were

compliments,21percentcomplaints,41percentsuggestionsand

33percentwereenquiries.AirportsCompanySouthAfrica’ssocial

mediastrategywaslaunchedinmid-2012andonlineplatforms

havesinceinitiatedconversationwithareachpotentialofmore

than 17 million people. In commercial terms, this would have

beenequivalenttoR3,9millionamonth.Mostcommunication,

onaverage, isneutral,with tenpercentbeingpositiveandtwo

percentnegative.

TheAirportsCompanySouthAfricacustomer-drivenapproachhas

atitscornerstoneafocusonwhatmattersmosttothecustomer,

and this is elaborated on when determining our customer

priorities.OneimportantmarketresearchtoolusedbytheGroup

toidentifycustomerprioritiesisAirportsCouncilInternational’s

(ACI)independentAirportServiceQuality(ASQ)survey.

A progressive and comprehensive customer care approach has

been developed to achieve a distinct and sustainable airport

serviceculturefortheGroup’sairports.Anairport-wideapproach

wastakentoinfluencebehaviourovertheshortterm,withthe

long-termgoal toentrenchapermanentserviceculturewithin

everyemployeepresentatanairport.AirportsCompanySouth

Africaisleadingthechangemanagementprocessof‘Thisisthe

wayweserveourcustomers,everytime,everyday’.Atotalof25

percentoftheairportcommunitywastrainedinthisculturein

thefinancialyearunderreview.

In line with the customer care strategy of providing the right

information,ontherightplatform,attherighttimetoimprove

customer communication, the‘Airport app’ will be launched in

thenextfinancialyeartoensurethatourcustomerswillreceive

informationinrealtime.Theapplicationissoadvancedthatnon-

airportcustomerscanalsouseit.

assisted passenger approach

AirportsCompany SouthAfrica has always been committed to

ensuringthatitsairportscomplywithoperationalrequirements

for assisted passengers. The need for a Group-wide project

addressing the needs of assisted passengers arose from a

fragmentedairportcommunityprovidingavarietyofservicesfor

assistedpassengers.

TheGroup forms only one part of an airport community that

provides facilities and services to passengers with disabilities.

Ourobjective,inconjunctionwithourstakeholders,istoensure

thattheend-to-endexperienceofassistedpassengersisefficient,

effectiveanddignified.Theobjectivesareunderpinnedbythree

pillars that guide us in terms of focus, namely: Operations,

InfrastructureandTraining.

avIatIOn SECuRIty

International aviation Security Conference

AirportsCompanySouthAfricawas represented in ahigh-level

SouthAfricandelegationthatattendedanimportantInternational

CivilAviationOrganisation(ICAO)aviationsecurityconferencein

Canada inSeptember2012.Seniorofficials from135countries

and27internationalorganisationsattendedthethree-dayevent

toseekagreementonanumberofcriticalsecuritypriorities.This

includedtheagreementfortheimplementationofnewaircargo

security measures, developed collaboratively by aviation and

cargosectorexperts.

Theconferencefocuswasonhowtoimplementtightersecurity

measuresonamoresustainable, long-termbasis.Theobjective

wastoagreeonco-ordinated,risk-basedapproaches,whichwill

providesolutionsthatarebothmoreeffectiveandefficient for

airports,airlinesandpassengers.Topicsincluded:

• Sharing of passenger information, in conjunction with

advancedriskanalyses

• Thelatestscreeninginnovations,leadingtowhereaviationcan

beassecureasitistodaybutlessobtrusive

• Thedevelopmentofaglobally-agreed,securitysustainability

standpoint

• Thethreatposedbyinsiders

• WaysofaugmentingassistancetoStatesexperiencingsecurity

deficiencies

• Enhancingthesecurityofpassports.

Baggage pilferage

Inanefforttoreducebaggageirregularitiesandpilferage,Airports

Company SouthAfrica embarked on a system-wide, structured

approach to the situation. In order to successfully execute

baggage protection and pilferage prevention, the Group has

created and manages an Integrated Team Operation Plan. Its

intention is to exceed airlines’ and passengers’ expectations in

termsofefficiencyandeffectiveness.Aspartoftheplan,several

initiativeswerelaunchedtosystematicallyre-engineerthewayin

whichbaggageishandled.Someoftheseare:

• Covertlyandovertlymonitoringtheloadingandunloadingof

baggagetoandfromairlinecarts

• Ensuring that ground handlers and airlines provide sufficient

supervisiontoensurecontinualmonitoringoftransferbaggage

• Respondingtoincidentsofbaggagepilferageandconducting

effectiveinvestigations

• Collaboration with the South African Police Service, airlines

and other stakeholders to implement the integrated team

operationplanacrosstheGroup’snetwork

• Improved selection and recruitment processes for baggage

handlersbygroundhandlingcompanies

• Ongoing vetting of all apron staff and regular, random,

polygraphtesting.



The implementationof theplanhasachievedexcellent results,

witha56percentdeclineinbaggagepilferagereportedbymajor

airlinesinthe2012/13financialyearascomparedto2011/12.

Security technology

TherandomuseofExplosiveTraceDetection(ETD)technology

at the Group’s airports nationwide is being increased as an

additional layerof security. ETD technology isacritical tool in

stayingaheadofevolvingthreatstoaviationsecurity.Sofar,12

tracedetectionmachineshavebeenpurchasedanddeployedat

airports.

Since2009, the randomuseofETDtechnologywithinsecurity

checkpoints to screen passengers’ hands and carry-on luggage

hasbeenincreased.Inaddition,thetechnologyhasbeenpiloted

inthecheckpointqueueatO.R.TamboInternationaltocomply

with the random screening of passengers as prescribed in the

NationalAviationSecurityprogramme.

Passengers can now expect to see the increased random use

of ETD technology at security checkpoints, as well as in the

checkpointqueues.Securityofficersmayswabapieceofluggage

or passengers’ hands, then use ETD technology to test for

explosives.TheswabisplacedinsidetheETDunit,whichanalyses

thecontentforthepresenceofpotentialexplosiveresidue.

aviation Security training

TheAviationSecurityProfessionalManagementCourse(PMC)is

anadvancedaviationsecuritytrainingprogrammeandcarriesa

formal designation (AvSEC PM), making it the first of its kind,

globally.

The programme was developed by ICAO to provide senior

management in aviation security with additional management

skillsandagreaterunderstandingoftheapplicationofstandards

and recommended practices, as well as the use of the ICAO

Security Manual. It is a predominantly web-based programme

andusesaninnovative,on-line,classroomapproach.

An Airports Company South Africa team, consisting of seven

seniormanagers,graduatedinNairobiinjuly2012.Thebenefits

ofthecourseextendfarbeyondtheactualqualificationtoallow

successfulgraduatespermanentaccesstoanexclusivee-network

community of aviation security experts who have successfully

completed thePMCcurriculum.This community facilitates the

sharingofinformationandoptimisestheexchangeofthelatest

international aviation security knowledge andbest practices. It

alsoprovidesaforumforexchangingexperiencesabouttraining

strategies and promotes intra-regional and international co-

operationamongstitsmembers.

InFORmatIOn tEChnOlOgy

The company’s Information Technology (IT) function provides

the platform forAirportsCompany SouthAfrica to confidently

rely on information communications technology to operate

acrossallsectionsofthebusiness.Assuch, IT isresponsiblefor

providingstrategicandoperationalsupporttotheGroupinline

withbusinessrequirements.

Inexecutingitsmandatetobusiness,theunit’srolefocuseson

thefollowingkeyITareas:

• Operations:theprovisionofeffectiveservicedeliverysolutions

againstagreedservicelevels

• Finance:providingcosteffectiveandoptimisedservicedelivery

capabilities

• Compliance:maintainingabalanced ITgovernanceapproach

to manage IT risk to deliver value, ensure sustainability and

promoteorganisationalgrowth

• Projects: standardisation and simplification of enterprise

architecture to ensure IT investments are aligned with the

Group’sbusinessstrategy

• HumanCapitalandTalent:continuousdevelopmentofanagile

ITteamwithappropriatestaffcompetenciesandcapabilities

tosupportbusinessrequirements.

Systems availability

ITperformancereportingprovidesacriticalmeansofassessing

theeffectivenessoftheITfunctionanditsvaluetothebusiness.

SystemsarecategorisedaccordingtoBoard-approvedmandates

inwhichsystemsareclassifiedascritical,priorityandoperational.

Criticalsystemsthathaveadirectimpactonthemovementof

passengers, baggageandaircraft are givenpriority tominimise

operationalimpact.

Thecritical systemsperformedwell in thefinancialyearunder

review and have consistently exceeded the benchmark of

98percent.Theflightinformationdisplaysystem(FIDS)received

concerted attention during the year, resulting in a meaningful

improvement in its availability over the last two quarters.

Theperformanceofthesoftwaresystem(Zeus)supportingthe

AirportManagementCentres(AMCs)alsoimprovedthroughthe

timeousapplicationofsoftwareupgrades.

56

average uptime per quarter

perc

enta

ge%

AODB FIDS BRS Zeus CUTE

100,50

100,00

99,50

99

98,50

98,00

97,504Quarteraverage

1Quarteraverage

2Quarteraverage

3Quarteraverage

AODB:airportoperationaldatabase

FIDS:flightinformationdisplaysystem

BRS:baggagereconciliationsystem

Zeus:airportmanagementcentresoftware

CUTE:common-useterminalequipment

Customer Satisfaction

A customer satisfaction index was introduced during the year,

wherebyusersareencouragedtoratetheperformanceoftheir

experiencewiththeservicedesk.Theratingscaleisbasedona

ratingoffromonetosix,andtheaveragecustomersatisfaction

ratingfortheyearwas4,5.Thetargetfortheaveragebenchmark

tobeachievedfortheforthcomingfinancialyearissetat5.

governance

The approach to IT governance is based on six fundamental

principles:accountability,transparency,responsibility,independence,

ethical fairness and social development.The Board ofAirports

Company South Africa is fully committed to maintaining the

standardsof integrity,accountabilityandtransparencyrequired

toachieveeffectivegovernanceofinformationtechnology.

human Capital

EstablishingandmaintainingacompetentpoolofITresourcesis

oneofthegreatestchallengesfacingtheITsectortoday.Airports

CompanySouthAfrica’sinformationtechnologyisconsideredto

be state-of-the-art,with expensive and complexhardware and

software components. However, the success of the IT function

depends more on the people that manage and support the

technologythanonthedeployedtechnologyitself.

Consequently, recruiting and retaining talent remains a key

successfactorfortheITdivision.Tohelpaddressthisrequirement,

nine IT internships have been approved for the coming year

for young, deserving graduates willing to gain exposure in the

aviation ITenvironment.AirportsCompanySouthAfricawillbe

partneringwiththeMICTSETAandtheirvendorstosource,train

anddevelopyounggraduates.

Service delivery

Continuedemphasis in the forthcomingyearwill beplacedon

improving the overall capacity and technical competence of

IToperational staff tomeetandexceed theexpectationsof IT

users.Thefollowingservicedeliveryareaswillreceiveparticular

attention:

• Theprovisionofimprovedservicelevelagreements(SLAs).

• Reducingtheaveragetimetoresolvecalls.

• Reducingthenumberofrepeatcalls.

• Improvingtheoverallcustomersatisfactionindex.


Customer satisfaction rating

7

6

5

4

3

2

1

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Ave1Q Ave2Q Ave3Q Ave4Q Column1

Gro

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King

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Bram

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A

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atio

nal

environment


EnvIROnmEntal pOlICy

TheGroupEnvironmentalPolicywas reviewed in the reporting

yearandfoundtoberelevant:nochangesweremade.Airports

Company South Africa continues to commit to responsible

environmental practices by maintaining its environmental

management system and complying with environmental

legislation.Furthermore,itwillcontinuetomonitorandmeasure

significant environmental aspects and impacts of airport

activitiesandoperationstoensurecontinualimprovementinthe

Group’s environmental performance.The company will review

itsEnvironmentalPolicyonanongoingbasistoensurethatitis

alignedtosustainabledevelopmentobjectives.

EnvIROnmEntal StRatEgy

Intheyearunderreview,theGroupEnvironmentalStrategywas

approved by the Executive Committee. The strategy provides

direction for environmental management over the next five

years and maps key objectives.These encompass initiatives to

beundertaken,focusingonenergyconservation,climatechange,

watermanagement,wastemanagement,airqualitymanagement,

noisemanagementandbiodiversity.

ClImatE ChangE and EnERgy COnSERvatIOn

Electricity Consumption

The electricity consumption for the four major airports is

shown in the tablebelow (unauditedfigures).The reduction in

energyconsumptionintheyearunderreviewisattributedtoan

energy saving drive across theGroup.This includes the use of

buildingmanagementsystemstomanageenergyconsumption.

Furthermore, lightemittingdiode(LED)technologieshavebeen

introducedinthepublicareas,streetandairfieldlighting.

Energy saving initiatives, including the use of LED technology,

havealsobeenimplementedatEastLondon,GeorgeandKimberley

AirportsandatBramFischerandUpingtonInternationalAirports.

In addition, as a pilot project East London Airport installed a

solarpaneltogenerateelectricityforthepubliccarparkingarea.

Upington InternationalAirport is in the process of conducting

feasibility studies on the use of solar panels for electricity

generation.

environment

Airport 2012/13 2011/12 2010/11 2009/10 2008/09

CapeTownInternational 67774778 69590621 73120669 53433678 52976525

O.R.TamboInternational 140307627 149231457 157825733 147480150 130655100

KingShakaInternational* 36773318 37085765 37206146 9852600 9847000

PortElizabethInternational 10201892 11209020 10428309 8939267 9654934

*Note:2009/10and2008/09figuresareforDurbanInternationalAirport

Electricity Consumption

Fuel and diesel Consumption

Thefuelanddieselconsumptionforcompanyownedanddrivenvehiclesisshowninthetableoverleaf(unauditedfigures).Theincreasein

thefuelconsumptionatPortElizabethInternationalisasaresultofextensiveuseofmobilepumpsthatwereusedtopumpstormwater

floodingthatoccurredinwinter.Inmitigation,aprojecthascommenced,inconjunctionwiththemunicipality,toupgradethestormwater

system.ItisthefirstyearthatGeorgeAirportisreportingonfuelconsumptionofcompanyownedanddrivenvehicles.

60

watER RESOuRCE managEmEnt

water withdrawal by Source

Thewaterconsumptionforthefourmajorairportsisshowninthetablebelow(unauditedfigures).

water Consumption (kilo-litres)

• Awaterreductionstrategy

• Theuseofboreholewaterforirrigation

• Recirculationofwatergeneratedbyairconditionerschillersin

thepassengerterminal.

King Shaka InternationalAirport continued to purify sewerage

generated from the airport at its two waste water treatment

works. The treated water is used to irrigate sugar cane fields

adjacenttotheplantandisalsousedforhydroponics.Thishasa

positiveeffectinreducingtheimpactonwaterresources.

ThemunicipalwaterfeedatPortElizabethInternationalAirport

had two major underground pipe bursts, which damaged

the airport’s water meters. Following an investigation by the

municipality, the airport received a rebate of approximately

R200000ontheirwateraccount.

At George Airport, water harvesting is undertaken at the

MaintenanceandEngineeringfacilityandattheFireandRescue

department.Thiswaterisusedtowashvehicles.

ThedecreaseinwaterconsumptionatO.R.TamboInternational

Airport is attributed to various water saving initiatives that

have been implemented.These incorporate replacing taps with

water saving nozzles, the use of borehole water for irrigation

andthemeteringoftenant’swaterconsumptionattheairport.

Constructionactivityhasreducedandthishasalsocontributed

towatersavings.Theairporthascommencedwithanintegrated

water resource management programme, which will further

contributetowaterconservationinthefuture.

ThedecreaseinwaterconsumptionatKingShakaInternational

Airport isattributedtoaprojectthatwasundertakentorepair

water leaks.Thiswill continue into thenextfinancial year and

willprovideforrapiddetectionofleaksoccurringontheairport

precinct. Further to this, feasibility studies are under way to

identify further resource conservation measures and these

include:

Airport 2012/13 2011/12 2010/11

CapeTownInternational 101005 93641 113482

O.R.TamboInternational 168184 184276 226200

KingShakaInternational 99522 82057 95745

PortElizabethInternational 16931 12399 24331

GeorgeAirport 23206 – –

environment (Continued)

Airport 2012/13 2011/12 2010/11 2009/10 2008/09


O.R.TamboInternational 929832 1008260 1260000 1526277 1228141

KingShakaInternational* 175930 245782 228448 221420 226370


*Note:2009/10and2008/09figuresareforDurbanInternationalAirport

Fuel and diesel Consumption (litres)


aIR QualIty managEmEnt

AirqualitymonitoringcontinuedtobemeasuredatO.R.Tambo

andCapeTownInternationalAirports.Monitoringwascarriedout

inaccordancewiththeNationalAmbientAirQualityStandards

andSANS1929AmbientAirQualityStandard.

air Quality transgressions

Airport 2012/13 2011/12 2010/11



No transgressions to the relevant standards were reported at

CapeTown International Airport, where air quality monitoring

is conducted on the airport site.Transgressions to the relevant

standardscontinuetobe recordedatO.R.Tambo International,

whereairqualitymonitoringisperformedofftheairportprecinct.

Readingsareinfluencedbythecloseproximityoftheairquality

monitoringstationtoexternalsourcessuchastheR21Freeway,

industrialsourcesandtheKelvincoal-firedpowerstation.

Air quality monitoring at various points within the O.R.Tambo

Internationalprecinctwasconductedduringthe2012/13financial

year.With collection of more data during the following year, it

willbepossibletomakecomparisonswithdatafromoutsidethe

precinct.Meaningfulidentificationofemissions’originationinsuch

acongestedareaasthatinandaroundO.R.TamboInternational

Airport is complex. Multiple sources, such as aircraft, cars,

industryandapowerstationallcontributetotheairqualitymix.

Comparativeanalysismayyieldmeaningfulinputtothedesignand

managementoffurtherairqualitycontrolmeasures.

King Shaka International Airport completed an air emissions

inventory,whichcommenced in thepreviousfinancialyear.An

air quality monitoring station will be installed in the 2013/14

financialyear.

The waste recycling campaign that was held with food and

beverage outlets at Cape Town International Airport in the

previous financial year was very successful, as the amount of

wasterecycledalmostdoubledwhencomparedtotheprevious

financial year. In the year under review, the airport recycled

approximately48percentofthewastegenerated.

There was an increase in the waste recycled to approximately

25percentofwastegeneratedatO.R.TamboInternationalAirport.

The development of an integrated waste management plan,

whichcommencedinthe2012/13financialyear,wascompleted

andwillbe implementedatthebeginningofthenextfinancial

year.Thiswillresultinanincreaseinthewasterecycled.

While the amount of recycled waste reduced at King Shaka

International Airport in comparison to the previous financial

year,itconsistedofapproximately41percentofthetotalwaste

generated.

A waste recycling programme commenced atGeorgeAirport in

2010and intheyearunderreview,approximately22percentof

thewastegeneratedwas recycled.Thisfinancialyear is thefirst

timethatrecycledwastehasbeenformallyreportedattheairport.

A new waste facility was constructed for the collection of all

waste streams at Port Elizabeth InternationalAirport. In the year

under review, thewastedisposal contractwas revised to awaste

managementcontract,inaccordancewiththewastemanagement

plan, which was reviewed in the previous financial year. Recycled

wastewillbereporteduponinthenextfinancialyear.

EastLondonAirportisintheprocessofconstructinganewwaste

facility.

Airport 2012/13 2011/12 2010/11 2009/10 2008/09


O.R.TamboInternational 1333450 1228231 1651565 1094750 –

KingShakaInternational 406133 494330 470417 – –

GeorgeAirport 17464 – – – –

waStE managEmEnt

Thewasterecycledforfourairportsisshowninthetablebelow(unauditedfigures).

waste Recycled (kilograms)

62

BIOdIvERSIty

Community Ecosystem Based adaptation programme

King Shaka International Airport partnered with Wildlands

Conservation Trust to develop a community ecosystem-based

adaptationprogrammewithinthecatchmentoftheTongaatRiver.

Theprojectisaimedatdevelopingcommunityskillsthrough:

• Unlocking the ‘green-preneur’ potential of the poor and

unemployed by nurturing the development of waste and

‘food–preneurs’whocollectmaterialforrecycling,growtrees

andorganicfood

• Ecosystem restoration, whereby communities restore the

ecosystemsthatprovidelifesupport:forests,rivers,wetlandsand

grasslands. The focus of this project is the Tongaat River

catchment in which lies the majority of the footprint of the

airport

• Formalconservationofprioritybiodiversity.

Eradication of alien vegetation

KingShaka InternationalAirport commencedwith a project to

clear alien vegetation at the airport in the reporting year and

it will continue until january 2015. Alien vegetation was also

clearedonlandthatisjointlyownedbyAirportsCompanySouth

AfricaandDubeTradePort.

At Port Elizabeth InternationalAirport, a local community was

employed to eradicate 50 hectares of alien vegetation on the

airportprecinctinthe2012/13financialyear.Inthenewfinancial

year,theairportwillconsultwithWorkingforWatertoassistwith

agrowthsuppressionpoisonapplicationprogramme.Thisforms

partofthephasedapproachtoeradicate180hectaresofalien

vegetation.

East London Airport will commence with the eradication of

approximately 21 hectares of alien vegetation in the new

financialyear.

Barn (European) Swallows

ThebirdradarusedtomonitortheBarnSwallowactivitywasfully

operationalfromOctobertoMarch,whentheswallowsroostat

MountMorelandwetlands immediatelyadjacenttoKingShaka

InternationalAirport. During this season, it was observed that

theswallowswereonlypresentat thewetlands forhalfof the

season.Forthelatterpartoftheseason,theswallowsrelocated

toanotherroostingsite,awayfromtheairport.

nOISE managEmEnt

A project commenced to install permanent aircraft noise

monitoring and tracking equipment atO.R.Tambo,CapeTown

and King Shaka InternationalAirports in the 2013/14 financial

year. Noise monitoring terminals will be located at strategic

locations in the vicinity of the airports. The monitoring and

trackingsystemwillassistwiththemeasurementofaircraftnoise

andadherenceofaircrafttoflightprocedures.

Localauthoritieswereengagedandconsultedregardingaircraft

noisecontoursandlanduseplanninginthevicinityoftheairports.

Consultationcontinuedwiththeinterestedandaffectedparties

attheAircraftNoiseConsultativeCommitteethatwasformedat

KingShakaInternationalAirportin2010.

Theaircraftnoisecomplaintsreceivedforthefourmajorairports

aredetailedinthetablebelow.

noise complaints

Airport 2012/2013 2011/12 2010/11


O.R.TamboInternational

2 1 0


PortElizabethInternational

4 5 5

SIgnIFICant FuEl SpIllS

No significant fuel spills occurred within the Group in the

reportingyear.Sevenyearsafterthefuelspillagethatoccurred

into Blaauwpan from O.R. Tambo International Airport, the

rehabilitationandmonitoringprogrammeisstilloperational.An

evaluationwascarriedoutinDecember2012andthenextand

finalevaluationwillbeconductedinDecember2013.



Bird and wildlife Strikes

Airport 2012/13 2011/12 2010/11




PortElizabethInternational 30 24 25

BramFischerInternational 8 14 8

KimberleyAirport 3 1 12

EastLondonAirport 6 10 14

GeorgeAirport 14 16 14

UpingtonInternational 1 2 4

COmplIanCE wIth lawS and REgulatIOnS

Duringthefinancialyearunderreview,forthesixthconsecutive

year therewerenofinesornon-monetarydirectives levied for

non-compliancewithenvironmentallawsandregulations.

ISO 14001: 2004 Certification

In2011,fiveairportswere ISO14001certified,as listed inthe

table below. In the year under review, external surveillance

auditswereconductedat theseairportsandnomajorfindings

were determined. The airports maintained their ISO 14001

certification.Thenextexternalsurveillanceauditswillbecarried

outin2013.

Astudywasconductedtodeterminetheconditionofthewetland

anditwasdeterminedthatthewetlandwasecologicallysound

and still provided the required conditions for the swallows to

roost.Thereasonfortheirrelocationwasdeterminedtobebased

onamatterofpreference.Monitoringoftheswallowswillresume

inOctober2013,whentheyreturnfromEurope.Therehasbeen

adeclineinBarnSwallowaircraftstrikesfromtenstrikesin2010

toonestrikeinthisreportingfinancialyear.

Bird and wildlife Strikes

TheprogrammetoemployBorderColliesandSpringerSpaniels

to scarebirds away from runways continues tobe successfully

operatedatO.R.TamboandKingShakaInternationalAirports.

EastLondonAirporthassuccessfullyconcludedagreementswith

nearby private game reserves to assist with the relocation of

wildlifefoundontheairfield.

TheFireandRescueServicesareconductingpatrolsatKimberley

Airporttoscarebirdsandwildlifefromtherunways.

Thenumberofaircraftbirdandwildlife strikes is shown in the

tableadjasent.

64

International Standards Organisation (ISO) certification at our

airports is being addressed in a phased approach.The second

phase,thecertificationofO.R.Tambo,KingShakaandBramFischer

InternationalAirports,aswellasKimberleyAirport,isunderway

anditisprojectedthatcertificationwilltakeplaceinthe2014/15

financial year. In line with the Environmental Strategy, Group

certificationisplannedforthe2015/16year.

ChallEngES

Therewereanumberof environmental challengesexperienced

in theGroup in theyearunder review. Included in these is the

lack of regulations to restrict the use of older, noisier aircraft.

Engagement with the Department ofTransport and the South

African Civil Aviation Authority has begun to address this

situation through the drafting of regulations. Determining the

impactthatnoiseregulationswouldhaveontheaviationindustry

willbeanimportantconsideration.

Commitment to environmental reporting compliant with the

guidelinesoftheGlobalReportingInitiative(GRI)isacceptedby

AirportsCompanySouthAfrica.However, anarea that requires

improvement is the lackofGrouptargetsandauditeddata for

electricity, water and fuel usage, as well as the percentage of

wastethatisrecycled.

Thisdeficiencyhasbeenrecognisedand,inthe2013/14financial

year,Grouptargetswillbesetandauditprocessesimplemented.

These will incorporate electricity, water, fuel, waste, noise, air

qualityand,possibly,biodiversity.Benchmarkswillbeestablished

andthese,togetherwiththeGrouptargetsandauditedresults,

willenablethecompanytomeasureenvironmentalperformance

ina farmoreaccuratemanner.Thisprocesswillbe reported in

nextyear’sintegratedannualreport.

ItwasreportedlastyearthattheNationalAirspaceCommittee

was investigating the impact on the aviation industry of

regulations governing the height that must be flown above

protectedareas.Thisevaluationandresultantrecommendations

to minimise the effect on civil aviation have not as yet been

completed.

Thepossibleeffectofflightrestrictionsgoverningoverflyingareas

identified for optical and radio astronomy (such as the Square

KilometreArray(SKA)intheNorthernCape)wasincludedinlast

year’sreport. Itcannowbereportedthatprovisionshavebeen

madethatwillminimiseanyeffectoncivilaviation.


ISO 14001 certification

Airport StatusofISO14001andEMS* Externalsurveillanceaudit

CapeTownInternational ISO-certifiedinMay2011 june2012

O.R.TamboInternational EMS*alignedtoISO14001

KingShakaInternational ImplementingISO14001

PortElizabethInternational ISO-certifiedinjuly2011 july2012

BramFischerInternational EMSalignedtoISO14001

KimberleyAirport EMSalignedtoISO14001

EastLondonAirport ISO-certifiedinOct2011 September2012

GeorgeAirport ISO-certifiedinjune2011 july2012&March2013

UpingtonInternational ISO-certifiedinjune2011 june2012

*EMS:EnvironmentalManagementSystem

employees and Communities


human resourCes

thE hR FOCuS tOwaRdS 2024

The overarching objective forAirportsCompany SouthAfrica’s

HumanResourcesteamistoensurecompetentandperformance-

driven employees, focused on the achievement of theGroup’s

operationalgoalsanddeliveryofthebusinessstrategy.

TheExecutiveCommitteecontinuouslyconsidersfuturecapability

requirements as dictated by the Group strategy and the

interventions requiredtoensureoptimal resourcing.Keytothe

aforementioned is the identificationofcritical, scarceandcore

skills, ensuring a fit between the resourcing approach and the

businessstrategy.

In executing its mandate, the HR division manages the full

spectrumoftheGroup’shumancapitalvaluechain: resourcing,

talent management, performance management, remuneration,

reward and recognition, training and development, employee

engagement and relationship management, and employee

satisfactionandorganisationalculture.Particularattentionispaid

totheorganisation’stransformationimperativesofemployment

equityandskillsdevelopment.

Noting theabove, theHR function is cognisantof theGroup’s

international strategy, which includes operating airports within

India and SouthAmerica, also noting the intention to further

expandintoAfrica.

KEy pERFORmanCE ImpERatIvES

TheHRcommunitysupportsthecompany’slong-termobjectives

throughdeliveringonthefollowingimperatives:

alIgnIng human CapItal tO lOng-tERm StRatEgy

delivering on Our Company Strategy

Real leadership is about productivity, people and purpose, that

resultsinacohesivegroupofpeopleworkingtogethereffectively

toward a common goal or purpose. Insights into the overall

commitment levelof leadership, support for strategyandeven

unawareness, will be leveraged to ensure integration into the

rolloutoftheten-yearplan.

a voice for the people

AirportsCompanySouthAfricahasembarkedonachangeprocess

aimed at ensuring business growth, relevance, sustainability,

efficiency and cost management, and business performance

excellence.

Within this context, the Group focused on interventions

strengthening the Employee-Customer-Profit Chain with the

ultimateviewofachievingbusinessimpact,inordertorealisethe

impactthatengagedemployeeshaveonstrategyimplementation.

In this regard the following Key Performance Indicators (KPI’s)

wereestablishedtomeasuretheimpactofthechangeprocess.

AnoteworthyimprovementwasobservedinallKPIs.

68

• Reach/Attendance–thenumberofemployeesreachedthrough

theprocess.Atarget for85percent reachofemployeeswas

set.Thiswasthefirstofsuchinterventionsacrossthebusiness

whichposedsomechallengesintermsofreach.However,the

averagereachwas67percent.

• Response/Content–theextenttowhichpeoplearesatisfied

withtheprocessandcontentofthechangejourney.Forthose

employees reached through the engagement sessions, an

averageof88percentsatisfactionwithcontentwasachieved

againstatargetof75percent.

• Change readiness – the extent to which people buy in and

readinesstoembracethechangesintheorganisation.Anaverage

of82,4percentwasachievedagainsta75percenttarget.

• EmployeeEngagement– theextent towhichemployeesare

more engaged with the organisation, which ultimately leads

to improvedperformance, discretionary effort, and retention

and in longer term, customer satisfaction and financial

performance.

CultIvatIng vISIOnaRy lEadERShIp

Leadership development remains a strategic priority for the

company.Inthisregard,severalleadershipprogrammeshavebeen

implemented over a number of years. Leadership development

is further enhanced by constructive coaching and mentoring

programmestoembedalearningcultureandensuresustainable

growth.

Supervisory development programme

A supervisory development programme was implemented

four years ago, aimed at impacting positively on performance.

To date, 186 supervisors and junior managers have completed

theprogramme.Thecompanyplans to trainaminimumof60

supervisorsinthe2013/14financialyear.

Supervisory development programme intake

64

63

62

61

60

59Year4

2012/13Year3

2011/12Year2

2010/11Year1

2009/10

61 61

64

62

Executive development programme

In order to ensure that the company has a strong succession

talentbench,theExecutiveDevelopmentprogrammeforsenior

managerscommencedin2012.

The programme is designed to support the Group’s strategic

intent and business challenges. Participants have been guided

todevelopseniorleadershipcapabilitieswhichallowthemtobe

personallyandintellectuallymoreeffectiveinleadingadynamic

andglobalorganisation.

Executive development programme intake

25

20

15

10

5

0

Year22013

Year12012

20 20

The20candidates,whowereenrolledduring2012,successfully

completed with some delegates being appointed into senior

management positions subsequent to the graduation. The

company plans to train another 20 candidates in the2013/14

financialyear.

human resourCes (Continued)


attRaCt, REtaIn and EngagE talEnt

The company continuously considers future capability require-

ments aligned to strategy. Key to this is the identification of

critical,scarceandcoreskills.Inparticular,notingtransformation

objectives, the resourcing strategy is focused on an integrated

approachofbuy,borrow,bindandbuildskill.

Within the broad context of the five-year Employment

Equity plan and succession and resourcing initiatives, efforts

continuouslyemphasiseachievementofourplans.Inthisregard

thegraphsfollowingreflecttheextentofappointmentsbyrace

and gender as well as internal promotions. During year one of

theEmploymentEquityplan, starting1September2011,good

progresswasmadeinresourcingthebusinessadequately,noting

thetransformation

objectives.

Internal Promotions by race and gender – 2012/13

140

120

100

80

60

40

20

0

Female Male

African White GrandtotalColoured Indian

58

72

12

24

7

21

12 14

89

131

Theabove isbasedona strongEmployerBrandandEmployee

valueproposition.Inthisregardthecompanywascertifiedasa

BEST Employer through an independent benchmarking process

forthesecondconsecutiveyear.

The company fully complies with best practice principles and

doesnotengageinchild,forcedorcompulsorylabour.

Thebusinessexperiencedanaverageturnoverrateofsixpercent

throughouttheyear,whichcomparespositivelytothenational

benchmarks,includingreferencetoturnoverbyagegroup,gender

andregion.

External appointments and terminations by race and gender – 2012/13

NewAppointments Terminations

120

100

80

60

40

20

0

Male Female

Afric

an

103

59

Colo

ured

1

13

Whi

te2

9

Afric

an

89

45

Colo

ured

28

Indi

an

1 4

Whi

te

19

PWD

*

61

PWD

*

40

Indi

an

70

*PWD:Personswithdisability(Thesenumbersareincorporatedintehremainderofthesheet)

70

Themainstaffcomplementismadeupofpermanentemployees.

However, flexibility exists in that temporary resources are

employedfromtimetotimetoserveneedsthataretemporary

innature.Thecompanyhadfivepermanentemployeesandone

temporary resourceseconded toBrazilduring theperiodunder

review.

nuRtuRIng talEnt

Talent management has been fully integrated as a business

processwithinthecompanyforthelastfiveyears;thisisevident

within all regions having fully functional Talent Forums and

Committees.

The aggressive pursuit of the agreed targets has stabilised

performanceover recentyearsandall interventionswithin the

People Intelligence environment are directed to maintain the

achievementsintothefuture.Asitrelatestostrategicleadership

developmentinterventions,theagreedtargetsweremetandin

certaincategoriesexceeded.

Talent investment 2012/13

80

70

60

50

40

30

20

10

0

Target Actual

Talentpipeline

20% 21%

Solidperformers

70%65%

Performanceimprovement

10%14%

Successiondevelopmentwasgreatlyimprovedbythesuccessful

implementation and delivery of the Executive Development

Programme.BasedontheTalentInvestmentmatrix,mostsenior

positions and international secondments can be filled from

withinthecompany.


Total workforce by employment type, employment contract, and region.

Employmentcontract–Actualstaffemployed

Airport FTEbudget Permanentstaff Temporarystaff Learnersinterns

andstudents

Totalstaff

employed

BramFishcer 76 64 0 1 65

CapeTown 583 514 17 3 534

Corporate 319 236 38 10 284

EastLondon 72 66 0 1 67

Regionalgeneralmanagement 11 11 0 0 11

George 71 62 0 10 72

Kimberley 42 40 0 1 41

KingShaka 416 348 4 26 378

O.RTambo 1232 1061 3 74 1138

PortElizabeth 139 109 0 1 110

Upington 26 19 0 0 19

Total 2 987 2 530 62 127 2 719


target-driven management

Target-driven management underpins the company’s high

performance culture. Each year, the Airports Company South

AfricaBoardapprovesaCompanyPerformanceFramework.Each

of our central business units sets its performance targets in a

BalanceScorecard framework that serves to trackperformance

onamonthlyandquarterlybasis,accordingtokeyperformance

indicators. The Learning and Growth perspective establishes

performance measures for the efficient progression of all

employeesacrossthebusiness.

Businessunits’performancescoreshavestabilisedoverthe last

fouryearsandthecompanyaveragedaperformancescoreof3,3,

onafive-pointscale,whereascoreof3isconsideredsatisfactory.

SOL

Totalplanned

training

Totalnumber

ofemployees

trained

Totalnumber

ofcompany

employees

Total

numberof

interventions

attended

%Trained/

SOLagainst

planned

%Trained/SOL

allcompany

employees

Cost/SOL

R’000

SOL1 91 115 277 191 126 42 141 000

SOL2 831 751 1085 2162 90 69 3146 000

SOL3 421 548 847 1467 130 65 2979 000

SOL4 136 154 259 372 113 59 1124 000

SOL5 108 104 195 191 96 53 583 000

SOL6 20 27 39 48 135 69 188 000

SOL7 3 2 9 3 67 22 8 000

Total 1 610 1 701 2 711 4 434 106 63 8 169 000

ThetablebelowdepictsthetrainingprogrammesexecutedforthefinancialyearendingMarch2013.

tRaInIng and dEvElOpmEnt

Building a Competent workforce

Severalleadershipprogrammeshavebeenimplementedoveraperiodofyearstoensurecontinuousbuildingofcapacity,includingcapacityof

seniorleadership.Thisissupportedbyseveralprogrammestobuildfuturecapacitybydevelopingyoungtalent.

A formalWorkplaceSkillsPlanwasdevelopedtosupport regulatorycompliance,businessneedsandcareerdevelopment requirements.

Fullcompliancewasachievedagainstthecompany’strainingplan.Technicaltrainingisprovidedthroughthecompany’sTrainingAcademy.

aggregated performance

Perfo

rman

ceS

cale

3,5

3,0

2,5

2,0

1,5

1,0

0,5

02012/132010/112009/102008/9 2011/12

72

Several programmes have been successfully implemented over

thelasttwoyearstodevelopyoungtalenttoensurefutureskills

availability.Theseincludethefollowingprogrammes:

Young talent programmes

140

120

100

80

60

40

20

0

2012/13 2013/14

Internships ApprenticeshipsLearnerships Trainees

10

30

136

116

513 8

5

The focus on learning and development extends to providing

supportforpursuingfurthereducation.Thesupportisintheform

ofa fully fundedbursary foremployeesand their children.The

studiesthatarefundedareinlinewiththeGroup’srequirements

forscarceandcriticalskills.

Staff bursaries

400

300

200

100

02013/142011/122010/112009/10

355

349

124142

Employees’ children’s bursaries

15

10

5

0

20132012

11

14

aviation Security training

AllairportshavemettheSouthAfricanCivilAviationAuthority

compliance requirements, whilst the aggregate compliance for

theGroup,againsttheBoard-approvedKPIs,wasexceededbysix

percent.Forcompliancepurposes,theaviationsecuritytraining

targetwillremainat100percentofallsecuritypersonnelinthe

nextfinancialyear.

aVSEC training

1800

1760

1720

1680

1640

1600

PlannedActual

1785

1686

aviation Safety

The development of the Aerodrome Emergency Management

System(AEMS)trainingprogrammewasconcludedinMarch2013.

Thisnewinterventionisaninteractive,picture-basedprogramme

aimed at training the Group’s staff and stakeholders at each

airportonprocedurestobefollowedduringspecificemergencies

such as hijackings, aircraft crashes and other incidents. The

programmewillcommenceatO.R.TamboInternationalAirportin

july2013,withallotherairportsscheduledfortrainingduringthe

2013/14financialyear.


73AIRPORTSCOMPANYSOUTHAFRICA IntEgRatEd REpORt 2013

International training

The Airports Company South Africa Training Academy is an

accredited ICAO Aviation Security Training Centre and two

international and five regional courses were conducted during

theyear.ThehighlightfortheyearwashavingtheICAOAvSEC

Professional Management Course hosted at the Academy in

2012and2013.TheAcademyhasalsocultivatedarelationship

with the US Department of State’s Antiterrorism Assistance

(ATA)Programmeandwillconductaseven-dayAirportSecurity

Managementtrainingprogrammeinjune2013.

hOlIStIC wEllBEIng

AirportsCompanySouthAfricaunderstands that employee job

satisfactionandengagement(thediscretionaryeffortemployees

putintotheirwork)areimportanttobusinesssustainability.An

annual employee satisfaction survey is conducted to identify

and understand the factors important to overall employee

job satisfaction and engagement.A total of 1 672 employees

(66percentofthecurrentheadcount)participatedinthesurvey.

Group performance for the year ended March 2012 was 3,16

outof5andat3,23attheendofMarch2013,demonstrating

an encouraging improvement in employee satisfaction. This

improvementexceedsthetargetof3and it isanticipatedthat

the forthcoming year’s performance should also exceed the

targetof3.

SincethelaunchoftheimprovedEmployeeWellnessProgramme

in December 2011, the total engagement rate, which includes

uptakeofallservicesprovided,amountedto50,3percentduring

the period under review.The uptake includes annualised usage

of the core counselling and advisory services of 16,8 percent.

This compares to an annualised core counselling and advisory

engagement rate of seven percent across all client companies

utilisingthisprogrammeduringthesameperiod.

In addition, it is understood that employee satisfaction is also

underpinned by effective administration of employee benefits

and remuneration. An integrated Human Resources Shared

Services Centre was created in November 2008 to efficiently

managetransactionalmatters,allowingstafftofocusonadding

valuetothebusiness.

COmpEtItIvE REwaRd, REmunERatIOn and RECOgnItIOn

The overall objective of the Reward and Remuneration policy

and approach is to attract, retain and motivate staff towards

performanceexcellence. It is in this context that theprinciples

ofmarket-relatedremuneration,internalequityandfairness,and

rewardingperformanceexcellencearerespected.

TheGrouprecognisestheimportanceofappropriatelyrewarding

performanceandtherebyconsidersthevalueofarewardmix.A

‘totalreward’approachhasbeenadopted,rangingfromfinancial

benefits,suchasguaranteedremunerationandemployeebenefits,

to non-financial benefits comprising of a talent management

initiative,learninganddevelopmentopportunitiesandemployee

wellbeingprogrammes.

EmplOyEE RElatIOnShIp managEmEnt

The focus of our employee relations approach is to maintain

leadership focus on employee relations, noting that engaged

employees are more committed to delivering on a Group’s

strategy.

In2005AirportsCompanySouthAfricaconcludedarecognition

agreement with the National Education, Health and Allied

Workers Union (NEHAWU), a trade union affiliated toCosatu.

This partnership has since grown from strength to strength as

supportedbythefollowingagreements:

1.ARecognitionandProceduralagreementwhichcommencedin

january2005,wasreviewedandamendedinNovember2011

andwillterminateonceNEHAWUceasestobearepresentative

and/ormajoritytradeunion.

2.AnAgency Shop agreement concluded in january 2005 and

willprevailuntilNEHAWUceasestobearepresentativeand/

ormajoritytradeunion.

3.The Picking agreement effective from january 2005 can

onlybeusedbyNEHAWUmemberswhoarenotdesignated

as providers of essential services and will terminate once

NEHAWUceasestobearepresentativetradeunion.

4.Sixwageagreementsovertheyears,oneofwhichwasamulti-

yearagreement.Wageagreementsarenegotiatedannuallyand

takeeffectfrom1Septembereachyear.

Intermsofgoodgovernance,labourrepresentativesareconsulted

on policy development and amendments, in particular as it

relatestoconditionsofemployment.Thestrongpartnershipwith

NEHAWUdeliveredthedesignandamendmentofseveralpolicies

tothebenefitofAirportsCompanySouthAfricaemployees.Each

airporthasaShopStewardCommitteewhichmeetswith local

managementona regular basis todiscuss employee collective

matters.

In 2005, the Essential Services Committee of the Commission

for Conciliation, Mediation andArbitration (CCMA) designated

several services as essential services for a period of one year.

74

TheGrouphassincebeendesignatedasanessentialserviceon

apermanentbasisandthisservestoensurestabilitywithinthe

managementoftheGroup’sairports.

Dispute resolution mechanisms exist to facilitate processes

related to the rights for employees to be represented at

disciplinaryandgrievancehearings,andtheCCMA, in linewith

labourlegislation.

tRanSFORmatIOn and EmplOymEnt EQuIty

Airports Company South Africa is committed to building a

workforce that is fully representative of the demographics of

SouthAfrica,whichisfreefromallformsofunfairdiscrimination

and where diversity is a key strength towards performance

excellence and productivity. Furthermore, the Employment

EquityStrategyaimstosupporttheBroad-BasedBlackEconomic

Empowermentstatus(B-BBEE)oftheGroup.

It is from this perspective that the Group is strongly focused

to ensure implementation of the required transformational

processes, also noting relevant legislative requirements. In this

regard theGrouphas implementeda structure tomonitorand

evaluate continuous progress. Roles and responsibilities are

clearlydefinedintheplanandEmploymentEquityForumsexist

toensureprogressmonitoringandcorrection.

TheGroupdulysubmittedaBoard-approvedEmploymentEquity

PlantotheDepartmentofLabourforthefive-yearperiodfrom

2011to2016.

In this regard, thecompanyachievedaB-BBEE ratingof11,73

during2011/12againstatargetof11,51.Thetargetfor2012/13

was12,39.Theactualratingforthe2012/13financialyearwillbe

finalisedinOctober2013.Untilthattime,thecurrentratingof

11,73remainsvalid.

wORKFORCE pROFIlE pROgRESS

Continuous progress is made towards achievement of set

numerical targetsandspecificsuccesswasagaindemonstrated

duringthe2012/13year.

Goodprogresswasmadeinensuringthattheworkforceprofile

is more representative of the demographics of SouthAfrica as

it relates to designated employees in the groupsAfrican male

andfemale.Itisrequiredthatthefocusremainsonmaintaining

theachievements,consideringmarketchallenges.Inconsidering

thechallengestoachievethecompanyplan,affirmativeaction

measures are being implemented, monitored and continually

measuredagainsttheactionplansinplace.

Considerable progress was made with the representation of

people with disabilities, where the representation increased by

133percent,from18to42people,thereforeachievingthetarget

fortheyearinlinewiththefive-yearplan.Theappointmentof

peoplewithdisabilities issupportedbyadditional interventions

toensurefullintegrationintothebusiness.

The five-year Employment Equity plan includes specific

affirmativeactionmeasuresthatareimplementedasprojectsto

ensurelong-termsustainableimpactrelatingtotransformation.

The projects range from institutionalising employment equity,

diversityintegration,andinteractiveandregularcommunication,

amongstothers.


Workplace profile progress: 2011 to 2013

1200

1000

800

600

400

200

0

Baseline(August2011) Current(March2013) Goal(August2016)

Male Female

Afric

an

872963

1014

Colo

ured

235 237

157

Indi

an

124 117 93W

hite

175 165118

Afric

an

614

759

877

Colo

ured

165 173129

Indi

an

56 51 45

Whi

te

127 116 92

76

Responsibilitiesforanycompanyoperatingintheseconddecade

ofthe21stcenturyhavebecomefarmoredemandingthaneven

tenyearsago.Thisisparticularlysoforenvironmentalandsocial

considerations and have been largely driven by direction from

KingIIIandtheGlobalReportingInitiative.ForAirportsCompany

SouthAfrica,thishasbeenstronglyreinforcedbytheSouthAfrican

Government’sexpectationthatthecompanywilldriveitsmandate

toaddresstransformation,jobcreationandpovertyalleviation.

Withthisbackground,itshouldbenosurprisethattheCorporate

Social Investment (CSI) programme ofAirportsCompany South

Africaisonethatreceivespriorityattention.Theprogrammehas

beeninplacefortwentyyears,sincetheformationofthecompany

in1993, andmaynowbeconsidered tohave reachedmaturity,

particularlywithrespecttostrategy,managementandgovernance.

Communityupliftment,socialdevelopmentandsocialcohesionare

strategicimperativesthatinformAirportsCompanySouthAfrica’s

mission towards improving the quality of life of South Africa’s

mostvulnerablesegmentsofsociety. Inthefinancialyearended

on 31 March 2013, Airports Company South Africa distributed

R58,8millionthroughitsCSIprogramme.

Airports Company South Africa is in the business of providing

the facilities and services for ‘moving people’ and consequently

providestheplatformforahostofotherstakeholderstoworkin

unisontodeliveranefficientandenjoyabletravelexperiencefor

airportusers.ItisforthisreasonthattheCSIstrategyispremised

onthefundamentalprincipleof‘movingpeople,changinglives’.

TheCSIbudgetallocationisfocusedonthreemainareasimpacted

directly by the Group’s operations: community development,

mobility and care for the environment.The programme extends

farbeyondsimplefinancialcontributions,althoughtheseplayan

importantpartofsupportingprojectsthatmeetCSIobjectives.

Surrounding each of the company’s nine airports are multiple

communities,oftenwithseveresocio-economicchallenges.justas

thesedemandsarediverse,soarethestaffcomplementsofthese

airports,rangingfrommorethan1000atO.R.TamboInternational

Airport to just19atUpington International.Eachairporthas its

ownCSIprogramme,eachofwhich involvestheparticipationof

staffmembers,whetheronahands-onbasisorfromaconsultative

ormanagementstandpoint.Furthermore,andequallygratifying,is

thatmanyairport stakeholders contribute toprojects, adding to

theoverallimpact.

Partnershipsarevitalforextendingthepotentialtoaddressmajor

undertakingsandtherecent,strategicallyimportantco-operation

withtheSouthAfricanNationalCommunityOrganisation(SANCO)

enabledthesupportoftheMasakhaneSchoolsRenovationProject

in the Harding region of KwaZulu-Natal. Four schools, providing

educationfor3400children,havebenefitedfrombeingupgraded

fromunacceptablydilapidatedconditionstoshowcaseeducation

facilities. Other partnerships are in the process of formation to

supportthedesperateneedtoimproveinfrastructureatsomany

SouthAfricanschools,especiallyinruralareas.

soCial impaCt


Fulfillingsocialresponsibilitiesisconsideredanintegralcomponent

of the way that Airports Company South Africa conducts its

business. The Corporate Social Investment programme is the

vehiclethatimplementsthisfunctionandthecompanyisfulfilling

itsobjectivesbybothmeetingandexceedingitsCSItargetsina

responsiblemanner.

Managing a budget that disbursed R58,8 million is similar to

running a medium-sized business. However, as a part of the

operationsofastate-ownedcompany,itcarriesstringentoversight

and governance obligations. The Corporate Social Investment

portfolio,throughtheCSICommittee,isresponsiblefor:

• Custodianship of the Corporate Social Investment strategy

developmentandreview.

• Ensuringthatthisstrategyintegrateswiththeoverallbusiness

strategy.

• Theidentificationandimplementationofprojectsatcorporate

level,with theproviso that theselectedprojectscomplement

businessobjectives.

• The provision of strategic support for airport-based projects,

bothintheiridentificationandimplementation.

• SecuringapprovalfromtheCSICommitteeforallkeyprojects,

while providing guidance on opportunistic interventions that

standtobenefitthebusiness.

• Providinganoveralladministrativefunctionfortheportfolio.

• Managing the reporting, monitoring and evaluation of the

function.

Overtheyears,AirportsCompanySouthAfricahasstriventobe

a responsibleandcaringcorporatecitizen,pursuingkeystrategic

projects that have enabled the Group to make meaningful

contributionstowardsimprovingthequalityoflifeofdisadvantaged

SouthAfricans.

Thefocusoftheprogrammesisintheareasofcommunitysupport,

carefortheenvironmentandsupportingpeoplewithdisabilities.

Empowerment of women, youth development, education and

training are critical subsets of these categories. Involvement of

AirportsCompanySouthAfricastaffmembersinCSIprojectsisa

vitalelementoftheGroup’sstrategicfocus.

The importance and relevance of staff involvement in projects,

especiallythoseassociatedwiththeairports,providedtheimpetus

for the formation of CSI committees at the larger airports.

Responsibilitiesincludetheassessmentandadjudicationofprojects

submittedbystaffmembersforsupport.Itextendstotheoverall

managementofprojects,andtheirgovernanceandreporting.

mOBIlIty

AirportsCompanySouthAfricahas,formanyyears,givenpriority

to providing access to, and means of mobility for people with

physicaldisabilitiesthroughprojectsthatenhancetheirintegration

intosociety,providephysicalsupport,infrastructureimprovement,

skills development, education and awareness. Four long-term

initiativessupportthisobjective:WheelchairTennis,theOuteniqua

WheelchairChallenge, theWheelchairDonationProgrammeand

theDisabilityTrade&LifestyleExpoandConference.

AirportsCompanySouthAfricawas recognisedat theDecember

2012 National Disability Awards for its commitment and

investmentwithin thedisabilityenvironment, through itsworld-

classprogrammes.ThecompanyreceivedtheprestigiousNational

Disability Champion Award, which recognises sustained and

extraordinarycommitmenttoimprovingthelivesofpersonswith

disabilities.

The 8th Annual Airports Company South Africa Disability Trade

& Lifestyle Expo and Conference was held in September 2012.

Sponsored by Airports Company South Africa, the conference

servesasaplatformwherechallengesexperiencedbypeoplewith

disabilitiesareraisedandalsoengagesdelegatesonhowtheycan

worktogethertowardsfindingsolutionsthatwillimprovethelives

ofpeoplewithdisabilities.

TheWheelchair Donation Programme has provided in excess of

10 000 wheelchairs and buggies since the inception of the

programme ten years ago. In the 2012/13 financial year,

688wheelchairsandbuggieswerehandedover.Eachwheelchair

recipientisassessedbyatherapisttodeterminethesizeandbest

configuration of the chair.This depends on the severity of the

disability and might include features such as upholstery, special

footrests,cushionsandupholsteryforbackposture,oraposture

buggyforthosewithmoresevereposturaldeformities. Itshould

benotedthatthewheelchairsaremanufacturedinSouthAfrica.

Wheelchair tennis is ayoung sport inSouthAfrica, nowonly in

itstenthyear.AirportsCompanySouthAfricahasbeenthemain

sponsor of the sport, through Wheelchair Tennis South Africa

(WTSA),forthepasteightyears.Itisgratifyingthatthissupport

hasenabledthesporttoflourish,andtoday,morethan450players

receive coaching each week at 45 active development centres

acrossSouthAfrica.

Amazingly, SouthAfrica has sixty players in the world rankings,

surpassed only by japan. Furthermore, four players qualified on

meritfortheLondonParalympicsinLondonin2012.Considering

that the sport is so young, SouthAfrican players have raced up

theworld rankingsandLucasSithole,SouthAfrica’snumberone

quadriplegicplayer,hasnowachievedapersonalbest rankingof

world number five. Kgothatso Montjane (fondly known as‘KG’),

SouthAfrica’snumberonewomanplayer,hasachievedapersonal

bestrankingofnumbersixintheworld.

78

COmmunIty SuppORt

Largely implemented through the programmes of the individual

airports, this component of the overall company objectives has

advancedasprogressivelyasanyotherinthepasttwoyears.

Recognitionof localcommunityneeds isbest identifiedthrough

Groupemployeeswhoareeitherclosetoorpartofthatcommunity.

The nine airports support a multiplicity of projects and

programmes,rangingfromsupportfororphansanddisadvantaged

children,homesforchildrenwithdisabilitiesandschooldonation

programmes to education, skills development for unemployed

people,socialenterpriseacceleratorsandcommunitysupportand

upliftment.

wOmEn’S vOluntEER pROgRammE

The Women’s volunteer Programme is a CSI initiative that

allowsemployees toplaya significant role inmakingapositive

contribution towards the development of our communities.

Throughthisprogramme,thevolunteersareempoweredtomakea

positivedifferenceatspecialneedsschoolsaroundourairportsthat

provideeducationforlearnerswithdisabilities.

The programme was launched in 2009 and encourages women

employeestoidentifyspecialneedsschoolsthatrequireassistance

withimprovingthelivesofthepupils.Theprojectiscurrentlyactive

forO.R.TamboandCapeTownInternationalAirportsandCorporate

Officeemployees.

The project is run in partnership with theAssociation of People

withDisability(APD),whichprovidesprojectmanagementservices

toAirportsCompanySouthAfricaandincludesdirect interaction

withthevolunteersandtheschools.

EnvIROnmEnt

Responsibility for the effect that we have as individuals and

organisations on the environment in which we live and operate

hasbecomefarmoreacceptedinthepastfewyears.KingIIIand

theGlobalReporting Initiativehaveprovidedclearguidelines for

reportingobligationsandthese, in turn,havehadaconsiderable

influenceonattitudestowardstheenvironment.

AirportsCompany SouthAfrica owns nine substantial properties

acrossSouthAfricaandthecompanyismeticulousinstrivingfor

compliancewithregulationsandlegislation.However,ittakesits

responsibilities farbeyondcomplianceby includingwide-ranging

programmes, within the corporate social investment sphere, to

supportenvironmentalinitiatives.

This has been achieved by developing strategic partnerships

that support key community environmental projects in airport

precincts andareas surrounding them.Some importantnational

environmentalprojectsarealsosupported.

ThepartnershipwiththeWildlandsConservationtrust isfocused

on an initiative centredon theTongaatRiver catchment,within

whichliesthemajorityofthefootprintofKingShakaInternational

Airport.

Theproject supports andmanages the sustainabledevelopment

of the Hambanathi and Ndwedwe communities, both of which

arepoor communitieswithurbanand rural components.A ten-

personrestorationteamhasbeenformed,consistingofpreviously

unemployedcommunitymembersagedbetween18and35.

Theprojectalsoincludesthesupportoftheexisting140Ndwedwe

community members, all drawn from the unemployed and

marginalisedsectorsofthecommunity,whogrowindigenoustrees

fromseed.Theseedlingsarebarteredforfood,buildingmaterials,

water tanks and educational support. Home-based vegetable

growing isalsoencouragedasameansofdiet supplementation

andincomegenerationthroughthesaleofexcessvegetables.

AirportsCompanySouthAfricahaspartneredwithBirdLifeSouth

Africa,theleadingbirdconservationnon-governmentalorganisation

(NGO) in South Africa. The Group’s support includes being a

‘SpeciesChampion’forthethreatenedSecretaryBird.Researchin

this programme involves attaching sophisticated, satellite-linked

trackingdevicestobirdstogainvaluableinformationabouttheir

movements and habits.Analysis of data to be collected over a

five-year period will inform the design and implementation of

conservationmeasurestopreventfurtherdeclineinthenumbers

ofthisiconicbird.

WWF-South Africa is part of the World Wildlife Fund global

network.ItisanNGOwiththegoalsofconservingSouthAfrica’s

biodiversity assets, addressing climate change and improving

the livelihoods of communities dependent on natural resources

throughbetterenvironmentalpractices.

As a means of demonstrating its belief in environmental

responsibility,AirportsCompanySouthAfricasupportsWWF-SA’s

Land and Stewardship Programme.The work of this programme

aimstoproduceanetworkoflandparcels,protectedfromadverse

humanimpacts,providingopportunitiestoexploresustainableland

usepracticesandinnovativelandtransactions.Theprogrammehas

a biodiversity conservation focus, which includes the protection

of endangered ecosystems, as well as identifying areas of high

wateryieldcriticaltothewatersecurityofanalreadywaterscarce

country.

soCial impaCt (Continued)

Financial contents

4. FinancialRiskManagement 103

5. SignificantAccountingEstimatesandJudgments 108

6. Property,PlantandEquipment 109

7. IntangibleAssets 112

8. InvestmentProperty 113

9. InvestmentinSubsidiaries 113

10. InvestmentinJointVentures 116

11. InvestmentinAssociates 116

12. OtherNon-currentAssets 119

13. Inventories 119

14. TradeandOtherReceivables 119

15. CashandCashEquivalents 119

16. Investments 120

17. Non-currentAssetsHeldforSale 120

18. ShareCapitalandPremium 120

19. TreasuryShareReserves 121

20. OtherReserves 121

21. RetirementBenefitObligations 122

22. DeferredIncome 124

23. DeferredTaxation 125

24. Interest-bearingBorrowings 126

25. TradeandOtherPayables 128

26. Provisions 128

27. DerivativeFinancialInstruments 129

28. FinancialGuarantee 130

29. Revenue 130

30. OtherOperatingIncome 131

31. EmployeeBenefitExpenses 131

32. OtherOperatingExpenses 131

33. NetFinanceIncomeandExpense 132

34. IncomeTaxExpense 132

35. EarningsandDividendsperShare 132

36. OperatingLeases 133

37. CapitalCommitments 133

38. RelatedParties 134

39. CashFlowWorkings 137

40. FinancialInstruments 138

41. ContingentLiabilities 143

42. EventsafterBalanceSheetDate 143

43. ReclassificationofComparitives 144

44. SegmentInformation 145

45. Irregularorfruitlessandwastefulexpenditure 148

StatiStical Review 149

adminiStRation 152

Statement of ReSponSibilitieS and appRoval 81

ceRtificate by company SecRetaRy 81

RepoRt of the boaRd audit and RiSk committee 82

RepoRt of the independent auditoRS 83

diRectoRS’ RepoRt 85

Statement of financial poSition 88

Statement of compRehenSive income 89

Statement of caSh flowS 90

Statement of changeS in equity 91

noteS to the financial StatementS 92

1. CorporateInformation 92

2. BasisofPreparation 92

3. SummaryofSignificantAccountingPolicies 92

3.1 BasisofConsolidation 92

3.2 RevenueRecognition 94

3.3 ConstructionContracts 95

3.4 OtherOperatingIncome 95

3.5 FinanceIncomeandExpense 96

3.6 Leases 96

3.7 ForeignCurrency 96

3.8 BorrowingCosts 97

3.9 EmployeeBenefits 97

3.10 IncomeTax 97

3.11 Property,PlantandEquipment 98

3.12 InvestmentProperty 99

3.13 IntangibleAssets 99

3.14 Impairment 99

3.15 Inventories 100

3.16 CashandCashEquivalents 100

3.17 FinancialInstruments 100

3.18 ShareCapital 101

3.19 Provisions 101

3.20 RelatedParties 102

3.21 OperatingSegments 102

3.22 EarningsperShare 102

3.23 Non-currentAssetsHeldforSale 102

3.24 GovernmentGrants 102

3.25 NewStandardsandInterpretations 102

notyetAdopted

For the year ended 31 March 2013

81Airports CompAny south AfriCA Integrated report 2013

Directors’ responsibility For the annual Financial statements

ThereportispresentedintermsofTreasuryRegulationsandthePublicFinanceManagementAct(Actno1of1999,asamended)(PFMA), which requires the directors to maintain adequateaccounting records to prepare financial statements that fairlypresent the consolidated and separate financial position ofAirportsCompanySouthAfricaSOCLtd(theCompanyandtheGroup). Informationpertaining to the companyand theGroupandperformanceagainstitspredefinedobjectivesisdisclosedonpage87oftheintegratedannualreport.

Theprescribeddisclosureoftheemoluments,intermsofTreasuryRegulation 28.1.1, is reflected in note 38.2 and note 38.3 onpages134to136oftheannualfinancialstatements.

TheBoardofDirectorsisresponsibleforthepreparationandfairpresentationoftheannualfinancialstatementsofthecompanyand the Group, comprising the consolidated and separatestatements of the financial position at 31 March 2013, theconsolidatedandseparatestatementsofcomprehensiveincome,changes inequityandcashflows for theyear thenended, thenotes to the financial statements, which include a summaryof significant accounting policies and other explanatory notes,and theDirectors’ Report, andhavebeenprepared in termsofInternational FinancialReportingStandards, theCompaniesActofSouthAfrica,71of2008,asamended,andthePublicFinanceManagementAct,1of1999,asamended.

Thedirectorsalsoconfirmtheotherinformationincludedintheintegratedannualreportandareresponsibleforbothitsaccuracyanditsconsistencywiththeannualfinancialstatements.

InorderfortheBoardofDirectorstodischargeitsresponsibilities,aswellasthosebestowedonitintermsofthePFMA,managementhas developed and continues to maintain a system of internalcontrols.The Board has ultimate responsibility for the systemofinternalcontrolsandreviewsitsoperationsprimarilythroughtheAuditandRiskCommitteeandvariousotherriskmonitoringcommittees.Nothingsignificanthascometotheattentionofthedirectorstoindicatethatanymaterialbreakdownhasoccurredinthefunctioningofthesecontrols,proceduresandsystemsduringtheyearunderreview.

The Board of Directors’ responsibilities include: designing,implementingandmaintaininginternalcontrolsrelevanttothepreparationand fair presentationof thesefinancial statementsthatarefreefrommaterialmisstatement,whetherduetofraudor error, selectingandapplyingappropriateaccountingpoliciesandmakingaccountingestimatesthatarereasonableunderthecircumstances.

TheBoardofDirectors’responsibilitiesalsoincludemaintainingadequate accounting records and an effective system of riskmanagement. The Board believes that the Company and theGroupwillbeagoingconcernintheyearaheadandhasforthisreasonadoptedthegoingconcernbasis inpreparingtheGroupannualfinancialstatements.

Theindependentexternalauditorsareresponsibleforexpressingan opinion on the consolidated and separate annual financialstatementsandwhethertheyarefairlypresentedinaccordancewiththeapplicablefinancialreportingframework.

Intheopinionofthedirectors,basedontheinformationavailabletodate,thefinancialstatements,assetoutonpages88to147,fairly present the financial position of the company and theGroupat31March2013and the resultsof itsoperationsandcashflowinformationfortheyearthenended.

TheCompanyandGroupannualfinancialstatementsfortheyearended31March2013havebeenpreparedunderthesupervisionof the Finance Director, Ms M Manyama-Matome CA (SA),approvedbytheBoardofDirectorsandsignedonitsbehalfon19July2013by:

b mabuza R morarChairman DeputyChairman19July2013 19July2013

In terms of S88(2)(e) of the CompaniesAct 71 of 2008, I, asCompany Secretary, certify that to the best of my knowledgeand belief,AirportsCompany SouthAfrica SOC Ltd has lodgedwith the Registrar of Companies for the financial year ended31 March 2013, all such returns as are required of a publiccompanyintermsoftheCompaniesActandthatallsuchreturnsaretrue,correctandup-to-date.

IntermsofS8(1)oftheAirportsCompanySouthAfricaAct44of1993,Icertifythat,forthefinancialyearended31March2013,

Airports Company South Africa SOC Ltd has lodged, with theMinisterofTransport,thefinancialstatementsinrespectoftheprecedingfinancialyear.

m manyama-matomeActingCompanySecretary19July2013

certiFicate by the company secretary


82

report oF the boarD auDit anD risk committee

ThereportoftheBoardAuditandRiskCommitteeisintermsof

TreasuryRegulations27(1)(10)(b)and(c)ofthePublicFinance

ManagementActno1of1999,asamended.Inexecutionofits

duties during the past financial year, the BoardAudit and Risk

Committeehas:

• ReviewedtheGroup’spoliciesandproceduresfordetecting

andpreventingfraud.

• ReviewedtheeffectivenessoftheGroup’spolicies,systems

andprocedures.

• Reviewed the effectiveness and adequacy of the Internal

Auditdepartmentandadequacyofitsannualworkplan.

• Considered whether the independence, objectives,

organisation staffing plans, financial budgets, audit plans

andstandingoftheinternalauditfunctionprovideadequate

supporttoenablethecommitteetomeetitsobjectives.

• Reviewedtheresultsoftheworkperformedbytheinternal

auditareas,internalcontrolandanysignificantinvestigation

andmanagementresponse.

• ReviewedtheGroup’scompliancewithsignificantlegaland

regulatoryprovisions.

• Reviewed such significant reported cases of employee

conflicts of interest, misconduct or fraud, or any other

unethicalactivitybyemployeesorthecorporation.

• Reviewed the controls over significant financial and

operationalrisks.

• ReviewedanyotherrelevantmattersreferredtoitbytheBoard.

• Reviewedtheadequacy,reliabilityandaccuracyoffinancial

information provided by management and other users of

suchinformation.

• Reviewedtheaccountingandauditingconcernsidentifiedby

internalandexternalauditors

• Reviewed the annual integrated report and financial

statements, taken as a whole, to ensure they present a

balanced and understandable assessment of the position,

performanceandprospectsofthecompany.

• RecommendedtheintegratedreportforapprovalbytheBoard.

• Reviewed the external auditors findings and reports

submittedtomanagement.

• Reviewedthe independenceandobjectivityoftheexternal

auditors.

• Reviewed the internal audit charter to ensure that the

internal audit function discharges its responsibilities with

independence and objectivity and in accordance with the

international standards for the professional practice of

internalauditing(standards).

Whereweaknesseswereidentifiedininternalcontrols,corrective

actionwastakentoeliminateorreducetherisks.TheBoardAudit

andRiskCommitteeisoftheopinion,basedontheinformation

andexplanationsgivenbymanagementand the InternalAudit

department and discussions with the independent external

auditorsontheresultsoftheiraudits,thattheinternalcontrolsof

thecompanyhaveoperatedeffectivelythroughouttheyearunder

reviewand,where internal controls didnotoperate effectively,

compensating controls have ensured the Group’s assets have

been safeguarded, proper accounting records maintained and

resourcesutilisedefficiently.

TheBoardAuditandRiskCommitteereviewedthe‘goingconcern’

oftheCompanyandtheGroupandissatisfiedthattheadoption

of the going concernpremise in thepreparationof the annual

financialstatementsisappropriate.

Wethereforerecommendthattheannualfinancialstatements,

assubmitted,beapproved.

OnbehalfoftheBoardAuditandRiskCommittee

mmt Ramano

Chairman

19July2013



report oF the inDepenDent auDitors

RepoRt on the conSolidated financial StatementS

intRoduction

Wehaveaudited theaccompanyingconsolidatedandseparate

financial statements of Airports Company South Africa (SOC)

Limited, which comprise the consolidated and separate

statementsoffinancial positionas at31March2013, and the

consolidatedandseparatestatementsofcomprehensiveincome,

theconsolidatedandseparatestatementsofchanges inequity

andtheconsolidatedandseparatestatementsofcashflowsfor

theyear thenended, anda summaryof significantaccounting

policiesandotherexplanatoryinformation,assetoutonpages

88to148.

diRectoRS’ ReSponSibility foR the financial

StatementS

Thecompany’sdirectorsareresponsibleforthepreparationand

fair presentation of these consolidated and separate financial

statementsinaccordancewithInternationalFinancialReporting

Standards and in the manner required by the Public Finance

ManagementActofSouthAfricaandtheCompaniesActofSouth

Africa,andforsuchinternalcontrolasthedirectorsdeterminesis

necessarytoenablethepreparationofconsolidatedandseparate

financial statements thatare free frommaterialmisstatement,

whetherduetofraudorerror.

auditoR’S ReSponSibility

Ourresponsibilityistoexpressanopinionontheseconsolidated

and separate financial statements based on our audit. We

conducted our audit in accordance with the Public Audit Act

ofSouthAfrica,theGeneralNoticeissuedintermsthereofand

International Standards on Auditing. Those standards require

thatwecomplywithethicalrequirementsandplanandperform

the audit to obtain reasonable assurance about whether the

consolidated and separate financial statements are free from

materialmisstatement.

Anauditinvolvesperformingprocedurestoobtainauditevidence

about the amounts and disclosures in the consolidated and

separatefinancialstatements.Theproceduresselecteddependon

theauditor’sjudgement,includingtheassessmentoftherisksof

materialmisstatementoftheconsolidatedandseparatefinancial

statements,whetherduetofraudorerror. Inmakingthoserisk

assessments,theauditorconsidersinternalcontrolrelevanttothe

entity’spreparationandfairpresentationoftheconsolidatedand

separatefinancial statements inorder todesignauditprocedures

thatareappropriateinthecircumstances,butnotforthepurpose

ofexpressinganopinionontheeffectivenessoftheentity’sinternal

control.An audit also includes evaluating the appropriateness of

accounting policies used and the reasonableness of accounting

estimatesmadebymanagement,aswellasevaluatingtheoverall

presentationoftheconsolidatedandseparatefinancialstatements.

Webelievethattheauditevidencewehaveobtainedissufficient

andappropriatetoprovideabasisforourauditopinion.

opinion

Inouropinion,theconsolidatedandseparatefinancialstatements

present fairly, in all material respects, the financial position of

Airports Company South Africa (SOC) Limited as at 31 March

2013, and its financial performance and cash flows for the year

then ended in accordance with International Financial Reporting

Standards and in the manner required by the Public Finance

Management Act of South Africa and the Companies Act of

SouthAfrica.

otheR RepoRtS RequiRed by the companieS act

As part of our audit of the consolidated and separate financial

statementsfortheyearended31March2013,wehavereadthe

Directors’Report,theAuditCommittee’sReportandthecompany

Secretary’sCertificateforthepurposeofidentifyingwhetherthere

arematerialinconsistenciesbetweenthesereportsandtheaudited

consolidatedandseparatefinancial statements.These reportsare

the responsibility of the respective preparers. Based on reading

these reports we have not identified material inconsistencies

betweenthesereportsandtheauditedconsolidatedandseparate

financialstatements.However,wehavenotauditedthesereports

andaccordinglydonotexpressanopiniononthesereports.

otheR matteRS

Thesupplementaryinformationassetoutonpages148to150does

notformpartoftheconsolidatedandseparatefinancialstatements

and is presented as additional information.We have not audited

thisinformationandaccordinglydonotexpressanopinionthereon.

Of the total number of 12 targets planned for the year, five of

the targetswerenot achievedduring theyearunder review.This

represents 33 percent of total planned targets that were not

achievedduringtheyearunderreview.


84

report oF the inDepenDent auDitors (continueD)

RepoRt on otheR legal and RegulatoRy

RequiRementS

paa Requirements

In accordance with the PAA and the General Notice issued

in terms thereof, we report the following findings relevant to

performanceagainstpredeterminedobjectives,compliancewith

lawsandregulationsandinternalcontrol,butnotforthepurpose

ofexpressinganopinion.

predetermined objectives

Weperformedprocedurestoobtainevidenceabouttheusefulness

and reliability of the information in the annual performance

reportassetoutonpage87oftheannualreport.

Thereportedperformanceagainstpredeterminedobjectiveswas

evaluatedagainsttheoverallcriteriaofusefulnessandreliability.

Theusefulnessofinformationintheannualperformancereport

relatestowhetheritispresentedinaccordancewiththeNational

Treasury annual reporting principles and whether the reported

performance is consistent with the planned objectives. The

usefulness of information further relates to whether indicators

andtargetsaremeasurable(i.e.welldefined,verifiable,specific,

measurable and time bound) and relevant as required by

the National Treasury Framework for managing programme

performanceinformation.

The reliability of the information in respect of the selected

objectivesisassessedtodeterminewhetheritadequatelyreflects

thefacts(i.e.whetheritisvalid,accurateandcomplete).

Therewerenomaterialfindingsontheannualperformancereport

concerningtheusefulnessandreliabilityoftheinformation.

compliance with laws and Regulations

We did not identify any instances of material non-compliance

withspecificmattersinkeyapplicablelawsandregulationsasset

outintheGeneralNoticeissuedintermsofthePAA.

companies act Requirements

As required by the CompaniesAct of SouthAfrica, 2008 (Act

No.71of2008),weperformedauditproceduresoncompliance

withrequirementsoftheAct.Nofindingswerenoted.

internal control

Wedidnotidentifyanydeficienciesininternalcontrolwhichwe

consideredsufficientlysignificantforinclusioninthisreport

pricewaterhousecoopers inc

Director:RDhanlall

RegisteredAuditor

Johannesburg

21August2013

ngubane & co (Jhb) inc

Director:ESibanda

RegisteredAuditor

Midrand

21August2013



Directors’ report

TheDirectorspresenttheir20thannualreport,whichformspart

of the audited financial statements of the Company and the

Groupfortheyearended31March2013.

ThecompanywasestablishedintermsoftheAirportsCompany

Act of 1993 as amended and the Companies Act of 2008 as

amended.

natuRe of buSineSSThe principal activities of the company are the acquisition,

development,provision,maintenance,managementandoperation

ofairportsorpartsofairportsoranyfacilitiesorservicesthatare

normallyperformedatanairport.OtheroperationsintheGroup

mainlycomprisehoteloperations.

There have been no material changes to the nature of the

Groups’sbusinessfromprioryears.

Review of opeRationSRevenuefortheGroupamountedtoR6,660billion(2012:R5,739

billion) including non-aeronautical revenue of R2,414 billion

(2012:R2,389billion).

ProfitbeforeincometaxfortheGroupamountedtoR1,641billion

(2012:R118million).

The profit for the year for theGroup was R991 million (2012:

R188 million) after making provision for taxation expense of

R650million(2012:R-70milliontaxincome).

dividendS

Nodividendwaspaidduringthefinancialyear.On26July2013,

theBoardofDirectorsproposedanordinarydividenddeclaration

of10%ofgroupprofitfortheyear.

capital eXpendituRe and capital commitmentS

During the year R990 million (2012: R417 million) was spent

on capital expenditure relating to improvements, expansions

andreplacementsbytheGroup.(RefertoNotes6to8formore

details.)

ShaRe capital

Therewerenochangestotheauthorisedandissuedsharecapital

ofthecompanyandtheGroupduringthefinancialyear.

going conceRn

TheDirectorshavenoreasontobelievethat theGrouporany

materialcompanywithintheGroupwillnotbegoingconcerns

in the foreseeable futurebasedon forecastsandavailablecash

resources.

eventS SubSequent to RepoRting Sheet date

weakening of the Rand against the dollar

The Rand/Dollar exchange weakened by approximately nine

percent from R9,225 to around R10,092 since year end.The

effect on the figures at 31 March 2013 would have been to

increasetheGroupequityandGroupprofitbyR62,553million.

SubSidiaRieS, Joint ventuReS and aSSociateS

Thefollowinginformationrelatestothecompany’sfinancialinterestsinitssubsidiaries,associatesandjointventures.Thenatureofthe

subsidiaries’businessesareinformationtechnology,airportmanagementandhoteloperations.

issued share capital % holding cost of shares

loans less impairments

(loss)/profit after tax

2013%

2012%

2013R’000

2012R’000

2013R’000

2012R’000

2013R’000

2012R’000

OSIAirportSystems(Pty)Ltds 1000 51 51 ** ** – – – –

PilanesbergInternationalAirport(Pty)Ltds

1000 – – – – – – – (3088)

Precinct2A(Pty)Ltd 100 100 100 ** ** 636 523 54489 (9 559) 13198

JIAPiazzaPark(Pty)Ltds 100 100 100 ** ** – 321 (2 052) (1716)

AirportLogisticsPropertyHoldings(Pty)LtdJV

2 50 50 ** ** – – 2 906 3153

GuardriskLifeLtd(cellcaptive)s 40 100 100 225 225 – – 1 013 (348)

ACSAGlobalLtds 6 100 100 ** ** 99 804 79438 44 014 162494

LaMercyJVPropertyInvestments(Pty)Ltda

100 40 40 ** ** – – 4 855 451

AeroportodeGuarulhosParticipaçõesS.A.a

852826000 10 – 76 892 – – – (7 846) –

77 117 225 736 327 134248 33 331 174144**AmountsbelowR1000sSubsidiaryJVJointVentureaAssociate


86

SubSidiaRieS, Joint ventuReS and aSSociateS (continued)TheGrouphasa50percentinterestinAirportLogisticsPropertyHoldings(Pty)Ltd,whichisajointventurebetweenthecompanyandTheBidvestGroupLtd.

ACSA Global Ltd holds a 10 percent interest in the MumbaiInternational Airport concession (MIAL). ACSA Global Ltdis registered in Mauritius. The investment in MIAL has beenaccountedforasanassociate.

TheGrouphasa40percentstakeintheLaMercyJVPropertyInvestments (Pty) Ltd company. The company is a propertyholding,developmentand lettingcompany.The investment inthecompanyhasbeenaccountedforasanassociate.

ACSASOCLtdholdsa10percent interest intheAeroportodeGuarulhosParticipaçõesS.A.concession.AeroportodeGuarulhosParticipaçõesS.A.isregisteredinBrazil.Theinvestmenthasbeenaccountedforasanassociate.

Detailsoftheassets,liabilities,revenuesandexpensesofthejointventures and associates that are included in the consolidatedstatement of comprehensive income and the statement offinancialpositionaresetout innotes10and11oftheannualfinancialstatements.TheGroup’s accounts include the consolidation of theAirportManagement Share Incentive Scheme Company (Pty) Ltd andLexshell 342 Investment Holdings (Pty) Ltd. These companiesare consolidated in terms of International Financial ReportingStandards.TheGroupconsolidatestheseentitiesasitisexposedto significant risks that are associated with loans extended totheentitiestoacquiresharesofthecompany.Furthermore,theGroupreceivesrewardsassociatedwiththeemploymentofthebeneficiaries.

Effective 1 October 2011,Airport Company SouthAfrica (‘thecompany’) ceased control, management and operationalresponsibilities of Pilanesberg International Airport as per theagreementwiththeNorthWestProvincialGovernment.Refertonote9formoredetails.

oRdinaRy ShaReholding analySiSAnanalysisofshareholdersextractedfromtheregisterofordinaryshareholdersat31March2013isasfollows: % of number

share of

capital shares

SAGovernment–National 74,60 372994884DepartmentofTransport ADRInternational 20,00 100000000AirportsSA(Pty)Ltd(referbelow) StaffShareIncentiveSchemes 1,19 5962452

% of number

share of

capital shares

Empowerment Investors

G10Investments(Pty)Ltd 1,21 6042664

AfricanHarvestStrategic 1,40 7000000

Investments(Pty)Ltd

PybusThirtyFour 0,40 2000000

Investments(Pty)Ltd

TelleInvestments(Pty)Ltd 0,80 4000000

UpfrontInvestments64(Pty)Ltd 0,40 2000000

100,00 500 000 000

ADR InternationalAirports SA (Pty) Ltd is ultimately a wholly

ownedsubsidiaryofthePublicInvestmentCorporationSOCLtd,

whichmanagesassetsonbehalfoftheGovernmentEmployees’

PensionFund.

diRectoRS and SecRetaRyDetailsoftheDirectorsandSecretaryofthecompanyaregiven

onpages8to11ofthisIntegratedreport.

inteReStS of diRectoRS and officeRSNocontractswereentered into inwhichdirectors andofficers

of the companyhadan interest andwhichaffect thebusiness

oftheGroup.Thedirectorshadnointerestinanythirdpartyor

companyresponsibleformanaginganyofthebusinessactivities

of theGroup.The emoluments of directors are determined by

theshareholders.Nolong-termservicecontractsexistbetween

directors and the company (other than for non-executive

directors).(Directorsemolumentscanbefoundinnotes38.2and

38.3.)

infoRmation RequiRed in teRmS of the public finance management actLosses due to criminal conduct or irregular or fruitless and

wasteful expenditure:

Intermsofthematerialityframeworkagreedwiththeshareholder,

any lossesdue to criminal conductor irregularor fruitless and

wasteful expenditure that individually (or collectively where

itemsarecloseyrelated)exceedR10million,mustbereported.

FruitlessandwastefulexpenditureofR13,6million,andirregular

expenditure of R32,8 million, was suffered by the Group in

relation to an information technology contract entered into in

an irregular manner. Management has instituted preventative

and corrective measures as considered appropriate, including

disciplinaryandpossiblelegalaction.

Management has controls in place to monitor and report on

this type of expenditure on a regular basis.This information is

consideredandpresented to theExecutiveCommitteeand the

AuditandRiskCommitteeforreviewonaquarterlybasis.

Directors’ report (continueD)



Directors’ report (continueD)

performance against predetermined objectives

national objectives business objectives

annual performance

indicators annual target Results

Managementof

transportcosts

andinfrastructure

developmentto

contributetoGrowth

andDevelopment

Programme

Contributetowardsjob

creation

Totalnumberofjob

opportunitiescreatedin

linewithcapexspend

andotherinitiatives

20380 20325

Efficientadministration

oftheorganisation

Providereturnsto

shareholders

Achievebudgeted

returnoncapital

employed(ROCE)for

theGroup

8,2% 7,68%

Achievebudgeted

EBITDAfortheGroup

R4,303billion R4,494billion

ebitda margin = 65%

(budgeted: 62%)

Corporategovernance

andlegislative

compliance

Ensurecompliance

tolicenceandgood

corporatecitizenship

Extentofregulatory

compliance

Achievefullregulatory

compliance

Nomaterialnon-

compliancenoted

Blackeconomic

empowerment

Ensurecompliancewith

CodeofGoodPractice

onB-BBEE

Achievementoftargets

setbytheBoardon

b-bbee

Level4 Level3

Employmentequity Ensurecompliancewith

EmploymentEquity

legislation

Achievementoftargets

setbytheBoard

executive

81,80%Black

18,20%White

Senior management

67,40%Black

32,60%White

disabled

1,7%

(ofstaffcomplement)

gender

targets

executive

78%male

22%female

Senior management

67%male

33%female

executive

44%-Black

56%-White

Senior management

73%-Black

27%-White

disabled

1,24%

(ofstaffcomplement)

gender performance

executive

89%male

11%female

Senior management

68%male

32%female

Corporatesocial

Investment

Ensureinvestmentin

CSI

Totalamountinvested

inCSI

R56million R58,8million

Improvedairfreight

services

Developairfreight

strategy

Developcargostrategy Implementandroll-out

cargostrategy

Notachieved

Information presented in terms of s(55)2 of the PFMA:


88

gRoup company

31 march 31March 31 march 31March

2013 2012 2013 2012

Note R’000 R’000 R’000 R’000

aSSetS

non-current assets 24 779 618 24594799 23 797 858 23166948

Property,plantandequipment 6 20 260 408 20624767 20 236 977 20602926

Investmentproperty 8 3 166 027 2832652 2 263 137 1959582

Intangibleassets 7 150 480 214745 150 465 214498

Investmentinsubsidiaries 9 – – 782 975 180569

Investmentinjointventures 10 – – * *

Investmentsinassociates 11 932 832 748643 112 273 35381

Othernon-currentassets 12 269 871 173992 252 031 173992

current assets 3 408 662 3621856 3 339 449 3532243

Inventories 13 6 222 6220 – –

Derivativefinancialinstruments 27 11 214 – 11 214 –

Tradeandotherreceivables 14 925 209 1035251 919 064 1029001

Investments 16 1 204 998 600000 1 204 998 600000

Cashandcashequivalents 15 1 261 019 1980385 1 204 173 1903242

non-current assets held for sale 17 – 1850000 – 1850000

total assets 28 188 280 30066655 27 137 307 28549191

equity and liabilitieS

equity

Sharecapital 18 500 000 500000 500 000 500000

Sharepremium 18 250 000 250000 250 000 250000

Otherreserves 20 (203 714) 719096 (83 287) 856346

Treasurysharereserve 19 (44 024) (44024) – –

Retainedearnings 10 436 782 8264557 9 487 426 7396482

total equity attributable to equity holders 10 939 044 9689629 10 154 139 9002828

total equity 10 939 044 9689629 10 154 139 9002828

non-current liabilities 13 364 441 16993204 13 162 508 16832724

Interest-bearingborrowings 24 11 919 339 15647002 11 880 909 15600538

Retirementbenefitobligations 21 185 482 125577 168 514 125577

Derivativefinancialinstruments 27 226 551 129426 226 551 129426

Deferredincome 22 72 248 74059 72 248 74059

Deferredincometaxliabilities 23 960 821 1017140 814 286 903124

current liabilities 3 884 792 3383822 3 820 660 2713639

Tradeandotherpayables 25 857 085 948419 808 717 916240

Interest-bearingborrowings 24 2 855 688 1063774 2 839 924 442367

Provisions 26 103 500 87026 103 500 87026


Currentincometaxliability 20 437 16597 20 437 –

Deferredincome 22 2 699 1202657 2 699 1202657

total liabilities 17 249 234 20377026 16 983 168 19546363

total equity and liabilities 28 188 280 30066655 27 137 307 28549191

*AmountlessthanR1000

consoliDateD statement oF Financial position



GROUP COMPANY

31March 31March 31March 31March

2013 2012 2013 2012

Note R’000 R’000 R’000 R’000

Revenue 29 6660261 5738543 6506729 5586104

Otheroperatingincome 30 268565 150967 236329 462

Employeebenefitexpenses 31 (873954) (769481) (853229) (750859)

Depreciationandamortisationexpense 6&7 (1411432) (1463804) (1407473) (1446725)

Otheroperatingexpenses 32 (1561182) (1554866) (1519164) (1523309)

Operatingprofit 3082258 2101359 2963192 1865673

Shareofprofitofequityaccountedassociate 11 21108 51035 – –

Netfinanceexpense 33 (1462326) (2034327) (1394346) (1962983)

Financeincome 33 124728 47133 153470 48786

Financeexpenses 33 (1612484) (1594657) (1573246) (1524966)

Lossesonremeasurementanddisposaloftrading 33 25430 (486803) 25430 (486803)

financialinstruments

Profit/(losses)beforetax 1641040 118067 1568846 (97310)

Incometaxexpense 34 (649975) 69506 (654928) 89566

Profit/(loss)fortheyear 991065 187573 913918 (7744)

Othercomprehensiveincomefortheyear,netoftax 5367 (102180) (15590) (34732)

Fairvalueoninvestmentproperty 67303 – 67303 –

Actuariallossesondefinedbenefitpostretirement 21 (17276) (8008) (17276) (8008)

medicalaidliability

Foreigncurrencytranslationdifferences 28166 (46028) – –

Cashflowhedgereserveonderivativefinancialinstruments (71680) (40231) (71680) (40231)

Incometaxrelatingtocomponentsof (1146) (7913) 6063 13507

othercomprehensiveincome

Totalcomprehensiveincomefortheyear 996432 85393 898328 (42476)

Profit/(loss)attributabletoownersoftheparent 991065 187573 913918 (7744)

Totalcomprehensiveincomeattributabletoownersoftheparent 996432 85393 898328 (42476)

Earnings/(loss)pershare

Basic(cents) 200,61 37,97 182,78 (1,57)

Diluted(cents) 200,61 37,97 182,78 (1,57)

Consolidated statement of Comprehensive inCome


90

consoliDateD statement oF cash Flows

gRoup company


2013 2012 2013 2012

Note R’000 R’000 R’000 R’000

caSh flowS fRom opeRating activitieS

Cashreceiptsfromcustomers 6 684 679 5784485 6 546 468 5492881

Cashpaidtosuppliersandemployees (2 463 597) (2830062) (2 434 184) (2737153)

Cashgeneratedfromoperations 39.1 4 221 082 2954423 4 112 284 2755728

Incometax(paid)/received 39.2 (404 001) 34680 (386 473) 40700

Interestreceived 124 728 47132 153 470 48786

Netcashinflowfromoperatingactivities 3 941 809 3036235 3 879 281 2845214

caSh flowS fRom inveSting activitieS

Increaseininvestmentsinassociates (76 892) (32163) (76 892) (3131)

Increaseinshort-terminvestments (604 998) (600000) (604 998) (600000)

Loans(grantedto)/repaidbysubsidiaries – – (635 206) 107716

Proceedsondisposalofproperty,plantandequipment 3 520 13703 3 481 13703

ProceedsondisposalofAssetsHeldforSale 650 000 1200000 650 000 1200000

Additionstoproperty,plantandequipmentand (990 628) (417100) (985 266) (414438)

investmentproperty

Netcashoutflowfrominvestingactivities (1 018 998) 164440 (1 648 881) 303850

caSh flowS fRom financing activitieS

Interest-bearingborrowingsrepaid (2 094 838) (2962394) (1 481 162) (2957044)

Interest-bearingborrowingsraised – 2960429 – 2960429

Financialinstrumentsheldfortrading (72 743) (425861) (72 743) (425861)

Interestpaid (1 474 891) (1471292) (1 375 564) (1401937)

Netcash(outflow)/inflowfromfinancingactivities (3 642 472) (1899118) (2 929 469) (1824413)

Netforeigncurrencytranslationadjustments 295 (53) – –

(decrease)/increase in cash and cash equivalents (719 366) 1301504 (699 069) 1324651

Cashandcashequivalentsatbeginningofyear 1 980 385 678881 1 903 242 578591

cash and cash equivalents at end of year 15 1 261 019 1980385 1 204 173 1903242



consoliDateD statement oF changes in equity

treasury

Share Share Retained share other deben-

capital premium earnings reserve reserves total tures total

R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000

gRoupbalance at 1 april 2011 500000 250000 8070624 (44024) 821637 9598237 6000 9604237transactions with owners

comprehensive incomeProfitfortheyear – – 187573 – – 187573 – 187573

other comprehensive income – – 6360 – (102541) (96181) (6000) (102181)Actuariallossesondefinedbenefit – – – – (5767) (5767) – (5767)postretirementmedicalaidliability,netoftaxForeigncurrencytranslationdifferences,netoftax (67448) (67448) – (67448)Cashflowhedgereserveonderivativefinancial – – – – (28966) (28966) – (28966)instruments,netoftaxTransferbetweenreserves – – 6360 – (360) 6000 (6000) –

total comprehensive income – – 193933 – (102541) 91392 (6000) 85392

balance at 1 april 2012 500000 250000 8264557 (44024) 719096 9689629 – 9689629

transactions with owners

comprehensive incomeProfitfortheyear – – 991 065 – – 991 065 – 991 065

other comprehensive income – – 1 181 160 – (922 810) 258 351 – 258 351Actuariallossesondefinedbenefit – – – – (12 439) (12 439) – (12 439)postretirementmedicalaidliability,netoftax Gainonrevaluationofinvestmentproperty, 48 458 48 458 – 48 458netoftaxForeigncurrencytranslationdifferences, – – – – 20 957 20 957 – 20 957netoftaxCashflowhedgereserveonderivative – – – – (51 610) (51 610) – (51 610)financialinstruments,netoftaxTransferondisposalofassetheldforsale, – – 928 176 – (928 176) – – –netoftax(note17) Deferredtaxontransfer – – 252 984 – – 252 984 – 252 984

total comprehensive income – – 2 172 225 – (922 810) 1 249 415 – 1 249 415

balance at 31 march 2013 500 000 250 000 10 436 782 (44 024) (203 714) 10 939 044 – 10 939 044

company Balanceat1April2011 500000 250000 7404226 – 891079 9045305 – 9045305

transactions with owners –

comprehensive incomeProfitfortheyear – – (7744) – – (7744) – (7744)

other comprehensive income – – – – (34733) (34733) – (34733)Actuariallossesondefinedbenefitpostretirementmedicalaidliability,netoftax – – – – (5767) (5767) – (5767)Cashflowhedgereserveonderivativefinancialinstruments,netoftax – (28966) (28966) – (28966)

total comprehensive income – – (7744) – (34733) (42477) – (42477)

balance at 1 april 2012 500 000 250 000 7 396 482 – 856 346 9 002 828 – 9 002 828

transactions with owners

comprehensive income – – 913 918 – – 913 918 – 913 918Profitfortheyear

other comprehensive income – – 1 177 026 – (939 633) 237 393 – 237 393Actuariallossesondefinedbenefit – – – – (12 439) (12 439) – (12 439)postretirementmedicalaidliability,netoftax Cashflowhedgereserveonderivative – – – – (51 610) (51 610) – (51 610)financialinstruments,netoftaxGainonrevaluationofinvestmentproperty, – – – – 48 458 48 458 48 458netoftaxTransferondisposalofassetheldforsale, – – 924 042 – (924 042) – – –netoftax(note17)Deferredtaxontransfer – – 252 984 – – 252 984 – 252 952

total comprehensive income – – 2 090 944 – (939 633) 1 151 311 – 1 151 311

balance at 31 march 2013 500 000 250 000 9 487 426 – (83 287) 10 154 139 – 10 154 139


92

notes to the Financial statements

1 coRpoRate infoRmation

AirportsCompanySouthAfricaSOCLimitedisacompany

domiciledinSouthAfrica.Theaddressofthecompany’s

registered office isThe Maples, RiverwoodsOffice Park,

24JohnsonRoad,Bedfordview.Thefinancialstatements

of the company for the year ended 31 March 2013

comprise those of the company and its subsidiaries

(together referred to as the ‘Group’ and individually

as ‘Group entities’) and the Group’s interest in jointly

controlledandassociatedentities.TheGroupisprimarily

involved in the acquisition, development, provision,

maintenance, management and operation of airports

orpartsofairportsorany facilitiesor services thatare

normallyperformedatanairport.Otheroperationsinthe

Groupmainlycomprisehoteloperations.

2 baSiS of pRepaRation

The financial statements have been prepared in

accordance with International Financial Reporting

Standards (IFRS) and its interpretations issued by the

InternationalAccountingStandardsBoard(IASB),aswell

as the requirements of the South African Companies

Actof2008andtherequirementsofthePublicFinance

ManagementAct(Act1of1999,asamended).

2.1 basis of measurement

The financial statements have been prepared on the

historicalcostbasis,exceptforinvestmentpropertyand

certainfinancialinstrumentsthatarecarriedatfairvalue.

2.2 functional and presentation currency

ThesefinancialstatementsarepresentedinSouthAfrican

Rand, which is the company’s functional currency. All

financialinformationpresentedinRandhasbeenrounded

tothenearestthousand.

Theaccountingpoliciessetoutbelowhavebeenapplied

consistently to all periods presented in these financial

statements,andhavebeenappliedconsistentlybyGroup

entities.

3 SummaRy of Significant accounting

policieS

3.1 basis of consolidation

Subsidiaries

Subdiaries are all entities (including special purpose

entities) over which the Group has the power to

govern the financial and operating policies generally

accompanyinga shareholdingofmore thanhalf of the

votingrights.Theexistenceandeffectofpotentialvoting

rights that are currently exercisable or convertible are

considered when assessing whether theGroup controls

another entity. Subsidiaries are fully consolidated from

the date on which control is transferred to the Group.

Consolidationceasesfromthedatethatcontrolceases.

The Group uses the acquisition method of accounting

toaccountforbusinesscombinations.Theconsideration

transferredfortheacquisitionofasubsidiary is thefair

values of the assets transferred, the liabilities incurred

and the equity interests issued by the Group. The

consideration transferred includes the fair value of any

assetorliabilityresultingfromacontingentconsideration

arrangement.Acquisition-related costs are expensed as

incurred. Identifiable assets acquired and liabilities and

contingentliabilitiesassumedinabusinesscombination

aremeasuredinitiallyattheirfairvaluesattheacquisition

date.On an acquisition-by-acquisition basis, theGroup

recognises any non-controlling interest in the acquiree

either at fair value or at the non-controlling interest’s

proportionateshareoftheacquiree’snetassets.

The company’s investments in subsidiaries are carried

at cost, net of accumulated impairment losses.Cost is

adjustedtoreflectthechangesinconsiderationarising

from contingent consideration amendments. Cost also

includesdirectlyattributablecostsofinvestment.




policieS (continued)

3.1 basis of consolidation (continued)

Subsidiaries (continued)

Theexcessoftheconsiderationtransferred,theamount

of any non-controlling interest in the acquiree and the

acquisition-datefairvalueofanypreviousequityinterest

intheacquireeover the fairvalueof theGroup’sshare

of the identifiable net assets acquired is recognised

asgoodwill. If this is less than the fairvalueof thenet

assetsofthesubsidiaryacquiredinthecaseofabargain

purchase, the difference is recognised directly in the

statementofcomprehensiveincome.

Associates

Associates are all entities over which the Group

has significant influence but not control, generally

accompanyingashareholdingofbetween20percentand

50percentofthevotingrights.Investmentsinassociates

areaccountedforusingtheequitymethodofaccounting

andareinitiallyrecognisedatcost.

TheGroup’sshareofitsassociates’post-acquisitionprofits

orlossesisrecognisedinthestatementofcomprehensive

income,anditsshareofpost-acquisitionmovementsin

reserves is recognised in reserves.The cumulative post-

acquisitionmovementsareadjustedagainstthecarrying

amount of the investment.When theGroup’s share of

losses in an associate equals or exceeds its interest in

theassociate,includinganyotherunsecuredreceivables,

theGroupdoesnotrecognisefurtherlosses,unlessithas

incurredobligationsormadepaymentsonbehalfofthe

associate.

UnrealisedgainsontransactionsbetweentheGroupand

itsassociatesareeliminatedtotheextentoftheGroup’s

interest in the associates. Unrealised losses are also

eliminatedunlessthetransactionprovidesevidenceofan

impairmentoftheassettransferred.Accountingpolicies

of associates have been changed where necessary to

ensure consistency with the policies adopted by the

Group. Dilution gains and losses arising in investments

in associates are recognised in the statement of

comprehensiveincome.

Jointlycontrolledentities

Ajointlycontrolledentityisajointventurethatinvolves

theestablishmentofacorporation,partnershiporother

entityinwhicheachventurerhasaninterest.Theentity

operates inthesamewayasotherentities,exceptthat

a contractual arrangement between the venturers

establishesjointcontrolovertheeconomicactivityofthe

entity.

Thecompany’sinvestmentinjointlycontrolledentitiesis

carriedatcost,netofaccumulatedimpairmentlosses.

The Group has an interest in a joint venture which

is a jointly controlled entity, whereby the venturers

have a contractual arrangement that establishes joint

control over the economic activities of the entity.The

Grouprecognises its interests inthejointventureusing

proportionate consolidation. The Group combines its

shareofeachoftheassets,liabilities,incomeandexpenses

ofthejointventurewithsimilarlineitems,linebyline,in

its consolidated financial statements. Adjustments are

made in theGroup’s financial statements to eliminate

the Group’s share of unrealised gains and losses on

transactionsbetweentheGroupanditsjointlycontrolled

entity. Losseson transactions are recognised if the loss

provided evidence of a reduction in the net realisable

valueofcurrentassetsoran impairment loss.The joint

ventureisproportionatelyconsolidateduntilthedateon

which theGroup ceases to have joint control over the

jointventure.

Transactionseliminatedonconsolidation

Intra-Group balances and transactions, and any

unrealisedincomeandexpensesarisingfromintra-Group

transactions,areeliminatedinpreparingtheconsolidated

financialstatements.Unrealisedlossesareeliminatedin

thesamewayasunrealisedgains,butonlytotheextent

thatthereisnoevidenceofimpairment.

notes to the Financial statements (continueD)


94



3.1 basis of consolidation (continued)

Transactionswithminorityinterests

The Group treats transactions with non-controlling

interests as transactions with equity owners of the

Group. For purchases from non-controlling interests,

the difference between any consideration paid and the

relevantshareacquiredofthecarryingvalueofnetassets

ofthesubsidiaryisrecordedinequity.Gainsorlosseson

disposalstonon-controllinginterestsarealsorecordedin

equity.

When the Group ceases to have control or significant

influence, any retained interest in the entity is

remeasuredtoitsfairvalue,withthechangeincarrying

amountrecognisedinprofitorloss.Thefairvalueisthe

initialcarryingamountforthepurposesofsubsequently

accountingfortheretainedinterestasanassociate,joint

venture or financial asset. In addition, any amounts

previouslyrecognisedinothercomprehensiveincomein

respectofthatentityareaccountedforasiftheGroup

had directly disposed of the related assets or liabilities.

This may mean that amounts previously recognised in

other comprehensive income are reclassified to profit

orloss.

If theownership interest inanassociate is reducedbut

significant influence is retained, only a proportionate

share of the amounts previously recognised in other

comprehensive income is reclassified to profit or loss

whereappropriate.

3.2 Revenue recognition

Revenue comprises the fair value of the consideration

received or receivable for the sale of goods and

services in theordinarycourseof theGroup’sactivities.

Revenue is shown net of value-added tax, returns,

rebates and discounts and after eliminating sales

within the Group.The Group recognises revenue when

the amount of revenue can be reliably measured, it is

probable that future economic benefits will flow to

the entity and when specific criteria have been met

for each of the Group’s activities as described below.

TheGroupbasesitsestimatesonhistoricalresults,taking

into consideration the type of customer, the type of

transactionandthespecificsofeacharrangement.

Rentalincomeisrecognisedinprofitandlossonastraight-

linebasisoverthetermofthelease.Leaseincentivesare

recognisedasanintegralpartofrentalincome,overthe

termofthelease.

RevenueoftheGroupcomprisesthefollowing:

aeronautical revenue

Aeronauticalrevenueconsistsofthefollowing:

Landing fees

Landingfeesaredeterminedbyusingregulatedtariffsfor

aircraftlandingsbasedonthemaximumtake-offweight

oflandingaircraftsforeachlanding.

Passenger service charges

Passenger service charges are determined by using

regulated tariffs for each departing passenger at an

airportofdeparture.

Aircraft parking

Aircraftparkingfeesaredeterminedonregulatedtariffs

foreachaircraftparkedforoverfourhours,basedonthe

maximumtake-offweightofaircraftparkingper24-hour

period.

commercial revenue

Commercialrevenueconsistsofthefollowing:

Advertising

Revenue is generated through the rental of advertising

space to concessionaires. Rental income is normally

basedonthehigherofaminimumguaranteedrentalora

percentageofturnover.

Retail

Revenue is generated through the rentalof retail space

toconcessionaires.Rental income isnormallybasedon

the greater of a percentage of turnover or a minimum

monthlyrental.






3.2 Revenue recognition (continued)

commercial revenue (continued)

Parking

Revenue generated by providing short- and long-term

parkingfacilitiesisdeterminedontime-basedtariffs.

Car hire

Revenueisgeneratedfromconcessionfeesandtherental

ofspaceandkioskstocarhirecompanies.

Property rental

Revenue is generated through the rentals of offices, air

lounges, aviation fuel depots, warehousing, logistics

facilities,hotelsandfillingstations,basedonmedium-to

long-termrentalagreementswithtenants.

Hotel operations

Revenuecomprisestheinvoicevalueofaccommodation

and the sale of food and beverages. Accommodation

income is recognised inthefinancialstatementsatthe

dateguestsareinvoiced.

Premiums received

Premiums received comprise the net gains on invest-

mentsinvestedinaninsurancecellcaptive.

Other

Other revenue mainly consists of the recovery of

electricity and water charges and fees charged for the

issuingofpermits,anddividendincome.

Dividend income is recognised in profit and loss on

the date that the Group’s right to receive payment is

established.

3.3 construction contracts

Constructionrevenue

AconstructioncontractisdefinedbyIAS11,‘Construction

contracts’, as a contract specifically negotiated for the

constructionofanasset.

When the outcome of a construction contract can be

estimated reliably, and it is probable that the contract

will be profitable, contract revenue is recognised over

theperiodof thecontractby reference to the stageof

completion. Contract costs are recognised as expenses

byreferencetothestageofcompletionofthecontract

activity at the end of the reporting period.When it is

probable that total contract costs will exceed total

contract revenue, theexpected loss is recognisedasan

expenseimmediately.

Whentheoutcomeofaconstructioncontractcannotbe

estimatedreliably,contractrevenueisrecognisedonlyto

theextentofcontractcostsincurredthatarelikelytobe

recoverable.

Variations in contract work, claims and incentive

paymentsareincludedincontractrevenuetotheextent

thatmayhavebeenagreedwith thecustomerandare

capableofbeingreliablymeasured.

TheGroupuses the‘percentage-of-completion’method

to determine the appropriate amount to recognise in

a given period. The stage of completion is measured

by reference to the contract costs incurred up to the

end of the reporting period as a percentage of total

estimatedcostsforeachcontract.Costs incurredinthe

yearinconnectionwithfutureactivityonacontractare

excludedfromcontractcostsindeterminingthestageof

completion.

Onthebalancesheet,theGroupreportsthenetcontract

positionforeachcontractaseitheranassetoraliability.

A contract represents an asset where costs incurred,

plus recognised profits (less recognised losses), exceed

progress billings; a contract represents a liability where

theoppositeisthecase.

3.4 other operating income

Other incomeisanyincomethataccruedtotheGroup

fromactivitiesthatarenotpartofthenormaloperations

andisrecognisedasearned.



96



3.5 finance income and expense

Finance income comprises interest income on funds

invested. Interest income is recognised as it accrues in

profitandloss,usingtheeffectiveinterestmethod.

Finance expenses comprise interest expense on

borrowings.All borrowingcostsare recognised inprofit

andloss,usingtheeffectiveinterestmethod.

3.6 leases

Paymentsmadeunderoperatingleasesarerecognisedin

profitand lossonastraight-linebasisover thetermof

thelease.Leaseincentivesarerecognisedasanintegral

partofthetotalleaseexpense,overthetermofthelease.

Minimum lease payments made under finance leases

are apportioned between the finance expense and

the reduction of the outstanding liability. The finance

expenseisallocatedtoeachperiodduringtheleaseterm

soastoproduceaconstantperiodicrateofintereston

theremainingbalanceoftheliability.

Contingentleasepaymentsareaccountedforbyrevising

theminimumleasepaymentsovertheremainingtermof

theleasewhenthecontingencynolongerexistsandthe

leaseadjustmentisknown.

LeasesintermsofwhichtheGroupassumessubstantially

all the risks and rewards of ownership are classified as

financeleases.Uponinitialrecognition,theleasedassets

are 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 assets

are accounted for in accordance with the accounting

policyapplicabletothoseassets.

Other leasesareoperating leasesnot recognised in the

Group’sstatementoffinancialposition.

3.7 foreign currency

foreign operations

Theassetsandliabilitiesofforeignoperations,including

goodwillandfairvalueadjustmentsarisingonacquisition,

aretranslatedtoSouthAfricanRandatclosingrate.The

income and expenses of foreign operations, excluding

foreign operations in hyperinflationary economies, are

translatedtoSouthAfricanRandatexchangeratesatthe

datesofthetransactions.

Foreign currency differences are recognised directly in

othercomprehensive income.Whenaforeignoperation

isdisposedof,inpartorinfull,therelevantamountinthe

ForeignCurrencyTranslationReserve(FCTR)istransferred

toprofitandloss.

Foreignexchangegainsandlossesarisingfromamonetary

item receivable from or payable to a foreign operation,

thesettlementofwhich isneitherplannednor likely in

the foreseeable future, are considered to form part of

netinvestmentinaforeignoperationandarerecognised

directlyinothercomprehensiveincomeintheFCTR.

foreign currency transactions and balances

Transactions in foreign currencies are translated to the

respective functional currencies of Group entities at

exchangeratesatthedatesofthetransactions.Monetary

assets and liabilities denominated in foreign currencies

at the reporting date are translated to the funtional

currencyat theexchange rateat thatdate.The foreign

currencygainorlossonmonetaryitemsisthedifference

betweentheamortisedcostofthefunctionalcurrencyat

thebeginningoftheperiod,adjustedforeffectiveinterest

andpaymentsduringtheperiod,andtheamortisedcost

inforeigncurrencytranslatedattheexchangerateatthe

end of the period. Non-monetary assets and liabilities

denominated in foreign currencies that are measured

at fairvalueare retranslatedto the functionalcurrency

attheexchangerateatthedatethatthefairvaluewas

determined. Foreign currency differences arising on

translationarerecognisedinprofitandloss.






3.8 borrowing costs

Borrowing costs directly attributable to the acquisition,

constructionorproductionofqualifyingassets,whichare

assetsthatnecessarilytakeasubstantialperiodoftime

togetreadyfortheirintendeduseorsale,areaddedto

the cost of those assets, until such time as the assets

are substantially ready for their intended use or sale.

Investmentincomeearnedonthetemporaryinvestment

of specific borrowings, pending their expenditure on

qualifyingassets, isdeducted fromtheborrowingcosts

eligibleforcapitalisation.

Allotherborrowingcostsarerecognisedinprofitandloss

intheperiodinwhichtheyareincurred.

3.9 employee benefits

defined contribution plans

A defined contribution plan is a plan under which an

entity pays fixed contributions into a separate entity

andwillhaveno legalorconstructiveobligationtopay

furtheramounts.Obligationsforcontributionstodefined

contribution pension plans and medical aid schemes

arerecognisedasanemployeebenefitexpenseinprofit

and loss when they are due. Prepaid contributions are

recognisedasanassettotheextentthatacashrefundor

areductioninfuturepaymentsisavailable.

other long-term employee benefits

TheGroup’snetobligationinrespectofpost-employment

medical benefits is the amount of future benefit that

employees have earned in return for their services in

thecurrentandpriorperiods.Thebenefit isdiscounted

todetermineitspresentvalue,andthefairvalueofany

relatedassetsisdeducted.Thediscountrateisdetermined

by theactuarial assumptions thathavematurity terms

approximatingthetermsoftheGroup’sobligations.The

calculation isperformedusing theprojectedunit credit

method.

TheGrouprecognisesallactuarialgainsandlossesarising

from experience adjustments and changes in actuarial

assumptionsdirectlytoequityinthestatementofother

comprehensiveincomeintheperiodinwhichtheyarise.

Short-term benefits

Short-term employee benefit obligations are measured

onanundiscountedbasisandareexpensedastherelated

serviceisprovided.

A liability is recognised for theamountexpected tobe

paid under short-term cash bonus or incentive scheme

plans if the Group has a present legal or constructive

obligationtopaythisamountasaresultofpastservice

provided by the employee, and the obligation can be

estimatedreliably.

3.10 income tax

Incometaxexpensecomprisescurrentanddeferredtax.

Incometaxisrecognisedintheprofitandloss,exceptto

theextentthatitrelatestoitemsrecogniseddirectlyin

equity,inwhichcaseitisrecognisedinequity.

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 the

previousyears.

Deferred tax is recognised using the balance sheet

methodbyprovidingfortemporarydifferencesbetween

thecarryingamountsofassetsandliabilitiesforfinancial

reporting purposes and the amounts used for taxation

purposes.Deferredtaxisnotrecognisedforthefollowing

temporary differences: the initial recognition of assets

and 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

extentthatisprobablethattheywillnotreverseinthe

foreseeablefutureandthetimingofthereversalofthe

temporarydifferenceiscontrolledbytheGroup.

In addition, deferred tax is not recognised for taxable

temporarydifferencesarisingontheinitialrecognitionof

goodwill. Deferred tax is measured at the tax rate that

is expected to be applied to the temporary differences

whentheyreverse,basedonlawsthathavebeenenacted

orsubstantivelyenactedbythereportingdate.



98



3.10 income tax (continued)

Deferredtaxassetsand liabilitiesareoffset if there isa

legallyenforceablerighttooffsettheliabilitiesandassets,

andtheyrelatetoincometaxesleviedbythesametax

authorityonthesametaxableentity,orondifferenttax

entities, but they intend to settle current tax liabilities

andassetsonanetbasis,ortheirtaxassetsandliabilities

willberealisedsimultaneously.

Adeferred tax asset is recognised to the extent that it

is probable that future taxable profits will be available

againstwhichthetemporarydifferencescanbeutilised.

Deferredtaxassetsarereviewedateachreportingdate

andarereducedtotheextentthatitisnolongerprobable

thattherelatedtaxbenefitwillrealise.

Additionalincometaxesthatarisefromthedistribution

of dividends are recognised at the same time as the

liabilitytopaytherelateddividendisrecognised.

3.11 property, plant and equipment

Recognition and measurement

Items of property, plant and equipment are measured

atcost lessaccumulateddepreciationandaccumulated

impairmentlosses.

Costincludesexpenditurethatisdirectlyattributableto

theacquisitionoftheasset.Thecostofself-constructed

assets includes the cost of materials and direct labour,

anyothercostsdirectlyattributabletobringingtheasset

toaworkingconditionforitsintendeduse,andthecosts

ofdismantlingandremovingtheitemsandrestoringthe

siteonwhichtheyarelocated.Purchasedsoftwarethat

isintegraltothefunctionalityoftherelatedequipment

iscapitalisedaspartofthatequipment.Borrowingcosts

relatedtotheacquisitionandconstructionofqualifying

assetsarecapitalisedduringtheperiodoftimerequired

tocompleteandpreparethepropertyforitsintendeduse,

aspartofthecostoftheasset.

Whenpartsofanitemofproperty,plantandequipment

(i.e. equipment, motor vehicles, roads, runways and

aprons,andbuildings)havedifferentusefullives,theyare

accountedforasseparateitems(majorcomponents)of

property,plantandequipment.

Gainsandlossesondisposalaredeterminedbycomparing

theproceedsfromdisposalwiththecarryingamountof

property, plant and equipment and are recognised net

within‘otheroperatingincome’inprofitandloss.

Reclassification to investment property

Property that is being constructed for future use as

investment property is accounted for as Investment

propertyat cost if fair value is not easilydeterminable

untilthedevelopmentiscomplete.

Subsequent costs

Thecostof replacingpartofan itemofproperty,plant

and equipment is recognised in the carrying amount

of the item if it is probable that the future economic

benefitsembodiedwithinthepartwillflowtotheGroup

and its cost can be measured reliably.The costs of the

day-to-day servicing of property, plant and equipment

arerecognisedinprofitandloss,asincurred.

depreciation

Depreciationisrecognisedinprofitandlossonastraight-

line basis to reduce the assets to their residual values

over theestimateduseful livesofeachpartofan item

of property, plant and equipment. Leased assets are

depreciatedovertheshorteroftheleasetermandtheir

usefullivesunlessitisreasonablycertainthattheGroup

willobtainownershipbytheendoftheleaseterm.Land

isnotdepreciated.

Theestimatedusefullivesforthecurrentand

comparativeperiodsareasfollows:

–Equipment 3–12years

–Motorvehicles 5years

–Roads,runwaysandaprons 20–50years

–Buildings 20–30years

Depreciationmethods,usefullivesandresidualvaluesare

re-assesedateachreportingdate.






3.12 investment property

Investmentproperty ispropertywhich isheldeither to

earnrentalincome,orforcapitalappreciation,orforboth,

butnot for sale in theordinarycourseofbusiness,use

in the production or supply of goods or services or for

administrative purposes. Investment property is carried

atfairvalue,representingopenmarketvaluedetermined

annually by independent expert valuers. Fair value is

basedonactivemarketprices,adjusted,ifnecessary,for

any difference in the nature, or location or condition

of the specific asset. If the information is not available,

theGroup uses alternative valuation methods, such as

recentpriceson lessactivemarketsordiscountedcash

flow projections.Changes in fair values are recorded in

comprehensiveincomeaspartofotherincome.

3.13 intangible assets

Intangible assets comprise: computer software, develop-

ment costsof theEnterpriseResourcePlanning system

and other information management systems. These

intangible assets are measured initially at cost and

are carried at cost less accumulated amortisation and

accumulatedimpairmentlosses.

Subsequent expenditure

Subsequentexpenditureoncapitalised intangibleassets

iscapitalisedonlywhenitincreasesthefutureeconomic

benefitsembodiedinthespecificassettowhichitrelates.

Allotherexpenditureisexpensedasincurred.

amortisation

Intangible assets are amortised on a straight-line

basis over their estimated useful lives and assessed for

impairment whenever there is an indication that the

intangible asset may be impaired. Intangible assets are

amortised fromthedatetheyareavailable foruse.The

amortisationperiodandtheamortisationmethodforan

intangibleassetarereviewedateachfinancialyear-end.

Thecurrentestimatedusefullifeisthreetofiveyears.

3.14 impairment

non-financial assets

The carrying amounts of the Group’s non-financial

assets, other than investment property, inventories and

deferredtaxassets,arereviewedateachreportingdateto

determinewhetherthereisanindicationofimpairment.

Ifanysuchindicationexists,thentheasset’srecoverable

amountisestimated.

The recoverableamountofanassetor cash-generating

unit is the greater of its value in use and its fair value

lesscoststosell.Inassessingvalueinuse,theestimated

future cashflowsarediscounted to their present value

usingapre-taxdiscountratethatreflectscurrentmarket

assessments of the time value of money and the risks

specific to the asset. For the purpose of impairment

testing, assets are grouped together into the smallest

groups of assets that generate cash inflows from

continuingusethatare largely independentofthecash

inflows of other assets or groups of assets (the ‘cash-

generating unit’). The goodwill acquired in a business

combination, for the purpose of impairment testing, is

allocated tocash-generatingunits thatareexpected to

benefitfromthesynergiesofthecombination.

Animpairmentlossisrecognisedifthecarryingamount

of an asset or its cash-generating unit exceeds its

recoverableamount.Impairmentlossesarerecognisedin

profitand loss. Impairment losses recognised in respect

ofcash-generatingunitsareallocatedfirsttoreducethe

carryingamountofanygoodwill allocated to theunits

and then to reduce the carrying amount of the other

assetsintheunit(groupofunits)onaproratabasis.

financial assets

A financial asset is assessed at each reporting date to

determinewhetherthereisanyobjectiveevidencethatit

isimpaired.Afinancialassetisconsideredtobeimpaired

ifobjectiveevidence indicatesthatoneormoreevents

hadanegativeeffectontheestimatedfuturecashflows

ofthatasset.



100



3.14 impairment (continued)

financial assets (continued)

ThecriteriathattheGroupusestodeterminethatthere

isobjectiveevidenceofanimpairmentlossinclude:

–Abreachofcontract,suchasadefaultordelinquency

inpayments

–Theprobabilitythatthedebtorwillenterbankruptcyor

otherfinancialreorganisation

–Observabledataindicatingthatthereisameasurable

decrease in the estimated future cash flows from a

portfoliooffinancialassetssincetheinitialrecognition

ofthoseassets.

An impairment loss in respect of a financial asset

measured at amortised cost is calculated as the

differencebetweenthecarryingamountandthepresent

valueof theestimated future cashflowsdiscountedat

theoriginaleffectiveinterestrate.

Individually significant financial assets are tested for

impairment on an individual basis. The remaining

financial assets are assessed collectively in groups that

sharesimilarcreditriskcharacteristics.

Allimpairmentlossesarerecognisedinprofitandloss.

An impairment loss is reversed if the reversal can be

related objectively to an event occurring after the

impairment loss was recognised. For financial assets

measuredatamortisedcost,thereversalisrecognisedin

profitandloss.

3.15 inventories

Inventories are measured at the lower of cost and net

realisablevalue.Thecostof inventories isbasedonthe

‘first-in, first-out’ principle, and includes expenditure

incurred in acquiring the inventories, production or

conversion costs and other costs incurred in bringing

themtotheircurrentlocationandcondition.

Netrealisablevalueistheestimatedsellingpriceinthe

ordinarycourseofbusiness, less theestimatedcostsof

completionandsellingexpenses.

3.16 cash and cash equivalents

Cashandcashequivalentsincludescashinhand,deposits

held at call with banks, other short-term, highly-liquid

investmentswithoriginalmaturitiesofthreemonthsor

less,andbankoverdrafts.

3.17 financial instruments

non-derivative financial instruments

Non-derivative financial instruments comprise

investments in equity and debt securities, trade and

other receivables, cash and cash equivalents, loans and

borrowings,andtradeandotherpayables.

Non-derivative financial instruments are recognised

initially at fair value plus, for instruments not at fair

value through profit and loss, any directly attributable

transaction costs. Subsequent to initial recognition

non-derivative financial instruments are measured as

describedbelow.

Accountingforfinanceincomeandexpenseisdiscussed

innote3.5.

Financial assets are derecognised when the contractual

rightstoreceivecashflowsfromthefinancialassetshave

expiredorwheretheGrouphastransferredsubstantially

alltherisksandrewardsofownership,withoutretaining

control.Anyinterestinthetransferredfinancialassetthat

is created or retained by theGroup is recognised as a

separateassetorliability.

A financial liability is derecognised when the obligation

undertheliabilityisdischarged,cancelledorexpires.Where

anexistingfinancialliabilityisreplacedbyanotherfromthe

samelenderonsubstantiallydifferentterms,ortheterms

ofanexistingliabilityaresubstantiallymodified,suchan

exchangeormodificationistreatedasaderecognitionof

theoriginalliabilityandtherecognitionofanewliability,

and the difference in the respective carrying amounts is

recognisedinprofitorloss.






3.17 financial instruments (continued)

held-to-maturity investments

IftheGrouphasapositiveintentandabilitytoholddebt

securitiestomaturity,thentheyareclassifiedasheld-to-

maturity.Held-to-maturityinvestmentsaremeasuredat

amortisedcostusingtheeffective interest ratemethod,

lessanyimpairmentlosses.

financial assets at fair value through profit and loss

Aninstrumentisclassifiedatfairvaluethroughprofitand

lossifitisheldfortradingorisdesignatedassuchupon

initial recognition. Financial instruments are designated

atfairvaluethroughprofitandlossiftheGroupmanages

suchinvestmentsandmakespurchasesandsaledecisions

basedontheirfairvalueinaccordancewiththeGroup’s

documented risk management or investment strategy.

Upon initial recognition attributable transactions

costs are recognised in profit and loss when incurred.

Financial instruments at fair value through profit and

lossaremeasuredatfairvalue,andchangesthereinare

recognisedinprofitandloss.

non-derivative financial instruments

Loansandreceivables

Loansandreceivablesarenon-derivativefinancialassets

withfixedordeterminablepaymentsthatarenotquoted

inanactivemarket.Theyare included incurrentassets,

except for maturities greater than 12 months after

the end of the reporting period.These are classified as

non-current assets. The Group’s loans and receivables

comprise‘tradeandotherreceivables’andcashandcash

equivalentsinthebalancesheet.

Other

Cash and cash equivalents are measured at amortised

cost.

Othernon-derivativefinancialinstrumentsaremeasured

at amortised cost using the effective interest method,

lessanyimpairmentlosses.

The effective interest rate method is a method of

calculating the amortised costof afinancial assetor a

financialliabilityandofallocatingtheinterestincomeor

interestexpenseovertherelevantperiod.

Derivativefinancialinstruments

The Group holds derivative financial instruments to

hedgeitsforeigncurrencyandinterestrateriskexposures.

Embedded derivatives are separated from the host

contract and accounted for separately if the economic

characteristics and risks of the host contract and the

embeddedderivativearenotclosely related,a separate

instrument with the same terms as the embedded

derivative would meet the definition of a derivative,

and the combined instrument is not measured at fair

value throughprofitand loss.Changes in the fair value

of separable embedded derivatives are recognised

immediatelyinprofitandloss.

Derivatives are recognised initially at fair value;

attributable transaction costs are recognised in profit

andlosswhenincurred.Subsequenttoinitialrecognition,

derivativesaremeasuredatfairvalue,andchangesinfair

valuearerecognisedinprofitandloss.

Economichedges

The derivative instruments are used to hedge the

risk of fluctuations in monetary assets and liabilities

denominated in foreign currencies.The entity does not

haveadesgnatedhedging strategyanddoesnot apply

hedgeaccountingthereforethechangesinthefairvalue

of such derivatives are recognised in profit and loss as

partofforeigncurrencygainsandlosses.

3.18 Share capital

Ordinarysharesareclassifiedasequity.Incrementalcosts

directlyattributable tothe issueofordinarysharesand

shareoptionsarerecognisedasadeductionfromequity,

netofanytaxeffects.

3.19 provisions

A provision is recognised if, as a result of a past event,

theGrouphasapresentlegalorconstructiveobligation

thatcanbeestimatedreliably,anditisprobablethatan

outflowof economicbenefitswill be required to settle

theobligation.Provisionsaredeterminedbydiscounting

the expected future cash flows at a pre-tax rate that

reflectscurrentmarketassessmentsofthetimevalueof

moneyandtherisksspecifictotheliability.



102



3.20 Related parties

Airport Company South Africa’s related parties include

entitiesdirectlyorindirectlyownedbytheSouthAfrican

Government.

Keymanagementisdefinedasbeingindividualswiththe

authority and responsibility for planning, directing and

controllingtheactivitiesoftheentity.TheGroupregards

allindividualsfromthelevelofGroupExecutiveuptothe

BoardofDirectorsaskeymanagementperthedefinition

ofthestandard.

Close family members of key management personnel

are considered to be those family members who may

be expected to influence, or be influenced by key

managementindividualsintheirdealingswiththeentity.

Other related party transactions are also disclosed in

termsoftherequirementsofthestandard.Theobjective

ofthestandardandthefinancialstatementsistoprovide

relevantandreliableinformationandthereforemateriality

isconsideredinthedisclosureofthesetransactions.

3.21 operating segments

Operatingsegmentsarereportedinamannerconsistent

withtheinternalreportingprovidedtothechiefoperating

decision-maker.The chief operating decision-maker has

beenidentifiedastheExecutiveCommitteethatmakes

strategicdecisions.

3.22 earnings per share

TheGrouppresentsbasicanddilutedearningspershare

(EPS)dataforitsordinaryshares.BasicEPSiscalculated

by dividing the profit and loss attributable to ordinary

shareholders of the company by the weighted average

numberofordinarysharesoutstandingduringtheperiod.

DilutedEPSisdeterminedbyadjustingtheprofitandloss

attributable to ordinary shareholders and the weighted

average number of ordinary shares outstanding for the

effects of all dilutive potential ordinary shares, which

comprises convertible bonds and shareoptions granted

toemployees.

3.23 non-current assets held for sale

Non-currentassets(ordisposalgroups)areclassifiedas

assetsheldforsalewhentheircarryingamountistobe

recoveredprincipallythroughasaletransactionandasale

isconsideredhighlyprobable.Theyarestatedatthelower

ofcarryingamountandfairvaluelesscoststoselliftheir

carryingamountistoberecoveredprincipallythrougha

saletransaction,ratherthanthroughcontinuinguse.

3.24 government grants

Government grants are recognised initially as deferred

incomeatfairvaluewhenthereisreasonableassurance

that they will be received and the Group will comply

with the conditions associated with the grant. Grants

that compensate the Group for expenses incurred

are recognised in profit or loss as other income on

a systematic basis in the same periods in which the

expenses are recognised. Grants that compensate the

Groupforthecostofanassetarerecognisedinprofitor

lossonasystematicbasisovertheusefullifeoftheasset.

3.25 new standards and interpretations issued but not yet

effective

The following standards and amendments to existing

standards have been published and are mandatory for

theGroup’saccountingperiodsbeginningonorafterthe

datesasindicated,buttheGrouphasnotearlyadopted

them.

3.25.1 amendment to ifRS 7 financial instruments

disclosure (effective 1 January 2013)

The IASB has published an amendment to IFRS

7, ‘Financial instruments: Disclosures’, reflecting the

joint requirements with the FASB to enhance current

offsetting disclosures. These new disclosures are

intended to facilitate comparison between those

entities thatprepare IFRSfinancial statementstothose

that prepare financial statements in accordance with

US GAAP.The Group will apply the amendment from

1April2013.

3.25.2 amendments to iaS 19 employee benefits

(effective 1 January 2013)

TheIASBhasissuedanamendmenttoIAS19,‘Employee

Benefits’, which makes significant changes to the

recognitionandmeasurementofdefinedbenefitpension

expenseandterminationbenefits,andtothedisclosures

for all employee benefits. The Group will apply the

amendmentfrom1April2013.






3.25.3 amendment to ifRS 9 – financial instruments


This IFRS ispartofthe IASB’sprojecttoreplace IAS39.

IFRS 9 addresses classification and measurement of

financial assets and replaces the multiple classification

andmeasurementmodelsinIAS39withasinglemodel

that has only two classification categories: amortised

costandfairvalue.TheGroupwillapplytheamendment

on1April2015.

The IASB has updated IFRS 9, ‘Financial instruments’

to include guidance on financial liabilities and

derecognition of financial instruments. The accounting

and presentation for financial liabilities and for

derecognising financial instruments has been relocated

from IAS 39, ‘Financial instruments: Recognition and

measurement’, without change, except for financial

liabilities that are designated at fair value through

profit or loss.TheGroup will apply the amendment on

1April2015.

3.25.4 ifRS 10 – consolidated financial statements


Thisstandardbuildsonexistingprinciplesbyidentifying

the concept of control as the determining factor

in whether an entity should be included within the

consolidatedfinancialstatements.Thestandardprovides

additional guidance to assist in determining control

wherethisisdifficulttoassess.Thisnewstandardmight

impact the entities that a Group consolidates as its

subsidiaries. The Group will apply the amendment on

1April2013.

3.25.5 ifRS 11 – Joint arrangements


This standard provides for a more realistic reflection

of joint arrangements by focusing on the rights and

obligations of the arrangement, rather than its legal

form.There are two types of joint arrangements: joint

operations and joint ventures. Joint operations arise

where a joint operator has rights to the assets and

obligations relating to the arrangement and hence

accountsforitsinterestinassets,liabilities,revenueand

expenses. Joint ventures arise where the joint operator

has rights to the net assets of the arrangement and

hence equity accounts for its interest. Proportional

consolidation of joint ventures is no longer allowed.

TheGroupwillapplytheamendmenton1April2013.

3.25.6 ifRS 12 - disclosure of interests in other entities


This standard includes the disclosure requirements for

all forms of interests in other entities, including joint

arrangements, associates, special purpose vehicles and

otheroffbalancesheetvehicles.TheGroupwillapplythe

amendmenton1April2013.

3.25.7 ifRS 13 – fair value measurement


This standard aims to improve consistency and reduce

complexity by providing a precise definition of fair

value and a single source of fair value measurement

and disclosure requirements for use across IFRSs. The

requirements,whicharelargelyalignedbetweenIFRSand

USGAAP,donotextendtheuseoffairvalueaccounting

but provide guidance on how it should be applied

where itsuse is already requiredorpermittedbyother

standardswithinIFRSorUSGAAP.TheGroupwillapply

theamendmenton1April2013.

4 financial RiSk management

TheGrouprecognisesthataneffectiveriskmanagement

function is fundamental to its business. Taking

international best practice into account, Airports

CompanySouthAfrica’scomprehensiveriskmanagement

processinvolvesidentifying,understandingandmanaging

the risks associated with each of theGroup’s business

units. Risk awareness, control and compliance are

embeddedintheGroup’sday-to-dayactivities.TheGroup

RiskManagementunitindependentlymonitors,manages

andreportsriskasmandatedbytheBoardofDirectors

through the Board Risk Committee, and the Treasury

and Economic Regulation Committee. The Executive

Committeeandbusinessunitsareultimatelyresponsible

formanagingrisksthatarise.



104

4 financial RiSk management (continued)

Soundfinancialriskmanagementframeworkisinplaceat

AirportsCompanySouthAfrica,basedonabest-practice

EnterpriseRiskManagementFramework,builtonrigorous

governancestructures.Theseframeworksaresupportedby

anexperiencedteamthatmanagestheexposuresacross

theGroup structures and these are regularly monitored

andreportedtotherespectivecommitteesandultimately

toBoard.

credit risk

Credit risk istheriskof losstotheGroupasaresultof

the failure by a customer or counterparty to meet its

contractual obligations. The credit risk that Airports

Company South Africa faces arises mainly from

commercial and aeronautical business.These risks are

mitigatedby theguaranteesheld for theexposureata

given period. Credit risks can also arise from cash and

cash equivalents, accounts receivable and derivative

financial instruments. These risks are effectively

managed in terms of the Board approved financial risk

management framework that specifies the investment

and counterparty policies. As at 31 March 2013 the

Grouphadnosignificantconcentrationofcreditriskfrom

treasurytradingactivities.

trade and other receivables

TheGroup’sexposuretocredit risk is influencedmainly

by the individual characteristics of each customer.The

demographics of the Group’s customer base, including

the default rate of the industry and country in which

customers operate, has less of an influence on credit

risk. Approximately 32 percent (2012: 32 percent)

of the Group’s aeronautical revenue is attributable

to transactions with a single customer. The main

concentrationofcreditriskisintheJohannesburgregion,

whichapproximate61percent(2012:58percent)ofthe

tradereceivablesoftheGroup.

The Treasury and Economic Regulation Committee

has established a credit policy under which each new

customer is analysed individually for creditworthiness

before the Group’s standard payment terms and

conditions are offered. The Group’s review includes

externalratings,whereavailable,andinsomecasesbank

references.Creditlimitsareestablishedforeachcustomer,

whichrepresentsthemaximumopenamount,andthese

limitsarereviewedonanongoingbasis.Customersthat

fail to meet the Group’s benchmark creditworthiness

maytransactwiththeGrouponlyonaprepayment/cash

basis.

More than 60 percent of the Group’s customers have

beentransactingwiththeGroupforover15years,and

losseshaveoccurredinfrequently.Inmonitoringcustomer

creditrisk,customersaregroupedaccordingtotheircredit

characteristics, includingwhether theyare individualor

legal entity,whether theyareaeronautical, commercial

or retail customer, geographic location, industry, aging

profile, maturity and existence of previous financial

difficulties. Trade and other receivables relate mainly

to theGroup’s aeronautical and commercial customers.

Customersthataregradedas‘highrisk’areplacedona

restrictedcustomerlist,andfuturetransactionsaremade

onaprepaymentbasiswithapprovaloftheTreasuryand

EconomicRegulationCommittee.

investments

In complying with the Treasury Regulation, Airports

Company South Africa’s Financial Risk Management

Framework limitstheGroupto investments inAshort-

term rated instrument or AAA rated instruments and

counterparts.

guarantees

TheGroup has no formal policy for providing financial

guarantees.

market risk

Market risk is theriskthattheAirportsCompanySouth

Africa’searningsorcapital,oritsabilitytomeetbusiness

objectives,will beadverselyaffectedby changes in the

levelorvolatilityofmarketratesorpricessuchasinterest

rates,foreignexchangeratesandcommodityprices.The

mainmarketriskarisesfromtreasuryactivitiesandboth

aeronautical and non-aeronautical business.The Group

hasdevelopedanalyticaltoolsthatareusedtoperform

variousanalysesinordertoassesstheimpactofmarket

riskonbusinessandtoidentifymitigantstomanagethe

riskwithinapprovedtolerancelevels.




Asat31March2013,theGrouphadcommittedandun-committedfacilitiesofR4,5billion(2012:R4,8billion).

committed uncommitted total

expiry date facility amount expiry date facility amount facility amount

R’000 R’000 R’000

April2013 250000 250 000

May2014 1000000 – 1 000 000

March2014 3250000 – 3 250 000

4250000 250000 4 500 000

Utilisedfacilities (2250000) – (2 250 000)

Totalunutilised 2000000 250000 2 250 000

Uncommittedfacilitiesrepresentundrawnlinesofcreditwherethebankhasanagreementwiththecompanytomakeavailablean

amount(uptothemaximumspecified)inloansondemandfromtheGroup.TheGroupisundernoobligationtoactuallytakeouta

loanatanyparticulartime.CommittedfacilitiesarethoselinesofcreditwheretheGroupandthebankhaveclearlydefinedterms

andconditionswhichbindthebanktolendtheGroupuptotheamountsstatedintheagreement.


interest rate risk

AirportsCompanySouthAfrica’s interest rate riskarises

from itsborrowings.Borrowings issuedatvariable rates

exposethecompanytocashflowrisks,andborrowings

issued at fixed rates expose the company to fair value

interestraterisk.AirportsCompanySouthAfrica’spolicy

istomaintainamixoffixedtofloatingratedebtwithin

theBoard-approvedparameters.

As at 31 March 2013,AirportsCompany SouthAfrica’s

fixedtofloatingrateprofileafterhedging,onnetdebtwas

77percent(2012:59percent)fixed.

tariff risk

Approximately half of theGroup’s revenue is regulated

byanindependenteconomicregulatorusingapricecap

methodology. The regulated tariff is linked to the CPI

index.AchangeinCPIhasapositiveoranegativeimpact

ontherevenueearnedbytheGroup.However,theGroup

is allowed to adjust the difference between actual and

forecastCPIinfuturetariffs.Thetariffisdeterminedevery

fiveyears,withanoptiontore-openafterthreeyears.The

Board has approved a regulatory strategy which seeks

toproactively influencethe regulatoryapproach in line

withbestpractice. In this regard, theGroupproactively

manages the economic regulatory risk while balancing

theinterestsofboththeGroupandthecustomers.

foreign exchange risk

Airports Company South Africa has two foreign

investmentsthatgivesrisetolimitedexposuretoforeign

currencyrisk,arisingprimarilywithrespecttotheBrazilian

Realand IndianRupee.All foreigndebt instrumentsare

issued in Rands or, where applicable, hedged through

cross-currency swaps. The Group also uses foreign

exchangecontractstohedgematerialexpenditureonce

theprojectorpurchasecashflowsarecertain.

liquidity and funding risk

Liquidity risk is the risk of not being able to generate

sufficient cash to honour financial commitments. In

Airports Company South Africa it refers particularly to

the risk of theGroup not being able to advance funds

forcapitalexpenditure,redeemandserviceloans,finance

operational costs and service unanticipated financial

commitments.

The objective of The Financial Risk Management

Framework is to ensure continuity of funding and

flexibility, ensuring debt maturities are spread over a

range of dates to manage refinancing risks.The Group

had all funding required for the 2013 financial year.

Further, the Group mitigates this risk by maintaining

banking facilities with major South African banks that

cover12months’fundingrequirements.TheGroupisnot

exposedtoexcessiverefinancingriskinanyoneyear.



106


Inaddition, thetablebelowanalysestheGroup’sfinancial liabilities in termsof theirmaturities.Theamountsdisclosedarethe

contractualundiscountedcash(inflows)/outflows.

carrying contractual 6 months between between between more than

amount cash flows or less 6-12 months 1-2 years 2-5 years 5 years

2013

gRoup

Securedborrowings 52 693 64 910 6 891 7 099 15 111 35 809 –

Unsecuredborrowings 14 722 334 21 049 033 782 607 2 081 157 2 277 875 3 513 706 12 393 688

Tradeandotherpayables 817 432 817 432 817 432 – – – –

Derivativefinancialinstruments 271 934 271 939 38 401 36 259 62 832 108 831 25 616

15 864 393 22 203 314 1 645 331 2 124 515 2 355 818 3 658 346 12 419 304

COMPANy

Unsecuredborrowings 14 720 834 21 049 033 782 607 2 081 157 2 277 875 3 513 706 12 393 688

Tradeandotherpayables 769 063 769 063 769 063 – – – –

Derivativefinancialinstruments 271 934 271 939 38 401 36 259 62 832 108 831 25 616

15 761 831 22 090 035 1 590 071 2 117 416 2 340 707 3 622 537 12 419 304

2012

gRoup

Securedborrowings 666371 792338 28066 634450 27984 89458 12380

Unsecuredborrowings 16044405 24384016 765053 1774902 1509993 5653815 14680253

Tradeandotherpayables 910354 910354 910354 – – – –


Financialguarantees 1200000 1200000 1200000 – – – –

19015905 27514000 2984196 2457988 1572416 5770785 14728615

company

Unsecuredborrowings 16042905 24384016 765053 1774902 1509993 565381514680253

Tradeandotherpayables 878917 878917 878917 – – – –


Financialguarantees 1200000 1200000 1200000 – – – –

18316597 26690225 2924693 1823538 1544432 5681327 14716235

capital risk management

TheGroup’scapitalmanagementstrategyisdesignedtoensurethattheGroupisadequatelycapitalisedinamannerconsistentwith

theGroup’sriskprofile,economicregulatoryrequirementsandmaintaininganinvestmentratinglevels.Thisstrategyisintendedto

maintaininvestorsconfidenceintheGroup’sdebtissuesinthedebtcapitalmarkets.

TheGroupmonitorscapitaladequacythroughthegearingratio,asrepresentedbynetinterest-bearingdebttototalcapital.Netdebt

iscalculatedastotalinterest-bearingborrowings(including‘currentandnon-currentborrowings’asshowninthebalancesheet)less

cashandcashequivalentsplusshort-terminvestments.Totalcapitaliscalculatedas‘equity’asshownintheconsolidatedbalance

sheet,plusnetdebt.ThegearingratiofortheGroupat31March2013was53percent(2012:59percent).





During2013, theGroup’sstrategychanged from2012toagearing ratiowithin57percent to60percent (2012:60percent to

65percent)andmaintainaninvestmentcreditrating.Thegearingratiosasat31March2013and2012wereasfollows:

2013 2012

R’000 R’000

gRoup

Totalborrowings 14 775 027 16710776

Less:cashandcashequivalentsplusshort-terminvestments (2 466 017) (2580385)

Netdebt 12 309 010 14130391

Totalequity 10 939 047 9689630

Totalcapital 23 248 057 23820021

Gearingratio(netdebtdividedbytotalcapital) 53% 59%

company

Totalborrowings 14 720 834 16042905

Less:cashandcashequivalentsplusshort-terminvestments (2 409 171) (2503242)

Netdebt 12 311 663 13539663

Totalequity 10 154 139 9002828

Totalcapital 22 465 802 22542491

Gearingratio(netdebtdividedbytotalcapital) 55% 60%

Neitherthecompanynoranyofitssubsidiariesaresubjecttoexternallyimposedcapitalrequirements.

fair value estimation

The fair valuesoffinancial instruments traded in activemarkets are basedonquotedmarket prices at thebalance sheet date.

TheGroupusesthecurrentbidpricestodeterminethemarketpricesforfinancialassets.

The fair values of financial instruments that are not traded in active markets are determined using valuation techniques.

TheGroupusesavarietyofmethodsandmakesassumptionsthatarebasedonmarketconditionsexistingateachbalancesheet

date.Quotedmarketpricesanddealerquotesforsimilarinstrumentsareusedforlong-termdebt.

Thefairvaluesofforwardforeignexchangecontractsaredeterminedusingforwardexchangeratesatthebalancesheetdate.

Thefairvaluesofinterestrateswapsarecalculatedasthepresentvalueoftheestimatedfuturecashflowsbasedonobservableyield

curves.

Othertechniquessuchasestimateddiscountedcashflows,areusedtodeterminefairvaluesfortheremainingfinancialinstruments.

Thecarryingvalueoftradereceivableslessimpairmentprovision,andcarryingvalueoftradepayables,areassumedtoapproximate

their fairvalues.Thefairvalueoffinancial liabilitiesfordiscountingpurposes isestimatedbydiscountingthefuturecontractual

cashflowsatthecurrentmarketinterestratethatisavailabletotheGroupforsimilarfinancialinstruments.

Estimatesandjudgmentsarecontinuallyevaluatedandarebasedonhistoricalexperienceandotherfactors,includingexpectations

offutureeventsthatarebelievedtobereasonableunderthecircumstances.



108

5 Significant accounting eStimateS and JudgmentS TheGroupmakesestimatesandassumptionsconcerningthefuture.Theresultingaccountingestimateswill,bydefinition,seldom

equaltherelatedactualresults.Theestimatesandassumptionsthathaveasignificantrisk,causingamaterialadjustmenttothe

carryingamountsofassetsandliabilitieswithinthenextfinancialyear,areaddressedbelow:

fair value of financial instruments

The fair values of financial instruments that are not traded in an active market are determined by using valuation techniques.

TheGroupusesitsjudgementtoselectavarietyofmethodsandmakesassumptionsthataremainlybasedonmarketconditions

existingateachbalancesheetdate.TheGrouphasuseddiscountedcashflowanalysisforfinancialassetsthatarenottradedin

activemarkets.

post-retirement medical aid obligation

Thepresentvalueofthepost-retirementmedicalaidobligationdependsonanumberoffactorsthataredeterminedonanactuarial

basis using anumberof assumptions.Theassumptionsused indetermining thenet cost (income) for post-retirementmedical

aidincludethediscountrate.Anychangesintheseassumptionswillimpactthecarryingamountofpost-retirementmedicalaid

obligations.

TheGroupdeterminestheappropriatediscountrateattheendofeachyear.Thisistheinterestratethatshouldbeusedtodetermine

thepresentvalueofestimatedfuturecashoutflowsexpectedtoberequiredtosettlethepostretirementmedicalaidobligations.

Indeterminingtheappropriatediscount rate, theGroupconsiders the interest ratesofhigh-qualitygovernmentbondsthatare

denominatedinthecurrencyinwhichthebenefitswillbepaid,andthathavetermstomaturityapproximatingthetermsofthe

relatedpostretirementmedicalaidliability.

Other key assumptions for post-retirement medical aid obligations are based in part on current market conditions.Additional

informationisdisclosedinnote21.

Werethediscountrateusedtodifferbyonepercentfrommanagement’sestimates,thecarryingamountofpost-retirementmedical

aidobligationswouldbeanestimatedR40,19millionlowerorR30,89millionhigher.

fair value of investment property

The fair values of investment properties are determined using the discounted cashflow analysis valuation technique, using

transactionsobservableinthemarketatthebalancesheetdate.TheGroupusesitsjudgementtoselectavarietyofmethodsand

makesassumptionsthataremainlybasedonmarketconditionsexistingateachbalancesheetdate.

useful lives and residual values of assets

TheGroupreassesstheusefullivesandresidualvaluesofproperty,plantandequipmentannuallybyreferencetotheageorknown

conditionoftheassetsandtheGroup’sexpecteduseoftherelatedassets.

accounting for investment in associate

TheGroup’stenpercentshareholdingsinMumbaiInternationalAirport(Pty)LimitedandAeroportodeGuarulhosParticipaçõesS.A.

hasbeenaccountedforusingtheequitymethodastheGroupbelievesthatithastheability(andpower)toparticipateinthefinancial

andoperatingpolicydecisions,whichgivestheGroupsignificantinfluence.




gRoup company

accumulated carrying accumulated carrying

cost depreciation amount cost depreciation amount

R’000 R’000 R’000 R’000 R’000 R’000

6 pRopeRty, plant and

equipment

2013

owned assets

Land and buildings 13 845 977 (2 697 553) 11 148 424 13 844 179 (2 696 440) 11 147 739

Land 742 777 – 742 777 742 777 – 742 777

Buildings 13 103 200 (2 697 553) 10 405 647 13 101 402 (2 696 440) 10 404 962

Roads, runways and aprons 7 836 461 (1 522 939) 6 313 522 7 836 461 (1 522 939) 6 313 522

Vehicles and equipment 4 047 509 (2 656 671) 1 390 816 4 013 069 (2 644 845) 1 368 224

Equipment 3 793 558 (2 511 288) 1 282 271 3 759 113 (2 499 462) 1 259 651

Vehicles 253 951 (145 383) 108 545 253 956 (145 383) 108 573

Capital work in progress 1 407 646 – 1 407 646 1 407 492 – 1 407 492

27 137 593 (6 877 162) 20 260 408 27 101 201 (6 864 224) 20 236 977

leased assets

Vehicles and equipment 90 645 (90 645) – 90 645 (90 645) –

Equipment 85 970 (85 970) – 85 970 (85 970) –

Vehicles 4 675 (4 675) – 4 675 (4 675) –

total property, plant and 27 228 238 (6 967 807) 20 260 408 27 191 846 (6 954 869) 20 236 977

equipment

2012

owned assets

Land and buildings 13812461 (2153770) 11658691 13810663 (2152828) 11657835

Land 727963 – 727963 727963 – 727963

Buildings 13084498 (2153770) 10930728 13082700 (2152828) 10929872

Roads, runways and aprons 7687840 (1261385) 6426455 7687840 (1261385) 6426455

Vehicles and equipment 3880996 (2229425) 1651571 3829026 (2198288) 1630738

Equipment 3644730 (2101685) 1543045 3592760 (2070548) 1522212

Vehicles 236266 (127740) 108526 236266 (127740) 108526

Capital work in progress 888050 – 888050 887898 – 887898

26269347 (5644580) 20624767 26215427 (5612501) 20602926

leased assets

Vehicles and equipment 90645 (90645) – 90645 (90645) –

Equipment 85970 (85970) – 85970 (85970) –

Vehicles 4675 (4675) – 4675 (4675) –

total property, plant 26359992 (5735225) 20624767 26306072 (5703146) 20602926

and equipment



110

6 pRopeRty, plant and equipment (continued)

Ownership

Detailsofthelandandbuildingsarerecordedinaregisterwhichmaybeinspectedbythemembersortheirdulyauthorisedagents

attheGroup’sregisteredoffice.

TheGroup’slandandbuildingsconsistofland,buildingsandequipment,includingaircorridorsandotherrelatedequipment.

Borrowing costs

Borrowingcostsincludedinthecostofqualifyingassetsduringtheyeararoseonthegeneralborrowingpoolandarecalculatedby

applyingacapitalisationrateof10,34percentinthe2012yeartoexpenditureonsuchassets.Nointerestwascapitalisedin2013.

carrying carrying

amount at amount at

beginning end

of year additions transfers depreciation disposals of year

R’000 R’000 R’000 R’000 R’000 R’000

gRoup

movement for the year

2013

owned assets

Land and buildings 11 658 691 26 467 25 828 (562 550) (12) 11 148 425

Land 727 963 – 14 826 – (12) 742 777

Buildings 10 930 728 26 467 11 002 (562 550) – 10 405 647

Roads, runways and aprons 6 426 455 – 168 795 (281 728) – 6 313 522

Vehicles and equipment 1 651 571 181 261 22 987 (464 959) (39) 1 390 816

Equipment 1 543 045 159 479 22 987 (443 196) (39) 1 282 271

Vehicles 108 526 21 782 – (21 763) – 108 545

Capital work in progress 888 050 737 206 (217 610) – – 1 407 646

total property, plant

and equipment 20 624 767 944 935 – (1 309 237) (51) 20 260 408

company

owned assets

Land and buildings 11 657 835 26 465 25 828 (562 377) (12) 11 147 739

Land 727 963 – 14 826 – (12) 742 777

Buildings 10 929 872 26 465 11 002 (562 377) – 10 404 962

Roads, runways and aprons 6 426 455 – 168 795 (281 728) – 6 313 522

Vehicles and equipment 1 630 738 175 920 22 987 (461 421) – 1 368 224

Equipment 1 522 212 154 133 22 987 (439 681) – 1 259 651

Vehicles 108 526 21 787 – (21 740) – 108 573

Capital work in progress 887 898 737 204 217 610 – – 1 407 492

total property, plant and

equipment 20 602 926 939 589 – (1 305 526) (12) 20 236 977




carrying carrying

amount at amount at

beginning end

of year additions transfers depreciation disposals of year

R’000 R’000 R’000 R’000 R’000 R’000

6 pRopeRty, plant and equipment (continued)

gRoup


(continued)

2012

owned assets

Land and buildings 12166914 – 61558 (569770) (11) 11658691

Land 727963 – – – – 727963

Buildings 11438951 – 61558 (569770) (11) 10930728

Roads, runways and aprons 6549981 – 154909 (278435) – 6426455

Vehicles and equipment 2030901 49456 98236 (520962) (6060) 1651571

Equipment 1910887 35531 102698 (500011) (6060) 1543045

Vehicles 120014 13925 (4462) (20951) – 108526

Capital work in progress 841796 360957 (314703) – – 888050

21589592 410413 – (1369167) (6071) 20624767

company

owned assets

Land and buildings 12161191 – 61558 (564903) (11) 11657835

Land 727963 – – – – 727963

Buildings 11433228 – 61558 (564903) (11) 10929872

Roads, runways and aprons 6543674 – 154727 (271946) – 6426455

Vehicles and equipment 2002505 46131 98236 (515540) (594) 1630738

Equipment 1882690 32206 102698 (494788) (594) 1522212

Vehicles 119815 9463 – (20752) – 108526

Capital work in progress 841614 365267 (318983) – – 887898

21548984 406936 – (1352389) (605) 20602926



112

gRoup company

accumulated carrying accumulated carrying

cost amortisation amount cost amortisation amount

R’000 R’000 R’000 R’000 R’000 R’000

7 intangible aSSetS 2013

Computersoftware 536 485 (386 005) 150 480 536 468 (386 003) 150 465

536 485 (386 005) 150 480 536 468 (386 003) 150 465

2012

Computersoftware 491430 (276685) 214745 498554 (284056) 214498

491430 (276685) 214745 498554 (284056) 214498

carrying carrying

amount at amount at

beginning amortisation end

of year additions transfers expense disposals of year

R’000 R’000 R’000 R’000 R’000 R’000

gRoup


2013

Computersoftware 214 745 37 930 – (102 195) – 150 480

total intangible assets 214 745 37 930 – (102 195) – 150 480

companyComputersoftware 214 498 37 914 – (101 947) – 150 465

total intangible assets 214 498 37 914 – (101 947) – 150 465

gRoup

2012

Computersoftware 301273 8110 – (94637) (1) 214745

total intangible assets 301273 8110 – (94637) (1) 214745

companyComputersoftware 300724 8110 – (94336) – 214498

total intangible assets 300724 8110 – (94336) – 214498




gRoup company


2013 2012 2013 2012

R’000 R’000 R’000 R’000

8 inveStment pRopeRty Balanceat1April 2 832 652 4669802 1 959 582 3814692

Improvements 7 763 11316 7 763 11316

Changeinfairvalue

–Recognisedinstatementofcomprehensiveincome 258 309 1534 228 489 (16426)

–Recognisedinothercomprehensiveincome 67 303 – 67 303 –

Transfertonon-currentassetheldforsale – (1850000) – (1850000)

balance at 31 march 3 166 027 2832652 2 263 137 1959582

Investmentpropertiesarestatedatfairvalue,whichhasbeendeterminedbasedonvaluationsperformedbyaccreditedindependent

valuers,asat31March2013and31March2012.Thevaluersareindustryspecialistsinvaluingthesetypesofinvestmentproperties.

Thefairvaluesofthepropertieshavebeendeterminedontransactionsobservableinthemarket.Wheretherewaslackofcomparable

data, a valuation model in accordance with that recommended by the InternationalValuation StandardsCommittee has been

applied.Thefollowingmaininputshavebeenused:

gRoup and company

2013 2012

Marketyieldofcomparableproperties(percent) 10-15 10-15

Averageescalationofleaserentals(percent) 8-12 8-12

Averagedurationoflease(years) 3-5 3-5

InvestmentpropertieswithafairvalueofRnil(2012:R737million)havebeenencumberedbysecuredborrowings.

TheGroup’sinvestmentpropertyconsistsoflandandbuildings.

Detailsoftheinvestmentpropertiesarerecordedinaregisterwhichmaybeinspectedbythemembersortheirdulyauthorised

agentsattheGroup’sregisteredoffice.Investmentpropertycomprisesanumberofcommercialpropertiesthatareleasedtothird

parties.Nocontingentrentsarecharged.

Rental incomeofR529million(2012:R558million)frominvestmentpropertieshasbeen included inrevenueoftheGroupand

company(note29).

company

2013 2012

R’000 R’000

9 inveStment in SubSidiaRieS Sharesatcost 225 225

Indebtedness 782 750 229662

Provisionforimpairment – (49318)

Totalinterestinsubsidiaries 782 975 180569

Directors’valuation 782 975 180569

Aggregateaftertaxprofitsofsubsidiarycompanies 34 819 158866



114

9 inveStment in SubSidiaRieS (continued) Detailsofthecompany’ssubsidiariesat31March2013areasfollows:

issued investment

share at indebted-

principal country of capital interest cost ness

Subsidiaries activity incorporation R’000 held R’000 R’000

2013

GuardriskLifeLtd Insurance SouthAfrica 225 100% 225 –

(cellcaptive)

Other

OSIAirportSystems Dormant SouthAfrica – 51% – –

(Pty)Ltd

PilanesbergInternational Airportmanagement SouthAfrica – 0% – –

Airport(Pty)Ltd

Precinct2A(Pty)Ltd Propertyowning SouthAfrica – 100% – 636 523

JIAPiazzaPark(Pty)Ltd Hoteloperations SouthAfrica – 100% – –

ACSAGlobalLtd Managementcompany Mauritius – 100% – 99 804

225 736 327

TheGroup’saccountsincludetheconsolidationoftheAirport

ManagementShareIncentiveSchemeCompany(Proprietary)Limited

andLexshell342InvestmentHoldings(Proprietary)Limited.Although

theAirportManagementShareIncentiveSchemeCompany(Proprietary)

LimitediswhollyownedbytheAirportManagementShareIncentive

SchemeTrustandLexshell342InvestmentHoldings(Proprietary)Limited

iswhollyownedbytheAirportsCompanySouthAfricaKaganoTrust,in

termsofSIC-12,‘ConsolidationofSpecialPurposeEntities’,theGroup

consolidatestheseentitiesasitisexposedtosignificantrisksthatare

associatedwithintercompanyloanfundingandthecompanyreceives

significantrewardsassociatedwiththeemploymentofthebeneficiaries.

DetailsofspecialpurposeentitiesconsolidatedintermsofSIC-12areas

follows:

Special purposes entities

Lexshell342Investment Employeeshareoptionplan SouthAfrica – – – 17 437

Holdings(Pty)Ltd

AirportManagement Employeeshareoptionplan SouthAfrica – – – 28 986

ShareIncentiveScheme

Company(Pty)Ltd

– 46 423

total 225 782 750




9 inveStment in SubSidiaRieS (continued) Detailsofthecompany’ssubsidiariesat31March2013areasfollows:

issued investment

share at indebted-

principal country of capital interest cost ness

Subsidiaries activity incorporation R’000 held R’000 R’000

2012

GuardriskLifeLtd Insurance SouthAfrica 225 100% 225 –

(cellcaptive)

Other

OSIAirportSystems Dormant SouthAfrica –* 51% – –

(Pty)Ltd

PilanesbergInternational Airportmanagement SouthAfrica –* 100% – 49319

Airport(Pty)Ltd

Precinct2A(Pty)Ltd Propertyowning SouthAfrica –* 100% – 54489

JIAPiazzaPark(Pty)Ltd Hoteloperations SouthAfrica –* 100% – 321

ACSAGlobalLtd Managementcompany Mauritius –* 100% – 79438

*AmountlessthanR1000 225 183567

2012

Special purposes entities

Lexshell342Investment Employeeshareoptionplan SouthAfrica – – – 17120

Holdings(Pty)Ltd

AirportManagement Employeeshareoptionplan SouthAfrica – – – 28975

ShareIncentiveScheme

Company(Pty)Ltd

– 46095

total 225 229662

termination of concession agreement

On1October2011,PilanesbergInternationalAirport(Pty)Ltd(asubsidiaryofthecompany)terminateditsconcessionagreement

withtheNorthWestProvincialGovernmenttomanageandoperatethePilanesbergInternationalAirport.Accordingly,thecompany

no longercontrolstheairportandhasceasedtoconsolidatetheresultsofoperationoftheairport.Thefollowingwerecarrying

amountsoftheassetsandliabilitiesatthedateoftermination:

2012

R’000

Property,plantandequipment 12902

Debentures (6000)

Tradeandotherpayables (1046)

Intercompanyloan (50707)

Totalnetassets/(liabilities)disposed (44851)

Lossondisposalofthesubsidiary (44851)

Totaldisposalproceeds –

Cashandcashequivalentsinsubsidiarydisposedof 3

NetcashinflowtotheGroup –



116

10 inveStment in Joint ventuReS TheGrouphasthefollowingsignificantinterestsinjointventures:

Airport Logistics Property Holdings (Pty) Ltd

Thecompanyhasa50percentinterestinajointventure,AirportLogisticsPropertyHoldings(Pty)Ltd,heldthroughAirports

CompanySouthAfricaSOCLtd.

ThefollowingrepresentstheGroup’sshareofassets,liabilities,revenueandexpensesofthejointventure:

airport logistics property

holdings (pty) ltd

2013 2012

R’000 R’000

gRoup Investmentproperty 174 900 136480

Currentassets 24 286 21898

199 186 158378

Non-currentliabilities 68 047 15893

Currentliabilities 58 208 99663

126 255 115556

Netassets 72 931 42822

Income 13 853 12280

Expenses (10 947) (9193)

Profitbeforeincometax 2 906 3087

Incometaxexpense – (844)

(Loss)/profitfortheyear 2 906 (2223)

11 inveStment in aSSociateS

InvestmentinMumbaiInternationalAirportPrivateLimited

TheGrouphasa10percentequity interest inthe30-yearconcession(withanoptionfora further30years)tomodernisethe

ChhatrapatiShivajiInternationalAirportinMumbai.AirportsCompanySouthAfricaisanintegralinvestorintheproject,aswellas

beingthedesignatedairportoperator.Theinvestmenthasbeenaccountedforasanassociate.

InvestmentinLaMercyJVPropertyInvestments(Pty)Ltd

TheGrouphasa40percentstakeinLaMercyJVPropertyInvestments(Pty)Ltd.Thecompanyisapropertyholding,development

andlettingcompany.Theinvestmentinthecompanyhasbeenaccountedforasanassociate.

AeroportodeGuarulhosParticipaçõesS.A.

TheGrouphasatenpercentequity interest,throughAirportsCompanySouthAfricaSOCLimited, inthe20-yearconcessionto

modernisetheGuarulhosInternationalAirport.AirportsCompanySouthAfricaisanintegralinvestorintheproject,aswellasbeing

thedesignatedairportoperatorforafive-yearperiod.TheGrouphasthepowertoparticipateinthefinancialandoperatingpolicy

decisionsthroughamemorandumofunderstandingbetweenthetwoparties.Theinvestmenthasthereforebeenaccountedforas

anassociate.




11 inveStment in aSSociateS (continued) mumbai international la mercy Joint venture co airport private ltd gRoup 2013 2012 2013 2012 R’000 R’000 R’000 R’000

gRoup

balance at beginning of year 150 845 147263 597 798 499866 Additionalequitycontribution – 3131 – 43367 Shareofprofit 4 855 451 24 099 50584 Foreigncurrencytranslationdifference – – 86 814 3981

balance at end of year 155 700 150845 708 711 597798

total investment 864 411 748643

aeroporto de guarulhos participações S.a 2013 2012 R’000 R’000

gRoup

balance at beginning of year – –Equitycontribution 76 892 –Shareofloss (7 846) –Foreigncurrencytranslationdifference (625) –

balance at end of year 68 421 –

total investment 932 832 748643

company

balance at beginning of year 35 381 32250 Additionalequitycontribution 76 892 3131

balance at end of year 112 273 35381

ThefollowingamountsrepresenttheGroup’sshareoftheassets,liabilities,revenueandexpensesoftheassociate:

mumbai international la mercy Joint venture co airport private ltd 2013 2012 2013 2012 R’000 R’000 R’000 R’000

Property,plantandequipment,andinvestmentproperty 180 000 172500 1 970 864 1366745 Currentassets 20 928 19741 305 510 208689

200 928 192241 2 276 374 1575434

Non-currentliabilities 47 977 40891 249 090 182608 Loans – – 1 053 980 581760 Currentliabilities 336 505 268 142 213268

48 313 41396 1 571 212 977636

net assets 152 615 150845 705 162 597798

Income 5 945 451 229 954 218375 Expenses (1 090) – (194 039) (160246)

Profitbeforeincometax 4 855 451 35 915 58129

income tax expense – – (11 816) (7545) –Currentyear – – (11 816) (19052) –Prioryearover-provisiondeferredtax – – – 11507

Profitfortheyear 4 855 451 24 099 50584



118

11 inveStment in aSSociateS (continued)

aeroporto de guarulhos

participações S.a.

31 march 31March

2013 2012

R’000 R’000

Property,plantandequipmentandinvestmentproperty 5 597 032 –

Deferredtaxassets 2 686 –

Currentassets 206 736 –

5 806 454 –

Non-currentliabilities 5 142 332 –

Currentliabilities 508 275 –

5 650 607 –

net assets 155 847 –

Income 309 274 –

Expenses (319 608) –

loss before income tax (10 334) –

income tax expense 2 488 –

–Currentyear 2 488 –

–Prioryearover-provisiondeferredtax – –

Lossfortheyear (7 846) –

group

2013 2012

R’000 R’000

total profit for the group 21 108 51035

gRoup company


2013 2012 2013 2012

R’000 R’000 R’000 R’000

Guaranteesissued

AirportsCompanySouthAfricahasissuedthe

followingguarantees:

Loanguarantees

LoanguaranteeissuedbyAirportsCompany 8 162 880 – – –

SouthAfricaSOCLtdUSD88485300(2012:USDNil)

EquityGuarantees

AirportoperatorguaranteeissuedbyACSAGlobal 492 900 492900 – –

LtdINR3000000000(2012:INR3000000000).

8 655 780 492900 – –

Performanceguarantees:

TheAirportOperatorguaranteeislimitedtothecompany’sperformancefeeofUSD1129371(2012:USD1103439).




gRoup company


2013 2012 2013 2012

R’000 R’000 R’000 R’000

12 otheR non-cuRRent aSSetS Leasereceivablenon-currentportion 252 031 173992 252 031 173992

Investments 17 840 – – –

269 871 173992 252 031 173992

13 inventoRieS Hotelfoodandbeverages 6 222 6220 – –

6 222 6220 – –

14 tRade and otheR ReceivableSTradereceivables 921 253 786954 891 560 760825

Loantojointventure/associate 43 248 20131 67 539 40261

Impairmentoftradeandotherreceivables (215 769) (131412) (215 702) (131412)

Loansandreceivables 748 732 675673 743 397 669674

Taxationreceivable 239 77809 – 77809

Prepayments 3 061 11793 2 805 11793

Otherreceivables 15 143 12700 14 828 12449

Leasereceivables 71 610 175107 71 610 175107

Insurancerent-a-captivereceivable(*) 86 424 82169 86 424 82169

925 209 1035251 919 064 1029001

timing of trade and other receivablesWithinoneyear 925 209 1035251 919 064 1029001

925 209 1035251 919 064 1029001

Theaveragecreditperiodis35days(2012:40days).Nointerestisincurredontradereceivables.

Tradereceivablesarecarriedatcost,whichnormallyapproximatestheirfairvalueduetoshort-termmaturitythereof.Nointerestis

chargedontradereceivables.

Anadjustmentforimpairmentofreceivableshasbeenmadeforestimatedirrecoverableamounts.

TheGroup’sexposuretocreditandcurrencyrisksandimpairmentlossesrelatedtotradeandotherreceivablesaredisclosedinnotes4

and40.

Loanstojointventuresandassociatesbearnointerestandhavenofixedrepaymentterms.

*ThecontingencypoliciesareunderwrittenbyGuardriskandCentriq.Theamountreceivablerepresentsthebalanceofthespecial

experienceaccount.Thespecialexperienceaccountispayableondemand

gRoup company


2013 2012 2013 2012

R’000 R’000 R’000 R’000

15 caSh and caSh equivalentS Bankbalances 1 009 045 1340379 952 199 1263236

Moneymarkets 251 974 640006 251 974 640006

1 261 019 1980385 1 204 173 1903242

TheGroup’sexposuretointerestrateriskandasensitivityanalysisforfinancialassetsandliabilitiesaredisclosedinnote40.



120


gRoup company


2013 2012 2013 2012

R’000 R’000 R’000 R’000

16 inveStmentS

Cashdeposit – 600000 – 600000

Unittrusts 1 204 998 – 1 204 998 –

1 204 998 600000 1 204 998 600000

Thecashdepositat31March2012represented

50percentofthedepositreceivedfromTransnetin

respectofdisposalofDurbanInternationalAirportby

thecompany.Thedepositwasheldasacalldeposit

foraminimumperiodofsixmonthsuntilsuchtime

thatallthesuspensivesaleconditionswerefullfilled.

Thedepositearnedinterestatthecompany’snominal

effectiverate.Refertonote28fortheguarantee

disclosedinfavourofTransnetandnote17forthe

disclosureofnon-currentassetsheldforsale.

17 non-cuRRent aSSetS held foR Sale

assets classified as held for sale

Fairvalueofnon-currentassetheldforsalepreviously – 1850000 – 1850000

classifiedunderinvestmentproperty

assets classified as held for sale at 31 march 2013 – 1850000 – 1850000

At31March2012,theimmovableassetsoftheDurban

InternationAirportwerepresentedasanon-currentasset

heldforsalefollowingacommitmentoftheGroup’s

managementon31March2012toaplantosellfacilities,

duetothemoveoftheairportoperationstoKingShaka

InternationalAirportinLaMercy.Asaleandtransferto

TransnetSOCLtdwascompletedon30September2012.

At31March2012,thefairvalueofnon-currentassetsheld

forsalewasR1,85billion,whichwastheagreedselling

price.AdepositofR1,2billionwasreceivedon31March2012

andthebalancewasreceivedon30September2012.

18 iSSued ShaRe capital and ShaRe pRemium

authorised

1000000000ordinaryR1par-valueshares 1 000 000 1000000 1 000 000 1000000

issued

500000000ordinaryR1par-valueshares 500 000 500000 500 000 500000

Sharepremium 250 000 250000 250 000 250000

750 000 750000 750 000 750000

Therewerenochangestothesharecapitalofthecompanyforthefinancialyearsended31March2013and31March2012




gRoup

31 march 31March

2013 2012

R’000 R’000

19 tReaSuRy ShaRe ReSeRve TheTreasuryShareReserverepresentsthecompany’sown

sharesheldbytheGroup.Referalsotonote9. (44 024) (44024)

5962452shares(2012:5962452shares)areheldbytheAirportManagementShareIncentiveSchemeCompany(Pty)Ltdand

Lexshell342InvestmentHoldings(Pty)Ltd.

foreign

currency

fair translation actuarial life

total value reserve losses fund

R’000 R’000 R’000 R’000 R’000

20 otheR ReSeRveS

gRoup

At1April2011 821637 924041 (73936) (32962) 4494

Actuariallosses,netoftax (5767) – – (5767) –

Gainonrevaluationofinvestmentproperty – – – – –

Transferfromlifefund (360) – – – (360)

Cashflowhedgereserveonderivative (28966) (28966) – – –

financialinstruments,netoftax

Translationdifferences,netoftax (67448) - (67448) – –

at 1 april 2012 719 096 895 075 (141 384) (38 729) 4 134

Actuariallosses,netoftax (12 439) - – (12 439) –

Gainonrevaluationofinvestmentproperty 48 458 48 458 – – –

Transfertoretainedearnings (928 176) (924 042) – – (4 134)

Cashflowhedgereserveonderivative (53 676) (53 676) – – –


Ineffectiveportionofcashflowhedge 2 066 2 066 – – –

Foreigncurrencytranslationdifferences, 20 957 – 20 957 – –

netoftax

at 31 march 2013 (203 714) (32 119) (120 427) (51 168) –

company

At1April2011 891079 924041 – (32962) –

Cashflowhedgereserveonderivative (28966) (28966) – – –


Actuariallosses,netoftax (5767) – – (5767) –

at 1 april 2012 856 346 895 075 – (38 729) –

Cashflowhedgereserveonderivative (53 676) (53 676)


Ineffectiveportionofcashflowhedge 2 066 2 066 – – –

Actuariallosses,netoftax (12 439) – – (12 439) –

Gainonrevaluationofinvestmentproperty 48 458 48 458 – – –

Transfertoretainedearningsondisposalof (924 042) (924 042) – – –

assetsclassifiedasheldforsale

at 31 march 2013 (83 287) (32 119) – (51 168) –


122

20 otheR ReSeRveS (continued) Defined benefit plan actuarial losses

Actuariallossesarerecogniseddirectlyinequity/otherreservesintermsofIAS19employeebenefits.

Life Fund

ThetransfertotheLifeFundrepresentsamountstofundfuturepensionpayments.Thecompanyacquired100percentshareholding

inacellcaptivewithGuardriskLifeLtdinSeptember2003tofunditsobligationarisingfrom2002,wherebythecompanyagreedto

increasetheminimumpensionpayouttoemployees.Guardriskperformsahalf-yearlyreviewperindividualcoveredtoestablishthe

presentvalueofthecompany’sobligationontheprescribedvaluationbasis(asapprovedbyGuardriskLifeStatutoryActuaries)in

ordertoassessthecompany’scommitmentaspertheassetsandexpressedliabilitiesandensuresufficientlifefundsaretransferred

tothenon-distributablereserves.

Foreign currency translation reserve (FCTR)

TheforeigncurrencytranslationreservearisesontranslationoftheGroup’sinterestsinforeignentitiesintothereportingcurrency.

Disposal of assets held for sale

ThetransfertoretainedearningsrelatestotherealisationofthefairvaluegainthatarosewhentheDurbanInternationalAirport

assetsweretransferredfromproperty,plantandequipmenttoinvestmentproperty,priortothembeingclassifiedasheldforsale.

Therevaluationwasrealiseduponthesaleoftheassetsheldforsaleinthecurrentfinancialyear(refertonote17).

21 RetiRement benefit obligationS defined contribution plans

Pensionfund

Allfull-timeemployeesofthecompanyaremembersofthepensionfund,adefinedcontributionfund,subjecttothePension

FundsAct1956.On31March2008anactuarialvaluationwasperformedbyindependentconsultingactuaries,whofoundthefund

tobeinasoundfinancialposition.Noeventshavehadasignificanteffectonthefund’spositionsincethisvaluation.

defined benefit plan

Postretirementmedicalbenefits

gRoup company

31 march 31March 31 march 31March 2013 2012 2013 2012 R’000 R’000 R’000 R’000

Presentvalueofunfundedobligations 168 514 125577 168 514 125577





21 RetiRement benefit obligationS (continued) The company makes contributions to a defined benefit plan that provides medical benefits to employees upon retirement.

Theemployeeseligibleforthepostretirementbenefitarethosewhowereinemploymentat1August2007.Theplanentitlesretired

employeestoreceiveareimbursementofcertainmedicalcosts. gRoup company


Movementinthepresentvalueofthedefinedbenefitobligations

Balanceatbeginningoftheyear 125 577 137106 125 577 137106

Prioroverprovision – (36517) – (36517)

Currentservicecost 14 328 7682 14 328 7682

Interestcost 11 333 9298 11 333 9298

Actuarialloss 17 276 8008 17 276 8008

balance at end of the year 168 514 125577 168 514 125577

Expenserecognisedincomprehensiveincome

Currentservicecost 14 328 7682 14 328 7682

Interestcost 11 333 9298 11 333 9298


Theexpenseisrecognisedinoperationalandadministrative

expensesintheincomestatement

Expenserecognisedinothercomprehensiveincome


Actuariallossrecognisedduringtheyear 17 276 8008 17 276 8008


Principalactuarialassumptionsatthebalancesheetdate

Discountrate 8,41% 9,02% 8,41% 9,02%

Healthcarecostinflation 7,88% 7,80% 7,88% 7,80%

Averageretirementage 60 60 60 60

Theassumptionsusedbyactuariesarethebestestimateschosenfromarangeofpossibleactuarialassumptionswhich,duetothe

timescalecovered,maynotnecessarilybeborneoutinpractice.

Assumedhealthcarecosttrendrateshaveasignificanteffectontheamountsrecognised.Aonepercentagepointchangeinassumed

healthcarecosttrendwouldhavethefollowingeffects:

1% increase 1% decrease

Effectontheaggregatecurrentserviceandinterestcost 6823 (5244)

Effectondefinedbenefitobligation 40191 (30889)

2013 2012 2011 2010 2009

R’000 R’000 R’000 R’000 R’000

Presentvalueofunfundedobligations 168 514 125577 137107 105043 89280

Expectedcontributionstopostemploymentbenefitplansfortheyearended31March2013areR2,344million.


124


21 RetiRement benefit obligationS (continued) gRoup company


LifeFund

Balanceatbeginningoftheyear – – – –

Initialrecognitionofliability 16 968 – – –

Actuarialloss – – – –

balance at end of the year 16 968 – – –

total retirement benefit obligation 185 482 125577 168 514 125577

22 defeRRed incomeDubeTradePortrentalsreceivedinadvance

Openingbalance 30 329 31419 30 329 31419

Less:amountsrecognisedincomprehensiveincome (1 090) (1090) (1 090) (1090)

Balanceatendofyear 29 239 30329 29 239 30329

Gautraindevelopment

Openingbalance 12 527 13217 12 527 13217

Less:amountsrecognisedincomprehensiveincome (690) (690) (690) (690)


Governmentgrants

Openingbalance 33 684 34386 33 684 34386

Additionalgrantreceived 717 – 717 –



Otherincomereceivedinadvance

Openingbalance 1 200 176 – 1 200 176 –

Additionalrentalsreceived–baserentals 566 322 566 322

Otherincomereceivedinadvance* – 1200000 – 1200000


Balanceatendofyear 195 1200176 195 1200176

total deferred income 74 946 1276716 74 946 1276716

Current 2 698 1202657 2 698 1202657

Non-current 72 248 74059 72 248 74059

government grants

TheGrouphasbeenawardedagovernmentgrant.ThegrantofR35,088millionwasreceivedinthe2010financialyear.Thegrantwas

usedfortheconstructionoftheroadwithintheCapeTownInternationalAirportprecinct.

*OtherincomereceivedinadvancerepresentsadepositreceivedfromTransnetinrespectofthedisposaloftheDurbanInternational

Airportsitebythecompany.




gRoup company


23 defeRRed taX liabilitieS Balanceatbeginningoftheyear 1 017 140 1080452 903 124 1010814

Movementsduringtheyear:

–Recognisedinthestatementofcomprehensiveincome 264 058 (71225) 223 653 (94184)

–Prioryearadjustment (53 444) – (53 444) –

–Recogniseddirectlyinothercomprehensiveincome (266 933) 7913 (259 047) (13507)


Deferredtaxliabilitiesexpectedtoberecoveredafter 1 005 761 1093182 859 226 979167

morethan12months

Deferredtaxliabilitiesexpectedtoberecoveredwithin (44 940) (76043) (44 940) (76044)

thenext12months

960 821 1017140 814 286 903124

Comprising:

deferred tax liabilities

Property,plantandequipment 576 847 664282 578 249 665293

Investmentproperty 366 195 292930 316 152 240110

Non-currentassetsheldforsale – 263113 – 263113

Intangibleassets 34 688 6406 34 688 6406

Leasereceivables 90 619 97748 90 619 97748

Provisions (93 330) (83486) (93 330) (83486)

Derivativefinancialinstruments (73 001) (54537) (73 001) (54537)

Investmentsinassociates 103 743 68056 5 849 5849

Prepayments 357 2874 357 2874

Impairmentoftradeandotherreceivables (45 297) (27597) (45 297) (27597)

Assessedloss – (212649) – (212649)

960 821 1017140 814 286 903124

income tax for components of other

comprehensive income

Actuariallossesondefinedbenefitpostretirement (4 837) (2242) (4 837) (2242)

medicalaidliabilitity

Fairvaluegainsoninvestmentproperty (234 140) – (234 140) –

Cashflowhedge (20 070) (11265) (20 070) (11265)

Foreigncurrencytranslationdifferences (7 886) (12888) – –

(266 933) (26395) (259 047) (13507)

Thedeferredtaxonlandandassetsheldforresalewascalculatedapplyinganeffectivecapitalgainstaxrateof18,6percent(2012:

18,6percent).Deferredtaxonallotherassetsandliabilitieswascalculatedatthestatutoryrateof28percent(2012:28percent).

Itisexpectedthatthedeferredtaxassetsandliabilitieswouldberecoveredthroughtheuseorthesaleofassetsandthesettlement

ofliabilities.


126

gRoup company

carrying fair Carrying Fair carrying fair Carrying Fair

value value value value value value value value

2013 2013 2012 2012 2013 2013 2012 2012

R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000

24 inteReSt-beaRing

boRRowingS

unsecured

Long-termbonds 9 886 158 11 102 807 9735276 10467104 9 886 158 11 102 807 9735276 10467104

NedbankBul.Loan 1 751 890 1 952 588 1750000 1963874 1 751 890 1 952 588 1750000 1963874

InfrustructureFinance 204 760 225 347 223519 245868 204 760 225 317 223519 245868

CorporationLimited(INCA)

DevelopmentBankof – – 1371615 1503029 – – 1371615 1503029

SouthAfrica(DBSA)

SouthernSunLoan 1 500 1 500 1500 1500 – – – –

L’AgenceFrancaise 934 853 1 098 046 1019894 1157984 934 853 1 098 046 1019894 1157984

deDeveloppement(AFD)

L’AgenceFrancaise 1 943 173 2 398 795 1942601 2303328 1 943 173 2 398 795 1942601 2303328

deDeveloppement(AFD1)

14 722 334 16 779 083 16044405 17642687 14 720 834 16 777 583 16042905 17641187

Secured

FirstRandBankLtd – – 607996 629094 – – – –

BidvestProperties(Pty)Ltd– 7 748 7 748 9572 9572 – – – –

Loan-1


Loan-2


Loan-3

52 693 52 693 666371 687469 – – – –

total 14 775 027 16 831 776 16710776 1833015614 720 834 16 777 583 16042905 17641187

maturity analysis:

Currentportion 2 855 688 2 855 688 1063774 1063774 2 839 924 2 839 924 442367 442367

Non-currentportion 11 919 339 13 976 088 15647002 1726638211 880 909 13 937 659 15600538 17198820

14 775 027 16 831 776 16710776 1833015614 720 834 16 777 583 16042905 17641187

Securedborrowings

TotalborrowingsincludeliabilitiesthataresecuredbythelandandbuildingsoftheGroupclassifiedasinvestmentpropertytothevalue

ofRnil(2012:R737million).





gRoup company

carrying value

interest

Security rate nominal maturity 2013 2012 2013 2012

number % R’000 date R’000 R’000 R’000 R’000

24 inteReSt-beaRing

boRRowingS (continued)

Termsanddebt

repaymentschedule

AIR02U 7.62 500000 Oct2014 508 954 509542 508 954 509542

AIR03U 7.58 500000 Oct2014 507 130 507208 507 130 507208

Long-termbonds AIRL02 10.50 1000000 Feb2014 1 242 112 1176107 1 242 112 1176107

AIR03 10.86 1729000 Mar2016 1 731 875 1739510 1 731 875 1739510

AIR01 8.58 2000000 Mar2019 2 001 572 2000181 2 001 572 2000181

AIR02 11.30 1712000 Apr2023 1 832 898 1833950 1 832 898 1833950

AIRL01 8.64 1191000 Apr2028 1 536 782 1443920 1 536 782 1443920

AIR04U 11.59 500000 Oct2029 524 835 524858 524 835 524858

9 886 158 9735276 9 886 158 9735276

FirstRandBankLtd 10.02 606000 Sep2012 – 607996 – –

SouthernSunHotelInterests(Pty)Ltd 2.00 1500 Dec2013 1 500 1500 – –

BidvestProperties(Pty)Ltd–Loan1 10.72 12980 Sep2015 7 748 9572 – –

BidvestProperties(Pty)Ltd–Loan2 10.72 18424 Sep2015 13 929 15592 – –

BidvestProperties(Pty)Ltd–Loan3 11.00 38127 May2017 31 016 33211 – –

NedbankBulLoan Primelinked 1750000 Sep2020 1 751 890 1750000 1 751 890 1750000

L’AgenceFrancaisede 10.35 985490 Nov2023 934 853 1019894 934 853 1019894

Developpement(AFD)

L’AgenceFrancaisede 10.55 1942200 Apr2026 1 943 173 1942601 1 943 173 1942601

Developpement(AFD1)

InfrastructureFinance JIBARlinked 250000 Nov2023 204 760 223519 204 760 223519

CorporationLimited(INCA)

DevelopmentBankofSouthernAfrica JIBARlinked 1500000 Dec2023 – 1371615 – 1371615

4 888 869 6975500 4 834 676 6307629

total interest-bearing borrowings 14 775 027 16710776 14 720 834 16042905

Currency:AllborrowingsaredenominatedinZAR.


128


gRoup company


2013 2012 2013 2012

R’000 R’000 R’000 R’000

25 tRade and otheR payableS Tradepayables 712 373 757397 665 289 732063

Financialliabilitiesatamortisedcost 712 373 757397 665 289 732063

Leavepayable 39 653 38065 39 653 37323

Bonusespayable 8 022 8342 8 022 7404

Tradedebtorsdeposits 49 910 38074 49 910 36350

VATpayable 15 658 80497 15 658 79966

Otherpayables 31 469 26044 30 185 23134

857 085 948419 808 717 916240

timing of trade and other payables

Withinoneyear 857 085 948419 808 717 916240

857 085 948419 808 717 916240

Theaveragecreditperiodisbetween60and140days(2012:60and140days).Nointerestisincurredontradepayables.

Tradepayablesandaccrualsprincipallycompriseamountsoutstandingfortradepurchases,capitalexpenditureaccrualsandother

costs.

Tradepayablesarestatedatcost,whichnormallyapproximatesthefairvalue,duetotheshort-termmaturitythereof.

Thebonusespayablerepresentstheliabilityaccruedforatyear-endrelatingtocontractualemployeebonuspayments.

Includedinotherpayablesisleasepayables,whichrelatestothestraight-liningofleaseaccruals.

TheGroup’sexposuretoliquidityriskrelatedtotradeandotherpayablesisdisclosedinnote4.

gRoup company


2013 2012 2013 2012

R’000 R’000 R’000 R’000

26 pRoviSionS Staff incentive bonuses


Additionalprovisionintheyear 103 500 87026 103 500 87026

Utilisationofprovision (87 026) (65694) (87 026) (65694)

Balanceatendoftheyear 103 500 87026 103 500 87026

analysed as follows

Currentliabilities 103 500 87026 103 500 87026

Theaccumulatedstaffbonusrepresentstheliabilityatyear-endprovidedforaplannedemployeeincentivebonuspayment.

Theprovisionforbonusesispayablewithinthreemonthsoffinalisationoftheauditedfinancialstatements.



2013 2013 2012

liabilities assets Liabilities

R’000 R’000 R’000

27 deRivative financial inStRumentS

gRoup Interestrateswaps–cashflowhedge 271 934 – 194775

Forwardexchangecontracts–heldfortrading – 11 214 –

Total 271 934 11 214 194775

271 934 11 214 194775

Currentportion 45 383 11 214 65349

Non-currentportion 226 551 – 129426

company

Interestrateswaps–cashflowhedge 271 934 – 194775

Forwardexchangecontracts–heldfortrading – 11 214 –

Total 271 934 11 214 194775

271 934 11 214 194775

Currentportion 45 383 11 214 65349

Non-currentportion 226 551 – 129426

interest rate swaps

TheGroupisexposedtothefloatingratesofinterest:SouthAfricanprimeratesandJIBAR.TheGroupmanagesitscashflowinterest

rateriskbyusingfloating-to-fixedinterestrateswaps.Suchinterestrateswapshavetheeconomiceffectofconvertingborrowings

fromfloatingratestofixedrates.

TheGrouphasenteredintointerestrateswapcontractsthatentitleorobligeittoreceiveinterestatfixedratesonnotionalprincipal

amountsandentitleorobligeittopayinterestatfloatingratesonthesamenotionalprincipalamounts.Theinterestrateswapsallow

theGrouptoswaplong-termdebtfromfloatingratestofixedratesthatarelower,orhigher,thanthoseavailableifithadborrowed

directly atfloating rates.Under the interest rate swapcontracts, theGroupagreeswithotherparties to exchange, at specified

quarterlyandsemi-annualintervals,thedifferencebetweenfixedratesandfloatingrateinterestamountsthatarecalculatedby

referencetotheagreednotionalprincipalamounts.

TheineffectiveportionrecognisedinprofitorlossthatarisesfromcashflowhedgesamountstoagainofR2,7million(2012:Rnil).

forward exchange contracts

TheGroupisexposedtoforeigncurrencyfluctuationsresultingfromtheUSDollar.TheGroupmanagesitsforeigncurrencyriskby

enteringintoforwardexchangecontracts,whichhavetheeffectoffixingtheexchangerateatwhichtransactionswillbedone.These

forwardexchangecontractsentitleorobligetheGrouptobuyforeigncurrencyatfixedratesonthesamenotionalprincipalamounts.



130


27 deRivative financial inStRumentS (continued) Thenotionalprincipalamountsoftheoutstandinginterestrateswapcontractswereasfollows:

gRoup and company gRoup and company

2013 2012 2013 2012

R’000 R’000 R’000 R’000

Instrumentnumber

andmaturity Receive Pay Notionalamount Fairvalue

30September2020 3mJIBAR+1,92% 10,980% 1 750 000 1750000 (248 045) (175214)

30November2023 3mJIBAR+1,90% 10,980% 250 000 250000 (23 889) (19561)

(271 934) (194775)

30April2013(US$rate) 8,83 R40083 $4 541 – 1 965 –

31July2013(US$rate) 8,93 R143560 $16 069 – 6 931 –

30October2013(US$rate) 9,04 R48731 $5 390 – 2 318 –

11 214 –

gRoup company


2013 2012 2013 2012

R’000 R’000 R’000 R’000

28 financial guaRantee TheguaranteewasgrantedtoTransnetasaresultofthe

saleofDurbanInternationalAirportimmovableproperty.

Thesaletookplaceon31March2012andTransnetSOC

LtdmadeafirstpaymentofR1,2billion.Thefinalpayment

ofR650millionwasreceivedon30September2012.

Thetransferofownershipprocesstookplaceon

30September,afterapprovalwasobtainedfromthe

CompetitionCommissionauthorities.Theguarantee

grantedcompriseda50percentcashcomponentand

50percentreserveontheextistingfacility.

Cashcomponent – 600000 – 600000

Existingfacility – 600000 – 600000

total financial guarantee – 1200000 – 1200000

29 Revenue Revenuecomprises:

Aeronautical 4 245 654 3349653 4 245 654 3349426

Retail1 1 603 477 1573629 1 603 477 1573454

Propertyrental 528 599 558045 483 429 502404

Hoteloperations 98 767 88121 – –

Recoveries2 117 287 106877 117 287 106877

Constructionrevenue – – – –

Other 66 477 62218 56 882 53943

6 660 261 5738543 6 506 729 5586104

1Retailrevenueincludesrevenueformcoreretail,carparking,advertisingandcarrental.

2Recoveriesrevenueincludewater,electricityandotherutilitychargesrecoveredfromtenants.



gRoup company


2013 2012 2013 2012

R’000 R’000 R’000 R’000

30 otheR opeRating income Net(loss)/profitondisposalofassets 3 469 13132 3 469 13132

Fairvaluegains/(losses)oninvestmentproperty 258 309 1534 228 489 (16426)

andnon-currentassetsheldforsale

Other^ 6 787 136301 4 371 3756

268 565 150967 236 329 462

In2012theGroupreceivedaonce-offpaymentof

R113,2millionfromBidvestfornotexercisingitsrights

toparticipateinsharetransactionsinvolvingthesaleof

sharesbyBidvestintheassociateinvestmentin

MumbaiInternationalAirport(MIAL).

31 employee benefit eXpenSeS Salariesandotherpersonnelcosts 773 933 697743 753 208 679121

Medicalaidbenefits 43 134 20072 43 134 20072

Pensionbenefits 56 887 51666 56 887 51666

873 954 769481 853 229 750859

32 otheR opeRating eXpenSeS Auditors’remuneration 6 687 6641 6 362 6306

Operatingleaseexpense 55 222 18299 19 205 18275

Repairsandmaintenance 248 923 226065 245 941 223093

Security 179 288 137082 178 323 135904

Impairmentoftradeandotherreceivables 96 181 127503 96 181 127468

Informationsystemexpense 97 161 100078 95 431 99172

Electricityandwater 236 750 216984 230 985 212731

RatesandTaxes 187 955 154755 177 800 153165

Cleaning 90 885 84479 90 790 83894

Marketing 52 781 51341 52 170 48014

Managerial,technicalandotherfees 105 420 151098 104 239 137571

Travel 32 648 24282 30 382 22744

Insurance 29 579 44357 29 381 44172

Administration 51 484 55257 44 594 47126

Traininganddevelopment 4 686 13203 4 558 13143

Foreigncurrencylosses 1 419 11435 1 419 -

Consumables 16 165 28316 12 969 28316

Corporatesocialinvestment 58 809 64875 58 809 64875

Telephone 13 155 12544 13 023 12544

Recruitmentexpenses 8 360 11458 8 229 11458

Legalexpenses 12 097 7633 12 073 7633

Other (24 473) 7181 6 300 25705

1 561 182 1554866 1 519 164 1523309



132

gRoup company


2013 2012 2013 2012

R’000 R’000 R’000 R’000

33 net finance income and eXpenSe Interestreceived 124 728 47133 153 470 48786

Financeincome 124 728 47133 153 470 48786

Financeexpense (1 612 484) (1594657) (1 573 246) (1524966)

Lossesonremeasurementanddisposalof 25 430 (486803) 25 430 (486803)

tradingfinancialinstruments

Totalfinanceexpense (1 587 054) (2081460) (1 547 816) (2011769)

Netfinanceexpense (1 462 326) (2034327) (1 394 346) (1962983)

34 income taX eXpenSe SouthAfricannormaltaxation

Currenttaxation

–Currentyear 431 060 21064 430 358 –

–Prioryear 54 361 4618 54 361 4618

Deferredtaxation

–Currentyear 217 998 (95188) 223 653 (94184)

–Prioryear (53 444) – (53 444) –

649 975 (69506) 654 928 (89566)

Normaltaxratereconciliation % % % %

Standardtaxrate 28,00 (28,00) 28,00 (28,00)

Non-deductibleexpenses 1,59 22,05 13,63 26,75

Resolutionofcertaintaxpositions 0,28 3,91 – 4,75

CGTratedifferential1 (10,55) (146,60) (5,96) (136,94)

Prioryearadjustments – 28,06 0,86 34,04

Other 20,29 5,72 – 7,36

Effectivetaxrate 39,61 (114,86) 41,75 (92,04)

1TheCGTratedifferentialisattributabletothesaleoftheDurbanInternationalAirportsite.

35 eaRningS and dividendS peR ShaRe The calculation of basic earnings per ordinary share is based on the Group and company net profit attributable to ordinary

shareholdersofR991millionandR914million respectively (2012:R188millionprofitandR8million loss)and494millionand

500millionordinarysharesinissueduringtheyear(2012:494millionand500million).Therewerenodilutivepotentialordinary

sharesforthethecurrentandpriorfinancialyears.




gRoup company


2013 2012 2013 2012

R’000 R’000 R’000 R’000

36 opeRating leaSeS the group as lessee

Minimumleasepaymentsrecognisedunderoperating 55 222 18299 19 205 18275

leasesasanexpenseduringtheyear.

Atthebalancesheetdate,theGrouphasoutstanding

commitmentsundernon-cancellableoperatingleasesfor

futureminimumleasepayments,recognisedonthecashbasis:

Withinoneyear 10 007 10782 10 007 10782

Twotofiveyears 36 922 5410 36 922 5410

46 929 16192 46 929 16192

TheGroupmainlyleasesofficeandotherequipment.

Theseleasestypicallyrunforaperiodbetween

oneandfiveyearsandusuallyhavenooptiontorenew.

the group as lessor

TheGrouprentsoutitsinvestmentpropertiesonairport

landunderoperatingleases.Propertyrentalincome

earnedduringtheyearwasR529million(2011:R558million).

Thepropertiesaremanagedandmaintainedbyinternal

propertymanagers.

Atthebalancesheetdate,theGrouphascontractedwith

tenantsforthefollowingfutureminimumcashleasepayments:

Withinoneyear 1 198 224 929079 1 198 224 929079

Twotofiveyears 2 143 389 2413446 2 143 389 2413446

Afterfiveyears 2 672 000 1372175 2 672 000 1372175

6 013 613 4714700 6 013 613 4714700

Unrecognisedleasepayments 6 013 613 4714700 6 013 613 4714700

37 capital commitmentS capital commitments

–Contracted

Withinoneyear 74 610 275180 74 610 275180

Twotofiveyears – 130407 – 130407

Afterfiveyears 188 139 – 188 139 –

–Authorisedbythedirectorsbutnotyetcontractedfor* 421 599 450000 421 599 450000

684 348 855587 684 348 855587

*Commitments authorised by directors not yet contracted for, relate to the partnership investment with Investimentos E

ParticipacoesEMINFRA-ESTRUTURAS.A.(‘Invepar’),foracquiring51percentofGuarulhosInternationalAirportconcession,with

AirportsCompanySouthAfricaacquiringatenpercentstake.TheGrouphascommitedaninitialinvestmentofR450million.Refer

tonote11formoredetails.



134


38 Related paRtieS AirportsCompanySouthAfricaLtdisoneof21Schedule2majorpublicentitiesintermsofthePublicFinanceManagementAct(Act1of

1999asamended)andthereforefallswithinthenationalsphereofgovernment.Asaconsequence,AirportsCompanySouthAfricaSOCLtd

hasa significantnumberof relatedparties that arepublic entities. In addition, the companyhasa relatedparty relationshipwith its

subsidiaries,associatesandwithitsdirectorsandexecutiveofficers(keymanagement).Unlessspecificallydisclosed,thesetransactionsare

concludedonanarm’slengthbasisandtheGroupisabletotransactwithanyentity.

gRoup company


2013 2012 2013 2012

R’000 R’000 R’000 R’000

38.1 transactions with related entities

Thefollowingisasummaryoftransactionswith

relatedpartiesduringtheyearandbalancesdueatyear-end:

Nationaldepartments

Servicesrendered 26 203 29961 26 203 29961

Servicesreceived 395 1443 395 1443

Amountdue/(from) 2 424 8334 2 424 8334

Constitutionalinstitutions

Servicesreceived 131 – 131 –

Majorpublicentities

Servicesrendered 1 937 398 1441679 1 937 398 1441679

Servicesreceived 59 765 43805 59 765 43805

Amountdue/(from) 210 278 192470 210 278 192470

Amountdue/(to) (1 224) (417) (1 224) (417)

Othernationalpublicentities


Servicesreceived 463 912 302541 463 912 302541

Amountdue/(from) 4 055 7220 4 055 7220

Amountdue/(to) (5 018) (18648) (5 018) (18648)

Subsidiariesandjointventures


Amountdue/(from) – – 803 866 164113

Servicesrenderedtorelatedmajorpublicentitiesconsist

primarilyofaeronauticalandrentalservicesfor

theGroupandforthecompany.

Alltransactionswiththeserelatedparties(otherthan

intercompanyloanbalances)arepricedonanarm’s-length

basisandaretobesettledwithinoneto12months

ofthereportingdate.Noneofthebalancesissecured.

38.2 Remuneration

Executivedirectors 6 572 17397 6 572 17397

Non-executivedirectors 2 309 687 2 309 687

Executivemanagement 25 167 29651 25 167 29651

34 048 47735 34 048 47735




38 Related paRtieS (continued)38.2 Remuneration (continued) All executivedirectorsandexecutivemanagementareeligible foranannualperformancebonuspayment linked toappropriate

targets.Duringthecurrentyear,aliabilityforincentivebonusofR6million(2012:R6million)wasraisedintermsoftheperformancemanagementsystemforexecutivedirectorsandexecutivemanagement.ThestructureoftheindividualbonusplansandawardsisdecidedbytheHumanResourcesTransformationandRemunerationCommittee.

38.3 transactions with key management personnel Thekeymanagementpersonnelcompensationsforthecompanyareasfollows:

Long-term Short-term Salary incentive incentive fees Total 2013 2012 2012 2013 R’000 R’000 R’000 R’000 R’000

executive directors BMaseko1(ActingManagingDirector, effective1October2011) 2 579 – 1557 – 4136 VWTlou1(ActingFinanceDirector, effective1September2011) 1 717 – 719 – 2436

4 296 – 2276 – 6572

Theserequireseparatedisclosureinterms ofTreasuryRegulation28.1.1.Senior personnelremunerationisasfollows:

executive management DACloete 1 789 – 1210 – 2999 PMduPlessis 1 772 – 1205 – 2977 HJeena 2 015 – 1490 – 3505 CJHlekane* 1 051 – 1357 – 2408 TSMekgoe^ 878 – – – 878 TDelomoney 1 659 – 1052 – 2711 JRNeville 2 268 – 1550 – 3818 GVracar 1 599 – 1039 – 2638 yESchoeman# 637 – 162 – 799 AVermeulen1(ActingGroupExecutive: AirportOperationseffective1October2011) 1 715 – 719 – 2434

15 383 – 9784 – 25167

*Resigned30September2012^Appointed10October2012#Appointed1November20121Salaryincludesactingallowance fees total 2013 2013 R’000 R’000

non-executive directors – company BMabuza(Chairman) (appointed1March2012) 595 595 EMasilela* (appointed1January2012) 291 291 MJvanRensburg (retired12November2012) 259 259 RMorar (appointed1January2012) 341 341 SMacozoma (appointed1March2012) 273 273 BPMabelane (appointed1August2012) 84 84 TRamano (appointed1March2012) 313 313 JLamola (appointed1December2012) 38 38 KMMoroka (appointed1December2012) 38 38 BLuthuli (appointed1December2012) 38 38 CMabude (appointed1December2012) 38 38

2 308 2 308

*Note:FeespayabletothePIC.


136

38 Related paRtieS (continued)38.3 transactions with key management personnel (continued)

Long-term Short-term

Salary incentive incentive Fees Total

2012 2012 2012 2012

R’000 R’000 R’000 R’000 R’000

executive directors

MWHlahla (resigned30September2011) 2571 6494 4385 – 13450

BPMabelane (resigned31August2011) 1764 582 1601 – 3947

4335 7076 5986 – 17397

Theserequireseparatedisclosureintermsof

TreasuryRegulation28.1.1.Seniorpersonnel

remunerationisasfollows:

executive management

BMaseko(ActingManagingDirector,

effective1October2011) 2280 847 1111 – 4238

DACloete 2027 516 705 – 3248

PMduPlessis 1658 660 760 – 3078

HJeena 1881 733 979 – 3593

CJHlekane 1844 566 968 – 3378

NRapoo# 392 – 731 1123

TDelomoney 1519 458 657 – 2634

JRNeville 2122 843 1064 – 4029

GVracar 1490 467 691 – 2648

VWTlou(ActingFinanceDirector

effective1September2011) 983 – – – 983

AVermeulen(ActingGroupExecutive:

AirportOperationseffective1October2011) 697 – – – 697

16893 5090 7666 – 29649

#Resigned31May2011

Fees Total

2012 2012

R’000 R’000

non-executive directors – company

BMabuza(Chairperson) (appointed1March2012) – –

EMasilela* (appointed1January2012) – –

MJvanRensburg (appointed1April2010) 299 299

RMorar (appointed1January2012) 35 35

SMacozoma (appointed1March2012) – –

TRamano (appointed1March2012) – –

AKekana (resigned1January2012) 138 138

WCvanderVent (resigned1January2012) 215 215

687 687

*Note:FeespayabletothePIC




gRoup company


2013 2012 2013 2012

R’000 R’000 R’000 R’000

39 caShflow woRkingS39.1 cash generated from operations

Profit/(loss)beforetax 1 641 040 118067 1 568 846 (97310)

adjustments:

Depreciationandamortisationexpense 1 411 432 1463804 1 407 473 1446725

Impairmentoftradeandotherreceivables 96 181 127503 96 181 127468

Financeexpense/(lesscapitalisedcosts) 1 612 484 1594657 1 573 246 1524966

Financeincome (124 728) (47133) (153 470) (48786)

Shareofprofitofassociate (21 108) (51035) – –

Unrealisedfairvaluegainsandlosses (258 309) 58928 (228 489) 76888

Profitondisposalofassets (3 469) (13132) (3 469) (13132)

Movementindeferredrevenue (1 769) (2306) (1 769) (2306)

Movementinretirementbenefitobligations 42 629 (19537) 25 661 (19537)

Movementinprovisionsandother 169 296 (66883) 169 296 21333

4 563 679 3162933 4 453 506 3016309

working capital changes:

(Increase)intradeandotherreceivables (251 262) (229044) (233 698) (283468)

Decrease/(increase)ininventories (2) (5304) – –

(Decrease)/increaseintradepayables (91 333) 25837 (107 524) 22887

4 221 082 2954422 4 112 284 2755728

39.2 income tax (paid)/received


Incomestatementcharge (485 411) (25682) (484 719) (4618)

Balanceatendoftheyear 20 198 (61212) 20 437 (77809)

(404 001) 34680 (386 473) 40700



138


carrying amount

gRoup company


2013 2012 2013 2012

R’000 R’000 R’000 R’000

40 financial inStRumentS40.1 credit risk

Exposure to credit risk

Thecarryingamountoffinancialassetsrepresentsthe

maximumcreditexposure.Themaximumexposure

tocreditriskatthereportingdatewas:

Loansandreceivables 748 732 675673 743 397 669674

748 732 675673 743 397 669674

Themaximumexposuretocreditriskfortrade

receivablesatthereportingdateby

geographicregionwas:

O.R.TamboInternationalAirport 451 853 414287 451 853 414287

CapeTownInternationalAirport 152 762 157346 152 762 157346

KingShakaInternationalAirport 91 013 78461 91 013 78461

PortElizabethInternationalAirport 23 503 25283 23 503 25283

EastLondonAirport 8 311 11492 8 311 11492

GeorgeAirport 6 061 8291 6 061 8291

BramFischerInternationalAirport 4 149 4059 4 149 4059

KimberleyAirport 1 597 1782 1 597 1782

UpingtonInternationalAirport 4 411 2277 4 411 2277

Johannesburgcorporateofficeandother 220 841 103807 215 439 97808

964 501 807085 959 099 801086

Less:Impairmentallowance (215 769) (131412) (215 702) (131412)

748 732 675673 743 397 669674

Themaximumexposuretocreditriskfortradereceivables

atthereportingdatebeforetheimpairmentprovision,

guaranteesanddepositsheldbytypeofcustomerwas:

Aeronautical 661 278 645683 661 278 645683

Commercial 194 433 34174 194 433 34174

Other 108 790 127228 103 388 138107

964 501 807085 959 099 817964




40 financial inStRumentS (continued)40.1 credit risk (continued)

Exposure to credit risk (continued)

Thefollowingtablerepresentsanageanalysisoftradeandotherreceivables.Tradeandotherreceivablesareconsideredpastdue

shouldaqualifyingpaymentnotbereceivedwithin30days.

trade and impairment

other as a

trade receivables, percentage

and allowance net of of trade

other for allowance for and other

receivables impairment impairment receivables

R’000 R’000 R’000 R’000

2013

gRoup

Notpastdue 134 558 – 134 558 –

Pastdue0–30days 504 656 – 504 656 –

Pastdue31–60days 96 844 – 96 844 –

Pastdue61–90days 228 443 (215 769) 12 674 94.4%

Totaltradeandotherreceivables 964 501 (215 769) 748 732 22.4%

company

Notpastdue 129 156 – 129 156 –

Pastdue0–30days 504 656 – 504 656 –

Pastdue31–60days 96 844 – 96 844 –

Pastdue61–90days 228 443 (215 769) 12 674 94.4%

Totaltradeandotherreceivables 959 099 (215 769) 743 332 22.5%

2012

gRoup

Notpastdue 562437 – 562437 –

Pastdue0–30days 95826 – 95826 –

Pastdue31–60days 71931 – 71931 –

Pastdue61–90days 76891 (131412) (54521) 170.9%

Totaltradeandotherreceivables 807085 (131412) 675673 16.3%

company

Notpastdue 573316 – 573316 –

Pastdue0–30days 95826 – 95826 –

Pastdue31–60days 71931 – 71931 –

Pastdue61–90days 76891 (131412) (54521) 170.9%

Totaltradeandotherreceivables 817964 (131412) 686552 16.1%


140


gRoup company


2013 2012 2013 2012

R’000 R’000 R’000 R’000

40 financial inStRumentS (continued)40.1 credit risk (continued)

Impairment loss

Themovementintheallowanceforimpairmentinrespect

oftradereceivablesduringtheyearwasasfollows:

Balanceat1April 131 412 27591 131 412 27591

Increase/(decrease)inallowance 84 357 103821 84 290 103821

Balanceat31March 215 769 131412 215 702 131412

Credit quality of financial instruments

Thecreditqualityoffinancialassetsthatareneitherpastduenorimpairedcanbeassessedbyreferencetohistoricalinformation

aboutthecustomer.Beforeacceptinganynewcustomer,theGroupusesanexternalcreditscoringsystemtoassessthepotential

customer’screditqualityanddefinescreditlimitsbycustomer.Limitsandscoringattributedtocustomersarereviewedperiodically.

60percentofthetradereceivablesthatareneitherpastduenorimpairedwererecoveredwithinonemonthafterthereporting

date.Ofthetradereceivablesbalanceattheendoftheyear,R181million(2012:R9,2million)isduefromonesignificantclient,

theGroup’slargest.Therearenoothercustomerswhorepresentmorethantenpercentofthetotalbalanceoftradereceivables.

Asat31March2013,AirportsCompanySouthAfricahadnosignificantconcentrationofcreditrisk(2012:Nil).

Theallowanceaccount in respectof trade receivables isused to record impairment lossesunless theGroup is satisfied thatno

recovery of the amounts owing is possible; at that point the amounts considered irrecoverable and are written off against the

allowanceaccount.

TheGroupbelievesthat,basedonhistoricdefaultrates,nootherimpairmentallowanceinrespectoftradereceivablesnotpastdue

orpastdue61–90daysisrequired.

40.2 currency risk

Exposure to currency risk

Inordertomanagerisksfromfluctuationsincurrencyrates,theGroupmakesuseofforwardexchangecontractstomanageexposure

tofluctuationsinforeigncurrencyratesonimportationofequipment.

TheGroup’sexposuretoforeigncurrencyriskswasasfollows,basedonnotionalamounts:

2013 2012

uSd Euro USD

‘000 ‘000 ‘000

gRoup

Tradereceivables 836 – 826

Cashandcashequivalents 1 095 – 9

Tradepayables (1 032) (158) (447)

Grossbalancesheetexposure 2 114 (158) 388

company

Tradepayables (632) (158) (461)

Foreignexchangecontracts 1 216 – –

Grossbalancesheetexposure (632) (158) (461)




average rate Reporting spot rate

2013 2012 2013 2012

R’000 R’000 R’000 R’000

40 financial inStRumentS (continued)

40.2 currency risk (continued)

Exposure to currency risk (continued)

Thefollowingsignificantexchangeratesappliedduringtheyear:

Euro 10,945 9,487 11,807 9,651

USD 8,423 7,173 9,225 6,793

GBP 13,418 11,147 14,012 10,921

INR 0,1552 0,156 0,169 0,152

BRS 4,2189 – 4,555 –

Sensitivityanalysis

A10percentstrengtheningof theRandagainst the followingcurrenciesat31Marchwouldhave increased/(decreased)equity,

andprofitandlossbytheamountsshownbelow.Thisanalysisassumesthatallothervariables,inparticularinterestrates,remain

constant.Theanalysisisperformedonthesamebasisfor2012.

equity profit or loss

R’000 R’000

31 march 2013

USD (75 268) (36 670)

INR (3 092) (2 907)

BRL (2 402) (2 907)

(80 762) (42 484)

31 march 2012

USD – –

Euro – –

A10percentweakeningoftheRandagainsttheabovecurrenciesat31Marchwouldhavehadtheequalbutoppositeeffectonthe

abovecurrenciestotheamountsshownabove,onthebasisthatallothervariablesremainconstant.Deviationsinallcaseswereless

thanR1000.

40.3 interest rate risk

Profile

Atthereportingdate,theinterestprofileoftheGroup’sinterest-bearingfinancialinstrumentswas:

carrying amount

gRoup company


2013 2012 2013 2012

R’000 R’000 R’000 R’000

fixed-rate instruments

Financialliabilities 10 038 176 10745617 9 985 291 10077746

variable-rate instruments

Financialliabilities 4 759 741 5965161 4 759 741 5965161


142


40 financial inStRumentS (continued)40.3 interest rate risk (continued)

Cash flow sensitivity analysis for variable-rate instruments

Anincreaseof50basispointsininterestratesatthereportingdatewouldhaveincreased/(decreased)profitandlossbeforetaxby

theamountsshownbelow.Theanalysisassumesthatallothervariablesremainconstant.Theanalysisisperformedonthesamebasis

for2012.Adecreaseof50basispointswouldhavehadtheequalbutoppositeeffectontheprofitandlossbeforetax.

gRoup and company

Profitandloss

50bpincrease

R’000

at 31 march 2013 (6 748)

At31March2012 (6005)

fair values and financial instrument by category

fair values versus carrying amount

Thefairvaluesoffinancialassetsandliabilities,togetherwiththecarryingamountshowninthebalancesheet,areasfollows:

31 march 2013 31March2012

carrying fair Carrying Fair

amount value amount value

classification R’000 R’000 R’000 R’000

gRoup

Interest-bearing Otherliabilities (14 775 027) (16 831 776) (16710776) (18330156)

borrowings atamortisedcost

Derivativefinancial Heldfortrading (271 934) (271 934) (194775) (194775)

instruments–liabilities

Derivativefinancial Heldfortrading 11 214 11 214 – –

instruments–assets

Cashandcashequivalents Loansandreceivables 1 261 019 1 261 019 1980385 1980385

Investments Loansandreceivables 1 204 998 1 204 998 600000 600000

Tradeandotherreceivables Loansandreceivables 1 120 409 1 120 409 1022343 1022343

Tradepayablesandaccruals Otherliabilitiesatamortisedcost (817 432) (817 432) (910354) (910354)

company

Interest-bearing Otherliabilitiesat (14 720 834) (16 777 583) (16042905) (17641187)

borrowings amortisedcost

Derivativefinancial Heldfortrading (271 934) (271 934) (194775) (194775)

instruments–liabilities

Derivativefinancial Heldfortrading 11 214 11 214 – –

instruments–assets

Cashandcashequivalents Loansandreceivables 1 204 173 1 204 173 1903173 1903242

Investments Loansandreceivables 1 204 998 1 204 998 600000 600000

Tradeandotherreceivables Loansandreceivables 1 096 680 1 096 680 1016093 1016093

Tradepayablesandaccruals Otherliabilitiesatamortisedcost (769 064) (769 064) (878917) (878917)

Thebasisfordeterminingthefairvaluesisdisclosedinnote4.



40 financial inStRumentS (continued)40.3 interest rate risk (continued)

fair value hierarchy

Thetablebelowanalysesfinancialinstrumentscarriedatfairvalue,byvaluationmethod.Thedifferentlevelshavebeendefinedas

follows:

level 1 level 2 level 3 total

gRoup

31 march 2013

Derivativefinancialinstruments-assets 11 214 – – 11 214

Derivativefinancialinstruments-liabilities – (271 934) – (271 934)

31 march 2012

Derivativefinancialinstruments-assets – – – –

Derivativefinancialinstruments-liabilities – (194775) – (194775)

company

31 march 2013

Derivativefinancialinstruments-assets – 11 214 – 11 214

Derivativefinancialinstruments-liabilities – (271 934) – (271 934)

31 march 2012

Derivativefinancialinstruments-assets – – – –

Derivativefinancialinstruments-liabilities – (194775) – (194775)

Level1:quotedprices(unadjusted)inactivemarketsforidenticalassetsorliabilities

Level2:inputsotherthanquotedpricesincludedwithinLevel1thatareobservablefortheassetorliability,eitherdirectly(i.e.as

prices)orindirectly(i.e.derivedfromprices)

Level3:inputsfortheassetorliabilitythatarenotbasedonobservablemarketdata(unobservableinputs).

41 contingent liabilitieS NedbankhasprovidedguaranteesofR26,018milliontoAirportsCompanySouthAfricaSOCLimited.

42 eventS afteR RepoRting date weakening of the Rand against the dollar

TheRand/DollarexchangeweakenedbyapproximatelyninepercentfromR9,225toaroundR10,092sinceyear-end.Theeffecton

thefiguresat31March2013wouldhavebeentoincreasetheGroupequityandgroupprofitbyR62,553million.

–Dividends On26July2013,theBoardofDirectorsproposedanordinarydividenddeclarationof10%ofGroupprofitfortheyearaftertax.



144


43 ReclaSSification of compaRativeS43.1 fair value gains on investment properties

TheGroupreclassifiedthefairvaluegainsoninvestmentproperties inthecurrentfinancialyeartootheroperatingincome.The

reclassificationwasdoneinordertoimprovedisclosure.Thereclassificationdoesnothaveanimpactonthestatementoffinancial

positionorthestatementofcashflows.Theeffectofreclassificationonprioryearstatementofcomprehensiveincomeisasfollows:

gRoup 2012

Previously Re- Reclassified

stated classification amount

R’000 R’000 R’000

Statement of compRehenSive income

Otheroperatingincome 149433 1543 150976

Fairvaluegainsoninvestmentproperties 1534 (1534) –

company 2012

Statement of compRehenSive income

Otheroperatingincome 16888 (16426) 462

Fairvaluegainsoninvestmentproperties (16426) 16426 –

43.2 net cash flows from operating activities

TheGroupreclassifiedtaxreceivedin2012tocashgeneratedbyoperations.Thereclassificationwasdonetoimprovedisclosure.The

reclassificationdoesnothaveanimpactonthestatementoffinancialpositionorthestatementofcashflows.Theeffectonprior

yearamountsisasfollows:

gRoup 2012

Previously Re- Reclassified

stated classification amount

R’000 R’000 R’000

Statement of caSh flowS

Cashpaidtosuppliersandemployees (2879249) 49187 (2830062)

Incometaxreceived/(paid) 83867 (49187) 34680

company 2012

Statement of caSh flowS

Cashpaidtosuppliersandemployees (2770626) 33473 (2737153)

Incometaxreceived/(paid) 74173 (33473) 40700




44 Segment infoRmation TheGroup’sreportedoperatingsegmentsarebasedonreportsreviewedbytheExecutiveCommitteetomakestrategicdecisions.

Thereportablesegmentsofferthesameservices(exceptforCorporateandother)andaremanagedseparatelybecausetheyrequire

differentmarketingstrategies.

Information regarding the operations of each reportable segment is included below. The Executive Committee assesses the

performance of the operating segments as a measure of earnings before interest, taxation, depreciation and amortisation

expense (EBITDA). Interest income and expenditure are not allocated to operating segments as they are driven largely by the

Corporatedivision,whichmanagesthecashrequirementsofthecompany.Corporateoverheadexpensesarenotallocatedtothe

reportablesegments.

Salesbetweenoperating segmentsarecarriedoutatarm’s-length.The revenue fromexternalparties reported to theExecutive

Committeeismeasuredinamannerconsistentwiththatintheincomestatement.

2013 2012

R’000 R’000

EBITDAforreportablesegmentsandothersegments 4 493 691 3565164

Depreciationandamortisationexpense (1 411 432) (1463804)

Shareofprofitofequityaccountedassociate 21 108 51035

Netfinanceexpense (1 462 326) (2034327)

profit/(loss) before tax 1 641 041 118068

Reportable segment assets are reconciled to total assets as follows:

Segmentassetsforreportablesegments 25 439 068 25439068

Othersegmentassets 2 749 213 4627587

28 188 281 30066655

Reportable segment liabilities are reconciled to total liabilities as follows:

Segmentliabilitiesforreportablesegments 28 628 084 15019301

Othersegmentliabilitiesandeliminations (27 407 069) (12581563)

unallocated

Deferredtax 960 821 1017140

Derivativefinancialinstruments:non-current 226 551 129426

Derivativefinancialinstruments:current 45 383 65349

Incometaxliabilities 20 437 16597

Interest-bearingliabilities:non-current 11 919 339 15647002

Interest-bearingliabilities:current 2 855 688 1063774

17 249 234 20377025


146

44 Segment infoRmation (continued)

O.R.Tambo CapeTown KingShaka BramFischer EastLondon George Kimberley

International International International International Airport Airport Airport

R’000 R’000 R’000 R’000 R’000 R’000 R’000

2013

Aeronautical 2 785 914 836 518 363 146 33 757 49 768 40 100 12 026

Non-aeronautical 1 395 658 451 493 244 914 15 682 21 179 18 084 5 669

–Retail 1 023 176 334 766 173 752 9 744 15 947 11 765 4 034

–Property 372 482 116 727 71 162 5 938 5 232 6 319 1 635

Other 22 330 7 815 18 169 456 666 371 501

total external revenue 4 203 902 1 295 826 626 229 49 895 71 613 58 555 18 196

Earningsbeforeinterest,tax, 3 401 281 925 982 357 909 11 651 37 144 28 220 1 157

depreciationand

amortisation(EBITDA)*

Depreciationandamortisation 553 008 266 268 395 274 18 599 27 638 17 857 11 472

Interestincome 2 176 2 428 278 – – – –

Interestexpense – 5 130 – – – 1 1

Reportabletotalassets 13 315 104 4 089 318 3 392 714 282 869 504 509 294 348 117 715

Reportabletotalliabilities 269 434 187 009 138 355 18 188 39 426 26 266 17 823

2012 Aeronautical 2145776 695921 307822 28017 41104 33494 8867

Non-aeronautical 1291724 442522 240068 14136 19397 15413 5725

–Retail 1006991 328233 166387 10285 15650 11554 4411

–Property 284733 114289 73681 3851 3747 3859 1314

Other 75263 33602 35728 2053 2261 2414 565

total external revenue 3512763 1172045 583618 44206 62762 51321 15157

Earningsbeforeinterest,tax, 2681123 812902 323964 18483 34962 21479 1700

depreciationand

amortisation(EBITDA)*

Depreciationandamortisation 619601 278033 402322 22912 25270 16596 10137

Interestincome 1801 2418 61 – – – –

Interestexpense – 931 – – – – –

Reportabletotalassets 9311837 4392331 7786244 485377 456461 272266 237906

Reportabletotalliabilities 271072 1712413 6723069 321885 207232 106278 145062

*EBITDAiscalculatedasrevenue,plusotheroperatingincome,lessemployeebenefitexpense,lessotheroperatingexpenses.




PortElizabeth Upington Pilanesberg Corporate JIAPiazza Unallocated

International International International Office Precinct2A Park andother Elimination Total

R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000

101 801 6 960 – – – – 15 664 – 4 245 654

47 096 4 418 – – 67 002 98 767 284 764 (35 490) 2 634 027

28 407 1 884 – – – 98 767 271 104 (35 490) 1 937 856

18 689 2 534 – – 67 002 – 13 660 – 696 171

979 1 342 – 4 251 – – (261 509) – (219 420)

149 876 12 720 – 4 251 67 002 98 767 38 919 (35 490) 6 660 261

92 965 (2 396) – 724 525 53 263 1 734 (1 139 744) – 4 493 691

32 536 7 951 – 76 794 1 3 959 75 – 1 411 432

– – – 148 588 615 306 (27 938) (29 821) 124 728

– – – 1 568 114 58 553 133 (11 523) (29 821) 1 612 484

655 795 55 701 – 20 044 195 759 915 41 208 (14 513 779) (851 332) 28 188 281

18 164 6 003 – 3 265 678 673 341 11 978 13 382 346 (804 768) 17 249 234

83268 5157 227 – – – – – 3349653

42801 4073 190 – 72406 88121 16066 (32845) 2219797

28203 1741 175 – – 88121 – (32845) 1628906

14598 2332 15 – 72406 – 16066 – 590891

4061 1951 89 2920 – – 8186 – 169093

130130 11181 506 2920 72406 88121 24252 (32845) 5738543

74647 (3031) 55028 (637405) 61194 1141 117443 – 3563630

28266 8587 13370 34997 3 3707 3 – 1463804

– – – 44505 – 357 (2009) (1515) 47133

– – – 1524035 60870 134 8687 (1515) 1594657

635779 137348 – 12069787 796025 40598 2681378 (9236682) 30066655

171719 124499 – 4525646 699903 10523 14331944 (8974219) 20377026



148


2013 2012

R’000 R’000

45. irregular or fruitless and wasteful expenditure

45.1 irregular expenditure

Openningbalance – –

Add:irregularexpenditure-currentyear 32 832 –

Less:amountswrittenoff – –

Less:amountsnotrecoverable(notcondoned) – –

irregular expenditure awaiting write off 32 832 –

Analysisofexpenditureawaitingwrite-offperageclassification

Currentyear 32 832 –

Prioryears – –

total 32 832

details of irregular expenditure

current year:

R32,8millioninrespectofanITcontractunderinvestigation.

45.2 fruitless and wasteful expenditure

Openningbalance – –

Add:fruitlessandwastefulexpenditure-currentyear 13 625 –

Less:amountswrittenoff – –

Less:amountsnotrecoverable(notcondoned) – –

fruitless and wasteful expenditure awaiting write off 13 625 –

Analysisofexpenditureawaitingwrite-offperageclassification

Currentyear 13 625 –

Prioryears – –

total 13 625 –

details of fruitless and wasteful expenditure

current year:

R13,6millioninrespectofanITcontractunderinvestigation.



statistical review

2013 2012 2011 2010 2009

R’000 R’000 R’000 R’000 R’000

gRoup

operations

Aeronauticalrevenue 4 245 654 3349653 2430447 1702372 1452067

Non-Aeronauticalrevenue 2 414 607 2388890 2227792 1828453 1714015

Revenue 6 660 261 5738543 4658239 3530825 3166082

ebitda 4 493 691 3563630 2615131 2672775 1744410

Operatingprofit 3 082 259 2099826 1169903 1595326 995471

Profitbeforetax 1 641 042 118068 (181303) 995038 633310

Profitfortheyear 1 298 412 187573 (220530) 900786 443897

Depreciationandamortisation (1 411 432) (1463804) (1445228) (1077449) (748939)

Capitalexpenditure (990 571) (417100) (505368) (5240614) (5996937)

financial position

Capitalandreserves 10 939 047 9689630 9598237 8968132 8074650

Noncurrentliabilitiesexcludingdeferredtax 12 403 620 15976064 15091193 14935848 9204201

Deferredtax 906 321 1017140 1080452 749849 775234

Debentures – – 6000 6000 6000

24 248 987 26682834 25775882 24659829 18060085

Property,plantandequipment,

investmentpropertyandintangibleassets 23 576 915 23672164 26560669 25812860 21064552

Investmentinassociates 932 832 748643 647129 661327 459978

Non-currentreceivables 269 871 173992 150115 113725 116511

Currentassets 3 408 663 3621856 1798666 1303266 1957071

Non-currentassetsheldforsale – 1850000 – – –

Totalassets 28 188 281 30066655 29156579 27891178 23598112

Currentliabilities 3 884 776 (3383822) (3380698) (3231349) (5538027)

32 073 057 24832834 25775881 24659829 18060085

cash flow

Netcashavailable/(utilsedin)operatingactivities 3 902 295 3036235 1665084 1168094 1579105

Cashgenerated/(utilised)ininvestingactivities (1 018 938) 164440 (532908) (4330247) (5950526)

Netcashgenerated/(utilised)byfinancingactivities (3 603 017) (1899118) (887749) 2600731 5237261

Netcash(outflow)/inflow (719 366) 1301504 244884 (555347) 877309

profitability

Earningspershare(cents) 262,82 37,97 (44,64) 182,33 89,85

productivity

Numberofemployees 2 715 2490 2342 2225 2232

Revenueperemployee(R’) 2 453 135 2304636 1989000 1586888 1418496

Operatingprofitperemployee(R’) 1 135 270 843304 499532 717001 445999

Departingpassengersperemployee 6 423 7208 7476 7549 7525

CosttoIncome 54% 63% 75% 55% 69%

Thesupplementaryinformationpresentedonpages149to151doesnotformpartofthefinancialstatementsandisunaudited.


150

2013 2012 2011 2010 2009

gRoup

other key statistics (in numbers)

aircraft landings

International 36 146 34716 34423 34423 33590

Domestic 126 388 142696 139839 139839 137645

Regional 11 251 12087 11492 11492 12150

Non-scheduled 81 238 82821 88538 88538 91329

255 023 272320 274292 274714 279545

departing passengers

International 4 914 163 4845495 4734075 4452380 4491602

Domestic 11 963 082 12534937 12205426 11529284 11771190

Regional 487 569 490407 462261 449648 443657

Non-scheduled 73 072 76715 107506 79330 90161

17 437 886 17947554 17509268 16510642 16796610

number of airlines

International 44 44 55 55 54

Domestic 6 7 8 7 7

50 51 63 62 61

aeronautical tariffs

Passengerservicecharges

Domestic R101,75 R96,49 R57,02 R42,98 R35,96

Regional R212,23 R19,12 R117,54 R89,47 R74,56

International R279,82 R262,28 R155,26 R118,42 R98,25

Landingfees(basedonanaircraftwitha

maximumtakeoffweightof60000kg)

Domestic R 4 437,01 R4166,02 R2456,08 R1872,82 R1558,55

Regional R 6 472,85 R6067,52 R3582,78 R2732,24 R2273,53

International R 8 507,50 R7986,88 R4709,26 R3590,94 R2988,28

operational volume (in numbers)

aircraft landings

O.R.TamboInternational 100 007 106353 106378 101307 106261

CapeTownInternational 44 537 48996 46818 46302 47805

KingShakaInternational 24 850 27556 27398 26454 25905

PortElizabethInternational 31 821 35087 36534 39169 34888

EastLondonAirport 15 265 16285 19324 17930 17421

GeorgeAirport 19 815 16726 16502 20931 21647

BramFischerInternational 8 925 10161 9423 11362 12364

KimberleyAirport 5 766 6172 6226 5980 7615

UpingtonInternational 4 037 3924 3588 3395 3228

company 255 023 271260 272191 272830 277134

PilanesbergInternational – 1060 2101 1884 2381

total 255 023 272320 274292 274714 279515

statistical review (continueD)



statistical review (continueD)

2013 2012 2011 2010 2009

departing passengers (‘000)


CapeTownInternational 4 226 4301 4113 3912 3917

KingShakaInternational 2 337 2526 2440 2208 2164


EastLondonAirport 323 339 339 337 347

GeorgeAirport 274 290 273 270 303

BramFischerInternational 207 222 209 199 205

KimberleyAirport 75 70 66 66 76

UpingtonInternational 27 26 24 21 24

company 17 438 17947 17501 16508 16786

PilanesbergInternational – 1 4 3 4

total 17 438 17948 17505 16511 16790

Staff



KingShakaInternational 391 335 335 292 247


EastLondonAirport 67 63 61 59 54

GeorgeAirport 72 60 67 63 59

BramFischerInternational 66 63 69 69 67

KimberleyAirport 41 39 34 31 33

UpingtonInternational 19 20 20 13 14

CorporateOffice 216 222 147 158 157

company 2 715 2490 2330 2213 2221

PilanesbergInternational – – 12 12 11

total 2 715 2490 2342 2225 2232

152

aiRpoRtS company South afRica Soc limited

RegNo1993/004149/30

RegiSteRed office

TheMaples

RiverwoodsOfficePark

24JohnsonRoad

Bedfordview

2008

poStal addReSS

POBox75480

Gardenview

2047

boaRd of diRectoRS

BMabuza,Non-executiveChairman

RMorar,Non-executiveDeputyChairman

JLamola,Non-executiveDirector

BLuthuli,Non-executiveDirector

PMabelane,Non-executiveDirector

CMabude,Non-executiveDirector

SMacozoma,Non-executiveDirector

EMasilela,Non-executiveDirector

MMatsaba,Non-executiveDirector(AlternateDirectortoEMasilela)

KMoroka,Non-executiveDirector

TRamano,Non-executiveDirector

BMaseko,ManagingDirector

MManyama-Matome,FinanceDirector

acting company SecRetaRy

MManyama-Matome

independent eXteRnal auditoRS

Ngubane&CoInc PricewaterhouseCoopersInc

Director:ESibanda Director:RDhanlall

RegisteredAuditor RegisteredAuditor

Midrand Johannesburg

aDministration

www.airports.co.za

rieport - airports company south africa in 1993 as a state-owned company under the companies act of...

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