ANNUAL REPORT 2012

ANNUAL REPORT 2012

ANNUAL REPORT 2012 Foreword by Polish Air Navigation Services Agency Dear Sirs, Lastly, in Decemeber 2012, after a thorough consultation process wi...

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ANNUAL REPORT 2012

Foreword by Polish Air Navigation Services Agency

Dear Sirs, Lastly, in Decemeber 2012, after a thorough consultation process with Oro Navigacija, the Baltic Functional Airspace Block was announced fulfilling requirement of the Single European Sky initiative.

Year 2012 was a first year of the reference period (RP1) within the Performance Scheme covering period 2012-2014. 2012 witnessed the very last works on the preparation of National Performance Plan of air traffic services for the years 2012-2014. The plan was drawn up in accordance with EU legal regulations and includes PANSA course of activity undertaken to contribute to the implementation of EU – wide targets in four key performance areas, above all within capacity and cost efficiency.

In 2012 PANSA continued with the implementation of many modern and innovative solutions, targeted at increasing capacity of Polish airspace while maintaining safety level. The most essential consisted of actions aimed at implementation of new ATM system, which is of key importance to PANSA, and numerous CNS investments. On top this in 2012 PANSA continued with the implementation of new RNAV / GNSS solutions in the airspace, allowing for its better usage by all users.

PANSA’s activities in 2012 was most impacted by the European Football Championships UEFA EURO 2012™. UEFA decision taken in 2007 to award Poland and Ukraine the right to host the UEFA EURO 2012™ and anticipated traffic growth during the tournament resulted in significant conclusions on resources and investments planning long before the contest. One could expect that the biggest sporting event in the history of both countries would be the cause of massive, though temporary, traffic increase.

The results of 2012 demonstrate that implementing investment plans, carrying out operational and organizational activities and continuing acquiring new licensed personnel, PANSA obtained stability in respect of operating costs and maintains employment costs at an optimum level, remaining one of the most effective ATM/CNS service providers in Europe.

With hindsight, due to measures taken by PANSA much in advance, the Agency was very good prepared to the traffic handling during the event. Large-scale process of preparations, comprising not only ATM/CNS infrastructure development but primarily new operational and organizational solutions made it possible to announce in May 2012 the operational readiness of PANSA to face challenges of the event-related traffic.

Polish Air Navigation Services Agency

On top of this, the last year saw operational opening of two brand-new airports, i.e. Modlin Airport and Lublin Airport. In this regard, new navigational aids (DVOR/DME) entered service at these airports in 2012.

2

Key events in 2012 

January: 

Addendum to National Performance Plan for the years 2012-2014 was sent to the European Commission.



ATIS system went into operation at airports in Gdańsk, Katowice, Kraków, Poznań, Rzeszów, Szczecin and Wrocław, The European Football Championships UEFA EURO 2012™.

March: 

 

July:

PANSA concluded an agreement with INDRA Sistemas S.A. to set forth terms and conditions of PANSA’s participation in SESAR project, Radar approach control entered service at Wrocław Airport, Redesign of ACC sectors architecture.

 

August:

April:

 

The Baltic FAB PMO submitted registration documents to the European Commission.

Finalization of construction works of aerodrome control Tower at Rzeszów Airport.

new

November:

May:

 

Opening of a new controlled airport in Modlin (Warsaw-Modlin Airport), PANSA and ON concluded an agreement on establishment of the Baltic Functional Airspace Block.

New navigational aid DVOR/DME entered service at Gdańsk Airport.



June:

New aerodrome control tower went into operations at Łódź Airport, CEOs of PANSA and ON undersigned an agreement on cooperation within the Baltic FAB.

December:  

PANSA launched new PSR/MSSR radars at Poznań and Wrocław Airports. New navigational aids DVOR/DME entered service at airports in Katowice, Modlin, Wrocław and Zielona Góra,

 

Opening of a new controlled airport in Lublin, PANSA signed an agreement with the Centre for EU transport Projects (CEUTP) on co-financing of thorough ATM/CNS investment project from EU funds.

Foto Andrzej Karwowski

3

Key performance statistics Item

2012

2011

Change 12/11

675 758

645 262

+4,7%

Total IFR flight-hours controlled by the ANSP (000)

402

382

+5,2%

Total ATFM en-route delays (000 minutes)

352

422

-16,6%

ATFM en-route delays (in minutes per flight)

0,5

0,63

-20,6%

Employment (as of 31 December)

1 744,39

1 721,30

+1,3%

Lublin

469,08

449,83

+4,3%

Łódź

Revenue from sales in total (000, in PLN)

747 350

674 900

+10,7%

Operating costs (000, in PLN)

663 731

619 116

+7,2%

Sales profit (000, in PLN)

83 619

55 784

+49,9%

Profit from operating activities (000, in PLN)

75 582

46 936

+61,0%

Gross profit (000, in PLN)

47 327

68 446

-30,8%

Net profit (000, in PLN)

37 093

55 647

-33,3%

Total en-route IFR controlled – GAT only

Employment – ATCO in OPS

2012

2011

Change 12/11

Bydgoszcz

2 400

2 030

+18,2%

Gdańsk

18 504

15 081

+22,7%

Katowice

13 582

13 522

+0,4%

Kraków

19 031

15 913

+19,6%

24

-

-

2 384

1 682

+41,7%

10 926

9 754

+12,0%

Rzeszów

3 672

3 367

+9,0%

Szczecin

2 986

2 260

+32,1%

68 001

68 487

-0,7%

3 217

-

-

12 321

10 723

+14,9%

392

280

+40,0%

Poznań

Warszawa Warszawa-Modlin Wrocław Zielona Góra

Traffic decline at Warsaw Chopin Airport in 2012 compared to 2011 resulted from Warsaw-Modlin Airport opening in mid-2012: a portion of traffic, especially low-cost carriers, was shifted to the new aerodrome.

Traffic Despite global economic slowdown, 2012 saw a modest air traffic growth in FIR Warsaw.

Traffic structure

With over 675 thousand of en-route IFR movements, a new annual record was set in FIR Warsaw in 2012 (+4,7% increase compared to 2011). Terminal traffic increased by +7,6% in 2012. For comparison, weak global economy resulted in slackening demand for air transport in Europe (EUROCONTROL Statistical Reference Area) with a significant traffic decline of -2,2%. Air traffic (movements)

Traffic at controlled aerodromes (movements)

2012

2011

Change 12/11

Total IFR movements

879 126

834 284

+5,4%

en-route

675 758

645 262

+4,7%

terminal

203 368

189 022

+7,6%

Overflights make up the biggest share of controlled operations in FIR Warsaw. Departures and arrivals accounted for over 34% and domestic traffic for 8,5% of all flights in 2012. It should be noted that in 2012, for the first time, there was no increase in the share of overflights, while the share of domestic flights increased as a result of the UEFA EURO 2012 ™.

Traffic structure in 2012

June and July 2012 saw the most significant traffic increase: en-route traffic accrued by 11% (June 2012/June 2011), while terminal traffic increased by 16,9% in June and by 19,6% in July accordingly. UEFA EURO 2012™ was one of the major factors behind traffic increase in 2012, especially in terminal area. The highest terminal traffic volume in 2012 was recorder in Warsaw Chopin Airport and totaled 68 001 operations.

4

The ATFM delay share of Poland (PANSA) in Europe in 2012

Greece Austria 1,90% 2,51% Norway 3,11% Poland 3,31% Portugal 3,61% the Netherlands 3,71%

Germany 20,64%

France 19,14%

Cyprus 4,11%

Foto Andrzej Karwowski

Switzerland 5,81%

Delays

Turkey 5,91%

Spain 9,22% UK 9,22%

Air traffic delays are one of the major indicators that measure quality of services provided by ANSPs. Ultimately, the key impact on air traffic delays reduction will have an implementation of a new air traffic management system in the FIR Warsaw, following which it will be possible to introduce a new architecture for air traffic control sectors, enabling the increase of airspace capacity to the level required by the continuously increasing traffic.

Others 4,11%

Croatia 1,20% Italy Canarias 1,00% 1,50%

In 2012 the share of Poland (FIR Warsaw) in the total delays (en-route and terminal) generated in Europe amounted to 3,3%.

Until the full implementation of the new air traffic management system – taking into account the technical limitations associated with the current air traffic control system – the major activities of PANSA aiming at delays reduction in 2012 were: 

improvement of the organization of work of air traffic services, allowing an increase of air traffic controllers efficiency,



continuation of activities in the field of flexible capacities management,



on-going modification of airspace architecture.

The above-mentioned activities allowed in 2012 to reduce delays by more than 20% compared to the previous year (0.5 min/flight in 2012, compared to 0.63 min/flight in 2011), which is particularly worth mentioning in the face of observed traffic increase in 2012, intensified by a rapid although temporary traffic growth during the UEFA EURO 2012 ™.

Foto Andrzej Karwowski

Traffic and delays in 2012

2,5

700 2 600 500

1,5

400 1

300 200

0,5

100 0

0 2007

2008

2009

2010

Średnie opóźnienia na operację (w minutach na lot)

5

2011

Liczba kontrolowanych operacji IFR (000)

2012

Średnie opóźnienie na operację (min/lot)

Liczba kontrolwoanych operacji IFR (000)

800

Strategic focuses PANSA’s development directions stem from an obligation of effective utilization of technical resources as well as from optimization of actions within CNS/ATM personnel development policy.



to implement operational and investment plans as well as appropriate technical solutions with the aim of ensuring business continuity,



to strive to establish conditions for aerodrome control units to operate as commercial entity,

to make use of the Functional Airspace Block in the following areas: operational, technical, financial, human resources and safety,



to provide aerodrome flight information services and aerodrome control services at brand-new airports with the cost efficiency priority,

to develop operational and financial benefits in the area of international cooperation within inter-FAB and non-FAB members,



to establish contingency plans in relation to aerodrome control on the basis of alternative solutions,

Major assumptions of operational concept encompass, among others: 





to develop activities to be in line with Network Strategy Plan for the years 2012-2019,



to expand, in the long-term perspective, service provisions at military airports,



to form new APP sectors without new local APP centres establishment, and finally to complete functional integration of local APP centres,



to transfer, in the medium- and long-term horizon, technical infrastructure (e.g. ILS) to airport operators.

Mission

Strategic goals

To provide high-quality, user and environment friendly air navigation services.

Vision To strengthen PANSA’s position in Europe as an economically competitive air navigation services provider offering top safety and quality services in response to the airspace users’ expectations.



to maintain high level of air traffic security,



to ensure required airspace capacity,



to minimize the negative environmental impact of air traffic,



to optimize cost efficiency.

PANSA’s airspace in 2012

Foto Andrzej Karwowski

6

Foto Andrzej Karwowski

Organisational structure PANSA, as statutorily mandated to provide air traffic services and other air navigation services, acts on:

PANSA is a certified entity designated by the Minister of Infrastructure by virtue of the Aviation Law Act and European Community law to ensure air navigation services in the airspace of FIR Warszawa. In 2012 executive duties were exercised by the President of PANSA and two Vice-Presidents.



The law concerning Polish Air Navigation Services Agency as of 8 December 2006,



The Statute of Polish Air Navigation Services Agency



Organizational regulation,



PANSA work regulation,



PANSA remuneration regulation.

PANSA organisational chart effective in 2012

7

Commitment to the Single European Sky SESAR Programme

Baltic Functional Airspace Block (Baltic FAB)

In 2012 PANSA became a member of Consortium “ANSPs coordination within Interim Deployment Steering Group (IDSG)”. The Consortium aims at supporting the IDSG – the the transitional arrangement to steer the implementation of short term SESAR deployments –in the planning, execution and monitoring of the Interim Deployment Programme. In 2012 Consortium was granted EU financial support for its work to be carried out. The timeframe of the Action comprise years 2012-2014. One of the key assumptions undelying the Consortium set-up, was to involve into its activities at least one member of each FABs. This was thought to provide a synchronised and consistent input of ANSPs involved which, in turn, would accelerate the decision-making process at the basis of the IDP definition. PANSA, as the Consortium member, plays a pivotal role within Baltic FAB as the IDP Coordinator.

In 2012 PANSA’s focus was put on formal requirements fulfillment stemming from the Single European Sky II (SES II) legislative package and on accomplishment of benefits from the functional airspace block establishment that were identified earlier. Baltic FAB Project has been coordinated by ministries for transport of Poland and Lithuania, appropriate civil aviation authorities of both states as well as military authorities.

The Consortium Agreement was signed in November 2012 and in December 2012, on the basis of the European Commission Decision, a financial support was granted for the Consortium’s studies. The total budget of the Action is EUR 3 628 000 while the EU will contribute a maximum amount equivalent to 50% of the total eligible costs, i.e. EUR 1 814 000. PANSA’s budget was estimated at EUR 112 892, while the indicative amount of EU financial aid for PANSA adds up to EUR 56 446.

In the year 2012 the following initiatives were completed in the scope of Baltic FAB implementation: 

6 April: the Baltic FAB Project Management Office submitted registration documents to the European Commission; EC posted the documents on its website and thereby initiated consultation procedure with relevant stakeholders.



11 May: a meeting of the Baltic FAB representatives (PANSA, Oro Navigacija, Ministry of transport, Polish Civil Aviation Authority) with EUROCONTROL (DSS), EASA, IATA, PRB/U, Network Manager, IFATCA and representatives of Air Traffic Control Trade Union.



3 July: the Baltic FAB PMO received from the EC comments to the FAB registration documents,



3 December: a complex answer to the EC’s comments as well as an update of the registration documents were prepared.

Foto Andrzej Karwowski

On top of the above-mentioned actions, in 2012 PANSA cooperated with Helios, a technology consultancy, on the Baltic FAB Feasibility Study.

National Performance Plan – performance check On 1 January 2012 we began an entirely new way of measuring performance under performance scheme within SESII. In early 2012 the Polish National Performance Plan (NPP) for the years 2012-2014 was elaborated and handed over to the European Commission. The table below presents the performance targets set for 2012 in the areas of capacity and cost-effectiveness, included in the NPP, and the actual data reported in 2012. KPA – key performance area/ KPI – key performance indicator

2012 plan

2012 actual

Capacity/minutes of en route ATFM delay per flight

1,0

0,5

145,62

134,13

Cost-effectiveness/ Determined unit rate for en-route air navigation services (Expressed in PLN, in real terms)

Foto Andrzej Karwowski

8

Key Performance Areas Safety



continuation of the programme involving the reorganization of uncontrolled airspace and flexible structures (MIL/GA),



completion of the project about raise the upper limit of the FIR Warsaw to FL660,



implementation of new procedures (SID/STAR) at the airports in Gdańśk, Poznań and Wrocław,



further optimization of flight trajectories in FIR Warsaw in terms of costs reduction for aircfraft operators,



elaboration of numerous aeronautical publications in AIP, especially relevant to preparations for UEFA EURO 2012™ and the new airports opening.

In respect of airspace management area, numerous tasks were implemented in 2012, that would yet produce effects in 2013 and subsequent years. The most significant tasks comprised works on introduction, for the first time in Poland, of approach procedures based on GNSS sensor. On top of that, a draft of Performance-based navigation plan (PBN) was elaborated and handed over to Civil Aviation Office with the aim to start off its implementation.

In 2012 PANSA succeeded in delivering on the assumed safety objectives. PANSA’s primary goals in the area of safety were to sustain he preceding year’s safety level and, where possible, to enhance safety levels against a backdrop of increasing air traffic volumes and, consequently, to prevent accidents in the air and reducing the volume of serious incidents with a direct or indirect ATM system contribution.

Air traffic services

In the year 2012 the following initiatives were completed in the scope of air traffic services’ activity:

Two serious incidents occurred though. They were investigated by PANSA with the aim to take appropriate preventive measures in future.



the process of operational personnel training in the scope of new air traffic management system,



strengthening of cooperation with EUROCONTROL (DNM), especially within the scope of common actions to be undertaken during UEFA EURO 2012™, migration to the new ATM system and comprehensive operational actions related to air traffic flow and capacity management,



establishment of new aerodrome control units, among others:

Airspace capacity The following events impacted airspace management and air navigation services areas most: challenges related to the European Football Championships UEFA EURO 2012™ and operational opening of two brand-new airports in Modlin and Lublin. Airspace management

- the launch of aerodrome control unit in Warsaw Modlin Airport (15 July),

Apart from the above-mentioned, in 2012 the following tasks were completed or continued:

- the launch of aerodrome control unit in Lublin Airport (17 December),





- operational opening of brand-new TWR at air port in Łódź (16 November),

further implementation of the works under ”Polish Airspace 2010+” Programme, aiming at drawing up and harmonization of projects connected with re-organization of existing and implementation of new elements and structures of the airspace for the new configuration of Polish airspace (vertical division of ACC sectors) considering the planned replacement air traffic control system,

- implementation of ATIS system (4 June), - implementation of new procedures of airspace elements’ dynamic management at ASM2 and ASM3 levels in connection with Lublin Airport opening,

implementation of airspace structure modifications, among others:

- continuation of CDO project, - commencement of cooperation with Beoing/LOT/Jeppesen aimed at optimization of operations profiles in the landing phase.

- new boundaries of the following TMAs: TMA Gdańsk, TMA Wrocław (TMA Poznań South), TMA Szczecin, TMA Rzeszów, - vertical split of TMA Gdańsk (new LTMA and UTMA Gdańsk, essential for opening of DIR position),

On top of above-mentioned activities, a focus was put on cost-effectiveness optimization. In this context, numerous analyses were elaborated on evaluating hours of ATS provision at aerodromes versus actual needs stemming from traffic volume and its distribution at the aerodromes. The analyses related particularly to the following PANSA’s units: TWR Bydgoszcz, TWR Modlin, TWR Szczecin and TWR Zielona Góra.

- implementation of ARN in TMA Gdańsk and TMA Poznań, 

airspace structure adjustments in connection with the opening of two brand-new airports in Modlin and Lublin.,

9

Key Performance Areas Moreover, cost-driven optimization of ATS provision, completed in 2012, was materialized through an implementation of Single Person Operations procedures. The above activities contributed to the improvement of the KPA Capacity indicator and a reduction of an average delay in the air traffic down to 0,5 min/flight, which is tantamount to the mprovement of 20% compared to 2011.

Environment The activities of Polish Air Navigation Services Agency focused on the abatement of negative impact of air transport on the environment entailed the compliance with the tasks included in the ESSIP (European Single Sky Implementation) and European ATM Master Plan, including, in particular: 

reduction of CO2 and NOX emissions into the atmosphere caused by aircraft fuel burn and



reduction of aircraft generated noise.

Foto Andrzej Karwowski

flight efficiency. In 2012 CDO technique was introduced at the following airports: Gdańsk, Katowice, Kraków, Poznań and Warsaw/ Modlin. In this respect, PANSA intends to gradually increase CDO at major airports with the average annual rate of 7%. 2012 saw 37 676 operations executed with CDO method in FIR Warsaw. On the basis of EUROCONTROL’s estimations, it is believed that the above-mentioned numbers of continuous descent operations in 2012 contributed to fuel reduction between 1 884–3 768 tonnes and CO2 emission reduction between 5 653–16 958 tonnes. PANSA intends to implement CCO (Continuous Climb Operations) technique in near future as well.

PANSA’s environmental measures in the ATM area focus primarily on the efficient airspace management with a view to improving horizontal flight efficiency. Another PANSA’s activity centres on popularization and familiarization with the CDO (continuous descent operations) technique at major FIR Warszawa controlled airports. In 2012 PANSA’s paramount environmental actions included further flights trajectory optimization aimed at costs reduction for airspace users. In this respect, DCTs that were implemented in 2012, together with the ones launched earlier, contributed to significant economic and environmental gains – it is believed that DCTs enabled to reduce distance flown by 20800 NM, what, in turn, resulted in fuel savings (148 tonnes) and CO2 emission reductions (460 tonnes).

Cost-efficiency Within activities related to cost optimization, in 2012 PANSA proceeded with costs verification, such as: employment costs, costs of services and other operating costs, in particular: training costs, costs of business trips and costs of overhauls.

Apart from horizontal flight efficiency, which is top priority from the environmental viewpoint, in 2012 measures were taken within vertical

One of the biggest challenges that faced PANSA in 2012 was the employment costs verification. This was done through an increase of efficiency of operational staff and other employees (through changes in work technology and improvement of major and supporting processes). Financial cost effectiveness

The financial cost-effectiveness indicator in accordance with EUROCONTROL/PRU methodology (ATM/CNS services provision costs by aggregated flight-hour) in 2012 totaled for PANSA EUR 299, whereas the European system average for ANSPs amounted to EUR 439. Economic cost effectiveness

Economic cost effectiveness is a more complex indicator that measures, apart from pure financial aspects, costs of air traffic delays included as well. In 2012 this indicator improved compared to 2011 and added up to EUR 361 (over 10% decline), while the European average was EUR 489. Determined unit rate

PANSA is one of the most efficient ANSPs in Europe. In 2012 en-route unit rate amounted to PLN 134,13 which ranked PANSA ninth among European ANSPs.

Foto Andrzej Karwowski

10

Investment policy Investment activities in 2012 focused, on one hand, on tasks supporting PANSA’s preparations for UEFA EURO 2012™ and, on the other hand, on works aimed at operational implementation of the new ATM system, PEGASUS_21.

PANSA capital expenditures on major investments (in PLN) Task

Both, continued as well as new investments commenced only in 2012 will facilitate the adjustment of the Agency and its services to the airspace users’ requirements and needs and will also contribute to the launch of the vertical split of ACC sectors. Capital expenditures borne by PANSA in 2012 totaled 78 297 thousand PLN. The table below depicts major expenditures grouped by strategic clusters of tasks.

Capital expenditures in 2012

ATM system

1 316 829

Radiocommunication systems (COM)

5 114 538

Navigational aids (NAV)

9 550 707

Surveillance systems (SUR)

28 569 694

Infrastructure facilities

12 578 159

Other investments

21 167 353

HR policy The employment as of 31 December 2012 in PANSA stood at 1.759 full time employees and increased by 1,5% compared to the figures of 31 December 2011, with an average yearly employment of 1.738,25 headcounts. However, when translated into the number of full time equivalent (FTE), the employment as of 31 December 2012 in PANSA stood at 1.744,39 FTEs, with an average yearly employment - 1.727,09 FTEs. Foto Andrzej Karwowski

Employment at PANSA as of 31 December 2012 – allocation of employees according to Performance Review Unit Specification – EUROCONTROL Employment – FTE (31.12.11)

Employment – FTE (31.12.12)

Change 12/11

Employment (31.12.11)

Employment (31.12.12)

Change 12/11

449,83

469,08

+19,25

452,00

475,00

+23,00

9,00

5,00

-4,00

9,00

5,00

-4,00

Ab-inition trainees (3)

28,00

54,00

+26,00

28,00

54,00

+26,00

On-the-job trainees(4)

39,50

20,50

-19,00

40,00

21,00

-19,00

ATC assistants (5)

90,30

88,18

-2,13

90,30

88,30

-2,00

OPS-support (6)

268,30

273,28

+4,98

269,70

274,70

+5,00

Technical support for operations CNS/ATM monitoring and control system staff (7)

342,00

336,00

-6,00

343,00

337,00

-6,00

64,20

63,20

-1,00

65,00

64,00

-1,00

Administration staff (9)

320,41

325,40

+4,99

325,00

329,00

+4,00

Staff for ancillary services (10)

109,75

109,75

0,00

111,00

111,00

0,00

1 721,30

1 744,39

+23,09

1 733,00

1 759,00

+26,00

PRU category

Air Traffic Controllers (1) Air Traffic Controllers on other duties (2)

Technical support staff for the development and implementation of CNS/ATM systems (8)

Total

Air Traffic Controllers were the most numerous employment group within employment structure in 2012 and amounted to 25,8% of total staff. ATCOs were followed by Technical support for operations CNS/ATM monitoring and control system staff (19,9%), Administration Staff (19,0%) and OPS-support (15,6%).

Nearly half of the total PANSA’s employment costs were generated by ATCOs employment costs (47,1%). Second largest group, in terms of employment costs, was Technical support for operations CNS/ATM monitoring and control system staff (15,2%), followed by OPS-support (14,9%) and Administration staff (10,1%). 11

UEFA EURO 2012™ ARN redesign Additionally, reorganization of RNAV routes at TMAs of Gdańsk and Poznań was implemented. The project of redesign of RNAV routes structure in the Gdańsk TMA was intended to separate inbound and outbound traffic to/from Gdańsk airport. The dualization of traffic flows decreased complexity of traffic and have a positive impact on safety. Introduction of new RNAV routes in the Poznań TMA was related to – planned at that time – Berlin Brandenburg Airport (BER) opening. In cooperation with UkSATSE representatives, route network within TMA Rzeszów was modified too with the aim to separate inbound and outbound traffic to/from Lviv airport.

Air traffic flows For the final tournament of the UEFA EURO 2012 ™ a special set of restrictions RAD (Route Availability Document – a set of restrictions governing the movement of air traffic in the airways (including the vertical profile of the flight)) was developed. Their purpose was to offload some sectors of the area control or redirect flows to sectors with spare capacity, allowing the optimization of distribution of air traffic in the Polish airspace.

The overriding goal of PANSA’s preparations for the European Football Championships UEFA EURO 2012™ was to adjust Polish airspace to temporarily increased air traffic while maintaining highest level of safety, ensuring smooth traffic flows and minimizing delays for traffic unrelated to the sporting event.

Apart from the above-mentioned RAD restrictions that regulate traffic flows within specified time intervals, "re-routing scenarios" were elaborated, which are more flexible form of traffic flows management and involve changes to the planned route of flight in order to avoid congested airspace sectors. These scenarios provide a set of alternative routes for the flights, which would be in the congested airspace sector, and can be dynamically activated to move the flight routes to sectors with spare capacity.

UEFA EURO 2012™ posed the biggest challenge for ATC services in PANSA’s history. The Agency passed this test with flying colours though. And this is people who were behind this success: but this success would not have happened but for the immense enthusiasm and involvement of operational personnel and superb cooperation with other stakeholders and business partners during the preparation phase and in the course of the tournament. Within the scope of PANSA’s preparations for the tournament, the Agency strived to accomplish numerous tasks of investment and operational nature. The latter were of particular importance as they directly contributed to airspace capacity gains and provided a control over delays. Investments were of secondary importance.

Airspace The airspace redesign comprised mostly a reshape of geographical and vertical boundaries of the following TMAs: TMA Gdańsk, TMA Poznań and TMA Wrocław (the new name: TMA Poznań South). These changes entered into force on 8 March 2012. The modification of TMA Rzeszów boundaries took place in May. TMA boundaries modification The key element of this action was the extension of above-mentioned TMAs in geographical and vertical range. As a result, a significant part of traffic arriving in or departing from particular airports occupied ACC sectors for a shorter period of time (less occupancy rate had a positive impact on airspace capacity). On top of that, a part of arrivals and departures did not enter some ACC sectors at all. These modifications allowed to increase capacity of FIR Warsaw through an off-load of some ACC sectors which were most loaded with air traffic during the sporting event.

12

Foto Andrzej Karwowski

UEFA EURO 2012™ ATC services

PANSA-EUROCONTROL cooperation

Radar approach control

In early 2012 representatives of PANSA and EUROCONTROL prepared a series of Air Traffic Flow and Capacity Management scenarios. Based on the results of the tournament final draw in December 2011, it bacame feasible to make simulations on air traffic origins and its intensity. The cooperation with EUROCONTROL and UkSATSE experts resulted in optimization of air traffic flows during the event. Additionally, for the time of UEFA EURO 2012™, some Polish air traffic controllers were seconded to EUROCONTROL Headquarter in order to facilitate ATFCM scenarios and traffic coordination in real time.

Radar approach control at Wrocław Airport was launched on March 8, 2012. Until that day there was procedural approach control provided for that TMA. The introduction of radar control, which is provided from Poznań Approach Control Centre (that’s the reason for Poznań South callsign) did have a positive impact on the TMA capacity increase and allowed to handle a larger number of aircrafts per hour during the sporting event as well as decrease the ACC EPWWT sector workload by detaching a lot of arrivals/departures from it.

Airport slots allocation

GND positions

PANSA representatives collaborated strictly with airport slot coordinator (ACL International Ltd.) with the aim of arranging flight schedule in such a way that flights would not generate a high traffic peaks which may then result in producing delays.

The main reason for setting up the temporary GND working positions at Gdańsk, Poznań, and Wrocław ATC Towers is an expected massive increase of air traffic at these airports during UEFA EURO 2012™. With the aim of eliminating possibilities of making a mistake in the most sensitive ATC sector, i.e. departures and arrivals, there will be a division of ATC duties and responsibilities – instead of one position (ADI endorsement), there will be two positions operating together, i.e. TWR and GND during traffic peaks. The establishment of a special position to be operated by ATC with ADI endorsement only for runway operations will reduce the workload of TWR controllers and mitigate the risk of a potential mistake, which will allow to maintain safety at constant high level, improve work effectiveness and air traffic flows. On top of that, the establishment of the GND position will guarantee that all ground movements of aircrafts, vehicles and people on taxiways as well as apron coordination will be assigned to a dedicated licensed air traffic controller, which translates into faster decision making, smoother ATC flow and coordination on manoeuvring area. The general objective of PANSA is to establish temporary GND at the three airports for the time of expected high traffic peak during the sporting event.

The result of PANSA cooperation with ACL was a supplement to AIP Polska on ATC flight plan matching with airport slots at coordinated airports. According to this publication, an air carrier’s flight plan may have been rejected if the air carrier intended to land or take off at a coordinated airport, without having a slot allocated by the coordinator. This had a positive effect on traffic predictability. Information campaign Since early January 2012, PANSA representatives were actively involved in a process of information diffusion among airspace users on the Agency’s event-related actions. In this context, a dedicated sub-web site was created on the main PANSA’s web site. Apart from this, a series of dedicated aeronautical publications were prepared (AIP Polska), among others:

APP Director



AIP Sup do AIP on temporary procedures for level 3 coordinated airports during the UEFA EURO 2012™ in the period 1 st June – 8th July 2012: Gdańsk Lech Walesa Airport (EPGD/GDN), Poznań/ Ławica Airport (EPPO/POZ), Warsaw Chopin Airport (EPWA/ WAW), Wrocław/Strachowice Airport (EPWR/WRO),



AIP Sup on airspace restrictions during the UEFA EURO 2012™,



AIP Sup on flight plan matching process of coordinated airports for the UEFA EURO 2012™,



AIP Sup on opening of GND positions at Gdańsk Lech Walesa Airport, Poznań/Ławica Airport, Wrocław/Strachowice Airport for the UEFA EURO 2012™.

In May 2012 a new position – APP DIRECTOR – entered service in Gdańsk. This position was opened with the aim of streamlining air traffic control on busiest days of the tournament. In order to implement the new position and to safeguard a smooth traffic flows, the Gdańsk TMA was split into Upper TMA (UTMA) and Lower TMA (LTMA). Since the launch of the DIR position, air traffic control in UTMA is provided by APP, and in LTMA by DIR respectively. Thanks to this vertical split of TMA Gdańsk, the hourly number of operations to be handled by ATCO increased from 24 to 40 operations per hour.

Foto Andrzej Karwowski

13

UEFA EURO 2012™ Traffic volume 2 500

2 000

1 500 2012

1 000

2011

500

0

During the UEFA EURO 2012™ (8 June – 1 July 2012) IFR traffic in FIR Warsaw increased by 8,6% compared to the same period of the previous year. Delays Average en-route delay during UEFA EURO 2012™ amounted to 0,81 minutes per flight, while in the same period of the previous year – in the context of lower traffic volume – the average en-route delay added up to 1,3 minutes per flight.

Air navigation services providers, which often play second fiddle to sizeable and modern stadiums, just like previous big sporting events proved, always play a big part in the events, since they make it possible for thousands of supporters to arrive in cities where football shows take place.

It needs to be highlighted that pre-analyses and pre-simulations that had been done by PANSA before the sporting event forecasted average delay in en-route traffic of 2 minutes per flight while the same EUROCONTROL projections predicted average delay of 3 minutes per flight.

This was true during UEFA EURO 2012™ as well. Polish Air Navigation Services Agency played a key role in transportation of fans to and from host cities. Its role consisted in ensuring smooth and effective handling of increased air traffic in the course of the event while maintaining the highest level of safety.

This outstanding result was mainly attributable to the operational personnel and their excellent job. ATCOs (ACC) secondment to EUROCONTROL (DNM) proved to be one of the key success factors since this allowed for a real-time traffic coordination and early information diffusion on traffic development between DNM and Warsaw ACC. This helped to optimize traffic flows according to air traffic control capacity while enabling airlines to operate safe and efficient flights.

Within the scope of PANSA’s preparations for UEFA EURO 2012™, the Agency accomplished numerous tasks of investment and operational nature. The success was the result of thorough preparation and considerable effort by PANSA staff. It was a large scale and complex project that required integrated planning and detailed coordination. Now that UEFA EURO 2012™ ended with success, PANSA is ready to make use of this unique experience as the opportunity arises.

The European Football Championships are the World’s third-largest sporting event just after the Football World Cup and the Olympics.

Delays in IFR movements in FIR Warsaw in the period: 8 June – 1 July 2011 and 2012 (delays in minutes per flight) and forecasts of delays during UEFA EURO 2012™ 7,00 min 6,00 min

2012 - Actual

5,00 min

2011 - Actual

4,00 min

2012 - Forecast (PAŻP) 2012 - Forecast (EUROCONTROL)

3,00 min 2,00 min 1,00 min 0,00 min

14

Financial results In 2012 PANSA generated a net financial profit of PLN 37 093 thousand. 2012 (000)

2011 (000)

Sales revenues

747 350

674 900

Change 12/11 +72 450

Operating expenses

663 731

619 116

+44 615

83 619

55 784

+27 834

Other operating revenues

3 555

1 347

+2 208

Other operating expenses

11 592

10 195

+1 397

Operating profit

75 582

46 936

+28 645

Financial revenues

2 079

21 666

- 19 587

Financial expenses

30 334

157

30 177

Profit before tax

47 327

68 446

-21 119

Current income tax expense

14 292

25 086

-10 794

Deferred income tax

- 4 058

-12 287

8 229

Net profit

37 093

55 647

-18 554

Item

Profit on sales

Changes in unit rates resulted, inter alia, from changes in the allocation of costs for each service. According to the assumptions of the National Performance Plan for 2012-2014 and the results of consultations with stakeholders, the Agency introduced in 2012 changes in cost’s allocation between en route and terminal services. In particular, these changes comprised a different allocation of costs of APP services provision, which, according to the new allocation scheme, for selected locations were allocated within en-route cost base. Air navigation services unit rates in the years 2010-2012 (in PLN) 2012

2011

2010

Change 12/11

En-route navigation Unit rate

155,40

155,17

165,88

+0,23

Terminal navigation Unit rate

781,06

1051,03

867,88

-269,97

Item

Analysis of PANSA’s sales revenues in 2012 (in PLN) 2012 (000)

Item

Revenues Revenues structure analysis show that the dominant share in the total revenues was income from services which for the twelve months of 2012 amounted to 747 350 thousand PLN. The major source of the total revenue generated by PANSA was the revenue from en-route navigation services followed by terminal navigation services.

Aeronautical services:

736 691

En-route navigation

614 477

Terminal navigation

116 684

Donation for free of charge fligjts

5 530 0

Deferred income

10 563

Non-aeronautical services:

It should be noted a significant increase of en-route navigation services after a slight increase in en-route unite rate in 2012 (+ PLN 0,23) but also after substantial en-route traffic growth (+4,7%).

Sales of materials

24

EU donations

72 747 350

Total sales revenues

The terminal navigation unit rate decreased considerably by PLN 269,97 in 2012 compared to 2011 and revenues from terminal navigation services decreased slightly in 2012 compared to 2011. Since the beginning of 2012 the terminal unit rate was determined by the President of the Civil Aviation Office and applied in all airports in Poland.

0,74% 1,41%

Structure of sales of navigation services and other services in 2012

0,01%

En-route navigation

15,61% TNC naviagtion

Non-navigation services

82,22%

Subsidies to flight exempt from payment of air navigation charges

Other (sales, EU grants)

15

Financial results Costs

Total costs in 2012

The total value of costs incurred by PANSA in 2012, consisting mostly of operating costs, amounted to PLN 705 657 thousand.

Item

2012 663 731

Operating expenses

Airspace users The structure of the individual operators contributing to the revenues from the sale of en-route navigation services in 2012 remains similar as in 2011. Leading position in this segment remained Deutsche Lufthansa offering flights from most of the Polish airports.

Other operating expenses

11 592

Financial expenses

30 334 705 657

Total

The total value of costs incurred by PANSA in 2012, consisting mostly of operating costs, amounted to PLN 705 657 thousand.

Share of airline operators in en-route navigation revenues in 2012

9,40%

Deutsche Lufthansa 5,70%

PLL LOT Aeroflot 5,60% Ryanair Wizzair 3,60%

British Airlines Emirates

3,40%

59,20%

KLM

3,10%

Air France Finnair

2,80%

Other operators

2,50% 2,40% 2,30%

Leading position on the market in the carriage at Polish airports for many years is LOT Polish Airlines. Share of airline operators in terminal revenues in 2012.

18%

PLL LOT Ryanair

38%

Wizzair Deutsche Lufthansa OLT Express

16%

Enter Air Eurolot SAS Sprintair Travels service

9%

2%

2%

2%

3%

5%

5%

16

Statement of financial position

Foto Andrzej Karwowski

17

Statement of financial position STATEMENT OF COMPREHENSIVE INCOME For the year ended 31 December 2012 For the year ended

For the year ended

31/12/2012

31/12/2011

Note

PLN

PLN

Sales revenues

9

747 350 017,82

674 899 853,94

Operating expenses

10

663 731 442,70

619 115 632,49

83 618 575,12

55 784 221,45

Profit on sale Other operating revenues

12.1

3 555 287,45

1 346 802,11

Other operating expenses

12.2

11 591 997,92

10 194 597,18

75 581 864,65

46 936 426,38

Operating profit Financial revenues

12.3

2 079 196,09

21 666 492,11

Fiancial expenses

12.4

30 333 925,59

156 637,32

47 327 135,15

68 446 281,17

10 233 892,91

12 798 996,48

37 093 242,24

55 647 284,69

-

-

37 093 242,24

55 647 284,69

Profit before tax Income tax expense

13.1

Net profit

Items of other comprehensive income Total net comprehensive income

STATEMENT OF FINANCIAL POSITION - ASSETS As at 31 December 2012 31/12/2012 Note Non-current assets

31/12/2011 PLN

PLN

691 106 082,83

654 924 849,62

Intangible assets

14

31 606 513,38

26 132 782,77

Property, plant and equipment

15

598 661 666,71

571 841 637,80

1 184 852,45

1 280 088,13

Prepayments for construction in progress Deferred tax assets

13.3

56 129 777,45

51 225 839,23

Long term receivables

18.1

51 478,85

1 026 270,85

Other long-term prepayments

19.1

3 471 793,99

3 418 230,84

322 699 280,98

290 691 780,82

453 940,66

372 995,98

Current assets Inventories

17

Trade and other receivables

18.2

128 509 374,51

129 704 028,78

Income tax receivables

13.4

4 932 040,00

4 939 936,00

Short-term prepayments

19.2

3 333 315,85

2 632 413,38

Cash and cash equivalents

19.3

185 470 609,96

153 042 406,68

1 013 805 363,81

945 616 630,44

Total Assets

18

Statement of financial position STATEMENT OF FINANCIAL POSITION – EQUITY AND LIABILITIES As at 31 December 2012 31/12/2012

31/12/2011

PLN

PLN

Note Equity, including:

670 843 781,54

633 750 539,30

Statutory fund

25.1

475 021 841,32

475 021 841,32

Reserve fund

25.1

158 728 697,98

103 081 413,29

Net profit

25.2

37 093 242,24

55 647 284,69

113 452 625,97

93 277 066,21

Long-term liabilities

Long-term provisions

21.3

103 355 305,87

83 508 260,75

Deferred tax liability

13.3

9 724 696,09

8 879 014,96

Other long-term liabilities

24.3

372 624,01

889 790,50

229 508 956,30

218 589 024,93

Short-term liabilities Short-term provisions

21.3

16 310 165,68

11 164 535,79

Trade and other liabilities

24.2

59 302 053,79

47 206 870,14

Accruals

21.1

153 896 736,83

160 217 619,00

1 013 805 363,81

945 616 630,44

Total Equity and Liabilities

STATEMENT OF CHANGES IN EQUITY For the year ended 31 December 2012 Statutory fund As at 31 December 2010

Reserve fund

Retained earnings

Total

475 021 841,32

78 821 099,02

24 260 314,27

578 103 254,61

Distibution of prior year profit

-

24 260 314,27

-24 260 314,27

-

Profit for the year

-

-

55 647 284,69

55 647 284,69

Other comprehensive income

-

-

-

-

475 021 841,32

103 081 413,29

55 647 284,69

633 750 539,30

As at 31 December 2011

Statutory fund

As at 31 December 2011

Reserve fund

Retained earnings

Total

475 021 841,32

103 081 413,29

55 647 284,69

633 750 539,30

Distibution of prior year profit

-

55 647 284,69

-55 647 284,69

-

Profit for the year

-

-

37 093 242,24

37 093 242,24

Other comprehensive income

-

-

-

-

475 021 841,32

158 728 697,98

37 093 242,24

670 843 781,54

As at 31 December 2012

19

STATEMENT OF CASH FLOW For the year ended 31 December 2012 For the year ended

For the year ended

31/12/2012

31/12/2011

PLN

PLN

Cash flow from operating activities Profit before tax

47 327 135,15

68 446 281,17

Total adjustments

69 733 685,53

59 657 065,41

Depreciation and amortisation

46 166 661,74

47 972 272,06

Foreign exchange profit/ (loss)

10 656 552,40

-8 554 212,66

Interest, net

-2 024 102,68

-2 299 656,11

-72 760,01

236 022,73

Change in receivables

2 172 004,27

-11 570 099,58

Change in inventories

-80 944,68

451 856,09

24 992 675,01

5 233 031,90

Change in liabilities

9 314 060,23

-897 918,27

Change in accruals

-7 075 347,79

61 167 230,79

-14 292 150,00

-25 411 201,00

-22 962,96

-6 670 260,54

117 060 820,68

128 103 346,58

5 338,00

-

Acquisition of property, plant and equipment and intangible assets

-76 025 695,46

-71 666 116,44

Net cash flows from investing activities

-76 020 357,46

-71 666 116,44

2 079 196,03

2 454 333,62

-55 093,35

-154 677,51

22 962,96

6 670 260,54

-2 773,18

-55 810,24

2 044 292,46

8 914 106,41

(Profit)/Loss on investing activities

Change in provisions

Income tax (paid) Other adjustments Net cash flows from operating activities Proceeds from the sale of property, plant and equipment and intangible assets

Cash flows from financing activities Interest received Interest paid Other financial proceeds (donations) Payment of finance lease liabilities Net cash flows from financing activities

For the year ended 31/12/2012

For the year ended 31/12/2011

PLN

PLN 43 084 755,68

65 351 336,55

-10 656 552,40

8 554 212,66

32 428 203,28

73 905 549,21

Cash and cash equivalents, at the beginning of the period

153 042 406,68

79 136 857,47

Cash and cash equivalents, at the end of the period, including:

185 470 609,96

153 042 406,68

3 923 007,31

2 383 043,68

Net increase in cash and cash equivalents Effect of exchange rates changes Balance sheet change in cash and cash equivalents

Restricted

Presented in statement of cash flow from operating activity position “Other adjustments” relates to donations obtained from the Civil Aviation Authority for realization of defensive tasks.

20

Introduction General information

Significant accounting policies

The financial statements of Polish Air Navigation Services Agency have been prepared for the year ended 31 December 2012 and the comparative information has been prepared for the year ended 31 December 2011.

Basis for preparation

Polish Air Navigation Services Agency („the Agency”) was established based on the Act on Polish Air Navigation Services Agency dated 8 December 2006 (Journal of Laws No. 249, Item 1829).

As from 1 April 2007 (i.e. from the date of establishment) Polish Air Navigation Services Agency, in accordance with the Act on Polish Air Navigation Services Agency dated 8 December 2006 (Journal of Laws No. 249, Item 1829) prepares its statutory financial statements in accordance with International Financial Reporting Standard (IFRS) applicable to financial reporting, adopted by the European Union.

The Agency is seated in Warsaw, Wieżowa 8 Street.

Functional and presentation currency of the financial statements

The Agency is not registered in the National Court Register. The Agency was given the Provincial Statistical Office registration number REGON 140886771.

The financial statements are presented in Polish zloty (“PLN”), which is a functional currency of the Agency. All financial information, unless otherwise indicated, is presented in PLN.

The Agency was established for an indefinite period.

Translation of items denominated in foreign currency

The Agency's scope of activities includes the following:

Transactions denominated in currency other than PLN are translated into PLN at the average exchange rate as established by the Polish National Bank from the preceding day.



 

ensure safe, continuous, smooth and efficient air navigation in the Polish airspace by carrying out the functions of the air navigation service providers, airspace management and air traffic flow management in accordance with the provisions of the European Union; provide airspace users with meteorological information; purchase, maintenance and modernization of equipment and systems for aeronautical communications, navigation and guarded airspace;



controlling of systems for aeronautical communications, navigation and guarded airspace;



conducting training and providing consultation in the field of air navigation;



conduct research and development for air navigation;



ensure the design of flight procedures.

As at the reporting date assets and liabilities denominated in currencies other than PLN are translated into PLN by applying the average exchange rate as established by the Polish National Bank as at the end of reporting period. Currency translation differences arising accordingly are booked in financial revenues or expenses. Following exchange rates have been adopted for valuation purposes : List of currencies occurring as at reporting date

The Agency is acting based on the Act on Polish Air Navigation Services Agency dated 8 December 2006 (Journal of Laws 2006, No. 249, Item 1829) and its Statue. The Agency is acting in accordance with the following plans: 

five year plan – annually updated,



annual plan – comprising financial plan for the financial year which is a calendar year.

The above plans are prepared in accordance with European Commission Regulation No 2096/2005 dated 20 December 2005 (Journal of Law UE L 2005 no 335 with amendments) laying down common requirements for the provision of air navigation services. The President of the Agency presents the above draft plans or approval to the Minister in charge of transport issues till 1 December each year. The draft plans need to be first approved by the President of the Civil Aviation Authority.

31 December 2012

31 December 2011

USD

3,0996

3,4174

EUR

4,0882

4,4168

GBP

5,0119

5,2691

SEK

3,1172

Not applicable

CHF

Not applicable

3,6333

Property, plant and equipment Items of property, plant and equipment are stated at historical cost less accumulated depreciation and impairment losses, if any. Assets under construction are stated at all the costs directly related with its acquisition or construction less impairment losses, if any. Constructions in progress are not depreciated till the end of construction and when the asset is brought into use. The cost of property, plant and equipment includes its acquisition price or construction cost. Acquisition price includes purchase price (the value paid to the seller less value added tax and excise tax), other state charges (in case of import) and costs incurred in the construction, assembly, installation and improvement process up to the date when the asset was brought into use, for example:

The financial statements were prepared under the assumption that the Agency will continue to operate as a going concern for the foreseeable future. As of the date of the approval of the financial statements, there is no evidence indicating that the Agency will not be able to continue its activities as a going concern.

21



cost of site preparation,



cost of shipment, loading and unloading,



installation costs,



fees for engineers, architects and other professionals services,



estimated costs of dismantling and removing the item and restoring the site on which it is located in the value of recognized provision.

As at the reporting date intangible assets are stated at acquisition price or construction cost less depreciation and impairment losses, if any.

Rebates, discounts and other similar reductions decrease acquisition price of the asset. Administration costs, training costs and other general costs are not a part of historical cost, unless they can be directly related with bringing the asset into use.

The Agency assesses whether the useful life of an intangible asset is finite or indefinite. An intangible asset with a finite useful life is amortised over the estimated useful life and is tested for impairment if there is any indication that the asset may be impaired. The amortization period and amortization method of an intangible assets with a finite useful life are reviewed at least at the end of each financial year. If there has been a change in the expected useful life or in the expected pattern of consumption of the future economic benefits embodied in the asset, the amortization period or amortization method are changed accordingly. Such changes should be accounted for as changes in accounting estimates.

Each part of an item of property, plant and equipment is separate in the moment of their acquisition / construction. They require replacement in the regular intervals as their depreciation period is different than depreciation period of assets with which they are related. Replacement costs can be recognized only, when incurred investments are related with each part of an item. If these parts were not separated in the moment of bringing the asset into use, it can be made in the moment of incurring new investments. The Agency increases the carrying value of property, plant and equipment of cost of major inspections, which are necessary to further functioning of the asset.

The useful life of the assets is reviewed at each financial year and, and if expectations differ from previous estimates, the changes are accounted for prospectively.

The cost of property, plant and equipment includes its acquisition price or construction cost increased by improvement costs. Improvement costs can increase initial costs only if future economic benefits associated with the item increase above benefits calculated originally.

The gain or loss arising from the derecognition of an intangible asset in the statement of financial position are determined as a difference between the net disposal proceeds, if any, and the carrying amount of the asset and are recognized in the statement of comprehensive income at the moment of derecognising. Useful life of an intangible assets is settled in the period 3-8 years in case of basic software and, if applicable, commercial software. If useful life of specific intangible asset is shorter or longer according to the agreement than presented above, than for the purpose of amortization, agreement period is established.

The cost of property, plant and equipment are increased by borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset. According to IAS 23 Borrowing Costs are interests and other costs that an entity incurs in connection with the borrowing of funds. Depreciation is calculated on the straight line basis over the estimated useful life of each asset, which is: Class of asset Leased buildings

Impairment of property, plant and equipment and intangible assets For the purposes of impairment analysis, the Agency applies IAS 36 Impairment of Assets. Impairment allowances indicators exists, if there is high likelihood that carrying value of an intangible assets will not generate all or part of future economic benefits. In such situations the entity determines the recoverable amount of the asset. If carrying amount is higher than recoverable amount – the entity recognizes impairment allowances in the position of other operating expenses.

Usefull life Lease period

Buildings and construction

20-40 years

Furniture and equipment

10-15 years

Vehicles

4-10 years

Aircraft

10-20 years

Electronic equipment (including telecomunication equipment)

7-15 years

General equipment

7-10 years

Computers

3-10 years

Due to the specification of the Agency’s financial situation based on the assumption that revenues from invoiced en-route and terminal navigation services should be equal to actual costs incurred in the reporting period, the Agency identifies the impairment losses indicators mainly base on external factors, such as significant changes with an adverse effect in the scope and way the asset is or will be used, physical damage of the asset or allocation of the item for sale before the end of its useful life. Recoverable amount should be based on fair value less cost to sell. Value in use calculated based on economic benefits generated by the item, should not be taken into consideration as cash flows generated by the Agency are directly related with calculation based on cost budget.

Depreciation period and depreciation method should be reviewed at least once a year and when necessary should be corrected from the beginning of just ended reporting year. Intangible assets

Decrease of recoverable amount settled as fair value less costs of sales, below carrying value of the item means impairment allowance. The effect of impairment allowances is recognized as an expense in the current period.

Intangible assets are stated either at acquisition price or construction cost. Cost is the amount of cash or cash equivalents paid or the fair value of other consideration given to acquire an asset at the time of its acquisition or construction, or, when applicable, the amount attributable to that asset when initially recognized in accordance with the specific requirements of other IFRS/IAS.

Financial assets Initially financial assets are recognized at its fair value plus, in the case of a financial asset not recognized at fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issuing of the financial asset.

The cost of a separate acquired intangible asset comprises: 

its purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates;



any directly attributable cost of preparing the asset for its intended use;



borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset.

For the purpose of measuring a financial asset after initial recognition, the Agency classifies financial assets into the following four categories:

The cost of an intangible asset does not comprise administration costs, training costs, technical support costs (service and update) and other general overhead costs unless they can be directly related with bringing the asset into use. 22



financial assets at fair value through profit or loss;



held-to-maturity investments;



loans and receivables;



available-for-sale financial assets.

Trade and other receivables

After initial recognition, an entity shall measure financial assets, including derivatives assets, at their fair values, without any deduction for transaction costs it may incur on sale or other disposal, except for the following financial assets: 

loans and receivables, which shall be measured at amortized cost using the effective interest method;



held-to-maturity investments, which shall be measured at amortized cost using the effective interest method; and



investments in equity that do not have a quoted market price in an active market and whose fair value cannot be reliably measured, at cost.

Short term receivables being part of the entity current assets comprise of trade receivables regardless their payment term and other receivables due within 12 months from the reporting date, excluding receivables, which are classified as financial assets. Receivables, which do not comply with these conditions, should be classified as non-current assets. Receivables are initially recognized at fair value. In case of normal payment terms, stated in the market practice in similar transactions, fair value is their nominal value at the moment of revenue recognition. Trade receivables:

Financial asset is derecognized from statement of financial position, when the Agency losses control over contractual rights comprising for financial instrument, usually it takes place in case of instrument sell or if all cash flow related with the instruments are transferred to independent third party.



due above 180 days are valued at the reporting date at amortized costs (discounted based on effective interests rate);



due within 180 days are values at nominal value plus incurred interests for overdue payments as at reporting date and other tittles based on legally valid court’s decisions.

The Agency possesses financial assets from category: 

Interests for overdue payments are recognized in the accounting records in the moment of issuing interest note in correspondence with the financial gains.

Loans given and receivables.

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are classified as current assets unless they are due within 12 months from the reporting date. Loans given and receivables due in more than 12 months from the reporting date are classified as non-current assets.

Receivables in other currencies than PLN are valued at the reporting date with the average exchange rate established by the Polish National Bank. In the statement of financial position, receivables are presented in the net value as the difference between their gross value and bad debt allowance. The value of receivables is updated taking into consideration the likelihood of future debt collection by recording bad debt allowance. The allowance for doubtful debtors is assessed taking into consideration each position of receivables, individually.

Inventories Materials not transferred through warehouse are recognized as an expense in the moment of purchase, unless in the Agency view they should be recognized as assets at the reporting date. They comprise of the following materials: 

office materials and paper,



press, magazines, books,



fuel, oil, lubricant,



spare parts to vehicles,



groceries purchased for representation purposes,



other materials for general purposes.

Other receivables comprise tax receivables, donation receivables and social security debtors and other benefits. Cash and cash equivalents Cash and cash equivalents presented in the statement of financial position comprise cash balances in polish and foreign currency and other financial assets with maturities from 3 to 8 months since they are received, issued, purchased or set up. Short term financial assets are measured at nominal value. Items of cash and cash equivalents are measured at the reporting date as at average exchange rate established by the Polish National Bank

Materials transferred through warehouse during the reporting period are recognized in the accounting records at cost of purchase.

Equity

Incurred cost of materials’ purchases (import duties, other non-refundable purchase taxes, also transport costs, loading and unloading costs, other costs directly attributable to the acquisition of materials less trade discounts, rebates and other similar deductions) are recognized as expense in the period, when they were incurred. If at the reporting date above mentioned costs are significant in the Agency’s view – they are recognized in the carrying value of inventory.

The Agency’s funds are presented in the statement of financial position according to template of the statement of financial position. Following Agency’s funds are created:

For materials physically transferred through warehouse volume records are kept in the warehouse and volume and value records in the accounting department.



statutory fund,



reserve fund,



other fund created based on separate regulations.

Agency’s net loss for the period is covered by the reserve fund. In case of higher net loss than reserve fund, uncovered part from the reserve fund is covered by the statutory fund.

For setting the cost of outflow (usage, sale, free of charge donations) of tangible current assets first-in first-out basis is used.

Agency’s net profit for the period is distributed for the reserve fund or other fund created based on separate regulations.

At the reporting date inventories are measured at the lower of cost and net realizable value at that day. Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.

23

In the case when total value of invoiced terminal navigation revenues in the period “n” is higher than actual incurred terminal costs in the period, the Agency is creating provision for the difference in the value.

Provisions Provisions are recognized in the statement of financial position when the Agency has a legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation. Significant provisions are determined by discounting the expected future cash flows with the pre-tax rate that reflects current market assessments of the time value of money and when appropriate, the risks specific to the liability.

Due to the fact that in 2012 the total invoiced value of terminal navigation services was lower than the actually incurred costs of these services, the Agency has not established appropriate provision. Sales revenues



employee benefits provision;



compensation provision;



provision for contracts;



deferred tax liabilities;

Revenue is recognized only if it is probable that economic benefits associated with the transaction will flow to the Agency. However, when an uncertainty arises about the collectability of an amount already included in revenue, the uncollectible amount or the amount in respect of which recovery has ceased to be probable is recognized as an expense, rather than as an adjustment to the amount of revenue originally recognized. The revenue is recognized net of value added tax (VAT) and discounts. The following recognition principles are also taken into account.



provision for costs due to the difference between invoiced revenues in the period and actual incurred costs;

Revenues from sale of goods



provision for unused holidays.

Revenue from the sale of goods is recognized when following conditions have been met:

Provisions comprise of:

The cost of recognition of provision for cost due to the difference between invoiced revenues in the period and actual incurred costs is presented as a decrease of revenues from sale of aeronautical services. The provision usage is recognized as an increase of revenues from the sale of air services and the discount extension is recognized as finance costs. The cost of recognition of other provisions is presented in operating cost or financial cost based on which better reflects circumstances of their recognition. Reversal of provision in the result of disappearance of risk or factors justifying its’ recognition, is presented in operating revenues or financial revenues.



the entity has transferred to the buyer the significant risks and rewards of ownership of the goods,



the entity retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold,



the amount of revenue can be measured reliably,



it is probable that the economic benefits associated with the transaction will flow to the entity; and



the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Provisions other than financial are measured at reliable estimated value.

Employee benefits provision

Revenue from the sale of goods shall be measured in the statement of comprehensive income at the fair value of the consideration received or receivable.

The Agency’s employees are entitled to jubilee awards and retirement benefits based on the Agency’s remuneration regulations. The jubilee awards are paid to the employees who were employed for a specified number of years. The retirement benefits are paid one-off at retire. The retirement benefits and jubilee awards depend on an employee’s seniority and average salary. The Agency provides for future liabilities to attribute the costs to periods of service. The current value of employee benefits provision is assessed by an authorized independent actuary. Discounted rate reflects applicable at the reporting date rate from low risks bonds with term consisted with a term of obligation. Actuarial losses and gains are recognized in the statement of comprehensive income.

Revenues from sale of services Revenue from sales of services is a main source of the Agency’s revenues. Services rendered by the Agency are related to following airspace services:

Provision for costs due to the difference between invoiced revenues in the period and actual incurred costs



airspace management services,



communication services,



navigation services,



surveillance service, and



aeronautical information services.

Services rendered by the Agency are related to following activities:

Under the European Commission Regulation no. 1191/2010 form 16 December 2010 amending European Commission Regulation no. 1794/2006 determining common scheme of en-route navigation rates and terminal navigation service charges for the year 2012 were calculated based on the determined cost bases, adjusted by the excessive reimbursement of costs incurred / costs incurred shortage associated with previous years, which is subject to settlement in 2012 and the forecasted airspace traffic for this year.



maintaining air traffic control,



providing aeronautical information services,



providing alert services,



planning air traffic over Poland territory,



conducting offices for crew clearance.

Agency’s revenues are related to three types of charges:

In 2012 actual quantity of service units is lower from the forecasted quantity of service units by 1,1%. As a result, partially settled adjustment will be a subject to settlements with airspace users in 2014. In such situation the Agency recognize provision for the unsettled part of adjustment in the amount of PLN 183 301. In process of recognizing the provision, the appropriate discount factor at the level of market quotations of 10-year bonds at the end of December 2012, reported by the Eurostat was applied.



en-route navigation service charges,



terminal navigation service charges, and



non-aeronautical charges.

Above mentioned charges (excluding non-aeronautical services) are calculated based on a cost basis and expected air traffic.

24

En-route navigation service charge

Terminal navigation service charge

The en-route navigation service charge is levied for air navigation services provided by the Agency in the en-route phase of flight within the controlled airspace of the Warszawa FIR. The en-route charge shall be levied on each flight operated within the controlled airspace of the Warszawa FIR.

Terminal navigation service charge for each flight, in particular zone, is equal to multiplied unit rate settled for particular zone of terminal navigation service charge and terminal service units for each year.

The en-route navigation service charge for each flight is equal to multiplied unit rate settled for en-route navigation service charge and en-route quantity units for each flight.

Unit rate, in particular zone, of terminal navigation service charge is calculated as planned expenses related with terminal navigation service by planned number of service units for the year. Planned expenses include also balance of under or over recovery of expenses in the previous years.

Unit rate is calculated as planned expenses related to en-route navigation service by planned number of service units for the year. Planned expenses include also balance of under or over recovery of expenses in the previous years.

Note 4 Significant values based on professional judgment Uncertainty of assumptions

Costs

The basic assumptions concerning the future that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities in the next financial year are discussed below.

After the end of the specific period the difference between the determined costs set in nominal values before the beginning of reference period and the determined costs adjusted on the basis of actual inflation recorded by the European Commission (Eurostat) is calculated. In other words the inflationary adjustment presents the difference set in real prices between the determined costs and actual costs. The inflationary adjustment is settled with the airspace users in the year n+2.

Provisions Employee benefits provisions were assessed using actuarial methods. The assumptions taken into account are presented in notes 21, 22, 23. Settlements with carriers According to the European Commission Regulation No 1191/2010 dated 16 December 2010 amending the European Commission Regulation No 1794/2006, which set the common scheme of payments for air navigation services (Journal of Law UE L 341 of 7 December 2006), EUROCONTROL guidelines dated October 2011 (document No. 11.60.01) and the Regulation of Minister of Transport, Construction and Maritime Economy on the exemption of the terminal navigation service charges from the above regulation dated 16 October 2012, in settlements with airspace users the Agency applies the following principles. En-route navigation service charges Revenues After the end of the specific period the ratio of actual quantity of service units to quantity of service units that were set before the beginning of reference period is calculated. The ratio is the basis for calculation of the amount of unrealized revenues or additional revenues, which are subject to settlements with other airspace users. If the actual quantity of service units exceeds the forecasted (for specific period) quantity of service units by more than 2%, the 70% of additional revenues realized by the Agency over the 2% of difference between the actual and forecasted quantity of service units is subject to settlements with airspace users in the year n+2. If the actual quantity of service units is higher by at least 10%, the additional revenues realized by the Agency in the amount over the 10% of difference between the actual and forecasted quantity of service units are subject to settlements with airspace users in the year n+2. The amounts of unrealized revenues are calculated in an analogical manner - if the actual quantity of service units is lower than the forecasted quantity, respectively by 2% or 10%. They are subject to settlements with airspace users no sooner than in the year n+2. If the increase of actual quantity of service units in relation to forecasted quantity of service units is lower than 2% or if the decrease of actual quantity of service units in relation to forecasted quantity of service units is higher than 2%, the above-described Regulation does not provide any mutual settlements.

If the actual quantity of service units is lower than the forecasted quantity of service units the adjustment due to excessive reimbursement of costs incurred / costs incurred shortage associated with previous years, which is subject to settlement in year n, it will be settled partially as compared to the situation as if the actual quantity of service units was equal to the forecasted quantity of service units. Unsettled part of adjustment is subject to settlement with airspace users in year n+2. After the end of the specific period the difference between the actual amount of costs which are out of control and the amount determined before the beginning of reference period is also calculated. The listing of costs which are out of control is approved by the supervising authority before the beginning of reference period and it concerns unforeseen changes in the local law in area of pension contributions, unforeseen changes in local tax law, which are applicable to entities covered by the above-described Regulation, i.e. Polish Air Navigation Services Agency, Institute of Meteorology and Water Management, Civil Aviation Authority, and unforeseen costs or revenues resulting from bilateral or multilateral international agreements concluded by Poland. The amount of costs which are out of control is subject to settlement with airspace users. Due to the lack of clear legal regulations and practices, as mentioned in Note 27.1, it should be emphasized that there is no certainty that the Agency will be able to settle uncontrollable costs as described above. Terminal navigation service charges Under the Regulation of Minister of Transport, Construction and Maritime Economy (dated 16 October 2012) on the exemption of the terminal navigation service charges from the European Commission Regulation No 1191/2010 dated 16 December 2010, the difference between revenues from terminal navigation service charges in the 2012 and the actual costs incurred in this period, is subject to further settlement with airspace users. The purpose of the applied adjustment mechanism is ensuring that finally only the actual incurred costs are reimbursed. If the total value of invoiced terminal navigation services in the year “n” exceeds actual incurred costs the Agency recognizes provision for the amount of difference.

25

Excessive reimbursement of costs incurred, which was received in year “n”, resulting from the difference between revenues and incurred costs, will be transferred and included in cost base for the period of five years (for the years starting from “n+2” up to “n+6”) and included in the relevant cost bases.

In every case significant risks causing that interest may be incurred, should be taken into account.

The amount of adjustment due to excessive reimbursement of costs incurred, which will be subject to settlement in the following period (“n+1”) is presented in short-term other provisions. The amount of adjustment, which will be subject to settlement in after the following period (“n+2 and next) is presented in long-term other provisions. The settlement of the provisions recognized due to the above, is made once – at the year-end.

As at 31 December 2012 none financial liabilities were classified at fair value through profit or loss

If after the year-end it is determined that the flight rates did not cover the costs, which fulfilled the prerequisites to include in cost base, the Agency is allowed to accordingly increase the flight rates for future years (starting from the year n+2) due to not covering the costs in the current period. Deferred tax asset

In the supplementary information overdue payables and risks of incurring interests from creditors should be revealed.

The Agency excludes a financial liability from its statement of financial position when it is extinguished, i.e. when the obligation specified in the contract is discharged, cancelled or expires. An exchange between an existing borrower and lender of debt instruments with substantially different terms are accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. Similarly, a substantial modification of the terms of an existing financial liability is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. The difference between the carrying amounts arising on the exchange is recognised in the statement of comprehensive income.

The Agency recognizes the deferred tax asset based on the assumption that a sufficient future profit will be available to allow utilising the asset. Deterioration in tax profits may cause the assumption to be no longer justified.

Other non financial liabilities comprise in particular value added tax liabilities, personal income tax liabilities, social security creditors and advance payments liabilities that will be settled at the delivery of property, plant and equipment. Other non financial liabilities are presented at the amounts due.

Depreciation rates

Operating segments

The depreciation rates are based on an estimated useful life of property, plant and equipment and intangible assets. The useful life of the assets is reviewed by the Agency based on the current assumptions.

The Agency carry on reporting activities concentrated in one operating segment - aeronautical branch. The Agency operates only in Poland.

Receivables impairment allowance Agency creates receivables impairment allowance for uncollectible overdue receivables according to principle that uncollectible receivables shall be covered in 100% with impairment allowance. Receivables due over 60 days and less than 180 days are covered in 50% with impairment allowance and receivables due over 181 days are covered in 100% with impairment allowance.

Interest bearing borrowings Borrowings are recognised initially at costs, which is a fair value of cash received, net of transaction costs incurred. Borrowings are subsequently stated at an amortised cost using the effective interest rate method. Transaction costs, discounts and bonuses connected with the borrowings are taken into account when an amortised cost is assessed.

Trade and other payables Trade payables and other payables are divided for long term and short term payables according to following criteria: 

payable within 12 months from the reporting date are presented as short term payables,



all payables other than trade payables and unfulfilling criteria of short term payables are presented as long term payables.

Trade payables with payment term above 180 days are measured at the reporting date at amortized cost (discounted using effective interest rate), plus, if applicable, due default interest at that day. Default interests for late payment of payables are not calculated if an authorized entity has issued formal statements of omission of their calculation. In other cases interest are calculated and recorded according to following rules: 

on a current basis, based on obtained interests notes,



at estimated value, estimate is based on historical data, which reflects accrued interests from individual customers in relation to indebtedness value. Foto Andrzej Karwowski

26

Note 9 Sales revenues Analysis of Agency’s sales revenues are as follows:

Aeronautical services including:

For the year ended

For the year ended

31/12/2012

31/12/2011

PLN

PLN

736 691 296,55

664 819 076,20

En-route navigation

614 476 875,66

576 612 023,88

Terminal navigation

116 684 273,43

139 326 142,47

5 530 147,46

7 278 851,85

-

-58 397 942,00

10 563 173,99

9 007 822,82

Meteorological measurements

3 684 933,35

2 246 177,67

Providing the radar data

2 799 337,83

2 560 920,00

Sales of materials

23 767,84

6 328,31

EU donations

71 779,44

1 066 626,61

747 350 017,82

674 899 853,94

51 948 989,60

49 752 217,27

Foreign sales

695 401 028,22

625 147 636,67

Total

747 350 017,82

674 899 853,94

Donation for free of charge flights

Deferred income

Non-aeronautical services including:

Total

Domestic sales

PANSA is entitled to donations for free of charge flights in the amount of PLN 5 530 147,46 based on art. 130, paragraph 7 of the Aviation Law Act of 3 July 2002 (Journal of Laws 2012, item 933 with amendments). Detailed principles for determining the value of allowed donations are specified in Ministry of Transport Regulation dated 5 July 2007 on the means and methods of documenting the expenses associated with providing air navigation services concerning free of charge flights (Journal of Laws 2007, No. 124, item 866, repealed on 19 March 2013).

navigation service providers under IDSG for the trans-European transport network (TEN-T) in accordance with the decision No. 2011-EU-93005-S of the European Commission of 11 December 2012 – amount of EUR 28.223 (PLN 114.909,94). As at 31 December 2012 the Agency used the grants in the total amount of PLN 71.779,44, of which grant for project SHERPA was fully used i.e. in the amount of PLN 48.087,33, and the grant for the realization of tasks associated with Coordination of air navigation service providers under IDSG was used in the amount of PLN 23.692,11. The amounts of donations used may be subject to verification in accordance with rules applicable in EU. Statements of incurred costs qualified for reimbursement were submitted to EU and accepted.

Detailed information on contingent assets related to the above-described donations is presented in Note 27.4. In 2012 the Agency received grants from the European Union in total amount of EUR 39.891 (PLN 162.997,27). The grants were intended for realization of project SHERPA implemented under the 7th Framework Programme (FP7) for research and technological development (2007-2013) established based on the decision No. 1982/2006/EC of the European Parliament and of the Council of 18 December 2006 – amount of EUR 11.668 (PLN 48.087,33) and the realization of tasks associated with Coordination of air

Business activities are homogeneous in terms of services, therefore, are entirely classified to one operating segment in sense of IFRS 8.

27

Note 10 Operating expenses For the year ended

For the year ended

31/12/2012

31/12/2011

PLN

PLN

Amortization and depreciation

46 166 661,74

47 972 272,06

Materials and energy

13 259 132,37

12 161 467,82

473 764 123,19

431 992 258,72

68 954 466,29

74 613 137,69

2 692 506,01

2 777 045,93

816 724,18

774 457,69

Security services

2 656 577,25

3 795 255,69

Technical service

2 378 147,27

2 253 680,87

Strategic, financial and technical advisory

1 146 637,63

4 111 412,82

Meteorological information Service

31 594 940,61

30 991 620,00

Rent and lease paayments

16 795 999,09

19 996 049,09

Legal services

664 922,32

784 140,49

Audit

122 700,00

144 800,00

14 392 831,72

13 347 462,52

10 836 111,00

9 851 420,00

Other operating expenses, including:

47 194 227,39

39 029 033,68

Membership fees and charges

36 044 825,10

28 886 016,32

Business trip

4 656 159,00

3 622 987,69

Property insurance

1 782 761,68

1 626 862,36

663 731 442,70

115 632,49

Employee benefits costs (note 11) External services, including: Repair services IT services

Taxes and charges, including: Civil Aviation Authority Payment

Total of cost by kind

Note 11 Employee benefits costs Level of employment as at 31 December (including President of the Agency and two Vice-Presidents) is presented below: As at

As at

31/12/2012

31/12/2011

Number of employees

1 759

1 733

Average employment

1 738

1 719

For the year ended 31/12/2012

For the year ended 31/12/2011

Remuneration Social security and other benefits, including: Employees Retirement Program Retirement and jubilee benefits

Unused holiday accrual Employee benefits costs, including: Positions included in operating costs

28

363 484 075,83

347 958 702,90

85 682 007,08

76 122 520,90

22 376 051,47

18 636 415,21

19 460 078,28

3 425 956,92

5 137 962,00

4 485 078,00

473 764 123,19

431 992 258,72

473 764 123,19

431 992 258,72

Employee Retirement Program

The program’s participant has the right to declare an additional contribution by defining amount of an additional contribution.

Employee Retirement Program was established on 26 May 2008, on the basis of a contract concluded between PANSA as an employer and representation of employees represented by five unions operating at the time of signing the contract.

Basic contribution less the operating expenses of the Program and additional contribution is invested entirely in accordance with principles of the Bond Fund, the Stable Growth Fund, the Sustainable Growth Fund and the Shares Fund. Payment of funds from the account of the participant is made at the request of the participant, once age of 60 years (men) is reached or after presenting the decision to grant the right to retirement and age of 55 years (women) is reached or once age of 70 years is reached by participant if no request of the payment was submitted before or in case of death of a participant on request of the person entitled.

The program was created in the form of group life insurance with an insurance capital fund. Management of resources is carried out by AVIVA Towarzystwo Ubezpieczeń na Życie S.A. The Employer is obliged to pay to Insurance Company the basic contribution of 7% of salary for each employee participating in the retirement program.

Note 12 Revenues and expenses 12.1 Other operating revenues

12.3 Financial revenues For the year ended 31/12/2012 PLN

Government grants

For the year ended 31/12/2011 PLN

22 962,96

10 553,00

Other

3 532 324,49

1 336 249,11

Total

3 555 287,45

346 802,11

Interest, including: Bank deposits Other loans and receivables

For the year ended 31/12/2011

PLN

PLN

2 079 196,09

2 454 333,92

886 849,76

1 694 323,24

1 192 346,33

760 010,68

-

19 212 158,19

2 079 196,09

666 492,11

Foreign exchange gain Total

12.2 Other operating expenses

Creation of receivables impairment allowances

For the year ended 31/12/2012

12.4 Financial expenses For the year ended 31/12/2012

For the year ended 31/12/2011

PLN

PLN

7 021 081,37

Liquidation of property, plant and equipment

5 510 796,20

32 444,41

236 022,73

Other

4 538 472,14

4 447 778,25

Total

11 591 997,92

194 597,18

For the year ended 31/12/2012

For the year ended 31/12/2011

PLN

PLN

Interest – deposits and securities

18 783,73

15 305,92

Interest – other

36 309,62

139 371,59

55 093,35

154 677,51

Foreign exchange loss

19 294 110,24

-

Discount extension of carriers settlements provision

10 984 722,00

-

Other

-

1 959,81

Total

30 333 925,59

156 637,32

Total interest

Note 13 Income tax 13.1 Income tax expense As at 31 December 2012 the income tax expense comprise of the following: For the year ended

For the year ended

31/12/2012

31/12/2011

Statement of comprehensive income Current income tax Current income tax expense

14 292 150,00

25 086 435,00

Creation and reversal of temporary differences

-4 058 257,09

-12 287 438,52

Income tax expense in statement of comprehensive income

10 233 892,91

12 798 996,48

Deferred income tax

29

13.3 Deferred tax assets and liabilities The deferred tax results from the following: Statement of financial position

31 December 2012

Statement of comprehensive income for the year ended

31 December 2011

31 December 2012

Deferred tax liability Non-taxable revenues

122 335,71

55 857,35

66 478,36

Difference between tax base of assets and carrying amount

9 602 360,38

8 823 157,61

779 202,77

Deferred tax liability

9 724 696,09

8 879 014,96

845 681,13

21 331 840,24

17 634 425,40

3 697 414,84

3 487 182,29

2 510 969,51

976 212,78

325 492,48

270 064,08

55 428,40

3 868 738,36

2 534 732,89

1 334 005,47

26 725 327,19

27 930 378,10

-1 205 050,91

1 925,00

1 925,00

-

389 271,89

343 344,25

45 927,64

56 129 777,45

51 225 839,23

4 903 938,22

-

-

-

Deferred tax asset, net

56 129 777,45

51 225 839,23

4 903 938,22

Change of net profit due to recognition of Deffered tax

-4 058 257,09

-12 287 438,52

Deferred tax asset

56 129 777,45

51 225 839,23

9 724 696,09

8 879 014,96

Deferred tax asset Post-employment and other benefits provision Unused holiday provision Unpaid remuneration with overheads Receivables impairment allowance Accruals Inventory impairment allowance Accruals – unpaid compensations Deferred tax asset, gross Deferred tax asset impairment allowance

Deferred tax liability

13.4 Income tax assets and liabilities Tax settlements and other activities (e.g. customs or currency issues) may be subject to control of administrative entities authorized to impose high penalties and sanctions. Polish regulations are unclear and inconsistent due to the lack of reference to consolidated law. Differences in legal interpretation of tax regulations, both within state authorities and between state authorities and enterprises, result in uncertainty and conflicts. These phenomena make tax risk much higher than in countries of more coherent tax system. Tax settlements may be subject to control within five years from the end of the year when the tax was paid. In result of carried out controls the Agency’s tax settlements may increase due to additional tax liabilities. The current income tax was calculated on a rate of 19 %.

31/12/2012

31/12/2011

PLN

PLN

Income tax assets Income tax receivables

4 932 040,00

4 939 936,00

Total

4 932 040,00

4 939 936,00

Final calculation for 2012 income tax was performed and tax payable in the amount of PLN 14 292 150,00 was presented it the Financial Statements. During the financial year, advance payments for income taxes in the amount of PLN 18 897 827,00 was made - to return for 2012 left PLN 4 605 677,00. In the table "Income tax assets and liabilities" the position "Income tax receivables" also includes income tax surplus resulting from the 2011 tax settlements in the amount of PLN 326 363,00. Overpayment of income tax for 2011 was returned to the PANSA’s bank account in the first quarter of 2013.

30

Note 14 Intangible assets Software and licenses 31/12/2012 GBV as at 31 December 2011

Total

45 341 694,87

45 341 694,87

Increases, including:

8 295 383,70

8 295 383,70

- acqusitions

8 295 383,70

8 295 383,70

12 183,33

12 183,33

12 183,33

12 183,33

GBV as at 31 December 2012

53 624 895,24

53 624 895,24

Accumulated amortization and impairment allowances as at 31 December 2011

19 208 912,10

19 208 912,10

2 821 653,09

2 821 653,09

2 821 653,09

2 821 653,09

12 183,33

12 183,33

12 183,33

12 183,33

Accumulated amortization and impairment allowances as at 31 December 2012

22 018 381,86

22 018 381,86

Carrying amount as at 31 December 2011

26 132 782,77

26 132 782,77

Carrying amount as at 31 December 2012

31 606 513,38

31 606 513,38

Decreases, including: - liquidation

Increases, including: - amortization for the period Decreases, including: - liquidation

Software and licenses 31/12/2011 GBV as at 31 December 2010

Total

42 548 551,78

42 548 551,78

Increases, including:

2 796 961,55

2 796 961,55

- acquisitions

2 796 961,55

2 796 961,55

Decreases, including:

3 818,46

3 818,46

- liquidations

3 818,46

3 818,46

GBV as at 31 December 2011

45 341 694,87

45 341 694,87

Accumulated amortization and impairment allowances as at 31 December 2010

15 555 707,38

15 555 707,38

3 656 895,34

3 656 895,34

3 656 895,34

3 656 895,34

3 690,62

3 690,62

3 690,62

3 690,62

Accumulated amortization and impairment allowances as at 31 December 2011

19 208 912,10

19 208 912,10

Carrying amount as at 31 December 2010

26 992 844,40

26 992 844,40

Carrying amount as at 31 December 2011

26 132 782,77

26 132 782,77

Increases, including: - amortization for the period Decreases, including: - liquidation

31

32

-

-

Decreases, including:

– liquidation

Usage from initial value

31 December 2012

Carrying amount as at

31 December 2011

Carrying amount as at

31 December 2012

11 123 078,85

11 118 278,85

-

-

Amortization for the period

Accumulated amortization and impairment allowances as at

-

11 123 078,85

31 December 2011

Accumulated amortization and impairment allowances as at

31 December 2012

Gross book value as at

110 311 009,75

110 306 909,75

-

-

-

-

-

110 311 009,75

23,84%

155 804 705,77

125 169 308,73

48 758 389,37

240 565,37

240 565,37

8 851 874,77

40 147 079,97

204 563 095,14

240 768,26

-

– liquidation -

-

-

-

39 487 474,70

– reclassifications

4 100,00

39 487 474,70

165 316 388,70

Buildings and constructions

240 768,26

4 800,00

– acquisitions

4 100,00

110 306 909,75

Perpetual usufruct of land

Decreases, including:

4 800,00

11 118 278,85

Increases, including:

31 December 2011

Gross book value as at

Land

40,62%

239 850 157,73

221 492 375,20

164 094 636,34

1 236 796,67

1 236 796,67

32 159 620,95

133 171 812,06

403 944 794,07

1 259 869,72

-

1 259 869,72

50 540 476,53

50 540 476,53

354 664 187,26

Machinery and equipment

68 427 599,24

91 723 454,46

-

-

-

-

-

68 427 599,24

4 621,10

93 293 131,14

93 297 752,24

70 001 897,02

70 001 897,02

91 723 454,46

Construction in progress

56,79%

6 912 637,66

6 337 051,19

9 085 658,74

19 820,80

19 820,80

1 439 224,63

7 666 254,91

15 998 296,40

35 500,00

-

35 500,00

2 030 490,30

2 030 490,30

14 003 306,10

Vehicles

65,22%

6 232 477,71

5 694 259,62

11 688 424,11

58 056,98

58 056,98

894 795,00

10 851 686,09

17 920 901,82

58 761,17

-

58 761,17

1 433 717,28

1 433 717,28

16 545 945,71

Other

28,07%

598 661 666,71

571 841 637,80

233 627 108,56

1 555 239,82

1 555 239,82

43 345 515,35

191 836 833,03

832 288 775,27

1 599 520,25

93 293 131,14

94 892 651,39

163 502 955,30

163 502 955,30

763 678 470,83

Total

Note 15 Property, plant and equipment

33

-

– liquidation

-

Decreases, including:

Usage from initial value

31 December 2011

Carrying amount as at

31 December 2010

Carrying amount as at

31 December 2011

Accumulated amortization and impairment allowances as at

11 118 278,85

5 939 667,63

-

-

-

Amortization for the period

– liquidation

-

Accumulated amortization and impairment allowances as at 31 December 2010

31 December 2011

11 118 278,85

-

– recclasifications

Gross book value as at

-

5 121 304,65

– acqusitions

Decreaes, including:

5 121 304,65

5 996 974,20

Increases, including:

31 December 2010

Gross book value as at

Land

110 306 909,75

110 306 909,75

-

-

-

-

-

110 306 909,75

-

-

-

-

-

110 306 909,75

Perpetual usufruct of land

24,28%

125 169 308,73

128 013 653,11

40 147 079,97

63 530,47

63 530,47

8 630 905,47

1 579 704,97

165 316 388,70

92 707,34

-

92 707,34

5 815 737,96

5 815 737,96

159 593 358,08

Buildings and constructions

37,55%

221 492 375,20

229 290 042,08

133 171 812,06

1 955 700,52

1 955 700,52

33 762 270,56

101 365 242,02

354 664 187,26

2 840 472,70

-

2 840 472,70

26 849 375,86

26 849 375,86

330 655 284,10

Machinery and equipment

91 723 454,46

75 811 081,04

-

-

-

-

-

91 723 454,46

-

41 039 523,77

41 039 523,77

56 951 897,19

56 951 897,19

75 811 081,04

Contruction in progress

54,75%

6 337 051,19

4 514 770,94

7 666 254,91

17 689,96

17 689,96

875 910,45

6 808 034,42

14 003 306,10

31 050,00

-

31 050,00

2 711 550,74

2 711 550,74

11 322 805,36

Vehicles

65,59%

5 694 259,62

5 308 213,44

10 851 686,09

157 813,24

157 813,24

1 046 290,24

9 963 209,09

16 545 945,71

181 326,14

-

181 326,14

1 455 849,32

1 455 849,32

15 271 422,53

Other

25,12%

571 841 637,80

559 241 644,56

191 836 833,03

2 194 734,19

2 194 734,19

44 315 376,72

149 716 190,50

763 678 470,83

3 145 556,18

41 039 523,77

44 185 079,95

98 905 715,72

98 905 715,72

708 957 835,06

Total

Note 18 Long-term receivables, trade and other receivables

The deposit in the amount of PLN 1 026 270,85 is a security for lease agreements related to two buildings, which lease period expires in May 2013. There are pending negotiations on annexing the lease agreements and on extending the lease period to 31 December 2016. In relation to the remaining period of the agreement less than 12 month after balance sheet date, the long-term receivables in the amount of PLN 974 792 were presented as short-term, trade and other receivables.

Note 18.1 Long-term receivables

Deposits

31/12/2012

31/12/2011

PLN

PLN

51 478,85

1 026 270,85

Note 18.2 Trade and other receivables 31/12/2012

31/12/2011

PLN

PLN

Trade receivables (gross)

135 277 459,63

132 511 979,74

Receivables impairment allowances

-20 361 780,76

-13 340 699,39

Trade receivables (net), including:

114 915 678,87

119 171 280,35

114 915 678,87

119 171 280,35

Other taxation, duty, social security and other benefits receivables

5 123 778,37

7 588 554,16

Other receivables

7 797 643,62

2 490 095,33

672 273,65

454 098,94

13 593 695,64

10 532 748,43

128 509 374,51

129 704 028,78

due within 12 months

Receivables from CSBF Other receivables Trade and other receivables

Note 19 Other assets

Bank deposits bear floating interest rate depending on the interest on overnight deposits. Short term investments are made for various periods from one day to 8 months, depending on current needs and bear fixed interest rate.

Note 19.1 Other prepayments 31/12/2012

31/12/2011

PLN

PLN

IT services and charges,electronic nature

20 935,78

-

Lease of wire

92 311,80

105 658,20

1 736 301,99

1 949 576,23

Guarantees

943 076,23

693 413,83

Perpetual usufruct

679 168,19

669 582,58

3 471 793,99

3 418 230,84

Technical inspections and maintenance

Total

Cash and cash equivalents consist of cash at bank, cash in hand and bank deposits of maturities of 8 months or less. The carrying amount of these assets is approximate to their fair values. Note 19.3 Cash and cash equivalents

Cash in hand and at bank

Note 19.2 Short-term prepayments 31/12/2012

31/12/2011

PLN

PLN

Insurance

1 481 289,66

1 585 738,29

Technical inspections and maintenance

1 712 498,23

906 540,60

IT services services

36 727,23

40 470,41

Membership charges

1 000,00

-

Other

101 800,73

99 664,08

Total

3 333 315,85

2 632 413,38

31/12/2012

31/12/2011

PLN

PLN

21 124 969,96

16 121 606,68

Cash equivalents (deposits)

164 345 640,00

136 920 800,00

Total

185 470 609,96

153 042 406,68

As at 31 December 2012 cash in foreign currency in the amount of EUR 41 208 580,99;USD 21 631,15. As at 31 December 2011 cash in foreign currency in the amount of EUR 32 801 407,74;USD 91 347,59; GBP 436,83 and CHF 1 863,60. As at 31 December 2012 restricted cash amounted to PLN 3 923 007,31 (PLN 2 383 043,68 as at 31 December 2011).

34

Note 25 The Agency’s fund and retained earnings

Note 25.1 The Agency’s fund

Note 25.2 Retained earnings 31/12/2012

31/12/2011

PLN

PLN

PLN Proposed distribution of profit for 2012:

Statutory fund

475 021 841,32

475 021 841,32

Reserve fund

158 728 697,98

103 081 413,29

Reserve fund

37 093 242,24

After the financial statements are approved by the Minister in charge of transport issues, net result of 2012 will be distributed to increase the reserve fund.

Note 21 Provisions and accruals

Note 21.2 Breakdown of accruals on long-term and short-term

Note 21.1 Accruals

Unused holiday Other, including: Settlements with carriers accrual for years 2008, 2010, 2011 and 2012

31/12/2012

31/12/2011

PLN

PLN

18 353 591,00 135 454 145,83

135 362 928,00

31/12/2012

31/12/2011

Short-term accruals

PLN

PLN

Unused holiday

18 353 591,00

13 215 629,00

36 355 552,00

124 180 542,00

ANS grant under IDSG

91 217,83

-

Audit

89 000,00

89 000,00

99 007 376,00

22 732 448,00

153 896 736,83

160 217 619,00

13 215 629,00 146 912 990,00

Settlements with carriers accrual for years 2008, 2010, 2011

146 912 990,00

ANS grant under IDSG

91 217,83

-

Audit

89 000,00

89 000,00

Total

153 896 736,83

160 217 619,00

Long-term accurals Settlements with carriers accrual for years 2008, 2010, 2011 and 2012 Total

Note 21.3 Provisions 2012

Opening balance PLN

Creation of provision

Reversal of provision

PLN

Closing balance

Short-term provisions

Long-term provisions

PLN

PLN

PLN

PLN

Title: Deferred tax liability

8 879 014,96

1 083 196,97

237 515,84

9 724 696,09

-

9 724 696,09

Employee benefit provision

92 812 765,31

28 362 320,48

8 902 242,20

112 272 843,59

11 102 476,89

101 170 366,70

Other provisions

1 807 074,98

241 724,52

-

2 048 799,50

-

2 048 799,50

Dismantling provision

52 956,25

83 183,42

-

136 139,67

-

136 139,67

Provision for returning the grant for free of charge flights

-

3 111 740,62

-

3 111 740,62

3 111 740,62

-

Provision for returning incorrectly accrued penalties

-

2 095 948,17

-

2 095 948,17

2 095 948,17

-

103 551 811,50

34 978 114,18

9 139 758,04

129 390 167,64

16 310 165,68

113 080 001,96

Total

35

Change in provisions for jubilee benefits, retirement and disability benefits liabilities in 2012

2012

Opening balance

Current employment costs

Interest

Actuarial gains/ losses

Benefits paid

Other actuarial gains/losses

Closing balance

PLN

PLN

PLN

PLN

PLN

PLN

PLN

Title: Jubilee awards

78 497 568,58

6 715 496,31

3 827 316,27

13 940 425,87

-8 535 165,00

-783 788,50

93 661 853,53

Employee benefits provision

13 755 019,39

742 742,79

635 938,02

989 338,23

-356 978,34

2 085 519,52

17 851 579,61

560 177,34

51 105,59

27 398,34

101 521,99

-10 098,87

29 306,06

759 410,45

92 812 765,31

7 509 344,69

4 490 652,63

15 031 286,09

-8 902 242,21

1 331 037,08

112 272 843,59

Disability benefits provision Total

Note 24 Trade and other liabilities

Note 24.1 Trade and other liabilities

Trade liabilities

31/12/2012

31/12/2011

PLN

PLN

14 575 209,78

11 676 045,67

14 575 209,78

11 676 045,67

including: due within 12 months

Note 24.2 Other liabilites 31/12/2012

31/12/2011

PLN

PLN

Payroll liabilities

5 961 853,33

5 377 407,20

Taxation, custom duties and social security liabilities

19 672 201,37

15 521 108,93

Other liabilities, including:

19 092 789,31

14 632 308,34

15 000 343,90

12 733 613,79

Other liabilities in total

44 726 844,01

35 530 824,47

Trade and other liabilities in total

59 302 053,79

47 206 870,14

Liabilities due to purchase of property, plant and equipment and intangible assets

In the Agency’s opinion the carrying amount of short term liabilities is approximately equal to their fair value. As at 31 December 2012 and 31 December 2011 contingent liabilities were recognized – see note 27.4.

Note 24.3 Other long-term liabilities 31/12/2012

31/12/2011

PLN

PLN

Deposits liabilities

372 624,01

889 790,50

Total

372 624,01

889 790,50

36

Foto Andrzej Karwowski

37

38

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02-147 Warsaw, 8 Wiezowa Street Phone no: + 48 574 50 01 Fax no: + 48 574 50 09 E-mail: [email protected] 40