Alpha Airports Group Plc Annual Report 2004/05
Alpha Airports Group Plc 
Annual Report 2004/05
People making travel special  Alpha’s business is making travel special
Alpha provides catering and retailing services 
for airlines and airports. After 50 years of continuous
growth, Alpha now operates from over 150 catering
and retailing outlets at 74 airports in 13 countries
across 5 continents. In total, we are 5,500 fully 
trained professionals at your service.
Alpha’s vision
Building an exceptional, international, world-class
travel services company by:
• Offering exceptional catering and retailing
experiences for our travelling customers
•Forging ever deeper and wider partnerships with 
our airline and airport customers
• Actively seeking out international acquisition and
alliance opportunities with like-minded companies
•Developing the full talents and active involvement 
of all our colleagues and thus creating a great place 
to work
• Dynamically improving and innovating every 
aspect of our business
... and thereby delivering financial success for 
all our stakeholders.
Contents
Financial and operational highlights of the year 1
Chairman’s review 2
Group at a glance 3
Chief Executive’s review 4
Review of operations 6
Financial review 14
Directors’ biographies 16
Corporate governance report 17
Directors’ report 20
Corporate social responsibility report 21
Remuneration report 22
Auditors’ report 27
Group profit and loss account 28
Statement of recognised gains and losses 28
Balance sheets 29
Group cash flow statement 30
Notes to the accounts 31
Five year financial summary 50
Notice of meeting 51
Shareholder information Inside back cover Financial highlights of the year 2004/05 2004/5 2003/4 % change
Turnover 
(
£m
)
487.8* 440.9 10.6
Profit before taxation 
(
£m
)
11.7 17.4
(
32.8
)
Earnings per share 
(
p
)
2.49 5.33
(
53.3
)
Dividend per share 
(
p
)
4.0 3.8 5.3
Net (debt)/cash 
(
£m
) (
19.3
)
1.9 –
*excluding turnover from joint ventures
Operational highlights 2004/05
• Alpha Heroes, our annual staff recognition
programme, is rolled out to all UK, Eire and Channel
Islands operations and wins a global Frontier award 
for its partnership work with suppliers and customers.
• Blue Sky Service, our innovative ‘trayless meal’
concept, is launched with MyTravel Airways on 
a globally back-catered basis, and is recognised 
for innovation at the Mercury Awards.
•We begin an £8m investment in IT projects to upgrade
supply chain capability in UK Flight Bonds, and across
our whole UK Retail estate.
•We are awarded a CTN contract at Birmingham
International Airport, to supply five World News stores.
In addition we win a contract to build a World News 
Café at the airport.
• Cathay Pacific awards a flight catering contract 
to our newly refurbished and extended Australian flight
kitchen network in Brisbane and Melbourne.
•We acquire 60% of a leading Turkish duty-free
company, and increased investment in Servair Airchef,
our Italian flight and retail catering business, by a
further 25%, to a 50% shareholding.
• Serious accidents are reduced by a further 33.3%.
1
Alpha Airports Group Plc
Annual Report 2004/05
1 Alpha Heroes culminated 
in an Oscars-style awards
ceremony for finalists and
industry representatives.
2 Blue Sky Service provides
passengers with individual
rubbish bags, giving them
freedom to clear away their
disposable meal sets.
3World News Café combines
Alpha’s retail catering and 
CTN skills.
3
1
2 Chairman’s review
“2004/05 was a year of significant investment to
support our future growth. We are working on an
unprecedented number and scale of opportunities 
to build and grow the business, both organically 
and by acquisition. ”
2
Alpha Airports Group Plc
Annual Report 2004/05
Review of the year
Group sales for the twelve months
ended 31 January 2005, including
turnover from joint ventures, were up
12.8% on the previous year at £497.2m
(2003/04: £440.9m). Turnover,
excluding joint ventures, was 10.6%
above last year at £487.8m. This
increase arose from continuing strong
growth of short-haul passengers and
flights at the UK’s regional airports,
and recovery on long-haul traffic –
particularly at London Heathrow and 
in Jordan. We made a strong start in
the first half, which weakened slightly
in the second half with the loss of the
Air Canada business at Heathrow. 
The pre-tax profit (before exceptional
items and goodwill amortisation) of
£18.9m was 12.9% below the previous
year (2003/04: £21.7m) and can be
attributed to a number of specific
Flight Services development issues.
Profit before taxation was down 32.8%
at £11.7m (2003/04: £17.4m).
The start-up of Australian flight 
service contracts for Cathay Pacific
and Royal Brunei at Sydney, Brisbane
and Melbourne resulted in start-up
costs as these flight kitchens became
operational. These kitchens are
operating at very low capacity
utilisation and will continue to incur
small operating losses until further
long-haul airline customers are 
won. Losses on the inflight retailing
contract with Qantas, which
commenced in May, continued 
into the second half and this contract
has now been renegotiated and
extended for six further years.
Following the loss of the Air Canada
contract from September, we decided
to hold onto our highly qualified
London Heathrow staff which ensured
a successful start-up for American
Airlines in February 2005. Further,
small losses were incurred in our UK
Flight Services bond network, due to
implementation of new IT systems,
which will provide future central stock
control and procurement capability.
There were losses in Amsterdam Flight
Services as this kitchen went through a
transition from a previous focus on
short-haul, charter logistics to a high
quality, full services long-haul
catering offer .
Dividend
The Board has recommended an
increase in the final dividend of 7.1% 
to 3.0 pence per share, giving a full 
year dividend per share of 4.0 pence
(2003/04: 3.8 pence). The dividend 
is payable on 8 June to shareholders 
on the register as at 6 May 2005.
Outlook
2005/06 has started as planned, 
and trading remains in line with
expectations. Within Asia, passenger
figures are down 15.7% year on year 
as a result of the tsunami. We
anticipate this trend will continue
throughout the first half of this year,
with a recovery in the second half. 
Over the past four years we have
transformed our business models to
adapt to a larger, faster-growing, more
competitive aviation market, investing
significantly in people, innovation 
and infrastructure. We continue to
concentrate on enhancing our core
business offerings and, with a healthy
balance sheet, excellent customer
relationships and a strong team in
place, are well positioned to take the
business forward and capitalise on 
our investments.
Graham Frost 
Chairman
Graham Frost 
Chairman 3
Alpha Airports Group Plc
Annual Report 2004/05
Alpha Retail
Offers purpose-designed retailing and 
catering services for airports. Alpha Airport
Shopping and Alpha Duty Free in Europe, plus
Alpha T ax and Duty Free internationally, provide
a full range of high quality consumer brands 
at excellent value prices. We operate stores at
10 UK airports, two airports in North America,
and three airports in the Indian Sub-Continent.
World News (confectionary, tobacco and
newspapers), Glorious Britain (destination 
gifts) and Zinq (fashion accessories) are
successful specialist shops operating at 
18 airports in the UK and USA. Alpha Retail
Catering offers popular restaurant, café 
and bar services at 14 airports in the British
Isles, Europe and Jordan.
£219.3m
£196.9m
£11.7m
£8.8m
98 outlets at 22 airports across
Eire
India
Jordan
Maldives
Sweden
Sri Lanka
Turkey
UK
USA 
Airport Retailing
Alpha Airport Shopping
Alpha Duty Free
Glorious Britain
World News
Boutique stores
Airport Catering
Bar O8
Bewleys
The Bar and Brasserie
Deli Sandwich Bar
The Foodhall
World News Café
Brand partners include
L ’Occitane
Mont Blanc
MAC
1,877
BAA Plc
Bandaranaike International Airport (Sri Lanka)
Birmingham International Airport
Greater Orlando Aviation Authority
Jersey Airport 
Manchester International Airport Plc
Newcastle International
Peel Holdings plc
TBI plc
Group at a glance
Sales 2004/05
2003/04
Adjusted operating profit* 2004/05
2003/04
Global spread
Services and brands
Employees 
Business partners include
Alpha Flight Services
Offers a comprehensive range of catering
logistics, inflight catering, bonded 
stores and management services for over 
100 airlines from 69 units in 8 countries. 
Alpha In-Flight Retail offers inflight retail
management services and is the European
leader in the fast growing market for the 
onboard sales of food, beverages and gifts.
£277.9m
£244.0m
£8.8m
£14.2m
Service units at 62 airports across
Australia
Europe
Middle East
UK
USA
Flight Catering
Long-haul service
Blue Sky Service
Frozen Entrée Manufacture
Managed Services
Bond and warehousing
Inflight Services Management
Compliance and security
Equipment management
Inflight Retailing
Onboard sales
Crew retail training 
Online pre-ordering
3,554
American Airlines
BA CitiExpress
BMI
Britannia
British Airways
Cathay Pacific
easyJet
Excel
Monarch Airlines
MyTravel Airways
Qantas
Royal Jordanian 
Ryanair
United Airlines
* From continuing operations but before goodwill amortisation and exceptionals. 4
Alpha Airports Group Plc
Annual Report 2004/05
Innovation
Exceptional new consumer experiences
have transformed our business in recent
years. Despite EU enlargement, which
reduced our UK retail sales potential by
an estimated 2% in the year, our newly
branded UK retail offers enjoyed sales
growth of nearly 9%. For example, our
latest ‘pink, everyone can buy’ Alpha
Airport shop at Newcastle International
Airport generated an excellent 24%
sales advance in its first year . Our airline
customers continually seek to upgrade
and streamline their inflight catering
offers, and we are delighted to have
launched the ‘trayless meal’ concept,
Blue Sky Service, with MyTravel Airways
on a globally back-catered basis. Blue
Sky Service provides major benefits to
airline and consumer alike, and will be
offered to customers as the basis of
future growth in our UK and emerging
European marketplace.
It’s always rewarding to be recognised
for our innovation and service excellence,
and last year Alpha won two Frontier 
and two Mercury Awards for innovation. 
We were equally delighted to be
recognised as the leading global flight
caterer by United Airlines and All 
Nippon Airways for Heathrow, and by
Continental Airlines for Edinburgh.
Compliance
Compliance remains critical to our
focus. With our accredited training
manuals and ongoing involvement 
in the IFCA/IFSA food safety code 
of practice for the worldwide airline
catering industry, we are among the
highest achievers in hygiene and food
safety. Foreign body incidents from
supplied products were down 24.5% 
in the year, with Alpha’s own attributable
rate down from 22.3% to 17.0%.
The Department for Transport has
maintained tight security procedures,
and renewal of our operating licences
depends on compliance. So we are
constantly monitoring our performance,
and have introduced upgraded training,
policies and procedures for all our staff.
Our rigorous compliance policies and
training have also reduced RIDDOR
accidents by 33.3%, and reduced reported
total or potential accidents by 29.5%.
Our business
Air travellers do not have to eat or
shop in transit; it is only by offering
outstanding retail and catering
experiences that we will achieve our
vision of building an exceptional,
international, world-class service
company. Experience tells us that
if the offer represents good value, 
the choice is genuine, the buying
appropriate for the market, and the
experience enticing, more and more
customers will stop, shop and eat.
Our exciting growth market
83% of our sales still come from
airports across the UK. With EU
deregulation in full force, lower fares
and wider choice have created an
explosion in passenger numbers,
with a particular focus on the growth
of regional airports. This is a thriving
and continually developing market,
which has given us more than 8%
passenger growth in the year . It
continues to be the key driver for our
major UK business – and therefore
that of the Group.
Chief Executive’s review
“Alpha’s business is retail and catering for airlines
and airports, and our essence is ‘people making
travel special’ . ”
Kevin Abbott 
Chief Executive 5
Alpha Airports Group Plc
Annual Report 2004/05
Our people
Creating a great place to work remains
a critical strategic priority. Alpha
Heroes, our successful reward and
recognition programme, has been
extended to cover all our UK, Eire and
Jersey staff, with a complementary
Local Heroes scheme at local unit
level. Our employees have endorsed
these initiatives wholeheartedly, with
almost 3,000 nominations for staff who
‘go the extra mile’.
Our confidential, independent annual
UK staff survey registered a 76%
overall satisfaction score: an excellent
upper quartile performance when
benchmarked against other UK
employers. Staff turnover continues 
to decline, from 24.3% to 21.9%. Once
again, the Board would like to extend
its thanks to all our staff for their
contributions to our success during 
the year . Without them, it would not 
be achievable.
Always improving
Ours is an exciting and challenging
marketplace. We must continually
improve and innovate to position
ourselves for future growth and
financial success. In our UK Retail and
Flight bond network, we are focusing
on IT improvement and upgraded
supply-chain capabilities. In our UK
Flight Services business, we improved
productivity by a further 6%, giving a
total improvement of 58% over the past
five years. This gives us the cost base
and practices to be fully competitive,
both in the UK and internationally. 
We have centralised assembly of the
fresh, high-quality food offers for our
new Blue Sky Service in Birmingham,
and established a national distribution
service. We plan to commercialise this
new offer with other UK and
international customers.
After a good first half performance,
our sales growth temporarily 
dipped in the second half from 
11.9% to 9.4%. With higher targeted
development costs and start-up
losses, underlying profits in the
second half were disappointing. 
A return on sales of 3.3% in the
second half, with a full year return on
sales of 3.9%, down from the previous
year’s 4.9% was below our target 
of 5% plus. However, we are 
confident of further growth in 2005/06,
and are anticipating an improved
return on sales.
Kevin Abbott 
Chief Executive
Group turnover (£m)
excluding joint ventures
05 487.8
04 440.9
03 419.3
02 430.8
01 433.0
Dividend per share (p)
05 4.00
04 3.80
03 3.60
02 3.60
01 3.40 6
Alpha Airports Group Plc
Annual Report 2004/05
1 Blue Sky Service replaces 
the traditional tray-set with 
a disposable roll mat that 
holds cold items and acts 
as a tablecloth.
2 Our chef teams and kitchens
continue to receive industry
accolades for their standards,
including ANA ’ s Gold Award.
Innovation
Blue Sky Service, a globally back-
catered business launched with
MyTravel Airways, is a new ‘trayless’
service concept, offering a more
contemporary experience for the
traveller . It also gives cabin crews more
service time, and provides extra galley
space for extended cost-effective 
back-catering or an increased range 
of inflight retailing. We believe many 
of our UK customers will move to a
similar service proposition, and that 
our investment to date will enable
us to grow our mainland European
business on a highly competitive,
relatively low capital cost of entry basis.
Of course, not every innovation 
succeeds immediately . Alpha D’lish, 
our online meal pre-ordering service 
for low cost airline passengers, was
withdrawn after ‘click-through’ rates
from online bookings proved lower 
than expected. However, the service 
was very well received, and our airline
partners have asked us to use the
knowledge we gained to develop further
online retail pre-ordering systems.
International
While our Jordan business has
continued to prosper, our Amsterdam
unit struggled to adapt cost-effectively
to the new customer mix. As a result, 
we have had to bring in new culinary
skill-sets and release existing long-
service staff. This redundancy
programme cost £1.4 million, with an
additional £1 million operating loss in
the year . We are confident of an eventual
return to profitability, but have made
provision to write-off the freehold
property assets.
In Australia, we have secured major 
new clients, including Cathay Pacific 
and Royal Brunei, for our recently
acquired and refurbished flight
kitchens. The kitchens currently 
operate at low capacity, and will
continue to incur small ongoing losses
until we win more major business.
Alpha Flight Services
United Kingdom
In response to the rapid growth 
of low fare airlines in regional
European airports, we are maximising
opportunities to develop a new profile
and new partnerships in the UK 
and Europe.
The last five years have been
challenging, and our airline customer
proposition has had to evolve. 
T oday, our business profile breaks 
down as follows:
• 52% catering logistics
• 36% inflight retailing
• 12% traditional flight catering 
Emerging trends in a changing market
have affected every airline catering
provider . At Alpha, where we focus 
on developing the best consumer
experience at the lowest cost, our 
58% improvement in productivity over
five years means we are now achieving
world-class levels of cost and service.
UK Flight Services enjoyed a 2.1%
growth in meals served, and maintained
overall market share despite the 
second half loss of our Air Canada
service contract at London Heathrow. 
By retaining the staff, we ensured 
a successful start-up for our new
American Airlines service, though
second half results suffered from 
the one-off costs of this transition.
As new and existing customers look 
to place more business with us, we 
have generated a 14% increase in 
future net contract gains during the
year, notably those with American
Airlines and Excel Airways.
Review of operations
Our business units provide catering and retailing
services for airlines and airports in an increasing
number of countries.
2
1 7
Alpha Airports Group Plc
Annual Report 2004/05
“Alpha has helped us to bring our 
inflight meal offering into the
noughties, through an active process 
of innovation, collaboration and 
Blue Sky thinking, whilst providing
considerable cost savings for the
airline and superb home from home
cooked cuisine for our customers. ”
Samantha Mackie
Cabin Services Director
MyTravel Airways
Blue Sky Service
Our latest innovative idea,
Blue Sky Service is a brand
new way to cater a flight. 
A disposable roll mat replaces
the tray; the food is fresh 
and simple, the packaging
contemporary and the concept
popular with crew and
passengers (trials with launch
customer MyTravel Airways
showed 80% of passengers
rated Blue Sky Service good or
very good, with only 20%
preferring the traditional tray).
It’s cheaper to produce,
lightweight and disposable, 
so delivers cost benefits at
every stage: an essential 
for every airline. Inflight Retail
The tremendous growth of low fare
travel, growing onboard spend per
passenger, and new business wins 
have all contributed to a 40.6% increase
in Inflight Retail sales over the year . 
We have established new bases for
airline customers in Germany and Italy,
our plans for further European bases
are advanced, and we are developing
expanded service offerings for 
the year ahead.
Internationally, we have set up a global
inflight duty free programme for Qantas
in Sydney, Melbourne, Brisbane and
Perth. After initial challenges, and 
a significant start-up loss, we have
redefined and extended our contract
with Qantas to establish a viable basis
for both partners.
A new IT system will allow our UK
bonded warehouse network to better
manage our range of high-value stocks.
The training and implementation
involved has entailed significant 
one-off costs, leading to temporary
losses. However, new operating
procedures will reduce costs in the
current year and enable us to centralise 
control and stocking in late 2005,
transforming the future capital
commitment and profitability of this
major growth business.
Alpha Retail
Alpha Airport Shopping and 
Alpha Duty Free
Alpha Airport Shopping has emerged and
gone from strength to strength over the
past four years. We are now recognised
as one of the world’ s leading travel
retailers, thanks to a clear vision and
values, a thorough understanding of our
customers, structured and systematic
investment, strong partnerships and,
above all, a passionate team dedicated to
making Alpha Airport Shopping the best
travel retailer in the world. Working
closely with our airport landlords and
suppliers and their big brands, we have
created exciting, innovative, world-class
stores, achieving like-for-like sales
growth of £7 million: some 7.4%.
2004/05 saw two changes in legislation
affecting our business. On 1 May 2004,
ten additional countries joined the 
EU, reducing the number of passengers 
that could buy duty free liquor and
tobacco products by 11%. This had 
a material, adverse effect on our 
incomes and margins, with duty free
liquor and tobacco sales down 2.2%. 
Secondly, from 21 December 2004,
tobacco advertising and promotions
legislation forced substantial changes 
to the merchandising and promotion 
of tobacco in our stores.
Despite such obstacles, we have
mitigated many of the adverse 
effects by continuing to invest in the
structure of our business with capital
expenditure of £2.8m.
Our brands
We sell the best brands in the world, and
enjoy considerable support from brand
owners and suppliers. Their investment
in Alpha is essential to continued sales
growth, and provides exceptional value
and service for our customers.
Innovation, the constant refreshment 
of our ranging, and new product
launches all drive footfall and average
transaction values. Our focus on category
management is also reaping benefits.
Fewer product categories and broader
key ranges enable us to retail with
authority and confidence. T o this end,
we’re continually introducing new
8
Alpha Airports Group Plc
Annual Report 2004/05
1 Alpha In-Flight Retail is the
European leader in the growing
market for the on board sales 
of food, drink and gifts.
2Positioning Bar 08 in Manchester
T3 at the entrance to the Alpha
Airport Shopping store helps
drive penetration.
Review of operations continued
2
1 9
Alpha Airports Group Plc
Annual Report 2004/05
“The start-up activities undertaken 
by the Australian team were a job 
well done. They were well co-ordinated
in both Melbourne and Brisbane 
and were delivered with a great team 
spirit. The delivery showed the
commitment and ability of which 
Alpha should be proud.
The start-up formed the basis of 
an excellent relationship in which we
continually seek ways to achieve the
best possible customer satisfaction. ”
Charles Grossrieder 
Manager, Catering Services
Cathay Pacific
Cathay Pacific
Every customer has unique
expectations, logistics and
needs. It is our challenge to
deliver to their requirements,
every time. Our commitment
to outstanding performance
was recognised this year 
when our Australian Flight
Services business started a
catering contract with Cathay
Pacific. Known for high and
exacting standards in long-
haul catering specifications
and delivery, Cathay Pacific 
is an exceptional customer . 
A perfect launch customer 
to help us grow our long-haul
business from Australia. premium brands – most recently MAC,
Smashbox, L ’Occitane, Mulberry and
Mont Blanc.
International stores
In Asia we enjoyed strong US$ sales
growth of over 24%, fuelled by record
tourist numbers. However, those
numbers dipped following the tsunami
disaster . Thankfully, no staff were lost
or injured in the tsunami, and we
suffered no loss of property or stock.
We continue to invest in new shops in
Sri Lanka, to maximise our five-year
contract extension.
Our retail operations in Florida recorded
a 28% increase in US$ sales from 
a 21.6% year-on-year increase in
passengers. A new five-year extension
to our duty free contract at Orlando
International Airport heralds a period 
of major investment, refurbishing,
expanding and re-branding our airside
stores. A similar project is now
complete at our duty free store at
Orlando Sanford International Airport,
with further investment planned for
specialist stores in 2005.
Glorious Britain and World News
Trading at Glorious Britain was up 
26.8% on last year’s record, with 
World News posting growth of 11.7%.
Passenger spend also increased
across both brands, with the average
up 14% in Glorious Britain and 3% 
in World News.
This year saw a new Glorious Britain
retail offer at Waterloo International
railway station.
We also leveraged our gift and souvenir
expertise to create an end-to-end retail
solution for Royal Ascot 2004. This
included developing an exclusive range
of merchandise, and managing retail
operations throughout the event.
We succeeded in our CTN business
tenders for Birmingham International
Airport T erminal 1 and the new
Doncaster Robin Hood Airport.
World News has expanded its offer
significantly, to maximise sales
opportunities from increased dwell
times at airside departure lounges. 
The most significant investments are 
at Belfast International, Cardiff, London
Luton and Belfast City, where we also
won the contract for an airside store.
Glorious Britain was named Best
Souvenir Retailer at ‘The Greats’ awards
2004, while World News’ East Midlands
store was awarded ‘Best Multiple 
Outlet’ at the MagSell 04 awards. 
World News was awarded Investors In 
People accreditation for Heathrow
T erminal 3, and re-accreditation for
Belfast International.
We are delighted to have signed a 
global pan-airport contract with BAA, 
to cover all Glorious Britain stores in
BAA Airports. As well as extending all
current Glorious Britain contracts 
for a further six years, this creates future
opportunities in BAA Airports. As part 
of the agreement, Alpha will also open 
a new Glorious Britain site at Gatwick
North Airside in May 2005, giving
additional exposure to higher spending
transatlantic passengers. 
Our CTN store serving the 5,000-
strong construction team at Heathrow
T5 gives us a presence there well 
ahead of its completion, and we have
been awarded a five-year extension 
to our contract at London City .
Alpha Retail Catering
Alpha Retail Catering provides fresh,
innovative, contemporary catering for
airport terminals. In a market where
quality and service are frequently
sacrificed to aggressive rents, we
continually deliver premium food and
beverage concepts that reflect the best
of contemporary high street brands.
This premium position has delivered
overall like-for-like sales growth of 
17%. Dublin Airport, one of our larger
contracts, delivered an impressive 
36% growth.
We understand our market, and know
that passengers now travel more
frequently, with less time on their hands.
They want fresh, exciting offers, such 
as food cooked to order or to take on
board, and environments that reflect 
the best of the high street. So we
continue to innovate, with more fresh
ideas in the pipeline.
10
Alpha Airports Group Plc
Annual Report 2004/05
1New MAC counters 
in Manchester staffed by
trained make-up artists
have added theatre to Alpha
Airport Shopping stores.
2 Sponsors of Alpha Heroes
provided product-based
activities during a day 
of reward and recognition 
for staff.
Review of operations continued
2
1 11
Alpha Airports Group Plc
Annual Report 2004/05
“Alpha Heroes was a milestone in the
travel retail industry. It recognised
those people who are so crucial to the
success of a business like Lancaster –
the people who sell our product to 
the customer .”
Graeme T oole
Vice President Sales, Europe
Lancaster
Alpha Heroes
Our business is founded on
great service, provided by
motivated and engaged staff.
Our commitment to staff
development has produced
fantastic results. We expanded
Alpha Heroes, our reward and
recognition scheme, across 
the Group to include all UK,
Ireland and Channel Islands
staff who ‘go the extra mile’.
This year, the scheme received
almost 3000 nominations, which
were judged by an independent
company, and recognised 
at an Oscar-style ceremony. 
Alpha Heroes’ success at
motivating staff is widely
applauded throughout the
industry. We work in partnership
with customers and suppliers 
to deliver a programme that
truly recognises outstanding
people.
Alpha Heroes won the Frontier
Award for Best Partnership
Initiative – a major accolade in 
the travel retail industry.
Staff feedback on Alpha Heroes
was overwhelmingly positive,
and the scheme is now part of
our annual calendar . Local
Heroes initiatives run
throughout the year and our
international businesses are
introducing their own schemes. Growing interest in our World News
Café, Deli Sandwich Bar and Bar08
concepts has delivered new contracts 
in Birmingham International and
Belfast, as well as a new contract at
Doncaster Robin Hood, in partnership
with Alpha Airport Shopping and World
News. Due to re-development at Luton,
our airside contract will cease from
1 July 2005, although we will retain our
landside business. We will also continue
our catering relationship with TBI,
after securing the contract to provide 
all catering at Stockholm Skavsta
airport from May 2004.
Investment in our longer term 
contracts has ensured consistency 
in our portfolio. This has included
introducing more Deli operations,
upgrading the foodhall in Jersey, 
and the forthcoming redesign of food 
and beverage at Inverness airport.
Our profile has also increased beyond
the UK with four new World News 
Cafés under development in Jordan 
and the successful launch of a foodhall,
coffee concession and airside bar in
Stockholm Skavsta airport.
Business development
In line with our strategy to
internationalise our business, we are
currently tendering for several major
opportunities in Europe. This costs
money, and we have had to increase
management resources as well as
committing revenue to this process.
IRIS (Integrated Retail Information
System) is the major internal 
project for this year . We are investing
over £7m in a new SAP supply chain
management system, including 
ANKER POS equipment and SAP
financial accounting, and plan a UK 
roll-out over Autumn / Winter 2005/06.
Our people
Our people are Alpha’s key
differentiating asset. Without them 
we could not continue to grow.
Pace and innovation are especially
essential in airport retail, where
customers are sophisticated, dwell
times limited and retail obsolescence
rates rapid. Our training and development
programmes for managers and staff
are therefore a critical part of our
approach to meeting ever-changing
consumer needs.
To attract and retain the best people,
Alpha Airport Shopping rewards its
management and staff at upper quartile
levels for their location and sector . 
Our award-winning Alpha Heroes
recognition scheme has also enthused
our retail teams, and staff satisfaction
scores in Alpha Retail are 83% –
comparable to the top 15% of UK
companies.
12
Alpha Airports Group Plc
Annual Report 2004/05
1 Pink display towers are
a feature of the new Alpha
Airport Shopping store at
Newcastle International.
2Glorious Britain’ s product
ranges will shortly be
available to buy over the
internet, in a response to
popular overseas demand.
Review of operations continued
2
1 13
Alpha Airports Group Plc
Annual Report 2004/05
Newcastle International 
Building relationships 
that last with our partners 
is key to the success of our
business. Working closely 
with Newcastle International
our Alpha Airport Shopping
team pinpointed the changing
passenger demographic and
developed an end-to-end
customer solution around it.
This enables us to offer the
right store concepts with the 
right selection of brands. The
success of this relationship
has resulted in an additional
seven-year contract to operate
two key stores in the airport
and generated results for 
all involved. Sales were up
24% in our first year of 
Alpha ‘pink’ shops.
“ The open routes of communication 
with the Alpha team mean that we can 
be confident our key retailer is working
with us to make Newcastle International 
one of the best airport environments 
in Europe. The Alpha team are committed
to maximising retail revenues through
understanding what drives each 
element of the customer experience. 
This partnership approach helps us to
capitalise on our rapidly increasing
passenger numbers. ”
John Parkin
Chief Executive, Newcastle International Heathrow, Australia, Netherlands and
across our UK bonds responsible for
the profit decline.
Our Retail sales increased 11.4% 
to £219.3m, and pre-tax profits (before
exceptional items and goodwill
amortisation) were up 32.9% to £11.7m.
As expected, the expansion of the EU in
May 2004 had a small negative impact,
reducing sales of duty free liquor and
tobacco by 2.2%. However, growth 
in passenger numbers at UK regional
airports helped offset this decline.
Internationally, our retail business had
a very successful year, with both the
USA and Asia recording sales growth 
in excess of 20% in US$.
Interest of £1.6m was slightly above 
the previous year, due to a higher level
of net debt throughout the second half.
Exceptional charges
As previously announced, our business
in the Netherlands has undergone
substantial change during the year . 
We have had to undertake our second
significant redundancy programme
toward the end of the year, at a cost of
£1.4m. We have also provided an
impairment charge of £3.9m against 
our freehold property value in the
Netherlands.
In the UK, the launch of our award-
winning Blue Sky Service has removed
work from local units to the new
Birmingham central facility. This
resulted in 107 UK redundancies, 
at a cost of £0.9m. Offsetting these
charges of £6.2m is the release of part
of our onerous contract provision
relating to the US business in Orlando.
The performance of the business 
over the last 18 months, and our
expectations for the remaining six
months of the contract, mean we no
longer require £1.5m of this provision
and accordingly it has been released.
Goodwill
The goodwill charge of £2.9m (2003/04:
£3.2m) relates predominantly to our
business acquired in Sri Lanka in 1996
(£1.8m), and our investment in Jordan
(£0.8m) acquired in 2001. Associate 
and joint ventures goodwill is £0.3m.
Review of results
Group sales, excluding joint ventures,
were 10.6% above last year at £487.8m.
This increase arose from continuing
strong growth of short-haul passenger
flights at the UK’s regional airports 
and recovery on long-haul traffic,
particularly at London Heathrow 
and Jordan. Our strong start in the first
half weakened slightly in the second
half, with the loss of the Air Canada
business at Heathrow.
The pre-tax profit (before 
exceptional items and goodwill
amortisation) of £18.9m was 12.9%
below the previous year (2003/04:
£21.7m). As shown in table 1, this
shortfall is in profit from our 
Flight Services division, arising 
from significant investment in new
business opportunities, whilst our
Retail business returned a 32.9%
increase in profit. Profit before taxation
was down 32.8% to £11.7m (2003/04:
£17.4m).
Within Flight Services, sales 
growth was mainly from inflight 
retail, as we enjoyed continued 
growth with the low cost airlines 
from UK regional airports. Airports
such as London Heathrow and
Amman, Jordan bounced back from
the Middle East conflict of the
previous year .
Pre-tax profit (before exceptional 
items and goodwill amortisation)
in Flight Services reduced 38% to
£8.8m (2003/04: £14.2m). Most of the
business units performed well, with
growth and transformation costs at
Financial review
“Group sales, excluding joint ventures, were
10.6% above last year at £487.8m. ”
14
Alpha Airports Group Plc
Annual Report 2004/05
Heather McRae
Finance Director
2004/05 2003/04
1 Segmental analysis £m £m
Turnover
Flight Services* 268.5 244.0
Retail 219.3 196.9
487.8* 440.9
*excluding turnover from joint ventures
2004/05 2003/04
£m £m
Adjusted profit before tax*
Flight Services 8.8 14.2
Retail 11.7 8.8
20.5 23.0
Net interest expense (1.6) (1.3)
18.9 21.7
* Before exceptional items and goodwill
amortisation including associates and joint
ventures
2004/05 2003/04
2Movement in net (debt)/cash £m £m
Net cash/(debt) at 1 Feb 1.9 (0.3)
Free cashflow (10.9) 9.1
(Purchase)/disposal of (4.5) (0.7)
businesses and associates
Equity dividends paid (6.6) (6.2)
Issue of shares 1.3 0.2
Currency translation (0.5) (0.2)
Net (debt)/cash at 31 Jan (19.3) 1.9 Acquisitions and disposals
In November 2004, we exchanged
contracts to acquire 60% of the share
capital of Istanbul Duty Free (‘IDF’)
for an initial consideration including
acquisition costs of £4.2m with 
two payments of contingent deferred
consideration of £0.3m each. IDF
operates duty free shops at two airports
and duty free border and port shops, 
as well as providing inflight retailing 
to a number of local airlines.
We also increased our shareholding 
in our Italian associate company,
Servair Airchef, from 25% to 50%, 
at a cost of £2.9m. This followed the
exercise of an option by the vendor . 
Our major shareholder, Servair,
increased its investment in Servair
Airchef to 50% at the same time. 
Due to the success of our Jordan
investment, our local partner exercised
his right to acquire a further 10% 
equity stake in Jordan Flight Catering
Company Limited. The disposal
generated sales proceeds of £1.7m 
and a profit on disposal of £0.3m. 
During July we sold our 20% investment
in Calibre Airline Services, as part 
of a full sale of that company . Proceeds
of £0.5m were received, realising 
a small profit on disposal of £0.4m.
Special reserve
During the year we released to
distributable reserves the sum 
of £152.3m previously retained 
as a ‘special reserve’ in the accounts 
of the Company, improving the capital
structure of the business, and giving 
the Company increased flexibility 
for the future. The ‘special reserve’ 
was created in 1994 as a result of 
a capital reduction following the
flotation of the Group in January 1994. 
The ‘special reserve’ could not form
part of the Company’s distributable
reserves until the directors had
satisfied themselves that all conditions
attached to the reserve no longer applied
and this event occurred during the year .
Treasury
Each year the Board reviews and sets
the treasury policies and objectives 
for the forthcoming year . Treasury is
managed centrally, and its prime
objective is to manage the risks on a
non-speculative basis. Our primary 
risk is exchange rate fluctuations,
mainly the US$, as we have a number 
of operations which trade in US$ or 
in currencies aligned to the US$ 
(Sri Lanka and Jordan). Our aim 
is to mitigate the effects of day-to-
day trading and, where possible, 
to match overseas investments and 
borrowings in the same currency . 
No currency exchange contracts 
or interest rate swaps existed at the
balance sheet date.
The Group’s funding position is
unchanged. We have a five-year
multicurrency facility of £60m, 
which expires in October 2006. 
The drawdown under the facility 
at 31 January 2005 was £24m.
Accounting policies
We have reviewed the accounting
policies as set out in the financial
statements, and continue to consider
them the most appropriate to our
business activities.
IFRS
We are continuing to assess the 
impact of adopting international
accounting standards. Whilst it is too
early to quantify the impact accurately,
the following standards are likely 
to be significantly different to those
currently adopted by the Group 
under UK GAAP
• Income taxes (IAS 12)
• Employee benefits (IAS 19)
• Share based payments (IFRS 2)
• Leases (IAS 17)
• Intangible assets (IAS 38)
The way we currently choose to
illustrate our business segmental
analysis is unlikely to change, 
however more disclosure will be 
made available as required by IAS 14.
We intend to further communicate 
the progress and implications 
of  this project to shareholders and
the financial community later in 
this financial year .
Heather McRae
Finance Director
Taxation
The 44% tax charge for the year is 
high. The significant losses incurred 
in overseas jurisdictions, where no
deferred tax asset is recognised for
those losses is a major contributing
factor to this rate. No tax asset has
been recognised as profits are not
budgeted for the current year . If we
exclude exceptional items and goodwill
amortisation from this calculation, 
the effective rate of tax reduces to 
31% (2003/04: 33%). The reduction 
of 2% in this rate since last year has been
influenced by the release of prior year
provisions which are no longer required.
Free cashflow
The free cashflow for the period 
was an outflow of £10.9m, compared
with an inflow of £9.1m last year . Three
factors contributed to this significant
change in the outflow of funds.
Firstly, operating profit excluding
depreciation was £6.6m below last year,
at £21.9m. There was also a £15.5m
outflow in working capital. Stocks
increased during the year because of the
new businesses acquired and contracts
secured during the year, in addition to
organic growth in the UK and overseas.
Trade debtors at £20.4m remained on
average at 31 days during the year, and
the increase reflects the increase in
business and new management and 
procurement business we are now
operating. Y ear end creditor days
represented an average of 44 days
compared with 46 days at the end of 
the previous year . 
Our investment in capital was £2.9m
higher than last year, and £6.1m higher
than depreciation. This expenditure
reflects the investments necessary to
support new contract wins, new bonded
stores facilities at Manchester for our
UK Flight Services business, and the
continued investment in our major IT
project for the retail business. 
As a result of the outflow in cash, we
ended the year with net debt of £19.3m
(2003/04: £1.9m net cash).
15
Alpha Airports Group Plc
Annual Report 2004/05 Directors’ biographies
16
Alpha Airports Group Plc
Annual Report 2004/05
1 Graham Frost (57)
Non-executive Chairman
Chairman of Nominations Committee
and member of Audit and Remuneration
Committees
Was appointed to the Board on 
3 April 2002. He is currently non-
executive Chairman of CHT Holdings
Ltd and Member of the Supervisory
Board of the Samlerhuset Group B.V.
He was previously Executive
Chairman of First Quench Retail,
Chief Executive of Argos plc and
Managing Director of Grattan plc.
2 Kevin Abbott (50)
Chief Executive 
Started his career with Schroders,
then spent sixteen years with
Redland Plc, eventually as Global
Roofing Director on the main board.
After a period as International
Packaging and main board Director
during Bowaters’ transition into
Rexam Plc, he joined Alpha Airports
Group Plc as Chief Executive in 1997.
In November 2004 he joined the
Board of Electrocomponents plc 
as a non-executive director .
3 David King (50)
Executive Director 
Was appointed to the Board on 
1 February 2003. He continues in 
his role as Managing Director, 
Alpha Airport Shopping (UK) and 
in addition has responsibility for
Alpha’s businesses in the US and
Asia. He is also a director of 
The UK Travel Retail Forum. 
4 Heather McRae (43)
Finance Director 
Joined Alpha Airports Group Plc 
as Corporate Finance & Treasury
Manager in 1996 after serving eight
years with Price Waterhouse where
she was audit and advisory manager
to Alpha through its period of
flotation. After a period as Alpha
Flight Services Divisional Finance
Director she was appointed to the
Board as Group Finance Director 
in June 2000.
5 Michel Ennesser (62)
Non-executive Director 
Was appointed to the Board in
October 2000. He is President and
Chief Executive Officer of Servair 
and was previously a senior vice
president of Air France. 
6 Lesley James CBE (56)
Independent non-executive Director
Chairman of Remuneration
Committee and Member of Audit 
and Nominations Committees
Was appointed to the Board on 
1 September 2002. She is currently 
a non-executive director of Liberty
International PLC, West Bromwich
Building Society, WBBS (SRS)
Limited, Care UK PLC and Trustee
Chairman of I Can Charity. She was
previously a director of Tesco PLC.
7 Terry Stannard (54)
Independent non-executive Director
Chairman of Audit Committee and
Member of Remuneration and
Nominations Committees
Was appointed to the Board on 
25 April 2002. He is currently a
director of Daniels Chilled Foods
Limited, International Cuisine
Limited, James Beattie Plc and
Bradford and Sons Limited. 
He was previously Chief Executive 
of Uniq plc, formerly Unigate plc, 
and has held senior executive
positions with Terranova Foods 
plc, Hillsdown Holdings Limited 
and United Biscuits plc.
1
2
3
4
5
6
7 17
Alpha Airports Group Plc
Annual Report 2004/05
Corporate Governance Report
Introduction
The Board is committed to high standards of corporate governance.
Following the publication of the revised Combined Code on Corporate
Governance in July 2003 (the “Code”), the Board has reviewed the
principles and provisions which should apply for reporting years
commencing after 1 November 2003. The report below and the
remuneration report on pages 22 to 26 describe the way in which the
principles detailed in this new Code are applied by the Company. As the
Company already conformed to many of the provisions of the 2003 Code,
fuller compliance has involved only minor changes to its procedures
during the year .
Board Membership
The Board is responsible for providing leadership and appropriate
controls over the running of the business. Strategy is developed and
determined by the Board and Company performance monitored against
the objectives set. The Board comprises the Chairman, three executive
directors and three non-executive directors, two of whom are
independent in accordance with the Code criteria. Brief biographies
of the directors are given on page 16. At the last review of Board
structure, it was decided that the balance of skills and experience
added value to the business and contributed to effective management.
The two roles of the Chairman and the Chief Executive are separate.
The Chairman has responsibility for the effective functioning of the
Board and ensuring appropriate strategic focus and direction for the
Company. The Chief Executive, supported by the senior executive team,
is responsible for day to day operations and the implementation of
Board policy and decisions.
The directors are encouraged to challenge and bring independent
judgement to bear on both strategic and operational matters.
Non-executive directors in particular monitor management performance
against agreed goals and maintain standards of corporate governance
and financial control. The Company is below the FTSE 350 and meets
the requirement to have at least two independent non-executive
directors on its Board and serving on the Audit and Remuneration
Committees. Any director may challenge Company policy and decisions
are taken democratically after discussion. Any concern which a director
felt was unresolved after discussion and asked to be recorded would be
noted in the minutes of the meeting. The Chairman held meetings with
the non-executive directors during the year to discuss matters relating
to Board performance without the executive directors being present.
Procedures were developed during the year for assessing the
performance of the Chairman and other non-executive directors and
for evaluating Board effectiveness. A review of Board performance was
carried out in the last quarter of the financial year . A questionnaire
was issued to Board members to assist in the evaluation of Board
effectiveness and the Chairman subsequently held one to one
meetings with directors to determine relevant recommended actions.
The executive directors are each subject to an annual performance
appraisal.
The directors have wide and varied commercial experience. All
directors are entitled to accept appointments outside the Group and
retain any fees received providing that the Chairman’s permission
is sought. 
There were no changes to the Board’s membership during the year .
All directors are required to retire every three years and, subject to
satisfactory performance, stand for re-election. No non-executive
director has been in office for more than five years. Succession planning
issues were discussed at the Board meeting in January 2005 and are
kept under review to help ensure that the Board has a suitable balance
of independence, experience and continuity. The letters of appointment
for the non-executive directors and the service contracts for executive
directors are available for inspection at the registered office during
normal business hours. 
There is a formal schedule of matters reserved for the Board. These
include business strategy, major capital expenditure and projects,
material contracts, significant investments and risk management
strategy. There is a day set aside annually specifically for discussions of
Group strategy. Major changes in policies for areas including health and
safety, employment, the environment, internal controls and the pension
scheme are reserved for the Board. Decisions about contracts, projects
and capital expenditure above pre-defined values must be made by
the Board and approval of significant new finance facilities, guarantees
or charges must be given by the Board. Responsibility for delivering
the Group’s objectives and running the business on a day to day basis
is delegated to the General Management Committee. In addition,
the Board has delegated certain of its governance responsibilities
to Board committees with clearly defined terms of reference.
Board Committees
Membership and Chairmen of the Board committees are shown below.
The terms of reference of the Audit, Nominations, Remuneration and
Treasury committees are reviewed annually by the Board and are
available from the Company Secretary on request.
The Audit Committee 
The Audit Committee met three times during the year and all
Committee members were present at every meeting. Mr Stannard
chairs the Committee and the other members are Ms James and
Mr Frost. The external auditors, the Finance Director, the Director of
Audit and Risk Management and senior members of the Company’s
finance team are invited to attend meetings. The Committee also meets
regularly alone with the external auditors so that there can be open and
honest discussion. All the members are financially literate independent
non-executive directors and believe that the Audit Committee
collectively has the financial capability to fulfil its obligations.
In addition to the internal control function described below, the
Committee considers and makes recommendations in connection
with the external auditors, dividends, external financial reporting and
internal audits. The Group’s accounting policies and practices are
reviewed at least annually and the accounts are examined before
publication, taking particular note of any significant financial reporting
judgements made. The Committee considers the appointment of the
external auditor and reviews the scope, adequacy and results of the
audit. A formal evaluation of the auditors’ performance is carried out
annually. A report of the Audit Committee business and conclusions is
usually given at the following Board meeting.
Consideration is given to the volume and type of non-audit services
provided by the external auditor in order that the independence of the
audit is safeguarded. Further details are given in note 3 to the accounts.
The auditors continue to operate procedures to safeguard against the
possibility that the auditors’ objectivity and independence could be
compromised. This includes the use of an independent review partner,
use of a technical review board (where appropriate) and annual
independence confirmations by all staff. The auditors report to the Audit
Committee on matters including independence and non-audit fees on an
annual basis. In addition, the role of the audit partner is rotated on a
periodic basis. The Company’s audit partner changed during the year .
Appropriate arrangements are in place for the investigation of any
concerns of possible improprieties raised within the Company and aformal policy called “Speaking Up” was approved during the year to
be circulated to all employees worldwide. 
The Nominations Committee
Succession planning issues have been identified by the Board for future
consideration by the Nominations Committee which did not meet
during the year . Its terms of reference include the authority to review
and make recommendations to the Board about executive and
non-executive director appointments. Any new appointment would be
made after a rigorous search and open and fair selection process.
Mr Frost chairs the Committee but would not chair the meeting if
succession planning for the role of Chairman were being considered.
The other members are the independent non-executive directors. 
The Remuneration Committee
The Remuneration Committee met six times during the year and all its
members were present at every meeting. The Committee is chaired by
Ms James and the other two members are Mr Frost and Mr Stannard. The
Report of the Remuneration Committee is included on pages 22 to 26. 
The General Management Committee 
The General Management Committee (“GMC”) comprises all the
executive directors together with the Group HR Director . It met nine
times during the year . Mr Abbott chairs the meetings and was present
at each meeting, Mr King missed one of the meetings and Ms McRae
attended all meetings. The Committee reviews transactions to be
proposed to the Board and has delegated authority to approve capital
expenditure, projects, investments and material contracts up to pre-
determined limits. In addition it reviews internal control procedures and
policies and makes recommendations to the Board. It also has authority
to determine changes in terms and conditions, pay and benefits to all
staff except executive directors and level one executives who report to
any of the directors. 
The Treasury Committee
The Treasury Committee is chaired by the Finance Director and met
twice during the year . It has authority to approve minor changes to bank
account facilities and letters of credit or guarantees up to a maximum
limit. The members are the executive directors and the Director of
Finance Services and there is a minimum quorum of two executive
directors.
Board Processes
There is a regular programme of eight Board meetings each year,
supplemented by additional meetings when required and meetings
held specifically for employee share scheme exercises. Mr Ennesser
was only able to attend one of the main Board meetings but had regular
meetings with the Chairman and Chief Executive throughout the year .
All the other directors attended the eight scheduled meetings, with the
exception of Ms James who was unable to attend one of the meetings.
The Board held four additional meetings during the year, all of which
were attended by the Chairman and at least one other independent
non-executive director with at least two executive directors present. 
Supporting papers for each Board agenda are circulated in advance
of meetings to ensure that Board members can make an effective
contribution. Papers, including management accounts, give detailed
information tailored to the needs of directors about the matters under
discussion and ongoing Company and Divisional performance. Further
information can be requested at any time from the Company’s
management and senior management are periodically invited to give
presentations to the Board. All new directors are given appropriate
induction training in the Group’s business and site visits to key locations
are regularly arranged for all directors. Further training is available on
request. The Chairman discusses prominent issues with the
non-executive directors in situations when it would be helpful to have
a separate discussion independently from the executive directors.
Independent professional advice is available to all directors at the
Company’s expense if required in connection with their duties and no
such advice was requested during the year . The Company Secretary
is available to give advice to all directors and ensures that Board
procedures are complied with. Appropriate insurance cover is in
place in case of legal action against the Company’s directors.
The Board considers the non-executive Chairman should be the
principal point of contact for shareholder concerns of whatever nature
to be conveyed but that any of the other non-executive directors may
also be contacted and has therefore decided not to separately nominate
a senior independent director . This decision is reviewed annually.
Shareholder Communication
The Company remains committed to good communication with its
shareholders and maintaining an open and proactive dialogue with
its institutional investors. The Chief Executive and Finance Director
normally attend all investor meetings and the Chairman attends the
briefings held with major institutional shareholders and analysts on the
Company’s announcements of full year and interim results. There is
an opportunity at the end of such briefings for the Chairman or other
non-executive director to meet alone with major shareholders so they
may communicate to him directly any concerns. The Chairman and
non-executive directors are free to attend any shareholder meetings or
enter into dialogue whenever they wish and are available for discussion
at the request of key investors. Reports of briefings with major or
potential shareholders are circulated to Board members afterwards.
A presentation is made by the Chief Executive at the Annual General
Meeting on the Group’s businesses, performance and future prospects,
for the benefit in particular of private investors, and shareholders are
encouraged to express their views and raise questions. They have the
opportunity to participate in informal discussions with Board members
after the meeting. The Chairman aims to ensure that all directors
including Committee Chairmen are available at the meeting to answer
relevant questions. Private investors are invited to submit concerns and
questions in advance which are reported to the Board and the Chairman
responds to the main themes from these at the meeting. Following the
report from Paul Myners to the Shareholder Voting Working Group
published in February 2004, a “vote withheld” box has been added to the
proxy card. Meeting documentation is mailed at least 20 working days
beforehand. The number of proxy votes cast for and against the
resolutions together with the number of votes withheld are reported
at the meeting and are available on request afterwards.
Financial Reporting
Detailed assessments of the performance and financial position of
each part of the Group appear in the divisional and financial reviews.
These, together with the Chairman’s review and the directors’ report on
page 20, present a balanced and clear assessment of the Company’s
position and prospects. The directors’ responsibility for the financial
statements are described on page 19.
Internal Control
The Board as a whole is responsible for the Group’s system of internal
control and for reviewing its effectiveness and has, accordingly, carried
out a review for the period 1 February 2004 to the date of this report. The
system of internal control is designed to ensure compliance with laws
and regulations, to create effective and efficient operations and to assist
in managing the Group’s exposure to significant risks. In establishing
this system, the directors review the nature of the Group’s businesses,
18
Alpha Airports Group Plc
Annual Report 2004/05
Corporate Governance Report continued including the impact and probability of potential risks and the cost of
controlling and mitigating associated losses. It therefore follows that
the system of control can only provide reasonable and not absolute
assurance and it is designed to manage rather than eliminate the risks
of failure to meet business objectives. 
The Board reviews the Group’s system of internal control, including its
financial, operational, compliance and risk management controls. The
Company’s system for identifying, evaluating and managing the
significant risks within the business includes a comprehensive annual
review by the Board, quarterly review meetings and an ongoing process
of continual risk assessment in accordance with the Turnbull guidance.
This process covers the Group’s subsidiaries; joint ventures in which the
Group does not have overall control are not treated, for these purposes,
as part of the Group. For these joint ventures, systems of internal
control are applied as agreed between the parties to the venture. There
is a Group framework of clearly defined structures and accountabilities
supported by appropriate policies and procedures. The Board receive a
comprehensive monthly update on the Group’s operational activities
and detailed monthly management accounts.
Internal controls are assessed throughout the year and amended where
appropriate to maintain alignment with the changing needs of the
business. 
The key components of the risk management structure were reviewed
at the annual Risk Management Forum which brings together senior
managers from all the Company’s businesses and was attended by the
Chairman of the Audit Committee and representatives from the
external auditors. The risk process is fully embedded in the business
and the monitoring and managing of risk is continually reviewed to
improve, enhance and simplify the process.
The key components in place to provide effective internal and financial
control are subject to ongoing review. These are:
• Control environment: Control is exercised through an organisation
structure with clearly defined levels of responsibility and authority
and appropriate reporting procedures, particularly with respect to
capital expenditure, investment, contractual commitments, granting
of guarantees and health and safety issues. 
• Financial reporting and information systems: The Board has a
comprehensive budgeting system with an annual budget approved
by the Board. Monthly trading results, balance sheets and cashflow
statements are reported against the corresponding figures for the
budget and the previous year with any significant variances examined
and explained by operating management and action taken as
appropriate.
• Risk management: Identification of major business risks is carried
out in conjunction with divisional management and appropriate steps
taken to monitor and mitigate risks.
• Monitoring system: A comprehensive system for measuring
compliance and risks is in place throughout the business.
The Group’s processes are subject to review by the risk-focused
internal audit department which reports to the Audit Committee.
Internal audit plans and twice yearly reports are reviewed by the Audit
Committee on behalf of the Board together with external audit plans
and management letters prepared by the external auditors. The scope
of work, authority and resources of internal audit are reviewed annually.
Going Concern Basis
The Group’s accounts have been prepared on the basis that the Group
is a going concern. In forming this view, the directors have reviewed
the Group’s budget for 2005/2006 and outline projections for the
subsequent year based on normal business planning and control
procedures. The directors have a reasonable expectation that the
Company and the Group have adequate resources to continue in
operation for the foreseeable future. The directors, therefore, continue
to adopt the going concern basis in preparing the accounts.
Directors’ Responsibilities Statement 
Company law requires the directors to prepare financial statements
foreach financial year which give a true and fair view of the state of
affairs of the Company and Group as at the end of the financial year and
of the profit or loss of the Group for that year . In preparing those
financial statements, the directors are required to:
• adopt suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable and prudent;
•state whether applicable accounting standards have been followed,
subject to any material departures disclosed and explained in the
financial statements;
•prepare the financial statements on the going concern basis unless it
is inappropriate to presume that the Group will continue in business.
The directors are responsible for ensuring that proper accounting
records are kept which disclose with reasonable accuracy the financial
position of the Company and Group at any time, and which enable them
to ensure that the financial statements comply with the Companies Act
1985. They are responsible for safeguarding the assets of the Company
and the Group and for taking reasonable steps to prevent fraud and
detect any other irregularities.
The directors are responsible for the maintenance and integrity of the
Alpha Airports Group Plc website, upon which the financial statements
will be available. Legislation in the United Kingdom governing the
preparation and dissemination of financial statements may differ from
legislation in other jurisdictions.
Compliance with Code Provisions
The Company seeks to uphold best practice in corporate governance.
The Board considers that it has complied throughout the year with the
principles set out in the Combined Code on Corporate Governance
published in July 2003 with the exception of the two points detailed
below. The report above gives an explanation of how the principles and
detailed provisions of section one of the Code have been applied by the
Company during the year . 
The Board has reviewed the provisions and considers that there are
two areas where the Company does not fully comply and further
explanation is therefore necessary. After consideration, it has been
decided not to appoint a separate senior non-executive director as
either of the two independent non-executive directors may be contacted
where there are concerns that cannot be discussed through the
Chairman who would be the usual principal contact. In connection with
the Smith Guidance on Audit Committees, the Chairman is currently a
member of the Audit Committee but he is not allowed to chair it and the
Company is compliant with the requirement to have two independent
non-executive directors on the Committee. Decisions about these
exceptions will be reviewed annually.
The Company continues to review its mechanisms for performance
evaluation of the Chairman, non-executives, Board and Committees
and may develop further the procedures which have been introduced
during the year . Committee terms of reference are not currently
available on the website but copies can be requested through the
website or directly from the Company Secretary. All other requirements
specified in section one of the Combined Code have been complied with.
19
Alpha Airports Group Plc
Annual Report 2004/05 The directors present their annual report and the audited financial
statements of the Company and the Group for the year ended
31 January 2005.
Principal Activities of the Group, Results and Future Prospects
The principal activities of the Group, its trading results, future
prospects and review of operations are described in the Chairman’s
Review, the Chief Executive’s Review, Divisional Reviews, the Financial
Review and the Accounts.
Directors
Profiles of the directors in office at 31 January 2005, who all served
throughout the year, are shown on page 16. Mr Stannard and Ms McRae
will retire by rotation at the forthcoming Annual General Meeting and,
being eligible, offer themselves for re-election. The Remuneration
Report on pages 22 to 26 includes details of service contracts and
letters of appointment and shows the interests of directors in share
options and ordinary shares of the Company. 
Significant Contracts
There were no contracts of significance as defined in the Listing Rules of
the Financial Services Authority subsisting during or at the end of the
year ended 31 January 2005 in which a director of the Company was
materially interested.
Dividends
An interim dividend of 1.0 pence per ordinary share was paid on
5November 2004. The directors recommend the payment of a final
dividend for the year ended 31 January 2005 of 3.0 pence per ordinary
share on 8 June 2005 to ordinary shareholders on the register at 6 May
2005 which, if approved, will result in a total dividend for the year of
4.0 pence per ordinary share.
Changes in Share Capital
At the Annual General Meeting on 3 June 2004, a resolution was passed
giving the Company the authority to make market purchases of ordinary
shares up to a maximum of 10% of the issued share capital. During the
year no market purchases have been made by the Company under this
authority which is due to expire at the forthcoming Annual General
Meeting. A resolution for its renewal will be proposed to the shareholders
at that meeting and is included in the Notice of Meeting on page 51.
Payments to Suppliers
The Company’s policy is to pay suppliers according to the agreed terms
and conditions of business under which transactions are conducted
provided that goods and services have been supplied in accordance with
the agreed terms. The Company is a holding company and therefore
does not have any trade creditors. The total amount of trade creditors
for the Group for the year end represents an average of 44 days
(2003/04: 46 days).
Substantial Shareholdings
As at the date of this report, the following were registered as being
interested in 3% or more of the Company’s issued share capital.
Number of % of Issued
ordinary shares Share Capital
Servair 46,616,666 26.80
Schroder Investment Management Ltd* 27,610,866 15.88
Aberforth Partners* 19,360,000 11.13
Morley Fund Management Ltd* 6,977,432 4.01
* Non-beneficial
Donations
The Group made no charitable donations (2003/04: £nil) and no political
donations (2003/04: £nil) during the year .
Directors’ and Officers’ Insurance
The Company maintains insurance in respect of its directors and
officers against liabilities they may incur in the performance of their
duties.
Employee Communication
During the year regular consultations and briefings took place with
employees and their representatives to increase their knowledge and
understanding of the Group’s performance and financial and economic
factors which affect it, as well as enabling the Group to take into account
the views of employees when making decisions. Feedback from
employees is actively encouraged and there is an annual employee
survey.
Equal Opportunities
The Group is committed to equality of opportunity and does not
discriminate between employees or potential employees on any
grounds and the requirements of all relevant employment legislation
are fully recognised. Due consideration is given to the recruitment,
promotion, training and working conditions of all staff including those
with disabilities. In the event of an employee becoming disabled, the
Group uses its best endeavours to ensure continuity of employment.
Pension Schemes
Alpha operates two main pension arrangements for its UK employees.
The Alpha Airports Group Pension and Life Assurance Plan (“the Plan”)
is a final salary related pension scheme which provides a benefit at
retirement age equal to either 1/45th, 1/60th or 1/80th of final salary for
each year of service. A life assurance benefit of three times earnings
and spouse’s and dependents’ pensions in the event of death are also
included in the membership of the Plan. Members contributions range
from 6% to 8% of pensionable salary dependant on the rate of accrual.
The Group closed the existing Plan to most new employees from
1 September 2001, and introduced a Stakeholder Pension Plan with
Legal & General. The Group matches employee contributions
dependent on length of service up to a maximum employer contribution
of 10% for at least ten years’ service and members of the Stakeholder
Plan are provided with a life assurance benefit of three times earnings.
Auditors
A resolution to re-appoint PricewaterhouseCoopers LLP will be
proposed at the forthcoming Annual General Meeting.
Annual General Meeting
The Annual General Meeting will be held on Thursday 2 June 2005 at
11.00am at the Conference Centre, Park Inn, Bath Road, Heathrow,
Middlesex UB7 0DU. The Notice convening the meeting is contained on
pages 51 to 52.
By Order of the Board
Heather McRae
Company Secretary
13 April 2005
20
Alpha Airports Group Plc
Annual Report 2004/05
Directors’ Report Corporate Social Responsibility Report
Effective social, environmental and ethical management continues to
be a joint effort between employees and management, with the Group
recognising it can only achieve its business objectives if its operational
activities reflect the environmental and social priorities of the
communities it serves.
Responsibility
As nominated by the Board, the Chief Executive is responsible for
maintaining effective social, environmental and ethical policies for the
Group. Policies are reviewed as a matter of importance at regular
intervals by the directors. The quarterly Health, Safety and Environment
and Risk Management review meetings continue to play a major part
in the regular review of performance throughout the Group; risks are
identified and appropriate policies and procedures are adopted in
accordance with industry best practice.
The Group’s compliance department monitors performance on a
regular basis and liaises closely with operational management to
ensure that policies are effective and reflect prevailing legislation.
Key issues are included in a monthly report circulated to the Board.
Performance Measurement
In support of the Group’s environmental and social policies, the Group
continues to use a self audit system which forms the basis of
performance measurement and continuous improvement. Unit self
audit analysis is continuously subject to internal verification by the
compliance department. On an annual basis, the compliance
management team produce internal annual reports on performance
measurement for trend analysis and to target improvements in the
forthcoming year which are linked to management appraisals. These
reports are presented to directors and senior management at the
quarterly review meetings. 
Statistical performance measurement on food safety, health and safety,
security, transport and facilities management is also included in the
monthly compliance report which is circulated to all senior Group
management for trend analysis and continual improvement targeting.
Flight Services is working with the HSE and the Airport Operators
Committee to develop benchmark accident statistics in relation to the
aviation industry and supporting services.
Development of Procedures
During the past year the compliance department formed a central food
safety committee comprising staff from all areas of the Group to review
and update the food safety HACCP system study. This was completed in
August and endorsed by the local government Home Authority Officer .
Revised company emergency procedures were produced and circulated
during the year .
An in-depth compliance audit of the Australian operations was
conducted mid-year by both the Group Health and Safety Manager and
the Group Security Manager . Following review of the reports by the
Chief Executive, the internal compliance structure in Australia has
been enhanced to reflect the needs of this growing business.
The compliance team have continued to work closely with the Health
and Safety Executive on improving airside safety and have agreed to a
programme of vehicle upgrade developments over the next five years to
ensure the fleet meet new safety standard designs as agreed with the
HSE by all flight caterers. This will assist in an industry reduction of
accidents involving falls from height.
Compliance Training
Regular internal training programmes are an important feature in the
Group’s approach to maintaining and continually improving compliance.
During 2004 the Group retained its formal accreditation with the Royal
Institute of Public Health and Hygiene for its national health and safety
training manual and in addition achieved formal accreditation to deliver
IOSH managing safely intermediate courses. The compliance training
department has delivered a series of internal courses for line
management during the year . In addition external support training on
food safety has been provided for contracted airline crews.
To further promote airside safety, the compliance department ran a
national airside safety campaign promoting safe systems of work and
the use of personal protective equipment when working airside. Airside
safety managers have been working alongside operational
management and individual airport authorities to support safe aircraft
turn-round management and risk assessment of various apron
standards, to minimise hazards and risks.
For the first time, the compliance department has provided external
audit management of third party flight catering companies, under the
banner of IFSM. Food safety audits to the AEA/IFCA world standard were
conducted both within the UK and overseas. This service was provided
for both BMI and Monarch Airlines and will continue next year .
Employees
Our employees are crucial to the success of every aspect of our
business. The annual employee survey not only provides valuable
information on how our teams feel about working for Alpha, but also
enables us to target areas which require improvement. 
The importance of training and developing employees as a key to
business success is recognised at all levels. The Group provides
training programmes both internally and externally, to support the
development of the business and its internal culture, to improve
business efficiency and safety, and to enable the Group to comply fully
with relevant legislation and local regulations.
The Group operates various incentive bonus schemes and recognition
programmes which are linked to profit performance at local, regional
and divisional level and individual performance. The majority of the
programmes focus on improving sales and profit, productivity and
customer service. Our award winning Alpha Heroes employee
recognition scheme has been extended to cover the whole of our UK,
Ireland and Jersey workforce with effect from the 2004/05 financial
year . In addition, the concept has been widened to our Asia business,
where the first Asia Heroes event takes place in April 2005.
In addition to its executive share option scheme, the Group has an
employee option allocation policy - Sharing in Success - for the purpose
of encouraging all employees to participate in the development of the
Group. As a reward system, grants are made annually to employees
based on length of service ranging from over 2 years to 30 years. For
those countries where it is appropriate, a deferred bonus scheme exists
to provide employees with a cash benefit equivalent to any gains they
would have received had they been granted normal share options.
Community issues
When Sri Lanka was hit by the Tsunami at the end of December 2004,
the management and staff of our operations in Sri Lanka immediately
offered practical assistance and were able to help in the relief work
around the island. Since then, a fund has been set up for employees
across the Group to contribute financially to help families on the island
and the Company has matched contributions made. The fund will
help rebuild a village to rehouse 15-20 families in the southern area
of the island. 
21
Alpha Airports Group Plc
Annual Report 2004/05
Corporate Social Responsibility Report Remuneration Report
This Report has been prepared by the Remuneration Committee on
behalf of the Board in accordance with the requirements of the
Directors’ Remuneration Report Regulations 2002 and the Listing Rules
of the Financial Services Authority. Shareholders will be asked to
approve the Committee’s Report at the 2005 Annual General Meeting.
The Remuneration Committee
The Remuneration Committee is chaired by Ms James, an independent
non-executive director . Mr Frost, the Company’s Chairman, and 
Mr Stannard, an independent non-executive director are the other two
members. None of the members have any personal interest in the
matters to be decided, other than as shareholders, and no day to day
involvement in the management of the Company. The Chief Executive
and the Group HR Director are invited to attend most of the Committee’s
meetings and give advice when required but they do not attend
discussions when decisions relating to their own remuneration are
being taken.
Remuneration Policy
The aim of the Committee is to establish a level of remuneration
sufficient to attract, retain and motivate executive directors and senior
managers of the highest calibre who have the experience and skills to
manage and develop the Group’s businesses. The Committee has
responsibility delegated to it to determine remuneration packages for
the executive directors of the Company and also those senior executives
reporting directly to the executive directors. Additionally it aims to
establish an appropriate overall framework for the remuneration of
Group employees and has an overview role in relation to Group
remuneration policy generally.
Reviews of the Group’s remuneration policy are carried out periodically
with advice from independent consultants as required to ensure that the
type and level of emoluments and incentive schemes are competitive in
the market place and are supportive of the Group’s business objectives
and the creation of shareholder value. Benchmarking comparisons are
made with the remuneration packages of similar jobs in a comparative
group of companies whose turnover or activities are similar to the
Group’s. Advice is available from Deloitte & Touche who have been
appointed by the Committee to provide remuneration consultancy
services and who are not engaged by the Company to provide any other
services. The Committee monitors developments in best practice and
consults with major shareholders when appropriate.
The Committee has developed a remuneration policy for executive
directors which includes a competitive base salary having regard to
levels of responsibility, experience and market comparatives.
Performance-related elements form a significant part of the total
remuneration package and include bonus payments linked to
challenging performance targets and an annual award of share options
to link the rewards of executives to the long term success of the Group.
The composition of total targeted remuneration is approximately 40%
performance related and 60% non-performance related for executive
directors and 100% non-performance related for non-executive
directors.
Remuneration Package
The Committee seeks to maintain an appropriate balance between
performance and non-performance related elements of the
remuneration packages in respect of each executive director and senior
manager . The components of the remuneration package comprise long
term and short term goals in four elements: base salary and benefits,
an annual performance bonus, share option incentive arrangements
and pension benefits as outlined below:
Base salary
Base salary is designed to recognise the executive director’s or senior
manager’s ongoing market value. Reviews of base salary are conducted
annually by the Committee having regard to the individual’s
performance, any changes to the level of responsibility and the practice
of similar companies. The Company also provides benefits such as
private healthcare and a car or car allowance. 
Details of directors’ remuneration during the year are shown on page 24
(Table 1).
Performance Bonus
The Company operates bonus schemes for executive directors and for
management. At the annual general meeting last year, approval was
given for the introduction of a new incentive bonus plan for executive
directors. This new plan increased the maximum level of bonus payable
to 50% of salary and stated that half the award of any amount payable
above 10% of salary would be paid in the form of shares to be held in
trust for three years. For the year ended 31 January 2005, the payment
of bonus was dependent on the Group achieving certain profit targets at
the full year with additional employee satisfaction criteria at unit level
determining the level of bonus paid. As the Group profit targets were not
met, no incentive bonus was payable for the year ended 31 January 2005
to any directors or employees. For the year ending 31 January 2006, the
payment of bonus will again be dependent on the Group achieving
specified levels of profit at the full year . Half of any profit above a
demanding target level will be available for bonus awards up to the
percentage of salary relevant to the individuals’ participation levels of
50% (directors), 25% (senior management) or 12.5% (other participating
employees). Individuals will only be eligible to receive a bonus if their
own business unit achieves its profit targets. 
Long-Term Incentives
Executive Share Option Scheme
The Company grants share options to executive directors and senior
management on an annual basis to incentivise long-term performance.
No payment is required on such grant and no share options are granted
at a discount. Cash options are granted to overseas executives and
unapproved share options may be satisfied in cash to manage the
Company’s share dilution limits. Exercise of options is subject to a
performance condition, in order to link the exercise of options with
sustained improvements in the financial performance of the Company.
Executive options granted before the annual general meeting in 2003
are subject to a performance condition that the growth in the Group’s
earnings per share (before exceptional items) must have exceeded by at
least 6% the growth in the retail price index over any three year period
beginning no earlier than the financial year in which the options were
granted. Under the Share Option Plan approved at the annual general
meeting in 2003, the Remuneration Committee review and select
appropriately challenging targets each time there is a grant of options.
After consideration of other measures, the Committee selected growth
in adjusted earnings per share (before goodwill amortisation and
exceptional items) as the most appropriate criteria for the Company as
it provides a direct link between rewards for executives and returns to
shareholders and encourages senior executives to identify with the
longer term results of the Company reflected in the share price. In
respect of options granted to executive directors and senior employees
during 2004/05, the performance target set after consultation with
major shareholders was that the growth in adjusted earnings per share
must exceed growth in the retail price index by a total of at least 9% over
the three year period ending 31 January 2007. After reviewing the
22
Alpha Airports Group Plc
Annual Report 2004/05
The Remuneration Report strategic plan for the following three years, the Committee decided
that in respect of options granted to executive directors and senior
managers during 2005/06, the performance target will be that the
growth in adjusted earnings per share (before goodwill amortisation
and exceptional items) must exceed growth in the retail price index by a
total of at least 36% over the three year period ending 31 January 2008.
If the condition is met, the options will become exercisable in full from
the third anniversary of the grant date. If the condition is not met for the
three year period specified for options granted in 2004 and 2005, no re-
testing will be allowed and the option will lapse. In the event of the early
exercise of options on a change of control or cessation of employment,
conditions will be time-apportioned unless the Committee considers it
appropriate to waive them in full or in part. Since 2004, eligible
executive directors have been granted a maximum number of options
equivalent to the value of one year’s salary per annum and this policy
will continue for future years. Senior management receive either 70,000
or 30,000 options depending on their level of seniority. The Chief
Executive, Mr Abbott, has not participated in the executive share option
scheme whilst his long term incentive plan has been in operation. He
became eligible to participate in share option grants made after the
announcement of preliminary results in 2005.
Employee Share Option Scheme
The Company also has an employee share option scheme in which all
employees including the executive directors are eligible to participate.
The Company makes annual share option awards at market price to
qualifying employees to recognise and reward length of service. The
level of award is determined by number of years in employment with the
Company and there are no other eligibility or performance criteria.
Long-Term Incentive Plan
A Long-Term Incentive Plan for the Chief Executive was approved in
2002 following consultation with a number of the Company’s larger
institutional investors. An award of 715,000 shares was accordingly
made under the Plan on 30 May 2002 and the shares acquired on the
open market during July in three tranches when the Company’s average
share price was 69 pence. Details of the award made to Mr Abbott are
shown on page 25 (Table 3) along with the challenging performance
conditions selected by the Committee as being the most appropriate
criteria at the time the award was made.
The earliest vesting date of the award was 1 February 2005 and the
quantity of shares due to Mr Abbott has been calculated in accordance
with the performance conditions. As the average share price for the
appropriate period was 90.1 pence, 16.6% of the total award has vested
and 118,773 shares have been transferred to Mr Abbott in accordance
with the share price performance criteria. As the earnings per share
target was not met, none of the award conditional on this criteria has
vested. A total of 16.6% of the total award has therefore vested and the
remainder will lapse.
There are no plans to make any further awards under the 2002 Long
Term Incentive Plan arrangements.
Pension Benefits
All of the executive directors participate in the Alpha Airports Group
Pension and Life Assurance Plan (“the Plan”). This is a contributory
defined benefit scheme. The executive directors are eligible for
membership of the executive section of the Plan which provides for
retirement at the age of 60 with a maximum pension, after 20 years’
service, equivalent to two-thirds of the highest year’s pensionable
salary in the five years ending on retirement. It also provides a lump
sum death in service benefit of four times pensionable salary, a
spouses’ pension of four-ninths of pensionable salary or two thirds of
prospective pension.
Pensions are guaranteed to increase at the rate of 5% per annum or
inflation if less (3% per annum or inflation if less for benefits earned
before 6 April 1997). Following advice from the Plan’s actuary the
Company pays a contribution rate equivalent to 13.1% of capped
pensionable salary (additional to the members’ contribution which is
8% from 1 August 2003). 
In 1997, the Company established a Funded Unapproved Retirement
Benefit Scheme (“FURBS”) to provide executive directors affected by the
earnings cap (£102,000 per annum for the 2004/05 tax year) with
benefits equivalent to those which would be provided by the executive
section of the Plan if the earnings cap did not apply. The Committee is
considering the planned changes to pension legislation and will make
appropriate arrangements for the pension provision for executive
directors and other senior management after reviewing
recommendations from the Company’s pension consultants and good
practice guidelines.
Details of directors’ pension benefits and the additional pension
entitlements earned during the year ended 31 January 2005 which
accrued for them under FURBS are shown on page 26 (Table 4).
Performance Graph
The line graph shown below illustrates the Company’s total
shareholder return for the past five years compared to the average total
shareholder return achieved by the companies making up the FTSE
Small Cap index over the same period. The Committee selected the
FTSE Small Cap index as the most appropriate comparator group for
this purpose as it is a widely used and understood index of broadly
similar size UK companies to the Company.
Total Return Indices 
2000 2001 2002 2003 2004 2005
40
60
80
100
120
140
160
180
200
Alpha Airports Group Plc Source: Datastream
FTSE  Small Cap Index
23
Alpha Airports Group Plc
Annual Report 2004/05 Table 1: Directors’ Remuneration
Aggregate emoluments of the directors of the Company are set out in Note 6 to the Accounts on page 35.
Total remuneration
Salary
(excl pensions)
2004/05 Fees Benefits 2004/05 2003/04 
Notes £000 £000 £000 £000 £000
Executive
K A Abbott 300 – 16 316 361
D W King 185 – 11 196 194
H L McRae 175 – 12 187 199
R W Stephenson 3–––– 545
Non-Executive
G E Frost – 80 – 80 80
M Ennesser 4 – 21 – 21 20
L James – 32 – 32 30
T G Stannard – 32 – 32 30
Sir Hugh Bidwell 5–––– 22 
660 165 39 864 1,481
Notes
1 The value of the benefits in kind received during the year relates principally to the provision of company cars, life assurance and medical expenses
cover . 
2 No taxable expense allowances were paid to the directors during the year .
3 Mr Stephenson left the business on 19 January 2004. 
4 £11,833 of Mr Ennesser’s fees were paid direct to SERVAIR.
5 Sir Hugh Bidwell retired as a director with effect from 31 March 2003.
6 No bonuses were paid to the directors for the year ended 31 January 2005.
24
Alpha Airports Group Plc
Annual Report 2004/05
Directors’ Service Contracts
The Company’s policy is that executive directors should have rolling
service contracts with an indefinite term providing for a maximum of
one year’s notice. Normal termination payments under directors’
contracts are not intended to exceed 100% of annual basic salary plus
any bonus, in line with the one year notice period. 
Under Mr Abbott’s contract dated 4 June 1998, Ms McRae’s contract
dated 1 March 2003 and Mr King’s letter of appointment dated
31 January 2003, the Company must give 12 months’ notice to terminate
the agreement and pay salary and contractual benefits in respect of that
period. In the event of early termination, the Company’s policy is to act
fairly in all circumstances and to take the duty to mitigate into account.
Neither Ms McRae nor Mr King are entitled to receive pre-determined
amounts of compensation. The Committee are currently reviewing the
contractual arrangements for Mr Abbott, the Chief Executive, whereby a
sum equal to 125% of annual salary plus any unpaid but accrued bonus
would be payable to him in the event of a take-over or acquisition of the
Company which resulted in his loss of office or status. The Committee is
reviewing a model contract suitable for introduction to all the executive
directors in due course. The model would comply with good practice for
executive service contracts.
External Appointments
The Board believes that a non-executive directorship of a company
outside the Alpha Group can provide executive directors with valuable
experience beneficial to the Company. During the year, Mr Abbott took
up a non-executive appointment with Electrocomponents plc and will
receive and retain fees of £36,000 per annum for this role.
Non-Executive Directors
None of the non-executive directors have service contracts. The
Chairman and independent non-executive directors were each
appointed for an initial three year term and renewal of their
appointments for a further three years has been approved. Michel
Ennesser is a non-independent non-executive director and was re-
appointed for a second term of three years from 21 September 2003,
subject to Servair continuing to hold at least 25% of the Company’s
issued ordinary share capital. Each non-executive director is entitled
to receive notice in the event of termination under their letters of
appointment and the Company’s policy is that such notice periods
should not exceed one year . Mr Frost is entitled to 12 months notice and
Mr Stannard, Ms James and Mr Ennesser are each entitled to 6 months
notice. The Board is responsible for setting non-executive directors’
fees and these are reviewed annually with regard to the director’s
knowledge and experience, market norms and the duties and time
commitment required. The non-executive directors are not eligible to
participate in the share option plan or long term incentive plan, nor in
any Company pension arrangement. 
The Remuneration Report continued Table 2: Directors’ Interests in Share Options
Number of Granted Exercised Number of Earliest Latest
options at during during options at Exercise exercise exercise
Note 31 Jan 2004 year year 31 Jan 2005 price date date
K A Abbott 564,972 – – 564,972 88.5p 10 Oct 2000 9 Oct 2007
300,000 – – 300,000 57.0p 29 Jul 2002 28 Jul 2009
300,000 – – 300,000 42.5p 12 Apr 2003 11 Apr 2010
2 200 – – 200 42.5p 26 Oct 2003 25 Oct 2010
200,000 – – 200,000 69.5p 04 Apr 2005 3 Apr 2012
2 200 – – 200 59.5p 28 Mar 2006 27 Mar 2013
2 600 – – 600 81.5p 23 Oct 2006 22 Oct 2013
D W King 50,000 – – 50,000 56.5p 30 Mar 2004 29 Mar 2011
50,000 – – 50,000 69.5p 4 Apr 2005 3 Apr 2012
2 200 – – 200 62.5p 7 Nov 2005 6 Nov 2012
120,000 – – 120,000 59.5p 28 Mar 2006 27 Mar 2013
2 200 – – 200 59.5p 28 Mar 2006 27 Mar 2013
– 241,830 – 241,830 76.5p 26 Mar 2007 25 Mar2014
H L McRae 30,000 – – 30,000 106.5p 15 Oct 1999 14 Oct 2006
35,926 – – 35,926 81.0p 30 Oct 2000 29 Oct 2007
50,000 – – 50,000 57.0p 29 Jul 2002 28 Jul 2009
2 200 – – 200 57.0p 29 Jul 2002 28 Jul 2009
50,000 – – 50,000 42.5p 12 Apr 2003 11 Apr 2010
100,000 – – 100,000 56.5p 30 Mar 2004 29 Mar 2011
2 300 – – 300 46.5p 25 Oct 2004 24 Oct 2011
100,000 – – 100,000 69.5p 4 Apr 2005 3 Apr 2012
120,000 – – 120,000 59.5p 28 Mar 2006 27 Mar 2013
2 500 – – 500 59.5p 28 Mar 2006 27 Mar 2013
– 228,758 – 228,758 76.5p 26 Mar 2007 25 Mar 2014
Notes:
1 The middle market price of the Company’s shares as at 31 January 2005 was 88.5p, with a range during the year of 71p to 95.5p.
2Granted under the employee share option scheme. All other options are under the executive share option scheme.
3 No options held by the directors lapsed unexercised since 31 January 2004.
4 All options are normally exercisable at any time on or after the third, but not later than the tenth anniversary of the date on which the option was
granted.
5 No options were exercised during the year .
6 On 1 April 2005, the Company granted executive share options at an exercise price of 95p. Mr Abbott received 347,368, Mr King 242,105 and
Ms McRae 210,526.
7 As at the date of this report, there have been no other changes in directors’ interests in share options from those disclosed above.
Table 3: Directors’ Interests in the Long Term Incentive Plan
Number at Awarded Vested Number at Performance
Award date 31 January 2004 during year during year 31 January 2005 Vesting date conditions
K A Abbott 30 May 2002 715,000 – – 715,000 1 February 2005 Note 1
Note:
1Vesting of the award was conditional on earnings per share (EPS) and share price performance criteria being met and the payment of £1 by the
executive. If adjusted EPS (before goodwill amortisation and exceptional items) for the year ending 31 January 2005 calculated on a basis
consistent with current accounting policies had been 11p or more, then 50% of the award would have vested. If such adjusted EPS had been 9p,
16.5% of the award would have vested. At adjusted EPS levels of between 9p and 11p, the proportion of the award vesting would have been
calculated on a straight line basis. If the Company’s share price averaged over the period 1 December 2004 to 31 January 2005 had been 120p or
more, 50% of the award would have vested. If such average share price had been 90p, 16.5% of the award would have vested. At levels of between
90p and 120p, the proportion of the award vesting was calculated on a straight line basis. Since 1 February 2005, 16.6% of the award has vested
and 118,773 shares have been transferred to Mr Abbott. The remainder of the award will lapse.
25
Alpha Airports Group Plc
Annual Report 2004/05 Table 4: Pension Benefits
Additional accrued Inflationary Total increase Accrued
benefit earned in the increase in accrued in accrued benefit benefit at
year (excluding inflation) benefit over the year over the year 31 January 2005 
111111111111 111111111111 111111111111 111111111111
Age at Main FURBS Main FURBS Main FURBS Main FURBS
31 January 2005 £pa £pa £pa £pa £pa £pa £pa £pa
K A Abbott 50 1,693 6,580 324 944 2,017 7,524 12,467 37,987
D W King 50 5,337 1,000 325 0 5,662 1,000 16,150 1,000
H L McRae 42 4,569 1,515 783 0 5,352 1,515 30,600 1,515
Director’s Increase in transfer
Transfer value at Transfer value at Increase in contributions over value less directors
31 January 2005 31 January 2004 transfer value the year contributions
111111111111 111111111111 111111111111 111111111111 111111111111
Main FURBS Main FURBS Main FURBS Main Main FURBS
££££££ £££
K A Abbott 166,375 401,532 123,536 296,583 42,839 104,949 5,401 37,438 104,949
D W King 169,957 10,109 90,985 0 78,972 10,109 12,885 66,087 10,109
H L McRae 246,205 11,068 170,565 0 75,640 11,068 10,468 65,172 11,068
Notes:
1 None of the Directors contributed to FURBS during the year .
2 The FURBS provides benefits in lump sum form, but these have been notionally converted into pensions in the above table for ease of comparison.
3 The transfer values in the above table have been calculated in accordance with “Retirement Benefit Schemes – Transfer Values (GN11)” as
published by the Institute and Faculty of Actuaries. This guidance led to an agreed change in the transfer value methodology. To ensure
consistency with the 31 January 2005 transfer value amounts, the 31 January 2004 transfer value figures have been re-worked based on this
updated method.
4 Inflationary increases over 2004/05 have been based on an inflation rate of 3.1%.
5 The accrued pension entitlements for Ms McRae have been recalculated as at 31 January 2004 and 31 January 2005 based on updated
information for pensionable earnings over the last four Plan Years. The updated 31 January 2004 accrued pension figure is slightly lower than that
given in last year’s disclosures as the previous amounts were based on estimated average pensionable salary. Updated salary information for
Mr King has also been used but has had no effect on the deferred pensions in the table because his benefits from the Plan that accrued before he
joined the Executive Section are subject to the earnings cap.
Table 5: Directors’ Beneficial Interests in Ordinary Shares
Number of shares as at Number of shares as at
31 January 2005 31 January 2004
G E Frost 20,000 20,000
K A Abbott 220,964 220,964
D W King 10,000 10,000
H L McRae 1,000 1,000
M Ennesser ––
L James 19,000 19,000
T G Stannard ––
Note:
1 On 31 March 2005, 118,773 shares were transferred to Mr Abbott under his LTIP arrangements.
2 As at the date of this report, there have been no other changes in directors’ interests in shares from those disclosed above.
Under Part 3 of Schedule 7A of the Companies Act 1985, Tables 1 to 4 above, including notes thereto, are subject to audit. The other parts of this
report are not subject to audit.
Lesley James
Chairman of the Remuneration Committee
13 April 2005
26
Alpha Airports Group Plc
Annual Report 2004/05
The Remuneration Report continued We have audited the financial statements which comprise the Group
profit and loss account, the Group and Company balance sheet, the
Group cash flow statement, the statement of total recognised gains and
losses and the related notes. We have also audited the disclosures
required by Part 3 of Schedule 7A to the Companies Act 1985 contained
in the directors’ remuneration report (“the auditable part”).
Respective responsibilities of directors and auditors
The directors’ responsibilities for preparing the annual report and the
financial statements in accordance with applicable United Kingdom law
and accounting standards are set out in the statement of directors’
responsibilities. The directors are also responsible for preparing the
directors’ remuneration report.
Our responsibility is to audit the financial statements and the auditable
part of the directors’ remuneration report in accordance with relevant
legal and regulatory requirements and United Kingdom Auditing
Standards issued by the Auditing Practices Board. This report, including
the opinion, has been prepared for and only for the Company’s members
as a body in accordance with Section 235 of the Companies Act 1985 and
for no other purpose. We do not, in giving this opinion, accept or assume
responsibility for any other purpose or to any other person to whom this
report is shown or into whose hands it may come save where expressly
agreed by our prior consent in writing.
We report to you our opinion as to whether the financial statements give
a true and fair view and whether the financial statements and the
auditable part of the directors’ remuneration report have been properly
prepared in accordance with the Companies Act 1985. We also report to
you if, in our opinion, the directors’ report is not consistent with the
financial statements, if the Company has not kept proper accounting
records, if we have not received all the information and explanations we
require for our audit, or if information specified by law regarding
directors’ remuneration and transactions is not disclosed.
We read the other information contained in the annual report and
consider the implications for our report if we become aware of any
apparent misstatements or material inconsistencies with the financial
statements. The other information comprises only the Directors’
Report, the unaudited part of the Remuneration Report, the Chairman’s
Review, the Chief Executive’s Review, Divisional Reviews, the Financial
Review and the Corporate Governance Statement.
We review whether the corporate governance statement reflects the
Company’s compliance with the nine provisions of the 2003 FRC
Combined Code specified for our review by the Listing Rules of the
Financial Services Authority, and we report if it does not. We are not
required to consider whether the board’s statements on internal control
cover all risks and controls, or form an opinion on the effectiveness of
the Group’s or Company’s corporate governance procedures or its risk
and control procedures.
Basis of audit opinion
We conducted our audit in accordance with auditing standards issued by
the Auditing Practices Board. An audit includes examination, on a test
basis, of evidence relevant to the amounts and disclosures in the
financial statements and the auditable part of the directors’
remuneration report. It also includes an assessment of the significant
estimates and judgements made by the directors in the preparation of
the financial statements, and of whether the accounting policies are
appropriate to the Company’s circumstances, consistently applied and
adequately disclosed.
We planned and performed our audit so as to obtain all the information
and explanations which we considered necessary in order to provide us
with sufficient evidence to give reasonable assurance that the financial
statements and the auditable part of the directors’ remuneration report
are free from material misstatement, whether caused by fraud or other
irregularity or error . In forming our opinion we also evaluated the
overall adequacy of the presentation of information in the financial
statements.
Opinion
In our opinion:
• the financial statements give a true and fair view of the state of affairs
of the Company and the Group at 31 January 2005 and of the profit
and cash flows of the Group for the year then ended;
• the financial statements have been properly prepared in accordance
with the Companies Act 1985; and
• those parts of the directors’ remuneration report required by Part 3
of Schedule 7A to the Companies Act 1985 have been properly
prepared in accordance with the Companies Act 1985.
PricewaterhouseCoopers LLP
Chartered Accountants and Registered Auditors
Harman House
1 George Street
Uxbridge
Middlesex UB8 1QQ
13 April 2005
27
Alpha Airports Group Plc
Annual Report 2004/05
Independent Auditors’ Report to the Members of Alpha Airports Group Plc Before Exceptional
Exceptional Items
Items (Note 3.2) Total Total
2005 2005 2005 2004
Notes £m £m £m £m
Turnover (including share of joint venture) 2 497.2 – 497.2 440.9 
Less share of turnover of joint venture (9.4) – (9.4) – 
Turnover 487.8 – 487.8 440.9 
Cost of sales (315.1)(2.3)(317.4) (281.5)*
Gross profit 172.7 (2.3) 170.4 159.4 
Administration expenses before goodwill amortisation (153.2)(2.4)(155.6) (137.6)
Amortisation of goodwill (2.9) – (2.9) (3.2)
(156.1)(2.4)(158.5) (140.8)
Group operating profit 3 16.6 (4.7) 11.9 18.6 
Income from interests in associated undertakings 4 1.0 – 1.0 0.5 
Associated undertakings goodwill amortisation 4 (0.3) – (0.3) (0.4)
0.7 – 0.7 0.1 
Profit on part disposal of subsidiary undertaking  
– continuing operations 3.2 – 0.3 0.3 –
Profit on disposal of associate 3.2 – 0.4 0.4 –
Profit on ordinary activities before interest and taxation 17.3 (4.0) 13.3 18.7
Interest receivable and similar income ––– 0.1
Interest payable and similar charges 8 (1.6) – (1.6) (1.4)
Profit on ordinary activities before taxation 2 15.7 (4.0) 11.7 17.4
Taxation on profit on ordinary activities 9 (5.9) 0.8 (5.1) (6.7)
Profit on ordinary activities after taxation 9.8 (3.2) 6.6 10.7 
Minority interest (equity) (2.3) – (2.3) (1.6)
Profit for the financial year 7.5 (3.2) 4.3 9.1
Equity dividends 10 (7.0) – (7.0) (6.5)
Retained (loss)/profit for the financial year 22 0.5 (3.2)(2.7) 2.6
Earnings per share 11 2.49p 5.33p
Diluted earnings per share 11 2.46p 5.28p
All results relate to continuing operations.
* The results for the year ended 31 January 2004 included net pre-tax exceptional charges of £0.7m as explained in Note 3.2.
Statement of total recognised gains and losses
for the year ended 31 January 2005
2005 2004
£m £m 
Profit for the financial year 4.3 9.1
Currency translation differences on foreign currency net assets and certain loans (0.9) 0.2
Total recognised gains for the year 3.4 9.3
There are no material differences between the reported results for the current and prior year and the results for those years on an historical cost
basis.
28
Alpha Airports Group Plc
Annual Report 2004/05
Group Profit and Loss Account
for the year ended 31 January 2005 Group Company
11111111111111111 111111111111111111
2005 2004 2005 2004
(restated)* (restated)*
Notes £m £m £m £m
Fixed assets
Intangible assets 12 11.5 11.3 – –
Tangible assets 13 58.4 56.0 – –
Investments in subsidiaries – – 201.0 201.0
Investments in associate 14.1 0.5 3.7 – –
Interest in joint venture:
– share of gross assets 6.6 – – –
– share of gross liabilities (5.6) – – –
– goodwill arising on acquisition 4.7 – – –
14.2 5.7 – – –
76.1 71.0 201.0 201.0
Current assets
Stocks 15 32.1 22.5 – –
Debtors 16 38.5 28.2 57.3 47.6
Cash at bank and in hand 17 10.8 8.6 – – 
81.4 59.3 57.3 47.6
Creditors: amounts falling due within one year
Bank and other borrowings 17 (30.1) (6.7) (26.6) (20.3)
Other creditors 18 (69.7) (62.5) (18.2) (12.8)
(99.8) (69.2) (44.8) (33.1)
Net current (liabilities)/assets (18.4) (9.9) 12.5 14.5
Total assets less current liabilities 57.7 61.1 213.5 215.5
Creditors: amounts falling due after one year 25 (0.5) – – –
Provisions for liabilities and charges 19 (1.8) (5.9) – –
Total net assets 2 55.4 55.2 213.5 215.5
Capital and reserves
Called up share capital 21 17.4 17.2 17.4 17.2
Share premium account 21 43.7 42.6 43.7 42.6 
Capital redemption reserve 21 0.4 0.4 0.4 0.4
Other reserves 22 – – – 152.3
Profit and loss account 22 (8.5) (6.3)* 152.0 3.0*
Shareholders’ funds 23 53.0 53.9 213.5 215.5
Minority interests (equity) 2.4 1.3 – –
Capital employed 55.4 55.2 213.5 215.5
* Amounts for the year ended 31 January 2004 have been restated as a result of the adoption of UITF 38 “Accounting for ESOP Trusts” (see Note 1).
The financial statements on pages 28 to 50 were approved by the Board on 13 April 2005.
Kevin Abbott Heather McRae
Chief Executive Finance Director
29
Alpha Airports Group Plc
Annual Report 2004/05
Balance Sheets
at 31 January 2005 2005 2004
Notes £m £m
Net cash inflow from operating activities 24.1 13.4 31.1
Dividends received from associates 14.1 0.2 0.2
Dividends received from joint ventures 14.2 0.1 –
Returns on investments and servicing of finance
Interest received – 0.1
Interest paid (1.6) (1.5)
Dividends paid to minority shareholders in subsidiary undertakings (2.2) (1.1)
Net cash outflow from returns on investments and servicing of finance (3.8) (2.5)
Taxation (4.7) (6.5)
Capital expenditure and financial investment
Purchase of tangible fixed assets (16.2) (13.6)
Disposal of tangible fixed assets 0.1 0.4
Net cash outflow from capital expenditure and financial investment (16.1) (13.2)
Acquisitions and disposals
Purchase of joint venture/associates 25 (2.9) (0.7)
Purchase of business 25 (4.2) –
Cash acquired on purchase of business 25 0.4 –
Part disposal of subsidiary undertaking – continuing operations 26 1.7 –
Disposal of associate 26 0.5 –
Net cash outflow from acquisitions and disposals (4.5) (0.7)
Equity dividends paid to members (6.6) (6.2)
Net cash (outflow)/inflow before use of liquid resources and financing (22.0) 2.2
Financing
Increase/(decrease) in unsecured loans less than 1 year 24.2 21.1 (3.0)
Issue of ordinary shares 1.3 0.2
Net cash inflow/(outflow) from financing 22.4 (2.8)
Increase/(decrease) in cash 24.2 0.4 (0.6)
30
Alpha Airports Group Plc
Annual Report 2004/05
Group Cash Flow Statement
for the year ended 31 January 2005 1 Accounting policies
The Board has reviewed the accounting policies set out below and considers them to be the most appropriate to the Group’s business activities.
(1) Basis of accounting
These financial statements have been prepared under the historical cost convention and in accordance with the Companies Act 1985 and
applicable accounting and financial reporting standards. The accounting policies are the same as those used last year, except for the adoption by
the Group of UITF 38 ”Accounting for ESOP Trusts” during the year . The effects on the Group’s profit and loss account and balance sheet of adopting
UITF 38 are shown in Note 22.1.
In respect of Retirement Benefits, in accordance with the transitional arrangements permitted by FRS 17, the Group’s results do not include the
effect of fully implementing FRS 17 but Note 7 illustrates the impact on the Group’s profit and loss account, balance sheet and reserves for the year
ended 31 January 2005 as if FRS 17 were fully implemented.
(2) Basis of consolidation
The Group accounts for the year ended 31 January 2005 include the accounts of Alpha Airports Group Plc and all of its subsidiary undertakings, and
the relevant proportion of the results of associates, accounted for on an equity basis, in which the Group holds a long term equity interest and over
which it exercises significant influence and the share of gross equity of joint ventures.
(3) Accounting for acquisitions
The results of businesses acquired are consolidated from the effective date of acquisition using acquisition accounting, whereby the acquisition of
a business or an associate cost is allocated to the fair value of net tangible assets after adjustments to bring accounting policies in line with those of
the Group.
(4) Goodwill
Goodwill arising on acquisitions is capitalised and amortised on a straight line basis through the profit and loss account over its useful economic
life not exceeding 20 years and is subject to regular impairment review. Goodwill arising on acquisitions prior to 1 February 1998 was written off
direct to reserves upon acquisition. On disposal or closure of a business goodwill previously written off to reserves is charged to the profit and loss
account.
(5) Turnover
Turnover represents the amounts receivable for goods sold and services provided, net of discounts and excluding VAT and similar sales taxes. 
In respect of goods sold, turnover is recognised at the point of sale to the customer in the Group’s Retail or Retail Catering outlets, or on-board
aircraft in the case of inflight sales. 
For the supply of airline catering services, turnover is recognised at the point of delivery of meals and drinks to the aircraft.
In respect of management service contracts, fee income is accrued during the year as services are provided to the customer .
(6) Onerous contracts
Where the benefits to be derived from a contract are lower than the unavoidable costs of meeting the Group’s obligation under the contract, a
provision is recognised. The provision is stated at the discounted present value of the future net cash outflows expected to be incurred in respect of
the contract.The provision is utilised as cash outflows are incurred under the contract and an amount is charged to the profit and loss account for
interest incurred on the unwinding of the discounted provision over time.
(7) Fixed assets
All fixed assets are stated at cost less depreciation. Cost includes all relevant external expenditure incurred in acquiring the asset. In connection
with the introduction of new systems, costs are capitalised once the Group is committed to the implementation.
The Group selects its depreciation rates carefully and reviews them regularly to take account of any changes in circumstances. When determining
expected economic lives, the Group considers the expected rate of technological developments and the intensity at which the assets are expected
to be used. All assets are subject to annual review and where necessary, further provision is made for any impairment in value.
In line with the above depreciation policy, freehold properties are amortised over a period of 50 years and leasehold properties amortised over the
unexpired lease term. Depreciation is provided on other assets on a straight line basis at annual rates estimated to write-off their book values over
their expected economic lives. The depreciation rates range from 10-15 years for plant and machinery and 4-10 years for furniture and equipment.
Costs incurred in respect of new systems are written off in equal annual instalments over the expected useful life of the system, commencing in the
year in which the benefits arise.
Assets under construction are not depreciated until they are ready for use, when they are transferred to the relevant asset class and depreciated
over their useful economic lives.
31
Alpha Airports Group Plc
Annual Report 2004/05
Notes to the Accounts (8) Leases
Where a Group company enters into a lease which entails taking substantially all the risks and rewards of ownership of an asset, the lease is
treated as a “finance lease”. The asset is recorded in the balance sheet as a tangible fixed asset and is depreciated over its estimated useful life or
the term of the lease, whichever is shorter . Future instalments under such leases, net of finance charges, are included within creditors. Rentals
payable are apportioned between the finance element, which is charged to the profit and loss account, and the capital element which reduces the
outstanding creditor .
(9) Stocks
Stocks are stated at the lower of cost and net realisable value. Provision is made, where necessary, against slow moving and obsolete stocks.
(10) Taxation, including deferred taxation
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where the
transactions or events that result in an obligation to pay more tax in the future or a right to pay less tax in the future have occurred at the balance
sheet date. Timing differences are differences between the Group’s taxable profit and its results as stated in the financial statements.
Deferred tax is measured using the average tax rate that is expected to apply in the period in which the timing differences are expected to reverse.
An asset is not recognised where the transfer of economic benefits in the future is uncertain. Deferred tax assets and liabilities recognised have not
been discounted.
Provision is made for the tax that could be payable (taking account of any double tax relief) on any future remittance of the past earnings of a
subsidiary or associate, only to the extent that dividends have been accrued as receivable, or there is a binding agreement for the subsidiary or
associate to distribute past earnings in the future.
A net deferred tax asset is recognised as recoverable and therefore recognised only when, on the basis of all available evidence, it can be regarded
as more likely than not that there will be suitable taxable profits against which to recover carried forward tax losses and from which the future
reversal of underlying timing differences can be deducted.
(11) Foreign currencies
The profit and loss accounts and cash flows of overseas subsidiaries and associates are translated into sterling at average rates of exchange
during the accounting period. Overseas net assets and UK loans denominated in foreign currencies are expressed in sterling at the rates of
exchange ruling at the balance sheet date.
Exchange differences arising on the retranslation, at closing rates, of the opening balance sheets of overseas subsidiaries and associates,
together with the year end adjustment to closing rates of profit and loss accounts translated at average rates, are taken to reserves.
Exchange differences arising in the normal course of trading and on the translation of monetary assets and liabilities are dealt with in the profit and
loss account. Differences arising on the translation of foreign currency borrowings are taken directly to reserves where there is a corresponding
exchange difference on the translation of the related net investment in overseas subsidiaries and associates.
The Group uses forward foreign exchange contracts to hedge its foreign exchange transaction exposure. Gains and losses are recognised on
maturity of the underlying transaction.
(12) Interest rate transactions
Interest receipts and payments due under interest rate swap agreements used to manage the interest rate exposure on borrowings and
investments are accrued so as to match the net costs with the related finance income and expense.
(13) Pensions and other post-retirement benefits
Where there is a defined benefit scheme, the cost of providing pensions and other post-retirement benefits is charged against profits on a
systematic basis, with pension surpluses and deficits arising being allocated over the expected remaining service lives of current employees.
The differences between the amounts charged in the profit and loss account and payments made to the pension scheme are treated as assets
and liabilities. The pension cost is assessed in accordance with the advice of qualified actuaries. For the defined contribution schemes, costs
are charged to the profit and loss account as incurred.
The Group continues to comply with the transitional arrangements permitted by FRS 17 “Retirement Benefits”.
(14) Investments
Investments in subsidiary undertakings are stated at historic cost less any required provision for impairment. The Directors review the carrying
value of the Group’s investments in subsidiary undertakings at least annually or whenever an event occurs that would indicate a possible
impairment.
(15) Long Term Incentive Plan (“L TIP”)
Until the shares held by the trust vest unconditionally to employees, the consideration paid for the shares, which equated to open market value at
the date of grant, is deducted in arriving at shareholders’ funds and amortised through the profit and loss account on a straight line basis over the
vesting period.
32
Alpha Airports Group Plc
Annual Report 2004/05
Notes to the Accounts continued 2 Segmental analysis Profit
Turnover before taxation Net assets
111111111 111111111 111111111
2005 2004 2005 2004 2005 2004
(restated)
£m £m £m £m £m £m
(a) Business sector analysis
Flight Services
– continuing operations * 268.5 244.0 7.8 13.7 44.4 36.7**
– share of operating profit of associates – – 0.6 0.5 – –
– share of joint venture 9.4 – 0.4 – 5.7 –
– associates and joint venture goodwill amortisation – – (0.3) (0.4) – –
– subsidiaries goodwill amortisation – – (1.1) (1.4) – –
– exceptional items (continuing operations) – – (6.2) (2.9) – –
– profit on part disposal of subsidiary undertaking – continuing operations – – 0.3 – – –
– profit on disposal of associate – – 0.4 – – –
277.9 244.0 1.9 9.5 50.1 36.7
Retail
– continuing operations * 219.3 196.9 11.7 8.8 24.6 16.6**
– goodwill amortisation – – (1.8) (1.8) – –
– exceptional items (continuing operations) – – 1.5 2.2 – –
219.3 196.9 11.4 9.2 24.6 16.6
497.2 440.9 13.3 18.7 74.7 53.3
Net interest payable – – (1.6) (1.3) – –
Net (borrowings)/cash – – – – (19.3) 1.9
Turnover, profit on ordinary activities before taxation and net assets 497.2 440.9 11.7 17.4 55.4 55.2
(b) Geographical analysis
United Kingdom
– continuing operations * 404.9 367.8 13.2 14.2 43.8 25.3**
– exceptional items (continuing operations) – – (0.9) (0.3) – –
404.9 367.8 12.3 13.9 43.8 25.3
Rest of the World
– continuing operations * 82.9 73.1 6.3 8.3 25.2 28.0
– share of operating profit of associates – – 0.6 0.5 – –
– share of joint venture 9.4 – 0.4 – 5.7 –
– associates and joint venture goodwill amortisation – – (0.3) (0.4) – –
– subsidiaries goodwill amortisation – – (2.9) (3.2) – –
– exceptional items (continuing operations) – – (3.8) (0.4) – –
– profit on part disposal of subsidiary undertaking – continuing operations – – 0.3 – – –
– profit on disposal of associate – – 0.4 – – –
92.3 73.1 1.0 4.8 30.9 28.0
497.2 440.9 13.3 18.7 74.7 53.3
Net interest payable – – (1.6) (1.3) – –
Net (borrowings)/cash – – – – (19.3) 1.9
Turnover, profit on ordinary activities before taxation and net assets 497.2 440.9 11.7 17.4 55.4 55.2
** Before goodwill amortisation and exceptional items.
** Amounts for the year ended 31 January 2004 have been restated as a result of the adoption of UITF 38 “Accounting for ESOP Trusts” (see Note 1).
Turnover is disclosed by origin. There is no material difference in turnover by destination.
Net interest payable has not been allocated recognising the centre’s role and responsibility in allocating financial resources.
33
Alpha Airports Group Plc
Annual Report 2004/05 3 Operating profit
3.1 Operating profit is stated after charging:
2005 2004
£m £m 
Staff costs (Note 5) 109.2 108.0
Depreciation on owned tangible fixed assets (Note 13) 10.0 9.9
Short term hire of plant and machinery 1.0 0.9
Operating lease charges – plant and machinery 1.6 1.7
– other 6.1 6.3
Foreign exchange loss 0.1 0.4
Goodwill amortisation – businesses and subsidiaries (Note 12) 1.7 2.0
Goodwill amortisation – Orient Lanka (Note 23) 1.2 1.2
During the year the Group (including its overseas subsidiaries) obtained the following services from the Group’s auditors:
2005 2004
£m £m 
Audit services
– statutory audit 0.3 0.2
– audit-related regulatory reporting 0.1 0.1
0.4 0.3
Tax advisory and compliance services 0.2 0.2
Due diligence 0.1 0.1
0.7 0.6
The statutory audit costs incurred by the Company during the year were £0.3m (2003/04: £0.2m).
In addition to the above services, the Group’s auditors acted as auditor to the Alpha Airports Group Pension and Life Assurance Plan in the UK
and the Funded Unapproved Retirement Benefits Scheme for executive directors in the UK. The appointment of auditors to the Group’s pension
schemes and the fees paid in respect of those audits are agreed by the trustees of each scheme, who act independently from the management
of the Group.
In order to maintain the independence of the external auditors, the Board has determined policies as to the non–audit services that can be provided
by the company’s external auditors and the approval processes related to them. The current auditors will provide all audit, accounting and tax
advisory services including auditing services throughout the world where cost effective. Due diligence on business opportunities in the same
sectors as the Company would normally be carried out by the auditors in order to utilise their skills and knowledge of the business. They may
provide pension fund auditing and due diligence in new fields if appropriate. The auditors would be excluded from providing all other significant
advisory and consultancy services to the Group unless they were considered to be outstanding in that field of excellence and to exclude them would
be to the detriment of the Company and its shareholders in obtaining the best advice.
As auditors, PricewaterhouseCoopers LLP will undertake work that they must or are best placed to complete.
3.2 Exceptional items
The results for the year ended 31 January 2005 include net exceptional items of £4.7m charged against operating profit, comprising redundancy
payments in respect of UK Flight operations (£0.9m) and the Netherlands Flight operations (£1.4m), an impairment charge in respect of freehold
property fixed assets in the Netherlands (£3.9m), partly offset by the release of £1.5m from the remaining onerous contract provision in Orlando,
USA where trading performance has been better than forecast.
In April 2004, a Group company disposed of 19.6% of its investment in Alpha Flight Services Overseas Limited (a subsidiary which owns 51% of
Jordan Flight Catering Company Limited), for a net consideration of £1.7m. The Group’s profit on disposal, including disposal of related goodwill,
was £0.3m. In July 2004, the Group disposed of its 20% shareholding in Calibre Airline Services Limited (an information technology company), for a
net consideration of £0.5m, realising a profit on disposal of £0.4m.
In the year ended 31 January 2004 the Group implemented a new management structure in Flight Services with a related redundancy cost of
£2.9m. These costs were partly offset by the release of £2.2m from two onerous contract provisions. At Newcastle the Group exited a loss making
contract during the year and no further provision was required. In Orlando, USA trading performance was better than forecast when the provision
was established and consequently the provision was reduced to the directors’ current best estimate of losses up until expiry of the contract
in July 2005.
34
Alpha Airports Group Plc
Annual Report 2004/05
Notes to the Accounts continued 4 Income from interests in associated undertakings
2005 2004
£m £m
Share of operating profit of associates before goodwill amortisation 0.6 0.5
Share of operating profit of joint venture before goodwill amortisation 0.4 –
1.0 0.5
Associates goodwill amortisation (0.2) (0.4)
Joint venture goodwill amortisation (0.1) –
(0.3) (0.4)
5 Employees
2005 2004
(a) Staff costs comprise: £m £m 
Wages and salaries 96.5 96.1
Social security costs 9.0 8.4
Other pension costs 3.7 3.5
109.2 108.0
2005 2004
(b) The average numbers of staff employed by the Group (including Directors) during the year were: Number Number
Flight Services full time 3,419 3,713 
part time 135 212
Retail full time 1,584 1,433 
part time 293 306
5,431 5,664 
6 Directors' emoluments
2005 2004
£’000 £’000 
Aggregate emoluments 864 1,168
Compensation for loss of office – 313
864 1,481
At 31 January 2005, 3 directors (31 January 2004: 3) have retirement benefits accruing under the Group’s defined benefit pension scheme.
More detailed information concerning directors’ emoluments, shareholdings and options is shown in the Remuneration Report on pages 22 to 26.
7Pensions
The Group has continued to account for pensions in accordance with SSAP 24 and the disclosures given in (a) are those required by that standard.
FRS 17 was issued in November 2000 with full adoption not yet mandatory. The transitional arrangements require additional disclosures which are
set out in Note 7(b)
(a) SSAP 24
The Group operates a number of pension plans throughout the world which are established in accordance with local conditions and practices and
include defined contribution and benefit schemes, for which the charges to the profit and loss account were as follows:
2005 2004
Notes £m £m 
Defined Benefit Schemes – UK (i) 2.8 3.0
– Netherlands (ii) 0.3 0.3
3.1 3.3
UK Funded Unapproved Retirement Benefits Scheme (”FURBS”)(iii) 0.3 0.2
Defined Contribution Schemes – UK Stakeholder (iv) 0.1 0.1
– Australian Plan (v) 0.2 0.2
3.7 3.8
35
Alpha Airports Group Plc
Annual Report 2004/05 7Pensions continued
(i) The Alpha Airports Group Pension and Life Assurance Plan (“the UK Plan”) is a defined benefit scheme. The Plan is funded by payments to a
separate pension fund administered by trustees and maintained independently of the Group’s finances. The Group’s funding policy is to ensure that
the assets of the UK Plan are sufficient to meet the accrued liabilities of its members allowing, where appropriate, for future pay increases.
Hewitt Bacon & Woodrow (“Hewitt”), independent Consulting Actuaries, carried out an actuarial valuation of the benefits due to the members of
the UK Plan as at 6 April 2002, using the projected unit method. The principal financial assumptions used were:
Price inflation 2.8% p.a.
Pay increases 3.8% p.a.
LPI pension increases 2.7% p.a.
Discount rate 6.1% p.a.
The market value of the UK Plan’s assets as at 6 April 2002 amounted to £37.1m and the actuarial value of those assets, after allowing for an
adjustment that recognises over a three year period the over or under performance of the UK Plan’s assets against a portfolio constructed to
match its liabilities, represented 89% of the benefit that had accrued to the members based on service to that date after allowing for assumed
future salary increases. As a result of the valuation, the Group agreed to contribute at the rate of 10.4% of pensionable salaries to cover the cost
of ongoing accrual of benefits plus an amount to accrue a valuation shortfall of £5.0m, as determined at 6 April 2002 over the average remaining
service lives of members. In addition, members’ contributions increased by broadly 2% of pensionable salaries with effect from August 2003.
The next actuarial valuation is due to be carried out in April 2005.
The SSAP 24 pension cost has been based on the funding valuation at 6 April 2002 set out above but with a discount rate of 6.85% p.a. before
retirement and 5.6% p.a. after retirement. This revised valuation revealed a past service shortfall of £2m which is being accrued over the average
remaining service of the active members, using the straight line method.
The pension cost for 2004/05 in respect of the UK Plan is £2.8m (2003/04: £3.0m), comprising a regular cost of £1.9m and a variation of £0.3m,
together with an additional contribution of £0.6m (2003/04: £0.6m) in respect of the valuation shortfall described above.
(ii) The Pensioen reglement von Alpha Flight Services Scheme in the Netherlands is a funded, defined benefit Scheme. The pension cost has been
assessed under the local accounting standard, in accordance with SSAP 24. The pension cost is equal to the employer’s contributions, £0.3m
(2003/04: £0.3m). 
(iii) Benefits are also payable to certain executive directors from a funded, unapproved retirement benefits scheme. The FURBS provides retirement
benefits in respect of salaries above the Inland Revenue earnings cap. Further details are included in the Remuneration Report on pages 22 to 26.
The pension cost for 2004/05 in respect of these benefits is £0.3m (2003/04: £0.2m) and as at 31 January 2005 the Group’s balance sheet has a
provision of £0.7m (31 January 2004: £0.4m).
(iv) The assets of the Group’s defined contribution scheme are held separately from those of the Group in an independently administered fund. The
total defined contribution pension cost of the Group amounted to £0.1m (2003/04: £0.1m).
(v) The Australian defined contribution pension arrangement is a government levy imposed upon employers at a flat rate, the cost for which was
£0.2m (2003/04: £0.2m).
In respect of the defined benefit and defined contribution schemes, there were no prepayments or provisions at the balance sheet date (31 January
2004: £nil).
(b) FRS 17
Details are given below for the two main pension arrangements in the Group; the UK Plans (comprising the main plan for employees and the
FURBS plan for directors) and the Pensioen reglement von Alpha Flight Services in the Netherlands. The valuation used for the FRS 17 disclosures
for the UK Plan has been based on the most recent actuarial valuation at 6 April 2002 and updated by Hewitt to take account of the requirements of
FRS 17 in order to assess the liabilities of the Plan at 31 January 2005. Plan assets are stated at their market value at 31 January 2005.
In respect of the Netherlands, the actuarial valuation at 31 January 2004 has been updated to determine the FRS 17 disclosures.
For the purposes of the FRS 17 disclosures, the UK and Netherlands plans have been combined. As at 31 January 2005, the UK Plans had assets of
£47.0m and the Netherlands Plan had assets of £6.1m.
31 January 2005 31 January 2004 31 January 2003
The principal financial assumptions used to calculate the liabilities under FRS 17 were: % p.a. % p.a. % p.a.
Rate of general long–term increase in salaries 3.7 3.7 3.3
Rate of increase to pensions in deferment 2.9 2.8 2.3
Rate of increase to pensions in payment 2.7 2.6 2.4
Discount rate for scheme liabilities 5.2 5.5 5.3
Inflation 2.7 2.8 2.3
36
Alpha Airports Group Plc
Annual Report 2004/05
Notes to the Accounts continued 7Pensions continued
31 January 2005 31 January 2004 31 January 2003
1111111111 1111111111 1111111111
Expected Expected Expected
long- long- long-
term term term
rate of rate of rate of
return Value return Value return Value
The assets in the Plans and the expected rates of return were: % p.a. £m % p.a. £m % p.a. £m
Equities 8.1 35.4 8.4 32.6 7.9 22.9
Bonds 4.7 15.0 5.1 11.0 4.9 9.4
Other 7.1 2.7 4.9 2.4 4.4 2.2
Total market value of assets 53.1 46.0 34.5
Present value of scheme liabilities (81.3) (70.2)(59.1)
Deficit in scheme (28.2) (24.2)(24.6)
Related deferred tax asset 8.5 7.3 7.3
Net pension liability (19.7) (16.9)(17.3)
The analysis below illustrates the amounts that would have been charged/(credited) to the profit and loss account in respect of defined benefit
schemes under the requirements of FRS 17:
2005 2004
£m £m 
Expected return on pension scheme assets (3.4) (2.4)
Interest on pension scheme liabilities 3.8 3.1
Amount charged to other finance income 0.4 0.7
Amount charged to operating profit in respect of current service cost 3.5 3.9
Net charge to the profit and loss account 3.9 4.6
Movement in each Plan’s deficit during the year
Deficit in the scheme at the beginning of the year (24.2) (24.6)
Current service cost (3.5) (3.9)
Contributions 3.1 3.2
Other finance charge (0.4) (0.7)
Actuarial loss (3.2) 1.8
Deficit in the scheme at the end of the year (28.2) (24.2)
The analysis below illustrates the amounts that would have been recognised in the Statement of Total Recognised Gains and Losses ("STRGL")
under the requirements of FRS 17:
2005 2004
£m £m 
Actual return less expected return on pension scheme assets 0.8 4.5
Experience gains and losses arising on the scheme liabilities (0.5) 0.5
Changes in assumptions underlying the present value of the scheme liabilities (3.5) (3.2)
Actuarial (loss)/gain recognised in STRGL (3.2) 1.8
History of experience gains and losses
2005 2004 2003
£m £m £m 
Difference between actual and expected return on scheme assets:
Amount (£m) 0.8 4.5 (12.9)
Percentage of scheme assets 1.5% 9.8% 37.4%
Experience gains and losses on scheme liabilities:
Amount (£m) (0.5) 0.5 1.2
Percentage of the present value of the scheme liabilities 0.6% 0.7% 2.0%
Total amount recognised in STRGL:
Amount (£m) (3.2) 1.8 (16.1)
Percentage of the present value of scheme liabilities 3.9% 2.6% 27.2%
37
Alpha Airports Group Plc
Annual Report 2004/05 7Pensions continued
The effect of the FRS 17 pension liability on the net assets and reserves of the Group are set out below:
2005 2004
(restated)*
£m £m 
Net assets per Group balance sheet 55.4 55.2
Deduct FRS 17 pension liability (net of deferred tax) (19.7) (16.9)
Net assets including FRS 17 pension liability 35.7 38.3
Profit and loss deficit per Group balance sheet (8.5) (6.3)
Add FRS 17 pension liability (net of deferred tax) (19.7) (16.9)
Profit and loss deficit including FRS 17 pension liability (28.2) (23.2)
* Amounts for the year ended 31 January 2004 have been restated as a result of the adoption of UITF38 “Accounting for ESOP Trusts” (See Note 1).
8 Interest payable and similar charges
2005 2004
£m £m 
Bank and other borrowings repayable within five years 1.5 1.1
Unwinding of discount on provisions (Note 19) 0.1 0.3
1.6 1.4
9Taxation
2005 2004
£m £m 
Current tax
United Kingdom
Corporation tax at 30% (2003/04: 30%) 5.6 6.0
Double tax relief (1.9) (2.0)
Tax on exceptional items (0.3) (0.4)
Prior year adjustments (0.2) –
3.2 3.6
Overseas
Corporation taxes 2.6 3.0
Share of taxation of associates 0.3 0.3
Share of taxation of joint venture 0.3 –
Tax on exceptional items (0.5) (0.5)
Prior year adjustments (0.2) (0.2)
Total current tax 5.7 6.2
Deferred tax
United Kingdom
Origination and reversal of timing differences (0.5) 0.2
Tax on exceptional items – 0.3
(0.5) 0.5
Overseas
Origination and reversal of timing differences (0.1) –
Total deferred tax (0.6) 0.5
Total tax on profit on ordinary activities 5.1 6.7
Taxation as a percentage of profit before taxation 44% 38%
Taxation as a percentage of profit before taxation before exceptional items 35% 40%
Taxation as a percentage of profit before taxation, exceptional items and goodwill amortisation 31% 33%
38
Alpha Airports Group Plc
Annual Report 2004/05
Notes to the Accounts continued 9Taxation continued
The tax for the year is higher (2003/04: higher) than the standard rate of corporation tax of 30%. The differences are explained below:
2005 2004
£m £m 
Profit on ordinary activities before tax 11.7 17.4
Tax on profit on ordinary activities at standard rate (30%) 3.5 5.2
Factors affecting tax charge for the period:
Adjustments to tax in respect of prior period (0.4) (0.2)
Adjustment in respect of foreign tax rates (0.9) (0.7)
Expenses not deductible for tax purposes 2.7 2.4
Depreciation in excess of capital allowances 0.1 0.2
Unrelieved overseas losses 1.1 –
Other short term timing differences (0.4) (0.7)
Total actual amount of current tax 5.7 6.2
10 Equity dividends
2005 2004
£m £m 
Interim dividend paid of 1.0p per ordinary share (2003/04: 1.0p) 1.8 1.7
Proposed final dividend of 3.0p per ordinary share (2003/04: 2.8p) 5.2 4.8
Total dividend of 4.0p per ordinary share (2003/04: 3.8p) 7.0 6.5
11 Earnings per share
Profit for the year Earnings per share
1111111111111111111 1111111111111111111
2005 2004 2005 2004
£m £m Pence Pence
Profit for the financial year and basic earnings per share 4.3 9.1 2.49 5.33
Adjustment for profit on part disposal of subsidiary undertaking
– continuing operations (0.3) – (0.17) –
Adjustment for profit on disposal of associate (0.4) – (0.23) –
Adjustment for goodwill amortisation and impairment 3.2 3.6 1.86 2.11
Adjustment for exceptional items 4.7 0.7 2.73 0.41
Taxation relating to these items (0.8) (0.6) (0.46) (0.35)
Adjusted profit and adjusted earnings per share 10.7 12.8 6.22 7.50
Diluted earnings per share 2.46 5.28
Adjusted earnings per share has been calculated to exclude the effect of goodwill amortisation, profits on disposal of businesses and net
exceptional items in order that the effects of these items on reported earnings can be fully appreciated.
The weighted average number of shares in issue during the year, excluding those held in the employee share trust, was 172,366,466
(2003/04: 170,733,330). Earnings per share is calculated by dividing the profit for the financial year by the weighted average number of shares in
issue during the year . Adjusted earnings per share is calculated by eliminating the effect of goodwill amortisation and exceptional items, adjusted
for any tax effect.
Diluted earnings per share of 2.46p (2003/04: 5.28p) is calculated by reference to the profit for the financial year of £4.3m (2003/04: £9.1m) and the
weighted average number of shares in issue during the year of 172,366,466 (2003/04: 170,733,330), as adjusted for potentially dilutive ordinary
shares of 2,113,322 (2003/04: 1,510,307).
12 Fixed assets – intangible assets
Cost Amortisation Net book value
Group £m £m £m
Goodwill on acquisition of businesses and subsidiaries
At 1 February 2004 32.9 (21.6) 11.3
Currency translation (0.3) 0.3 –
Additions (Note 25) 3.1 – 3.1
Disposal (Note 26) (1.6) 0.4 (1.2)
Amortisation during the year – (1.7)(1.7)
At 31 January 2005 34.1 (22.6) 11.5
39
Alpha Airports Group Plc
Annual Report 2004/05 13 Fixed assets – tangible assets
Land and buildings
11111111111111111111
Freehold Leasehold
Plant and Furniture and Assets under 1111111111 1111111111
Long Short machinery equipment construction Total
Group £m £m £m £m £m £m £m
Cost
At 1 February 2004 11.1 5.4 29.3 75.7 17.0 0.7 139.2
Currency translation 0.1 – (0.1) – (0.2) – (0.2)
Acquisition of business (Note 25) ––– – 0.3 – 0.3
Additions 0.3 – 3.1 9.4 1.6 1.8 16.2
Disposals (0.1) – (0.2)(0.2) –– (0.5)
At 31 January 2005 11.4 5.4 32.1 84.9 18.7 2.5 155.0
Accumulated depreciation
At 1 February 2004 2.8 1.5 13.6 51.6 13.7 – 83.2
Currency translation 0.1 – (0.1) – (0.1) – (0.1)
Charge for the year 0.2 0.1 1.6 6.7 1.4 – 10.0
Impairment charge (Note 3.2) 3.9 – – – – – 3.9
Disposals – – (0.2)(0.2) –– (0.4)
At 31 January 2005 7.0 1.6 14.9 58.1 15.0 – 96.6
Net book value
At 31 January 2005 4.4 3.8 17.2 26.8 3.7 2.5 58.4
At 31 January 2004 8.3 3.9 15.7 24.1 3.3 0.7 56.0
14 Fixed assets – investments
Group Company
111111111111111111 111111111111111111
2005 2004 2005 2004
(restated)* (restated)*
£m £m £m £m
Investment in associates (Note 14.1) 0.5 3.7 – –
Investment in joint venture (Note 14.2) 5.7 – – –
Shares in subsidiary undertakings – – 201.0 201.0
6.2 3.7 201.0 201.0
* Amounts for the year ended 31 January 2004 have been restated as a result of the adoption of UITF 38 “Accounting for ESOP Trusts”
(see Note 22.1).
In the opinion of the directors, the value of the Company's investments in shares in subsidiary undertakings exceeds the carrying value of those
investments in the Company's balance sheet.
Details of principal subsidiary undertakings are set out in Note 29.
14.1 Group – investment in associates
Total
Cost of Goodwill on Share of interest in
investment acquisitions reserves associates
£m £m £m £m
At 1 February 2004 0.8 2.8 0.1 3.7
Currency translation – (0.1) – (0.1)
Disposal – (0.2) 0.1 (0.1)
Share of profit after tax – – 0.2 0.2
Dividends received from associates – – (0.2) (0.2)
Amortisation of goodwill – (0.2) – (0.2)
Reclassification to joint venture (0.4)(2.3)(0.1) (2.8)
At 31 January 2005 0.4 – 0.1 0.5
In July 2004, the Group disposed of its 20% shareholding in Calibre Airline Services Limited (an information technology company), for a net
consideration of £0.5m (Note 26).
40
Alpha Airports Group Plc
Annual Report 2004/05
Notes to the Accounts continued 14.2 Group – investment in joint venture
Total
Cost of Goodwill on Share of interest in
investment acquisitions reserves joint venture
£m £m £m £m
At 1 February 2004 – – – –
Currency translation – – – –
Reclassification from associates 0.4 2.3 0.1 2.8
Addition 0.4 2.5 – 2.9
Share of profit after tax – – 0.2 0.2
Dividends received from joint venture – – (0.1) (0.1)
Amortisation of goodwill – (0.1)– (0.1)
At 31 January 2005 0.8 4.7 0.2 5.7
In August 2004, the Group increased its shareholding in Servair Airchef Srl which, together with the original investment, made in February 2001,
results in a total shareholding in the company of 50%, representing a joint investment with the Group’s major shareholder, Servair . The cash
consideration for the further 25% investment was £2.9m (Note 25).
The Group’s investments in associates and joint ventures as at 31 January 2005 are listed in Note 29.
15 Stocks
Group Company
111111111111111111 111111111111111111
2005 2004 2005 2004
£m £m £m £m
Raw materials and consumables 2.4 2.6 – –
Goods for resale 29.7 19.9 – –
32.1 22.5 – –
16 Debtors
Group Company
111111111111111111 111111111111111111
2005 2004 2005 2004
£m £m £m £m
Trade debtors 20.4 19.2 – –
Amounts owed by group undertakings – – 57.3 47.6
Other debtors 12.9 6.8 – –
Prepayments and accrued income 5.2 2.2 – –
38.5 28.2 57.3 47.6
Other debtors includes £0.4m (2003/04: £0.6m) due after more than one year .
41
Alpha Airports Group Plc
Annual Report 2004/05 17 Net (borrowings)/cash and financial instruments
2005 2004
£m £m
17.1 Bank and other borrowings
Unsecured loans (24.1) (3.0)
Bank overdrafts (6.0) (3.7)
Total bank and other borrowings due within one year (30.1) (6.7)
The Company’s bank and other borrowings comprised unsecured loans of £20.0m (2003/04: £3.0m) and bank overdrafts of £6.8m
(2003/04: £17.5m).
17.2 Net (borrowings)/cash
Total bank and other borrowings (30.1) (6.7)
Cash at bank and in hand 10.8 8.6 
Net (borrowings)/cash (19.3) 1.9
17.3 Currency analysis
Bank and other borrowings are payable in the following currencies:
– Sterling (23.3) (6.0)
– Others (6.8) (0.7)
(30.1) (6.7)
Cash at bank and in hand is analysed in the following currencies:
– Sterling 2.6 1.6 
– Australian Dollar 0.4 0.8 
– United States Dollar 3.4 2.4 
– Euro 3.9 3.7 
– Others 0.5 0.1 
10.8 8.6 
17.4 Financial assets
The following table analyses the currency and interest rate composition of the Group's financial assets, comprising cash at bank and in hand.
As at 31 January 2005 As at 31 January 2004
1111111111111111111111111111 1111111111111111111111111111
Non-interest Non-interest
Floating rate earning Floating rate earning
financial assets financial assets Total financial assets financial assets Total
£m £m £m £m £m £m
Sterling 0.5 2.1 2.6 0.8 0.8 1.6 
United States Dollar 2.4 1.0 3.4 2.1 0.3 2.4
Euro 2.9 1.0 3.9 2.3 1.4 3.7
Others – 0.9 0.9 – 0.9 0.9
5.8 5.0 10.8 5.2 3.4 8.6
There are no fixed rate financial assets at 31 January 2005 or 31 January 2004. Floating rate financial assets attract interest at rates based on the
relevant national LIBOR equivalents. Short-term debtors have been excluded from the above analysis.
Non-interest earning financial assets comprise cash in hand and as such do not have a weighted period to maturity.
42
Alpha Airports Group Plc
Annual Report 2004/05
Notes to the Accounts continued 17 Net (borrowings)/cash and financial instruments continued
17.5 Financial liabilities
The following table analyses the currency and interest rate composition of the Group's financial liabilities, comprising bank and other borrowings
and provisions for liabilities and charges which are expected to result in cash payments. Short term creditors have been excluded from the
analysis below.
As at 31 January 2005 As at 31 January 2004
1111111111111111111111111111 1111111111111111111111111111
Non-interest Non-interest
Floating rate bearing Floating rate bearing
financial liabilities financial liabilities Total financial liabilities financial liabilities Total
£m £m £m £m £m £m
Sterling 23.3 – 23.3 6.3 1.5 7.8
Euro 6.5 1.4 7.9 – 1.1 1.1
United States Dollar 0.8 – 0.8 2.7 – 2.7
Others 0.1 – 0.1 0.1 – 0.1
30.7 1.4 32.1 9.1 2.6 11.7
The period to maturity of financial liabilities was as follows:
2005 2004
£m £m
Within one year 31.6 10.5
Between one and two years – 1.2
Between two and five years 0.5 -
32.1 11.7
There were no fixed rate financial liabilities at 31 January 2005 or 31 January 2004.
Floating rate financial liabilities relating to bank and other borrowings bear interest at rates based on the relevant national LIBOR equivalents. At
31 January 2005 the non–interest bearing financial liabilities had a weighted average maturity of 0.25 years in respect of Euro liabilities of £1.4m.
17.6 Fair values
As at 31 January 2005 and 31 January 2004 the Group’s financial assets and financial liabilities were of such a nature that their fair values were not
materially different to their book values.
17.7 Hedging
A hedging analysis has not been presented as the Group did not have any hedging instruments at 31 January 2005 or 31 January 2004.
17.8 Currency exposure analysis
At 31 January 2005 and 31 January 2004 the Group’s subsidiaries did not hold material net monetary assets in currencies other than their
functional currency, with the exception of Alpha Catering Services Limited which had net monetary assets of £1.8m in Euros (2003/04: £0.6m) and
Alpha Overseas Holdings Limited which had net monetary assets of £0.8m in US dollars (2003/04: £0.3m).
18 Other creditors
Group Company
1111111111111111111 1111111111111111111
2005 2004 2005 2004
£m £m £m £m
Amounts due within one year
Trade creditors 33.3 32.6 – –
Amounts owed to group undertakings – – 13.0 8.0
Taxation and social security 5.4 4.9 – –
Other creditors 6.2 8.9 – –
Accruals and deferred income 19.6 11.3 – –
Dividends payable 5.2 4.8 5.2 4.8
69.7 62.5 18.2 12.8
43
Alpha Airports Group Plc
Annual Report 2004/05 19 Provisions for liabilities and charges
Group
11111111111111111111111111111111111111
Deferred 
taxation Onerous Restructuring/
(Note 20) contracts redundancy Total
£m £m £m £m
At 1 February 2004 0.9 2.4 2.6 5.9
(Release from)/charge to profit and loss account (0.6)(1.5) 2.3 0.2
Utilised during the year – (0.9)(3.5) (4.4)
Amortisation of discount – 0.1 – 0.1
At 31 January 2005 0.3 0.1 1.4 1.8
An onerous contract provision of £2.4m at 31 January 2004 in respect of the duty free retail operation in Orlando was partly utilised during the year
ending 31 January 2005. The original contract has only a further six months remaining as at 31 January 2005 and the expected provision required
at that date is £0.1m. Therefore, £1.5m was released to the profit and loss account at the year end, as described in Note 3.2.
The restructuring and redundancy provision brought forward at 31 January 2004 was fully utilised during the year . In addition, there were further
charges of £2.3m incurred during the year ending 31 January 2005 which arose from the loss of 142 positions in the UK and Europe as discussed
in Note 3.2.
There were no provisions held by the Company.
20 Deferred taxation
Group
1111111111111111111
2005 2004
£m £m 
Timing differences due to :
Accelerated capital allowances 0.3 0.8
Other timing differences – 0.1
0.3 0.9
The Group has not recognised a deferred tax asset of £1.6m at 31 January 2005 (2003/04: £0.4m) relating to cumulative carried forward trading
losses due to the uncertainty as to the specific timing of suitable taxable profits in the relevant jurisdictions against which the asset would
crystallise. The Group has no unprovided deferred tax liabilities at 31 January 2005 (2003/04: £nil).
21 Share capital and share premium account
Group and Company
11111111111111111111111111111111111111
Number Number
of shares of shares 2005 2004
21.1 Authorised and issued share capital 2005 2004 £m £m
Authorised
Ordinary Shares of 10 pence each 249,540,000 249,540,000 25.0 25.0 
6
1
⁄ 2 % cumulative redeemable preference shares of £1 each 46,000 46,000 – –
25.0 25.0 
Issued, allotted and fully paid
Ordinary Shares of 10 pence each 173,919,613 171,736,417 17.4 17.2
21.2 Movement in called up share capital and share premium account
Share Capital 
Ordinary premium redemption 
Shares account reserve Total
£m £m £m £m
At 1 February 2004 17.2 42.6 0.4 60.2
Share issues relating to share options 0.2 1.1 – 1.3
At 31 January 2005 17.4 43.7 0.4 61.5 
During the year 2,183,196 shares were issued at option prices ranging from 31.0p to 81.0p per ordinary share.
44
Alpha Airports Group Plc
Annual Report 2004/05
Notes to the Accounts continued 21.3 Share options
At 31 January 2005 options had been granted and remained outstanding over 10,751,814 (2003/04: 11,727,072) ordinary shares under the
Company’s share option schemes.
Executive share option scheme 
The normal exercise period for options granted under this scheme is between 3 and 10 years and the exercise of options is dependent upon a
performance target being satisfied which, in summary, requires the growth in the Company’s earnings per share to exceed the growth in the retail
price index by a specified amount over three consecutive years prior to exercise.
At 31 January 2005 there were options outstanding over 6,756,814 (2003/04: 7,474,796) ordinary shares under the executive share option scheme.
Number of shares Exercise price per share Exercise period
5,730,588 42.5p – 76.5p July 2002 – March 2014
1,026,226 81.0p – 106.5p October 1999 – October 2007
On 1 April 2005, the Company granted share options at an exercise price of 95p over 2,539,999 shares under the executive share option scheme,
including 799,999 options granted to executive directors as stated in the Remuneration Report on page 25.
Employee share option scheme
Under the Company’s employee share option scheme at 31 January 2005, employees held options over 3,995,000 (2003/04: 4,252,276) ordinary
shares.
Number of shares Exercise price per share Exercise period
2,923,000 42.5p – 62.5p July 2002 – March 2013
1,072,000 81.5p – 85.0p October 2006 – October 2014
22 Reserves
22.1 Group
Profit
and loss
£m
At 1 February 2004 as previously reported (6.1)
Prior year adjustment (see below) (0.2)
As restated (6.3)
Retained loss for the financial year (2.7)
Credit in respect of long term incentive plan amortisation charge 0.2
Goodwill charged to the profit and loss account previously written off directly to reserves (Note 23) 1.2
Currency translation differences (0.9)
At 31 January 2005 (8.5)
The cumulative amount of goodwill eliminated directly against reserves at 31 January 2005 was £171.6m (2003/04: £172.8m).
The Group adopted UITF 38 “Accounting for ESOP Trusts” during the year . There is no effect on the current or prior periods’ Group profit as a result
of this change in accounting policy; the Group’s balance sheet has been restated for prior periods to reflect the shares purchased in July 2002 for
the Chief Executive’s Long Term Incentive Plan (“LTIP”) as a deduction from shareholders’ funds (previously included within investments). The LTIP
was fully written off in the year ended 31 January 2005 and therefore there is no effect on the Group’s balance sheet as at 31 January 2005. The
effect on the Group’s balance sheet at 31 January 2004 and 31 January 2003 was to decrease investments and shareholders’ funds by £0.2m and
£0.4m respectively.
22.2 Company
Profit Special 
and loss reserve Total
£m £m £m
At 1 February 2004 as previously reported 3.2 152.3 155.5
Prior year adjustment (Note 22.1)(0.2) – (0.2)
As restated 3.0 152.3 155.3
Reclassification of reserves 152.3 (152.3) –
Retained loss for the financial year (3.3) – (3.3)
At 31 January 2005 152.0 – 152.0
45
Alpha Airports Group Plc
Annual Report 2004/05 The special reserve of £152.3m was created in March 1994 as a result of a capital reduction following the flotation of the Group in January 1994. It is
a standard requirement in such cases for the protection of creditors that the special reserve does not form part of the Company’s distributable
profits until certain conditions no longer apply. During the year, the Company satisfied itself that no such conditions exist and the Board of Alpha
Airports Group Plc approved the release of the reserve to distributable profits.
The Company has not presented its own profit and loss account as permitted by section 230 (i) of the Companies Act 1985. The profit after tax dealt
with in the accounts of the Company for the year ended 31 January 2005 is £3.5m (2003/04: £4.7m).
23 Reconciliation of movements in shareholders' funds
2005 2004
(restated)*
£m £m
Profit for the financial year 4.3 9.1
Dividends (7.0) (6.5)
Retained (loss)/profit for the financial year (2.7) 2.6
Currency translation differences on foreign currency net assets and certain loans (0.9) 0.2
Issue of shares 1.3 0.2
Credit in respect of long term incentive plan amortisation charge 0.2 0.2
Goodwill charged to the profit and loss account previously written off directly to reserves 1.2 1.2
Net (decrease)/increase to shareholders’ funds (0.9) 4.4
Opening shareholders’ funds as previously reported 54.1 49.9
Prior year adjustment (Note 22.1) (0.2) (0.4)
Opening shareholders’ funds as restated 53.9 49.5
Closing shareholders’ funds 53.0 53.9
* Amounts for the year ended 31 January 2004 have been restated as a result of the adoption of UITF 38 “Accounting for ESOP Trusts”
(see Note 22.1).
Goodwill of £10.3m which arose on the acquisition of the original shareholding of Orient Lanka Limited in 1996 was written off to reserves. With
effect from 1 February 1998 this is being amortised through the profit and loss account over 8.5 years (the remaining life of the licence as at that
date). Accordingly, the charge in the profit and loss account of £1.2m (2003/04: £1.2m) has been added back into shareholders’ funds.
24 Notes to the cash flow statement
24.1 Reconciliation of operating profit to net cash inflow from operating activities 
2005 2004
£m £m 
Operating profit 11.9 18.6
Depreciation 10.0 9.9
Goodwill amortisation 2.9 3.2
Long term incentive plan amortisation charge 0.2 0.2
Fixed asset impairment 3.9 –
(Increase) in stocks (7.3) (2.7)
(Increase) in debtors (10.4) (2.6)
Increase in creditors 2.2 4.5
Net cash inflow from operating activities 13.4 31.1
24.2 Reconciliation of net cash flow to movement in net (debt)/cash
2005 2004
£m £m 
Increase/(decrease) in cash in the period 2.5 2.4
Increase in overdrafts in the period (2.1) (3.0)
(Increase)/decrease in debt and lease financing (21.1) 3.0
Change in net (debt)/cash from cash flows (20.7) 2.4
Currency translation (0.5) (0.2)
Movements in net (debt)/cash in period (21.2) 2.2
Net debt at 1 February 1.9 (0.3)
Net (debt)/cash at 31 January (19.3) 1.9
46
Alpha Airports Group Plc
Annual Report 2004/05
Notes to the Accounts continued 24.3 Analysis of net (debt)/cash
1 February Cash Exchange 31 January
2004 flows movement 2005
£m £m £m £m
Cash at bank and in hand 8.6 2.5 (0.3) 10.8
Overdrafts (3.7)(2.1)(0.2) (6.0)
4.9 0.4 (0.5) 4.8 
Debt due within 1 year (3.0)(21.1) – (24.1)
Total 1.9 (20.7)(0.5)(19.3)
25 Acquisition of businesses
25.1 Servair AirChef srl
On 4 August 2004 the Group purchased a further 25% shareholding in Servair AirChef srl which, together with the original investment, results in a
total shareholding in the company of 50%, representing a joint investment with the Group’s major shareholder, Servair .
The consideration was £2.9m, for which the share of net assets acquired was £0.4m resulting in goodwill of £2.5m, all of which is included under
investments in joint ventures.
25.2 Istanbul Duty Free Ic ve Dis Ticaret A.S.
On 3 November 2004, the Group signed a contract to acquire 60% of the share capital of Istanbul Duty Free, a company operating duty free
concessions and shops at seven locations in Turkey and providing inflight retailing to three local airlines. The acquisition was completed on
14 December 2004 and the results of the company were consolidated from that date. The goodwill arising on the acquisition was £3.1m as follows:
Book Fair Value Provisional
Value adjustments fair value
£m £m £m
Intangible fixed assets 0.5 (0.5) –
Tangible fixed assets 0.2 0.1 0.3
Stocks 2.5 – 2.5
Debtors 0.1 – 0.1
Creditors (0.4)(0.1) (0.5)
Cash at bank and in hand 0.4 – 0.4
Taxation 0.4 (0.5) (0.1)
Total net assets at acquisition 3.7 (1.0) 2.7
Minority Interests (1.1)
Total net assets acquired 1.6
Goodwill 3.1
Consideration 4.7
Consideration satisfied by:
Cash (including costs of acquisitions) 4.2
Deferred contingent consideration 0.5
4.7
The book value of the assets and liabilities has been taken from the management accounts of Istanbul Duty Free at 14 December 2004 (the
acquisition date) at actual exchange rates on that date. The fair value adjustments contain some provisional amounts, as indicated below, which
will be finalised in the 2006 financial statements when the detailed acquisition investigation has been completed.
The provisional fair value adjustments principally comprise £0.5m for the write off of the remaining net book value of certain “rights” paid in 2001
by the company for the operation of duty free shops and an accrual of £0.5m for corporation tax not charged to the profit and loss account by
14 December 2004 but relating to income arising in the period up to that date.
The profit after tax of Istanbul Duty Free was £1.1m for the period from 1 January 2004 to 14 December 2004 and £1.6m for the year ended
31 December 2003.
The deferred contingent consideration is payable in two instalments of €0.5m, in 2008 and 2009 provided the minority shareholder remains
actively involved in the business at those dates. The amount has been discounted and recognised within creditors due after more than one year as
the directors believe it is likely that these amounts will be payable.
47
Alpha Airports Group Plc
Annual Report 2004/05 26 Disposal of businesses
Alpha Flight
Calibre Services
Airline Overseas
Services Ltd Total
£m £m £m
Net assets disposed of:
Intangible fixed assets – 1.2 1.2
Investment in associates 0.1 – 0.1
Minority Interest – 0.2 0.2
0.1 1.4 1.5
Profit on disposal of businesses 0.4 0.3 0.7
0.5 1.7 2.2
Satisfied by:
Cash consideration 0.5 1.7 2.2
0.5 1.7 2.2
The disposals of businesses are described in Note 3.2.
27 Commitments
27.1 Operating lease commitments and minimum guaranteed concession rent
At 31 January 2005 there were annual commitments under operating leases and minimum guaranteed concession rent as follows:
Group 
1111111111111111111
2005 2004
£m £m
Land and buildings
Expiring within one year 0.6 0.4 
Expiring between two and five years 1.1 1.5 
Expiring over five years 3.1 3.0 
4.8 4.9 
Other and minimum guaranteed concession rent
Expiring within one year 3.8 1.2 
Expiring between two and five years 4.0 8.0 
Expiring over five years 2.9 1.5
15.5 15.6
27.2 Capital commitments
Authorised and contracted 12.0 6.1
The commitments exclude other rental obligations where the obligations vary in accordance with passenger numbers or turnover . Rental
payments in 2004/05, which were based upon passenger numbers or turnover, totalled £45.0m (2003/4: £38.2m). These payments exclude rents
paid to airport authorities which have been recharged to our customers.
48
Alpha Airports Group Plc
Annual Report 2004/05
Notes to the Accounts continued  28 Contingent liabilities
Alpha Airports Group Plc has guaranteed bank overdrafts and other facilities of subsidiary undertakings to the extent of £0.1m (2003/04: £0.1m).
Drawings under these facilities totalled £nil (2003/04: £nil). The Company has also issued guarantees of £0.7m (2003/04: £1.5m) to support
guaranteed rent obligations to an airport authority. The Company has also guaranteed ongoing performance obligations of its subsidiary
undertakings.
The Group’s subsidiary undertakings have issued guarantees in favour of HM Customs and US Insurance Companies totalling £6.2m (2003/04:
£3.8m) to support ongoing obligations. They have also guaranteed ongoing performance obligations of their subsidiary undertakings.
29 Principal subsidiary undertakings, associates and joint ventures
Percentage of
Country of issued share
incorporation and capital held by
operation the Group % Business Description
(1) Subsidiary undertakings
UK
Alpha Airport Holdings (UK) Limited * UK 100.0 Retail, retail catering and holding company
Alpha Overseas Holdings Limited * UK 100.0 Holding company
Alpha Catering Services Limited UK 100.0 Flight services
Overseas
Alpha Flight Services Overseas Limited Jersey 80.4 Holding company
Alpha Airports Group (Jersey) Limited Jersey 100.0 Flight services, retail catering and retail
Alpha Airport Catering (Ireland) Limited Ireland 100.0 Retail catering
Alpha Flight Services Ireland Limited Ireland 100.0 Flight services
Alpha Airport Holdings BV * Netherlands 100.0 Holding company
Alpha Flight Services BV Netherlands 100.0 Flight services
Alpha Keys Orlando Retail Associates LLP USA 85.0 Retail
Alpha Airport Services Inc USA 100.0 Retail and flight services
Alpha Flight Services Pty. Limited Australia 100.0 Flight services
Orient Lanka Limited Sri Lanka 100.0 Retail
Jordan Flight Catering Company Limited Jordan 41.0 Flight services
Alpha MVKB Maldives Pvt Limited Maldives 60.0 Retail
Istanbul Duty Free Ic ve Dis Ticaret A.S. Turkey 60.0 Retail
Alpha Retail Catering Sweden AB Sweden 100.0 Retail catering
(2) Associates and joint ventures
Virgin Express Catering Services N.V. (Associate) Belgium 49.98 Inflight retailing
Servair Airchef srl (Joint Venture) Italy 50.0 Flight services
The percentage of the issued share capital held by the Group is equivalent to the percentage of the voting rights held . Where the percentage is
100% the Group holds the whole of all classes of issued share capital. The share capital of all the subsidiary undertakings comprised ordinary
shares. The companies listed above include all those which materially affect the amount of profit and the assets of the Group. A full list of
subsidiary undertakings will be annexed to the next annual return of Alpha Airports Group Plc to be filed with the Registrar of Companies.
* The equity of these subsidiary undertakings is held directly by Alpha Airports Group Plc.
30 Post balance sheet event
On 12 April the Group acquired 64.18% of the share capital of Abela Rocas S.A., a small flight catering and retail catering business based at Henri
Coanda International Airport, Bucharest for consideration of €5.0m (£3.4m).
49
Alpha Airports Group Plc
Annual Report 2004/05 Profit and loss account for the years ended 31 January 2001 2002 2003 2004 2005
£m £m £m £m £m
Turnover (including share of joint venture) 433.0 430.8 419.3 440.9 497.2
Less share of turnover of joint venture – – – – (9.4)
Turnover 433.0 430.8 419.3 440.9 487.8
Turnover
– Continuing operations 413.5 419.4 419.3 440.9 487.8
– Discontinued 19.5 11.4 – – –
Turnover 433.0 430.8 419.3 440.9 487.8
Cost of sales (296.5)(283.3)(267.1)(281.5) (317.4)
Gross profit 136.5 147.5 152.2 159.4 170.4
Administration expenses before goodwill amortisation (118.1)(136.6)(129.4)(137.6) (155.6)
Amortisation of goodwill (3.2)(14.8)(2.9)(3.2) (2.9)
Group operating profit
– Continuing operations 15.9 (4.2) 19.6 18.6 11.9
– Discontinued operations (0.7) 0.3 0.3 – –
Operating profit/(loss) 15.2 (3.9) 19.9 18.6 11.9
Income from interests in associated undertakings – (0.1) 0.3 0.5 1.0
Associated undertakings goodwill amortisation (0.2)(2.3)(0.1)(0.4) (0.3)
(0.2)(2.4) 0.2 0.1 0.7
Profit/(loss) on disposal of discontinued operations (8.4) 0.7 2.1 – 0.7
Profit on ordinary activities before interest 6.6 (5.6) 22.2 18.7 13.3
Net interest payable (0.7)(1.3)(1.5)(1.3) (1.6)
Profit on ordinary activities before taxation 5.9 (6.9) 20.7 17.4 11.7
Taxation on profit on ordinary activities (6.4)(6.2)(7.2)(6.7) (5.1)
Profit/(loss) on ordinary activities after taxation (0.5)(13.1) 13.5 10.7 6.6
Minority interest – (0.8)(1.7)(1.6) (2.3)
Profit/(loss) for the financial period (0.5)(13.9) 11.8 9.1 4.3
Equity dividends (5.8)(6.1)(6.2)(6.5) (7.0)
Retained profit/(loss) for the period (6.3)(20.0) 5.6 2.6 (2.7)
Earnings/(loss) per share (0.29p)(8.15p) 6.91p 5.33p 2.49p
Diluted earnings/(loss) per share (0.29p)(8.15p) 6.87p 5.28p 2.46p
Adjusted earnings per share 6.55p 7.26p 7.50p 7.50p 6.22p
Dividend per share 3.40p 3.60p 3.60p 3.80p 4.00p
Balance sheets as at 31 January 2001 2002 2003 2004 2005
(restated)(restated)
£m £m £m £m £m
Fixed assets
Intangible assets 17.7 14.7 13.0 11.3 11.5
Tangible assets 60.0 56.9 53.5 56.0 58.4
Investments 2.6 3.1 3.3* 3.7* 6.2
80.3 74.7 69.8 71.0 76.1
Net current operating assets 52.6 43.0 45.9 50.7 70.6
Net current operating creditors (58.1)(60.0)(57.5)(62.5) (69.7)
Long term creditors and provisions (8.4)(12.2)(7.5)(5.9) (2.3)
66.4 45.5 50.7 53.3 74.7
Net (borrowings)/cash (3.4)(1.3)(0.3) 1.9 (19.3)
Total net assets 63.0 44.2 50.4 55.2 55.4
Capital and reserves
Called up share capital 17.1 17.1 17.1 17.2 17.4
Share premium 42.2 42.2 42.5 42.6 43.7
Capital redemption reserve 0.4 0.4 0.4 0.4 0.4
Profit and loss account 3.3 (16.4)(10.5)* (6.3)* (8.5)
63.0 43.3 49.5 53.9 53.0
Minority interests – 0.9 0.9 1.3 2.4
Total equity 63.0 44.2 50.4 55.2 55.4
*Amounts for prior years have been restated as a result of the adoption of UITF 38 “Accounting for ESOP Trusts” (see Note 1).
50
Alpha Airports Group Plc
Annual Report 2004/05
Five year financial summary Notice is hereby given that the twelfth Annual General Meeting of
Alpha Airports Group Plc will be held at the Conference Centre,
Park Inn, Bath Road, Heathrow, Middlesex UB7 0DU on Thursday
2 June 2005, commencing at 11.00 am for the following business:
Ordinary Business
Resolution 1
To receive the Company’s annual accounts for the year ended
31 January 2005, together with the Directors’ Report and the Auditors’
Report on those accounts.
Resolution 2
To approve the Remuneration Report, as set out on pages 22 to 26 in the
Company’s report and accounts for the year ended 31 January 2005.
Resolution 3
To declare a final dividend for the year ended 31 January 2005 of 3.0p
per ordinary share payable on 8 June 2005.
Resolution 4
To re-elect Mr Terry Stannard as a director .
Resolution 5
To re-elect Ms Heather McRae as a director .
Resolution 6 
To re-appoint PricewaterhouseCoopers LLP as auditors of the
Company, to hold office until the conclusion of the next general meeting
at which accounts are laid before the Company, and to authorise the
directors to set the auditors’ remuneration for the year ending
31 January 2006.
Special Business
To consider and, if thought fit, pass the following resolutions of which
resolution numbered 7 will be proposed as an Ordinary Resolution and
resolutions 8 and 9 will be proposed as Special Resolutions.
Resolution 7
That the authority and power, conferred on the directors under section
80 of the Companies Act 1985 (“the Act”) and in accordance with
Regulation 6 of the Articles of Association of the Company, to allot
relevant securities up to an aggregate nominal amount (the section 80
amount) of £5,798,083 be renewed for the period ending on the date of
the Annual General Meeting in 2006 or 1 September 2006 whichever is
the earlier .
Resolution 8
That, subject to the passing of resolution 7, the authority and power
conferred on the directors under section 95 of the Act and the authority
conferred by resolution 7 and in accordance with Regulation 7 of the
Articles of Association of the Company, to allot equity securities (within
the meaning of section 94(2) to section 94(3) of the Act) wholly for cash in
connection with a rights issue or otherwise than in connection with a
rights issue up to an aggregate nominal amount (the section 89 amount)
of £869,712 be renewed for the period ending on the date of the Annual
General Meeting in 2006 or 1 September 2006, whichever is the earlier .
This power applies in relation to a sale of shares which is an allotment
of equity securities by virtue of section 94(3A) of the Act as if in the
preceding paragraph the words “and the authority conferred by
resolution 8” were omitted.
Notes: Directors’ Authority to Allot Shares
At the Annual General Meeting held on 3 June 2004 shareholders gave
the directors authority to allot ordinary shares up to a cash amount of
£5,752,050 and to allot shares for cash, other than by way of a rights
issue up to an amount of £862,807. These authorities expire at the
conclusion of the Annual General Meeting and resolutions 7 and 8 will
renew the authorities on similar terms for a further year .
The authority to issue shares under resolution 7 is for an amount which
is one third of the nominal value of the issued share capital at the date of
this notice and the authority to allot shares for cash other than by way of
a rights issue, pursuant to resolution 8, represents 5% of the nominal
value of the issued share capital.
Resolution 8 includes the authority to sell shares held in treasury for
cash. This would give the Company the ability to re-issue treasury
shares quickly and cost-effectively and would give the Company
additional flexibility in the management of its capital base. At the date of
this Notice, no treasury stock transactions had taken place. 
The directors will only exercise these authorities when to do so would be
in the best interests of all shareholders and the Company or in relation
to shares being issued pursuant to the Company’s share option
schemes.
Resolution 9
That the Company be authorised generally and unconditionally to make
market purchases (as defined in section 163(3) of the Act) of fully paid
ordinary shares of 10 pence each in the Company and, where shares are
held as treasury shares, to use them for the purposes of employee
share schemes operated by the Company, provided that:
(a) the Company does not purchase under this authority more than
17,394,251 ordinary shares;
(b) the Company does not pay less than 10 pence for each share;
(c) the Company does not pay more for each share than 5% over the
average middle market price of the ordinary shares according to
the Daily Official List of the London Stock Exchange for the five
business days immediately preceding the date on which the
Company agrees to buy the shares concerned.
The authority shall continue for the period ending on the date of the next
Annual General Meeting of the Company or 1 September 2006
whichever is the earlier, provided that if the Company has agreed to
purchase ordinary shares where the purchase will or may be executed
after the authority terminates (either wholly or in part) the Company
may complete such a purchase.
51
Alpha Airports Group Plc
Annual Report 2004/05
Notice of Meeting and Resolutions to be Proposed Notes: Share Buy-Back
Authority is sought to purchase up to 10% of the ordinary issued share
capital. Resolution 9 specifies the maximum number of shares that may
be purchased and the minimum and maximum prices at which they may
be bought. The directors will only exercise this authority when to do so
would be in the best interests of all the shareholders and an overall
improvement in earnings per share could be expected to result. The
authority will expire at the conclusion of the next Annual General
Meeting or on 1 September 2006, whichever is the earlier .
This resolution would enable the Company to purchase up to a
maximum of 17,394,251 of its ordinary shares. The total number of
ordinary shares that may be issued on the exercise of outstanding
options under the Company’s employee share schemes as at 13 April
2005 is 8,629,849 which represents approximately 4.96% of the issued
share capital at that date. If the Company were to purchase and cancel
shares up to the maximum permitted by this resolution, the proportion
of ordinary shares subject to outstanding options would represent
approximately 5.51% of the issued share capital as at 13 April 2005.
Following legislation which came into force on 1 December 2003, shares
purchased under the authority given by resolution 9 may be held by the
Company as treasury shares, within the limits allowed by law. These
shares may be resold. Resolution 9 also authorises the Company to
transfer any shares repurchased and held in treasury for the purposes
of its employee share schemes. If any such shares are so used the
Company will, so long as required under institutional guidelines, count
them towards the limits in such employee share schemes on the
number of new shares which may be issued under them. 
13 April 2005 Registered Office
By Order of the Board Europa House
Heather McRae 804 Bath Road
Company Secretary Cranford
Middlesex TW5 9US
Notes and Instructions for Attending and Voting:
(i) If you have sold or transferred all or any part of your holding of
shares in Alpha Airports Group Plc please inform the purchaser or
transferee or the stockbrokers or the agent through whom the
transaction was effected as soon as possible.
(ii) A member entitled to attend and vote at the Annual General
Meeting may appoint a proxy or proxies to attend and vote on a poll
on his/her behalf. A proxy need not be a member of the Company.
(iii) If you wish to appoint a proxy, please complete the accompanying
form. To be valid, the form must be received by the Company’s
Registrar by 11am on 31 May 2005. 
(iv) A person you appoint as your proxy must attend the meeting.
Your proxy will be asked to present the Annual General Meeting
attendance card and show a form of identification at registration.
If you appoint a proxy you may still choose later to come to the
meeting. Please bring the attendance card with you. 
(v) A corporation intending to be present at the Annual General
Meeting through a representative should fill in the name of the
representative on the attendance card and affix its common seal or
have the form signed by an authorised officer . Such representative
will be asked to show a form of identification at registration.
Acorporation may appoint the chairman of the meeting as its
representative and instruct him how to vote by completing the
proxy form.
(vi) The time by which a person must be entered on the register of
members of the Company in order to attend and vote at the Annual
General Meeting is 6.00pm on 31 May 2005. Changes to entries
after this date will be disregarded in determining the rights of any
person to attend and vote at the meeting.
(vii) The register of directors’ interests together with copies of contracts
of service between the directors and the Company are available for
inspection during normal business hours at Europa House, 804
Bath Road, Cranford, Middlesex, TW5 9US, from the date of this
notice until the date of the Annual General Meeting. They will be
available for inspection at the Conference Centre, Park Inn,
Heathrow, London from 9.30 am on 2 June 2005 until the
conclusion of the Annual General Meeting.
52
Alpha Airports Group Plc
Annual Report 2004/05
Notice of Meeting and Resolutions to be Proposed continued  Company Enquiries
General shareholder enquiries about the Company and requests for
copies of the Group’s literature, Annual Report or Interim Statements
should be directed to the Company Secretary at the registered office
address.
Internet
Visit our website at www.alpha-group.com for:
– share price updates
– the latest Alpha news as it happens
– information on operational locations
– further details about the Group
– latest Annual and Interim Reports
Shareholding Enquiries
Queries about personal shareholdings (e.g. lost certificates, dividend
payments, change of personal details, etc.) should be directed to the
Company’s Registrars, Lloyds TSB.
The Shareview service from Lloyds TSB Registrars gives you access to
information on your investments including balance movements,
indicative share prices and information on recent dividends. For more
details on this and practical help on transferring shares or updating
your details visit “www.shareview.co.uk”. You will need the shareholder
reference number printed on your proxy form or dividend stationery.
Financial Calendar
2005 4 May Ex-dividend date (final)
6 May Record date for final dividend
2 June Annual General Meeting
8 June Payment date for final dividend
September Announcement of interim results
October Posting of interim statement to shareholders
October Ex-dividend date (interim)
October Record date for interim dividend
November Payment date for interim dividend
2006 March/April Announcement of full year results
Share Dealing Service
A telephone service provided by
Stocktrade is available for sales
and purchases of shares.
Commission is calculated as 0.5%
on proceeds up to £10,000 and
0.2% on the excess thereafter and
is subject to a minimum charge of
£15. Purchases can be made by
debit card and funds from a sale
transaction can be credited
directly into your bank account.
Telephone 0845 601 0995 and
quote reference Low Co 0154.
Company Secretary
Heather McRae
Registered Office
Europa House
804 Bath Road 
Cranford
Middlesex TW5 9US
Telephone: 020 8580 3200
Facsimile: 020 8580 3201
Registered in England
Company Number 2854090
Registrars
Lloyds TSB Registrars
The Causeway
Worthing
West Sussex BN99 6DA
Telephone: 0870 600 3970
Principal Bankers
National Westminster Bank plc
City of London Office
PO Box 12258
1 Princes Street
London EC2R 8PA
Solicitors
Berwin Leighton Paisner
Adelaide House
London Bridge
London
EC4R 9HA
Auditors 
PricewaterhouseCoopers LLP
Chartered Accountants &
Registered Auditors
Harman House
1 George Street
Uxbridge
Middlesex UB8 1QQ
Stockbrokers
Panmure Gordon
50 Stratton Street
London W1J 8LL
Merchant Bankers & Financial
Advisors
Close Brothers Corporate Finance
Limited
10 Crown Place
London EC2A 4FT
Designed and produced by Linnett Webb Jenkins
Typeset and printed by Greenaways
Shareholder Information
Analysis of Ordinary Shareholdings
Shareholders Shareholders Shares Shares
At 31 January 2005 (Number)(%)(Number)(%)
By range of holdings
1– 100 702 5.72 41,528 0.02
101 – 250 1,740 14.18 352,621 0.20
251 – 500 2,516 20.51 846,154 0.49
501 – 750 1,808 14.74 1,138,888 0.66
751 – 1,000 1,098 8.95 993,000 0.57
1,001 – 2,000 2,098 17.10 2,899,678 1.67
2,001 – 5,000 1,300 10.60 4,145,306 2.38
5,001 – 10,000 529 4.31 3,913,284 2.25
10,001 – 50,000 356 2.90 6,736,985 3.87
50,001 and above 122 0.99 152,852,169 87.89
12,269 100.00 173,919,613 100.00
By category
Private Individuals 10,963 89.36 12,758,104 7.34
Banks 2 0.02 31,500 0.02
Nominee Companies 1,208 9.85 113,347,233 65.17
Insurance Companies 3 0.02 390,160 0.22
Pension Funds 1 0.01 12,250 0.01
Other Limited Companies 92 0.74 47,380,366 27.24
12,269 100.00 173,919,613 100.00 Alpha Airports Group Plc
Europa House
804 Bath Road
Cranford
Middlesex TW5 9US
Telephone +44 (0)20 8580 3200
Facsimile +44 (0)20 8580 3201
www.alpha-group.com
aagenquiries@alpha-group.com