DPWorldAR12 - Final - 10 April 2013

Connecting Global Markets
Annual Report 2012

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Manila (Philippines) Photo by Gilbert Manawat
01
DP World Annual Report 2012
BUSINESS
OVERVIEW
CORPORATE
GOVERNANCE
FINANCIAL
STATEMENTS
Contents
Business Overview
02. 2012 Review
04. Chairmans Statement
06. Our History
08. Our Business
10. Where We Operate
12. Our Strategy
14. Management Review
21. 2012 Key Performance Indicators
22. Corporate Responsibility
26. Our People
30. Case Study: Doraleh Container Terminal (Djibouti)
32. Case Study: Nhava Sheva (India)
34. Principal Risks and Uncertainties
36. Board of Directors
Corporate Governance
38. Report of the Directors
40. Corporate Governance
47. Statement of Directors Responsibilities
Financial Statements
48. Independent Auditors Report
49. Consolidated Income Statement
50. Consolidated Statement of Comprehensive Income
51. Consolidated Statement of Financial Position
52. Consolidated Statement of Changes in Equity
54. Consolidated Statement of Cash Flows
55. Notes to the Consolidated Financial Statements
The creative talent of DP World employees is showcased in this Annual Report with many of the images included having been taken by
our own people. Employees are credited accordingly.
02
2012 Review
April 2012
London, UK
On 23 April 2012, to mark the 175th anniversary of
the founding of British maritime group P&O,
DPWorld unveiled a prestigious and fascinating
book telling the P&O story through the eyes of those
who travelled with, worked for and managed P&O
over the years, richly illuminated by works from the
ofcial P&O Heritage Collection. Having acquired the
P&O Group in 2006, DPWorld is the proud preserver
of the P&O Heritage Collection which includes more
than 25,000 documents, paintings, photographs and
memorabilia dating back to the formation of P&O
in1837.
June 2012
UAE, Dubai
On 27 and 28 June 2012, DPWorld and the UAE
Ministry of Foreign Affairs jointly convened the
second UAE Counter-Piracy Conference under the
theme A Regional Response to Maritime Piracy:
Enhancing Public-Private Partnerships and
Strengthening Global Engagement. The conference
participants welcomed the progress made in
combating maritime piracy over the past year and
reafrmed their commitment to strengthen the
Public Private Partnership in the search for a
sustainable solution to the issue of piracy.
May 2012
Melbourne, Australia
In May 2012, DPWorld Melbourne commissioned eight new energy
efcient diesel-electric straddle carriers with a total of 22 on site by the
end of 2012. Based on the performance of the initial set of six over a 12
month period, the diesel electric straddle carriers are operating at 11%
lower fuel consumption than the existing diesel hydraulic straddle
carriers. The use of this energy-efcient equipment is important in
reducing DPWorlds carbon footprint at Australias largest commercial
port and provides greater container handling capacity.
03
BUSINESS
OVERVIEW
CORPORATE
GOVERNANCE
FINANCIAL
STATEMENTS
November 2012
Mumbai, India
DPWorld announced the receipt of the Letter of Award from
Jawaharlal Nehru Port Trust, Government of India, to build and operate
a single berth facility of 330 metres quay length alongside its existing
terminal operation at Nhava Sheva, Mumbai (India). The new quay will
be equipped with four rail mounted quay cranes and twelve rubber
tyred gantry cranes and is expected to be operational in 2015 with an
annual handling capacity of 800,000 TEU
1
and a draft of 13.5 metres.
December 2012
Dubai, UAE
In a special ceremony at Jebel Ali, Chairman H.E.
Sultan Ahmed Bin Sulayem formally oversaw the
installation of the last 65 tonne block which
completed the 2752 block foundation of the
extended quay wall for the one million TEU
expansion of Jebel Ali Container Terminal 2. The
expansion, scheduled to open for business in the
second quarter of 2013, extends the quay wall by
400 metres to 3000 metres, allowing the
simultaneous handling of six 15,000 TEU
mega-vessels.
December 2012
London, UK
DPWorlds London Gateway received its rst ship, which delivered four
new automatic stacking cranes. The automated cranes will operate
throughout the day and night and will therefore ensure a new level of
port reliability for the UK market. The stacking areas for shipping
containers will have dedicated land-side and quay-side equipment
which means that road vehicles will always have equipment dedicated
to their needs.
1 TEU means twenty foot equivalent container units.
04
Chairmans Statement
SULTAN AHMED BIN SULAYEM
CHAIRMAN
Dear Shareholders,
DP World delivered prot for the year
of $749 million
2
following a strong year
of operational performance from its
global operations, prudent nancial
management and proactive
management of assets within the
portfolio whilst investing in the future
growth of the Company.
Delivering an improvement in prots during what has been a
challenging operating environment shows that our portfolio is
focused on the right markets, and on delivering the right
operations and service to our customers.
This year, we have continued to actively manage our portfolio,
managing our assets to maximum advantage, divesting non-core
or low return assets, and repaying debt. This has enabled us to
move capital into those markets where we see more protable
returns whilst signicantly reducing our leverage and
strengthening our capital base.
This has all been achieved without compromising our global
network or compromising our focus on delivering world class
customer service. When taking into account prot from
divestments and monetisations, the prot attributable to owners
of the Company was $749 million.
We continue to invest in our portfolio with an additional 10
million TEU becoming operational during 2013 and 2014. This
new capacity will come into markets where there is signicant
demand for container terminal capacity, such as Brazil and the
UAE, or where the existing infrastructure is insufcient to meet
the changing requirements of our customers, for example in the
UK and the Netherlands.
Progress against strategy
DP World continues to make good progress towards the delivery
of our strategy. With our focus on incremental revenue generation
and improving operational efciencies, as well as delivering new
capacity, we will drive protable growth and deliver our longer-
term objective of improving returns.
Following another strong performance in 2012, we remain on
track to reach global capacity of 100 million TEU, 50% adjusted
EBITDA
3
margin and 15% return on capital employed
4
over the
medium term, whilst retaining a strong capital base. We have
gross capacity of 70 million with utilisation rates in excess of 80%.
In 2012, we reported an increase in adjusted EBITDA margin to
45.1% and further improvement in return on capital employed to
6.8%.
DP World has invested more than $6 billion to add over 20 million
TEU of operational capacity over the past ve to six years and a
further 10 million TEU will be added in the next two years. Todays
results are diluted by this signicant investment. However, we will
see further improvement as this capacity matures and as we
continue to focus on price improvements, cost management and
efciencies across the remainder of our portfolio.
Our balance sheet remains very strong. With another year of
strong cash performance, net cash ow from operations increased
to $1,231 million. The improvement in cash ow combined with
the proceeds of divestments or monetisations during 2012 has
resulted in lower net debt of $2,871 million as at 31December
2012. Our leverage (net debt to adjusted EBITDA) remains low at
2.0 times, which gives us the exibility to continue to invest in
new opportunities whilst retaining a strong capital base.
In line with our strategy, DP World is focused on investing for the
long-term capacity requirements of our customers, whether it is in
developed markets which do not have the efciencies or
capabilities to handle the increasing size of vessels, or in
developing markets, which have limited container port capacity to
meet their growing needs.
Qingdao (China) Photo by Mr Wang
2 Prot for the year attributable to owners of the Company after separately disclosed items.
3 Adjusted EBITDA is earnings before interest, tax, depreciation & amortisation before
separately disclosed items including share of prot from equity-accounted investees.
4 Return on capital employed is EBIT divided by total assets less current liabilities and
includesgoodwill.
05
BUSINESS
OVERVIEW
CORPORATE
GOVERNANCE
FINANCIAL
STATEMENTS
New projects at Embraport (Brazil), London Gateway (UK),
Rotterdam (Netherlands) and NSCIT (India) as well as the
expansion of our agship facility at Jebel Ali (UAE), will add a
signicant amount of infrastructure to the DP World network.
A sustainable future
As a Board, we believe it is a priority to integrate responsible
business practices into our daily activities, allowing us to grow our
business in a sustainable manner which is always consistent with
our obligations to the communities and countries where we
operate.
In December 2012, DP World was recognised as the number one
listed company on the S&P/Hawkamah ESG Pan Arab Index for
our performance against 200 environmental, social and
governance metrics.
We factor in climate change and sustainability as we invest in both
new capacity and our existing portfolio. Lower greenhouse gases
and the development of sustainable strategies are particularly
important, not just to port operators and shipping lines, but
across the global supply chain. Since 2009, our efforts to reduce
carbon emissions have reduced our global carbon footprint by
13%.
DP World plays a signicant role in the communities in which we
operate and we strongly believe that it is our responsibility to
contribute to their long-term sustainability.
The Board views safety as an integral part of our business
supporting the efciencies of our operations. DP Worlds safety
record continues to improve and we are pleased to report further
progress in 2012 with the frequency of injuries per million hours
worked, or lost time injury frequency rates, falling by 9% against
2011. This trend demonstrates our commitment to providing a
safe and responsible work environment across theglobe.
World Expo 2020
DP World is delighted to support the UAEs bid to host the World
Expo 2020 in Dubai. With our global portfolio and international
family of over 28,000 employees, DP World exemplies the
theme of the UAE Expo bid: Connecting Minds, Creating the
Future.
Dividend
The Board is recommending a full year dividend of 24 US cents
per share (2011: 24 US cents per share). This comprises an increase
of 10% in the ordinary dividend to 21 US cents per share,
supplemented by a special dividend of 3 US cents per share
reecting the prot attributable to owners of the Company from
separately disclosed items. This will result in a total dividend
distribution of $199 million reecting continued condence in our
ability to generate cash and support our growth plans whilst
maintaining a consistent dividend payout.
Subject to approval by shareholders, the dividend will be paid on
30 April 2013 to shareholders on the relevant register as at the
close of business on 2 April 2013.
Outlook
Operating conditions in each of our markets in the rst two
months of 2013 have been consistent with those experienced at
the end of last year and the economic environment continues to
remain uncertain.
We remain condent about the long-term outlook of our industry
and remain well positioned to deal with a changing economic
environment as well as continue to focus on our established high
standards of service to customers.
Employees
I would like to express my appreciation to the entire Board and to
all of our colleagues around the world who have contributed to
another year of excellent results, ensuring DP World remains a
leading global terminal operator. In addition, we thank all of our
partners for their commitment. As we continue this exciting
journey, I look forward to sharing another year of growth and
success.
Sultan Ahmed Bin Sulayem
Chairman
Southampton (UK) Photo by Steven Salmon
06
Our History
First stage of Port Rashid (UAE)
was completed.
DPI won the management
contract for Djibouti Port,
expanding into Africa.
Jebel Ali Port (UAE) opened. DPI won the contract to operate
a new container terminal at
Visakhapatnam Port (India).
Port Rashid and Jebel Ali Port
merged to form Dubai Ports
Authority (DPA).
DPI entered Europe after
it won the contract to operate
a new container terminal at
Constanta (Romania).
Dubai Ports International (DPI)
was formed to export DPAs
success internationally.
DPI won the contract to manage
Jeddah Islamic Port (Saudi
Arabia).
DPI acquired CSX World
Terminals, expanding from a
regional to a global operator.
The deal completed in early
2005.
1972 1979 1991 1999 2000 2002 2003 2004
07
BUSINESS
OVERVIEW
CORPORATE
GOVERNANCE
FINANCIAL
STATEMENTS
DPWorld acquired P&O and
became the third largest port
operator in the world.
DPWorld invested in Tianjin
Port (China) and started
construction at Doraleh
Container Terminal (Djibouti). It
also won the concession to
develop a new container
terminal at the Port of Callao
(Peru).
DPWorld started infrastructure
work at DPWorld London
Gateway (United Kingdom).
DPWorld ofcially inaugurated
DPWorld Callao (Peru).
The Company was listed on
NASDAQ Dubai.
DPWorld ofcially inaugurated
Terminal 2 at Jebel Ali Port,
Dubai (UAE) and signed an
agreement for the development
of Rotterdam World Gateway
(Netherlands).
DPWorld added Tarragona
(Spain), Dakar (Senegal) and
Sokhna (Egypt) to its portfolio.
DPWorld increased its
shareholding in Chennai (India)
and Karachi (Pakistan).
DPI was rebranded under the
name of DPWorld and
separated from DPA. Going
forward DP World was
responsible for all ports related
commercial activities.
Greeneld sites at Yarimca
(Turkey), Qingdao (China) and
Vallarpadam (India) were added
to the DPWorld portfolio.
DPWorld was contracted to
provide operations and
maintenance logistics for Pusan
Newport Company (South
Korea).
DPWorld opened new
terminals at Doraleh (Djibouti),
Algiers and Djen-Djen (Algeria)
and Ho Chi Minh City
(Vietnam).
DPWorld entered a partnership
to acquire a majority stake in
the greeneld development of
Embraport, Santos (Brazil).
DPWorld opened its new one
million TEU (Phase 1) capacity
terminal at Vallarpadam (India).
DPWorld expanded its portfolio
with two new terminals at
Paramaribo (Suriname).
DPWorld listed on the London
Stock Exchange.
DPWorld and Citi Infrastructure
Investors formed a strategic
partnership to manage and
operate ve terminals in
Australia.
2005 2006 2007 2008 2009 2010 2011
08
DPWorld
connecting
global trade
Southampton (UK) Photo by Andrew Sassoli Walker
09
Group 5 Year Capacity Growth
TEU million
2008 2009 2010 2011 2012
Consolidated
Gross
31.0
55.5
34.4
59.7
35.1
64.1
33.6
69.4
34.7
69.7
Group 5 Year Volume Growth
TEU million
2008 2009 2010 2011 2012
Consolidated
Gross
27.8
46.2
25.6
43.4
27.8
49.6
27.5
54.7
27.1
56.1
BUSINESS
OVERVIEW
CORPORATE
GOVERNANCE
FINANCIAL
STATEMENTS
Our Business
Yantai (China) Photo by Li Bo
DPWorld is a global operator of container and marine terminals.
With a network of more than 60 terminals spanning six
continents, DPWorld is one of the largest and most
geographically diversied container terminal operators in the
world. It has a global capacity of 70 million TEU and handled over
56 million TEU across its global portfolio during 2012. In 2012,
DPWorld generated revenues of $3,121 million and EBITDA of
$1,407 million.
DPWorld aims to enhance the supply chain efciency of its
customers by effectively handling container, bulk and general
cargo across its network. It also manages cruise terminals in the
UAE and Argentina. Its dedicated, experienced and professional
team serves customers in some of the most dynamic economies
around the world.
DPWorld operates its portfolio of container terminals through
long-term concession agreements entered into with the owner of
each port and with an average concession across the Group of
approximately 40 years. DPWorlds portfolio also includes three
freehold terminals which do not attract a concession fee structure.
DPWorld continually invests in terminal infrastructure leading to
increased efciency and protability within the Groups terminals.
Investment in terminal infrastructure can be advantageous for a
countrys Foreign Direct Investment, facilitating trade and
inuencing domestic production while enhancing community
development with the creation of local jobs. With the expansion
of existing terminals and a pipeline of new developments,
DPWorld is contributing to economic growth and development
around the world.
DPWorld is committed to working closely with its customers and
joint venture partners to deliver quality services today and to plan
for the needs of customers tomorrow. Whether it is planning for
new developments such as enabling ports to handle the next
generation of ultra-large container ships or improving the
reliability and efciency standards to handle more containers
safely, DPWorld is a global business partner.
10
Where We Operate
We operate our portfolio under
three regions:
Middle East, Europe and Africa
Asia Pacic and Indian
Subcontinent
Australia and Americas
UAE
DPWorlds UAE operation is at the core of the Groups
portfolio and is comprised of three terminals, including
its agship facility at Jebel Ali (UAE), which is one of the
largest container terminals in the world. Jebel Ali is
undergoing major expansion work adding 5 million
TEU, taking capacity to 19 million TEU.
Middle East (excluding UAE)
The Group has two container terminals in two
countries, including a major new expansion project at
Sokhna (Egypt).
Europe
The Group has thirteen container terminals in seven
countries and a number of inland terminals in Northern
Europe. In addition, it has development projects in the
United Kingdom, Turkey, France and the Netherlands.
Africa
The Group has six container terminals in four countries,
providing general and bulk cargo stevedoring. The Group
has a new development project in Dakar (Senegal).
Asia Pacic and Indian Subcontinent
Asia Pacic
The Group has a network of ten container terminals in six
countries throughout the Asia Pacic area. Additionally, it
operates ATL Logistics Centre in Hong Kong.
Indian Subcontinent
The Group has ve terminals in India and one in
Pakistan, and has the largest presence of any container
terminal operator in the Indian Subcontinent. The
Group has a new development project in Kulpi (India)
and another development in Nhava Sheva (India).
Australia
The Group manages a network of four container
terminals in Australia including Brisbane, Sydney,
Fremantle and Australias busiest and largest container
terminal in the Port of Melbourne.
Americas
The Group has ve terminals in ve countries. In
addition, it has a new greeneld development in Brazil.
Container Terminals
Non-Container Terminals
New developments and major expansions
11
BUSINESS
OVERVIEW
CORPORATE
GOVERNANCE
FINANCIAL
STATEMENTS
Map of DP Worlds portfolio as at 31 December 2012
12
Our Strategy
Our strategic focus
DPWorlds vision is to create sustainable value through global
growth, service and excellence. This vision is embodied in the
Groups strategic focus which is to deliver sustained long-term
value to our shareholders, by providing quality customer service,
developing efcient, safe and secure methods of managing world
trade and offering rewarding careers to our employees.
The ports industry serves as a vital economic lifeline and gateway
to a country by supporting the countrys economic growth,
security and prosperity. By efciently servicing vessels crossing the
worlds oceans, ports play a signicant role in contributing to a
countrys GDP,
5
reinforcing trade relationships, supporting
economic diversication, building local knowledge and expertise
to increase a countrys competitiveness and also generating
employment. Container ships transport around 60% of the value
of global seaborne trade, more than $4 trillion worth of goods
annually.
6
Key inuences driving the growth of our industry include
globalisation, rapidly developing economies, urbanisation, the
emergence of mega cities, containerisation, efciency and
changing customer demands. We develop and adapt our strategy
to take into account these global trends and their impact on our
industry.
We believe our business will continue to deliver long-term value to
our shareholders as it offers stable and long-term cash ows,
relatively high growth rates, high barriers to entry, a global
network which is managed locally, and world class operations and
employees.
We recognise health and safety and corporate responsibility as key
enablers that guide our activities and they are embedded within
our values. We are committed to creating a safe culture
throughout our portfolio and we recognise that governments,
and the communities that they serve, focus on more than just the
movement of cargo.
Our strategy
Our strategy describes our plan to expand our portfolio of
world-class infrastructure assets, to strengthen global supply
chains and to generate sustainable economic growth, by focusing
on key strategic priorities.
Southampton (UK) Photo by Andrew Sassoli Walker Jebel Ali (UAE)
DP World Vision
Sustainable value through
global growth, service
and excellence
DP World Mission
A global approach to a local
business environment where
excellence, innovation and
protability drive our core
business philosophy
of exceptional
customer service
DP World Values:
Commitment to our
people and our customers
Protable global growth
Responsible corporate
and personal behaviour
Excellence and innovation
Strategic priorities to achieve DP Worlds vision
Financial
Organisation wide
strategies
Customer
Internal/
Operational
People and
Learning
Corporate Responsibility
Strategy Implementation
Communication
Driving sustained long-term
shareholder value
Creating a satised
and protable
customer experience
Developing efcient, safe
and secure methods of
managing world trade
Creating a learning and
growth environment
Figure 1 : DPWorlds Vision, Mission and Values
Figure 2 : DPWorlds Strategy Map
We dene strategic initiatives that are organisation wide, as well
as strategic priorities to support our mission and values and
achieve our vision. DPWorlds initiatives and priorities are
reassessed on a regular basis to take into account the changing
environment in which we operate, including changes in supply
and demand, competitive positioning, developments in
technology, environmental management and the availability
ofresources.
13
BUSINESS
OVERVIEW
CORPORATE
GOVERNANCE
FINANCIAL
STATEMENTS
Mundra (India)
Our strategic priorities
Our four strategic priorities are dened as:
1. Driving sustained long-term shareholder value by:
i. setting challenging nancial targets to drive an optimised
productivity strategy that encompasses best practices and
utilises global synergies;
ii. actively managing our portfolio and ensuring access to the
best sources of capital for our business in view of its
long-term nature;
iii. strategically investing in core value-adding terminal
businesses where we have management control and
exploring partnership opportunities; and
iv. operating our portfolio of container ports through long-
term concession agreements.
2. Creating a satised and protable customer experience by:
i. being a leader in quality and reliability and delivering to our
customers the right capacity to meet the right demand.
Going beyond the port gates when necessary to add value;
ii. growing sustainable high value customer relationships
through our commitment to being a market leader in
investment to address changing demands; such as investing
to cater for the new ultra-large container ships;
iii. being a global operator with operating advantages and
efciencies; and
iv. being dedicated to providing exceptional customer service
that maintains customer trust in our business.
3. Developing efcient, safe and secure methods of
managing world trade by:
i. growing our portfolio sustainably and protably by growing
the Groups portfolio in line with market driven volume
growth and investing for the future;
ii. adopting an investment strategy that focuses on origin and
destination cargo and emerging markets where growth is
stronger and we can add real value;
iii. managing risk and optimising business processes;
iv. providing a safe and secure work environment; and
v. achieving operational excellence and encouraging
innovation in our business and industry.
4. Creating a learning and growth environment by:
i. being the employer of choice, offering employees rewarding
careers and developing future generations;
ii. creating an open work environment where our core values
are embedded; and
iii. creating a learning culture that encourages employees to
share knowledge.
5 GDP means Gross Domestic Product.
6 These gures are reported by the World Shipping Council on their website
www.worldshipping.org as at 3 March 2013.
External engagement
To enhance our understanding of the drivers of the
demand and supply balance, and developments in
technology, corporate responsibility, environment and
regulatory frameworks, we actively engage with leaders in
these elds. We have worked with the World Economic
Forum (WEF) since 2010 and during 2012 we worked with
them on their Connected World project: Transforming
Travel, Transportation and Supply Chains 2025. This project
is a multi-stakeholder project to identify and leverage
long-term opportunities for travel and transportation and
develop scenarios for 2025. DPWorld has also worked with
the Global Agenda Council in Dubai in 2012, which brings
together leaders from academia, government, business and
other elds to share ideas on key global challenges and put
forward ideas and recommendations, to the WEF annual
meeting in Davos. Since 2011, we have worked with Oxford
University in the United Kingdom to lead scenario planning
workshops for the Universitys MBA programme with the
aim of engaging with tomorrows leaders and discussing
long-term strategy and responses to future industry
challenges.
14
Management Review
Global trade lies at the heart of DP Worlds business. Ensuring our
ports are well placed to capture current and future trade ows is
essential to our success and creating value for all stakeholders.
The patterns of global trade continue to evolve as the balance of
economic activity shifts to the south and the east and emerging
markets take an increasing share of world economic activity.
Figures from the United Nations Conference of Trade and
Development show that in 2011, developing countries had a
40.4% share of global manufactured exports. In some categories
the export market share of these countries grew by over 30
percentage points in only 15 years.
While industrialised Asian countries still dominate these trends,
one of the growing patterns is for increased intra-regional trade.
Over the 2000-2010 period, south-south exports grew from 13%
to 23% of world trade. China-India trade has more than doubled
since 2007 and Africa is also an increasingly important part of the
picture. Trade between China and Africa is likely to be over $200
billion in 2012. The World Trade Organisation has suggested at
this rate of increase 25% year on year Africa could, within
three to ve years, surpass the EU and US to become Chinas
largest trade partner.
Another factor at play is the Made in the World phenomenon
as manufacturing processes continue to become global;
developing countries increasingly act as producers and markets for
each other. World Trade Organisation gures show almost 60%
of trade in goods is in intermediate goods with the average
import content of exports around 40%.
With manufacturing continuing to shift to cheaper locations,
middle class consumers in the emerging markets are playing an
increased role in global demand for goods. These trends are set to
continue.
To date, however, port development has not kept pace with these
changes. Volume growth has been almost double the rate of new
capacity growth, resulting in a signicant lack of global container
terminal capacity today.
Shortage of capacity is further exacerbated by the fact that much
of the developed world port capacity is over 30 years old and
increasingly no longer t for purpose. This point takes on
increased relevance with the arrival this year of a new breed of
ultra-large container ships at 18,000 TEU. These vessels are
around 400m in length, which is larger than the average 300-
350m container berth.
The shift to these new vessels by our customers, the shipping
lines, represents a signicant operational change on the Asia to
Europe routes. This in turn has led to a cascade of sub 8,000 TEU
vessels being deployed on smaller or emerging trade routes,
which can add further to bottle-necks because many of the
smaller emerging market ports are not yet capable of handling
these larger vessels.
Meanwhile, cargo owners are increasingly focused on short lead
times and real time inventories, pushing port operators to improve
terminal efciencies to move goods along the supply chain more
quickly. Our investment in London Gateway for example is
expressly for this reason, to improve the efciency of the UK
supply chain.
Responding to these different operating challenges is critical to
fullling our customers requirements and ensuring an efcient
supply chain. We do this through implementing processes,
training and efcient equipment. We are very focused on
investing to improve the reliability and performance of our
container terminals for the benet of our customers and we are
already seeing results. In Dakar (Senegal) for example truck
turnaround time has decreased from 8 hours to 45 minutes, in
Dubai (UAE) it has reduced to 25 minutes and in Constanta
(Romania) to 21 minutes. This allows a higher number of deliveries
and pick ups each day and helps reduce congestion in port cities.
With the average life of a container port concession across the
industry in excess of 30 years, DP World must take a long-term
view in positioning the Company to respond to these trends.
In 2012 we have focused on our existing
operations through the delivery of
exceptional customer service from
improved efciencies in our terminals.
This has allowed us to deliver good
revenue growth and manage costs,
resulting in a signicant improvement in
adjusted EBITDA margin to45.1%.
MOHAMMED SHARAF
GROUP CHIEF EXECUTIVE OFFICER
15
BUSINESS
OVERVIEW
CORPORATE
GOVERNANCE
FINANCIAL
STATEMENTS
Over the past ve to six years DP World has invested more than
$6 billion adding over 20 million TEU of new capacity and
growing ahead of the market. Our investment has focused on
ensuring we have the capacity to match customer needs by:
matching investment to changing trade lanes (such as in Africa,
Turkey, Latin America);
matching investment for larger vessels (such as in London
Gateway and Jebel Ali ); and
matching investment to emerging market growth (such as in
India).
The investment we are making now will ensure we are the best
positioned port operator to respond to these signicant changes
to the global supply chain. We are already one of the best placed
terminal operators to handle these larger vessels across our
portfolio. We handled 1,283 ultra-large container ships globally in
2012, 72% more than last year. This has driven higher utilisation
across our portfolio and increased our market share.
By 2015 we expect to have approximately 85 million TEU of
capacity globally, with 30% of our capacity in the Middle East and
Africa, markets that are forecast to grow signicantly. Our aim by
2020 is to be operating 100 million TEU of capacity, retaining our
10% market share and our 75% focus on emerging markets.
Uncertainty persists in the global economic outlook. Volumes on
major trade routes such as Asia to Europe will come under stress
during 2013 owing to a weak Eurozone economy. However, the
DP World geographic network positions us effectively to take
advantage of the strong intra-Asia trade and Middle East trades,
the growing African market and the relatively stable markets of
the Americas. We see plenty of opportunity to further expand our
portfolio with an emphasis on emerging markets in Africa, Central
and South America and Asia.
Operating and nancial review
This year, we have focused on our existing operations through the
delivery of exceptional customer service from improved
efciencies in our terminals. This has allowed us to deliver good
revenue growth and manage costs, resulting in an improvement
in adjusted EBITDA margin to 45.1%.
Whilst the operating environment has remained challenging in
some of our regions, it is the strength of our operations in Africa,
Middle East, South America and Asia which has supported our
improvement in adjusted EBITDA to $1,407 million.
In 2012, we continued to actively manage our portfolio,
strategically divesting or monetising some of our terminals. This
makes a comparison with the prior year more challenging. Like for
like growth at constant currency, where referenced below, is a
better comparison as this is without the addition of (a) new
capacity at Paramaribo (Suriname) (b) divested equity-accounted
investees Tilbury (UK), P&O Trans Australia (POTA), Aden (Yemen),
Adelaide (Australia), Vostochny (Russia) and DMS (P&O Maritime)
(c) the deconsolidation of our ve Australian terminals and (d) the
impact of exchange rates as our nancial results are translated
into US dollars for reporting purposes.
Karachi (Pakistan) Photo by Raheel Khan Qingdao (China) Photo by Mr Cheung
USD million before separately disclosed items
7
full details on page 49 onwards 2012 2011
%
change
Consolidated throughput
8
(TEU 000) 27,097 27,471 (1%)
Revenue 3,121 2,978 5%
Share of prot (loss) from equity-accounted investees 134 142 (6%)
Adjusted EBITDA 1,407 1,307 8%
Adjusted EBITDA margin 45.1% 43.9%
Prot for the year attributable to owners of the Company 555 459 21%
7 Before separately disclosed items primarily excluded non-recurring items.
8 Consolidated throughput is 100% of the throughput from all terminals we operate regardless of % ownership.
16
Management Review continued
Revenue from our consolidated terminals was $3,121 million, 5%
ahead of the prior year. Containerised revenue accounted for 77%
of our total revenue and was $2,411 million for the year, 2%
ahead of the previous year. In spite of the 1% decline in
throughput, container revenue per TEU increased 4% as we
focused on handling higher revenue container volumes and
implemented price increases particularly in the Middle East,
Europe and Africa region. Non-container revenue was $710
million, 14% ahead of the prior year and accounted for 23% of
total revenue.
During the year we divested a number of terminals from our
equity-accounted investees portfolio, in particular in the Middle
East, Europe and Africa region. Our share of prot from equity
accounted investees was lower than last year at $134 million.
However, excluding these divestments, the portfolio performed
well, delivering 9% like for like growth at constant currency as
terminals in the Americas and Australia region, and Middle East,
Europe and Africa region performed strongly.
Adjusted EBITDA continued to improve reaching $1,407 million,
an increase of 8%, due to strong growth in the Middle East,
Europe and Africa region. Adjusted EBITDA margin expanded to
45.1% as utilisation rates improved to over 80%, terminal
efciencies improved and we maintained good cost discipline.
Prot for the year attributable to owners of the Company, before
separately disclosed items, was $555 million and 21% ahead of
the prior year following the increase in adjusted EBITDA growth
and a $17 million reduction in net nance costs, depreciation and
amortisation from the prior year.
On a like for like basis at constant currency,
9
revenue was 10%
ahead and adjusted EBITDA was 11% ahead of the prior year.
During 2012, we invested $685 million across our portfolio. This
was signicantly lower than expected as some of our planned
capital expenditure in 2012 will now come in 2013. This will not
impact the timing of the delivery of new capacity, but is simply a
function of when equipment is invoiced and paid for.
Investment in new developments accounted for approximately
57% of our total capital expenditure with the majority focused on
our new development at London Gateway (UK), which will open
with 1.6 million TEU of capacity in the fourth quarter of 2013.
Expansion of existing facilities accounted for 27% of our total
capital expenditure, supporting the expansion of Jebel Ali where
an additional 1 million TEU is on track to open at Terminal 2 in
2013 and a further 4 million TEU is due to open at Terminal 3 in
2014.
The Middle East, Europe and Africa region delivered an excellent
performance with a 19% improvement in adjusted EBITDA, and
further improvement in adjusted EBITDA margin to 48.3% as
both container revenue per TEU and non-container revenue
increased. This reects the strategic positioning of our terminals
Hong Kong (China) Photo by Wong Chi Kong Jebel Ali (UAE) Photo by Joel Naguiat
USD million before separately disclosed items 2012 2011
%
change
Consolidated throughput (TEU 000) 19,202 19,110 1%
Revenue 2,112 1,884 12%
Share of prot (loss) from equity-accounted investees 24 14 69%
Adjusted EBITDA 1,021 861 19%
9 Like for like growth at constant currency, is without the addition of (a) new capacity at Paramaribo (Suriname) (b) divested equity-accounted investees Tilbury (UK), P&O Trans Australia (POTA), Aden
(Yemen), Adelaide (Australia), Vostochny (Russia) and DMS (P&O Maritime) (c) the deconsolidation of our ve Australian terminals (d) and the impact of exchange rates as our nancial results are
translated into US dollars for reporting purposes.
17
BUSINESS
OVERVIEW
CORPORATE
GOVERNANCE
FINANCIAL
STATEMENTS
toward the stronger economies with a focus on the origin and
destination markets and compensates for weaker trade across
continental Europe.
Revenue was $2,112 million, 12% ahead of the prior year as
container volumes increased 1% and container revenue per TEU
increased 10% following price increases in this region. Non-
container revenue increased 19% to $493 million, primarily driven
by the UAE where we saw an increase in demand related to
construction, tourism and roll-on roll-off cargo.
Our share of prot from equity-accounted investees increased to
$24 million as a stronger performance from the Africa and Middle
East terminals mitigated a weaker performance in European ports
where volumes softened and recent divestments impacted our
share ofprot.
Adjusted EBITDA was $1,021 million, 19% ahead of 2011 as the
increase in revenue combined with improved productivity, higher
utilisation and good cost management resulted in higher adjusted
EBITDA margin of48.3%.
The UAE region delivered another excellent performance with
container revenue per TEU increasing by 18%. This growth in
revenue is as a result of proactive pricing measures for both
container stevedoring and container storage. Non-container
revenue grew by 28% as the region continued to benet from an
improvement in economic performance, driven by the tourism and
retail sectors and an increase in the number of infrastructure
projects.
Investment in our Middle East, Europe and Africa portfolio was
$575 million during 2012. This investment was focused on London
Gateway (UK), which will open with 1.6 million TEU in 2013, and
the extension of Jebel Ali (UAE) where an additional 1 million TEU
at Terminal 2 will open in 2013 and 4 million TEU at Terminal3 is
expected in2014.
During the year, some of our Europe and Middle East equity-
accounted terminals were divested as we took the opportunity
torecycle capital into high return businesses in faster growing
markets where we have management control.
Divestments included container terminals in Tilbury (UK), Aden
(Yemen) and Vostochny (Russia). In addition, as part of a
restructuring in Antwerp (Belgium), we divested our break bulk
facility to focus on container terminal operations. Excluding these
divestments, like for like revenue growth at constant currency
10

was 13% ahead of the prior year and adjusted EBITDA was 20%
ahead.
The Asia Pacic and Indian Subcontinent region took a strategic
decision to focus on handling a smaller number of higher margin
containers. Whilst this has reduced revenue and adjusted EBITDA,
adjusted EBITDA margin increased to 65.6%. The region was also
impacted by unfavourable currency movements.
Revenue across the region fell 9% to $457 million due to the
reduction in container volumes, lower storage revenue in Karachi
(Pakistan) and unfavourable currency movements. Non-container
We remain condent about the long-term outlook of our industry and remain well
positioned to deal with a changing economic environment as well as continue
to focus on our established high standards of service to customers.
%
change
Consolidated throughput (TEU 000) 5,401 5,578 (3%)
Revenue 457 500 (9%)
Share of prot (loss) from equity-accounted investees 111 117 (6%)
Adjusted EBITDA 299 322 (7%)
10 Like for like growth at constant currency normalises for the divestments or monetisation of Tilbury (UK), Aden (Yemen), Vostochny (Russia) and the translation impact of exchange rates.
18
revenue improved 8% to $63 million as we saw a greater
contribution from our rail service in India and non-container
revenue in some Indian ports.
Whilst our portfolio of terminals accounted for as equity
accounted investees performed well in 2012, the comparison with
the prior year was impacted by higher prot in 2011 from a
one-off government rent and rates refund in Asia. Excluding this,
prot from our portfolio of equity-accounted terminals was
slightly lower than the prior year.
Adjusted EBITDA was $299 million, 7% lower than last year on
account of the lower revenue and lower contribution from our
share of prot from equity accounted investees. However, our
decision to focus on higher margin containers in India has resulted
in higher adjusted EBITDA margin of 65.6%.
Excluding unfavourable currency movements, like for like revenue
growth at constant currency
11
declined 3% and adjusted EBITDA
declined 6% when compared with the prior year.
On 7 March 2013, DP World entered into a strategic partnership
with Goodman Hong Kong Logistics Fund, monetising 75% of its
interests in CSX World Terminals Hong Kong Limited (CT3), which
operates berth 3 of the Kwai Chung Container Terminal (CT3) and
ATL Logistics Centre Hong Kong Limited (ATL), a logistics centre
located alongside CT3. As part of the strategic partnership, DP
World will continue to manage the port operations. Completion,
subject to regulatory approvals, is expected to be towards the end
of the rst half of2013.
On the same day, DP World divested all of its interest in Asia
Container Terminals Holdings Limited, the holding company of the
entity that owns and operates Asia Container Terminal 8 West
(CT8).
The total consideration for the two transactions was $742 million
and the total net gain is expected to be approximately $151
million, subject to transaction costs and currency movements.
Our terminals in the Americas and Australia region delivered a
strong underlying
12
revenue performance in 2012. However this
has not been converted into equally strong adjusted EBITDA
growth due to weaker results from our equity-accounted
investees which were impacted by pre-operational costs in
Embraport (Brazil) and the impact of one-off non-core expenses
in theregion.
Revenue was $553 million for the year, down 7% due to the
deconsolidation of Australian terminals from 12March 2011.
Onan underlying basis this was 14% ahead, reecting a 4%
improvement in container revenue per TEU and a 3%
improvement in non-container revenue.
We reported a loss of $1 million on our share of prot from
equity-accounted investees. This was due to the higher interest
costs associated with the new capital structure in relation to our
joint venture in Australia, pre-operational expenses in relation to
our new development in Embraport (Brazil) and the exclusion of
prot from P&O Trans Australia (POTA) and Adelaide (Australia),
which were divested in 2011 and 2012 respectively.
As reported
% change
Underlying
% change
Consolidated throughput (TEU 000) 2,494 2,782 (10%) 12%
Revenue 553 594 (7%) 14%
Share of prot (loss) from equity-accounted investees (1) 10 (110%) (7%)
Adjusted EBITDA 166 203 (18%) 2%
11 Like for like growth at constant currency normalises for the translation impact of exchange rates.
12 Underlying change shows what the % year over year change would have been had the ve terminals in Australia continued to be consolidated in DP Worlds accounts from 1 January 2012 to
11March 2012 and allows a better comparison with the prior period.
Last year was also an important period in terms of progressing the delivery of four
major development projects around the world. The rst of these will come on
stream in the next few months at Jebel Ali (UAE), with Embraport (Brazil) and
London Gateway (UK) opening later this year. The fourth, the new terminal at
Jebel Ali, is well underway and set to open next year.
19
BUSINESS
OVERVIEW
CORPORATE
GOVERNANCE
FINANCIAL
STATEMENTS
Adjusted EBITDA was $166 million, down 18% on a reported
basis principally due to the deconsolidation of Australian terminals
and divestments. On an underlying basis adjusted EBITDA was 2%
ahead as we continued to grow underlying revenue and maintain
good cost control. The adjusted EBITDA margin of 30% was
diluted by the loss of prot from equity-accounted investees.
Like for like revenue growth at constant currency
13
was 11%
ahead of the prior year as volumes grew 10% and adjusted
EBITDA decreased 3%.
Capital expenditure
During 2012, we invested $685 million across our portfolio. This
was signicantly lower than expected as some of our planned
capital expenditure in 2012 will now come in 2013. This will not
impact the timing of the delivery of new capacity, but is simply a
function of when equipment is invoiced and paid for.
Our three year forecast for capital expenditure between 2012 and
2014 remains at $3.7 billion with the expectation of investing
approximately $1.8 billion and $1.1 billion in 2013 and 2014
respectively. From 2015 onwards we expect capital expenditure,
including maintenance capital expenditure, to signicantly reduce.
Investment in new developments accounted for approximately
57% of our total capital expenditure with the majority focused on
our new development at London Gateway (UK) which will open
with 1.6 million TEU of capacity in the fourth quarter of 2013.
Expansion of existing facilities accounted for 27% of our total
capital expenditure, supporting the expansion of Jebel Ali Port
where an additional 1 million TEU is on track to open at Terminal
2 in 2013 and a further 4million TEU is due to open at Terminal 3
in 2014.
Alongside these larger capital investment projects, additional
capital expenditure was focused on our existing portfolio to
ensure that our terminals are improving efciencies and
productivity.
Net nance costs
As at 31 December 2012, gross debt was $4.8 billion and cash
balances were $1.9 billion.
In April 2012, we repaid a $3 billion syndicated loan facility using
some of the cash held on our balance sheet. The repayment of
the loan facility resulted in lower nance costs of $364 million for
the year and reduced nance income of $75 million. Net nance
costs of $289 million remained broadly in line with the previous
year.
Interest Cover (adjusted EBITDA and net nance costs) improved
to 4.9 times in 2012.
Taxation
DP World is not subject to income tax on its UAE operations. The
tax expense relates to the tax payable on the prot earned by
overseas subsidiaries, as adjusted in accordance with taxation laws
and regulations of the countries in which they operate. For 2012,
DP Worlds income tax expense was $73 million before separately
disclosed items.
The effective tax rate before separately disclosed items was
14.9%, lower than the prior year, due to a change in the mix of
our prot.
Prot attributable to non-controlling interests (minority
interest)
Prot attributable to non-controlling interests (minority interests)
was higher than the prior year at $80 million due to a stronger
performance in those terminals where there is a larger non-
controlling interest.
The key terminals where we have non-controlling interest in 2012
are CT3 (Hong Kong), Doraleh (Djibouti), Karachi (Pakistan),
Buenos Aires (Argentina) and Southampton (UK).
Separately disclosed items
In 2012, DP World reported separately disclosed items of $192
million. This comprised $249 million prot on sale of businesses
and our share of prot of equity-accounted investees. These
prots were netted off against impairment of assets and
restructuring costs, ineffective interest rate swaps and currency
options and income tax expenses.
Saigon (Vietnam) Photo by Long Le Duong Saigon (Vietnam) Photo by Long Le Duong
13 Like for like growth at constant currency normalises for the divestments or monetisation of Australia, P&O Trans Australia, Adelaide (Australia), DMS (P&O Maritime, Australia), new capacity at
Paramaribo (Suriname) and the translation impact of exchange rates.
20
Balance sheet
In 2012, total assets reduced to $16.4 billion as cash balances
decreased due to the repayment of debt using cash from the
balance sheet. Total equity increased to $8.7 billion due to an
increase in retained earnings.
The Groups investment in equity-accounted investees reduced to
$3.3 billion as we made a number of divestments from this
portfolio during the year.
Cash ow
Net cash from operating activities was $1,231 million, an increase
of $251 million over 2011 due to better performance from our
terminals.
Net debt
As at 31 December 2012 net debt was $2.9 billion (gross debt of
$4.8 billion and cash of $1.9 billion). This compares with a net
debt of $3.5 billion as at 30 June 2012. Net debt is signicantly
lower due to increased net cash from operating activities, and
proceeds from divestments.
Long-term corporate bonds totalled $3.25 billion, made up of
$1.75 billion 30-year unsecured MTN due in 2037 and $1.5 billion
10-year unsecured sukuk due in 2017. In addition we have $1.5
billion of debt at the subsidiary level.
Leverage (net debt to adjusted EBITDA) decreased to 2.0 times.
Following the transactions in Hong Kong, our leverage will reduce
further.
Return on capital employed
In 2012, we reported an improvement in return on capital
employed (EBIT divided by total assets less current liabilities) to
6.8%.
DP World has a portfolio of long-term assets with an average
concession life of approximately 40 years. As at the end of 2012,
26% of our capacity was less than ve years old and we have four
major projects at pre-operational stage of development. This
means a signicant proportion of our assets are some way from
delivering maximum potential EBIT which dilutes the overall
returns. However, as this capacity becomes operational and
matures we expect our returns to make steady progress towards
15%.
Mohammed Sharaf
Group Chief Executive Ofcer
Yuvraj Narayan
Chief Financial Ofcer
Hong Kong (China) Photo by Wong Chi Kong Antwerp (Belgium) Photo by Ronny Vanpachtenbeke
21
2010 2011 2012
8.8
8.0
7.3
Per million hours worked
2010 2011 2012
1240
1307
1407
US$ million
2010 2011 2012
40.3
43.9
45.1
%
2010 2011 2012
374
459
555
US$ million
2010 2011 2012
45
82
90
US$ cents
2010 2011 2012
4.4
6.0
6.8
%
BUSINESS
OVERVIEW
CORPORATE
GOVERNANCE
FINANCIAL
STATEMENTS
2012 Key Performance Indicators
Frequency of lost time injuries
7.3
LTIFR (frequency of lost time injuries) is dened as the frequency of injuries per million hours
worked.
DPWorld is committed to ensuring the safety of our employees and contractors.
Adjusted EBITDA
$1,407 million
Growing adjusted EBITDA (earnings before interest, tax, depreciation and amortisation) is a key
measure of value delivered to shareholders. EBITDA is calculated including our share of prot
from joint ventures and associates on a basis which excludes separately disclosed items.
Adjusted EBITDA margin
45.1%
The adjusted EBITDA margin is based on EBITDA (earnings before interest, tax, depreciation and
amortisation) calculated including our share of prot from joint ventures and associates.
Prot attributable to owners of the Company
$555 million
Prot attributable to owners of the Company is before taking separately disclosed items into
account and excludes any prot attributable to non-controlling interests (minorities).
Earnings per share (cents)
90 cents
EPS (earnings per share) is calculated by dividing the prot after tax attributable to owners of
the Company (after separately disclosed items) by the weighted average shares outstanding. The
EPS gure for 2010 has been adjusted for the share consolidation in May 2011.
Return on capital employed
6.8%
Return on capital employed is EBIT (earnings before interest and taxation) before separately
disclosed items as a percentage of total assets less current liabilities.
22
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Corporate Responsibility
Corporate responsibility at DPWorld
DPWorld plays a signicant role in the communities in which we
operate. As a world class business integral to the supply chain of
our customers, we act with integrity in the development of
solutions for our customers and partners, leveraging the talent of
our employees to contribute to a sustainable future.
Our objective is to integrate responsible business practices into
our daily activities, growing our business in a sustainable manner
and maintaining our commitment to corporate responsibility. We
work with our customers, suppliers and communities to identify
sustainability challenges and develop partnership opportunities.
During 2012, signicant progress was made in integrating
corporate responsibility principles throughout DPWorlds business
strategy with the development of a corporate responsibility
strategy and the establishment of a corporate responsibility
champions network designed to ensure alignment of regional and
business unit activities with our strategy. An overarching
Corporate Responsibility Advisory Committee, chaired by the
Group Chief Executive Ofcer, was also formed in 2012 to assist in
the review of policies, procedures and the implementation of
DPWorlds corporate responsibility strategy.
We recognise that our global reach brings diversity. Rather than
applying a uniform policy across the jurisdictions in which we
operate, DPWorlds corporate responsibility strategy is based on
the four quadrants of community, environment, people and safety
and marketplace. The strategy is adapted to suit the local needs of
each community. This approach provides consistency, yet enables
each business unit to provide the greatest benet to the
communities in which they operate.
The four quadrant approach at DPWorld
DPWorld adopts the four quadrant approach to its corporate
responsibility strategy:
Community: Community engagement plans are developed by
the business units, to align our efforts with the needs of our
people, their community and the business. This kind of approach
enables DPWorld to identify areas of greatest social need, what
matters most in any community and how we can develop
partnership plans. This engagement is guided by the Groups
community investment framework which was launched in 2012 to
provide business units with support and a principled approach for
developing strategic and effective community partnerships.
A full review and data collection exercise was also conducted
during 2012 to understand our community reach which will help
us plan further activities in 2013. This will become an annual
project to help us map trends and identify focus areas requiring
support.
Karachi (Pakistan) Photo by Shahid Hameed Siddiqui Callao (Peru)
23
London Gateway (UK)
BUSINESS
OVERVIEW
CORPORATE
GOVERNANCE
FINANCIAL
STATEMENTS
Antwerp (Belgium) Photo by Kenny Verhoeven
Environment: As a global organisation, DPWorlds focus is on
delivering responsible environmental management. We constantly
seek to improve our understanding of our environmental impact
and the risks and opportunities related to our operations. We take
an active role and are continually working to reduce our
environmental impact with an overarching goal of avoiding or,
where this is not possible, minimising our environmental footprint
while also contributing to lasting environmental benets across
the regions we operate in.
Environmental protection and management is considered in all of
our activities with impact reduction initiatives being prioritised to
direct resources to where the greatest environmental return can
be realised. In addition, we constantly challenge our operations to
reduce greenhouse gas emissions through improved energy
management across our operations, reduce pollution, improve
natural resource management and enhance biodiversity. The
environmental progress of each business unit is consolidated for
reporting and reviewed by the Board at every meeting.
People and Safety: Our goal is zero harm with safety as a
business-wide issue at the heart of all our operations. Our policies
meet or exceed national health and safety legislation in the
markets in which we operate. We comply with all aspects of the
internationally recognised certication system OHSAS 18001 with
staff and contractors required to meet health and safety
requirements and participate in comprehensive training. We have
zero tolerance of conditions and behaviours contributing to
workplace incidents.
Building the talents and ability of our people is at the core of our
Human Capital strategy. Our recruitment, induction processes and
talent management programmes focus on responsibility,
behavioural change, innovation and excellence. We regularly
review our policies to ensure we maintain a focus on responsibility,
treating our people fairly and with respect. We also recognise that
our success is enhanced by the diversity of our people. The rich
and diverse mix of backgrounds, beliefs, cultures, skills and
knowledge is a major contributor to our continued success. As a
major employer and contributor to the communities in which we
operate, it is important that we attract talent from the
communities that work with us to build a sustainable future.
The well-being of our people also rests on how secure they feel as
members of the DPWorld global family. We are committed to
ensuring the safety and security of our people and our assets by
investing in security management systems.
Marketplace: Given our position in the industry and our global
reach we continually drive performance improvements and
change to positively impact our stakeholders around the world.
We are committed to conducting business with socially
responsible and ethical suppliers ensuring the principles of
sustainability and responsibility apply to the procurement of all
goods, services and construction activities.
24
Hong Kong: A group of staff volunteers took fty children
from disadvantaged families in Tung Chung to the Tree Top
Cottage camp site in Tai Po for a eld trip.
Surabaya (Indonesia): A seminar on cervical and breast
cancer was developed and arranged by the wives of the
members of INSA (Indonesian National Shipowners
Association) and sponsored by DPWorld. Approximately 200
women attended to hear more about early detection and
support mechanisms.
India: Physically challenged Indian artists who paint with their
mouth or feet were involved in a corporate responsibility
project backed by DPWorld. A countrywide partnership with
the Indian Mouth and Foot Painting Artists Association (MFPA)
during the festival of Diwali saw twelve paintings
commissioned with four highlighted for special praise.
Cochin (India): Support was provided for the construction of
a kitchen shed at St. Marys High School (Vallarpadam) to be
used for the preparation of nutritious lunches for school
students. Donations of essential items were made to the Infant
Jesus Orphanage at Ochanthuruth and support for a career
guidance course for 400 local students was provided.
Karachi (Pakistan): Staff volunteers renovated and supported
the Syed Meher Ali Shah Primary School through the provision
of electricity in the school, levelling the playground, painting
the school buildings, replacing lights with energy saving lights,
donating furniture and renovating the toilet facilities.
Corporate Responsibility continued
Southampton (UK): Support was given to a wide range of
local community projects and health charities, including
helping to establish a social enterprise caf, providing IT
equipment for charity internet cafs and safety equipment at a
local primary school as well as contributing to local youth
sports clubs which many staff run or coach.
Constanta (Romania): A partnership with UNICEF was
developed to raise funds to establish the rst multifunctional
centre for disadvantaged children, providing education, health,
social care and counselling for parents.
London Gateway (UK): A partnership with Essex Wildlife
Trust was formed to establish a local Nature Park and Visitor
Centre to raise awareness of London Gateway, its operations
and local environmental issues.
South Africa: Employees were involved in the clean up of
beaches on Clean up the World Day.
Maputo (Mozambique): A day with the employees and their
children (1,200 in total) provided the opportunity for all to
learn about safety and health at work.
DPWorld UAE Region (UAE): DPWorld UAE Region was the
platinum sponsor for the Al Noor Fun-Fair tournament, a
fundraising event aimed at treating children with various
physical and cognitive challenges such as Downs Syndrome,
Cerebral Palsy and Autism. A ve week know-your-heart
awareness campaign targeting 6,000 employees was also
organised, aimed at raising awareness about heart diseases
and promoting a healthy lifestyle.
Painting commissioned by DPWorld in partnership with the Indian Mouth and Foot Painting
Artists Association
25
Santos (Brazil) Photo from the Ecovacation Programme run by Embraport
BUSINESS
OVERVIEW
CORPORATE
GOVERNANCE
FINANCIAL
STATEMENTS
Vancouver (Canada): DPWorld Vancouver has developed a
strategic partnership with Mission Possible, a not-for-prot
organisation that supports people challenged by homelessness
and poverty. Support is provided through its membership on
the board of Mission Possible, by assisting with the
procurement of equipment and encouraging the business
community to get involved with Mission Possible. Employees
have also volunteered at nine events during 2012.
Paramaribo (Suriname): An employee survey was conducted
to understand the motivations and passions of the staff, the
results of which will form the basis of the Suriname corporate
responsibility plan. The plan will focus on social issues,
including the physically challenged, poverty, homelessness,
unemployment and the environment.
Buenos Aires (Argentina): A new solar energy system
consisting of twelve photovoltaic panels that are connected to
the electricity grid generating 6,000 kWh per year was
installed.
Santos (Brazil): The Ecovacation Programme, an
environmental educational programme, was developed and
promoted by employees from Embraport for the children of
Diana Island. A handcraft course was also developed and
delivered to help shermens families diversify and increase
their income.
Caucedo (Dominican Republic): Consultations took place
with stakeholders regarding the social and economic issues
affecting the community in order to better align DPWorld
Caucedos corporate responsibility plan with the needs of their
community. There has been a focus on improving the quality of
education in the community, with a back to school celebration
organised by employee volunteers that entertained and
provided school supplies to 250 children aged ve to eight.
Callao (Peru): A workshop for the local shermen of Puerto
Nuevo was organised on recycling of sh skin focusing on
environmental sustainability and income diversication.
Melbourne (Australia): Staff participated in the 2012 Good
Friday Fundraising event in Melbourne where approximately
A$16,000 was raised in aid of the Royal Childrens Hospital.
Australia: During 2012, the Health and Safety team at
DPWorld Australia ran a Health and Wellbeing programme for
staff and families, including a 10,000 steps programme which
promoted an active lifestyle amongst staff. Some 180
participants in the programme walked over 41 million steps in
an eight week period.
Caucedo (Dominican Republic) Back to School initiative
26
Our People
Jebel Ali (UAE) Photo by Mark Louis Vicente
Jebel Ali (UAE) Qingdao (China) Photo by Mr Wang
27
BUSINESS
OVERVIEW
CORPORATE
GOVERNANCE
FINANCIAL
STATEMENTS
DPWorld is a global team in excess of 28,000 people from across six continents. With a commitment to
achieving operational excellence and providing exceptional customer service we hold the rm belief that
everything we do is aligned to our values, ethics and contributes to the societies in which we operate.
DPWorld aims to cultivate a dynamic and inspiring work environment as a key driver of its success.
Although our operations are geographically diverse, the values of teamwork, commitment and
leadership are shared across the Group.
A career with DPWorld is a rewarding journey supported by sound performance management,
succession planning and learning and development opportunities. During 2012, over 1,000 employees
participated in programmes or undertook courses designed to support their personal and professional
development. DPWorld is also actively working towards creating an environment in which our
employees can full their corporate responsibilities in a meaningful and sustainable manner.
With a solid DPWorld Leadership Development Framework, we are able to ensure we recruit and
promote the right people to meet DPWorlds needs.
Delivering growth through
effective teamwork
Manila (Philippines) Photo by Ian Baking
Antwerp (Belgium)
Paramaribo (Suriname) Photo by Sastrowitomo W Jebel Ali (UAE)
28
Our People continued
The emerging market focus of our business is reected in the
demographic of the Groups workforce.
A large majority of DPWorlds workforce is employed in an
operational capacity and this reects the operational nature of
ourbusiness.
With a relatively young workforce and a focus on succession
planning, DPWorld is well placed to manage its operations in
both the short and long term. The Board oversees the succession
planning of DPWorlds senior executives and reviews its plans
annually. Succession planning for the Group is further supported
by DPWorlds People Development Framework which sets out the
specic competencies and technical skills required for those
identied as future successors and unique development plans are
developed to bridge any skill or knowledge gaps. This enables
DPWorld to effectively manage the succession planning needs of
the Groups critical business unit roles, including Terminal General
Managers and their direct reports.
The development of new businesses and business expansion is
reected in the increase in DPWorlds workforce in the last 5
years. New employees ensure that DPWorlds outlook remains
fresh, while retaining 58% of our staff for more than 5 years
ensures stability and maintains operational continuity.
This is an aspect of employee diversity that DPWorld will continue
to work towards improving. In 2012, DPWorlds Group Chief
Executive Ofcer, Mohammed Sharaf, welcomed the Womens
International Shipping and Trading Association (WISTA) at their
UAE meeting hosted by DPWorld.
1) Category by region
2) Category by job level
Executive Management
Middle Management
Operational and Support Staff
3) Category by age of employee
Under 30
30 to 50
Above 50
4) Category by years of service
(0 to 5)
(5 to 10)
(10 to 20)
Above 20
5) Category by gender
Male
Female
29
BUSINESS
OVERVIEW
CORPORATE
GOVERNANCE
FINANCIAL
STATEMENTS
Jebel Ali (UAE) Photo by Shafeek Hassan
Paramaribo (Suriname) Photo by Sastrowitomo W
Jebel Ali (UAE) Surabaya (Indonesia) Photo by Irfan Sugianto
Jebel Ali (UAE)
30
Case Study:
Doraleh Container Terminal (Djibouti)
Developing
gateways
for growth
31
BUSINESS
OVERVIEW
CORPORATE
GOVERNANCE
FINANCIAL
STATEMENTS
Sitting at the intersection of some of
the worlds main shipping lanes
connecting Asia, Africa and Europe,
Doraleh Container Terminal (DCT) is
a jewel in the crown of DPWorlds
Africa operations and is the most
technologically advanced port on
the continent.
In 2000, DPWorld and the Djibouti Government
established a joint venture and DPWorld was awarded
a 20 year concession to operate the Port of Djibouti.
This successful partnership led to a further joint venture
resulting in the construction of a terminal at Doraleh
which opened in 2008.
Through its modern logistics facilities and strategic
location, Doraleh is well placed to become a premier
container distribution hub. The terminal has an annual
handling capacity of 1.2 million TEU, the largest in East
Africa, with almost 50% of containers handled destined
for Ethiopia. Its 18 metre draft and 1050 metre quay
accommodate the largest ships with six super post-
panamax STS cranes
14
and sixteen RTG cranes
15

handling container trafc.
Standards also keep pace with this sizeable operation as
DPWorld achieved the ISO 28000 standard
(Specications for Security Management Systems in the
Supply Chain) in 2009 and ISO 9001 (Quality
Management Systems) in 2011.
Doraleh is well placed to handle transhipment and relay
business. Markets in the Red Sea offer potential
business opportunities for trade and the terminal plays
a major role in facilitating Ethiopian trade movement,
contributing to the countrys growth and development.
To keep pace with these developments, new equipment
is already in the pipeline, including two new STS cranes
and eight RTGs. DPWorld is reviewing the timing for
the Phase II extension of the terminal which would
double the size of the berths and the yard.
Coupled with strong growth in the region and
investments in infrastructure such as a new free zone
set to boost terminal trafc, Doraleh looks ready to take
a further step forward to becoming a leading hub port.
14 STS cranes means ship to shore cranes
15 RTG cranes means rubber tyred gantry cranes
32
Case Study:
Nhava Sheva (India)
Investing in
emerging
markets
33
BUSINESS
OVERVIEW
CORPORATE
GOVERNANCE
FINANCIAL
STATEMENTS
India is one of the fastest growing
emerging economies of the world
and DPWorld is committed to
supporting that growth into the
future. With ve terminals across the
country, we are privileged to be a
partner in providing world class
facilities for its traders.
There is a need to develop infrastructure in India and
the Port of Nhava Sheva is a key example of our
investment in Indias long-term future, being part of the
largest port in the country at Jawaharlal Nehru Port
close to the commercial capital, Mumbai, that handles
almost half of Indias maritime trafc.
Starting operations in 1999 as the rst private container
terminal, Nhava Sheva is a major gateway to the vast
hinterland beyond its gates. Links to a wide network of
inland container depots in Pune, Nagpur, Ahmadabad,
Hyderabad, Ludhiana and New Delhi through two sets
of railway sidings, ensure efcient operation. The
terminal is also connected to Indias major highway and
rail networks, which give access to neighbouring
Mumbai and to the hinterland of Madhya Pradesh,
Maharashtra, Gujarat, Karnataka and most of North
India.
Indian container ports remain the most dynamic in the
Subcontinent and the scope for expanding container
trafc is vast. With that in mind we have been given the
letter of award from Jawaharlal Nehru Port Trust to
build and operate a new single berth facility of some
330 metres quay length alongside existing facilities
which will be operational in 2015.
DPWorld will be investing approximately $200 million
to build the container terminal and 17 hectares of yard
with an annual handling capacity of 800,000 TEU and a
draft of 13.5 metres. The new quay has been awarded
a seventeen year concession and will be equipped with
four rail mounted quay cranes and twelve rubber tyred
gantry cranes. The 330 metre extension will provide the
capability to handle three ships simultaneously.
Our investment in Nhava Sheva also takes other forms
alongside new equipment and construction. Employees
are active in the local community, with school projects
and environmental awareness campaigns just part of
our involvement. Employee welfare is also high on the
agenda, with incentives to boost productivity, increase
safety awareness and round the clock paramedic
services on site.
34
Principal Risks and Uncertainties
Risk management framework
Risk is an inherent part of doing business. Our risk management system is designed to identify and assess all signicant risks which could
adversely affect the Groups ability to achieve its business objectives and to identify management actions which seek to mitigate those
risks to an acceptable level.
Whilst not intended to be exhaustive, a summary of the Groups principal risks are provided below:
Risk

Description

Mitigation

Political, Social
and Economic

DPWorld has global operations. Our assets are exposed to,
and earnings inuenced by, political, social and economic
events associated with the countries in which we operate.
Political actions such as changes to the regulatory
environment, strikes, civil strife, expropriation or
nationalisation of property could cause us to incur additional
costs, impact our nancial earnings, and disrupt or terminate
our operations.

DPWorld has a diversity of investments across a number of
geographical jurisdictions spreading the risk. We have covered
a range of risks through insurance where appropriate.
Ongoing security assessments and continual monitoring of
geopolitical developments worldwide and engagement with
government, local authorities and joint venture partners
ensures we are well positioned to respond to changes in the
political, social and economic environments in which we
operate.
Uncertain
Trading
Environment

The Groups results are subject to adverse impact from a
downturn in the global / local macroeconomic environment.

DPWorlds diversied portfolio is focused on the more
resilient emerging markets and more stable origin and
destination cargo.
We have a continuous focus on delivering high levels of service
that meet our customers expectations and a proven track
record of active cost management in line with the changing
economic climate to mitigate any downturn in the
macroeconomic environment.
Legal,
Regulatory and
Contractual
Obligations

Our businesses operate under increasingly stringent regulatory
regimes around the world and are subject to various legal and
contractual obligations. New legislation and other evolving
practices could impact our operations, increase the cost of
compliance, limit or impose restrictions on our growth.

DPWorld continually monitors regulatory trends and
developments. We have comprehensive policies, procedures
and training in place to promote legal and regulatory
compliance.
Project Risk

Business development is subject to regulatory approvals and
political, capital raising, construction and commercial risks.
Crystallisation of associated risks could impact the Groups
results.

DPWorld has a thorough approvals process prior to
committing to business development or major expansion
opportunities, including reviewing political risk, regulatory
obligations and construction risk.
Skilled technical teams are assigned to oversee large projects
and actively monitor risks throughout the process.
Foreign
Exchange Rate
Exposures

The global diversity of the Groups operations results in
foreign currency exposure. Adverse currency movements and
volatility may impact nancial performance.

The Groups policy is to identify the impact of foreign
exchange exposure and to monitor and mitigate material
currency exposures through hedge programmes where
applicable.
Health,
Safety and
Operational
Risks

The nature of our operations exposes us to various
operational, health, safety and security risks. The occurrence
of any such risks could impact our business operations,
nancial results and our reputation.

The Board and senior management are committed to creating
a safe culture throughout the Group. The Board monitors the
implementation of health and safety strategies, including
employee training programmes.
We mitigate these risks with continuous monitoring by
management and by having management review processes,
policies, guidance documents and specic operational
procedures in place.
35
BUSINESS
OVERVIEW
CORPORATE
GOVERNANCE
FINANCIAL
STATEMENTS
Internal controls
The Board is responsible for establishing and
maintaining an effective system of internal control. This
system of internal control is embedded in all key
operations and is designed to provide reasonable
assurance that the Groups business objectives will be
achieved. Regular management reporting and annual
self-certication provides a balanced assessment of key
risks and controls and is an important component of
the Boards assurance. The Board also receives updates
from the Audit Committee, which receives regular
information from internal and external audit reports on
the Groups risks and internal controls. The Groups
internal audit function is responsible for reporting to the
Audit Committee on the effectiveness of the Groups
risk management process and for evaluating the
internal control environment to ensure controls are
appropriate and operating efciently and effectively.
The core elements of DPWorlds system of internal
controls consists of:
Organisational structure: A clearly dened
organisational structure that provides clear roles,
responsibilities and delegated levels of authority to
enable effective decision making across the Group.
Code of conduct: A code of conduct, originated
from the top of the Group that sets out how the
Group expects its employees to act.
Whistle blowing policy: A whistle blowing
programme for employees to report complaints and
concerns about conduct which is considered to be
contrary to DPWorlds values. The programme,
monitored by the Audit Committee, makes
communication channels available to all employees
within the Group.
Anti bribery and corruption policy: An Anti
Bribery and Corruption policy has been implemented
by DPWorld, supported by online training that is
directed and proportionate to the identied areas
ofrisk.
Strategy and nancial management: Clear
strategy and nancial management which is
consistent throughout the organisation and can be
actively translated into practical measures.
Comprehensive reporting systems, including monthly
results, annual budgets and periodic forecasts,
monitored by the Board.
Policies and procedures: Documented policies and
procedures for all Group functions within the
business, which are communicated to all business
units.
Risk management and performance: Risk-
proling for all business units and the Group to
identify, monitor and manage signicant risks which
could affect the achievement of the Groups
objectives.
Assurance: Assurance activities cover key business
risks which contribute to the overall assurance
framework, including an internal audit function to
review the systems of internal control.
36
Board of Directors
Sultan Ahmed Bin Sulayem
Chairman
Sultan Ahmed Bin Sulayem has served as Chairman of the Board
of the Company since 30 May 2007. He was previously Chairman
of Dubai World and in this role oversaw businesses in industries as
diverse as real estate development, hospitality, retail, e-commerce
and various commodities exchanges, as well as businesses
associated with transportation and logistics. He previously served
as Chairman of Port & Free Zone World FZE and he remains one
of the two representatives of Port & Free Zone World FZE on the
Board. He is a leading Dubai and international businessman, with
more than 30 years experience in the marine terminal industry.
Acitizen of the United Arab Emirates, he is 57 years old.
Sir John Parker t
Senior Independent Non-Executive Director and Vice
Chairman
Sir John Parker has served as an Independent Non-Executive
Director and Vice Chairman of the Company since 30 May 2007.
He also acts as Senior Independent Director and is Chairman of
the Companys Nominations and Governance Committee and
Chairman of the Companys Remuneration Committee. He serves
as Chairman of Anglo American plc. He is also Non-Executive
Director of Carnival plc, Carnival Corporation and EADS Airbus.
He previously served as Chair of the Court of the Bank of England,
Non-Executive Chairman of BVT, Joint Chairman of Mondi plc,
Chairman of National Grid plc, Non-Executive Director and
Deputy Chairman and, subsequently, Chairman of P&O and as
Vice Chairman of Port & Free Zone World. He was a Member of
the Prime Ministers Business Council for Britain. A British citizen,
he is 70 years old.
Jamal Majid Bin Thaniah
Non-Executive Director and Vice Chairman
Jamal Majid Bin Thaniah has served as a Director and Vice Chairman
of the Company since 30 May 2007 and became a Non-Executive
Director on 27 October 2009. He joined Dubai Ports in 1981 and,
from 2001, led Dubai Ports Authority. He also serves as a
Non-Executive Director of Etihad Rail (Abu Dhabi) and was
appointed as an Independent Non-Executive Director of Emaar
Properties PJSC on 23 April 2012. He previously served as a Director
of Port & Free Zone World FZE and he remains one of the two
representatives of Port & Free Zone World FZE on the Board of
DPWorld. A citizen of the United Arab Emirates, he is
54yearsold.
David Williams t
Independent Non-Executive Director
David Williams has served as an Independent Non-Executive
Director of the Company since 30 May 2007. He is also Chairman
of the Companys Audit Committee. He is currently Joint
Chairman of Mondi plc and Senior Independent Non-Executive
Director of Meggitt plc. He previously served as a Non-Executive
Director of Tullow Oil plc and P&O and Senior Independent
Non-Executive Director of both Taylor Wimpey plc and George
Wimpey plc. He has also served as a Non-Executive Director of
Dewhirst Group plc and Medeva plc and as Finance Director of
Bunzl plc. He is a qualied Chartered Accountant. A British citizen,
he is 67 years old.
t Member of the Audit Committee
Member of the Remuneration Committee
Member of the Nominations and Governance Committee
Member of the Executive Committee
Sultan Ahmed Bin Sulayem Sir John Parker Jamal Majid Bin Thaniah David Williams
37
BUSINESS
OVERVIEW
CORPORATE
GOVERNANCE
FINANCIAL
STATEMENTS
Deepak Parekh t
Deepak Parekh was appointed as an Independent Non-Executive
Director of the Company on 22 March 2011. He is the Non-
Executive Chairman of HDFC Ltd, Indias premier Housing Finance
Institution. He is also the Non-Executive Chairman of
GlaxoSmithkline Pharmaceuticals Ltd, Infrastructure Development
Finance Company and Siemens India and on the board of several
other leading corporations including Mahindra and Mahindra, and
The Indian Hotels Co Ltd. He has been a member of numerous
Indian Government appointed advisory committees and task
forces on matters ranging from infrastructure reform, capital
markets and nancial services. In 2010, he became the rst
international recipient of the Institute of Chartered Accountants in
England and Wales Outstanding Achievement Award, and
received the Knight in the Order of the Legion of Honour one
of the highest distinctions awarded by the French Republic.
Acitizen of the Republic of India, he is 68 years old.
Cho Ying Davy Ho t
Cho Ying Davy Ho has served as an Independent Non-Executive
Director of the Company since 30 May 2007. Having retired from
many of his Swire Group positions, he continues to serve as
Director of several Swire Group entities relating to properties and
cold storage. He previously served as Director of Cathay Pacic
Airways Limited, Modern Terminals Ltd and Shekou Container
Terminals Ltd and as Chairman of the Shipping Committee of the
Hong Kong General Chamber of Commerce. A British citizen, he is
65 years old.
Mohammed Sharaf
Group Chief Executive Ofcer
Mohammed Sharaf has served as Group Chief Executive Ofcer of
the Group since 2005 and as a Director of the Company since
30May 2007. He joined Dubai Ports Authority in 1992, and in
2001 he became Managing Director of DPWorld FZE. In this
position, he oversaw the Groups growth into an international
business and performed central roles in developing its rst
international operations at the terminals of Jeddah (Saudi Arabia),
Constanta (Romania) and Vizag (India) and in developing its
national operations at Jebel Ali and Port Rashid terminals. He
began his shipping career at Holland Hook terminal in The Port of
New York/New Jersey and has more than 20 years experience in
the transport and logistics business. He is also Chairman of Tejari
World FZ LLC. A citizen of the United Arab Emirates, he is
51yearsold.
Yuvraj Narayan
Chief Financial Ofcer
Yuvraj Narayan has served as Chief Financial Ofcer of the Group
since 2005 and as a Director of the Company since 9 August
2006. He joined DPWorld FZE in 2004. He serves as Non-
Executive Director of IDFC Securities Limited. He previously served
as Non-Executive Director of Istithmar World PJSC and as ANZ
Groups Head of Corporate and Project Finance for South Asia
before becoming Chief Financial Ofcer of Salalah Port Services in
Oman. He is a qualied Chartered Accountant and has a wealth
of experience in the ports and international banking sectors.
Acitizen of the Republic of India, he is 56 years old.
Deepak Parekh Cho Ying Davy Ho Mohammed Sharaf Yuvraj Narayan
38
The Directors present their report and accounts for the year ended
31 December 2012.
Principal activities
The Business Overview on pages 2 to 35 describes the principal
activities, operations, performance and nancial position of the
Group. The results of the Group are set out in detail on pages 49
to 54 and in the accompanying notes. The principal subsidiaries,
joint ventures and associates are listed on pages 103 to 104.
Principal changes in the Group
On 25 January 2012, the Company sold all of its 34%
shareholding in Tilbury Container Services Limited to a subsidiary
of Otter Ports Holdings Ltd, owner of Forth Ports Limited.
On 4 July 2012, DPWorld Australia Limited, in which the
Company has a 25% shareholding, sold all of its 60%
shareholding in Adelaide Container Terminal Pty Ltd to Flinders
Ports Adelaide Container Terminal Pty Ltd for A$134 million
(approx $138 million).
On 20 September 2012, DPWorld Yemen LLC, in which the
Company has a 66.6% indirect shareholding, divested its 50%
shareholding in Dubai and Aden Port Development Company to
its joint venture partner Yemen Gulf of Aden Ports Corporation.
The value of the net assets divested by DPWorld Limited was $27
million.
On 20 September 2012, the Company announced the divestment
of all of its 60% shareholding in DPWorld Breakbulk NV and A
Projects NV to Oriental. The transaction completed on 30
December 2012 for a consideration to the Company of $23
million.
On 22 October 2012, the Company divested its 25% shareholding
in Vostochnaya Stevedoring Company (Russia) for a total
consideration of $230 million. The purchaser was the existing
75% majority shareholder, Global Ports Investments PLC.
On 1 November 2012, the Company announced the receipt of the
Letter of Award from Jawaharlal Nehru Port Trust, Government of
India, to build and operate a single berth facility of 330m quay
length alongside its existing terminal operation at Nhava Sheva,
Mumbai. DPWorld will be investing approximately $200 million to
build the new facility which is expected to be operational in 2015.
Directors
During the year, Deepak Parekh was appointed as a member of
the Nominations and Governance Committee.
In accordance with the UK Corporate Governance Code
(theCode) and the Companys Articles of Association (the
Articles), Directors offer themselves annually for re-appointment.
Biographical details of the current Directors of the Company are
given on pages 36 and 37 together with details of Board
Committee memberships.
Details of the Directors remuneration and their interests in shares
are given on page 46 in the Corporate Governance Section of this
Report.
Financial instruments
Details regarding the use of nancial instruments and nancial risk
management are included in the Notes to Consolidated Financial
Statements on pages 96 to 101.
Results
The Groups Consolidated Financial Statements for the year ended
31 December 2012 are shown on pages 49 to 54.
Dividends
The Directors recommend a nal dividend in respect of the year
ended 31 December 2012 of 24 US cents per share. This
comprises of an increase of 10% in the ordinary dividend to 21 US
cents per share, supplemented by a special dividend of 3 US cents
per share. Subject to approval by shareholders, the nal dividend
will be paid on 30 April 2013 to shareholders on the Register at
close of business on 2 April 2013.
Post-balance sheet events
These events are disclosed in the Notes to Consolidated Financial
Statements on page 104.
Employees
DPWorld is a global team in excess of 28,000 people which
continues to be as diverse as the communities and countries in
which it operates. DPWorld adheres to local labour regulations
and statutes, yet emphasises that it is one company seeking
common goals. To reinforce this, common approaches are
implemented, where possible, for reward, performance
management and succession planning. These frameworks are
used to facilitate the delivery of business objectives and
DPWorlds values. For example, where appropriate at a local level,
at least one of the objectives that earns bonus must be linked to a
safety measure. DPWorlds performance management process is
applied in a way that cascades the annual corporate business
goals throughout the organisation.
DPWorlds strategy for learning and development is delivered
through the DPWorld Institute, with a focus on blended learning
which suits a global company and enables employees to learn via
eLearning as well as traditional methods. The emphasis is on
developing people to excel in their current role, while identifying
opportunities for future roles via succession planning.
More information is included on pages 26 to 29 in the Our People
section.
Corporate responsibility
The corporate responsibility (CR) section is found on pages 22
to 25. This section focuses on DPWorlds CR strategy, integrating
responsible business practices into process and procedures across
the Group.
Report of the Directors
39
Substantial shareholdings
As at the date of this report, the Company has been notied that
the following entity has an interest in the Companys shares
amounting to 5% or more.
Class Shares
Percentage
of class
Port and Free Zone World FZE Ordinary 667,735,000 80.45%
Going concern
The Directors, having made enquiries, consider that the Company
and the Group have adequate resources to continue in
operational existence for the foreseeable future and therefore
they consider it appropriate to adopt the going concern basis in
preparing the accounts. Further details can be found under Note
2(c) to the consolidated nancial statements.
Audit information
Having made the required enquiries, so far as the Directors in
ofce at the date of the signing of this report are aware, there is
no relevant audit information of which the auditors are unaware
and each Director has taken all reasonable steps to make
themselves aware of any relevant audit information and to
establish that the auditors are aware of that information.
Creditor payment policy
The policy is to pay suppliers in accordance with terms and
conditions agreed when the orders are placed. The international
nature of the Group means that the Group adopts policies
applicable to the jurisdictions of its operations.
Articles of Association
The Articles set out the internal regulation of the Company and
cover such matters as the rights of shareholders, the appointment
and removal of Directors and the conduct of the Board and
general meetings. Subject to DIFC Companies Law and the
Articles, the Directors may exercise all the powers of the Company
and may delegate authorities to Committees and day-to-day
management and decision making to individual Executive
Directors. Details of the main Board Committees can be found on
pages 42 to 44.
Indemnity
All Directors are entitled to indemnication from the Company to
the extent permitted by the law against claims and legal expenses
incurred in the course of their duties.
Authority to purchase shares
At the Companys Annual General Meeting (AGM) on 30 April
2012, the Company was authorised to make market purchases of
up to 29,050,000 ordinary shares (representing approximately
3.5% of the Companys issued share capital). No such purchases
were made during 2012. Shareholders will be asked to approve
the renewal of a similar authority at the Companys AGM to be
held on 25 April 2013.
Auditors
The auditors, KPMG LLP, have indicated their willingness to
continue in ofce. A resolution to re-appoint them as auditors will
be proposed at the AGM to be held on 25 April 2013.
Share capital
As at 31 December 2012, the Companys issued share capital was
US$1,660,000,000 comprising 830,000,000 ordinary shares of
US$2.00 each.
Annual General Meeting
The Companys AGM will be held on 25 April 2013 at The
Wheelhouse, Jebel Ali Port, Dubai, United Arab Emirates. Full
details are set out in the Notice of AGM.
By order of the Board
B Allinson
Board Legal Adviser and Company Secretary
26 March 2013
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The Company is incorporated in the Dubai International Financial
Centre (DIFC).
The Company has a dual listing which requires compliance with
the disclosure obligations of the Dubai Financial Services
Authoritys (DFSA) Markets Rules (Markets Rules), the Disclosure
and Transparency Rules and the Listing Rules of the UK Listing
Authority. The Board reviews and monitors the policies and
procedures that are in place to ensure compliance with the
Corporate Governance principles of the UK Corporate Governance
Code (the Code) and Market Rules.
During the nancial year ended 31 December 2012, the Company
has applied the Corporate Governance principles of the Code and
Market Rules.
Throughout the nancial year, the Company complied with the
provisions of the Code other than provision A.3.1 in that the
Chairman did not meet the independence criteria laid out in
provision B.1.1 of the Code at the time of his appointment.
The Chairman, Sultan Ahmed Bin Sulayem, was Chairman of
Dubai World and Port & Free Zone World FZE at the time that
DPWorld was admitted to listing in Dubai and remains one of
Port & Free Zone World FZEs representatives on the DPWorld
Board.
The Company appointed Sir John Parker as Joint Vice Chairman
and Senior Independent Non-Executive Director. Sir John Parker
chairs the Nominations and Governance Committee and, together
with the Chairman, leads on governance matters and the annual
performance review of the Board and its Committees. The Board
believes that this support ensures that robust governance is
maintained and that appropriate challenge to the executives is
inplace.
The following is an explanation of the Companys corporate
governance policies.
Directors
The Board of eight Directors manages the Companys business.
The primary responsibility of the Board is to foster the long-term
success of the Company. The Board is ultimately responsible for
the management and is accountable for all operations of the
Company.
The Board met 8 times during the year either in person or via
telephone or video conference. In addition, written resolutions (as
provided by the Articles) were used as required for the approval of
decisions that exceeded the delegated authorities provided to
Executive Directors and Committees.
Although there is a prescribed pattern of presentation to the
Board, including matters specically reserved for the Boards
decision (which include strategy; the annual budget; dividends;
major transactions; health, safety and environment policies;
insurance and risk management; and internal controls), all Board
meetings tend to have further subjects for discussion and decision
taking. Board papers, including an agenda, are sent out in
advance of the meetings. Board meetings are discursive in style
and all Directors are encouraged to offer their opinions.
The Matters Reserved to the Board are available on DPWorlds
website.
The Board has delegated the following responsibilities to
management: the development and recommendation of strategic
plans for consideration by the Board that reect the longer term
Bernadette Allinson, Board Legal Adviser and Company Secretary
Attendance by individual Directors at meetings of the Board and its Committees in 2012
Director Board Audit
Nominations
and
Governance Remuneration
Sultan Ahmed Bin Sulayem 8(8)
Jamal Majid Bin Thaniah 8(8) 1(2)
Mohammed Sharaf 8(8) 2(2)
Yuvraj Narayan 8(8)
Sir John Parker 7(8) 3(4) 2(2) 3(3)
David Williams 6(8) 4(4) 2(2) 3(3)
Cho Ying Davy Ho 8(8) 4(4) 2(2) 3(3)
Deepak Parekh* 6(8) 3(4) 1(2)* 3(3)
* Deepak Parekh was appointed to Nominations and Governance Committee on 18 December 2012.
Figures in brackets denote the maximum number of meetings that could have been attended.
41
objectives and priorities established by the Board; implementation
of DPWorlds strategies and policies as determined by the Board;
monitoring the operating and nancial results against plans and
budgets; monitoring the quality of the investment process against
objectives, prioritising the allocation of capital and technical
resources; and developing and implementing risk management
systems subject to the continued oversight of the Board and the
Audit Committee as set out on page 42.
Details of the Directors of the Company are given on pages 36
and 37.
Independent Non-Executive Directors
In compliance with the Code, at least half the Board (excluding
the Chairman) comprises Independent Non-Executive Directors.
In order for the Independent Non-Executive Directors to
contribute fully to the Board, and in particular to challenge the
Executive Directors over strategic matters where appropriate, it is
important that the Independent Non-Executive Directors bring
experience, probity and independence to the Board. Accordingly,
the independence of the Independent Non-Executive Directors is
considered annually.
The Board believes the Independent Non-Executive Directors have
retained independent character and judgement. The Board
considers that the varied and relevant experience of all the
Independent Directors combines to provide an exceptional
balance of skills and knowledge which is of great benet to the
Company.
Roles of the Chairman, Group Chief Executive Ofcer and
SeniorIndependent Director
The positions of Chairman and Group Chief Executive Ofcer are
held by separate individuals with separate roles and responsibilities
which have been approved by the Board. The Chairman, in
conjunction with the Senior Independent Director is responsible
for leadership and effective management of the Board in all
aspects of its role and its governance. The Chairman chairs the
Board meetings ensuring, with the support of the Senior
Independent Director, that the agendas are forward looking and
that relevant business is brought to the Board for consideration in
accordance with the schedule of matters reserved to the Board
and that each Director has the opportunity to consider the matter
brought to the meeting and to contribute accordingly. The Group
Chief Executive Ofcer, as leader of the Companys executive
team, retains responsibility for the leadership and day-to-day
management of the Company and the execution of its strategy as
approved by the Board.
Sir John Parker has acted as Senior Independent Director since the
IPO of the Company in 2007. His responsibilities include
supporting the Chairman in the leadership of the Board and
meeting with the Non-Executive Directors at least once a year to
appraise the Chairmans performance and holding discussions
with the Non-Executive Directors without the Executives present.
Board performance
Board evaluation
The Board undertakes a formal and rigorous annual evaluation of
its own performance and that of its Committees and individual
Directors. For 2012, an external review of the Boards
performance was undertaken by an independent third party to
consider the Boards effectiveness. The review was carried out
using questionnaires and the key areas of focus were strategy,
succession planning, training and development, Board processes
and structure, information ow and communication.
Evaluation process
The following actions were taken as part of the evaluation of the
Board performance during 2012:
a questionnaire was sent to each Director;
the Senior Independent Non-Executive Director and Chairman
held one-to-one interviews with each Director, using their
questionnaire responses as a starting point for the interview;
questionnaires were also used to perform reviews of the
Committees;
the questionnaire responses from the Board members and
reviews of the Committees were shared with the external
facilitator, Professor Andrew Kakabadse;
the external facilitator subsequently met with the Directors to
discuss the review;
the external facilitator presented to the Board on how boards
in a variety of other countries discharged their governance
obligations which provided a benchmark against which to
judge the performance of the DPWorld Board;
a paper discussing the key issues raised during the evaluation
process was prepared and submitted for Board consideration;
and
following consideration of the Board paper and further
discussions between the Board and the external facilitator, an
action plan for 2013 was set by the Board.
Conclusions
The external review concluded that the Board displayed a
powerful desire for continuous learning and constant improvement
of its processes and procedures. The Directors exhibited great
interest in adopting latest governance thinking and board best
practice. The quality of debate and desire for feedback in order to
enhance board and organisational performance were distinct,
shared features of the members of the Board.
Tracking from previous evaluation and next steps for 2013
As a result of the evaluation conducted of the Boards
performance during 2011, the Company implemented a formally
documented professional development framework whereby all
Board members are regularly updated on available directors
training courses to further develop and enhance their professional
skills. The Board also received an independent presentation on
boardroom best practices.
During 2012, the use of an electronic board portal for the
dissemination of Board papers was introduced with the aim of
improving Board effectiveness, streamlining information ow and
ensuring the timely delivery of Board papers to the Directors.
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The actions arising from the 2012 Board evaluation have been
incorporated into a Board action plan for 2013. The principal
actions reect the continued focus of the Board on succession
and strategic planning.
In compliance with the UK Corporate Governance Code, the
Board will undertake an independent review of its effectiveness
once every three years. All Directors will also have access to the
Board Legal Adviser and Company Secretary and independent
professional advice at the Companys expense, if required.
Relations with shareholders
The Company is committed to communicating its strategy and
activities clearly to its shareholders and, to that end, maintains an
active dialogue with investors through a planned programme of
investor relations activities.
The Companys full and half year results and quarterly throughput
announcements are reported to investors through a combination
of presentations and conference calls. The full and half year
reporting is then followed by investor meetings in major cities in
locations where the Company has institutional shareholders
including Australia, Europe, North America and the UAE.
Regular attendance at Industry and Regional Investor Conferences
provides opportunities to meet with existing and prospective
shareholders in order to update them on performance or to
introduce them to the Company. In addition, DPWorld frequently
hosts investor and analyst visits to DPWorlds ports around the
world, offering analysts and shareholders a better understanding
of the day-to-day business and the opportunity to meet regional
and port management teams.
All presentations and related investor communications are
available in a dedicated section of DPWorlds website.
The Board receives regular updates on the views of shareholders
through briengs from the Chairman, Group Chief Executive
Ofcer and Chief Financial Ofcer as well as reports from the
Companys brokers and investor relations team. The Chairman,
the Senior Independent Director and the chairmen of the Boards
Committees are available to meet major investors on request. The
Senior Independent Director has a specic responsibility to be
available to shareholders who have concerns, and for whom
contact with the Chairman, Group Chief Executive Ofcer or
Chief Financial Ofcer has either failed to resolve their concerns,
or for whom such contact is inappropriate.
Accountability
The Board is responsible for DPWorlds system of internal control
and for reviewing its effectiveness. The internal control system is
designed to manage rather than eliminate the risk of failure to
achieve business objectives, and can only provide reasonable and
not absolute assurance against material mis-statement or loss.
The system of internal control described below has been in place
throughout the year.
Board committees
The Board has Remuneration, Audit and Nominations and
Governance Committees, with formally delegated duties and
responsibilities and written terms of reference. The Board also has
an Executive Committee which is an operational committee to
manage the Groups operations and implement the strategic
policies approved by the Board. From time to time, separate
committees may be set up by the Board to consider specic issues
when the need arises.
Audit Committee
Members
David Williams (Chairman)
Sir John Parker
Cho Ying Davy Ho
Deepak Parekh
The Audit Committee assists the Board in discharging its
responsibilities with regard to nancial reporting and external and
internal audits and controls. The ultimate responsibility for
reviewing and approving the Annual Report and Accounts and
the half-yearly reports remains with the Board.
The membership of the Audit Committee is comprised of four
Independent Non-Executive Directors and is chaired by David
Williams, whom the Board considers has appropriate nancial
expertise to full this role.
The Audit Committee meets formally at least four times a year
and otherwise as required.
In accordance with its terms of reference, the principal matters
considered by the Audit Committee during 2012 included:
a review of the level and constitution of external audit and
non-audit fees and the independence and objectivity of
external auditors;
monitoring and reviewing the effectiveness of internal audit
activities, including discussions with the Vice President
Internal Audit;
reviewing the effectiveness of the Groups nancial reporting,
internal controls and compliance with applicable legal
requirements and monitoring risk and compliance procedures
across the Group;
reviewing the Companys results statements, interim
management statements and Annual Report and Accounts
before publication and making appropriate recommendations
to the Board following review;
reviewing accounting policies in light of international
accounting developments; and
receiving reports where appropriate in accordance with its
terms of reference on business conduct issues, including any
instances of alleged fraud and actions taken as a result of
investigation.
The full terms of reference of the Audit Committee can be found
on DPWorlds website.
Corporate Governance continued
43
External and internal auditors are invited to attend the Audit
Committee meetings, along with any other Director or member of
staff considered necessary by the Committee to complete its
work. The Committee meets with external auditors and internal
auditors without Executive Directors or members of staff present,
as it considers appropriate (and at least once a year).
External Auditors
The Audit Committee is responsible for recommending a rm of
auditors of appropriate independence and experience and for the
approval of all audit fees and terms of engagement. The
Committees policy is to undertake a formal assessment of the
auditors independence each year which includes:
a review of non-audit services provided to the Group and
related fees;
discussion with the auditors of a written report detailing any
relationships with the Company and any other parties that
could affect independence or the perception of independence;
a review of the auditors own procedures for ensuring the
independence of the audit rm and partners and staff involved
in the audit, including the regular rotation of the audit partner;
and
obtaining written conrmation from the auditors that, in their
professional judgement, they are independent.
The Audit Committee has implemented the following policy
relating to the provision of non-audit services by the Companys
auditors.
Audit related services
These services are undertaken by theauditors:
review of interim nancial information; and
formalities relating to borrowings, shareholder and other
circulars.
Permitted non-audit services
The selection of providers of permitted non-audit services is
subject to a tender process, where appropriate. Non-audit work
and the fees involved are approved in advance by the Audit
Committee. Below are examples of permitted non-audit services:
tax planning, advice and compliance assistance; and
mergers and acquisitions.
Prohibited non-audit services
bookkeeping or other services related to the accounting
records;
nancial information systems design and implementation; and
investment banking services.
Throughout the year, the Committee monitored the cost and
nature of non-audit work undertaken by the auditors and is,
therefore, in a position to take action if it believes that there is a
threat to the auditors independence through the award of
thiswork.
KPMG LLP are appointed as external auditors to the Company. The
Committee has undertaken an annual review of the independence
and objectivity of the auditors and an assessment of the
effectiveness of the audit process, which included a report from
the external auditors of their own internal quality procedures. It
also received assurances from the Auditors regarding their
independence. On the basis of this review, the Committee
recommended to the Board that it recommend that shareholders
support the re-appointment of the Auditors at the 2013 AGM.
Risk management process
The Group risk management process has the following key
features:
through a series of interviews, management discussions and
risk assessment workshops, all major businesses within the
Group determine the most signicant risks to the achievement
of their business objectives. Appropriate risk management
activity is then determined and any required action plans are
implemented. This is a continual process, and may be
associated with a variety of nancial, operational and
compliance matters including organisation structures, business
strategies, disruption in information technology systems,
competition, natural catastrophe and regulatory requirements;
the risks and associated controls are summarised in the risk
portfolios and are presented to the Board for review; and
at the year end, the regional management certies that the risk
management process is in place and an assessment has been
conducted throughout their businesses and that appropriate
internal control procedures are in place or in hand to manage
the risks identied.
Further details on the risk management process can be found
under Note 5 to the consolidated nancial statements. Details of
the Groups principal risks and uncertainties are set out on
page34.
Internal controls
The Board is responsible for maintaining a sound system of
internal controls and has established a control framework within
which the Group operates and the Audit Committee has
undertaken a review of the effectiveness of internal controls and
risk management in accordance with its remit. The core elements
of DPWorlds system of internal control are set out on page 35.
The key high level control procedures include:
an organisation structure which supports clear lines of
communication and accountability and delegation of authority
rules which specify responsibility;
business strategies prepared at regional level and approved by
the Board. In addition, there are annual budgeting and
strategic planning processes. Financial forecasts are prepared
every quarter. Actual performance is compared to budget,
latest forecast and prior year on a monthly basis. Signicant
variances are investigated and explained through normal
monthly reporting channels;
key performance indicators produced to summarise and
monitor business activity;
evaluation and approval procedures for major capital
expenditure and signicant treasury transactions;
regular reviews of the effectiveness of the Groups health,
safety, welfare, environment and security processes; and
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the internal audit department providing additional assurance to
the Board and the audit committee that key controls are
operating as intended.
The risk management process and the system of internal control
are subject to continuous improvement.
Guidelines regarding insider trading
The Company takes all reasonable steps to avoid the risk of insider
trading. The Company has adopted processes to keep all
members of staff informed about their duties with respect to the
handling of inside information, as well as dealings in DPWorlds
shares.
The Company has adopted a share dealing code which sets out
the restrictions and close periods applicable to trading in
securities. Memoranda and guidelines regarding dealings (either
selling or buying) in shares have been circulated within the Group.
The share dealing code applies to the Directors, Senior Managers
and certain other of the Groups employees.
Fraud
DPWorld has a Fraud policy and a Fraud Incident Response Plan,
which takes effect in the event of serious incidents to oversee
case management and to ensure appropriate actions are taken.
The Audit Committee receives an update at each meeting on any
material frauds. The Audit Committee has reviewed DPWorlds
whistle blowing procedures to ensure that arrangements are in
place to enable Company employees to raise concerns about
possible improprieties on a condential basis.
Anti bribery and corruption
DPWorld has implemented an Anti Bribery and Corruption Policy
in addition to processes and procedures to meet the requirements
of the UK Bribery Act 2010. During 2012, online training on the
importance of compliance with the Anti Bribery and Corruption
Policy was rolled out to management and key employees across
the Group.
Nominations and Governance Committee
Members
Sir John Parker (Chairman)
David Williams
Cho Ying Davy Ho
Jamal Majid Bin Thaniah
Mohammed Sharaf
Deepak Parekh
The Nominations and Governance Committee assists the Board in
discharging its responsibilities relating to the size and composition
of the Board. It is also responsible for periodically reviewing the
Boards structure and identifying potential candidates to be
appointed as Directors as the need may arise. The Nominations
and Governance Committee is responsible for evaluating the
balance of skills, knowledge, experience and diversity on the
Board and, in particular:
identifying individuals qualied to become Board members;
recommending individuals to be considered for election at the
next Annual General Meeting of the Company or to ll
vacancies; and
preparing a description of the role and capabilities required for
a particular appointment.
The full terms of reference of the Nominations and Governance
Committee can be found on DPWorlds website.
The Nominations and Governance Committee is comprised of six
members, four of whom are Independent Non-Executive
Directors. The Chairman of the Nominations and Governance
Committee is Sir John Parker.
The Nominations and Governance Committee meets formally at
least twice a year and otherwise as required.
Remuneration Committee
Members
Sir John Parker (Chairman)
David Williams
Cho Ying Davy Ho
Deepak Parekh
The Remuneration Committee determines and agrees with the
Board the framework and broad policy for the remuneration of
the Group Chief Executive Ofcer and Chief Financial Ofcer and
other members of senior management. The policy of the
committee is to review remuneration based on independent
assessment and market practice. The remuneration of
Independent Non-Executive Directors is a matter for the Chairman
and executive members of the Board. No executive is involved in
any decisions as to their own remuneration. The Remuneration
Committee:
determines and agrees with the Board, the Companys
framework for remuneration;
recommends and monitors the level and structure of
remuneration to senior management;
keeps under review its own performance, constitution and
terms of reference; and
considers other matters as referred to it by the Board.
The full terms of reference of the Remuneration Committee can
be found on DPWorlds website.
The membership of the Remuneration Committee is comprised of
four members, all of whom are Independent Non-Executive
Directors. The chairman of the Remuneration Committee is Sir
John Parker.
The Remuneration Committee meets formally at least twice a year
Executive Committee
The Executive Committee has primary responsibility for the
day-to-day management of DPWorlds operations and strategic
policy implementation (such policies being established and
approved by the Board). The Executive Committee is comprised of
the Executive Directors and certain Senior Managers.
45
The Executive Committee meets formally at least four times a year
Remuneration
Executive reward policy
The reward policy for Executive Directors and senior management
(Executive Committee and other experienced managers) is guided
by the following key principles:
business strategy support: aligned with our business strategy
with focus on both short-term goals and the creation of
long-term value ensuring alignment to shareholders interests;
competitive pay: ensures competitiveness against our target
market;
fair pay: ensures consistent, equitable and fair treatment within
the organisation; and
performance-related pay: linked to performance targets via
short and long-term incentive plans and the pay review
process.
The reward policy for Executive Directors and senior management
consists of the following key components:
Market benchmark:
the target market position is between median and upper
quartile on a total remuneration basis;
for Executive Directors and senior management based in
Dubai, practice and policy reect the structure of the Dubai
pay market, whilst at the same time ensuring competitiveness
on an international basis. Variable pay is also reviewed and
balanced against the total remuneration package; and
DPWorld engages the services of Hay Group as the main
provider of market information and as advisers on particular
remuneration matters. This is subject to periodic review.
Base salary:
xed cash compensation based on level of responsibility as
determined by the application of a formal job evaluation
methodology;
reects local practice in each of the geographies in which
DPWorld operates, but is also set against common market
policy positions; and
reviewed annually on 1 April to take into account market pay
movements, individual performance, relativity to market on an
individual basis and DPWorlds ability to pay.
Allowances and benets
Can either be cash or non-cash elements based on level of
responsibility as determined by the application of a formal job
evaluation methodology.
Reects local practice in each of the geographies in which
DPWorld operates, but are also set against common market
policy positions.
For Executive Directors and senior management based in
Dubai, cash allowances are a normal component of the
package and typically cover accommodation, utility, transport
and club elements in line with Dubai market practice. Benets
include the provision of childrens education assistance, travel
assistance, medical and dental insurance and post retirement
benets.
Reviewed annually to ensure that DPWorld remains
competitive within the market place and that it continues to
provide the reward mechanisms to aid retention in line with its
ability to pay.
Performance Delivery Plan (PDP)
Cash-based incentive plan to motivate, drive and reward
performance over an operating cycle of one year.
The PDP combines business nancial performance and
individual performance objectives. Levels of awards, nancial
and personal measures and weightings will vary depending on
the role, geography and level of responsibility of the individual.
For individuals outside the Executive Directors and senior
management category, the principle is then typically cascaded
throughout the business units organisational levels in line with
local policies.
Appropriateness of the levels of awards, nancial and personal
measures and weightings are reviewed on an annual basis to
ensure they continue to support our business strategy.
Payment is in cash and is expected to be made in April each
year for performance over the previous nancial year, subject
to review and sign-off by the Remuneration Committee.
Long-Term Incentive Plan (LTIP)
Cash-based rolling incentive plan to motivate, drive and reward
sustained performance over the long-term operating cycle of
three years.
The LTIP reects business nancial performance only. Levels of
awards, nancial measures and weightings will vary depending
on the role, geography and levels of responsibility of the
individuals. In addition to the Executive Directors and Senior
Managers, employees performing the top 100 jobs (as
determined by job size) are also eligible to participate in the
LTIP in line with the same nancial metrics as described for
Executive Directors and Senior Managers with varying levels of
award in line with their job size.
Appropriateness of the levels of awards, nancial measures
and weightings are reviewed on an annual basis to ensure they
continue to support our business strategy.
Payment is in cash and is expected to be made in April each
year for performance over the previous three nancial years,
subject to review and sign-off by the Remuneration
Committee.
Incentive plans
As described above, the Company has adopted a short-term and
a long-term incentive plan for its Executive Directors and Senior
Managers. Details of these plans are outlined below.
The Performance Delivery Plan (PDP) for the nancial years ended
2012 (award to be paid in 2013) and 2011 (award paid in 2012) is
worth a maximum of 75% of annual base salary. It is made up of
2 components; a nancial component worth 70% of the overall
award value and a personal component worth 30% of the overall
award value.
The nancial component is based on performance assessed
against a budgeted Prot After Tax (PAT) measure. Payout on the
nancial component is triggered if the Company achieves 95% of
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46
its target (Threshold). Maximum payout on the nancial
component will occur if the Company achieves 105% of its target.
The payout for performance between the 95% and 105% of
target is on a straight-line basis.
The personal component is based on performance assessed
against Specic, Measurable, Achievable, Relevant & Timebound
(SMART) objectives. The objectives are particular to each
individual role and can include nancial based objectives and
more qualitative ones.
The Long-Term Incentive Plan (LTIP) for the 2010-2012 (award to
be paid in 2013) and 2009-2011 (award paid in 2012)
performance cycles is based on performance over 3 years
assessed against a budgeted earnings per share (EPS) measure
linked to corporate EBITDA targets.
The LTIP for the 2012-2014 (award to be paid in 2015) and
2011-2013 (award to be paid in 2014) performance cycles is based
on performance over 3 years assessed against two budgeted
measures with 70% of the award linked to a Return On Capital
Employed (ROCE) measure and 30% linked to the same earnings
per share measure described above.
The LTIP for the cycles described above is worth a maximum of
100% of average annual base salary for the Executive Directors
and the Chief Operating Ofcer and a maximum of 75% of
average annual base salary for other Senior Managers.
Executive Directors service contracts and remuneration
As mentioned above, the Executive Directors remuneration
structure follows the market practice in the UAE, and all payments
are made tax free reecting the UAEs status.
Each of the Executive Directors is employed pursuant to a service
agreement with the Group.
Mohammed Sharaf
Mohammed Sharafs service agreement is with DPWorld FZE (a
subsidiary of the Company). It can be terminated on six months
notice by either party. In addition, DPWorld FZE can terminate the
agreement, without notice, on payment of six months base
salary.
Mohammed Sharaf is entitled to receive a base salary and certain
other benets under his service agreement.
He was also granted a Performance Delivery Plan award of 72.2%
(out of a maximum of 75%) for performance linked to the 2011
nancial year and a Long Term Incentive Plan award of 21.71%
(out of a maximum of 100%) for performance linked to the
2009-2011 cycle.
His total remuneration for the year ended 31 December 2012
(which includes his base salary and these other benets) was
$1,250,351.
Yuvraj Narayan
Yuvraj Narayans service agreement is with DPWorld FZE. It can
be terminated on six months notice by either party. In addition,
DPWorld FZE can terminate the agreement, without notice, on
payment of six months base salary.
Yuvraj Narayan is entitled to receive a base salary and certain
other benets under his service agreement.
He was also granted a Performance Delivery Plan award of 75%
(out of a maximum of 75%) for performance linked to the 2011
nancial year and a Long Term Incentive Plan award of 21.71%
(out of a maximum of 100%) for performance linked to the
2009-2011 cycle.
His total remuneration for the year ended 31 December 2012
(which includes his base salary and these other benets) was
$1,044,183.
Post retirement benets
Mohammed Sharaf participates in the government pension
scheme in accordance with local labour law. Yuvraj Narayan
participates in an end of service benet scheme in accordance
with local labour law.
Non-Executive Directors letters of appointment and fees
The Non-Executive Directors do not have service contracts with
the Company. Their terms of appointment are governed by letters
of appointment. The Company has no contractual obligation to
provide any benets to any of the Non-Executive Directors upon
termination of their directorship.
Each Non-Executive Directors letter of appointment is with the
Company and is envisaged to be for a period of three years,
subject to annual re-election by the shareholders at each AGM.
Itcan be terminated on six months notice by either party.
For the year ended 31 December 2012, the fees and other
remuneration payable to each of the Non-Executive Directors,
which includes remuneration for their services in being a member
of, or chairing, a Board Committee are set out below:
Sir John Parker received a Non-Executive Director fee of $593,578.
David Williams received a Non-Executive Director fee of $160,711.
Cho Ying Davy Ho received a Non-Executive Director fee of
$110,943.
Deepak Parekh received a Non-Executive Director fee of $110,943.
The Chairman, Sultan Ahmed Bin Sulayem, and Non-Executive
Vice Chairman, Jamal Majid Bin Thaniah are not remunerated by
the Company.
Directors interests in shares
The following is a table of the Directors shareholdings:
$2.00
ordinary
shares
held as at
1January
2012
$2.00
ordinary
shares held
as at 31Dec
2012 Change
Mohammed Sharaf 28,221 28,221
Yuvraj Narayan 14,668 14,668
Sir John Parker 7,262 7,262
47
The following statement, which should be read in conjunction with the Auditors responsibility section of the Independent Auditors
Report, is made with a view to distinguishing the respective responsibilities of the Directors and of the Auditors in relation to the
consolidated nancial statements.
The Directors are required to prepare consolidated nancial statements for each nancial year which give a true and fair view of the
state of affairs of DPWorld Limited (the Company) and its subsidiaries (collectively referred to as the Group) as at the end of the
nancial year and of the prot and loss for the nancialyear.
The consolidated nancial statements are prepared in accordance with International Financial Reporting Standards. In preparing the
consolidated nancial statements, the Directors are required to select appropriate accounting policies and then apply them consistently,
make judgements and estimates that are reasonable and prudent and state whether all accounting standards which they consider to be
applicable have been followed, subject to any material departures disclosed and explained in the consolidated nancial statements. The
Directors also use a going concern basis in preparing the consolidated nancial statements unless this is inappropriate.
The Directors have responsibility for ensuring that the Company keeps accounting records which disclose with reasonable accuracy at
any time the nancial position of the Company and which enable them to ensure that the consolidated nancial statements comply with
the applicable laws in the relevant jurisdiction.
The Directors have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and
to prevent and detect fraud and other irregularities.
The Directors are also responsible for preparing a Directors Report and Corporate Governance Statement in accordance with applicable
law and regulations.
The Directors consider the Annual Report and the consolidated nancial statements, taken as a whole, to be fair, balanced and
understandable, and provide necessary information for shareholders to assess the Companys performance, business model and
strategy.
By order of the Board
B Allinson
Board Legal Adviser and Company Secretary
26 March 2013
BUSINESS
OVERVIEW
CORPORATE
GOVERNANCE
FINANCIAL
STATEMENTS
Statement of Directors Responsibilities
inrespect of the preparation of the
AnnualReport and the Consolidated
FinancialStatements
48
Independent Auditors Report
The Shareholders,
DP World Limited
Report on the consolidated nancial statements
We have audited the accompanying consolidated nancial statements of DP World (the Company) and its subsidiaries (collectively
referred to as the Group), which comprise the consolidated statement of nancial position as at 31 December 2012, the consolidated
statements of comprehensive income (comprising a separate consolidated income statement and a consolidated statement of
comprehensive income), consolidated statements of changes in equity and cash ows for the year then ended, and notes, comprising a
summary of signicant accounting policies and other explanatory information.
Managements responsibility for the consolidated nancial statements
Management is responsible for the preparation and fair presentation of these consolidated nancial statements in accordance with
International Financial Reporting Standards, and for such internal control as management determines is necessary to enable the
preparation of consolidated nancial statements that are free from material misstatement, whether due to fraud or error.
Auditors responsibility
Our responsibility is to express an opinion on these consolidated nancial statements based on our audit. We conducted our audit in
accordance with International Standards on Auditing. Those standards require that we comply with relevant ethical requirements and
plan and perform the audit to obtain reasonable assurance about whether the consolidated nancial statements are free of material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated nancial
statements. The procedures selected depend on our judgement, including the assessment of the risks of material misstatement of the
consolidated nancial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant
to the entitys preparation and fair presentation of the consolidated nancial statements in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entitys internal control.
An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made
by management, as well as evaluating the overall presentation of the consolidated nancial statements.
We believe that the audit evidence we have obtained is sufcient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the consolidated nancial statements give a true and fair view of the consolidated nancial position of the Group as at
31 December 2012, and of its consolidated nancial performance and its consolidated cash ows for the year then ended in accordance
with International Financial Reporting Standards.
Matters on which we are required to report by exception
We have nothing to report in respect of the following:
Under the Listing Rules, we are required to review:
the Directors statement, set out on page 47, in relation to going concern;
the part of the Corporate Governance statement on page 40 relating to the Companys compliance with the nine provisions of the
UK Corporate Governance Code specied for our review; and
certain elements of the report to shareholders by the Board on Directors remuneration.
KPMG LLP
Dubai
49
BUSINESS
OVERVIEW
CORPORATE
GOVERNANCE
FINANCIAL
STATEMENTS
Consolidated income statement
for the year ended 31 December 2012
Year ended 31 December 2012 Year ended 31 December 2011
Notes
Before
separately
disclosed items
USD000
Separately
disclosed items
(Note 11)
USD000
Total
USD000
Before
separately
disclosed items
USD000
Separately
disclosed items
(Note 11)
USD000
Total
USD000
Revenue 7 3,121,017 3,121,017 2,977,731 2,977,731
Cost of sales (2,002,806) (2,002,806) (2,005,159) (2,005,159)
Gross prot 1,118,211 1,118,211 972,572 972,572
General and administrative expenses (276,900) (55,850) (332,750) (256,961) (243,862) (500,823)
Other income 21,643 21,643 21,029 21,029
Prot on sale and termination of
businesses (net of tax) 11 237,204 237,204 484,354 484,354
Share of prot/(loss) from equity-
accounted investees (net of tax) 15 133,897 20,710 154,607 141,711 (3,047) 138,664
Results from operating activities 996,851 202,064 1,198,915 878,351 237,445 1,115,796
Finance income 9 75,211 75,211 135,361 135,361
Finance costs 9 (364,092) (10,373) (374,465) (422,931) (10,770) (433,701)
Net nance costs (288,881) (10,373) (299,254) (287,570) (10,770) (298,340)
Prot before tax 707,970 191,691 899,661 590,781 226,675 817,456
Income tax expense 10 (72,954) (72,954) (59,042) (7,211) (66,253)
Prot for the year 8 635,016 191,691 826,707 531,739 219,464 751,203
Prot attributable to:
Owners of the Company 555,390 193,216 748,606 458,620 224,672 683,292
Non-controlling interests 79,626 (1,525) 78,101 73,119 (5,208) 67,911
635,016 191,691 826,707 531,739 219,464 751,203
Earnings per share
Basic and diluted earnings per share
UScents 22 90.19 82.32
The accompanying notes 1 to 35 form an integral part of these consolidated nancial statements.
The Independent Auditors Report is set out on page 48.
50
Consolidated statement of comprehensive income
Notes
2012
USD000
2011
USD000
Prot for the year 826,707 751,203
Other comprehensive income
Foreign exchange translation differences for foreign operations* 104,135 (202,057)
Foreign exchange prot recycled to consolidated income statement on sale of businesses (2,131) (425,773)
Effective portion of net changes in fair value of cash ow hedges (24,768) (52,308)
Net change in cash ow hedges recycled to consolidated income statement 10,373
Net change in fair value of available-for-sale nancial assets 16 (132) 8,939
Dened benet plan actuarial losses 24 (49,900) (110,400)
Share in other comprehensive income of equity-accounted investees (8,686) (10,268)
Income tax on other comprehensive income:
Fair value of cash ow hedges 10,444 14,595
Dened benet plan actuarial losses 500 2,245
Other comprehensive income for the year, net of income tax 39,835 (775,027)
Total comprehensive income/(loss) for the year 866,542 (23,824)
Total comprehensive income/(loss) attributable to:
Owners of the Company 788,531 (82,589)
Non-controlling interests 78,011 58,765
866,542 (23,824)
* A signicant portion of this includes foreign exchange translation differences arising from the translation of goodwill and purchase price adjustments which are denominated in foreign currencies at
the Group level. The translation differences arising on account of translation of the nancial statements of foreign operations whose functional currencies are different from that of the Groups
presentation currency on Group consolidation are also reected here. There are no differences on translation from functional to presentation currency as the Companys functional currency is
currently pegged to the presentation currency (refer to note 2(d)).
51
BUSINESS
OVERVIEW
CORPORATE
GOVERNANCE
FINANCIAL
STATEMENTS
Consolidated statement of nancial position
as at 31 December 2012
Notes
2012
USD000
2011
USD000
Assets
Non-current assets
Property, plant and equipment 12 5,413,262 5,124,120
Goodwill 13 1,588,918 1,607,655
Port concession rights 13 3,115,084 3,223,958
Investment in equity-accounted investees 15 3,348,317 3,451,264
Deferred tax assets 10 105,753 101,212
Other investments 16 60,833 73,193
Accounts receivable and prepayments 17 263,428 260,114
Total non-current assets 13,895,595 13,841,516
Current assets
Inventories 53,283 54,979
Accounts receivable and prepayments 17 603,103 624,020
Bank balances and cash 18 1,881,928 4,159,364
Assets held for sale 28 77,706
Total current assets 2,538,314 4,916,069
Total assets 16,433,909 18,757,585
Equity
Share capital 19 1,660,000 1,660,000
Share premium 20 2,472,655 2,472,655
Shareholders reserve 20 2,000,000 2,000,000
Retained earnings 2,936,637 2,367,164
Hedging and other reserves 20 (122,229) (104,408)
Actuarial reserve 20 (398,302) (352,402)
Translation reserve 20 (482,909) (586,555)
Total equity attributable to equity holders of the Company 8,065,852 7,456,454
Non-controlling interests 663,993 765,013
Total equity 8,729,845 8,221,467
Liabilities
Non-current liabilities
Deferred tax liabilities 10 1,070,931 1,078,355
Employees end of service benets 23 55,747 49,393
Pension and post-employment benets 24 273,796 235,750
Interest bearing loans and borrowings 25 4,049,621 4,563,309
Accounts payable and accruals 26 504,755 467,240
Total non-current liabilities 5,954,850 6,394,047
Current liabilities
Income tax liabilities 10 180,267 169,585
Bank overdrafts 18 195 1,017
Pension and post-employment benets 24 11,845 12,621
Interest bearing loans and borrowings 25 702,835 3,178,446
Accounts payable and accruals 26 854,072 780,402
Total current liabilities 1,749,214 4,142,071
Total liabilities 7,704,064 10,536,118
Total equity and liabilities 16,433,909 18,757,585
The consolidated nancial statements were authorised for issue on 20 March 2013.
Mohammed Sharaf Yuvraj Narayan
Group Chief Executive Ofcer Chief Financial Ofcer
52
Consolidated statement of changes in equity
Attributable to equity holders of the Company
Share capital
USD000
Share premium
USD000
Shareholders
reserve
USD000
Retained
earnings
USD000
Hedging and
other reserves
USD000
Actuarial
reserve
USD000
Translation
reserve
USD000
Total
USD000
Non-controlling
interests
USD000
Total equity
USD000
Balance as at 1 January 2012 1,660,000 2,472,655 2,000,000 2,367,164 (104,408) (352,402) (586,555) 7,456,454 765,013 8,221,467
Total comprehensive income for the year:
Prot for the year 748,606 748,606 78,101 826,707
Total other comprehensive income, net of income tax (17,821) (45,900) 103,646 39,925 (90) 39,835
Total comprehensive income for the year 748,606 (17,821) (45,900) 103,646 788,531 78,011 866,542
Transactions with owners, recorded directly in equity
Dividends paid (refer to note 21) (199,200) (199,200) (199,200)
Total transactions with owners (199,200) (199,200) (199,200)
Changes in ownership interests in subsidiaries
Acquisition of non-controlling interests without change in control* 20,067 20,067 (66,457) (46,390)
Transactions with non-controlling interests, recorded directly in equity
Dividends paid (90,050) (90,050)
Derecognition of non-controlling interests on monetisation of investment in
subsidiaries (22,524) (22,524)
Total transactions with non-controlling interests 20,067 20,067 (179,031) (158,964)
Balance as at 31 December 2012 1,660,000 2,472,655 2,000,000 2,936,637 (122,229) (398,302) (482,909) 8,065,852 663,993 8,729,845
Balance as at 1 January 2011 1,660,000 2,472,655 2,000,000 1,823,491 (64,658) (249,700) 40,074 7,681,862 814,064 8,495,926
Prot for the year 683,292 683,292 67,911 751,203
Total other comprehensive income, net of income tax (36,550) (102,702) (626,629) (765,881) (9,146) (775,027)
Total comprehensive income for the year 683,292 (36,550) (102,702) (626,629) (82,589) 58,765 (23,824)
Settlement of share-based payment transactions (3,200) (3,200) (3,200)
Total transactions with owners (142,760) (3,200) (145,960) (145,960)
Acquisition of non-controlling interest, recorded directly in equity** 3,141 3,141 (20,141) (17,000)
Acquisition of subsidiary with non-controlling interests (refer to note 30) 15,753 15,753
* This mainly includes acquisition of remaining 10% interest in a subsidiary in Middle East, Europe and Africa Region for a consideration of USD 46,390 thousand resulting in a gain on acquisition of
USD 20,067 thousand.
** During the previous year, the Group acquired an additional 10% non-controlling interest of USD 20,141 thousand in a subsidiary in Australia & Americas region for a consideration of USD 17,000
thousand resulting in a gain on acquisition.
53
BUSINESS
OVERVIEW
CORPORATE
GOVERNANCE
FINANCIAL
STATEMENTS
Attributable to equity holders of the Company
Share capital
USD000
Share premium
USD000
Shareholders
reserve
USD000
Retained
earnings
USD000
Hedging and
other reserves
USD000
Actuarial
reserve
USD000
Translation
reserve
USD000
Total
USD000
Non-controlling
interests
USD000
Total equity
USD000
Balance as at 1 January 2012 1,660,000 2,472,655 2,000,000 2,367,164 (104,408) (352,402) (586,555) 7,456,454 765,013 8,221,467
Prot for the year 748,606 748,606 78,101 826,707
Total other comprehensive income, net of income tax (17,821) (45,900) 103,646 39,925 (90) 39,835
Total comprehensive income for the year 748,606 (17,821) (45,900) 103,646 788,531 78,011 866,542
Total transactions with owners (199,200) (199,200) (199,200)
Acquisition of non-controlling interests without change in control* 20,067 20,067 (66,457) (46,390)
Balance as at 1 January 2011 1,660,000 2,472,655 2,000,000 1,823,491 (64,658) (249,700) 40,074 7,681,862 814,064 8,495,926
Prot for the year 683,292 683,292 67,911 751,203
Total other comprehensive income, net of income tax (36,550) (102,702) (626,629) (765,881) (9,146) (775,027)
Total comprehensive income for the year 683,292 (36,550) (102,702) (626,629) (82,589) 58,765 (23,824)
Settlement of share-based payment transactions (3,200) (3,200) (3,200)
Total transactions with owners (142,760) (3,200) (145,960) (145,960)
Acquisition of non-controlling interest, recorded directly in equity** 3,141 3,141 (20,141) (17,000)
Acquisition of subsidiary with non-controlling interests (refer to note 30) 15,753 15,753
54
Consolidated statement of cash ows
Notes
2012
USD000
2011
USD000
Cash ows from operating activities
Prot for the year 826,707 751,203
Adjustments for:
Depreciation, amortisation and impairment 8 460,532 672,973
Share of prot from equity-accounted investees (net of tax) (154,607) (138,664)
Finance costs 9 374,465 433,701
Loss/(gain) on sale of property, plant and equipment and port concession rights 1,490 (6,928)
Prot on sale and termination of businesses (net of tax) (237,204) (484,354)
Finance income 9 (75,211) (135,361)
Income tax expense 10 72,954 66,253
Gross cash ows from operations 1,269,126 1,158,823
Change in inventories 1,641 (2,637)
Change in accounts receivable and prepayments 25,036 60,374
Change in accounts payable and accruals 47,141 (114,941)
Change in provisions, pensions and post-employment benets (36,743) (48,575)
Cash generated from operating activities 1,306,201 1,053,044
Income taxes paid (74,856) (72,687)
Net cash from operating activities 1,231,345 980,357
Cash ows from investing activities
Additions to property, plant and equipment 12 (641,934) (449,508)
Additions to port concession rights 13 (43,017) (31,673)
Proceeds from disposal of property, plant and equipment and port concession rights 17,744 31,559
Net proceeds from monetisation of investment in subsidiaries 14,744 1,404,649
Net cash outow on acquisition of interest in a subsidiary 30 (31,315)
Cash outow on acquisition of non-controlling interests without change in control (46,390) (17,000)
Interest received 77,594 108,980
Net proceeds from sale of investment in equity-accounted investees 421,308 111,230
Dividends received from equity-accounted investees 197,839 160,588
Additional investment in equity-accounted investees (15,283) (11,527)
Net loan given to equity-accounted investees (500) (53,385)
Return of capital from equity-accounted investees 28,244
Return of capital from other investments 12,228
Net cash from investing activities 22,577 1,222,598
Cash ows from nancing activities
Repayment of interest bearing loans and borrowings (3,204,428) (197,457)
Drawdown of interest bearing loans and borrowings 241,411 216,024
Interest paid (292,575) (447,405)
Dividend paid to the owners of the Company (199,200) (142,760)
Dividends paid to non-controlling interests (90,050) (51,665)
Net cash used in nancing activities (3,544,842) (623,263)
Net (decrease)/increase in cash and cash equivalents (2,290,920) 1,579,692
Cash and cash equivalents as at 1 January 4,158,347 2,567,516
Effect of exchange rate uctuations on cash held 14,306 11,139
Cash and cash equivalents as at 31 December 18 1,881,733 4,158,347
Cash and cash equivalents comprise the following:
Bank balances and cash 1,881,928 4,159,364
Bank overdrafts (195) (1,017)
Cash and cash equivalents 1,881,733 4,158,347
55
BUSINESS
OVERVIEW
CORPORATE
GOVERNANCE
FINANCIAL
STATEMENTS
Notes to consolidated nancial statements
(forming part of the nancial statements)
2 Basis of preparation
(a) Statement of compliance
These consolidated nancial statements have been prepared in accordance with International Financial Reporting Standards (IFRS).
The consolidated nancial statements were approved by the Board of Directors on 20 March 2013.
(b) Basis of measurement
The consolidated nancial statements have been prepared on the historical cost basis except for derivative nancial instruments and
available-for-sale nancial assets which are measured at fair value.
The methods used to measure fair values are discussed further in note 4.
(c) Funding and liquidity
The Groups business activities, together with factors likely to affect its future development, performance and position are set out in the
Chairmans Statement and Operating and Financial Review. In addition, note 5 sets out the Groups objectives, policies and processes for
managing the Groups nancial risk including capital management and note 29 provides details of the Groups exposure to credit risk,
liquidity risk and interest rate risk from nancial instruments.
The Board of Directors remain satised with the Groups funding and liquidity position. At 31 December 2012, the Group has a net debt
of USD 2,870,723 thousand (2011: USD 3,583,408 thousand). The Groups credit facility covenants are currently well within the
covenant limits. The Group generated gross cash of USD 1,269,126 thousand (2011: USD 1,158,823 thousand) from operating activities
and its interest cover for the year is 4.9 times (2011: 4.5 times) (calculated using adjusted EBITDA and net nance cost).
Based on the above, the Board of Directors have concluded that the going concern basis of preparation continues to be appropriate.
(d) Functional and presentation currency
The functional currency of the Company is UAE Dirhams. Each entity in the Group determines its own functional currency and items
included in the nancial statements of each entity are measured using that functional currency.
These consolidated nancial statements are presented in United States Dollars (USD), which in the opinion of management is the most
appropriate presentation currency in view of the global presence of the Group. All nancial information presented in USD is rounded to
the nearest thousand.
UAE Dirham is currently pegged to USD and there are no differences on translation from functional to presentation currency.
(e) Use of estimates and judgements
The preparation of consolidated nancial statements in conformity with IFRS requires management to make judgements, estimates and
assumptions that affect the application of accounting policies and reported amounts of assets, liabilities, income and expenses. Actual
results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period
in which the estimate is revised and in any future periods affected.
1 Reporting entity
DP World Limited (the Company) was incorporated on 9 August 2006 as a Company Limited by Shares with the Registrar of
Companies of the Dubai International Financial Centre (DIFC) under the Companies Law, DIFC Law No. 3 of 2006. The consolidated
nancial statements of the Company for the year ended 31 December 2012 comprise the Company and its subsidiaries (collectively
referred to as the Group) and the Groups interests in equity-accounted investees. The Group is engaged in the business of
international marine terminal operations and development, logistics and related services.
Port & Free Zone World FZE (the Parent Company), which originally held 100% of the Companys issued and outstanding share
capital, made an initial public offer of 19.55% of its share capital to the public and the Company was listed on the Nasdaq Dubai with
effect from 26 November 2007. The Company was further admitted to trade on the London Stock Exchange with effect from 1 June
2011.
Port & Free Zone World FZE is a wholly owned subsidiary of Dubai World Corporation (the Ultimate Parent Company).
The Companys registered ofce address is P.O. Box 17000, Dubai, United Arab Emirates.
56
Notes to consolidated nancial statements continued
(a) Judgements
Information about critical judgements in applying accounting policies that have the most signicant effect on the amounts recognised in
the consolidated nancial statements are as follows:
(i) Provision for income taxes and deferred tax assets
The Group is subject to income taxes in numerous jurisdictions. Signicant judgement is required in determining the worldwide provision
for income taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary
course of business. The Group recognises liabilities for anticipated tax claims based on estimates of whether additional taxes will be due.
Where the nal tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the
income tax and deferred tax provisions in the period in which such determination is made.
Deferred tax assets are recognised for all unused tax losses to the extent that it is probable that taxable prot will be available against
which the losses can be utilised. Signicant management judgement is required to determine the amount of deferred tax assets that can
be recognised, based upon the likely timing and level of future taxable prots together with future tax planning strategies.
(ii) Impairment of available-for-sale nancial assets
Available-for-sale nancial assets are impaired when objective evidence of impairment exists. A signicant or prolonged decline in the
fair value of an investment is considered as objective evidence of impairment. The Group considers that generally a decline of 20% will
be considered as signicant and a decline of over 9 months will be considered as prolonged.
(iii) Fair value of nancial instruments
Where the fair value of nancial assets and nancial liabilities recorded in the consolidated statement of nancial position cannot be
derived from active markets, they are determined using valuation techniques including the discounted cash ow model. The inputs to
these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in
establishing fair values. The judgements include consideration of inputs such as market risk, credit risk and volatility.
(iv) Contingent liabilities
There are various factors that could result in a contingent liability being disclosed if the probability of any outow in settlement is not
remote. The assessment of the outcome and nancial effect is based upon managements best knowledge and judgement of current
facts as at the reporting date.
(b) Estimates
Information about assumptions and estimation uncertainties that have signicant risk of resulting in a material adjustment within the
next nancial year are as follows:
(i) Useful life of property, plant and equipment and port concession rights with nite life
The useful life of property, plant and equipment and port concession rights with nite life is determined by the Groups management
based on their estimate of the period over which an asset or port concession right is expected to be available for use by the Group. This
estimate is reviewed and adjusted if appropriate at each nancial year end. This may result in a change in the useful economic lives and
therefore depreciation and amortisation expense in future periods.
(ii) Impairment testing of goodwill and port concession rights
The Group determines whether goodwill and port concession rights with indenite life are impaired, at least on an annual basis. This
requires an estimation of the value in use of the cash-generating units to which the goodwill is allocated or in which the port concession
rights with indenite life exist. Estimating the value in use requires the Group to make an estimate of the expected future cash ows
from the cash-generating unit and also to choose a suitable discount rate in order to calculate the present value of those cash ows.
(iii) Impairment of accounts receivable
An estimate of the collectible amount of accounts receivable is made when collection of the full amount is no longer probable. For
signicant amounts, this estimation is performed on an individual basis. Amounts which are not individually signicant, but which are
past due, are assessed collectively and a provision applied according to the length of time past due, based on historical recovery rates.
Any difference between the amounts actually collected in future periods and the amounts expected, will be recognised in the
consolidated income statement.
(iv) Pension and post-employment benets
The cost of dened benet pension plans and other post-employment benets is determined using actuarial valuations. The actuarial
valuation involves making assumptions about discount rates, expected rates of return on assets, future salary increases, mortality rates
and future pension increases. Due to the long-term nature of these plans, such estimates are subject to signicant uncertainty.
2 Basis of preparation continued
57
BUSINESS
OVERVIEW
CORPORATE
GOVERNANCE
FINANCIAL
STATEMENTS
3 Signicant accounting policies
The accounting policies set out below have been applied consistently in the period presented in these consolidated nancial statements
and have been applied consistently by the Group entities.
(a) Basis of consolidation
(i) Business combinations
Except for transactions involving entities under common control, where the provisions of IFRS 3, Business Combinations are not
applicable, business combinations are accounted for using the acquisition method as at the acquisition date i.e. when control is
transferred to the Group. Control is the power to govern the nancial and operating policies of an entity so as to obtain benets from its
activities. In assessing control, the Group takes into consideration potential voting rights that are currently exercisable.
The Group measures goodwill at the acquisition date as:
the fair value of the consideration transferred; plus
the recognised amount of any non-controlling interests in the acquiree; plus
if the business combination is achieved in stages, the fair value of the pre-existing equity interest in the acquiree; less
the net recognised amount (generally fair value) of the identiable assets (including previously unrecognised port concession rights)
acquired and liabilities (including contingent liabilities and excluding future restructuring) assumed.
When the excess is negative, a bargain purchase gain is immediately recognised in the consolidated income statement.
The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are
generally recognised in the consolidated income statement.
Transaction costs, other than those associated with the issue of debt or equity securities, that the Group incurs in connection with a
business combination are expensed as incurred.
Any contingent consideration payable is measured at fair value at the acquisition date. If the contingent consideration is classied as
equity, then it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes in the fair value of the
contingent consideration are recognised in the consolidated income statement.
(ii) Non-controlling interests
For each business combination, the Group elects to measure any non-controlling interests at their proportionate share of the acquirees
identiable net assets, which is generally at fair value.
Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests even if doing so, causes the
non-controlling interests to have a debit balance.
Changes in the Groups interests in a subsidiary that do not result in a loss of control are accounted for as transactions with owners in
their capacity as owners and therefore no goodwill is recognised as a result of such transactions. The difference between the fair value
of any consideration paid and relevant share acquired in the carrying value of net assets of the subsidiary is recorded in equity under
retained earnings.
(iii) Subsidiaries
Subsidiaries are entities controlled by the Group. The nancial statements of subsidiaries are included in the consolidated nancial
statements from the date that control commences until the date that control ceases. The accounting policies of subsidiaries have been
changed where necessary to align them with the policies adopted by the Group.
(iv) Loss of control
On the loss of control, the Group derecognises the assets and liabilities of a subsidiary, any non-controlling interests and the other
components of equity related to the subsidiary. Any surplus or decit arising on the loss of control is recognised in the consolidated
2 Basis of preparation continued
(v) Business combinations
In accounting for business combinations, judgement is required in identifying whether an identiable intangible asset is to be recorded
separately from goodwill. Additionally, estimating the acquisition date fair value of the identiable assets acquired and liabilities
assumed involves management judgement. These measurements are based on information available at the acquisition date and are
based on expectations and assumptions that have been deemed reasonable by the management. Changes in these judgements,
estimates and assumptions can materially affect the results of operations.
58
income statement. If the Group retains any interest in the previous subsidiary, then such interest is re-measured at fair value at the date
that control is lost. Subsequently, that retained interest is accounted for as an equity-accounted investee or as an available-for-sale
nancial asset depending on the level of inuence retained.
(v) Special purpose entities
The Group has established DP World Sukuk Limited (a limited liability company incorporated in the Cayman Islands) as a special purpose
entity (SPE) for the issue of Sukuk Certicates. These certicates are listed on Nasdaq Dubai and London Stock Exchange. The Group
does not have any direct or indirect shareholding in this entity. A SPE is consolidated based on an evaluation of the substance of its
relationship with the Group and based on the SPEs risks and rewards, the Group concludes that it controls the SPE. The SPE controlled
by the Group was established under terms that impose strict limitations on the decision-making powers of the SPEs management and it
results in the Group receiving the majority of the benets related to the SPEs operations and net assets, being exposed to risks incident
to the SPEs activities, and retaining the majority of the residual or ownership risks related to the SPE or its assets. Refer to accounting
policy on non-derivative nancial liabilities in note 3 (c) (ii).
(vi) Investments in associates and joint ventures (equity-accounted investees)
Associates are those entities in which the Group has signicant inuence, but not control, over the nancial and operating policies.
Signicant inuence is presumed to exist when the Group holds between 20 percent and 50 percent of the voting power of another
entity.
Joint ventures are those entities over whose activities the Group has joint control, established by contractual agreement and requiring
unanimous consent for strategic nancial and operating decisions.
Investment in equity-accounted investees are accounted for using the equity method and are initially recorded at cost including
transaction costs. The Groups investment includes goodwill identied on acquisition, fair value adjustments net of any accumulated
impairment losses. The consolidated nancial statements include the Groups share of the income and expenses of equity-accounted
investees, after adjustments to align the accounting policies with those of the Group, from the date that signicant inuence or joint
control commences until the date that signicant inuence or joint control ceases.
When the Groups share of losses exceeds its interest in an equity-accounted investee, the carrying amount of that interest (including
any long-term investments) is reduced to nil and the recognition of further losses is discontinued except to the extent that the Group has
an obligation or has made payments on behalf of the investee. If the equity-accounted investees subsequently reports prots, the Group
resumes recognising its share of those prots only after its share of the prots equals the share of losses not recognised.
The nancial statements of the equity-accounted investees are prepared for the same reporting period as the Group. The transactions
between the Group and its equity-accounted investees are made at normal market prices.
At each reporting date, the Group determines whether there is any objective evidence that the investment in the equity-accounted
investees are impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable
amount of the equity-accounted investees and its carrying value and recognises the same in the consolidated income statement.
Upon loss of joint control or signicant inuence, the Group measures and recognises any retained investment at its fair value. The
difference between the carrying amount of the equity-accounted investees upon loss of joint control or signicant inuence and the fair
value of the retained investment and proceeds from disposal is recognised as prot or loss in the consolidated income statement.
(vii) Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated in
preparing the consolidated nancial statements. Unrealised gains arising from the transactions with equity-accounted investees are
eliminated against the investment to the extent of the Groups interest in the investee. Unrealised losses are eliminated in the same way
as unrealised gains, but only to the extent that there is no evidence of impairment.
(b) Foreign currency
(i) Foreign currency transactions
These consolidated nancial statements are presented in USD, which is the Groups presentation currency. Transactions in foreign
currencies are translated to the respective functional currencies of the Group entities at exchange rates at the date of the transactions.
Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the functional currency at the
exchange rate at that date. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are
retranslated to the functional currency at the exchange rate at the date that the fair value was determined. Non-monetary items in a
foreign currency that are measured at historical cost are translated to the functional currency using the exchange rate at the date of
transaction. Foreign currency differences arising on retranslation of monetary items are recognised in the consolidated income
3 Signicant accounting policies continued
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statement, except for differences arising on the retranslation of available-for-sale equity instruments, of a nancial liability designated as
a hedge of the net investment in a foreign operation, or qualifying cash ow hedges, which are recognised directly in consolidated
statement of other comprehensive income (refer to note 3b (iii)).
(ii) Foreign operations
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated to USD
at exchange rates at the reporting date. The income and expenses of foreign operations are translated to USD at rates approximating to
the foreign exchange rates ruling at the date of the transactions. Foreign exchange differences arising on translation are recognised in
consolidated statement of other comprehensive income and presented in the translation reserve in equity. However, if the foreign
operation is not a wholly owned subsidiary, then the relevant proportion of the translation difference is allocated to non-controlling
interests.
When a foreign operation is disposed such that control, signicant inuence or joint control is lost, the cumulative amount in the
translation reserve related to that foreign operation is reclassied to the consolidated income statement as part of the gain or loss on
disposal. When the Group disposes of only part of its interest in a subsidiary that includes a foreign operation while retaining control,
the relevant proportion of the cumulative amount is reattributed to non-controlling interests. When the Group disposes of only part of
its investment in an associate or joint venture that includes a foreign operation while retaining signicant inuence or joint control, the
relevant proportion of the cumulative amount is reclassied to the consolidated income statement.
Foreign exchange gains and losses arising from a monetary item receivable from or payable to a foreign operation, the settlement of
which is neither planned nor likely in the foreseeable future, are considered to form part of a net investment in a foreign operation and
are recognised in consolidated statement of other comprehensive income and presented in the translation reserve in equity.
(iii) Hedge of a net investment in a foreign operation
Foreign currency differences arising on the retranslation of a nancial liability designated as a hedge of a net investment in a foreign
operation are recognised in consolidated statement of other comprehensive income, to the extent that the hedge is effective. To the
extent that the hedge is ineffective, such differences are recognised in the consolidated income statement. When the hedged net
investment is disposed off, the associated cumulative amount in consolidated statement of other comprehensive income is transferred to
the consolidated income statement as part of the gain or loss on disposal.
(c) Financial instruments
(i) Non-derivative nancial assets
Initial recognition and measurement
The Group classies non-derivative nancial assets into the following categories: held to maturity nancial assets, loans and receivables
and available-for-sale nancial assets. The Group determines the classication of its nancial assets at initial recognition.
All non-derivative nancial assets are recognised initially at fair value, plus, for instruments not at fair value through prot or loss, any
directly attributable transaction costs.
The Group initially recognises loans and receivables and deposits on the date that they are originated. All other nancial assets (including
assets designated at fair value through prot or loss) are recognised initially on the trade date, which is the date that the Group becomes
a party to the contractual provisions of the instrument.
The Groups non-derivative nancial assets comprise investments in an unquoted infrastructure fund, debt securities held to maturity,
trade and other receivables, due from related parties and cash and cash equivalents.
Subsequent measurement
The subsequent measurement of non-derivative nancial assets depends on their classication as follows:
Held to maturity nancial assets
If the Group has a positive intent and ability to hold debt securities to maturity, then these are classied as held-to-maturity. Subsequent
to initial recognition, held-to-maturity nancial assets are measured at amortised cost using the effective interest method, less any
impairment losses. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are
an integral part of the effective interest rate. The effective interest rate amortisation is included in nance cost in the consolidated
income statement. Gains and losses are also recognised in the consolidated income statement when these nancial assets are
derecognised.
Loans and receivables
Loans and receivables are nancial assets with xed or determinable payments that are not quoted in an active market. Subsequent to
60
initial recognition, loans and receivables are measured at amortised cost using the effective interest rate method, less any impairment
losses. Loans and receivables comprise bank balances and cash, due from related parties and, trade and other receivables.
Bank balances and cash
Bank balances and cash in the consolidated statement of nancial position comprise cash in hand, bank balances and deposits.
For the purpose of consolidated statement of cash ows, cash and cash equivalents consist of bank balances and cash as dened above
and cash classied as held for sale, net of bank overdrafts. Bank overdrafts form an integral part of the Groups cash management and is
included as a component of cash and cash equivalents for the purpose of the consolidated statement of cash ows.
Available-for-sale investments
Available-for-sale nancial assets comprise equity securities. Available-for-sale nancial assets are non-derivative nancial assets that are
designated as available-for-sale or are not classied in any of the above categories of nancial assets. Subsequent to initial recognition
these are measured at fair value and changes therein are recognised in consolidated statement of other comprehensive income and
presented in the other reserves in equity. When an investment is derecognised, the balance accumulated in equity is reclassied to the
consolidated income statement.
De-recognition of non-derivative nancial assets
The Group derecognises a nancial asset when the contractual rights to the cash ows from the asset expire, or it transfers the rights to
receive the contractual cash ows on the nancial asset in a transaction in which substantially all the risks and rewards of ownership of
the nancial asset are transferred. Any interest in transferred nancial assets that is created or retained by the Group is recognised as a
separate asset or liability.
(ii) Non-derivative nancial liabilities
Initial recognition and measurement
The Groups non-derivative nancial liabilities consist of loans and borrowings, bank overdrafts, amounts due to related parties, and
trade and other payables. The Group determines the classication of its nancial liabilities at initial recognition.
All non-derivative nancial liabilities are recognised initially at fair value and in the case of other nancial liabilities net of directly
attributable transaction costs.
The Group initially recognises debt securities issued and subordinated liabilities on the date they are originated. All other nancial
liabilities (including liabilities designated at fair value through prot or loss) are recognised initially on the trade date, which is the date
that the Group becomes a party to the contractual provisions of the instrument.
Fees paid on the establishment of loan facilities are recognised as transaction costs to the extent there is evidence that it is probable that
some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over the period
of the facility to which it relates.
The subsequent measurement of non-derivative nancial liabilities depends on their classication as follows:
Subsequent to initial recognition, these nancial liabilities are measured at amortised cost using effective interest rate method.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of
the effective interest rate. The effective interest rate amortisation is included in nance costs in the consolidated income statement.
A substantial modication of the terms of an existing nancial liability or a part of it shall be accounted for as an extinguishment of the
original nancial liability and the recognition of a new nancial liability. Any gain or loss on extinguishment is recognised in the
consolidated income statement. If discounted present value of the cash ows (including any fees paid) under a new term arrangement is
at least 10% different from the discounted present value of the remaining cash ows of the original liability, this is accounted for as an
extinguishment of the old liability and the recognition of a new liability. Furthermore, qualitative assessment to assess extinguishment is
also performed. Some of the factors considered in performing a qualitative assessment include change in interest basis, extension of
debt tenor, change in collateral arrangements and change in currency of lending.
De-recognition of non-derivative nancial liabilities
The Group derecognises a nancial liability when its contractual obligations are discharged or cancelled or expired.
(iii) Derivative nancial instruments
The Group holds derivative nancial instruments such as forward currency contracts and interest rate swaps to hedge its foreign
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STATEMENTS
currency and interest rate risk exposures. On initial designation of the derivatives as the hedging instrument, the Group formally
documents the relationship between the hedging instrument and hedged item, including the risk management objective and strategy in
undertaking the hedge transaction and hedged risk together with the methods that will be used to assess the effectiveness of the
hedging relationship. The Group makes an assessment, both at the inception of the hedge relationship as well as on an ongoing basis,
of whether the hedging instruments are expected to be highly effective in offsetting the changes in the fair value or cash ows of the
respective hedged items attributable to the hedged risk and whether the actual results of each hedge are within the acceptable range.
Derivatives are recognised initially at fair value and attributable transaction costs are recognised in the consolidated income statement
when incurred. Derivatives are carried as nancial assets when the fair value is positive and as nancial liabilities when the fair value is
negative.
Derivative instruments that are not designated as hedging instruments in hedge relationships are classied as nancial liabilities or assets
at fair value through prot or loss.
Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are accounted for as described below:
Cash ow hedges
When a derivative is designated as the hedging instrument in a hedge of the variability in cash ows attributable to a particular risk
associated with a recognised asset or liability or a highly probable forecast transaction or the foreign currency risk in an unrecognised
rm commitment that could affect the consolidated income statement, then such hedges are classied as cash ow hedges.
Changes in the fair value of the derivative hedging instrument designated as a cash ow hedge are recognised directly in consolidated
statement of other comprehensive income to the extent that the hedge is effective and presented in the hedging reserve in equity. Any
ineffective portion of changes in the fair value of the derivative is recognised immediately in the consolidated income statement.
When the hedged item is a non-nancial asset, the amount recognised in consolidated statement of other comprehensive income is
transferred to the carrying amount of the asset when it is recognised. In other cases, the amount recognised in consolidated statement
of other comprehensive income is transferred to the consolidated income statement in the same period that the hedged item affects the
consolidated income statement. If the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold,
terminated or exercised, or the designation is revoked, then hedge accounting is discontinued prospectively. The cumulative gain or loss
previously recognised in consolidated statement of other comprehensive income remains there until the forecast transaction or rm
commitment occurs. If the forecast transaction or rm commitment is no longer expected to occur, then the balance in equity is
reclassied to prot or loss.
(iv) Offsetting of nancial instruments
Financial assets and nancial liabilities are offset and the net amount presented in the consolidated statement of nancial position when,
and only when, the Group has a legal right to offset the amounts and intends either to set off on a net basis, or to realise the assets and
settle the liability simultaneously.
(d) Property, plant and equipment
(i) Recognition and measurement
Items of property, plant and equipment are measured at cost less accumulated depreciation and impairment losses (refer to note 3(i)).
Cost includes expenditures that are directly attributable to the acquisition of the asset. The cost of a self-constructed asset includes the
cost of materials and direct labour, any other costs directly attributable to bringing the asset to a working condition for its intended use
and the cost of dismantling and removing the items and restoring the site on which they are located.
Borrowing costs that are directly attributable to acquisition and construction of a qualifying asset are included in the cost of that asset.
Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment.
When parts of an item of property, plant and equipment have different useful lives, they are depreciated as separate items (major
components) of property, plant and equipment.
Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with
the carrying amount of property, plant and equipment and recognised within other income in the consolidated income statement.
Capital work-in-progress
Capital work-in-progress is measured at cost less impairment losses and not depreciated until such time the assets are ready for intended
use and transferred to the respective category under property, plant and equipment.
62
Dredging
Dredging expenditure is categorised into capital dredging and major maintenance dredging. Capital dredging is expenditure which
includes creation of a new harbour, deepening or extension of the channel berths or waterways in order to allow access to larger ships
which will result in future economic benets for the Group. This expenditure is capitalised and amortised over the expected period of
the relevant concession agreement. The expenditure is also capitalised under port concession rights due to the application of IFRIC 12
Service Concession Arrangements.
Major maintenance dredging is expenditure incurred to restore the channel to its previous condition and depth. On an average, the
Group incurs such expenditure every 10 years. At the completion of maintenance dredging, the channel has an average service potential
of 10 years. Any unamortised expense is written-off on the commencement of any new dredging activities. Maintenance dredging is
regarded as a separate component of the asset and is capitalised and amortised evenly over 10 years.
(ii) Subsequent costs
The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable
that the future economic benets embodied within the part will ow to the Group and its cost can be measured reliably. The carrying
amounts of the replaced parts are derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised
in the consolidated income statement as incurred.
(iii) Depreciation
Depreciation is recognised in the consolidated income statement on a straight-line basis over the estimated useful lives of each part of
an item of property, plant and equipment and is based on cost less residual value.
Dredging costs are depreciated on a straight line basis based on the lives of various components of dredging.
Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Group will
obtain ownership by the end of the lease term. No depreciation is provided on freehold land.
The estimated useful lives of assets are as follows:
Assets
Useful life
(years)
Buildings 550
Plant and equipment 325
Ships 1035
Dredging (included in land and buildings) 1099
Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted prospectively, if required.
(e) Goodwill
Goodwill arises on the acquisition of subsidiaries, associates and joint ventures. Goodwill represents the excess of the cost of the
acquisition over the Groups interest in the net fair value of the identiable assets, liabilities and contingent liabilities of the acquiree.
When the excess is negative (negative goodwill), it is recognised immediately in the consolidated income statement.
Goodwill is measured at cost less accumulated impairment losses (refer to note 3(i)).
In respect of equity-accounted investees, the carrying amount of goodwill is included in the carrying amount of the investment and is
not tested for impairment separately.
(f) Port concession rights
The Group classies the port concession rights as intangible assets as the Group bears demand risk over the infrastructure assets.
Substantially all of the Groups terminal operations are conducted pursuant to long-term operating concessions or leases entered into
with the owner of a relevant port for terms generally between 25 and 50 years (excluding the port concession rights relating to
associates and joint ventures). The Group commonly starts negotiations regarding renewal of concession agreements with approximately
5-10 years remaining on the term and often obtains renewals or extensions on the concession agreements in advance of their expiration
in return for a commitment to make certain capital expenditures in respect of the subject terminal. In addition, such negotiations may
result in the re-basing of rental charges to reect prevailing market rates. However, based on the Groups experience, incumbent
operators are typically granted renewal often because it can be costly for a port owner to switch operators, both administratively and
due to interruptions to port operations and reduced productivity associated with such transactions. Port concession rights consist of:
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(i) Port concession rights arising on business combinations
The cost of port concession rights acquired in a business combination is the fair value as at the date of acquisition. Other port concession
rights acquired separately are measured on initial recognition at cost.
Following initial recognition, port concession rights are carried at cost less accumulated amortisation and any accumulated impairment
losses (refer to note 3(i)). Internally generated port concession rights, excluding capitalised development costs, are recognised in the
consolidated income statement as incurred. The useful lives of port concession rights are assessed to be either nite or indenite.
Port concession rights with nite lives are amortised on a straight line basis over the useful economic life and assessed for impairment
whenever there is an indication that the port concession rights may be impaired. Port concession rights with indenite lives (arising
where freehold rights are granted) are not amortised and are tested for impairment at least on an annual basis.
The amortisation period and amortisation method for port concession rights with nite useful lives are reviewed at least at each nancial
year end. Changes in the expected useful life or the expected pattern of consumption of future economic benets embodied in the
assets are accounted for by changing the amortisation period or method, as appropriate, and treated as changes in accounting
estimates. The amortisation expenses on port concession rights with nite useful lives are recognised in the consolidated income
statement on a straight line basis in the expense category consistent with the function of port concession rights.
Port concession rights with indenite useful lives are tested for impairment annually either individually or at the cash-generating unit
level. Such port concession rights are not amortised. The useful life of port concession rights with an indenite life is reviewed annually
to determine whether the indenite life assessment continues to be supportable. If not, the change in the useful life assessment from
indenite to nite is made on a prospective basis.
(ii) Port concession rights arising from Service Concession Arrangements (IFRIC 12)
The Group recognises port concession rights arising from a service concession arrangement, in which the grantor controls or regulates
the services provided and the prices charged, and also controls any signicant residual interest in the infrastructure such as property,
plant and equipment, if the infrastructure is existing infrastructure of the grantor or the infrastructure is constructed or purchased by the
Group as part of the service concession arrangement.
Port concession rights also include certain property, plant and equipment which are reclassied as intangible assets in accordance with
IFRIC 12 Service Concession Arrangements. These assets are amortised based on the lower of their useful lives or concession period.
Gains or losses arising from de-recognition of port concession rights are measured as the difference between the net disposal proceeds
and the carrying amount of the asset and are recognised in the consolidated income statement when the asset is de-recognised.
The estimated useful lives for port concession rights range within a period of 575 years (including the concession rights relating to
associates and joint ventures).
(g) Inventories
Inventories mainly consist of spare parts and consumables. Inventories are measured at the lower of cost and net realisable value. The
cost of inventories is based on weighted average method and includes expenditure incurred in acquiring inventories and bringing them
to their existing location and condition. Net realisable value is the estimated selling price in the ordinary course of business, less the
estimated costs of completion and selling expenses.
(h) Leases
The determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement at the inception
date. The arrangement is assessed for whether fullment of the arrangement is dependent on the use of a specic asset or assets or the
arrangement conveys a right to use the asset or assets, even if that right is not explicitly specied in an arrangement.
(i) Group as a lessee
Assets held by the Group under leases in which a signicant portion of the risks and rewards of ownership are retained by the lessor are
classied as operating leases. Assets held under operating leases are not recognised in the Groups consolidated statement of nancial
position. Payments made under operating leases are recognised in the consolidated income statement on a straight-line basis over the
term of the lease. Lease incentives received are recognised as an integral part of the total lease expense, over the term of the lease.
The Group leases certain property, plant and equipment. Leases of property, plant and equipment where the Group has substantially all
the risks and rewards of ownership are classied as nance lease. On initial recognition, the leased assets are measured at an amount
equal to the lower of its fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the leased
asset is accounted for in accordance with the accounting policy applicable to that asset. Minimum lease payments made under nance
64
leases are apportioned between the nance expense and the reduction of the outstanding liability. The nance expense is allocated to
each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Contingent payments are accounted for by revising the minimum lease payments over the remaining term of the lease when the lease
adjustment is conrmed.
(ii) Group as a lessor
Leases where the Group retains substantially all the risks and benets of ownership of the asset are classied as operating leases. Initial
direct costs incurred in negotiating an operating lease are added to the carrying amount of the leased asset and recognised over the
lease term on the same basis as rental income. Contingent rents are recognised as income in the period in which they are earned.
(iii) Leasing and sub-leasing transactions
A series of leasing and sub-leasing transactions between the Group and third parties, which are closely interrelated, negotiated as a
single transaction, and which take place concurrently or in a continuous sequence are considered linked and accounted for as one
transaction when the overall economic effect cannot be understood without reference to the series of transactions as a whole.
These leasing and sub-leasing transactions are designed to achieve certain benets for the third parties in overseas locations in return for
a cash benet to the Group. Such cash benet is accounted in the consolidated income statement based on its economic substance.
Under these leasing and sub-leasing transactions, current and non-current liabilities have been decreased by the loan receivable and the
placement of deposits. Those liabilities, receivables and deposits (and income and charges arising therefrom) are netted off in the
consolidated nancial statements, in order to reect the overall commercial effect of the arrangement.
(iv) Leases of land in port concession
Leases of land have not been classied as nance leases as the Group believes that the substantial risks and rewards of ownership of the
land have not been transferred. The existence of a signicant exposure of the lessor to performance of the asset through contingent
rentals was a basis of concluding that substantially all the risks and rewards of ownership have not passed.
(i) Impairment
(i) Financial assets
(a) Loans and receivables and held to maturity investments
The Group considers evidence of impairment for loans and receivables and held to maturity investment securities at both a specic asset
level and collective level. All individually signicant receivables and held to maturity investment securities are assessed for specic
impairment.
(b) Loans and receivables and held to maturity investments
An impairment loss in respect of a nancial asset measured at amortised cost is calculated as the difference between its carrying amount
and the present value of the estimated future cash ows discounted at the original effective interest rate. Impairment losses are
recognised in the consolidated income statement and reected in an allowance account against loans and receivables or held to
maturity investments. When a subsequent event causes the amount of impairment loss to decrease, the decrease in impairment loss is
reversed through the consolidated income statement.
(c) Available-for-sale nancial assets
For available-for-sale nancial investments, the Group assesses at each reporting date whether there is objective evidence that an
investment or a group of investments is impaired. A signicant or prolonged decline in the fair value of an equity investment is
considered as an objective evidence of impairment. The Group considers that generally a decline of 20% will be considered as signicant
and a decline of over 9 months will be considered as prolonged.
Impairment losses on available-for-sale nancial assets are recognised by reclassifying the losses accumulated in the other reserve in
equity to the consolidated income statement. The cumulative loss that is reclassied from equity to the consolidated income statement is
the difference between the acquisition cost, net of any principal repayment and amortisation, and the current fair value, less any
impairment loss recognised previously in the consolidated income statement. Any subsequent recovery in the fair value of an impaired
available-for-sale equity security is recognised in consolidated statement of other comprehensive income.
(ii) Non-nancial assets
The carrying amounts of the Groups non-nancial assets, other than inventories and deferred tax assets are reviewed for impairment
whenever there is an indication of impairment. If any such indication exists then the assets recoverable amount is estimated. The
recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing
value in use, the estimated future cash ows are discounted to their present value using a pre-tax discount rate that reects current
market assessments of the time value of money and the risks specic to the asset or cash generating unit. A cash-generating unit is the
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smallest identiable asset group that generates cash ows that largely are independent from other assets and groups.
An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its estimated recoverable
amount. Impairment losses are recognised in the consolidated income statement. Impairment losses recognised in respect of cash-
generating units are allocated rst to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying
amount of the other assets in the unit (group of units) on a pro rata basis.
For goodwill and port concession rights that have indenite lives or that are not yet available for use, recoverable amount is estimated
annually and when circumstances indicate that carrying value may be impaired. Goodwill acquired in business combination is allocated
to groups of cash generating units that are expected to benet from the synergies of the combination. An impairment loss in respect of
goodwill is not reversed.
In respect of other assets, impairment losses recognised in prior periods are assessed at each reporting date for any indications that the
loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the
recoverable amount. An impairment loss is reversed only to the extent that the assets carrying amount does not exceed the carrying
amount, which would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
(j) Assets held for sale
Assets (or disposal groups comprising assets and liabilities) which are expected to be recovered primarily through sale rather than
through continuing use are classied as held for sale. Immediately before classication as held for sale, the assets (or components of a
disposal group) are re-measured in accordance with the Groups accounting policies. Thereafter, generally the assets (or disposal group)
are measured at the lower of their carrying amount or fair value less costs to sell. Any impairment loss on a disposal group is rst
allocated to goodwill, and then to remaining assets and liabilities on a pro rata basis, except that no loss is allocated to inventories,
nancial assets, deferred tax assets and employee benet assets which continue to be measured in accordance with the Groups
accounting policies. Impairment losses on initial classication as held for sale and subsequent gains or losses on re-measurement are
recognised in the consolidated income statement. Gains are not recognised in excess of any cumulative impairment loss.
Port concession rights and property, plant and equipment once classied as held for sale or distribution are not amortised or
depreciated. In addition, equity accounting of equity-accounted investees ceases once classied as held for sale.
(k) Share capital
Ordinary shares are classied as equity. Incremental costs directly attributable to the issue of ordinary shares are recognised as a
deduction from equity. Any excess payment received over par value is treated as share premium.
(l) Employee benets
(i) Pension and post-employment benets
The Groups net obligation in respect of dened benet pension plans is calculated separately for each plan by estimating the amount of
future benet that employees have earned in return for their service in the current and prior periods. That benet is discounted to
determine the present value, and the fair value of any plan assets is deducted. The calculation is performed by a qualied actuary using
the projected unit credit method. The discount rate is the yield at the reporting date on AA credit rated bonds that have maturity dates
approximating to the terms of the Groups obligations.
When the benets of a plan are improved, the portion of the increased benet relating to past service by employees is recognised as an
expense in the consolidated income statement on a straight line basis over the average period until the benets become vested. To the
extent that the benets vest immediately, the expense is recognised immediately in the consolidated income statement.
When the actuarial calculation results in a benet to the Group, the recognised asset is limited to the total of any unrecognised past
service costs and the present value of economic benets available in the form of any future refunds from the plan or reductions in future
contributions to the plan. In order to calculate the present value of economic benets, consideration is given to any minimum funding
requirements that apply to any plan in the Group. An economic benet is available to the Group if it is realisable during the life of the
plan, or on settlement of the plan liabilities.
Where the present value of the decit contributions exceeds the IAS 19 decit an additional liability is recognised.
Actuarial gains and losses that arise in calculating the Groups obligation in respect of a plan are recognised in the period in which they
arise directly in consolidated statement of other comprehensive income. The cost of providing benets under the dened benet plans is
determined separately for each plan using the projected unit credit method, which attributes entitlement to benets to the current
period (to determine current service cost) and to the current and prior periods (to determine the present value of dened benet
obligation) and is based on actuarial advice.
66
Contributions, including lump sum payments, in respect of dened contribution pension schemes and multi-employer dened benet
schemes where it is not possible to identify the Groups share of the scheme, are charged to the consolidated income statement as they
fall due.
(ii) Long-term service benets
The Groups net obligation in respect of long-term service benets, other than pension plans, is the amount of future benet that
employees have earned in return for their service in the current and prior periods. The obligation is calculated using the projected unit
credit method and is discounted to its present value and the fair value of any related assets is deducted. The discount rate is the yield at
the reporting date on AA credit rated bonds that have maturity dates approximating to the terms of the Groups obligations.
(m) Provisions
A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated
reliably, and it is probable that an outow of economic benets will be required to settle the obligation. Provisions are determined by
discounting the expected future cash ows at a pre-tax rate that reects current market assessments of the time value of money and
the risks specic to the liability. The unwinding of the discount is recognised as a nance cost in the consolidated income statement.
Provision for an onerous contract is recognised when the expected benets to be derived by the Group from a contract are lower than
the unavoidable cost of meeting its obligations under the contract. The provision is measured at the present value of the lower of the
expected cost of terminating the contract and the expected net cost of continuing with the contract.
(n) Revenue
Revenue is recognised to the extent that it is probable that the economic benets will ow to the Group and the revenue can be reliably
measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or
receivable, taking into account contractually dened terms of payment and excluding taxes or duty.
Revenue mainly consists of containerised stevedoring and other containerised revenue. Non-containerised revenue mainly includes
logistics and handling of break bulk cargo. The following specic recognition criteria must also be met before revenue is recognised:
Rendering of services
Revenue from providing containerised stevedoring, other containerised services and non-containerised services is recognised on the
delivery and completion of those services.
Service concession arrangements
Revenues relating to construction contracts which are entered into with local authorities for the construction of the infrastructure
necessary for the provision of services are measured at the fair value of the consideration received or receivable.
(o) Finance income and expense
Finance income comprises interest income on funds invested and gains on hedging instruments that are recognised in the consolidated
income statement. Interest income is recognised as it accrues, using the effective interest method.
Finance costs comprises interest expense on borrowings, unwinding of the discount on provisions, impairment losses recognised on
nancial assets and losses on hedging instruments that are recognised in the consolidated income statement.
Finance income and expense also include realised and unrealised exchange gains and losses.
(p) Income tax
Income tax expense comprises current and deferred tax. Income tax expense is recognised in the consolidated income statement except
to the extent that it relates to a business combination, or items recognised directly in consolidated statement of other comprehensive
income.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the
reporting date in the countries where the Group operates and generates taxable income. It also includes any adjustment to tax payable
in respect of previous years.
Deferred tax is recognised using the liability method, providing for temporary differences between the carrying amounts of assets and
liabilities for nancial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for:
the temporary differences arising on the initial recognition of goodwill and the initial recognition of assets or liabilities in a transaction
that is not a business combination and that affects neither accounting nor taxable prot or loss; and
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the temporary differences relating to investments in subsidiaries and jointly controlled entities to the extent that they probably will not
reverse in the foreseeable future.
The measurement of deferred tax reects the tax consequences that would follow the manner in which the Group expects, at the end
of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the
laws that have been enacted or substantively enacted by the reporting date.
A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences, to the extent that it is
probable that future taxable prots will be available against which they can be utilised. Deferred tax assets are reviewed at each
reporting date and are reduced to the extent that it is no longer probable that the related tax benet will be realised.
(q) Discontinued operation
A discontinued operation is a component of the Groups business that represents a separate major line of business or geographical area
of operations that has been disposed or is held for sale. Classication as a discontinued operation occurs upon disposal or when the
operation meets the criteria to be classied as held for sale, if earlier. When an operation is classied as a discontinued operation, the
comparative consolidated income statement and consolidated statement of comprehensive income is restated as if the operation had
been discontinued from the start of the comparative period.
In the consolidated income statement of the reporting period, and of the comparable period of the previous year, income and expenses
from discontinued operations are reported separately from income and expenses from continuing operations, down to the level of prot
after taxes, even when the Group retains a non-controlling interest in the subsidiary after the sale. The resulting prot or loss (after
taxes) is reported separately in the consolidated income statement and disclosed in the notes to consolidated nancial statements.
(r) Earnings per share
The Group presents basic earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the prot or loss
attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the year.
(s) Segment reporting
An operating segment is a component of the Group that engages in business activities from which it may earn revenue and incur
expenses, including revenues and expenses that relate to transactions with any of the Groups other components. All operating
segments operating results are reviewed regularly by the Groups Board of Directors to assess performance.
Segment results that are reported to the Board of Directors include items directly attributable to a segment as well as those that can be
allocated on a reasonable basis. Unallocated items mainly comprise corporate assets (primarily Companys head ofce), head ofce
expenses and income tax assets and liabilities.
Segment capital expenditure is the total cost incurred during the year to acquire property, plant and equipment, and port concession
rights other than goodwill.
(t) Separately disclosed items
The Group presents, as separately disclosed items on the face of the consolidated income statement, those items of income and expense
which, because of the nature and expected infrequency of the events giving rise to them, merit separate presentation to allow users to
understand better the elements of nancial performance in the period, so as to facilitate a comparison with prior periods and a better
assessment of trends in nancial performance.
(u) New standard and interpretation not yet effective
A number of new standards, amendments to standards and interpretations are not yet effective for annual periods beginning after
1January 2012, and have not been applied in preparing these consolidated nancial statements. These are:
IAS 1 Presentation of Items of Other Comprehensive Income (OCI) Amendments to IAS 1 The amendments to IAS 1 change
the grouping of items presented in OCI. Items that could be reclassied (or recycled) to prot or loss at a future point in time (for
example, upon de-recognition or settlement) would be presented separately from items that will never be reclassied. The
amendment affects presentation only and has therefore no impact on the Groups nancial position or performance. The
amendment becomes effective for annual periods beginning on or after 1 July 2012.
IFRS 9 Financial Instruments (2009 and 2010) IFRS 9 as issued reects the rst phase of the IASBs work on the replacement of
IAS39 and applies to classication and measurement of nancial assets and nancial liabilities as dened in IAS 39. The standard is
68
effective for annual periods beginning on or after 1 January 2015. In subsequent phases, the IASB will address hedge accounting and
impairment of nancial assets. The adoption of the rst phase of IFRS 9 will have an effect on the classication and measurement of
the Groups nancial assets, but will potentially have no impact on classication and measurements of nancial liabilities. The Group
will quantify the effect in conjunction with the other phases, when issued, to present a comprehensive picture.
IFRS 10 Consolidated Financial Statements (2011) IFRS 10 replaces the portion of IAS 27 Consolidated and Separate Financial
Statements that addresses the accounting for consolidated nancial statements. It also includes the issues raised in SIC-12
Consolidation Special Purpose Entities.
IFRS 10 establishes a single control model that applies to all entities including special purpose entities. The changes introduced by
IFRS10 will require management to exercise signicant judgement to determine which entities are controlled, and therefore, are
required to be consolidated by a parent, compared with the requirements that were in IAS 27. The Group is currently assessing the
impact that this standard will have on its nancial position and performance. The standard is effective for annual periods beginning
on or after 1January 2013.
IFRS 11 Joint Arrangements (2011) IFRS 11 replaces IAS 31 Interests in Joint Ventures and SIC-13 Jointly-controlled Entities
Non-monetary Contributions by Venturers.
IFRS 11 removes the option to account for jointly-controlled entities (JCEs) using proportionate consolidation. Instead, JCEs that meet
the denition of a joint venture must be accounted for using the equity method. The Group is currently assessing the impact that this
standard will have on its nancial position and performance. The standard is effective for annual periods beginning on or after
1January 2013.
IFRS 12 Disclosure of Involvement with Other Entities (2011) IFRS 12 includes all of the disclosures that were previously in IAS 27
related to consolidated nancial statements, as well as all of the disclosures that were previously included in IAS 31 and IAS 28. These
disclosures relate to an entitys interests in subsidiaries, joint arrangements, associates and structured entities. A number of new
disclosures are also required. This standard becomes effective for annual periods beginning on or after 1 January 2013. The
application of this standard affects disclosure only and will have no impact on the Groups nancial position or performance.
IFRS 13 Fair Value Measurement IFRS 13 establishes a single source of guidance under IFRS for all fair value measurements. IFRS
13 does not change when an entity is required to use fair value, but rather provides guidance on how to measure fair value under
IFRS when fair value is required or permitted. The Group is currently assessing the impact that this standard will have on the nancial
position and performance of the Group. This standard becomes effective for annual periods beginning on or after 1 January 2013.
IAS 19 (Revised 2011) IAS 19 changes the denition of short term and other long-term employee benets to clarify the distinction
between the two. For dened benet plans, removal of the accounting policy choice for recognition of actuarial gains and losses is
not expected to have any impact on the Group. The Group is currently assessing the impact that this standard will have on its
nancial position and performance. The standard is effective for annual periods beginning on or after 1 January 2013.
IAS 27 (Revised 2011) As a consequence of the new IFRS 10 and IFRS 12, what remains of IAS 27 is limited to accounting for
subsidiaries, jointly controlled entities, and associates in separate nancial statements. The Group is currently assessing the impact
that this standard will have on the nancial position and performance of the Group. This amendment becomes effective for annual
periods beginning on or after 1 January 2013.
IAS 28 (Revised 2011) As a consequence of the new IFRS 11 and IFRS 12, IAS 28 has been renamed as IAS 28 Investments in
Associates and Joint Ventures, and describes the application of the equity method to investments in joint ventures in addition to
associates. The Group is currently assessing the impact that this standard will have on the nancial position and performance of the
Group. This amendment becomes effective for annual periods beginning on or after 1 January 2013.
IAS 31 (Revised 2011) As a consequence of the new IFRS 11 and IFRS 12, IAS 31 has been replaced with this new standard. The
Group is currently assessing the impact that this standard will have on its nancial position and performance. The amendment
becomes effective for annual periods beginning on or after 1 January 2013.
Management anticipates that the above standards, amendments to standards and interpretations will be adopted by the Group to the
extent applicable to them from their effective dates. The extent of the impact on adoption of these standards, amendments and
interpretations has not been determined.
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5 Financial risk management
Overview
The Group has exposure to the following risks from its use of nancial instruments:
(a) credit risk
(b) liquidity risk
(c) market risk
This note presents information about the Groups exposure to each of the above risks, the Groups objectives, policies and processes for
measuring and managing risk. Further quantitative disclosures are included throughout these consolidated nancial statements. Also
refer to note 29 for further details.
Risk management framework
The Board of Directors have overall responsibility for the establishment and oversight of the Groups risk management framework.
The Groups risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits
and controls, and to monitor risks and adherence to limits. The Group, through its training and management standards and procedures,
aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.
4 Determination of fair values
A number of the Groups accounting policies and disclosures require the determination of fair value, for both nancial and non-nancial
assets and liabilities. Fair values have been determined for measurement and/or disclosure purposes based on the following methods.
When applicable, further information about the assumptions made in determining fair values is disclosed in the notes specic to that
asset or liability.
(i) Property, plant and equipment
The fair value of property, plant and equipment recognised as a result of a business combination is based on market values. The market
value of property is the estimated amount for which a property could be exchanged on the date of valuation between a willing buyer
and a willing seller in an arms length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently
and without compulsion. The market value of items of plant, equipment, xtures and ttings is based on the quoted market prices for
similar items.
(ii) Port concession rights
Port concession rights acquired in a business combination are accounted at their fair values. The fair value is based on the discounted
cash ows expected to be derived from the use and eventual sale of the assets.
(iii) Investments in debt securities and available-for-sale nancial assets
The fair values of equity and debt securities are determined by reference to their quoted closing bid price at the reporting date. The fair
value of the unquoted infrastructure investment fund classied as available-for-sale is based on the independent valuation of the fund.
The fair value of investments in unquoted bonds is determined based on the discounted cash ows at a market related discount rate.
The fair value of debt securities held to maturity is determined for disclosure purposes only.
(iv) Trade and other receivables/payables
The fair value of trade and other receivables and trade and other payables approximates to the carrying values due to the short term
maturity of these instruments.
(v) Derivatives
The fair value of forward exchange contracts and interest rate swaps is based on the bank quotes at the reporting dates.
(vi) Non-derivative nancial liabilities
Fair value for quoted bonds is based on their market price as at the reporting date. Other loans include term loans and nance leases.
These are largely at variable interest rates and therefore, the carrying value normally equates to the fair value.
The fair value of bank balances and cash and bank overdrafts approximates to the carrying value due to the short term maturity of these
instruments.
70
The Group Audit Committee oversees how management monitors compliance with the Groups risk management policies and
procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Group. The Group Audit
Committee is assisted in its oversight role by Internal Audit. Internal Audit undertakes both regular and ad-hoc reviews of risk
management controls and procedures, the results of which are reported to the Audit Committee.
(a) Credit risk
Credit risk is the risk of nancial loss to the Group if a customer fails to meet its contractual obligations, and arises principally from the
Groups receivables from customers, amounts due from related parties and investment securities.
Trade and other receivables
The Group trades mainly with recognised and creditworthy third parties. It is the Groups policy that all customers who wish to trade on
credit terms are subject to credit verication procedures and are required to submit nancial guarantees based on their creditworthiness.
In addition, receivable balances are monitored on an ongoing basis with the result that the Groups exposure to bad debts is not
signicant.
The Group establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade and other
receivables. The main components of this allowance are a specic loss component that relates to individually signicant exposures, and a
collective loss component established for groups of similar assets in respect of losses that have been incurred but not yet identied. The
collective loss allowance is determined based on historical data of payment statistics for similar nancial assets.
Other nancial assets
Credit risk arising from other nancial assets of the Group comprises cash and cash equivalents and certain derivative instruments. The
Groups exposure to credit risk arises from default of the counterparty, with a maximum exposure equal to the carrying amount of these
instruments.
The Group manages its credit risks with regard to bank deposits, throughout the Group, through a number of controls, which include
assessing the credit rating of the bank either from public credit ratings, or internal analysis where public data is not available and
consideration of the support for nancial institutions from their central banks or other regulatory authorities.
Financial guarantees
The Groups policy is to consider the provision of a nancial guarantee to wholly-owned subsidiaries, where there is a commercial
rationale to do so. Guarantees may also be provided to associates and joint ventures in very limited circumstances and always only for
the Groups share of the obligation. The provision of guarantees always requires the approval of senior management.
(b) Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its nancial obligations as they fall due. The Groups approach to
managing liquidity is to ensure, as far as possible, that it will always have sufcient cash to meet its liabilities when due, under both
normal and stressed conditions, without incurring unacceptable losses or risking damage to the Groups reputation.
The Groups objective is to maintain a balance between continuity of funding and exibility through the use of bank facilities and by
ensuring adequate internally generated funds. The Groups terms of business require amounts to be paid within 60 days of the date of
provision of the service. Trade payables are normally settled within 45 days of the date of purchase.
(c) Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates will affect the Groups income or
the value of its holdings of nancial instruments. The objective of market risk management is to manage and control market risk
exposures within acceptable parameters, while optimising the return.
The Group buys and sells derivatives and also incurs nancial liabilities, in order to manage market risks. All such transactions are carried
out within the guidelines set by the Board of Directors in the Group Treasury policy. Generally, the Group seeks to apply hedge
accounting in order to manage the volatility in the consolidated income statement.
(i) Currency risk
The proportion of the Groups net operating assets denominated in foreign currencies (i.e. other than the functional currency of the
Company, UAE Dirhams) is approximately 73% (2011: 62%) with the result that the Groups USD consolidated statement of nancial
position, and in particular owners equity, can be affected by currency movements when it is retranslated at each year end rate. The
Group partially mitigates the effect of such movements by borrowing in the same currencies as those in which the assets are
denominated and using cross currency swaps. The impact of currency movements on operating prot is partially mitigated by interest
costs being incurred in foreign currencies. The Group operates in some locations where the local currency is xed to the Groups
5 Financial risk management continued
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presentation currency of USD further reducing the risk of currency movements.
Interest on borrowings is denominated in the currency of the borrowings. Generally, borrowings are denominated in currencies that
match the cash ows generated by the underlying foreign operations of the Group. This provides an economic hedge without
derivatives being entered into and therefore hedge accounting is not applied in these circumstances.
A portion of the Groups activities generate part of their revenue and incur some costs outside their main functional currency. Due to
the diverse number of locations in which the Group operates there is some natural hedging that occurs within the Group. When it is
considered that currency volatility could have a material impact on the results of an operation, hedging using forward foreign currency
contracts is undertaken to reduce the short-term effect of currency movements.
When the Groups businesses enter into capital expenditure or lease commitments in currencies other than their main functional
currency, these commitments are hedged in most instances using forward contracts and currency swaps in order to x the cost when
converted to the functional currency. The Group classies its forward exchange contracts hedging forecast transactions as cash ow
hedges and states them at fair value.
(ii) Interest rate risk
The Groups exposure to the risk of changes in market interest rates relates primarily to the Groups long-term debt obligations with a
xed/oating interest rate and bank deposits. The Group issued two xed rate bonds, a 10 year Sukuk with a prot rate of 6.25% and a
30 year Medium Term Note with a coupon of 6.85% which collectively represents USD 3,229,299 thousand of the Groups outstanding
debt as at the reporting date.
The Groups policy is to manage its interest cost by entering into interest rate swap agreements, in which the Group agrees to exchange,
at specied intervals, the difference between xed and variable rate interest amounts calculated by reference to an agreed-upon
notional principal amount. These swaps are designated to hedge underlying debt obligations.
At 31 December 2012, after taking into account the effect of interest rate swaps, approximately 89% (2011: 68%) of the Groups
borrowings are at a xed rate of interest.
Capital management
The Boards policy is to maintain a strong capital base so as to maintain investor, creditor and market condence and to sustain future
development of the business. Capital consists of share capital, share premium, shareholders reserve, retained earnings, hedging and
other reserves, actuarial reserve and translation reserve. The primary objective of the Groups capital management is to ensure that it
maintains a strong credit rating and healthy capital ratios in order to support its business and maximise shareholder value. The Board
seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowings and the advantages and
security afforded by a sound capital position.
Neither the Company nor any of its subsidiaries are subject to externally imposed capital requirements.
The key performance ratios as at 31 December are as follows:
2012
USD000
2011
USD000
Total interest bearing loans and borrowings (refer to note 25) 4,752,456 7,741,755
Less: cash and cash equivalents (refer to note 18) (1,881,733) (4,158,347)
Total net debt 2,870,723 3,583,408
Adjusted EBITDA (refer to note 6) 1,407,483 1,307,462
Net nance cost before separately disclosed items 288,881 287,570
Net debt/adjusted EBITDA 2.0 2.7
Interest cover before separately disclosed items 4.9 4.5
5 Financial risk management continued
72
6 Segment information
The internal management reports which are prepared under IFRS are reviewed by the Board of Directors (Chief Operating Decision
Maker) based on the location of the Groups assets and liabilities. The Group has identied the following geographic areas as its basis
of segmentation. The Group measures segment performance based on the earnings before separately disclosed items, interest, tax,
depreciation and amortisation (Adjusted EBITDA).
Asia Pacic and Indian subcontinent
Each of these operating segments have an individual appointed as Segment Director responsible for these segments, who in turn reports
to the Chief Operating Decision Maker.
In addition to the above reportable segments, the Group also reports unallocated head ofce costs, nance costs, nance income and
tax expense under head ofce segment.
Information regarding the results of each reportable segment is included below.
The following table presents certain results, assets and liabilities information regarding the Groups segments as at the reporting date.
Asia Pacic and
Indiansubcontinent Australia and Americas
Middle East, Europe
andAfrica Head ofce Inter-segment Total
2012
USD000
2011
USD000
2012
USD000
2011
USD000
2012
USD000
2011
USD000
2012
USD000
2011
USD000
2012
USD000
2011
USD000
2012
USD000
2011
USD000
(Including separately disclosed items)
Revenue 456,578 499,765 552,751 594,065 2,111,688 1,883,901 3,121,017 2,977,731
Segment results from
operations* 217,755 118,471 109,330 589,973 955,186 490,986 (156,310) (149,887) 1,125,961 1,049,543
Finance income 75,211 135,361 75,211 135,361
Finance costs (374,465) (433,701) (374,465) (433,701)
Prot/(loss) for theyear 217,755 118,471 109,330 589,973 955,186 490,986 (455,564) (448,227) 826,707 751,203
* Segment results from operations comprise prot for the year before net nance cost.
Net nance cost and tax expense from various geographical locations and head ofce have been grouped under head ofce.
Asia Pacic and
Middle East, Europe
2012
USD000
2011
USD000
2012
USD000
2011
USD000
2012
USD000
2011
USD000
2012
USD000
2011
USD000
2012
USD000
2011
USD000
2012
USD000
2011
USD000
Segment assets 4,993,196 5,076,106 1,804,715 1,847,887 9,448,179 8,031,636 8,862,301 11,185,296 (8,674,482) (7,383,340) 16,433,909 18,757,585
Segment liabilities 427,202 422,189 140,115 227,370 1,538,016 1,414,480 6,178,971 7,810,438 (1,831,438) (586,299) 6,452,866 9,288,178
Tax liabilities* 1,251,198 1,247,940 1,251,198 1,247,940
Total liabilities 427,202 422,189 140,115 227,370 1,538,016 1,414,480 7,430,169 9,058,378 (1,831,438) (586,299) 7,704,064 10,536,118
Capital expenditure 7,894 15,954 98,650 84,279 575,034 378,668 3,373 2,280 684,951 481,181
Depreciation 32,848 32,504 64,458 61,103 187,636 194,133 5,069 5,137 290,011 292,877
Amortisation/
impairment 57,781 170,231 48,675 37,371 64,065 172,494 170,521 380,096
Share of prot of equity-
accounted investees
before separately
disclosed items 110,853 117,354 (973) 10,107 24,017 14,250 133,897 141,711
Tax expense 72,954 59,042 72,954 59,042
* Tax liabilities and tax expenses from various geographical locations have been grouped under head ofce.
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7 Revenue
2012
USD000
2011
USD000
Revenue consists of:
Containerised stevedoring revenue 1,366,200 1,382,642
Containerised other revenue 1,044,967 973,073
Non-containerised revenue 709,850 622,016
3,121,017 2,977,731
The Group does not have any customer which contributes more than 10 percent of the Groups total revenue.
6 Segment information continued
Earnings before separately disclosed items, interest, tax, depreciation and amortisation (Adjusted EBITDA)
Asia Pacic and
Middle East, Europe
2012
USD000
2011
USD000
2012
USD000
2011
USD000
2012
USD000
2011
USD000
2012
USD000
2011
USD000
2012
USD000
2011
USD000
2012
USD000
2011
USD000
Revenue before
separately
disclosed items 456,578 499,765 552,751 594,065 2,111,688 1,883,901 3,121,017 2,977,731
Adjusted EBITDA 299,391 322,158 165,845 203,142 1,020,534 860,660 (78,287) (78,498) 1,407,483 1,307,462
Finance income 75,211 135,361 75,211 135,361
Finance costs (364,092) (422,931) (364,092) (422,931)
Tax expense (72,954) (59,042) (72,954) (59,042)
Depreciation and
amortisation (90,629) (102,772) (77,333) (68,481) (237,601) (252,721) (5,069) (5,137) (410,632) (429,111)
Adjusted net prot/(loss)
for the year before
separately disclosed
items 208,762 219,386 88,512 134,661 782,933 607,939 (445,191) (430,247) 635,016 531,739
Adjusted for separately
disclosed items 8,993 (100,915) 20,818 455,312 172,253 (116,953) (10,373) (17,980) 191,691 219,464
Prot/(loss) for
theyear 217,755 118,471 109,330 589,973 955,186 490,986 (455,564) (448,227) 826,707 751,203
8 Prot for the year (including separately disclosed items)
2012
USD000
2011
USD000
Prot for the year is stated after charging the following costs:
Staff costs 646,846 575,143
Depreciation and amortisation 410,632 429,111
Impairment 49,900 243,862
Operating lease rentals 384,521 412,398
9 Finance income and costs (including separately disclosed items)
2012
USD000
2011
USD000
Finance income
Interest income 67,295 123,392
Exchange gains 6,688 7,350
Other net nancing income in respect of pension plans 1,228 4,619
75,211 135,361
Finance costs
Interest expense (350,222) (378,563)
Exchange losses (13,067) (44,344)
Other net nancing expense in respect of pension plans (803) (24)
Finance costs before separately disclosed items (364,092) (422,931)
Adjusted for separately disclosed items (refer to note 11) (10,373) (10,770)
Finance costs after separately disclosed items (374,465) (433,701)
Net nance costs after separately disclosed items (299,254) (298,340)
74
10 Income tax
The major components of income tax expense for the year ended 31 December:
2012
USD000
2011
USD000
Current income tax expense
Current year 108,912 58,190
Adjustment for prior periods (20,738) 2,538
88,174 60,728
Deferred tax credits (15,220) (1,686)
72,954 59,042
Income tax expense 72,954 59,042
Tax on separately disclosed items 7,211
Total tax expenses 72,954 66,253
Share of income tax of equity-accounted investees 38,189 42,321
Total tax charge 111,143 108,574
Current income tax liabilities 180,267 169,585
All tax items included within separately disclosed items are detailed in note 11.
The Group is not subject to income tax on its UAE operations. The tax expense relates to the tax payable on the prot earned by the
overseas subsidiaries, associates and joint ventures as adjusted in accordance with the taxation laws and regulations of the countries in
which they operate. The applicable tax rates in the regions in which the Group operates are set out below:
Geographical segments
Applicable
corporate tax rate
Asia Pacic and Indian subcontinent 16.5% to 35.0%
Australia and Americas 15.0% to 36.0%
Middle East, Europe and Africa 0% to 34.0%
The relationship between the tax expense and the accounting prot can be explained as follows:
2012
USD000
2011
USD000
Net prot before tax 899,661 817,456
Tax at the Groups domestic tax rate
Higher income tax on foreign earnings 182,888 439,146
Permanent differences including non-taxable income and non-deductible expenses (86,530) (385,070)
Tax charge on equity-accounted investees 38,189 42,321
Current year losses not recognised for deferred tax asset 31,785 29,978
Brought forward losses utilised (32,691) (247)
Deferred tax in respect of fair value adjustments (43,036) (28,529)
Others 11,933 (547)
Tax expense before prior year adjustments 102,538 97,052
Tax (over)/under provided in prior periods:
current tax (20,738) 2,538
deferred tax 29,343 8,984
Total tax expense from operations 111,143 108,574
Adjustment for separately disclosed items (7,211)
Total tax expenses (A) 111,143 101,363
Net prot before tax 899,661 817,456
Adjustment for separately disclosed items (191,691) (226,675)
Adjustment to share of income tax of equity-accounted investees 38,189 42,321
Adjusted prot before tax and before separately disclosed items (B) 746,159 633,102
Effective tax rate before separately disclosed items (A/B) 14.90% 16.01%
75
BUSINESS
OVERVIEW
CORPORATE
GOVERNANCE
FINANCIAL
STATEMENTS
11 Separately disclosed items
2012
USD000
2011
USD000
Impairment of assets and restructuring costs (55,850) (243,862)
Share of prot/(loss) of equity-accounted investees 20,710 (3,047)
Prot on sale and termination of business 237,204 484,354
Ineffective interest rate swaps and currency options (10,373) (10,770)
Income tax expense (7,211)
191,691 219,464
Impairment of assets and restructuring costs represents the following:
Impairment of property, plant and equipment of USD 14,100 thousand in the Middle East, Europe and Africa region and USD 35,800
thousand in the Australia and Americas region. USD 5,500 thousand relates to the restructuring costs of a subsidiary in the Middle
East, Europe and Africa region and USD 450 thousand in the Australia and Americas region. The impairment is mainly due to
signicant adverse effects in the market and economic condition which are outside the control of the Group (2011: Impairment of
property, plant and equipment of USD 29,993 thousand in the Australia and Americas region and USD 22,890 thousand in the Middle
East, Europe and Africa region. Impairment of net assets in a subsidiary of USD 99,963 thousand in the Asia Pacic and Indian
subcontinent region representing the difference between the value in use and the carrying amount as at the reporting date. Impairment
of USD 91,016 thousand of investments in equity-accounted investees in the Middle East, Europe and Africa region, representing the
difference between the fair value less cost to sell and the carrying amount as at the reporting date).
Share of prot/(loss) of equity-accounted investees includes USD 11,717 thousand share of equity earnings of a joint venture upon
sale of an entity within this group in the Australia and Americas region and USD 8,993 thousand share of prot on transfer of certain
assets by an associate in the Asia Pacic and Indian subcontinent region. (2011: represents USD 3,047 thousand impairment of deferred
tax assets in an equity-accounted investee in the Middle East, Europe and Africa region).
10 Income tax continued
Unrecognised deferred tax assets
Deferred tax is not recognised on trading losses of USD 486,771 thousand (2011: USD 428,749 thousand) where utilisation is uncertain,
either because they have not been agreed with tax authorities, or because the likelihood of future taxable prots is not sufciently
certain, or because of the impact of tax holidays on infrastructure projects. Under current legislation, USD 331,196 thousand (2011: USD
303,676 thousand) of these trading losses can be carried forward indenitely.
Deferred tax is also not recognised on capital and other losses of USD 288,722 thousand (2011: USD 356,423 thousand) due to the fact
that their utilisation is uncertain.
Movement in temporary differences during the year:
1 January
2012
USD000
Recognised in
consolidated
income
statement
USD000
Translation
and other
movements
USD000
31 December
2012
USD000
Deferred tax liabilities
Property, plant and equipment 136,879 13,480 (2,006) 148,353
Investment in equity-accounted investees 21,219 10,985 755 32,959
Fair value adjustment on acquisitions 492,053 (40,563) 8,696 460,186
Others 428,204 888 341 429,433
Total 1,078,355 (15,210) 7,786 1,070,931
Deferred tax assets
Property, plant and equipment 6,531 (3,377) 584 3,738
Pension and post-employment benets 9,488 (919) 1,534 10,103
Financial instruments 14,185 10,511 24,696
Provisions 32,546 (27,741) 477 5,282
Tax value of losses carried forward recognised 22,793 32,430 (6,740) 48,483
Others 15,669 (383) (1,835) 13,451
Total 101,212 10 4,531 105,753
76
Prot on sale and termination of businesses represents:
USD 193,533 thousand prot on monetisation of investments in equity-accounted investees in the Middle East, Europe and Africa
region.
USD 53,288 thousand prot on monetisation of investments in an equity-accounted investee in the Australia and Americas region,
offset by a tax charge of USD 7,937 thousand.
USD 6,312 thousand loss on termination of a concession in the Middle East, Europe and Africa region.
USD 4,632 thousand prot on monetisation of a subsidiary in the Middle East, Europe and Africa region. (2011: relates to the prot
(net of tax) of USD 435,509 thousand on monetisation of 75% interest in the Australia Ports business and sale of interest in an
associate in the Australia and Americas region resulting in a prot (net of tax) of USD 49,796 thousand. The prot on sale and
termination of businesses includes foreign exchange reserves recycled to the consolidated income statement on account of loss of
control. This is offset by USD 951 thousand loss on termination of a non-core business in the Asia Pacic and Indian subcontinent
region).
Ineffective interest rate swaps and currency options: USD 10,373 thousand relates to the loss on ineffective interest rate swaps in
the Asia Pacic and Indian subcontinent region. (2011: represents USD 10,770 thousand loss on foreign currency options in the
Australia and Americas region).
Income tax expense: 2012: Nil (2011: represents USD 12,785 thousand of deferred tax assets impaired in a subsidiary in the Middle
East, Europe and Africa region which is offset by USD 5,574 thousand of tax credit on impairment of assets in the Australia and
Americas region).
11 Separately disclosed items continued
12 Property, plant and equipment
Land and
buildings
USD000
Plant and
equipment
USD000
Ships
USD000
Capital work-
in-progress
USD000
Total
USD000
Cost
As at 1 January 2012 3,069,584 2,486,928 216,479 791,760 6,564,751
Additions during the year 7,530 39,771 48,582 546,051 641,934
Transfers from capital work-in-progress 27,347 51,097 (78,444)
Translation adjustment (2,815) (2,667) (9,000) 59,650 45,168
Disposals (3,662) (68,093) (15,700) (2,211) (89,666)
Disposal of subsidiaries (24,400) (44,756) (69,156)
As at 31 December 2012 3,073,584 2,462,280 240,361 1,316,806 7,093,031
Depreciation and impairment
As at 1 January 2012 482,535 883,323 74,773 1,440,631
Charge for the year 137,944 138,964 13,103 290,011
Impairment (refer to note 11) 4,900 19,000 26,000 49,900
Translation adjustment 1,640 4,424 276 6,340
On disposals (2,752) (57,661) (10,300) (70,713)
On disposal of subsidiaries (9,500) (26,900) (36,400)
As at 31 December 2012 614,767 961,150 103,852 1,679,769
Net book value
As at 31 December 2012 2,458,817 1,501,130 136,509 1,316,806 5,413,262
In the prior years, the Group had entered into agreements with third parties pursuant to which the Group participated in a series of
linked transactions including leasing and sub-leasing of certain cranes of the Group (the Crane French Lease Arrangements). At 31
December 2012, cranes with aggregate net book value amounting to USD 288,710 thousand (2011: USD 304,449 thousand) were
covered by these Crane French Lease Arrangements. These cranes are accounted for as property, plant and equipment as the Group
retains all the risks and rewards incidental to the ownership of the underlying assets.
At 31 December 2012, property, plant and equipment with a carrying amount of USD 2,391,298 thousand (2011: USD 1,148,903
thousand) are pledged to secure bank loans (refer to note 25). At 31 December 2012, the net carrying value of the leased plant and
equipment and other assets was USD 48,796 thousand (2011: USD 59,067 thousand).
Borrowing costs capitalised to property, plant and equipment amounted to USD 44,900 thousand (2011: USD 10,512 thousand) with a
capitalisation rate in the range of 4.68 % to 5.13% per annum (2011: 4.73% to 5.08% per annum).
77
BUSINESS
OVERVIEW
CORPORATE
GOVERNANCE
FINANCIAL
STATEMENTS
13 Goodwill and port concession rights
Goodwill
USD000
Port concession
rights
USD000
Total
USD000
Cost
As at 1 January 2012 1,607,655 3,941,977 5,549,632
Additions 43,017 43,017
Re-classication (37,991) (37,991)
Disposals (58,237) (1,613) (59,850)
Translation adjustment 39,500 (10,742) 28,758
As at 31 December 2012 1,588,918 3,934,648 5,523,566
Amortisation
As at 1 January 2012 718,019 718,019
Charge for the year 120,621 120,621
On disposals (1,332) (1,332)
Translation adjustment (17,744) (17,744)
As at 31 December 2012 819,564 819,564
Net book value
As at 31 December 2012 1,588,918 3,115,084 4,704,002
Port concession rights include concession agreements which are mainly accounted for as business combinations and acquisitions. These
concessions were determined to have nite and indenite useful lives based on the terms of the respective concession agreements and
the income approach model was used for the purpose of determining their fair values.
12 Property, plant and equipment continued
Land and
buildings
USD000
Plant and
equipment
USD000
Ships
USD000
Capital work-
in-progress
USD000
Total
USD000
Cost
As at 1 January 2011 3,000,931 2,491,086 131,080 604,271 6,227,368
Acquired through business combination 29,099 29,099
Additions during the year 8,342 22,827 73,951 344,388 449,508
Transfers from capital work-in-progress 73,911 59,061 7,031 (140,003)
Translation adjustment (19,881) (52,201) 4,417 (16,896) (84,561)
Disposals (22,818) (33,845) (56,663)
As at 31 December 2011 3,069,584 2,486,928 216,479 791,760 6,564,751
Depreciation and impairment
As at 1 January 2011 364,690 756,326 20,135 1,141,151
Charge for the year 106,763 163,266 22,848 292,877
Impairment (refer to note 11) 17,918 4,932 30,033 52,883
Translation adjustment (4,089) (11,173) 1,757 (13,505)
On disposals (2,747) (30,028) (32,775)
As at 31 December 2011 482,535 883,323 74,773 1,440,631
Net book value
As at 31 December 2011 2,587,049 1,603,605 141,706 791,760 5,124,120
78
At 31 December 2012, port concession rights with a carrying amount of USD 502,896 thousand (2011: USD 344,668 thousand) are
pledged to secure bank loans (refer to note 25).
Goodwill
USD000
Port concession
rights
USD000
Total
USD000
Cost
As at 1 January 2011 1,670,301 4,118,142 5,788,443
Acquired through business combination (refer to note 30) 9,693 32,474 42,167
Additions 31,673 31,673
Impairment loss (12,790) (12,790)
Disposals (2,385) (2,385)
Translation adjustment (59,549) (237,927) (297,476)
As at 31 December 2011 1,607,655 3,941,977 5,549,632
Amortisation and impairment losses
As at 1 January 2011 540,329 540,329
Charge for the year 136,234 136,234
Impairment loss 96,710 96,710
On disposals (1,642) (1,642)
Translation adjustment (53,612) (53,612)
As at 31 December 2011 718,019 718,019
Net book value
As at 31 December 2011 1,607,655 3,223,958 4,831,613
13 Goodwill and port concession rights continued
14 Impairment testing
Goodwill acquired through business combinations and port concession rights with indenite useful lives have been allocated to various
cash-generating units (CGU), which are reportable business units, for the purposes of impairment testing.
Impairment testing is done at an operating port level that represents an individual CGU. Details of the CGUs by operating segment are
shown below:
Carrying amount ofgoodwill
Carrying amount of port concession
rights with indenite useful life
2012
USD000
2011
USD000
2012
USD000
2011
USD000 Discount rates Perpetuity growth rate
Cash-generating units aggregated
by operating segment
Asia Pacic and Indian subcontinent 224,868 233,123 8.00%15.50% 2.50%
Australia and Americas 271,309 323,104 8.00%14.50% 2.50%
Middle East, Europe and Africa 1,092,741 1,051,428 1,030,134 989,012 7.00%12.50% 2.50%2.60%
Total 1,588,918 1,607,655 1,030,134 989,012
The recoverable amount of the CGU has been determined based on their value in use calculated using cash ow projections based on
the nancial budgets approved by management covering a three year period and a further outlook for ve years, which is considered
appropriate in view of the outlook for the industry and the long-term nature of the concession agreements held i.e. generally for a
period of 2550 years.
Key assumptions used in value in use calculations
The following describes each key assumption on which management has based its cash ow projections to undertake impairment
testing of goodwill and port concession rights with indenite useful lives.
Budgeted margins The basis used to determine the value assigned to the budgeted margin is the average gross margin achieved in the
year immediately before the budgeted year, adjusted for expected efciency improvements, price uctuations and manpower costs.
Discount rates These represent the cost of capital adjusted for the respective location risk factors. The Group uses the post-tax
Weighted Average Cost of Capital which reects the country specic risk adjusted discount rate.
79
BUSINESS
OVERVIEW
CORPORATE
GOVERNANCE
FINANCIAL
STATEMENTS
Cost ination The forecast general price index is used to determine the cost ination during the budget year for the relevant countries
where the Group is operating.
Perpetuity growth rate In managements view, the perpetuity growth rate is the minimum growth rate expected to be achieved
beyond the eight year period. This is based on the overall regional economic growth forecasted and the Groups existing internal
capacity changes for a given region. The Group also takes into account competition and regional capacity growth to provide a
comprehensive growth assumption for the entire portfolio.
The values assigned to key assumptions are consistent with the past experience of management.
Sensitivity to changes in assumptions
The calculation of value in use for the CGU is sensitive to future earnings and therefore a sensitivity analysis was performed. The analysis
demonstrated that a 10% decrease in earnings for a future period of three years from the reporting date would not result in an
impairment.
14 Impairment testing continued
15 Investment in equity-accounted investees
Summary nancial information for equity-accounted investees, not adjusted for the percentage ownership held by the Group:
Asia Pacic and
Indian subcontinent Australia and Americas
Middle East, Europe
and Africa Total
2012
USD000
2011
USD000
2012
USD000
2011
USD000
2012
USD000
2011
USD000
2012
USD000
2011
USD000
Current assets 515,254 492,575 373,871 425,910 324,725 316,072 1,213,850 1,234,557
Non-current assets 8,068,891 7,533,647 2,861,185 2,799,767 2,389,594 2,311,415 13,319,670 12,644,829
Total assets 8,584,145 8,026,222 3,235,056 3,225,677 2,714,319 2,627,487 14,533,520 13,879,386
Current liabilities 666,372 511,661 168,232 236,265 209,422 181,051 1,044,026 928,977
Non-current liabilities 1,903,811 1,528,068 1,846,981 1,458,954 1,022,209 841,070 4,773,001 3,828,092
Total liabilities 2,570,183 2,039,729 2,015,213 1,695,219 1,231,631 1,022,121 5,817,027 4,757,069
Revenue 1,268,308 1,203,610 852,553 749,426 623,095 694,793 2,743,956 2,647,829
Expenses (979,062) (937,343) (846,046) (765,353) (536,398) (639,529) (2,361,506) (2,342,225)
Net prot/(loss) 289,246 266,267 6,507 (15,927) 86,697 55,264 382,450 305,604
The Groups share of prot from equity-accounted investees (before separately disclosed items) 133,897 141,711
The Groups investments in net assets of equity-accounted investees as at 31 December 3,348,317 3,451,264
For ownership percentages in equity-accounted investees, refer to note 34.
16 Other investments
2012
USD000
2011
USD000
Debt securities held to maturity (Note a) 11,277 12,815
Available-for-sale nancial assets (Note b) 49,556 60,378
60,833 73,193
(a) The movement in debt securities held to maturity mainly relates to redemption of USD 1,538 thousand during the year.
(b) Available-for-sale nancial assets consist of an unquoted investment in an Infrastructure Fund.
The movement schedule for these investments is as follows:
2012
USD000
2011
USD000
As at 1 January 60,378 51,439
Return of capital during the year (10,690)
Change in fair value recognised in consolidated statement of other comprehensive income (132) 8,939
As at 31 December 49,556 60,378
80
17 Accounts receivable and prepayments
2012
Non-current
USD000
2012
USD000
2012
Total
USD000
Trade receivables (net) 244,534 244,534
Advances paid to suppliers 53,962 53,962
Other receivables and prepayments 56,115 198,646 254,761
Employee benet assets (refer to note 24) 216 216
Due from related parties (refer to note 27) 207,097 105,961 313,058
263,428 603,103 866,531
2011
Non-current
USD000
2011
USD000
2011
Total
USD000
Trade receivables (net) 232,957 232,957
Advances paid to suppliers 28,268 28,268
Other receivables and prepayments 53,425 258,700 312,125
Employee benet assets (refer to note 24) 155 155
Due from related parties (refer to note 27) 206,534 104,095 310,629
260,114 624,020 884,134
The Groups exposure to credit and currency risks are disclosed in note 29.
18 Bank balances and cash
2012
USD000
2011
USD000
Cash at banks and in hand 472,409 468,673
Short-term deposits 1,362,752 3,637,270
Deposits under lien 46,767 53,421
Bank balances and cash 1,881,928 4,159,364
Bank overdrafts (195) (1,017)
Cash and cash equivalents for consolidated statement of cash ows 1,881,733 4,158,347
Short-term deposits are made for varying periods between one day and three months depending on the immediate cash requirements
of the Group and earn interest at the respective short-term deposit market rates. Bank overdrafts are repayable on demand.
The deposits under lien amounting to USD 46,767 thousand (2011: USD 53,421 thousand) are placed to collateralise some of the
borrowings of the Companys subsidiaries.
19 Share capital
The share capital of the Company as at 31 December was as follows:
2012
USD000
2011
USD000
Authorised
1,250,000,000 of USD 2.00 each 2,500,000 2,500,000
Issued and fully paid
830,000,000 of USD 2.00 each 1,660,000 1,660,000
20 Reserves
Share premium
Share premium represents surplus received over and above the nominal cost of the shares issued to the shareholders and forms part of
the shareholder equity. The reserve is not available for distribution except in circumstances as stipulated by the law.
Shareholders reserve
Shareholders reserve forms part of the distributable reserves of the Group.
Hedging reserve
The hedging reserve comprises the effective portion of the cumulative net change in the fair value of the cash ow hedging instruments
related to hedge transactions that have not yet occurred.
81
BUSINESS
OVERVIEW
CORPORATE
GOVERNANCE
FINANCIAL
STATEMENTS
Other reserves
The other reserves mainly include statutory reserves of subsidiaries as required by applicable local legislations. This reserve also includes
the unrealised fair value changes on available-for-sale investments.
Actuarial reserve
The actuarial reserve comprises the cumulative actuarial losses recognised in consolidated statement of other comprehensive income.
Translation reserve
The translation reserve comprises all foreign currency differences arising from the translation of the nancial statements of foreign
operations whose functional currencies are different from that of the Groups presentation currency. It also includes foreign exchange
translation differences arising from translation of goodwill and purchase price adjustments which are denominated in foreign currencies
at the Group level.
20 Reserves continued
21 Dividends
2012
USD000
2011
USD000
Declared and paid during the year:
Final dividend 24 US cents per share/
17 US cents per share 199,200 142,760
Proposed for approval at the annual general meeting
(not recognised as a liability as at 31 December):
Final dividend: 24 US cents per share/24 US cents per share 199,200 199,200
22 Earnings per share
Basic earnings per share
The calculation of basic earnings per share is based on the prot attributable to ordinary shareholders and the weighted average number
of ordinary shares outstanding.
2012
USD000
2011
USD000
Prot attributable to ordinary shareholders 748,606 683,292
Number
of shares
Number
of shares
Number of ordinary shares outstanding as at 31 December 830,000,000 830,000,000
2012
USD
2011
USD
Basic earnings per share after separately disclosed items (US cents) 90.19 82.32
Basic earnings per share before separately disclosed items (US cents) 66.91 55.26
The Company has no share options outstanding at the year end and therefore the basic and diluted earnings per share are not different.
23 Employees end of service benets
Movements in the provision recognised in the consolidated statement of nancial position are as follows:
2012
USD000
2011
USD000
As at 1 January 49,393 45,988
Provision made during the year* 11,522 13,933
Amounts paid during the year (5,168) (10,528)
As at 31 December 55,747 49,393
* The provision for expatriate staff gratuities, included in Employees end of service benets, is calculated in accordance with the regulations of the Jebel Ali Free Zone Authority. This is based on the
liability that would arise if employment of all staff were terminated at the reporting date.
The UAE government had introduced Federal Labour Law No.7 of 1999 for pension and social security. Under this Law, employers are
required to contribute 15% of the contribution calculation salary of those employees who are UAE nationals. These employees are also
required to contribute 5% of the contribution calculation salary to the scheme. The Groups contribution is recognised as an expense in
the consolidated income statement as incurred.
82
24 Pension and post-employment benets
The Groups subsidiary P&O participates in a number of pension schemes throughout the world. The principal scheme is located in
theUK (the P&O UK scheme). The P&O UK scheme is a funded dened benet scheme and was closed to routine new members
on1January 2002. The assets of the scheme are managed on behalf of the trustee by independent fund managers.
P&O also operates a number of smaller dened benet and dened contribution schemes. In addition, P&O participates in various
industry schemes, the most signicant of which is the Merchant Navy Ofcers Pension Fund (the MNOPF Scheme). These generally
have assets held in separate trustee administered funds.
Reconciliation of assets and liabilities recognised in the consolidated statement of nancial position
2012
USD000
2011
USD000
Non-current
Dened benet schemes net liabilities 272,200 234,400
Liabilities from dened contribution schemes 800 600
Liability in respect of long service leave 580 595
273,580 235,595
Current
Liability for current deferred compensation 11,845 12,621
Net liabilities 285,425 248,216
Net liabilities
Reected in the consolidated statement of nancial position as follows:
Employee benets assets (included within non-current receivables (refer to note 17)) (216) (155)
Employee benets liabilities: Non-current 273,796 235,750
Employee benets liabilities: Current 11,845 12,621
285,425 248,216
The dened benet pension schemes net liabilities of USD 272,200 thousand (2011: USD 234,400 thousand) is in respect of the total
P&O schemes shown below. The USD 2,700 thousand (2011: USD 1,700 thousand) net liabilities in respect of the P&Os share of
equity-accounted investees are included within investment in equity-accounted investees in the consolidated statement of nancial
position.
An expense of USD 16,600 thousand (2011: 17,600 thousand) has been recognised in the consolidated income statement in respect of
employee benets excluding pensions, USD 7,800 thousand (2011: USD 12,500 thousand) in general and administrative expenses and
USD 8,800 thousand (2011: USD 5,100 thousand) in cost of sales.
The current portion of employee benets liabilities includes a liability of USD 9,800 thousand (2011: USD 10,500 thousand) in respect
ofannual leave, USD 1,800 thousand (2011: USD 2,000 thousand) in respect of long service leave, and USD 245 thousand (2011:
USD121 thousand) in respect of sick leave and other miscellaneous employee benet items.
83
BUSINESS
OVERVIEW
CORPORATE
GOVERNANCE
FINANCIAL
STATEMENTS
Expenses recognised in the consolidated income statement of 2012:
Dened benet pension schemes
P&O UK
scheme
USD000
MNOPF scheme
USD000
Other schemes
USD000
Total group
schemes
USD000
Share of equity
accounted
investees
schemes
USD000
2012
P&O UK
schemes
USD000
Employers current service cost 500 3,500 4,000 600 4,600
Employers past service cost
Gain due to settlements/curtailments
500 3,500 4,000 600 4,600
Expected return on scheme assets (87,600) (7,900) (6,800) (102,300) (600) (102,900)
Finance costs 87,500 8,900 7,600 104,000 500 104,500
Total (100) 1,000 800 1,700 (100) 1,600
Total dened benet expenses 400 1,000 4,300 5,700 500 6,200
Total dened contribution expenses 10,000 8,500 18,500
Total 400 1,000 4,300 15,700 9,000 24,700
Expenses recognised in the consolidated income statement of 2011:
P&O UK
scheme
USD000
MNOPF scheme
USD000
Other schemes
USD000
Total group
schemes
USD000
Share of equity
accounted
investees
schemes
USD000
2012
P&O UK
schemes
USD000
Employers current service cost 600 3,800 4,400 700 5,100
Employers past service cost (1,400) (13,500) (14,900) (1,400) (16,300)
Gain due to settlements/curtailments (2,900) (5,600) (8,500) (8,500)
(3,700) (15,300) (19,000) (700) (19,700)
Expected return on scheme assets (100,400) (9,600) (7,200) (117,200) (1,600) (118,800)
Finance costs 95,900 9,500 8,800 114,200 1,700 115,900
Total (4,500) (100) 1,600 (3,000) 100 (2,900)
Total dened benet expenses (8,200) (100) (13,700) (22,000) (600) (22,600)
Total dened contribution expenses 13,600 6,600 20,200
Total (8,200) (100) (13,700) (8,400) 6,000 (2,400)
The expenses for dened benet and dened contribution schemes are recognised in the following line items in the consolidated
income statement of 2012:
P&O UK
scheme
USD000
MNOPF
scheme
USD000
Other
schemes
USD000
Dened
contribution
pension
schemes
USD000
Total
group
schemes
USD000
Share of
equity-
accounted
investees
schemes
USD000
Total
USD000
Operating expenses 2,900 3,000 5,900 5,900
General and administrative expenses 500 600 7,000 8,100 8,100
Share of results of equity-accounted
investees 9,000 9,000
500 3,500 10,000 14,000 9,000 23,000
Finance costs (100) 1,000 800 1,700 1,700
Total 400 1,000 4,300 10,000 15,700 9,000 24,700
24 Pension and post-employment benets continued
84
The expenses for dened benet and dened contribution schemes are recognised in the following line items in the consolidated
income statement of 2011:
P&O UK
scheme
USD000
MNOPF
scheme
USD000
Other
schemes
USD000
Dened
contribution
pension
schemes
USD000
Total group
schemes
USD000
Share of equity-
accounted
investees
schemes
USD000
Total
USD000
Operating expenses 3,600 7,300 10,900 10,900
General and administrative expenses (3,700) (18,900) 6,300 (16,300) (16,300)
Share of results of equity-accounted
investees 6,000 6,000
(3,700) (15,300) 13,600 (5,400) 6,000 600
Finance costs (4,500) (100) 1,600 (3,000) (3,000)
Total (8,200) (100) (13,700) 13,600 (8,400) 6,000 (2,400)
Total amount of actuarial losses gross of tax recognised in consolidated statement of other comprehensive income.
2012
USD000
2011
USD000
Actuarial loss recognised in the year 52,700 120,900
Movement in minimum funding liability (2,800) (10,500)
49,900 110,400
The cumulative amount of actuarial losses recognised in the consolidated statement of other comprehensive income is USD 420,700
thousand (2011: USD 368,000 thousand).
Actuarial valuations and assumptions
The latest valuations of the dened benet schemes have been updated to 31 December 2012 by qualied independent actuaries. The
principal assumptions are included in the table below.
The assumptions used by the actuaries are the best estimates chosen from a range of possible actuarial assumptions, which, due to the
timescale covered, may not necessarily be borne out in practice.
P&O UK
scheme
2012
MNOPF
scheme
2012
Other
schemes
2012
Share of
equity-
accounted
investees
schemes
2012
Discount rates 4.15% 4.15% 4.40% 4.40%
Discount rates bulk annuity asset 4.00%
Expected rates of salary increases 2.50% 1.90% 5.30%
Pension increases: deferment 2.75% 2.20% 2.90% 2.50%
payment 2.75% 3.00% 2.90% 2.50%
Ination 3.05% 3.05% 3.10% 4.00%
Ination bulk annuity asset 3.00%
Expected rate of return on scheme assets 4.49% 4.65% 5.21% 7.30%
85
BUSINESS
OVERVIEW
CORPORATE
GOVERNANCE
FINANCIAL
STATEMENTS
P&O UK
scheme
2011
MNOPF
scheme
2011
Other
schemes
2011
Share of equity-
accounted
investees
schemes
2011
Discount rates 4.65% 4.65% 2.26% 4.29%
Discount rates bulk annuity asset 4.60%
Expected rates of salary increases 2.50% 2.62% 3.65%
Pension increases: deferment 2.80% 2.10% 2.84% 2.34%
payment 2.80% 3.05% 2.84% 2.34%
Ination 3.10% 3.10% 3.07% 2.46%
Ination bulk annuity asset 3.05%
Expected rate of return on scheme assets 5.09% 5.14% 5.95% 6.21%
From 1 December 2011, changes have been made to the benets provided by the P&O UK scheme. These include a restriction to pay
increases equal to the lower of RPI and 2.5% in a Scheme Year. This restriction is reected in the pay increase assumption above and
there is no allowance for promotional increases.
The assumptions for pensioner longevity under both the P&O UK scheme and the MNOPF scheme are based on analysis of pensioner
death trends under the respective schemes over many years.
For illustration, the life expectancies for the two schemes at age 65 now and in the future are detailed in the table below.
Male Female
Age 65
now
Age 65
in 20 years
time
Age 65
now
Age 65
in 20 years
time
2012
P&O UK scheme 23.8 26.8 25.6 28.7
MNOPF scheme 22.0 24.5 25.9 28.2
2011
P&O UK scheme 23.7 26.7 25.4 28.5
MNOPF scheme 21.9 24.4 25.7 28.1
The expected long-term rates of return for each of the main asset classes are subjective judgements based on market indicators,
economic background, historical analysis of returns and industry forecasts. They take into account the schemes strategic asset
allocations across the sectors of the main asset classes.
P&O UK
scheme MNOPF scheme Other schemes
Share of equity-
accounted investees
schemes
Expected
long-term
rate of
return %
p.a.
Fair value
USD000
Expected
long-term
rate of
return %
p.a.
Fair value
USD000
Expected
long-term
rate of
return %
p.a.
Fair value
USD000
Group
schemes
fair value
USD000
Fair value
USD000
Total fair
value
USD000
2012
Equities 7.00 343,500 7.00 40,200 6.70 84,100 467,800 500 468,300
Bonds 3.85 241,800 3.40 93,000 3.60 79,400 414,200 3,800 418,000
Other 2.85 20,700 5.30 34,300 5.30 24,500 79,500 6,500 86,000
Value of insured pensioner liability 4.00 1,361,400 1,361,400 1,361,400
4.49 1,967,400 4.65 167,500 5.21 188,000 2,322,900 10,800 2,333,700
2011
Equities 7.35 286,300 7.35 30,900 7.60 62,100 379,300 300 379,600
Bonds 5.00 199,100 4.25 89,200 3.90 45,000 333,300 3,100 336,400
Other 3.00 10,400 5.50 30,600 5.20 13,800 54,800 5,600 60,400
Value of insured pensioner liability 4.60 1,237,000 1,237,000 1,237,000
5.09 1,732,800 5.14 150,700 5.95 120,900 2,004,400 9,000 2,013,400
86
Reconciliation of the opening and closing present value of dened benet obligations:
P&O UK
scheme
USD000
MNOPF
scheme
USD000
Other
schemes
USD000
Total group
schemes
USD000
Share of equity
accounted
investees
schemes
USD000
2012
Total
USD000
Present value of obligation at 1 January 2012 (1,892,800) (191,000) (152,200) (2,236,000) (10,700) (2,246,700)
Employers interest cost (87,500) (8,900) (7,600) (104,000) (500) (104,500)
Employers current service cost (500) (3,500) (4,000) (600) (4,600)
Past service costs
Gain due to settlements/curtailments
Contributions by scheme participants (200) (1,300) (1,500) (100) (1,600)
Foreign currency exchange (84,100) (8,600) (7,800) (100,500) (600) (101,100)
Benets paid 103,500 9,200 7,000 119,700 600 120,300
Obligations pertaining to equity-accounted investees
recognised during the year
Amounts re-classied from other benets (68,500) (68,500) (68,500)
Actuarial loss on obligation (168,000) (20,500) (11,800) (200,300) (1,600) (201,900)
Transfer to assets/liabilities classied as held for sale
Present value of obligation at 31 December 2012 (2,129,600) (219,800) (245,700) (2,595,100) (13,500) (2,608,600)
Reconciliation of the opening and closing present value of dened benet obligations:
P&O UK
scheme
USD000
MNOPF
scheme
USD000
Other
schemes
USD000
Total group
schemes
USD000
Share of equity
accounted
investees
schemes
USD000
2011
Total
USD000
Present value of obligation at 1 January 2011 (1,779,600) (174,400) (151,600) (2,105,600) (24,400) (2,130,000)
Employers interest cost (95,900) (9,500) (8,800) (114,200) (1,700) (115,900)
Employers current service cost (600) (3,800) (4,400) (700) (5,100)
Past service costs 1,400 13,500 14,900 1,400 16,300
Gain due to settlements/curtailments 2,900 5,600 8,500 8,500
Contributions by scheme participants (200) (1,300) (1,500) (400) (1,900)
Foreign currency exchange 11,800 1,400 200 13,400 (1,100) 12,300
Benets paid 107,500 9,000 7,500 124,000 3,100 127,100
Obligations pertaining to equity-accounted investees
recognised during the year (6,800) (6,800)
Amounts re-classied from other benets (2,900) (2,900) (2,900)
Actuarial loss on obligation (140,100) (17,500) (10,600) (168,200) (1,800) (170,000)
Transfer to assets/liabilities classied as held for sale 21,700 21,700
Present value of obligation at 31 December 2011 (1,892,800) (191,000) (152,200) (2,236,000) (10,700) (2,246,700)
87
BUSINESS
OVERVIEW
CORPORATE
GOVERNANCE
FINANCIAL
STATEMENTS
Reconciliation of the opening and closing fair value of scheme assets:
P&O UK
scheme
USD000
MNOPF
scheme
USD000
Other
schemes
USD000
Total
group
schemes
USD000
Share of equity
accounted
investees
schemes
USD000
2012
Total
USD000
Fair value of scheme assets at 1 January 2012 1,732,800 150,700 120,900 2,004,400 9,000 2,013,400
Expected return on scheme assets 87,600 7,900 6,800 102,300 600 102,900
Contributions by employer 13,500 7,000 7,400 27,900 400 28,300
Contributions by scheme participants 200 1,300 1,500 100 1,600
Foreign currency exchange 77,500 6,700 6,200 90,400 500 90,900
Benets paid (103,500) (9,200) (7,000) (119,700) (600) (120,300)
Assets pertaining to equity-accounted investee
recognised during the year
Amounts reclassied from dened
contributionschemes 48,500 48,500 48,500
Actuarial gain on assets 159,300 4,400 3,900 167,600 800 168,400
Fair value of scheme assets at 31 December 2012 1,967,400 167,500 188,000 2,322,900 10,800 2,333,700
Dened benet schemes net liabilities (162,200) (52,300) (57,700) (272,200) (2,700) (274,900)
Minimum funding liability
Net liability recognised in the consolidated statement
of nancial position at 31 December 2012 (162,200) (52,300) (57,700) (272,200) (2,700) (274,900)
Actual gain on scheme assets
Where a surplus arises on a scheme in accordance with IAS19 and IFRIC14, the surplus is recognised as an asset only if it represents an
unconditional economic benet available to the Group in the future. Any surplus in excess of this benet is not recognised in the
consolidated statement of nancial position. A minimum funding liability arises where the statutory funding requirements are such that
future contributions in respect of past service will result in a future unrecognisable surplus.
88
Reconciliation of the opening and closing fair value of scheme assets:
P&O UK
scheme
USD000
MNOPF
scheme
USD000
Other
schemes
USD000
Total
group
schemes
USD000
Share of equity
accounted
investees
schemes
USD000
2011
Total
USD000
Fair value of scheme assets at 1 January 2011 1,688,900 141,000 115,100 1,945,000 19,200 1,964,200
Expected return on scheme assets 100,400 9,600 7,200 117,200 1,600 118,800
Contributions by employer 14,000 7,100 7,200 28,300 1,300 29,600
Contributions by scheme participants 200 1,400 1,600 400 2,000
Foreign currency exchange (9,200) (900) (900) (11,000) 600 (10,400)
Benets paid (107,500) (9,000) (7,500) (124,000) (2,900) (126,900)
Assets pertaining to equity-accounted investee
recognised during the year 6,500 6,500
Actuarial gain/(loss) on assets 46,000 2,900 (1,600) 47,300 (100) 47,200
Transfer to assets/liabilities classied as held for sale (17,600) (17,600)
Fair value of scheme assets at 31 December 2011 1,732,800 150,700 120,900 2,004,400 9,000 2,013,400
Dened benet schemes net liabilities (160,000) (40,300) (31,300) (231,600) (1,700) (233,300)
Minimum funding liability (2,800) (2,800) (2,800)
of nancial position at 31 December 2011 (160,000) (43,100) (31,300) (234,400) (1,700) (236,100)
Actual gain on scheme assets 146,400 12,500 7,000 165,900 1,300 167,200
It is anticipated that the Group will make the following contributions to the pension schemes in 2013:
P&O UK
scheme
USD000
MNOPF
scheme
USD000
Other
schemes
USD000
Total group
schemes
USD000
Share of equity
accounted
investees
schemes
USD000
Total
USD000
Pension scheme contributions 13,800 7,100 7,600 28,500 400 28,900
31 December 2012
Present value of dened benet obligation (2,129,600) (219,800) (245,700) (2,595,100) (13,500) (2,608,600)
Fair value of scheme assets 1,967,400 167,500 188,000 2,322,900 10,800 2,333,700
Decit in the scheme (162,200) (52,300) (57,700) (272,200) (2,700) (274,900)
Minimum funding obligation
Net liability recognised in the consolidated
statement of nancial position (162,200) (52,300) (57,700) (272,200) (2,700) (274,900)
Experience gain on scheme assets 159,300 4,400 3,900 167,600 500 168,100
Percentage of scheme assets at year end (%) 8% 3% 2% 7% 5% 7%
Experience loss on scheme liabilities (30,400) (5,400) (1,600) (37,400) (1,400) (38,800)
Percentage of scheme liabilities at year end (%) 2% 3% 1% 2% 13% 2%
(Loss)/gain due to change in assumptions (137,600) (15,100) (10,200) (162,900) 100 (162,800)
Movement in minimum funding liability 2,800 2,800 2,800
89
BUSINESS
OVERVIEW
CORPORATE
GOVERNANCE
FINANCIAL
STATEMENTS
P&O UK
scheme
USD000
MNOPF
scheme
USD000
Other
schemes
USD000
Total group
schemes
USD000
Share of equity
accounted
investees
schemes
USD000
Total
USD000
31 December 2011
Decit in the scheme (160,000) (40,300) (31,300) (231,600) (1,700) (233,300)
Minimum funding obligation (2,800) (2,800) (2,800)
of nancial position (160,000) (43,100) (31,300) (234,400) (1,700) (236,100)
Experience gain/(loss) on scheme assets 46,000 2,900 (200) 48,700 (300) 48,400
Percentage of scheme assets at year end (%) 3% 2% 0.17% 2% 3% 2%
Experience loss on scheme liabilities (13,200) (3,200) (10,600) (27,000) (1,400) (28,400)
Loss due to change in assumptions (126,900) (14,300) (1,400) (142,600) (200) (142,800)
Movement in minimum funding liability 10,500 10,500 10,500
31 December 2010
Minimum funding obligation (13,300) (13,300) (13,300)
of nancial position (90,700) (46,700) (36,500) (173,900) (5,200) (179,100)
Experience (loss)/gain on scheme assets (70,300) 11,900 2,200 (56,200) 600 (55,600)
Experience gain/(loss) on scheme liabilities 101,600 (7,400) 5,200 99,400 (600) 98,800
Gain/(loss) due to change in assumptions 39,900 (8,700) (6,000) 25,200 25,200
Movement in minimum funding liability (13,300) (13,300) (13,300)
31 December 2009
Surplus or decit in the scheme (179,800) (36,500) (41,600) (257,900) (6,500) (264,400)
Experience gain on scheme assets 202,200 5,600 11,600 219,400 300 219,700
Experience gain on scheme liabilities 200 200 200
Loss due to change in assumptions (326,400) (22,700) (28,700) (377,800) (4,400) (382,200)
31 December 2008
Present value of dene benet obligation (1,508,400) (126,000) (142,300) (1,776,700) (14,200) (1,790,900)
Surplus or decit in the scheme (58,000) (20,100) (23,800) (101,900) (2,200) (104,100)
Experience loss on scheme assets (278,500) (33,500) (38,700) (350,700) (3,900) (354,600)
Experience (loss)/gain on scheme liabilities (11,300) (3,300) 2,200 (12,400) (12,400)
Gain due to change in assumptions 213,300 14,500 28,000 255,800 4,300 260,100
90
P&O UK scheme
Formal actuarial valuations of the P&O UK scheme are normally carried out triennially by qualied independent actuaries, the latest
completed regular valuation report for the scheme being at 31 March 2010, using the projected unit credit method.
At this date, the market value of the P&O UK schemes assets were USD 1,774,000 thousand and the value of accrued benets to
members allowing for future increases in earnings was USD 1,865,000 thousand giving a decit of USD 91,000 thousand and a funding
ratio of 95%.
Excluding the decit reduction payments, the average contribution rate for the P&O UK scheme was 29.1% for the year to 31 December
2011 and 21.8% for the year to 31 December 2012.
The principal long-term assumptions in the P&O UK schemes 2010 valuation are:
Nominal %
per annum
Price ination 3.60
Investment return on pre-retirement portfolio 6.71
Investment return on post-retirement portfolio 4.07
Bulk Purchase Annuity liabilities 4.40
Earnings escalation 5.10
Increase in accrued pensions on excess over Guaranteed Minimum Pensions 3.00
As a result of this valuation P&O committed to regular monthly decit payments from April 2011 totalling USD 1,060 thousand until
November 2019.
In December 2007, as part of a process developed with P&O to de-risk the pension scheme, the Trustee transferred USD 1,600,000
thousand of P&O UK scheme assets to Paternoster (UK) Ltd, in exchange for a bulk annuity insurance policy to ensure that the assets (in
the Companys statement of nancial position and in the scheme) will always be equal to the current value of the liability of the pensions
in payment at 30 June 2007, thus removing the funding risks for these liabilities.
Merchant Navy Ofcers Pension Fund (MNOPF)
The MNOPF scheme is a dened benet multi-employer scheme in which ofcers employed by companies within the Group have
participated.
The scheme is divided into two sections, the old section and the new section, both of which are closed to new members and the latest
valuation was carried out at 31 March 2009.
The old section has been closed to benet accrual since 1978. The schemes independent actuary advised that at 31 March 2009 the
market value of the schemes assets for the old section was USD 1,595,000 thousand, representing approximately 89% of the value of
the benets accrued to members. The Trustee has determined that the asset growth of the Fund, in excess of that assumed in
calculating the technical provisions, between the formal date of the valuation and 18 November 2009 has been sufcient to eliminate
the shortfall. Therefore no contributions are required to meet the shortfall. The assets of the old section were substantially invested
inbonds.
The Group could not identify its share of the underlying assets and liabilities of the old section on a consistent and reasonable basis and
is therefore accounting for contributions and payments to the old section under IAS 19 as if it were a dened contribution scheme.
As at 31 March 2009, the date of the most recent formal actuarial valuation, the new section had assets with a market value of USD
2,217,000 thousand, representing approximately 68% of the benets accrued to members. The valuation assumptions were as follows:
Nominal %
Per annum
Rate of national average earnings increase 4.50
Rate of pension increases (where increases apply) 3.00
At the date of the valuation, approximately 48% of the new sections assets were invested in pooled investment vehicles, 35% in
equities, 9% in bonds and 8% in cash and other assets.
91
BUSINESS
OVERVIEW
CORPORATE
GOVERNANCE
FINANCIAL
STATEMENTS
Subsequent to valuation, the Trustee and Employers have agreed to contribute in addition to those arising from the 31 March 2003 and
31 March 2006 valuations to the section by participating employers over the period to 30 September 2022. These additional payments
have a present value of USD 632,000 thousand as at 30 September 2010.
The Trustee will decide the payment terms for each participating employer in accordance with the Trustees Contribution Collection
Policy. The Groups share is USD 29,500 thousand.
In addition Group companies are making regular annual decit payments in respect of the 31 March 2003 valuation of USD 2,485
thousand until 30 March 2014 and in respect of the 31 March 2006 valuation of USD 1,864 thousand until 30 September 2014.
P&Os share of the net decit of the new section at 31 December 2012 is estimated at 4.807%.
Merchant Navy Ratings Pension Fund (MNRPF)
The Merchant Navy Ratings Pension Fund (the MNRPF Scheme) is an industry wide multi-employer dened benet pension scheme in
which sea staff employed by companies within P&O have participated. The scheme has a signicant funding decit and has been closed
to further benet accrual.
As at 31 March 2011, the date of the most recent full triennial actuarial valuation carried out by an independent actuary, the scheme
had assets with a market value of USD 1,084,000 thousand, representing 76% of the benets accrued to members allowing for future
increases. Approximately 54% of the schemes assets were invested in bonds, 19% in equities and 27% in property and other return
seeking assets. The valuation assumptions were as follows:
Nominal %
Per annum
Rate of national average earnings increase 4.60
Rate of pension increases (where increases apply) 3.60
Certain Group companies which are no longer current employers in the MNRPF had settled their statutory debt obligation, were not
considered to have any legal obligation with respect to the ongoing decit in the fund. However, following a legal challenge, by Stena
Line Limited, the High Court decided that the Trustees could require all employers that had ever participated in the scheme to make
contributions to fund the decit. Although the Group appealed the decision, it was not overturned.
The Trustees notied these Group companies of their estimated share of current decit during December 2012 equating to 3.0%. The
method of decit allocation has still to be approved by the court however based on this initial indication the Group has provided for this
liability after an allowance for the impact of irrecoverable contributions in respect of companies no longer in existence or able to pay
their share. The net impact of USD 20,000 thousand has been reected as an actuarial movement in the consolidated statement of
other comprehensive income.
Other schemes
Other dened benet schemes include schemes in Australia, Canada, Indonesia, Pakistan, Hong Kong and Philippines.
Other industry schemes are mainly overseas multi-employer schemes, in which the Group is unable to identify its share of the underlying
assets and liabilities on a consistent and reasonable basis. The Group is therefore accounting for contributions to these schemes as if
they were dened contribution schemes for IAS 19 purposes.
The Group operates a dened contribution Mandatory Provident Fund retirement benets scheme (the MPF Scheme) in Hong Kong,
under the Mandatory Provident Fund Schemes Ordinance, for those employees who are eligible to participate in the MPF scheme.
Contributions are made based on a percentage of the employees relevant income and are charged to the consolidated income
statement as they become payable in accordance with the rules of the MPF scheme. The assets of the MPF scheme are held separately
from those of the Group in an independently administered fund. The Groups employer contributions vest fully with the employees
when contributed into the MPF scheme.
The Group also operates a dened contribution retirement benets scheme (the ORSO scheme) in Hong Kong for those employees
who are eligible to participate in this scheme. The ORSO scheme operates in a similar way to the MPF scheme, except that when an
employee leaves the ORSO scheme before the employer contributions vest fully, the ongoing employer contributions payable by the
Group are reduced by the relevant amount of the forfeited employer contributions.
92
25 Interest bearing loans and borrowings
This note provides information about the terms of the Groups interest-bearing loans and borrowings, which are measured at amortised
cost. Information about the Groups exposure to interest rate, foreign currency and liquidity risk are described in note 29.
2012
USD000
2011
USD000
Non-current liabilities
Secured bank loans 669,322 720,482
Mortgage debenture stock 2,307 2,212
Unsecured loan stock 5,287 5,071
Unsecured bank loans 106,916 552,842
Unsecured bond issues 3,237,234 3,235,320
Finance lease liabilities 28,555 47,382
4,049,621 4,563,309
Current liabilities
Secured bank loans 203,111 100,242
Unsecured bank loans 484,909 3,062,653
Unsecured loans 3,719 3,619
Finance lease liabilities 11,096 11,932
702,835 3,178,446
Total 4,752,456 7,741,755
Terms and debt repayment schedule
Terms and conditions of outstanding loans were as follows:
Currency Notes
Nominal
interest rate
Year of
maturity
Face value
USD000
2012
Carrying
amount
USD000
Secured loans
EGP Variable 2013 1,868 1,868
EUR Variable 20172023 103,353 103,353
GBP Variable 2031 119,846 119,846
GBP 8.5% 2017 18,000 18,000
HKD Variable 2015 837 837
INR Variable 20152017 39,820 39,820
PKR Variable 2018 76,345 76,345
USD 3%8% 20172022 29,794 29,794
USD Variable 20132020 481,784 481,784
ZAR 9.5% 2017 786 786
Unsecured loans
CAD Variable 2013 158,030 158,030
SAR Variable 2017 19,205 19,205
INR Variable 20142019 70,260 70,260
USD 4.14%7% 20132024 29,330 29,330
USD 8% 2013 1,200 1,200
USD Variable 2013 315,000 315,000
EUR Variable 2013 2,519 2,519
Mortgage debenture stock
GBP 3.5% undated 2,307 2,307
Unsecured loan stock
GBP 7.5% undated 5,287 5,287
Unsecured Bond
USD 7.88% 2027 8,000 7,935
Unsecured sukuk bonds
USD (b) * 2017 1,500,000 1,490,661
Unsecured MTNs
USD (b) 6.85% 2037 1,750,000 1,738,638
Finance lease liabilities in various currencies 4.14%14% 20132054 39,651 39,651
4,773,222 4,752,456
* The prot rate on this Islamic Bond is 6.25%.
93
BUSINESS
OVERVIEW
CORPORATE
GOVERNANCE
FINANCIAL
STATEMENTS
Terms and debt repayment schedule
Terms and conditions of outstanding loans were as follows:
Currency Notes
Nominal
interest rate
Year of
maturity
Face value
USD000
2011
Carrying
amount
USD000
Secured loans
EGP Variable 2013 3,099 3,099
EUR Variable 20172024 117,248 117,248
EUR 2% 2024 14,824 14,824
HKD Variable 2015 1,206 1,206
INR Variable 20152017 76,632 76,632
PKR Variable 2018 75,306 75,306
USD 3%8% 20132019 7,089 7,089
USD Variable 20142020 524,320 524,320
ZAR 10% 2017 1,000 1,000
Unsecured loans
CAD Variable 2013 167,995 167,995
INR Variable 2014 45,272 45,272
INR 11.25% 2012 28,295 28,295
SAR Variable 2017 23,232 23,232
USD 4.14% 2024 30,893 30,893
USD 6.21% 2012 1,000 1,000
USD 8% 2012 1,200 1,200
USD (a) Variable 2012 3,000,000 2,997,792
USD Variable 2013 309,999 309,999
USD Variable 2012 11,017 11,017
EUR Variable 2012 2,419 2,419
Mortgage debenture stock
GBP 3.50% undated 2,212 2,212
Unsecured loan stock
GBP 7.50% undated 5,071 5,071
Unsecured Bond
USD 7.88% 2027 8,000 7,935
Unsecured sukuk bonds
USD (b) * 2017 1,500,000 1,488,922
Unsecured MTNs
USD (b) 6.85% 2037 1,750,000 1,738,463
Finance lease liabilities in various currencies 4.14%14% 20122054 59,314 59,314
7,766,643 7,741,755
* The prot rate on this Islamic Bond is 6.25%.
(a) During the year, the Group has repaid USD 3,000,000 thousand outstanding under its revolving credit facility utilising its existing
cashresources.
(b) The Group has issued conventional bond of USD 1,750,000 thousand as Medium Term Note and a Sukuk (Islamic Bond) of USD
1,500,000 thousand. The Medium Term note and Sukuk are currently listed on Nasdaq Dubai and the London Stock Exchange (LSE).
Certain property, plant and equipment and port concession rights are pledged against the facilities obtained from the banks (refer to
note 12 and note 13). The deposits under lien amounting to USD 46,767 thousand (2011: USD 53,421 thousand) are placed to
collateralise some of the borrowings of the Companys subsidiaries (refer to note 18).
There has been no issuance or repayment of debt securities in the current year (2011: Nil). At 31 December 2012, the undrawn
committed borrowing facilities of USD 1,897,511 thousand (2011: USD 1,037,021 thousand) were available to the Group, in respect of
which all conditions precedent had been met.
25 Interest bearing loans and borrowings continued
94
Finance lease liabilities
The Group classies certain property, plant and equipment as nance leases where it retains all risks and rewards incidental to the
ownership. The net carrying values of these assets are disclosed in note 12.
Future minimum lease payments under nance leases together with the present value of the net minimum lease payments are
asfollows:
Future
minimum lease
payments
USD000
Interest
USD000
2012
Present value
of minimum
lease payments
USD000
Less than one year 13,715 (2,619) 11,096
Between one and ve years 25,938 (5,011) 20,927
More than ve years 15,328 (7,700) 7,628
At 31 December 54,981 (15,330) 39,651
Future
minimum lease
payments
USD000
Interest
USD000
2011
Present value of
minimum lease
payments
USD000
Less than one year 15,833 (3,901) 11,932
Between one and ve years 43,689 (8,866) 34,823
More than ve years 22,647 (10,088) 12,559
At 31 December 82,169 (22,855) 59,314
The nance leases do not contain any escalation clauses and do not provide for contingent rents.
25 Interest bearing loans and borrowings continued
26 Accounts payable and accruals
Non-current
USD000
Current
USD000
2012
Total
USD000
Trade payables 115,415 115,415
Other payables and accruals 384,248 642,625 1,026,873
Provisions* 499 41,000 41,499
Fair value of derivative nancial instruments 120,008 41,850 161,858
Amounts due to related parties (refer to note 27) 13,182 13,182
As at 31 December 504,755 854,072 1,358,827
Non-current
USD000
Current
USD000
2011
Total
USD000
Trade payables 138,616 138,616
Other payables and accruals 386,071 549,699 935,770
Provisions* 269 26,479 26,748
Fair value of derivative nancial instruments 80,900 53,336 134,236
Amounts due to related parties (refer to note 27) 12,272 12,272
As at 31 December 467,240 780,402 1,247,642
* During the current year, additional provision of USD 33,451 thousand was made (2011: USD 13,598 thousand) and an amount of USD 18,700 thousand was utilised (2011: USD 31,550 thousand).
95
BUSINESS
OVERVIEW
CORPORATE
GOVERNANCE
FINANCIAL
STATEMENTS
27 Related party transactions
For the purpose of these consolidated nancial statements, parties are considered to be related to the Group, if the Group has the
ability, directly or indirectly, to control the party or exercise signicant inuence over it in making nancial and operating decisions, or
vice versa, or where the Group and the party are subject to common control or signicant inuence i.e. part of the same Parent Group.
Related parties represent associated companies, shareholders, directors and key management personnel of the Group, the Parent
Company, Ultimate Parent Company (Dubai World Corporation) and entities jointly controlled or signicantly inuenced by such parties.
Pricing policies and terms of these transactions are approved by the Groups management. The terms and conditions of the related party
transactions were made on an arms length basis.
The Ultimate Parent Company operates a Shared Services Unit (SSU) which recharges the proportionate costs of services provided to
the Group. SSU also processes the payroll for the Company and certain subsidiaries and recharges the respective payroll costs.
Transactions with related parties included in the consolidated nancial statements are as follows:
Equity-
accounted
investees
USD000
Other related
parties
USD000
2012
Total
USD000
Expenses charged:
Concession fee 48,169 48,169
Shared services 2,354 2,354
Other services 29,249 29,249
Revenue earned:
Management fee income 24,889 24,889
Equity-
accounted
investees
USD000
Other related
parties
USD000
2011
Total
USD000
Expenses charged:
Concession fee 48,166 48,166
Shared services 9,259 9,259
Other services 20,676 20,676
Revenue earned:
Management fee income 23,248 23,248
Balances with related parties included in the consolidated statement of nancial position are as follows:
Due from related parties Due to related parties
2012
USD000
2011
USD000
2012
USD000
2011
USD000
Ultimate Parent Company 1,871 2,730 194
Parent Company 53,450 54,154
Equity-accounted investees 232,973 232,052 124 386
Other related parties 24,764 21,693 12,864 11,886
313,058 310,629 13,182 12,272
Guarantees issued on behalf of equity-accounted investees amount to USD 98,720 thousand (2011: USD 12,020 thousand).
Compensation of key management personnel
The remuneration of Directors and other key members of the management during the year were as follows:
2012
USD000
2011
USD000
Short-term benets and bonus 8,135 8,620
Post retirement benets 720 722
8,855 9,342
96
28 Assets held for sale
2012
USD000
2011
USD000
Middle East, Europe and Africa region 77,706
Assets held for sale in 2011 represent the investments in Tilbury Container Services Limited which was disposed in January 2012.
29 Financial instruments
(a) Credit risk
(i) Exposure to credit risk
The carrying amount of nancial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting
date was as follows:
2012
USD000
2011
USD000
Available-for-sale nancial assets 49,556 60,378
Debt securities held to maturity 11,277 12,815
Loans and receivables 693,705 727,190
Bank balances 1,881,928 4,159,364
2,636,466 4,959,747
The maximum exposure to credit risk for trade receivables (net) at the reporting date by operating segments is as follows:
2012
USD000
2011
USD000
Asia Pacic and Indian subcontinent 17,758 21,939
Australia and Americas 39,996 40,332
Middle East, Europe and Africa 186,780 170,686
244,534 232,957
The ageing of trade receivables (net) at the reporting date was:
2012
USD000
2011
USD000
Neither past due nor impaired on the reporting date: 174,112 172,756
Past due on the reporting date
Past due 030 days 60,440 48,006
Past due 3160 days 7,526 8,892
Past due 6190 days 1,328 1,227
Past due >90 days 1,128 2,076
244,534 232,957
The Group believes that the unimpaired amounts that are past due by more than 30 days are still collectible, based on the historic
payment behaviour.
Movement in the allowance for impairment in respect of trade receivables during the year was:
2012
USD000
2011
USD000
As at 1 January 35,954 31,829
Provision recognised during the year 2,966 4,125
As at 31 December 38,920 35,954
Based on historic default rates, the Group believes that, apart from the above, no impairment allowance is necessary in respect of trade
receivables not past due or past due.
Trade receivables with the top ten customers represent 45% (2011: 40%) of the trade receivables.
97
BUSINESS
OVERVIEW
CORPORATE
GOVERNANCE
FINANCIAL
STATEMENTS
(b) Liquidity risk
2012
The following are the undiscounted contractual maturities of nancial liabilities, including estimated interest payments and includes the
impact of netting agreements.
Carrying
amount
USD000
Contractual
cash ows
USD000
Less than
1 year
USD000
12 years
USD000
25 years
USD000
More than
5years
USD000
Non-derivative nancial liabilities
Secured bank loans 872,433 (1,120,723) (169,021) (171,607) (513,525) (266,570)
Unsecured bond issues 3,237,234 (6,627,141) (214,255) (214,255) (2,096,411) (4,102,220)
Mortgage debenture stocks 2,307 (4,405) (81) (81) (242) (4,001)
Unsecured loans and loan stock 9,006 (19,472) (4,268) (397) (1,190) (13,617)
Finance lease liabilities 39,651 (54,981) (13,715) (11,645) (14,293) (15,328)
Unsecured syndicate bank loans
Unsecured other bank loans 591,825 (634,830) (509,236) (55,643) (40,435) (29,516)
Trade and other payables 635,824 (644,505) (251,576) (109,422) (254,830) (28,677)
Bank overdraft 195 (195) (195)
Financial guarantees* (266,814) (266,814)
Derivative nancial liabilities
Interest rate swaps 161,823 (238,381) (41,096) (36,399) (87,129) (73,757)
Forward exchange contracts 35 192 192
Total 5,550,333 (9,611,255) (1,470,065) (599,449) (3,008,055) (4,533,686)
* Refer to note 33 for further details.
2012
The following table indicates the periods in which the undiscounted cash ows associated with derivatives that are expected to occur.
The timing of these cash ows are not materially different from the impact on the consolidated income statement.
Carrying
amount
USD000
Expected
cash ows
USD000
Less than
1year
USD000
12 years
USD000
25 years
USD000
More than
5 years
USD000
Interest rate swaps
Liabilities (161,823) (238,381) (41,096) (36,399) (87,129) (73,757)
Forward exchange contracts
Liabilities (35) 192 192
Total (161,858) (238,189) (40,904) (36,399) (87,129) (73,757)
2011
The following are the undiscounted contractual maturities of nancial liabilities, including estimated interest payments and includes the
impact of netting agreements.
Carrying
amount
USD000
Contractual
cash ows
USD000
Less than
1 year
USD000
12 years
USD000
25 years
USD000
More than
5 years
USD000
Non-derivative nancial liabilities
Secured bank loans 820,724 (1,009,331) (148,023) (167,074) (512,560) (181,674)
Unsecured bond issues 3,235,320 (6,841,396) (214,255) (214,255) (642,765) (5,770,121)
Mortgage debenture stocks 2,212 (4,300) (78) (78) (233) (3,911)
Unsecured loans and loan stock 8,690 (19,109) (4,149) (380) (1,141) (13,439)
Finance lease liabilities 59,314 (82,169) (15,833) (15,211) (28,478) (22,647)
Unsecured syndicate bank loans 2,997,792 (3,007,078) (3,007,078)
Unsecured other bank loans 617,703 (693,468) (108,626) (494,390) (62,808) (27,644)
Trade and other payables 861,872 (869,382) (475,801) (180,512) (179,796) (33,273)
Bank overdraft 1,017 (1,017) (1,017)
Financial guarantees* (12,020) (12,020)
Derivative nancial liabilities
Interest rate swaps 133,541 (210,470) (40,316) (33,821) (77,420) (58,913)
Forward exchange contracts 539 (397) (397)
Cross currency options 156
Total 8,738,880 (12,750,137) (4,027,593) (1,105,721) (1,505,201) (6,111,622)
* Refer to note 33 for further details.
29 Financial instruments continued
98
2011
The following table indicates the periods in which the undiscounted cash ows associated with derivatives that are expected to occur.
The timing of these cash ows are not materially different from the impact on the consolidated income statement.
Carrying
amount
USD000
Expected
cash ows
USD000
Less than
1 year
USD000
12 years
USD000
25 years
USD000
More than
5years
USD000
Interest rate swaps
Liabilities (133,541) (210,470) (40,316) (33,821) (77,420) (58,913)
Forward exchange contracts
Liabilities (539) (397) (397)
Cross currency options
Liabilities (156)
Total (134,236) (210,867) (40,713) (33,821) (77,420) (58,913)
(c) Market risk
(i) Currency risk
Exposure to currency risk
The Groups nancial instruments in different currencies were as follows:
USD*
USD000
GBP
USD000
EUR
USD000
AUD
USD000
INR
USD000
CAD
USD000
Others
USD000
2012
Total
USD000
Cash and cash equivalents 1,508,112 77,411 162,594 32,751 14,634 21,700 64,726 1,881,928
Trade receivables 145,088 21,700 31,731 4,000 7,676 15,500 18,839 244,534
Secured bank loans
andmortgage
debenturestock (534,568) (126,237) (103,353) (39,820) (70,762) (874,740)
Unsecured bank loans
andloan stock (345,531) (5,287) (2,519) (70,260) (158,030) (19,204) (600,831)
Bank overdraft (195) (195)
Trade payables (36,597) (15,900) (25,542) (2,100) (24,168) (2,300) (8,808) (115,415)
Net consolidated
statement of nancial
position exposures 736,504 (48,313) 62,911 34,651 (112,133) (123,130) (15,209) 535,281
* The functional currency of the Company is UAE Dirham. UAE Dirham is currently pegged to USD and therefore the Group has no foreign currency risk on these balances.
The Groups nancial instruments in different currencies were as follows:
USD*
USD000
GBP
USD000
EUR
USD000
AUD
USD000
INR
USD000
CAD
USD000
Others
USD000
2011
Total
USD000
Cash and cash equivalents 3,841,137 64,697 103,070 66,340 13,237 14,754 56,129 4,159,364
Trade receivables 114,704 23,297 44,650 11,493 8,761 12,114 17,938 232,957
Secured bank loans
andmortgage
debenturestock (531,411) (2,212) (132,071) (76,632) (80,610) (822,936)
Unsecured bank loans
andloan stock (3,351,901) (5,071) (2,419) (73,566) (167,995) (23,233) (3,624,185)
Bank overdraft (155) (862) (1,017)
Trade payables (33,656) (15,220) (36,113) (5,281) (39,288) (3,106) (5,952) (138,616)
Net consolidated
statement of nancial
position exposures 38,873 65,491 (22,883) 72,552 (167,643) (144,233) (36,590) (194,433)
* The functional currency of the Company is UAE Dirham. UAE Dirham is currently pegged to USD and therefore the Group has no foreign currency risk on these balances.
99
BUSINESS
OVERVIEW
CORPORATE
GOVERNANCE
FINANCIAL
STATEMENTS
The following signicant exchange rates applied during the year:
Average rate during Reporting date spot rate
2012 2011 2012 2011
GBP 0.631 0.623 0.618 0.644
EUR 0.778 0.719 0.757 0.772
AUD 0.966 0.969 0.964 0.979
INR 53.361 46.610 54.898 53.013
CAD 0.999 0.989 0.996 1.021
(ii) Sensitivity analysis
A 10 percent strengthening of the USD against the following currencies at 31 December would have increased/(decreased) consolidated
income statement and consolidated statement of other comprehensive income by the amounts shown below. This analysis assumes that
all other variables, in particular interest rates, remain constant. Furthermore, as each entity in the Group determines its own functional
currency, the effect of translating nancial assets and liabilities of the respective entity would mainly impact consolidated statement of
other comprehensive income.
Consolidated statement of other
comprehensive income
2012
USD000
2011
USD000
2012
USD000
2011
USD000
GBP 7,349 1,461 (5,368) 7,277
EUR 1,584 3,207 6,990 (2,543)
AUD 3,850 8,061
INR 3,557 4,116 (12,459) (18,627)
CAD 1,193 1,991 (13,681) (16,026)
A 10 percent weakening of the USD against the above currencies at 31 December would have had the equal but opposite effect on the
above currencies to the amounts shown above, on the basis that all other variables remain constant.
(iii) Interest rate risk
(i) Prole
At the reporting date the interest rate prole of the Groups interest bearing nancial instruments was:
Carrying amount
2012
USD000
2011
USD000
Fixed rate instruments
Financial assets 11,277 12,815
Financial liabilities (3,285,137) (3,383,712)
Interest rate swaps (925,243) (1,857,983)
(4,199,103) (5,228,880)
Variable rate instruments
Financial assets 1,362,752 3,637,270
Financial liabilities (1,467,514) (4,359,060)
Interest rate swaps 925,243 1,857,983
820,481 1,136,193
(ii) Cash ow sensitivity analysis for variable rate instruments
A change of 100 basis points (bp) in interest rates at the reporting date would have increased/(decreased) consolidated income
statement and consolidated statement of other comprehensive income by the amounts shown below. This analysis assumes that all
other variables, in particular foreign currency rates, remain constant.
100
Consolidated statement of other
comprehensive income
100 bp
increase
USD000
100 bp
decrease
USD000
100 bp
increase
USD000
100 bp
decrease
USD000
2012
Variable rate instruments 8,205 (8,205)
Interest rate swap 741 (741) 10,489 (10,489)
Cash ow sensitivity (net) 8,946 (8,946) 10,489 (10,489)
2011
Variable rate instruments 11,362 (11,362)
Interest rate swap 18,580 (18,580)
Cash ow sensitivity (net) 11,362 (11,362) 18,580 (18,580)
(d) Fair values
Fair values versus carrying amounts
The fair values of nancial assets and liabilities, together with the carrying amounts shown in the consolidated statement of nancial
position are as follows:
2012 2011
Carrying
amount
USD000
Fair value
USD000
Carrying
amount
USD000
Fair value
USD000
Assets carried at fair values
Available-for-sale nancial assets 49,556 49,556 60,378 60,378
49,556 49,556 60,378 60,378
Assets carried at amortised cost
Debt securities held to maturity 11,277 11,149 12,815 12,670
Loans and receivables 693,705 693,705 727,190 727,190
Cash and cash equivalents 1,881,928 1,881,928 4,159,364 4,159,364
2,586,910 2,586,782 4,899,369 4,899,224
Liabilities carried at fair values
Interest rate swaps (161,823) (161,823) (133,541) (133,541)
Forward exchange contracts (35) (35) (539) (539)
Cross currency options (156) (156)
(161,858) (161,858) (134,236) (134,236)
Liabilities carried at amortised cost
Secured bank loans* (872,433) (872,433) (820,724) (820,724)
Mortgage debenture stocks (2,307) (2,662) (2,212) (2,124)
Unsecured bond issues (3,237,234) (3,734,175) (3,235,320) (3,107,661)
Unsecured loan stock (9,006) (9,006) (8,690) (8,690)
Finance lease liabilities (39,651) (39,651) (59,314) (59,314)
Unsecured bank and other loans* (591,825) (591,825) (3,615,495) (3,615,495)
Trade and other payables (635,824) (635,824) (861,872) (861,872)
Bank overdraft (195) (195) (1,017) (1,017)
(5,388,475) (5,885,771) (8,604,644) (8,476,897)
* A signicant portion of these loans carry a variable rate of interest and hence, the fair values reported are same as carrying values.
101
BUSINESS
OVERVIEW
CORPORATE
GOVERNANCE
FINANCIAL
STATEMENTS
Fair value hierarchy
The table below analyses nancial instruments carried at fair value, by valuation method. The different levels have been dened as
follows:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as
prices) or indirectly (i.e. derived from prices)
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs)
Level 1
USD000
Level 2
USD000
Level 3
USD000
2012
Available-for-sale nancial assets 49,556
Derivative nancial liabilities (161,858)
(112,302)
2011
Available-for-sale nancial assets 60,378
Derivative nancial liabilities (134,236)
(73,858)
30 Business combination
There were no business combinations in 2012.
2011
On 16 August 2011, the Company acquired 60% interest in Integra Port Services N.V and Suriname Port Services N.V (Suriname
Group) for a total cost of USD 31,315 thousand (net of cash). The Suriname Group is engaged in the ports business in the Republic of
Suriname.
This acquisition has resulted in recognition of goodwill of USD 9,693 thousand, port concession rights of USD 32,474 thousand and
non-controlling interest of USD 15,753 thousand.
From the date of acquisition, Suriname Group has contributed revenue of USD 5,898 thousand and prot of USD 1,567 thousand. If the
acquisition had taken place at the beginning of the year, the revenue would have been USD 15,600 thousand and prot would have
been USD 4,144 thousand.
31 Operating leases
Operating lease commitments Group as a lessee
Future minimum rentals payable under non-cancellable operating leases as at 31 December are as follows:
2012
USD000
2011
USD000
Within one year 303,685 192,961
Between one to ve years 735,859 711,097
Between ve to ten years 1,102,940 1,086,178
Between ten to twenty years 1,351,947 1,398,808
Between twenty to thirty years 1,311,794 1,357,630
Between thirty to fty years 1,221,425 1,201,046
Between fty to seventy years 1,052,910 1,063,338
More than seventy years 1,029,272 1,075,017
8,109,832 8,086,075
The above operating leases (Group as a lessee) mainly consist of terminal operating leases arising out of concession arrangements which
are long term in nature. In addition, this also includes leases of plant, equipment and vehicles. In respect of terminal operating leases,
contingent rent is payable based on revenues/prots earned in the future period. The majority of leases contain renewable options for
additional lease periods at rental rates based on negotiations or prevailing market rates.
102
Operating lease commitments Group as a lessor
Future minimum rentals receivable under non-cancellable operating leases as at 31 December are as follows:
2012
USD000
2011
USD000
Within one year 21,646 22,691
Between one to ve years 84,718 75,966
More than ve years 25,640 25,887
132,004 124,544
The above operating leases (Group as a lessor) mainly consist of rental of property, plant and equipment leased out by the Group. The
leases contain renewal options for additional lease periods and at rental rates based on negotiations or prevailing market rates.
31 Operating leases continued
32 Capital commitments
2012
USD000
2011
USD000
Estimated capital expenditure contracted for as at 31 December 1,178,529 538,383
33 Contingencies
(a) The Group has contingent liabilities amounting to USD 15,538 thousand (2011: USD 99,491 thousand) in respect of payment
guarantees, USD 152,556 thousand (2011: USD 82,117 thousand) in respect of performance guarantees and USD 853 thousand
(2011: 195 thousand) in respect of letters of credit issued by the Groups bankers. The bank guarantees and letters of credit are
arising in the ordinary course of business from which it is anticipated that no material liabilities will arise.
(b) The Group has contingent liabilities in respect of guarantees issued on behalf of equity-accounted investees (refer to note 27).
(c) The Group through its 100% owned subsidiary Mundra International Container Terminal Private Limited (MICT) has developed and
is operating the container terminal at the Mundra port in Gujarat.
In 2006, MICT received a show cause notice from Gujarat Maritime Board (GMB) requiring MICT to demonstrate that the
undertaking given by its parent company, P&O Ports (Mundra) Private Limited, with regard to its shareholding in MICT has not been
breached in view of P&O Ports being taken over by the Group (DP World).
Based on the strong merits of the case and on the advice received from legal counsel, management believes that the above litigation
is unsubstantiated, and in managements view, it will have no impact on the Groups ability to continue to operate the port.
(d) Chennai Port Trust (CPT) had raised a demand for an amount of USD 21,773 thousand (2011: USD 22,548 thousand) from Chennai
Container Terminal Limited (CCTL), a subsidiary of the Company, on the basis that CCTL had failed to full its obligations in respect
of non-transhipment containers for a period of four consecutive years from 1 December 2003. CCTL had subsequently paid USD
11,633 thousand (2011: USD 12,047 thousand) under dispute in 2008. CCTL had initiated arbitration proceedings against CPT in this
regard. The arbitral tribunal passed its award on 26 November 2012 ruling in favour of CCTL. As per the local legislation, CPT can
make an application for setting aside the award within a period of 90 days from the date of award. No such application for setting
aside the arbitration has been made by CPT as at the reporting date.
103
BUSINESS
OVERVIEW
CORPORATE
GOVERNANCE
FINANCIAL
STATEMENTS
34 Signicant Group entities
The extent of the Groups ownership in its various subsidiaries, associates and joint ventures and their principal activities are as follows:
(a) Signicant holding companies
Legal Name
Ownership
interest
Country
of incorporation
Principal
activities
DP World FZE 100% United Arab Emirates
Management and operation
ofseaports, airports and
leasing of port equipment
Thunder FZE 100% United Arab Emirates Holding company
Peninsular and Oriental Steam Navigation
CompanyLimited 100% United Kingdom
Management and operation
ofseaports
DP World Australia (POSN) Pty Ltd 100% Australia Holding company
DPI Terminals Asia Holding Limited 100% British Virgin Islands Holding company
DPI Terminals (BVI) Limited 100% British Virgin Islands Holding company
DP World Ports Cooperatieve U.A. 100% Netherlands Holding company
DP World Maritime Cooperatieve U.A. 100% Netherlands Holding company
DPI Terminals Holdings C.V. 100% Netherlands Holding company
(b) Signicant subsidiaries Ports
Legal Name
Ownership
interest
Country
of incorporation
Principal
activities
Terminales Rio de la Plata SA 55.62% Argentina Container terminal operations
DP World Antwerp N.V. 100% Belgium
Container terminal and
otheroperations
DP World (Canada) Inc. 100% Canada
Container terminal operations
and stevedoring
Egyptian Container Handling Company (ECHCO) S.A.E. 100% Egypt Container terminal operations
DP World Germersheim, GmbH and Co. KG 100% Germany
Container terminal operator and
barge management operator
CSX World Terminals Hong Kong Limited 66.66% Hong Kong Container terminal operations
Chennai Container Terminal Private Limited 100% India Container terminal operations
India Gateway Terminal Pvt. Ltd 81.63% India Container terminal operations
Mundra International Container Terminal Private Limited 100% India Container terminal operations
Nhava Sheva International Container Terminal
PrivateLimited 100% India Container terminal operations
DP World Middle East Limited 100% Kingdom of Saudi Arabia Container terminal operations
DP World Maputo SA 60% Mozambique Container terminal operations
Qasim International Container Terminal Pakistan Ltd 75% Pakistan Container terminal operations
DP World Callao SRL 100% Peru Container terminal operations
Doraleh Container Terminal SARL 33.33%* Republic of Djibouti Container terminal operations
Integra Port Services N.V. 60% Republic of Suriname Container terminal operations
Suriname Port Services N.V. 60% Republic of Suriname
General cargo
terminaloperations
Constanta South Container Terminal SRL 75% Romania Container terminal operations
DP World Dakar S.A. 90% Senegal Container terminal operations
DP World Tarragona S.A. 60% Spain Container terminal operations
DP World UAE Region FZE 100% United Arab Emirates Container terminal operations
DP World Fujairah FZE 100% United Arab Emirates Container terminal operations
Southampton Container Terminals Limited 51% United Kingdom Container terminal operations
Saigon Premier Container Terminal 80% Vietnam Container terminal operations
* Although the Group only has a 33.33% effective ownership interest in Doraleh Container Terminal SARL, this entity is treated as a subsidiary, as the Group is able to govern the nancial and
operating policies of the company by virtue of an agreement with the other investor.
104
(c) Associates and joint ventures Ports
Legal Name
Ownership
interest
Country
of incorporation
Principal
activities
Djazair Port World Spa 50% Algeria Container terminal operations
DP World Djen Djen Spa 50% Algeria Container terminal operations
DP World Australia (Holding) Pty Ltd 25% Australia Container terminal operations
Antwerp Gateway N.V 42.50% Belgium Container terminal operations
Caucedo Investment Inc. 50% British Virgin Islands Container terminal operations
Eurofos S.A.R.L 50% France Container terminal operations
Generale de Manutention Portuaire S.A 50% France Container terminal operations
Asia Container Terminals Limited 55.16%** Hong Kong Container terminal operations
Vishaka Container Terminals Private Limited 26% India Container terminal operations
PT Terminal Petikemas Surabaya 49% Indonesia Container terminal operations
Pusan Newport Co. Ltd 42.10% Korea Container terminal operations
Qingdao Qianwan Container Terminal Co. Ltd 29% Peoples Republic of China Container terminal operations
Tianjin Orient Container Terminals Co Ltd 24.50% Peoples Republic of China Container terminal operations
DP World Yantai Company Limited 32.50% Peoples Republic of China Container terminal operations
Asian Terminals Inc 50.54%** Philippines Container terminal operations
Laem Chabang International Terminal Co. Ltd 34.50% Thailand Container terminal operations
(d) Other non-port business
Legal Name
Ownership
interest
Country
of incorporation
Principal
activities
P&O Maritime Services Pty Ltd 100% Australia Maritime services
ATL Logistics Centre Hong Kong Limited 34% Hong Kong Warehouse owner/operator
Container Rail Road Services Private Limited 100% India Container rail freight operations
Empresa de Dragagem do Porto de Maputo, SA 25.50% Mozambique Dredging services
Port Secure Djibouti 40% Republic of Djibouti Port security services
DP World Cargo Services (Pty) Limited 70% South Africa Cargo services
Dubai International Djibouti FZE 100% United Arab Emirates Port management and operation
P&O Maritime FZE 100% United Arab Emirates
Management of marine
assets service and
portsupportoperations
(e) Ports under development
Legal Name
Ownership
interest
Country
of incorporation
Principal
activities
Empresa Brasileira de Terminais Portuarious S.A. 33.33% Brazil Container terminal operations
Rotterdam World Gateway B.V. 30% Netherlands Container terminal operations
DP World Properties Liman Isletmeleri Anonim Sirketi 100% Turkey Container terminal operations
London Gateway Port Ltd 100% United Kingdom Container terminal operations
** Although the Group has more than 50% effective ownership interest in these entities, they are not treated as subsidiaries, but instead treated as joint ventures. The underlying joint venture
agreement with the other shareholders does not provide signicant control to the Group.
34 Signicant group entities continued
35 Subsequent events
On 7 March 2013, the Group entered into a strategic partnership with Goodman Hong Kong Logistics Fund, monetising 75% of its
interests in CSX World Terminals Hong Kong Limited (CT3), which operates berth 3 of the Kwai Chung Container Terminal (CT3) and
ATL Logistics Centre Hong Kong Limited (ATL), a logistics centre located alongside CT3 for a total cash consideration of USD 463,000
thousand. As part of the strategic partnership, the Group will continue to manage the port operations. Completion, subject to
regulatory approvals, is expected to be towards the end of the rst half of 2013.
On the same day, the Group divested all of its 55.16% interest in Asia Container Terminals Holdings Limited, the holding company of the
entity that owns and operates Asia Container Terminal 8 West (CT8), for a cash consideration of USD 279,000 thousand, to Hutchison
Port Holdings Trust (HPH Trust).
The total consideration to be received by the Group for the two transactions is USD 742,000 thousand including the repayment of
certain shareholder loans. The proceeds will go towards maintaining a strong capital position. The net nancial impact will be computed
and disclosed in the consolidated nancial statements for the six months ended 30 June 2013, after taking into account the impact of
recycling of the foreign currency translation reserve and other costs related to the transaction.
5th Floor, JAFZA 17
Jebel Ali Free Zone
PO Box 17000
Dubai - U.A.E.
Tel: +971 4 881 1110
Fax: +971 4881 1331
www.dpworld.com
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