Annual Report & Accounts 2019

www.-harbour.co.uk Annual Report Chairman’s & Accounts 2019 Statement

03 Chairman’s Statement

06 Board Member Profiles

09 Commissioners’ Attendance

10 Executive Team

The first half of 2020 has seen the COVID-19 Profit, turnover and cash flow were in line with crisis result in an unprecedented interruption expectations and reflected the changing mix 12 Chief Executive’s Review to our daily lives, changing the way that we of business. Turnover at £65.9m was down live and work and no doubt will bring about slightly (4%) and operating profit at £30.6m significant social and economic change after was down 15%, largely reflecting the impacts it ends. of the completion of offshore windfarm 18 contracts and the ongoing reduction in and the Community First and foremost, I want to take this power station coal. The wind farm lease of opportunity to put on record the gratitude our D1 facility has ended and this quayside of the Board and the staff at Belfast Harbour is now being used for cruise ships and to the key workers across all sectors who 19 Belfast Harbour other activities. have continued to work tirelessly for us all. and the Environment I want to pay particular tribute to the key Trade through the Port remained strong, workers of Belfast Harbour and our with more than 24m Tonnes of cargo customers who maintained port operations handled for only the second time in our 20 Strategic Report and ensured that the goods which keep history. Passenger numbers exceeded life going in Northern – such as food, 1.5m for the third year in a row, there were fuel, medical and essential supplies – a record number of freight vehicles (up 4% continued to flow every day. to 542,000) and exports of aggregates rose 22 Risks and Uncertainties by 4% to 1.6m Tonnes for the first time. As a port, we have comprehensive business Cruise ship activity continued to grow with continuity plans and resources, hoping that 280,000 visitors during the year. they will never have to be used in real life. It is 23 Corporate reassuring that the deployment of these plans The Board was also very pleased with the Governance Statement has allowed Belfast Harbour to continue to progress being made on various projects to operate safely and effectively during this transform our business and cater for the recent crisis and that the Harbour community emerging needs of our regional economy. collectively rose to the challenges faced. During 2019 there was capital expenditure 26 Corporate Matters of £44.8m, on a range of port and estate As we reflect back on Belfast Harbour’s projects. In Port Operations there were performance during the 2019 financial investments totalling £40m, to upgrade and year we are acutely aware of the impact automate our container terminal at VT3 and 28 Trade and 24m that the COVID-19 crisis is having on our to prepare VT2 for the introduction, by Stena Shipping Statistics Tonnes of Port customers and all aspects of life and Line, of larger, more sustainable and modern cargo handled the economy. However, it is reassuring to vessels on its Belfast-Birkenhead route. “ First and foremost, I want to take know that as we prepare for the post crisis 29 Annual Accounts recovery, that our performance and Within our growing Harbour Estate a this opportunity to put on record progress in 2019 provides a strong 900-space multi-storey car park was the gratitude of the Board and platform to move forward. completed and work began on City Quays 3, £40m which will be one of ’s largest From a financial perspective, Belfast Harbour ever Grade A office buildings. It is encouraging the staff at Belfast Harbour to invested in had a sound performance in 2019 and to note that the last remaining Grade A office port operations the key workers across all sectors.” finished the year with a strong balance sheet. space at City Quays 2 building was occupied.

2 3 Annual Report Chairman’s Statement & Accounts 2019 Continued

During 2019 Belfast Harbour launched Belfast Harbour is already leading the way the latest stage of its strategy ‘A Port for as the first port in the UK and Ireland to Everyone’ which details our vision out to trial practical applications supported by 2035 and our plans to become the best the new 5G mobile network. We have regional port in the world, making Belfast partnered with one of the world’s smartest Harbour a key gateway for trade, ports, Rotterdam, to develop new ways tradeable services and tourism. This will to share information and collaborate with include further developing the Harbour as our customers. a key economic hub for the region and creating an iconic waterfront for Belfast We also established a Responsible Business which is an attractive and safe place to and Stakeholder Committee to oversee the live, work, visit and invest. formulation and delivery of Belfast Harbour’s Responsible Business Strategy. This Our plans were developed in anticipation committee also considers actions to further that the rate of societal and economic enhance Belfast Harbour’s workforce change will continue apace – driven by diversity and inclusion agenda. the decarbonisation agenda and the changing shape of the economy with Looking Forward growth in tradeable services such as media and ICT, plus the rapid evolution The impacts of the COVID-19 pandemic on of technology and continued growth in trade and the economy are significant and tourism and leisure activities for which widespread and at this time are still being the Harbour Estate already is a key assessed. Added to this will be the impact regional destination. We now have added of Brexit. Belfast Harbour’s sound financial the impact of the COVID-19 pandemic position and intact capabilities will allow us as a further driver of change. While the to continue to play a key role in helping drive pandemic may influence some of our the local economy and helping address the short and medium term priorities we key challenges from COVID-19 and Brexit, believe that the long term goals of our working with our customers and key partners strategy largely remain valid. to get the economy back on track.

Key to the delivery of our ambitious The current forecasts indicate that our plans is close collaboration with our business will see reduced income, profit customers and a number of partners and cash flow in 2021 but will remain cash including Belfast City Council, positive. While we will continue to invest Quarter Limited, our two Universities, in opportunities to improve our infrastructure Catalyst, Northern Ireland Screen, and capability it will be necessary to Odyssey Trust, Tourism NI, Visit Belfast reprioritise our plans in line with the new and the Department of Infrastructure. reality post the pandemic and our reduced Together our goal is to create a vibrant cash flow. Among the many lessons that economy and long-term opportunities the pandemic has taught us so far, it is for good jobs and a better way of life that we are stronger together, and together for our citizens. we can overcome significant challenges and succeed. Further details of our plans are contained within this report, and we have set a ‘A Port for target of building upon our existing environmental work to become the greenest multi-purpose port anywhere in Dr David Dobbin, CBE these islands and beyond, and to utilise Chairman SMART technology to deliver even Everyone’ greater levels of efficiency and flexibility.

Details our Vision out to 2035 and our plans to become the best regional port in the world, making Belfast Harbour a key gateway for trade, tradeable services and tourism.

4 5 Annual Report Board Member & Accounts 2019 Profiles

1. Dr David Dobbin CBE 3. Kyle Alexander OBE 6. Councillor Sonia Copeland

David was appointed to the Board in Kyle was appointed to the Board in Councillor Copeland is a full-time 1 2 3 2012 and took up the position of February 2016. He has considerable member of Belfast City Council. She is Chairman in 2015. He has extensive experience in delivering urban her party’s group leader in City Hall, board level experience across the regeneration, having been Chief representing the Titanic Electoral Ward. private, public and voluntary sectors Executive of Laganside Corporation and is actively involved in promoting which was responsible for the She is a member of the North regional economic development. transformation of Belfast’s waterfront Foreshore Committee, the Licensing He is currently Chairman of Firmus and Cathedral Quarter. He stepped Committee, the East Belfast Area Energy and a member of the KPMG down as Chief Executive of Maze Long Working Group, the East Belfast Northern Ireland Advisory Board. Kesh Development Corporation in Policing and Community Safety March 2017, having overseen the Partnership, the Waterfront and David has wide industrial experience establishment of the organisation. Hall Ltd Shareholders Committee, the 4 5 6 having previously held a number of Kyle received an OBE for services to Chair of the Older Persons Reference

Profiles senior executive roles in Dale Farm, regeneration in Northern Ireland in 2007. Group. She has recently been Boxmore International, Dalgety, C&C He is a Fellow of the Royal Institute of appointed onto the Board of Governors and Rothmans International. He has Chartered Surveyors. for Ashfield Girls School, Braniel also served as Chairman of a number Primary School and McArthur Nursery of organisations including: Dairy UK, Kyle’s ongoing commitment to ensuring School, as well as appointed onto the Ulster Rugby Management Committee, social benefit from regeneration is Board of the Grand Opera House Trust. the Northern Ireland Food & Drink reflected in his role as a Trustee of Sonia has previously held the post of Association, the Strategic Investment The Eastside Greenways Trust and Deputy Lord Mayor of Belfast. Board, InterTradeIreland, the Prince’s The Waterways Community. Trust NI, CBI NI, the NI Centre for 7. Richard Everitt CBE 7 8 9 Competitiveness and as President of Kyle is also a Trustee of Parkinson’s UK, the Northern Ireland Grain Trade. He representing Northern Ireland interests on Richard was appointed to the Board in has also served as a Non-Executive on the national charity’s board. February 2016. He was formerly the the boards of Food from Britain, the NI Chief Executive at the

Board MemberBoard Agrifood Strategy Board, Invest NI, BT 4. Councillor Ciaran Beattie Authority from 2004 to 2014 and is Ireland, Queen’s University Senate currently Chairman of the Dover and was Vice Chairman of the Ireland/ Councillor Ciaran Beattie is a full-time Harbour Board. Northern Ireland 2023 Rugby World member of Belfast City Council and Cup Bid. represents the Black Mountain Electoral Richard qualified as a solicitor and Area. He is a member of the City Growth spent much of his career in BAA plc, 2. Joe O’Neill and Regeneration Committee and the airports company, before becoming 10 11 12 Strategic Policy and Resource Chief Executive of National Air Traffic Joe was appointed CEO of Belfast Committee. He does not hold Services from 2001-2004. Harbour on 1st January 2018 having any other public appointments. joined the organisation in 1997 and having held a number of prior roles 5. Jane Chambers within Belfast Harbour including Commercial Manager, Port Manager Jane was appointed to the Board in and Commercial Director. February 2016. She is a Chartered Civil Engineer and Chartered Joe has had lead responsibility for all Environmentalist and holds a Masters’

major port and infrastructure projects Degree in Civil Engineering from Queen’s 13 14 in Belfast Harbour Estate over the University, Belfast. Currently, Jane is last 14 years with cumulative working as a project manager in the investment of c. £300m. Prior to delivery of the Greater Dublin Drainage joining the Port, Joe held positions project, specialising in environmental with Undus Ltd and C&C Ltd. protection and major infrastructure delivery for Irish Water. Joe is a board member of the Simon Community and the UK Major Ports Additionally, Jane has had a long career Group, a member of the CBI Regional in both contracting and consultancy Council, the Centre for Competitiveness environments, working at Regional and and a Council Member of the British Technical Director level. She has spent Ports Association. Joe was previously many years delivering project Chairman of the MAC theatre in management services for Water Service / Belfast, stepping down on 31st Northern Ireland Water and, ultimately, December 2017. eliminated risks of Infraction Proceedings being instigated by the European Commission for non compliance with the Urban Wastewater Treatment Directive. 6 7 Annual Report Commissioners’ & Accounts 2019 Attendance

8. Diana Fitzsimons 10. Rotha Johnston DBE 13. Dr Gerard O’Hare Commissioners’ Diana was appointed to the Board in Rotha was first appointed to the Board CBE DL FRICS February 2016. Diana is an FRTPI in February 2012. Rotha is a Director Gerard was first appointed to the Board planner and an FRICS development of Wildflower Property, and Ulster in February 2012. Gerard is currently surveyor, having formerly worked in Garden Village. She is also Chair of Group Chairman and Managing Director Attendance 2019 Northern Ireland as a Senior Lecturer Northern Ireland Electricity Networks, of Parker Green International, with in Planning & Development, a member of both the KPMG Northern Irish Head Offices in Newry and satellite as a Principal Commissioner with Ireland Advisory Board and the UK offices in Central and Eastern Europe the Planning Appeals Commission, Industrial Strategy Council, Chair of NI and the USA. He is a Fellow of the Board Committee Total Meetings Total Meetings as Office Director of the planning Screen and a Director of Qubis. Royal Institute of Chartered Surveyors Meetings Meetings Attended attended consultancy Turley, and as a sole and a Visiting Professor at the Rotha was previously BBC Trustee practitioner planning consultant. University of Ulster School of Built for Northern Ireland, Deputy Chairman Name Possible Actual Possible Actual Possible Actual % She has extensive practical experience Environment and Harvard Graduate of Invest NI and a Director of Variety in urban regeneration, port planning, School of Design in the USA. housing development and mixed use Foods. She was also Chair of Senate Alexander, Kyle 6 5 13 11 19 16 84 master planning. She was formerly and Pro Chancellor at Queen’s Gerard is currently Deputy Chairman Beattie, Ciaran 6 3 7 3 13 6 46 Chair of both the RTPI and the RICS University Belfast. of Invest NI. He was Chairman of NI Branches, a member of RICS Belfast Tall Ships 2009/2015 and sits Chambers, Jane 6 4 5 5 11 9 82 Governing Council, a member of the 11. Deborah Lange on the NI Council of the Prince’s Trust. Ministerial Advisory Group, Deputy In addition, Gerard is immediate past Copeland, Sonia 6 3 13 8 19 11 57 President of the International Deborah was appointed to the Board Honorary Consul for the Republic of Federation for Housing and Planning in February 2016. Deborah is also a Latvia in the UK and NI. He was also Dobbin, David 6 6 22 22 28 28 100 (IFHP), Co-Chair of the UN Habitats member of the Board and Chair of the appointed both as Ambassador for Professionals’ Forum, and Deputy Chair Audit and Risk Committee of Invest NI. HRH The Prince of Wales for Corporate Everitt, Richard 6 6 8 3 14 9 64 of the charity Lionheart. She is currently Responsibility in 2009 and, more Chair of Radius Housing Association, Deborah is a Certified Public recently, as a Deputy Lieutenant of Fitzsimons, Diana 6 5 14 12 20 17 85 an IFHP Council Member, a member Accountant. Previously she was County Down. Gerard is also a of the RICS Awards Panel, and a Senior Vice President of Tax at Oracle Trustee and board member of the Hayes, Christine 6 6 12 12 18 18 100 Visiting Professor in the Built Corporation based in California. She Air Ambulance of Northern Ireland Johnston, Rotha 6 5 13 12 19 17 89 Environment at Ulster University. was also a member of the boards of (ANNI) Charity. Planitax and Liquid Engines, both software companies, Chair of the Lange, Deborah 6 6 17 17 23 23 100 9. Christine Hayes Silicon Valley Tax Directors Group, 14. Dr Ed Vernon OBE past Chair of the Tax Committee of the McCoubrey, Frank 6 4 5 2 11 6 55 Christine was first appointed to the Ed was first appointed to the Board in American Electronics Association and a Board in February 2012. Christine has February 2012. Ed is a board member member of the Executive Committee of O’Hare, Gerard 6 3 8 7 14 10 71 had a long career in the Finance and of BT Northern Ireland, Deputy Chair of the Tax Executive Institute. Deborah is Banking industry with particular focus Queen’s University Foundation and a O’Neill, Joe 6 6 29 29 35 35 100 a past member of the board of Queen’s on credit risk, risk management member of Belfast City Council’s University Belfast Foundation. and senior management leadership Growth Commission. Vernon, Ed 6 6 22 19 28 25 89 development. She was a founding Director of Egg (the UK’s first internet 12. Alderman Frank Ed founded B.I.C Systems, a bank), working as the Risk Director, McCoubrey technology services business which and prior to that with TSB Group was acquired by BT Group. He is a ultimately becoming its Director of Alderman McCoubrey is a full-time former member of Matrix, the Northern Credit Management. member of Belfast City Council and Ireland Science and Industry Panel, represents the Court District Electoral former Chairman of NI Software After leaving banking, she worked as Area. He is a member of the People Industry Federation and a former Board a freelance consultant specialising in and Communities Committee, the Town member of Invest NI. From February business coaching and mentoring, Planning Committee, the West Belfast 2011 until January 2014 he was Asset group facilitation and senior District Policing and Community Safety Management Advisor to the Northern management development for a range Partnership and the BCC West Belfast Ireland Executive. Ed was awarded an of incorporated business entities. Area Working Group. He does not hold OBE for services to economic Christine subsequently completed any other public appointments. development in 2012 and in 2013 was studies with the Open University awarded an honorary doctorate by achieving a first in a Bachelor of Arts Queen’s University for exceptional (Honours) in Humanities with Art History services to business and commerce. and is now working as a volunteer business mentor with the Prince’s Trust.

8 9 10 & Accounts 2019 Annual Report Executive Team Profiles

7 5 3 1

6 4 2 and PrivateSectors. Voluntary, Community, SocialEnterprise small andmediumorganisationsinthe that deliversservicesandexpertiseto Corporate Services,asocialenterprise is currently theChairmanofViable based inMontreal, Canada.Trevor for Bombardier Aerospace Worldwide including HeadofEnterpriseSystems Bombardier inanumberofroles had spentatotalof22yearswith from Bombardier Aerospace. Trevor and joinedtheorganisationin2006 Trevor isanengineerbyprofession Transformation Director Infrastructure andBusiness 1. Trevor Anderson Profiles Executive Team

Property Manager forUlsterBank. the HendersonGroup andall-Ireland was previously Property Director for Project ManagementSurveyorand Chartered SurveyorandChartered Retail sectors.Graemeisaqualified senior positionsintheBankingand in 2007havingheldanumberof Graeme joinedtheorganisation Property andPlaceDirector 4. Graeme Johnston Foundation. Titanic Group andformerBoard Trustee with a formerDirector oftheBritishBrands five yearsinPRconsultancy. Sheis communicationsand Government her career includedfiveyearsin sector roles. Before joiningDiageo marketing from bothprivateandpublic communications andbrandexternal anddiverse experienceininternal brand buildingandmarketing,gaining experience inreputation management, roles. Allisonhasmore than20years’ of European andGloballeadership and publicaffairs leadinanumber Director GBandascommunications years atDiageo,asCorporateRelations October 2019,afterspending11 Allison joinedBelfastHarbourin Director Communications andMarketing 3. AllisonDowling National PensionFund. Participating BodiesofthePilots’ member oftheAssociation Member ofNIWater andCouncil the BritishPortsAssociation,aBoard Treasurer andCouncilMemberof Chartered Accountants.Mauriceis qualified withPriceWaterhouse, portfolios. PriortothatMaurice and oversawarangeoffinance Maurice wasemployedbyCawoods organisation in2000.Previously in BelfastHarboursincejoiningthe has heldanumberoffinancepositions Maurice isaChartered Accountantand Finance andComplianceDirector 2. MauriceBullick

movement in Northern Ireland.movement inNorthern board positionsacross theCamphill he alsoholdsanumberofother disabilities, for adultswithlearning residential care andworkplacement Holywood, asocialenterpriseproviding Chairman ofCamphillCommunity asset management.Scottiscurrently regeneration, fundmanagementand roles inconstruction,development, in theUKandoverseasincluding years ofproperty sectorexperience Institute ofBuildingandhasover28 Institute ofSurveyorsandtheChartered is aqualifiedMemberoftheChartered Management Unitforeightyears.Scott IrelandNorthern Executive’s Asset Board where hewasHeadofthe 2019 from theStrategicInvestment Scott joined the organisation in October Development Director 7. ScottWilson Care Trust area. HealthandSocial South Eastern Child ContactCentre basedinthe of theBoard ofTrustees ofCloona Development andiscurrently amember Chartered InstituteofPersonnel period. Patriciaisamemberofthe Roles withintheBBCovera10-year Resources andBusinessPlanning NI &Europe, andoccupiedHuman Resources ManagerinNortelNetworks her appointmentPatriciawasHuman promoted toDirector in2014.Priorto as HumanResources Managerandwas Patricia joinedBelfastHarbourin2002 Human Resources Director 6. Patricia Toolan Member of Visit Belfast. Member ofVisit Institute ofDirectors andisaBoard in CompanyDirection through the with Diageo.MichaelholdsaDiploma Inc. andstartedhiscareer inlogistics Technologies andInformixSoftware held positionswithbothBaltimore Director in2018.Previously, Michael before beingappointedCommercial in 2003,holdinganumberofroles Michael joinedtheorganisation Port Director 5. MichaelRobinson

11

Annual Report & Accounts 2019 Chief Executive’s Review

A significant review of Belfast Harbour’s 5 Strategic Themes will underpin delivery strategic vision and purpose in 2019 produced of Belfast Harbour’s Vision and Purpose: a new strategic ambition for 2019-2023 and outlined a longer term 2035 vision. World’s Best Regional Port - a best-in-class and customer-focussed 1 Port, with modern and resilient infrastructure and an exemplary The strategic review was informed by external Health & Safety offering at its core. socio-economic trends and aligned Belfast A best-in-class Green Port delivering sustainability, net zero 2 Harbour’s strategic objectives to the wider public carbon and high standards of air and water quality. and private sector ambitions for the region. A Key Economic Hub - an engine for economic growth for the region, The review culminated in the ‘A Port for Everyone’ 3 leveraging the Trust Port model, creating jobs and talent pipelines strategy document and revised vision and underpinning the Port, Property and Industrial asset base. purpose statements, which were shared A best-in-class Smart Port empowering our visitors and widely with key stakeholder audiences. 4 customers through information and high speed connectivity.

An Iconic Waterfront for the City transforming the infrastructure and 5 landscape of Belfast’s waterfront through integrated Place Making, community and civic engagement.

Belfast Harbour’s To develop the best regional port in the world and an iconic Vision waterfront for Belfast.

Belfast Harbour’s To provide the region with a best-in-class Port to meet Trust Port Purpose current and emerging market requirements and to develop the Estate as a key economic hub and iconic waterfront for Belfast to drive our income from trade, tradeable services and tourism.

12 13 Annual Report Chief Executive’s & Accounts 2019 Review

Port Business Update

Trade Bulk Cruise Port Development

2019’s Port trade exceeded 24m There were differing, but not One of Northern Ireland’s key export 2019 was a good year for cruise ship Investment continued in facilities to drive Tonnes of cargo for the second year unexpected, performances in the commodities, aggregates, increased calls to Belfast Harbour, with close to efficiency and capacity improvements at in succession. This result represents Dry Bulk sector as overall throughput trade with more than 1.6m Tonnes a 50% increase on the previous year. the Port. The £40m redevelopment of another strong performance, recording rationalised following a peak in 2018. exported through the Port during In 2019, 148 calls were made versus Victoria Terminal 3 (the container terminal) a total of 24.3m Tonnes of cargo Throughput dropped by 6% finishing 2019. Co. Down producer Conexpo, just over 100 calls in 2018. Visitor commenced with the first semi-autonomous handled and with some individual the year at 9.3m Tonnes. which processes its raw material on numbers to Belfast and Northern rubber tyre gantry cranes tested in late sectoral highlights. This result built site at Belfast Harbour, achieved its Ireland who arrived by cruise ship 2019 and early 2020. The upgrade is on a landmark trading year in 2018, After a number of record years of own milestone during the period and totalled 280,000. 2019 was the first full expected to be completed in 2021. when trade exceeded 24m Tonnes grain and animal feed imports, 2019 exported over 1m Tonnes of materials, season during which Belfast Harbour for the first time. saw a 10% drop to 2.1m Tonnes primarily destined for infrastructure dedicated the D1 berth as a cruise Victoria Terminal 3 experienced a strong as more favourable local growing projects in Great Britain. facility, which reduced interactions increase in volume in 2019 with containers The aggregate and RoRo sectors both conditions resulted in reduced reliance between cruise and other port traffic. handled up 3% to more than 131,000. contributed strongly to the overall on imported animal feed. Liquid Bulk tonnage decreased slightly, This performance is notable in the context result. The Cruise business welcomed with 2.3m Tonnes imported into Belfast’s The dedicated berth provided an of large areas of the terminal being 148 ships and 280,000 visitors to the Lissan Coal Company (LCC) enjoyed oil terminals during 2019. Kerosene opportunity to enhance the passenger inaccessible due to civil works associated region and supported the tourism another successful year in its Belfast imports dropped by 7% due to milder experience, and a terminal building was with its upgrade. sector throughout the 2019 season. Harbour based coal processing facility; conditions, diesel volumes remained erected at D1, in partnership with Visit importing commodity, primarily from static and petrol had a modest reduction. Belfast and Tourism NI. This enabled The largest hydraulic material handling Enabling connectivity to other regions South America, and exporting passenger processing and tourist crane of its kind anywhere in the world is a key responsibility for Belfast processed material to destinations Break Bulk tonnages reduced, primarily information to be provided in a was purchased and placed into operation Harbour in its role as a leading regional across the world. Exports of this due to the absence of activities at Belfast modern and comfortable environment during 2019. This was complemented by port. Three main ferry routes operated industrial commodity rose by 20% in Harbour’s D1 Wind Terminal with Orsted which contributed to Belfast being on-going civil works at Pollock Dock, throughout 2019 from Belfast Harbour 2019. Thermal coal used in the EP having completed its Belfast activity in awarded the 2019 accolade of Cruise which will enhance the crane offering to Great Britain by . For Kilroot power plant continued its trend 2018. Other major commodities in this Critic’s Best Cruise Port of Call for UK and enable mobile cranes to load and the tenth consecutive year, a record of reducing tonnage. EP Kilroot sector- steel, paper and timber-incurred and Ireland. discharge ships more flexibly. number of freight vehicles, 542,000 retained contracts in 2019 to provide marginal reductions in activity. equivalent units, passed through essential capacity to the grid for several The installation of a new two tier linkspan the three terminals. Volumes on the more years, however, coal consumption and berth works at Victoria Terminal 2 were Belfast-Heysham route reduced due is expected to continue to reduce in largely completed in 2019. These came into to lower capacity but, demand line with increased production of service in Quarter 1 2020, with the arrival of remained strong; whilst conversely the renewable energy. the first of the new build Stena Line ships, Belfast-Birkenhead route saw freight Stena Edda, operating on the Belfast- volumes increase by 6% and the Birkenhead route. These new vessels Belfast- route enjoyed a will increase both freight and passenger similarly healthy growth across its capacity, Belfast Harbour and Stena Line vehicle, passenger and freight will further enhance passenger terminal businesses. Total passenger volumes facilities as they celebrate 25 successful also remained strong with passenger years of partnership between numbers exceeding 1.5m for the the two organisations. third year in a row. 280,000 visitor numbers to Belfast & Northern Ireland arriving on cruise ships

£40m redevelopment of Victoria Terminal 3 commenced 131,000 containers handled, 14 an increase of 3% 15 Annual Report Chief Executive’s & Accounts 2019 Review

Estate Business Update

City Quays and Queen’s Island Belfast Harbour Studios

Belfast Harbour’s Real Estate business Construction work completed early This is the first Marriott branded hotel Belfast Harbour and Titanic Quarter Belfast Harbour and Titanic Quarter In recent years, film and TV production had another busy year during 2019 in the year on the 907 space multi- in Northern Ireland and the first Limited, together with professional Limited also issued the tender for the has blossomed in Belfast. To support delivering on our strategic objectives. storey car park, via local contractor, new build AC by Marriott hotel master planning consultants Chapman construction of Olympic House, a this industry Belfast Harbour developed During the year all eight office floors of Felix O’Hare, and opened in January on the entire island. Taylor, London, embarked in 2019 on proposed 190,000 square feet Grade in 2017, purpose built sound stages City Quays 2, Belfast Harbour’s most 2019. This strategic £17m facility was the reimagining of the Masterplan for ‘A’ office building on a site located and supporting buildings at Giant’s recently completed Grade ‘A’ water - developed and financed by Belfast The 110 seater restaurant, operated the remainder of the Titanic Quarter between Belfast Metropolitan College Park to further enhance Northern front office development, were agreed/ Harbour and is operated via the under the leadership of the award development lands. Both organisations and the Public Record Office. This Ireland’s reputation as a global player. occupied by tenants from a wide range specialist car park operator, National winning chef Jean-Christophe Novelli, also entered into an Agreement to £32m co-investment development has The second series of the Warner of sectors including ITV and Wireless Car Parks (NCP).The car park is already provides the food and beverage for the Lease with a third party developer already secured Planning approval and Horizon TV series ‘Krypton’, a prequel (U105 Radio) in the media sector, TP providing a positive benefit to the hotel as well as acting as a stand-alone for a hotel development on a site when built should help address to Superman, completed in the new ICAP in the financial services sector, overall City Quays development by bistro open to the public. adjacent to Hamilton Dock. A planning the current lack of Grade ‘A’ office Belfast Harbour Film Studios at Baker McKenzie in the legal sector, bringing much required parking facilities application for this significant scheme space in the city. Giant’s Park during 2019. ARM Limited in the software for the offices and hotel users. The hotel and restaurant provide an was lodged late in 2019. development sector and Aflac additional reason to visit the City ‘Catalyst’ awaits planning approval for The strength of demand for studio in the insurance sector. Work commenced on site for a further Quays and Clarendon area. They Titanic Belfast achieved a 9% increase its latest office development for science space is such that immediately upon Grade ‘A’ waterfront office development complement the businesses within in visitor numbers with over 900,000 and innovation based businesses vacation the entire facility was occupied The depth and strength of the occupier – City Quays 3. This 16 storey 250,000 the surrounding offices by providing local and international visitors in known as ‘Pierpont Plaza’ aiming to for a major film production to be known base and speed of letting stands square feet, environmentally sustainable hotel space for clients and colleagues their last reporting year to the end of provide up to 120,000 square feet of as ‘The Northman.’ testament to Belfast Harbour’s strategy building, will front both the river and the as well as a food and beverage offer March 2019. space. This £15m project will be of providing high quality ‘BREEAM new City Quays plaza adjacent to the together with formal and informal developed and funded by Belfast Within the objectives of ‘A Port for Excellent’ buildings in advance of AC by Marriott and will be one of the meeting spaces. Another significant development Harbour and will help underpin the Everyone’ Strategy, it is an ambition tenant demand. Such a strategy has largest new build commercial office announcement surrounded the growth of the burgeoning knowledge - to create a leading European creative The hotel fronts a new public plaza been essential in underpinning Invest properties in the City in recent years. proposed construction of a £10m based sectors in this locale. and media hub. This will involve NI’s objective of securing both new The design team is led by local experts adjacent to the City Quays offices and aquarium which, subject to planning extending the existing facility at the entrants to the Northern Ireland market RPP Architects, and construction is links with the waterfront walk and approval, is scheduled to open in 2021 Giant’s Park by building additional and expanding indigenous businesses. being undertaken by main contractor cycleway providing a new landscaped and is expected to attract 300,000 studios, workshops and offices and Farrans Construction. It is anticipated amenity for the area and the City. visitors per annum. Developments such providing opportunities for businesses The quality of product and building that work will be completed by Quarter as this align closely with Belfast involved in the creative industries to management services at City Quays 2 4 2021. This project represents a Harbour’s strategic ambition to create base themselves in the Harbour Estate. was recognised through the attainment further £50m+ strategic development an iconic waterfront area, connecting This further £45m investment will help of ‘Premier Property’ status, a global by Belfast Harbour and the completed with the City and developing safe to realise our, and NI Screen’s, ambition standard employed by managing agent building will accommodate 1,800 and attractive places to live, work, for Northern Ireland to become CBRE which identifies commercial office workers. invest and visit. the UK’s largest creative and media office assets in each region which are 250,000 hub outside of London. unique, high quality properties which The 188 bedroom 4* AC by Marriott offer a 5-star service to tenants and waterfront hotel celebrated its first SQ FT Work continues with NI Screen not their visitors. year’s trading in early 2019. The hotel only in terms of marketing the studio grade ‘A’ waterfront office with restaurant, bar, fitness suite and complex but also in supporting a new Furthermore, the City Quays 2 building meeting rooms, was developed and development – City Quays 3 creative academy for young people received three industry accolades – financed by Belfast Harbour, and is aspiring to a career in Northern The Royal Institute of British Architects, operated via a specialist hotel operator Ireland’s expanding screen industries. Royal Society of Ulster Architects – Interstate Europe Hotels and Resorts. Belfast Harbour provides funding Design Award and Sustainability support that enables the Nerve Centre Award and a High Commendation to deliver industry training for 16-19 from the British Council for Offices, year-olds attending a Production Northern Region. Design and Film Construction Academy, with the support of NI Screen. The The water fronting ground floor area Academy offers up to 80 participants of the building was also occupied in a series of masterclasses and 2019 by ‘Centra’ for a café/food and workshops, facilitated by industry convenience store which has provided professionals, in areas such as an enhanced service offer to the mix of costume, makeup and set décor uses developing within the scheme. as well as the skills to work as part of the art and construction departments on a production.

16 17 Annual Report Belfast Harbour and & Accounts 2019 the Environment Belfast Harbour and Belfast Harbour and the Community the Environment

As part of Belfast Harbour’s deep and longstanding Belfast Harbour’s focus on its environmental obligations and commitment to minimising environmental impact are longstanding. The new Strategy builds commitment to supporting local communities, the Board on activity to date, and stretches the ambitions of Belfast Harbour’s sustainability agenda. The goal to further develop as a Green Port reinforces a commitment established a Responsible Business and Stakeholder to carbon zero development and operations, reducing pollution and ensuring Committee in 2019, to formulate and oversee the responsible and sustainable environmental management. implementation of the organisation’s community and During 2019, Belfast Harbour’s systems for Environmental and Energy Management were validated against the internationally recognised ISO stakeholder engagement strategies. 14001:2015 and ISO 50001:2011 standards respectively. There were no significant single environmental incidents during 2019, however, with abnormal Belfast Harbour’s 2019 Community Engagement strategy windy conditions and high volumes in the Dry Bulk trade, significant resources supported initiatives across the four principal themes of were applied to dust management. employability and skills, environmental sustainability, Operationally, Belfast Harbour Other activities during In partnership with The Girona building community and wellbeing and inclusivity. continued to be an active 2019 included: Project, Belfast Harbour established participant in a number of key a consortium of local SMEs to develop strategic environmental forums Attainment of Platinum status in a long-term energy roadmap. which included: Business in the Community’s annual ARENA Network Electricity used throughout the During 2019, Belfast Harbour people attending Extern’s alternative Belfast Harbour’s partnership with The Eco-Ports Project which seeks to Harbour Estate was procured to supported more than 10 major education setting. Each of these Culture Night saw the delivery of an identify and share environmental best Environmental Benchmarking Survey ensure 100% of it comes from initiatives and worked with wide ranging programmes saw participants build interactive, family friendly tour which practice within the port industry for the twelfth consecutive year renewable energy sources. organisations and community groups to new skills and confidence to allowed visitors to explore Belfast Multi-agency pollution deliver programmes which impact our bolster their educational foundation Harbour locations in a structured, Climate NI Belfast Harbour took initial steps response exercises communities in a positive way. and employability prospects. enjoyable way through a guided to mitigate emissions through Business in the Community the commencement of a vehicle journey of discovery and learning. Ongoing replacement of street Delivered through a mix of existing During 2019, a five year partnership Environmental Workshops replacement scheme with the lighting with high efficiency LEDs and new community partnerships, was established to assist with As part of our Responsible Business purchase of its first electric vehicles. Participation in the Queen’s University significant funding was granted operational costs for Lagan Search Programme, Belfast Harbour continued Moses Blue Growth study Purchase of electric vehicles during 2019 to fund employability and Rescue and to support its team to gift use of the Harbour Office to Belfast Harbour has also purchased wind and solar powered quay lighting and skills initiatives and help bridge of volunteers in delivering an important organisations, hosting more than 100 Installation of solar power and used SMART technology via a the gap to employment. water safety, health and wellbeing role events in 2019 as well as opening the and energy storage for the community. office to the public during European ‘flower’ which generates electricity Examples of new partnerships Heritage Weekend. Supporting clean-up initiatives to power the cruise terminal. developed during the year included As part of Belfast Harbour’s in our support to Active Communities, commitment to improving our local in its work with some of the ‘hardest environment, we supported eco-charity Launch of comprehensive Air Quality to reach’ young people in the City and Citizen of the Sea in using a converted and Sustainability strategies our support to the Nerve Centre Screen vessel as a floating collection point for Academies, in its work with NI Screen waste that was gathered by volunteers to deliver industry and skills based from the beaches and tidelines of training for young people. Belfast Lough. 3,300 cubic litres of waste was collected and delivered to Our longstanding support for Business Abercorn Basin where the Belfast in the Community’s ‘Time to Code’ Harbour team took it to be recycled. initiative and partnership with the Prince’s Trust also continued in 2019, to support its Essential Skills literacy and numeracy sessions and ‘Achieve’ programmes for young

18 19 Annual Report Strategic Report & Accounts 2019 Strategic Report

Belfast Harbour is incorporated as a Statutory Corporation, Trading Capital Expenditure Taxation Strategy and whilst not directly bound by The Companies Act 2006 Belfast Harbour has successfully Belfast Harbour is primarily an It is the policy of Belfast Harbour (Strategic Report and Directors’ Report) Regulations 2013, delivered against its financial objective, infrastructure business wholly as a good corporate citizen to adhere delivering a strong financial performance funded at present by retained profits. to all taxation legislation, ensuring Belfast Harbour has adopted the main provisions of the Act for 2019, with consolidated turnover at No public money is received or spent payment of all tax properly due and not £65.9m reduced by 4% on 2018 and by Belfast Harbour. to engage in any contrived or artificial and, therefore presents a Strategic Report consistent with consolidated operating profit at £30.6m transactions to secure a tax saving. reduced by 15% on 2018. The ending All profit, net of taxation, is reinvested corporate entities of a similar size. of the windfarm operation lease at the in the development of the Harbour’s Hence the risk appetite of Belfast D1 facility in 2018 has produced a Port and Property activities. The Harbour towards any tax mitigation This report, to be read in conjunction with the full annual reduction in turnover and operating beneficiaries are the businesses scheme is low, and it is anticipated profit in 2019. throughout Northern Ireland, which that all corporation tax will be paid report, contains information that the Board consider to trade through and rely on the Harbour, at a level similar to the policy rate, The Financial Statements show and consequently there is a significant save for the point noted below on be of strategic importance to Belfast Harbour. consolidated Profit before Taxation for positive impact on the local economy in investment allowances. 2019 at £31.6m which is a reduction on general. As is common in the Ports the 2018 figure of £7.0m. This is stated industry, the scale of economic benefit Belfast Harbour has a capital-intensive Strategy Update after the movement on valuation of of this investment is considerably business model, and investment in and Business Model investment properties. in excess of the direct economic benefit capital including plant is considered to Belfast Harbour itself. accretive to the development of the Belfast Harbour remains committed to Northern Ireland Trust Ports are Terminal and improved roll on roll off The movement on valuation of business and overall Northern Ireland investing in the Harbour Undertaking, independent statutory corporations, facilities at Victoria Terminal 2 (VT2) investment properties is not a trading Total capital expenditure during economy. Thus, Belfast Harbour will with delivery of sustainable financial with their only source of funding being as well as regeneration activities, item, and after adjusting for this, the 2019 was £44.8m, and in addition, seek to fully utilise all investment returns according to investment criteria. profits generated from trading. Hence principally commencement of “Underlying” Profit before Taxation a further £115.7m was committed allowances, particularly capital Operating the business profitably is a Belfast Harbour must generate an City Quays 3. reduced by 14% to £31.3m from at the 2019 year-end to strategically allowances, although this will be legal requirement and is essential to acceptable return on assets in order £36.6m, as set out in the table below: significant projects. done in a manner fully compliant with fund investment and to enable trade to sustain operating expenditure In addition, substantial funds legislation, and in a fully transparent This will be funded from Liquid funds growth. This enables Belfast Harbour and future investment. continue to be allocated to ongoing 2019 2018 way in communication with HMRC. to best serve the business and the improvements in Port trading facilities. which were £55.5m at December The primary focus of Belfast Harbour During 2020 the VT2 and VT3 2019 and future trading profits. The total taxes paid by Belfast Harbour Northern Ireland economy at large. Profit before £31.6m £38.6m In addition, there is investment in is and remains major investment in improvement programmes will in 2019 were in excess of £10m. Taxation as In the past 10 years in excess of maintenance capital expenditure to port facilities to enable and develop complete, and the investment in reported £290m has been invested in the The oversight of taxation compliance keep the basic infrastructure of the port trade. In 2019 the primary focus City Quays 3 will continue. Harbour, mostly in Port facilities and risk management is within Harbour fit for purpose. The business of investment covered both Port and Less: Surplus on £0.3m £2.0m and all funded from trading profit. the purview of the Audit and model is highly capital intensive, and Real Estate assets, with substantial revaluation of Risk Committee. generating retained profits to fund expenditure on re-equipment of the investment properties trading and investment is the core Victoria Terminal 3 (VT3) Container financial objective of Belfast Harbour. “Underlying” Profit £31.3m £36.6m Business Environment before Taxation Belfast Harbour has considerable financial resources together with a diverse business model holding long - term contracts with key customers. The Harbour has continued to successfully manage the business risks associated with the continuing uncertain economic outlook. The growth in revenue in 2019 was produced by a forward looking investment strategy in capital intensive harbour facilities, which facilitated the business growth and positive economic impact of Belfast Harbour on Northern Ireland notwithstanding the underlying economic environment.

20 21 Annual Report Corporate Governance & Accounts 2019 Statement Risks and Corporate Uncertainties Governance Statement

Funding Risk Regulatory Risk COVID-19 Risk The Organisation The Board Ensure high standards of corporate governance; Belfast Harbour as a Trust Port is solely Belfast Harbour, like all UK ports, Belfast Harbour is closely monitoring Belfast Harbour Commissioners The constitution of the Board is set responsible for funding the business’s operates in a highly regulated industry the current uncertainty around (BHC) was first constituted by The out in the Belfast Harbour Order 1. Establish the overall strategic operating and investing activities via and is fully cognisant of the regulatory COVID-19 and the impact it may Belfast Harbour Act 1847 as a statutory (Northern Ireland) Order 2002, direction of the Port, having retained profit. Most major UK Trust obligations not least those pertaining potentially have on the operating corporation with the underlying purpose Schedule 1. BHC is committed to regard to the best interests of Ports are classified for public to People, Safety, Environment and model and financial performance of of operating, maintaining and improving high standards of Corporate the Port and the local economy expenditure accounting purposes as Security. In addition, the successful the Harbour. It is expected that many Belfast Harbour. The powers and duties Governance. The primary reference following consultation with key “public corporations”. The classification execution of Belfast Harbour Harbour stakeholders will be affected of BHC are limited to those conferred point for corporate governance is stakeholders, where relevant; has the potential to impact on public developments, and their accretive by COVID-19, and Belfast Harbour’s by the various Belfast Harbour Acts considered to be the pertinent content budgets as any exercise of borrowing effect on the Northern Ireland economy, management will continue to monitor and Orders 1847-2002, and any within the ’UK Corporate Governance 2. Ensure that, in reaching powers by Belfast Harbour will “count” depends on planning and consenting and review operational performance relevant public general Acts such Code’ and taking account of any best decisions, Government policy is as public borrowing even though there processes. Belfast Harbour is also and business forecasts in light of the as the Harbours’ Act (NI) 1970. In practice guidance relating to Trust taken into account; is no public money involved and no aware of the need to operate a strong rapidly changing situation, bearing common with other Northern Ireland Ports. BHC is independent of recourse to Government for lenders to governance model, including in mind the critical role of the port and Great Britain ports similarly Government and any other legal person 3. Ensure that, in carrying out their the Harbour. At present Belfast Harbour governance specifically pertaining to in the Northern Ireland economy. constituted, BHC is generally referred and management is the responsibility of functions, due regard is paid to is able to maintain its investment Trust Ports. In mitigation of regulatory At all times the health and safety to as a ‘Trust Port’ although it is not the Board and the Executive Team. the need to promote equality strategy at a level supported by trading risks, Belfast Harbour has strong of our employees and those of a trust in any legal sense. of opportunity. profits generated by the business, oversight mechanisms in place at our stakeholders will be the The duties of the Board Members are without utilising its borrowing capability. Board and Executive level for foremost priority. akin to those of a company director, The Department for Infrastructure monitoring and meeting the ongoing in particular, to be accountable for the appoints Board Members on the challenges in all of these areas. The Board of Belfast Harbour proper exercise of the statutory and basis of open public advertisement. Economic Risk Commissioners considers that the administrative requirements placed The number of Board Members, business model and financial resources, upon them. In addition Board including the Chairman and Chief Belfast Harbour trade is reflective of the Brexit Risk including substantial tangible net Members are required to: Executive Officer, may be no less health of the overall Northern Ireland worth and cash reserves, together than 10 and no more than 15, economy, and the economy will always Brexit is the single greatest change with diversified income sources, with up to four Board Members be a managed risk. Although trade to the UK’s trading relationship with mean the business has sufficient being elected representatives levels slightly reduced in 2019, overall Europe and the rest of the world since resources to address this uncertainty. from Belfast City Council. financial performance remained sound. the UK joined the European Economic In mitigation of the economic risk, Community in 1973. Belfast Harbour has a well-diversified trading base across a number of Belfast Harbour will continue to trading sectors, strong trading monitor developments and engage counterparties, and continues to with government via the UK Major Ports seek new business investment Group and British Ports Association. with sustainable financial returns. The objective is best possible access to European and other markets, with minimal disruption to the flow of Trading Risk people and goods.

Belfast Harbour is exposed to Belfast Harbour continually competition on the main trades through assesses Brexit risks, and in view the Port, and over time there have been of the preponderance of intra UK market share gains and losses through trade through the port, together the effect of competition from other with developed processes for handling ports. In mitigation of this risk, Belfast WTO trade, traffic impacts are likely to Harbour has a well-diversified trading be manageable. The derived demand base, strong trading counterparties and effects on overall economic activity and especially an active strategy for their concomitant effects on trade are investment in facilities to preserve harder to predict. and enhance the offer to customers.

22 23 Annual Report Corporate Governance & Accounts 2019 Statement

Belfast Harbour Pension Fund Ltd Audit and Risk Committee Safety, Environmental Policy and Strategy Committee & Security Committee Membership Membership Membership

Ms C Hayes (Chair) Ms R Johnston DBE (Chair) Membership Dr D Dobbin CBE (Chair)

Ms D Lange Mr R Everitt CBE Dr G O’Hare CBE, DL (Chair) Mr J O’Neill

Mr J O’Neill Ms D Fitzsimons Mr J O’Neill Ms C Hayes

Dr E Vernon OBE Ms D Lange Ms C Hayes Ms R Johnston DBE

*plus two member nominated Directors Ald F McCoubrey Cllr S Copeland Dr G O’Hare CBE, DL

Dr E Vernon OBE Ms J Chambers Dr E Vernon OBE The sole function of the Belfast Harbour Pension Fund Ltd is to act Mr K Alexander OBE as Trustee to the Belfast Harbour Belfast Harbour is committed to high The Committee develops strategy on Pension Scheme, operated for the standards of Corporate Governance Ald F McCoubrey behalf of the Board, guides the Board benefit of the Board’s employees. which is under the oversight of the on policy matters, guides the Executive The Directors of the Belfast Harbour Audit & Risk Committee. The primary Cllr C Beattie on Corporate Planning and assists the Pension Fund Ltd comprises of four reference point for corporate Board on matters relating to the legal Board Members, including the CEO, governance is considered to be the The Safety, Environmental & Security status, powers and duties of Belfast as well as two Directors nominated pertinent content within the ’UK Committee advises the Board on all Harbour. by the scheme membership. Corporate Governance Code’ and aspects of safety, environment and taking account of any best practice security throughout the Port and Board Committees guidance relating to the Trust Ports. Harbour Estate, including on-going Responsible Business and obligations under the Port Marine This oversight covers all Financial Stakeholder Committee The Board operates a Committee Safety Code and the operation of Reporting issues, the control Belfast Harbour Police. system with the objective of environment and any governance Membership maintaining high standards of corporate matters: governance and streamlining the work Property and Place Committee Dr D Dobbin CBE (Chair) of the Board. All Board Members are 1. Monitoring the integrity of the Mr J O’Neill also members of at least two of the organisation’s financial statements; The Property and Place Committee Board’s Committees. All Committees considers major land issues not related Cllr C Beattie 2. Reviewing the organisation’s internal report to the Board. to pure port operations within the financial control and risk Commissioners’ land management role. Ms R Johnston DBE management systems; It is particularly concerned with all Commercial Committee Dr E Vernon OBE 3. Monitoring and reviewing the matters relating to regeneration Membership effectiveness of the organisation’s projects including City Quays and Mr K Alexander OBE internal audit function; Titanic Quarter. Dr D Dobbin CBE (Chair) Ms D Fitzsimons 4. Monitoring and reviewing the Membership Mr J O’Neill external auditors’ independence, Cllr S Copeland objectivity and effectiveness. Dr E Vernon OBE (Chair) Ms R Johnston DBE Neither the Chairman of the Board nor The Responsible Business and Dr D Dobbin CBE Dr G O’Hare CBE, DL the CEO are members of this Stakeholder Committee formulates Committee, but they are entitled to Mr J O’Neill and oversees the implementation of Mr R Everitt CBE attend meetings. the organisation’s community and Ms D Lange stakeholder engagement strategies Ms J Chambers Remuneration Committee as well as approving corporate giving. Mr K Alexander OBE Cllr C Beattie It also considers the organisation’s Diversity and Inclusion agenda. Membership Ms D Fitzsimons

The role of the Commercial Committee is Dr D Dobbin CBE (Chair) Cllr S Copeland to consider major commercial projects. Ms C Hayes

Ms R Johnston DBE

The primary duty of the Remuneration Committee is to set policy on remuneration and related matters, and to ensure that such remuneration policy facilitates the employment and retention of senior personnel. The 24 Committee is also responsible for 25 senior management appointments. Corporate Matters

Diversity opportunities for providing feedback to the senior leadership and a fresh Other activities during 2019 included: dynamic approach to celebrating and Belfast Harbour is committed to • Familiarisation visits for emergency marking everyday exemplars living the meeting its statutory duties and and humanitarian responders continues to promote diversity, equality Values in how they perform their roles. of opportunity and good relations • Be Prepared workshops for Harbour through its people culture and Health & Safety tenants to encourage business corporate responsibility activities. continuity planning Both the Equality Scheme and the Belfast Harbour is committed to Disability Action Plan now span 2017 the provision of a safe and healthy • Participation in the development of a – 2022, in relation to our Section 75 working environment and the flood prevention scheme for Belfast Duties of the Equality Act. elimination of accidents. During 2019, Belfast Harbour’s overall Safety • Multi-agency emergency response In 2019 Belfast Harbour shifted focus Management System was validated exercise focused on cruise ships on its Equality, Diversity and Inclusion against the internationally recognised (EDI) strategy from that of equal standard ISO 45001:2018. Crisis Management processes have opportunities to developing an EDI been activated in response to the strategy that focuses on wide-ranging, Belfast Harbour continues to be COVID-19 emergency, with emphasis impactful and proactive initiatives. In an active participant in the Northern on the health and safety of employees 2019 Belfast Harbour was proud to Ireland Safety Group which seeks and stakeholders, and continuity of the assist the Women in Maritime to promote the adoption of best Port operating model. Taskforce, hosting the Northern Ireland health and safety practice throughout local industry. launch of the Taskforce on International Technical Innovation Women’s Day in March. Belfast Harbour was also delighted to retain the Gender Other priorities during 2019 included: at Belfast Harbour Diversity Charter Mark NI, after a Workplace health and wellbeing Corporate successful reassessment. As part of Belfast Harbour’s ambition This award signals Belfast Harbour’s Continued engagement in an industry to create a best-in-class SMART Port, ongoing commitment to EDI with such working group with Port Skills and 2019 saw partnerships established commitment being reviewed by an Safety to develop guidance for safer with BT and Titanic Quarter Limited independent panel on an annual basis. working practices to optimise the 5G opportunity in Matters general and specifically to assist with Culture and Values Vehicle safety within the Harbour Estate CCTV and policing operations and Augmented Reality and Virtual Safety of interactions in operational Reality applications. People, Diversity and Inclusion In 2019 we ran a comprehensive port areas programme to engage our people in With the introduction of a new Belfast Harbour has a dedicated team In 2019 we began to reshape the organisation to enhance understanding the Strategic Plan and Multi-agency emergency Information Services team in 2019, of people who work together to provide our customer facing capability and introduce new skillsets how everyone can play an important response exercises Belfast Harbour has streamlined driving business transformation to support Belfast Harbour role in the successful future of the port customers, tenants and Harbour corporate operations, to include finance in the implementation of the Strategic Plan, delivering business. We also initiated a series of Safety in public areas including and asset management. The on-going Estate visitors with a high level of “A Port for Everyone”. activities to embed the new Values in water safety work on the asset management system our people culture. Employees played ‘Maximo’ for example, will improve service, and who also contribute to a We continue to promote future careers to young people an important role here, with an Business Continuity Operations Engineering ability to diverse range of volunteering activities within local schools, focusing on areas of the talent market employee focus group of maintain and develop the Port’s where there may be a shortage of skills in years to come, representatives from every department in the communities in which they live Belfast Harbour is committed to infrastructure and equipment, including and we have success in using apprentice programmes to meeting regularly. This group developed maintaining effective contingency plans cranes and material handlers. and work. With a strong focus on health nurture skills of young people at the start of their careers. the internal Values brand “Charting our to safeguard business continuity during and wellbeing, including mental health, Belfast Harbour also promotes ongoing work experience Course”, and played a key role in disruptive events and its Business Work also commenced during the year opportunities through the Connect to Success portal influencing collateral and developing employee engagement and assisting our Continuity Management System is with the Port of Rotterdam to scope the provided by the Department for Communities. strong visual reminders and other people to reach their full potential, there certified to the internationally development of a Port Community activities to embrace and embed System and enter into a Memorandum In 2019 Belfast Harbour employees again participated in recognised ISO 22301 standard. is a strong sense of camaraderie where the Values as part of our everyday of Understanding to reflect this. a comprehensive workplace wellbeing survey, providing people understand their roles and how working life. Belfast Harbour Chairs a Harbour an immediate personal and confidential health report to Resilience Forum comprised of key All Belfast Harbour’s investments will they contribute to the overall success participants and useful employee feedback on the The Values act as a guide to articulating stakeholders and emergency consider SMART technology to ensure direction of our future wellbeing strategy and initiatives. the underpinning behaviours throughout of the business. responders, and is an active participant they are future proof and efficient. This complemented the already existing workplace wellbeing the organisation creating a Culture in the following groups: Emphasis is placed on attracting and retaining highly initiatives in place throughout the business, with further plans where all colleagues can flourish and skilled employees and creating an environment where to extend the initiatives based on the survey results. In 2019 support the delivery of the new Belfast Emergency they feel motivated and committed and have a sense we matched well-being initiatives to the demographic profile Strategy successfully. We will measure Preparedness Group of belonging within the team. It is important that Belfast of our employees with different monthly themes linked progress on embedding the values in Harbour continues to invest in developing the skills to our wellbeing calendar, and in May we ran a Mental Health 2020, with an employee survey to Belfast Flooding and Severe and expertise of its people, seeking to maximise job Awareness campaign with a full programme of physical and determine and tailor our People Weather Working Group enrichment and personal development. lifestyle educational seminars and events. Centred Initiatives accordingly going forward. We have reinvigorated the Belfast Resilience Board “Employee Voice” internally with new 26 Belfast First Responders Group 27 Annual Report Consolidated Financial & Accounts 2019 Statements Contents

Trade and Consolidated Financial Shipping Statistics Statements Contents

for the year ended 31 December 2019 2019 2018 (000s) (000s)

Passengers Passengers 1,624 1,549 30 31 Passengers Cars 328 316 Statement of Commissioners’ Independent auditor’s Unit Load Responsibilities report to the Belfast Harbour Freight Vehicles 542 536 Commissioners

Containers 131 128 Bulk Cargo 34 35 Liquid Bulk 2,284 2,362 Consolidated Income Consolidated Statement of Dry Bulk 6,698 7,047 Statement Other Comprehensive Income Break Bulk 318 459

Import Bulk Commodities

Petroleum Products 1,961 2,041

Grain & Feeds 2,114 2,353 36 37

Coal 2,135 2,206 Consolidated Statement BHC Statement of Financial Position of Financial Position Fertilisers 293 321

Timber 39 63

Export Bulk Commodities

Stones 1,612 1,555 38 38

Scrap 329 357 Consolidated Statement BHC Statement of of Changes in Equity Changes in Equity Shipping

Gross Tonnage (000s Tonnes) 112,460 112,778 Number of Arrivals 5,688 5,788 39 40 Consolidated Notes to the Financial Cash Flow Statement Statements

28 29 Annual Report Annual Report & Accounts 2019 & Accounts 2019 Annual Accounts Annual Accounts

The Commissioners are responsible The Commissioners are responsible for Opinion Basis for opinion Statement of for preparing the annual report and keeping adequate accounting records Independent the financial statements in accordance that are sufficient to show and explain In our opinion the financial statements We conducted our audit in Commissioners’ with applicable law and regulations. the Belfast Harbour Commissioners’ auditor’s of the Belfast Harbour Commissioners accordance with International Responsibilites Under that law the Commissioners transactions and disclose with report to the (the ‘parent entity’ or ‘BHC’) and its Standards on Auditing (UK) (ISAs(UK)) have elected to prepare the financial reasonable accuracy at any time the subsidiaries (the ‘group’): and applicable law. Our responsibilities statements in accordance with financial position of the Belfast Harbour Belfast Harbour under those standards are further United Kingdom Generally Accepted Commissioners and enable them to • give a true and fair view of the state described in the auditor’s responsibilities Accounting Practice (United Kingdom ensure that the financial statements Commissioners of the group’s and the parent entity’s for the audit of the financial statements Accounting Standards and applicable comply with the Harbours Act (Northern affairs as at 31 December 2019 section of our report. law), including FRS 102 ‘The Financial Ireland) 1970. They are also responsible Report on the audit of the and of the group’s profit for the Reporting Standard applicable in for safeguarding the assets of the financial statements year then ended; We are independent of the group the United Kingdom and Republic Belfast Harbour Commissioners and and the Belfast Harbour Commissioners of Ireland’. hence for taking reasonable steps for • have been properly prepared in in accordance with the ethical the prevention and detection of fraud accordance with United Kingdom requirements that are relevant to The Commissioners must not approve and other irregularities. Generally Accepted Accounting our audit of the financial statements the financial statements unless they Practice including Financial in the UK, including the FRC’s Ethical are satisfied that they give a true and The Commissioners are responsible Reporting Standard 102 “The Standard, and we have fulfilled fair view of the state of affairs of the for the maintenance and integrity of Financial Reporting Standard our other ethical responsibilities in Belfast Harbour Commissioners and the corporate and financial information applicable in the UK and Republic accordance with these requirements. of the profit or loss of the Belfast included on the Belfast Harbour of Ireland”; and We believe that the audit evidence Harbour Commissioners and its Commissioners’ website. Legislation we have obtained is sufficient and subsidiaries for that period. In preparing in the United Kingdom governing the • have been prepared in accordance appropriate to provide a basis these financial statements, the preparation and dissemination of with the requirements of the for our opinion. Commissioners are required to: financial statements may differ from Harbours Act (Northern Ireland) 1970. legislation in other jurisdictions. Conclusions relating • select suitable accounting policies We have audited the financial and then apply them consistently; statements of the Belfast Harbour to going concern Commissioners which comprise: • make judgments and accounting We are required by ISAs (UK) to estimates that are reasonable • the consolidated income statement; report in respect of the following and prudent; matters where: • the consolidated statement of other • state whether applicable UK comprehensive income; • the Commissioners’ use of the Accounting Standards have been going concern basis of accounting • the consolidated statement followed, subject to any material in preparation of the financial of financial position; departures disclosed and explained statements is not appropriate; or in the financial statements; and • the BHC statement • the Commissioners have not of financial position; • prepare the financial statements on disclosed in the financial statements any identified material uncertainties the going concern basis unless it is • the consolidated statement that may cast significant doubt about inappropriate to presume that the of changes in equity; Belfast Harbour Commissioners will the group of the parent entity’s ability continue in business. • the BHC statement to continue to adopt the going of changes in equity; concern basis of accounting for a period of at least twelve months • the consolidated statement from the date when the financial of cash flows; and statements are authorised for issue.

• the related notes 1 to 22. We have nothing to report in respect of these matters. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) including FRS 102 ‘The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland’. 30 31 Annual Report Independent & Accounts 2019 Auditor’s Report Annual Accounts Annual Accounts

Other information Harbour Commissioners’ ability to • Obtain an understanding of internal Use of our report Matters on which we are continue as a going concern, control relevant to the audit in order The Commissioners are responsible for disclosing, as applicable, matters to design audit procedures that are This report is made solely to required to report by exception the other information. The other related to going concern and using the appropriate in the circumstances, but the Commissioners, as a body, We are required to report to you if, information comprises the information going concern basis of accounting not for the purpose of expressing an in accordance with the Harbours in our opinion: included in the annual report, other unless the Commissioners either intend opinion on the effectiveness of the Act (Northern Ireland) 1970. Our audit than the financial statements and our to liquidate the group or the Belfast entity’s internal control. work has been undertaken so that we • adequate accounting records have auditor’s report thereon. Our opinion on Harbour Commissioners or to cease might state to the Commissioners not been kept by the parent entity, the financial statements does not cover operations, or have no realistic • Evaluate the appropriateness of those matters we are required to state or returns adequate for our audit the other information and, except to the alternative but to do so. accounting policies used and the to them in an auditor’s report and for have not been received from extent otherwise explicitly stated in our reasonableness of accounting no other purpose. To the fullest extent branches not visited by us; or report, we do not express any form of Auditor’s responsibilities estimates and related disclosures permitted by law, we do not accept or made by the Commissioners. assurance conclusion thereon. for the audit of the assume responsibility to anyone other • the parent entity financial statements than the Commissioners, for our audit are not in agreement with the In connection with our audit of the financial statements • Conclude on the appropriateness of work, for this report, or for the opinions accounting records and returns; or financial statements, our responsibility the Commissioners’ use of the going we have formed. is to read the other information and, in Our objectives are to obtain reasonable concern basis of accounting and, • we have not received all the doing so, consider whether the other assurance about whether the financial based on the audit evidence Report on other legal and regulatory information and explanations we information is materially inconsistent statements as a whole are free from obtained, whether a material requirements. Opinion on other matters. require for our audit. with the financial statements or our material misstatement, whether due to uncertainty exists related to events or knowledge obtained in the audit or fraud or error, and to issue an auditor’s conditions that may cast significant In our opinion, based on the work We have nothing to report in respect otherwise appears to be materially report that includes our opinion. doubt on the entity’s ability undertaken in the course of the audit: of these matters. misstated. If we identify such material Reasonable assurance is a high level of to continue as a going concern. If we inconsistencies or apparent material assurance, but is not a guarantee that conclude that a material uncertainty • the information given in the Annual misstatements, we are required an audit conducted in accordance with exists, we are required to draw Report for the financial year for which Kevin Sheehan to determine whether there is a material ISAs (UK) will always detect a material attention in our auditor’s report to the the financial statements are prepared (Senior Statutory Auditor) misstatement in the financial misstatement when it exists. related disclosures in the financial is consistent with the financial statements or a material misstatement Misstatements can arise from fraud or statements or, if such disclosures are statements; and For and on behalf of of the other information. If, based on error and are considered material if, inadequate, to modify our opinion. Deloitte (NI) Limited • the Annual Report has been prepared the work we have performed, we individually or in the aggregate, they Our conclusions are based on the Statutory Auditor in accordance with applicable legal conclude that there is a material could reasonably be expected to audit evidence obtained up to the requirements. Belfast, Northern Ireland misstatement of this other information, influence the economic decisions of date of the auditor’s report. However, 8/6/20 users taken on the basis of these future events or conditions may we are required to report that fact. In the light of the knowledge and financial statements. cause the entity (or where relevant, understanding of the group and the We have nothing to report in respect the group) to cease to continue as a parent entity and its environment of these matters. As part of an audit in accordance with going concern. ISAs (UK), we exercise professional obtained in the course of the audit, we have not identified any material Responsibilities of judgment and maintain professional • Evaluate the overall presentation, scepticism throughout the audit. We structure and content of the financial misstatements in the Annual Report. Commissioners also: statements, including the disclosures, and whether the financial statements As explained more fully in the • Identify and assess the risks of represent the underlying transactions Commissioners’ responsibilities material misstatement of the financial and events in a manner that achieves statement, the Commissioners are statements, whether due to fraud or fair presentation. responsible for the preparation of the error, design and perform audit financial statements and for being procedures responsive to those risks, We communicate with those charged satisfied that they give a true and fair and obtain audit evidence that is with governance regarding, among view, and for such internal control as sufficient and appropriate to provide other matters, the planned scope and the Commissioners determine is a basis for our opinion. The risk of timing of the audit and significant audit necessary to enable the preparation of not detecting a material misstatement findings, including any significant financial statements that are free from resulting from fraud is higher than for deficiencies in internal control that the material misstatement, whether due to one resulting from error, as fraud may auditor identifies during the audit. fraud or error. involve collusion, forgery, intentional omissions, misrepresentations, or the In preparing the financial statements, override of internal control. the Commissioners are responsible for assessing the group’s and the Belfast

32 33 Annual Report Annual Report & Accounts 2019 & Accounts 2019 Annual Accounts Annual Accounts

Consolidated 2019 2018 Consolidated 2019 2018 income Note (£’000) (£’000) statement (£’000) (£’000) statement for the Turnover 5 65,929 68,789 of other Profit for the financial year Overleaf 25,196 31,409 year ended 31 Net operating expenses (35,330) (32,802) comprehensive Actuarial gain/(loss) on defined benefit pensions 21 1,294 (604) Operating Profit 30,599 35,984 Deferred tax (debit)/credit associated December 2019 income for the 18 (220) 102 with defined benefit pensions Surplus on revaluation of investment properties 12 324 2,021 year ended 31 Total comprehensive income 26,270 30,907 Profit before taxation and similar income 30,923 38,005 December 2019 Investment income 6 725 618

Profit before taxation 7 31,648 38,623

Tax on profit 10 (6,452) (7,214)

Profit for the financial year 25,196 31,409

All activities derive from continuing operations.

Explanation of “Underlying” Profit before Taxation

2019 2018

(£’000) (£’000)

Profit before taxation as reported 31,648 38,623

Less: Surplus on revaluation of investment properties (324) (2,021)

“Underlying” profit before taxation 31,324 36,602

34 35 Annual Report Annual Report & Accounts 2019 & Accounts 2019 Annual Accounts Annual Accounts

Consolidated 2019 2018 BHC Statement 2019 2018 statement Note (£’000) (£’000) of Financial Note (£’000) (£’000) of financial Fixed assets Position at 31 Fixed assets position at 31 Tangible assets 12 502,819 472,269 December 2019 Tangible assets 12 506,711 472,562 December 2019 Investment in Associate 13 515 - Investments 13 515 - 503,334 472,269 507,226 472,562

Current assets Current assets

Stocks 740 634 Stocks 724 619

Debtors: due within one year 14 19,575 20,157 Debtors: due within one year 14 19,511 20,171

Debtors: due greater than one year 14 6,601 5,441 Debtors: due greater than one year 14 7,216 6,069

Investments 15 52,850 59,950 Investments 15 52,850 59,950

Cash at bank and in hand 2,646 2,554 Cash at bank and in hand 2,077 2,088

82,412 88,736 82,378 88,897

Creditors: Amounts falling due within one year 16 (20,308) (22,934) Creditors: Amounts falling due within one year 16 (19,757) (22,352)

Net current assets 62,104 65,802 Net current assets 62,621 66,545

Total assets less current liabilities 565,438 538,071 Total assets less current liabilities 569,847 539,107

Creditors: Amounts falling due after more than one year 17 (25,499) (27,051) Creditors: Amounts falling due after more than one year 17 (25,499) (27,051)

Provisions for liabilities 18 (25,041) (22,392) Provisions for liabilities 18 (25,576) (22,487)

Net assets 514,898 488,628 Net assets 518,772 489,569

Reserves Reserves

Profit & Loss Account 422,700 396,754 Profit & Loss Account 423,756 397,741

Reserves 92,198 91,874 Revaluation Reserve 95,016 91,828

514,898 488,628 518,772 489,569

The consolidated financial statements of Belfast Harbour Commissioners were approved on The profit of BHC for the financial year was £28,129k (2018: £32,285k). 21st April, 2020 by the Commissioners and signed on their behalf by: The consolidated financial statements of Belfast Harbour Commissioners were approved by the Commissioners on 21st April, 2020 and signed on their behalf by:

Dr D Dobbin CBE J O’Neill Dr D Dobbin CBE J O’Neill Chairman Chief Executive Chairman Chief Executive

R Johnston DBE J M Bullick R Johnston DBE J M Bullick Commissioner Finance Director Commissioner Finance Director

36 37 Annual Report Annual Report & Accounts 2019 & Accounts 2019 Annual Accounts Annual Accounts

2019 2018 Consolidated Revaluation Profit & Loss Consolidated Total Statement Reserve Account Cash Flow (£’000) (£’000) Cash flows from operating activities of Changes in (£’000) (£’000) (£’000) Statement for the Operating Profit 30,599 35,984 Equity at 31 Balance at 31 December 2017 89,853 367,868 457,721 Year Ended 31 Adjustments for: Profit for the financial year - 31,409 31,409 December 2019 December 2019 Depreciation 11,397 10,360 Transfer to the revaluation reserve 2,021 (2,021) - Impairment 100 400 Other comprehensive income for the year - (502) (502) Release of EU grants (1,124) (1,303) Balance at 31 December 2018 91,874 396,754 488,628 Loss on disposal of fixed assets (26) 3 Profit for the financial year - 25,196 25,196 Increase in maintenance dredging provision 1,190 1,101 Transfer to the revaluation reserve 324 (324) - Pension Charge 254 281 Other comprehensive income for the year - 1,074 1,074 Pension contributions in cash (166) (161) Balance at 31 December 2019 92,198 422,700 514,898 Decrease in stocks (105) (9)

Decrease/(increase) in debtors due within 1 year 543 4,658

(Increase)/decrease in debtors due greater than 1 year 154 (724)

Increase/(decrease) in creditors due within 1 year 151 2,931

BHC Statement Revaluation Profit & Loss Cash from operations 42,967 53,521 Total Reserve Account of Changes in Corporation tax paid (5,853) (7,372) Equity at 31 (£’000) (£’000) (£’000) Net cash generated from operating activities 37,114 46,149

December 2019 Balance at 31 December 2017 89,853 367,933 457,786 Cash flows from investing activities Profit for the financial year - 32,285 32,285 Purchase of tangible assets (44,820) (46,578)

Transfer to the revaluation reserve 1,975 (1,975) - Proceeds from land transactions - -

Other comprehensive income for the year - (502) (502) Net realisation from sale of tangible assets 41 118

Balance at 31 December 2018 91,828 397,741 489,569 Interest received 657 450

Profit for the financial year - 28,129 28,129 Net cash from investing activities (44,122) (46,010)

Transfer to the revaluation reserve 3,188 (3,188) - Net (decrease)/ increase in cash (7,008) 139

Other comprehensive income for the year - 1,074 1,074 Cash and cash equivalents at beginning of year 62,504 62,365

Balance at 31 December 2019 95,016 423,756 518,772 Cash and cash equivalents at end of year 55,496 62,504

Components of cash and cash equivalents

Cash at bank and in hand 2,646 2,554

Investments 52,850 59,950

Cash and cash equivalents 55,496 62,504

38 39 Annual Report Notes to the Consolidated & Accounts 2019 Financial Statements Annual Accounts Annual Accounts

1. Statutory Information Basis of consolidation Tangible fixed assets Reserves transfers to another party substantially Notes to the – operational assets all of the risks and rewards of Belfast Harbour is a Statutory The financial statements consolidate The surplus arising on the revaluation of ownership of the financial asset, or c) Consolidated Corporation first constituted under the financial statements of the Harbour Operational assets are stated at cost, investment properties is recognised in the Group, despite having retained Financial The Belfast Harbour Act 1847 and its subsidiary undertakings drawn net of depreciation and any provision the income statement and then some, but not all, significant risks and and domiciled in Northern Ireland. up to 31 December each year. for impairment. The cost of operational transferred to the revaluation reserve rewards of ownership, has transferred Statements for The principal place of business is fixed assets, which excludes estate (the amount transferred is stated before control of the asset to another party. Harbour Office, Corporation Square, Going Concern property, comprises the purchase price related deferred tax). the Year Ended 31 Belfast, BT1 3AL. of assets acquired, net of capital Financial liabilities are derecognised The financial statements have been contributions received (excluding EU Financial instruments only when the obligation specified in December 2019 As a Statutory Corporation, prepared using the going concern basis grants which are shown separately the contract is discharged, cancelled Belfast Harbour is not bound by the of accounting. The Group has within creditors). Financial assets and financial liabilities or expires. Companies Act 2006 (Strategic Report considerable financial resources, are recognised when the Group and Directors’ Report) Regulations together with long-term contracts with No provision is made for depreciation becomes a party to the contractual Inventories 2013. However, consistent with a number of customers and a presence of land nor assets under construction. provisions of the instrument. corporate entities of a similar size across different business sectors. As a Other operational fixed assets are Inventories are valued at cost to the Harbour, the Commissioners consequence, the Commissioners depreciated by the straight-line method Financial liabilities and equity with provision for any obsolete have adopted the main provisions believe that the organisation is well according to their effective economic instruments are classified according to or defective content. of the Act and therefore present a placed to manage its business risks lives as follows: the substance of the related contractual strategic report. The principal activities successfully despite the current Years arrangements. An equity instrument is Impairment of assets of the Harbour and its subsidiaries uncertain economic outlook. The any contract that evidences a residual Capital dredging 35 to 50 Assets, other than those measured at (the Group) and the nature of the Commissioners have considered the interest in the assets of the Group after deducting all of its liabilities. fair value, are assessed for indicators of Group’s operations are set out in possible financial impact of COVID-19, Dock structures 12 to 50 impairment at each balance sheet date. the strategic report. and whilst the situation continues to All financial assets and liabilities are If there is objective evidence of develop, the Commissioners have Buildings 10 to 50 initially measured at transaction price impairment, an impairment loss is concluded that the Group has sufficient 2. Compliance with Roads 5 to 50 (including transaction costs), except for recognised in profit or loss as financial resources to operate for at Accounting Standards those financial assets classified as at described below. least twelve months from the date of Plant & machinery 3 to 40 fair value through profit or loss, which approval of these financial statements. The financial statements have been Fixtures & fittings 5 are initially measured at fair value Non-financial assets prepared in accordance with FRS 102. After making enquiries, the (which is normally the transaction price There were no material departures from Commissioners have a reasonable Residual value represents the estimated excluding transaction costs), unless the An asset is impaired where there is that standard. expectation that adequate resources amount which would currently be arrangement constitutes a financing objective evidence that, as a result of are available to continue in operational obtained from disposal of an asset, transaction. If an arrangement one or more events that occurred after 3. Accounting policies existence for the foreseeable future. after deducting estimated costs of constitutes a financing transaction, initial recognition, the estimated Accordingly, they continue to adopt the disposal, if the asset were already of the financial asset or financial liability recoverable value of the asset has been reduced. The recoverable amount of an Basis of preparation going concern basis in preparing the the age and in the condition expected is measured at the present value of annual report and accounts. at the end of its useful life. the future payments discounted at asset is the higher of its fair value less The financial statements have been a market rate of interest for a similar costs to sell and its value in use. prepared under the historical cost Tangible fixed assets debt instrument. The recoverable amount of goodwill is convention, modified to include certain – estate property derived from measurement of the items at fair value, and in accordance Financial assets and liabilities are only present value of the future cash flows with Financial Reporting Standard 102 Estate property primarily represents offset in the statement of financial of the cash-generating units (CGUs) of (FRS 102) issued by the Financial land let to tenants who are not position when, and only when there which the goodwill is a part. Reporting Council. associated with port operations. exists a legally enforceable right to set off the recognised amounts and the This property falls within the FRS Any impairment loss in respect of The functional currency of Belfast Group intends either to settle on a net 102 Section 16 definition of investment a CGU is allocated first to the goodwill Harbour Commissioners is pounds basis, or to realise the asset and settle property and so is not depreciated attached to that CGU, and then to sterling because that is the currency of the liability simultaneously. but is revalued annually and included other assets within that CGU on a the primary economic environment in in the balance sheet at fair value. pro–rata basis. which BHC and its subsidiaries (the Revaluation surpluses or deficits are Financial assets are derecognised when Group) operate. The consolidated recognised in the Income Statement. and only when a) the contractual rights financial statements are also presented Deferred tax is provided on these gains to the cash flows from the financial in pounds sterling. Foreign operations at the rate expected to apply when the asset expire or are settled, b) the Group are included in accordance with the property is sold. policies set out below.

40 41 Annual Report Notes to the Consolidated & Accounts 2019 Financial Statements Annual Accounts Annual Accounts

Where indicators exist for a decrease in A provision is recognised for those Deferred tax liabilities are recognised Turnover Pension scheme assets are measured or constructive) as a result of a past impairment loss previously recognised matters for which the tax determination for timing differences arising from at fair value and liabilities are measured event, it is probable that the Group will for assets other than goodwill, the prior is uncertain but it is considered investments in subsidiaries and Turnover is stated net of VAT and trade on an actuarial basis using the be required to settle that obligation and impairment loss is tested to determine probable that there will be a future associates, except where the Group is discounts and is recognised when the projected unit credit method. The a reliable estimate can be made of the reversal. An impairment loss is reversed outflow of funds to a tax authority. The able to control the reversal of the timing significant risks and rewards are actuarial valuations are obtained at amount of the obligation. on an individual impaired asset to the provisions are measured at the best difference and it is probable that it will considered to have been transferred least triennially and are updated at each extent that the revised recoverable estimate of the amount expected to not reverse in the foreseeable future. to the buyer. balance sheet date. The amount recognised as a provision value does not lead to a revised become payable. The assessment is is the best estimate of the carrying amount higher than the based on the judgement of tax Deferred tax is measured using the tax Turnover comprises revenue from For defined contribution schemes the consideration required to settle the carrying value had no impairment been professionals within the Company rates and laws that have been enacted charges to port users, from rents of amount charged to the profit and loss present obligation recognised. Where a reversal of supported by previous experience in or substantively enacted by the balance both operational and estate property account in respect of pension costs at the balance sheet date, taking into impairment occurs in respect of a CGU, respect of such activities and in certain sheet date that are expected to apply and from the hotel. Turnover is and other retirement benefits is the account the risks and uncertainties the reversal is applied first to the assets cases based on specialist independent to the reversal of the timing difference. recognised in the period in which it is contributions payable in the year. surrounding the obligation. Where a of the CGU, except for goodwill, on a tax advice. Deferred tax relating to non-depreciable earned. Shipping income is earned in Differences between contributions provision is measured using the cash pro-rata basis. Impairment of goodwill property measured using the the period in which it falls due i.e. in payable in the year and contributions flows estimated to settle the present is never reversed. Deferred tax is recognised in respect of revaluation model and investment accordance with the date on which a actually paid are shown as either obligation, its carrying amount is the all timing differences that have property is measured using the tax particular ship docks in the Port of accruals or prepayments in the present value of those cash flows Financial assets originated but not reversed at the rates and allowances that apply to sale Belfast. Rental and storage income is balance sheet. (when the effect of the time value of balance sheet date where transactions of the asset. In other cases, the recognised for the period January 2019 money is material). For financial assets carried at amortised or events that result in an obligation to measurement of deferred tax liabilities to December 2019. To the extent that Other long-term employee benefits are cost, the amount of an impairment is pay more tax in the future or a right to and assets reflects the tax rental and storage income is received in measured at the present value of the When some or all of the economic the difference between the asset’s pay less tax in the future have occurred consequences that would follow from 2019 but relates to 2020 it is treated as benefit obligation at the reporting date. benefits required to settle a provision carrying amount and the present value at the balance sheet date. Timing the manner in which the Group deferred income. Rental and storage are expected to be recovered from a of estimated future cash flows, differences are differences between the expects, at the end of the reporting income relating to 2019 but not Leases third party, a receivable is recognised discounted at the financial asset’s Group’s taxable profits and its results period, to recover or settle the carrying received until 2020 is accrued for in the as an asset if it is virtually certain that original effective interest rate. as stated in the financial statements amount of its assets and liabilities. financial statements. The Group as leasee reimbursement will be received and the amount of the receivable can be that arise from the inclusion of gains Rentals under operating leases are For financial assets carried at cost less Where items recognised in other Employee benefits measured reliably. and losses in tax assessments in charged on a straight-line basis over impairment, the impairment loss is the comprehensive income or equity are periods different from those in which the lease term, even if the payments difference between the asset’s carrying chargeable to or deductible for tax The Commissioners operate both Investments they are recognised in the financial are not made on such a basis. Benefits amount and the best estimate of the purposes, the resulting current or a pension scheme and a defined statements. received and receivable as an incentive amount that would be received for deferred tax expense or income is contribution scheme in the UK, the Fixed asset investments, comprising to sign an operating lease are similarly the asset if it were to be sold at the Unrelieved tax losses and other presented in the same component of assets of which are held in a separate shares in subsidiary undertakings, spread on a straight-line basis over the reporting date. deferred tax assets are recognised only comprehensive income or equity as the trustee-administered fund. are stated at cost less provision lease term. to the extent that, on the basis of all transaction or other event that resulted for impairment. Where indicators exist for a decrease in available evidence, it can be regarded in the tax expense or income. For defined benefit schemes the The Group as leasor Current asset investments are stated impairment loss, and the decrease can as more likely than not that there will be amounts charged to operating profit are be related objectively to an event the costs arising from employee at lower of cost and net realisable suitable taxable profits from which the Current tax assets and liabilities are Rental income from operating leases occurring after the impairment was services rendered during the period and value. Investments comprise monies on future reversal of the underlying timing offset only when there is a legally is recognised on a straight-line basis recognised, the prior impairment loss is the cost of plan introductions, benefit short term deposits. differences can be deducted. enforceable right to set off the amounts over the term of the relevant lease. tested to determine reversal. An changes, settlements and curtailments. and the Group intends either to settle Initial direct costs incurred in impairment loss is reversed on an They are included as part of staff costs. Investment in Associate When the amount that can be deducted on a net basis or to realise the asset negotiating and arranging an operating individual impaired financial asset to the for tax for an asset (other than goodwill) and settle the liability simultaneously. The net interest cost on the net defined lease are added to the carrying amount An associate is an entity over which the extent that the revised recoverable that is recognised in a business benefit liability is charged to profit or of the leased asset and recognised group has significant influence. value does not leadto a revised carrying combination is less (more) than the Deferred tax assets and liabilities are loss and included within finance costs. on a straight-line basis over the Significant influence is the power to amount higher than the carrying value value at which it is recognised, a offset only if: a) the Group has a legally Remeasurement comprising actuarial lease term. participate in the financial and had no impairment been recognised. deferred tax liability (asset) is enforceable right to set off current tax gains and losses and the return on operating policy decisions of the recognised for the additional tax that assets against current tax liabilities; and scheme assets (excluding amounts EU grants investee but is not control or joint Taxation will be paid (avoided) in respect of that b) the deferred tax assets and deferred included in net interest on the net control over these policies. The results difference. Similarly, a deferred tax tax liabilities relate to income taxes defined benefit liability) are recognised EU grants relating to tangible fixed Current tax, including UK corporation and assets and liabilities are asset (liability) is recognised for the levied by the same taxation authority on immediately in other comprehensive assets are included within deferred tax and foreign tax, is provided at incorporated in these consolidated additional tax that will be avoided (paid) either the same taxable entity or income. income and are recognised over the amounts expected to be paid (or financial statements using the cost because of a difference between the different taxable entities which intend expected useful economic life. recovered) using the tax rates and laws model. The investments in associates value at which a liability is recognised either to settle current tax liabilities and Defined benefit schemes are funded, that have been enacted or substantively with the assets of the scheme held are measured at cost less any and the amount that will be assessed assets on a net basis, or to realise the Provisions enacted by the balance sheet date. accumulated impairment losses. for tax. The amount attributed to assets and settle the liabilities separately from those of the Group, goodwill is adjusted by the amount of simultaneously, in each future period in in separate trustee administered funds. Provisions are recognised when the deferred tax recognised. which significant amounts of deferred Group has a present obligation (legal tax liabilities or assets are expected to 42 be settled or recovered. 43 Annual Report Notes to the Consolidated & Accounts 2019 Financial Statements Annual Accounts Annual Accounts

4. Critical accounting specifically in relation to environmental 5. Turnover conditions, estimated rental values 2019 2018 judgements and key sources and estimated rental yields. Turnover is analysed as follows of estimation uncertainty (£’000) (£’000) The surplus arising on the revaluation Port revenue 47,477 54,141 In the application of the Group’s of investment properties is recognised accounting policies, which are in the income statement and then Estate revenue 12,876 11,097 described in note 3, the Commissioners transferred to the revaluation reserve. Hotel revenue 5,576 3,548 are required to make judgements (other than those involving estimations) that Dredging provision 65,929 68,786 have a significant impact on the amounts recognised and to make The provision for maintenance dredging estimates and assumptions about the reflects the Commissioners’ obligation carrying amounts of assets and to maintain channels and berths within 6. Investment Income liabilities that are not readily apparent the Port at a minimum depth. Dredging 2019 2018 from other sources. costs are dependent on a range of factors including environmental (£’000) (£’000) The estimates and associated conditions, volumes of material to Interest receivable 617 495 assumptions are based on historical be dredged and the nature of the experience and other factors that are dredging equipment. Other finance income 108 123 considered to be relevant. Actual 725 618 results may differ from these estimates. Pensions

The estimates and underlying The liability of defined benefit pension assumptions are reviewed on an plans are determined using actuarial ongoing basis. Revisions to accounting valuations. The actuarial valuation 7. Profit before Taxation estimates are recognised in the period involves making assumptions about 2019 2018 in which the estimate is revised if the discount rates, future salary increases, Profit before taxation is stated (£’000) (£’000) revision affects only that period, or in mortality rates and future inflation rates. after charging/ (crediting) the period of the revision and future Due to the complexity of the valuation, Depreciation of tangible fixed assets (see note 12) 11,397 10,361 periods if the revision affects both the underlying assumptions and the Impairment of tangible fixed assets (see note 12) 100 400 current and future periods. long term nature of these plans, such estimates are subject to uncertainty. Amortisation of EU grants (see notes 16 and 17) (1,124) (1,304) Critical judgements in applying the Group’s accounting policies Tangible fixed assets Loss on disposal of fixed assets (26) 3

The following are the critical Tangible fixed assets are depreciated Foreign exchange loss/(gain) 34 (46) judgements, apart from those involving over their useful lives taking into Fees payable to the auditor and its 40 38 estimations (which are dealt with account residual values where associates for the audit of the annual accounts separately below), that the appropriate. The actual lives of the Commissioners have made in assets and residual values are Fees payable to the auditor and its the process of applying the Group’s assessed annually and may vary associates for other services to the Group accounting policies and that have the depending on a number of factors. The audit of the subsidiaries 8 8 most significant effect on the amounts recognised in the financial statements. Total audit fees 48 46

Revaluation of investment Taxation and compliance services 22 24 properties Other taxation advisory services 35 97

Estate property, including certain land Total non-audit fees 57 121 reclassified as estate property in 2001, was valued by the Commissioners as at 31 December 2019 at fair value. Fees payable to Deloitte and its associates for non-audit services to BHC are not There are elements of uncertainty in required to be disclosed because the consolidated financial statements are required to the underlying assumptions of the disclose such fees on a consolidated basis. methodology used to determine the fair value of investment property,

44 45 Annual Report Notes to the Consolidated & Accounts 2019 Financial Statements Annual Accounts Annual Accounts

8. Pilotage 10. Tax and profit 2019 2018 2019 2018 The tax charge comprises: (£’000) (£’000) (£’000) (£’000) Income from pilotage (included in turnover) Current tax and profit

Pilotage services 2,277 2,176 UK corporation tax 5,635 7,098

Ships navigating under pilotage exemption certificates 180 175 Adjustments in respect of previous periods (640) (1,446)

2,457 2,351 Total current tax 4,995 5,652

Expenditure on provision of pilotage (included in net operating expenses) Deferred tax

Providing the services of pilots 2,070 1,887 Origination and reversal of timing differences 1,442 1,077

Providing, maintaining and operating pilot boats 439 338 Adjustment in respect of previous periods 167 599

2,509 2,225 Effect of decrease in tax rate (152) (114)

(Loss)/Gain against port operational costs (52) 126 Total deferred tax (see note 18) 1,457 1,562

(net operating expenses) 2,457 2,351 Total tax on profit 6,452 7,214

The standard rate of tax applied to reported profit is 19% (2018: 19%).

The differences between the total tax charge shown above and the amount calculated 9. Employee Numbers The average number of employees during the year was 212 (2018:201). by applying the standard rate of UK corporation tax to the profit before tax is as follows:

2019 2018

(£’000) (£’000)

Group profit before tax 31,648 38,623

Tax on Group profit at standard UK 6,013 7,338 corporation tax rate of 19% (2018: 19%)

Effects of

- Expenses not deductible for tax purposes 139 268

- Non-qualifying depreciation 925 864

- Entitlement indexation allowances - (295)

- Effect of decrease in tax rate (152) (114)

- Adjustments to tax charge in respect of previous years (473) (847)

Group total tax charge for year 6,452 7,214

11. Profit attributed to BHC As permitted by section 408 of the Companies Act 2006, no separate income statement or statement of other comprehensive income is presented in respect of BHC. The profit attributable to BHC is the footnote to BHC’s balance sheet.

46 47 Annual Report Notes to the Consolidated & Accounts 2019 Financial Statements Annual Accounts Annual Accounts

12. Assets in the Assets in the Consolidated Capital Dock Land & Plant & Operational Estate Estate Total Total Roads Course of Course of Dredging Structures Buildings Machinery Assets Property Assets 2019 2018 Tangible Construction Construction Fixed Assets (£’000) (£’000) (£’000) (£’000) (£’000) (£’000) (£’000) (£’000) (£’000) (£’000) (£’000) (£’000)

Cost or Valuation

At 1 January 15,099 223,367 105,352 30,416 88,149 14,968 477,351 186,488 15,335 201,823 679,174 629,879

Reclassified - 10,581 12,759 - 7,316 (16,488) 14,168 202 (14,370) (14,168) - -

Revaluation adjustment ------324 - 324 324 2,021

Additions - 439 3,236 899 1,320 28,417 34,311 1,671 5,757 7,428 41,739 51,772

Disposals - - - - (170) - (170) - - - (170) (4,498)

At 31 December 15,099 234,387 121,347 31,315 96,615 26,897 525,660 188,685 6,722 195,407 721,067 679,174

Depreciation

At 1 January (6,730) (83,990) (28,175) (17,901) (69,890) - (206,687) (219) - (219) (206,906) (200,523)

Reclassified ------

Depreciation charge (249) (3,933) (2,572) (926) (3,717) - (11,397) - - - (11,397) (10,361)

Impairment - - - - (100) - (100) - - - (100) (400)

Disposals - - - - 154 - 154 - - - 154 4,378

At 31 December (6,979) (87,923) (30,747) (18,827) (73,553) - (218,029) (219) - (219) (218,248) (206,906)

Balance sheet value

At 31 December 2018 8,369 139,377 77,177 12,515 18,259 14,968 270,665 186,269 15,335 201,604 472,269

At 31 December 2019 8,120 146,464 90,600 12,488 23,062 26,897 307,631 188,466 6,722 195,188 502,819

The Harbour Estate has been classified as estate property on the basis that it is currently substantially let to tenants who are not associated with port operations. Estate property, including certain land reclassification as estate property in 2001, was valued by the Commissioners as at 31 December 2019 at fair value.

The surplus arising on revaluation has been taken to the property revaluation reserve. Land and Buildings includes £13,301,600 (2018: £12,664,261) for land which is not depreciated. The amounts above are stated net of capital contributions (excluding EU grants). Included in the balance sheet value at 31 December 2019 are capital contributions amounting to £233,271 (2018: £246,817).

48 49 Annual Report Notes to the Consolidated & Accounts 2019 Financial Statements Annual Accounts Annual Accounts

12. BHC Assets in the Assets in the Tangible Capital Dock Land & Plant & Operational Estate Estate Total Total Roads Course of Course of Dredging Structures Buildings Machinery Assets Property Assets 2019 2018 fixed assets Construction Construction

(£’000) (£’000) (£’000) (£’000) (£’000) (£’000) (£’000) (£’000) (£’000) (£’000) (£’000) (£’000)

Cost or Valuation

At 1 January 15,099 223,367 88,261 30,416 80,743 14,967 452,853 210,734 15,335 226,069 678,922 629,879

Reclassified - 10,581 12,759 - 7,316 (16,488) 14,168 202 (14,370) (14,168) - -

Revaluation adjustment ------3,188 - 3,188 3,188 1,975

Additions - 439 2,789 899 1,375 28,417 33,919 2,062 5,757 7,819 41,738 51,566

Disposals - - - - (170) - (170) - - - (170) (4,498)

At 31 December 15,099 234,387 103,809 31,315 89,264 26,896 500,770 216,186 6,722 222,908 723,678 678,922

Depreciation

At 1 January (6,730) (83,990) (27,925) (17,901) (69,594) - (206,141) (219) - (219) (206,360) (200,523)

Reclassified ------

Depreciation charge (249) (3,933) (2,230) (926) (3,323) - (10,661) - - - (10,661) (9,815)

Impairment - - - - (100) - (100) - - - (100) (400)

Disposals - - - - 154 - 154 - - - 154 4,378

At 31 December (6,979) (87,923) (30,155) (18,827) (72,863) - (216,748) (219) - (219) (216,967) (206,360)

Balance sheet value

At 31 December 2018 8,369 139,377 60,336 12,515 11,149 14,967 246,712 210,515 15,335 225,850 472,562

At 31 December 2019 8,120 146,464 73,654 12,488 16,401 26,896 284,022 215,967 6,722 222,689 506,711

The Harbour Estate has been classified as estate property on the basis that it is currently substantially let to tenants who are not associated with port operations. Estate property, including certain land reclassified as estate property in 2001, was valued by the Commissioners as at 31 December 2019 at fair value.

The surplus arising on revaluation has been taken to the property revaluation reserve. Land and Buildings includes £12,874,346 (2018: £12,237,007) for land which is not depreciated. The amounts above are stated net of capital contributions (excluding EU grants). Included in the balance sheet value at 31 December 2019 are capital contributions amounting to £233,271 (2018: £246,817).

50 51 Annual Report Notes to the Consolidated & Accounts 2019 Financial Statements Annual Accounts Annual Accounts

13. Fixed asset 15. Investments BHC Group BHC investments 2019 2018 2019 2018 2019 2018

(£’000) (£’000) (£’000) (£’000) (£’000) (£’000)

Investment in Associate 515 - Short term deposits 52,850 59,950 52,850 59,950

Total 515 -

The Investment in Associate is held at cost at 31 December 2019 (note 22) 16. Creditors – Subsidiary undertakings - - Group BHC amounts falling due Total - - within one year 2019 2018 2019 2018 BHC has investments in the following subsidiary undertakings: (£’000) (£’000) (£’000) (£’000)

Registered office address Holding % Trade creditors 2,741 293 2,603 174

Trading Entities Corporation tax 701 1,559 656 1,559

Harbour Office, Corporation Ordinary Other taxation and social security 382 361 280 263 BHC Estates Limited 100 Square, Belfast, BT1 3AL Shares Other creditors 13,237 17,693 13,147 17,604 Harbour Office, Corporation Ordinary City Quays Hotel Limited 100 EU grants (see note 7) 1,124 890 1,124 890 Square, Belfast, BT1 3AL Shares Accruals and deferred income 2,123 2,138 1,947 1,862 Dormant Entities 20,308 22,934 19,757 22,352 Harbour Office, Corporation Ordinary City Quays Car Park Limited 100 Square, Belfast, BT1 3AL Shares

Belfast Harbour Harbour Office, Corporation Ordinary 100 Film Studios Limited Square, Belfast, BT1 3AL Shares 17. Creditors – Group BHC amounts falling due 14. Debtors 2019 2018 2019 2018 Group BHC after more than one year (£’000) (£’000) (£’000) (£’000) 2019 2018 2019 2018 Other creditors 2,446 2,641 2,446 2,641 (£’000) (£’000) (£’000) (£’000) EU grants (see note 7) 23,053 24,410 23,053 24,410 Amounts falling due within one year 25,499 27,051 25,499 27,051 Trade debtors 9,283 9,066 9,213 8,993

Amounts owed by Group undertakings - - 97 99 Pilots National Pension Fund

Other debtors 9,356 10,331 9,356 10,353 The Belfast Harbour Commissioners’ share of the PNPF liabilities has been determined Prepayments and accrued income 936 760 845 726 by the PNPF Trust Company and was notified to the Commissioners on 29 October 2012. The appropriate obligation of £2.6m, (2018: £2.8m) based on the currently 19,575 20,157 19,511 20,171 available information, has been reflected in the accounts and included within other Amounts falling due after more than one year: creditors. This has been split between creditors: due within one year of £195k (£2018: £188k) and creditors: due after one year of £2,446k (2018: £2,641k). The majority of Other debtors 1,542 1,696 2,157 2,324 this obligation refers to “Orphan Liabilities” which do not relate to retirement benefit obligations of employment with Belfast Harbour Commissioners. Pension asset (note 21) 5,059 3,745 5,059 3,745

6,601 5,441 7,216 6,069

Other debtors due within one year include an amount owed by the Belfast Harbour Commissioners Pension Scheme of £6,519k at 31 December 2019 (2018: £8,731k). 52 53 Annual Report Notes to the Consolidated & Accounts 2019 Financial Statements Annual Accounts Annual Accounts

18. Provisions for 19. Financial instruments a) Overview Deferred Maintenance Total liabilities Taxation Dredging This note provides details of the entity’s financial instruments. Except where otherwise stated, the disclosures in this note exclude retirement benefit assets and obligations. (£’000) (£’000) (£’000) Liabilities or assets that are not contractual (such as income taxes, prepayments, Group provisions and deferred income) are not financial assets or financial liabilities and accordingly are excluded from the disclosure provided in this note. At 1 January 20,670 1,722 22,392 Details of the significant accounting policies and methods adopted for each class of Adjustment in respect of prior periods 167 - 167 financial asset and financial liability are disclosed in the accounting policies note.

Charged to income statement 1,290 1,190 2,480 b) Categories and carrying value of financial instruments

Charged to other comprehensive income 220 - 220 The carrying values of the Group and BHC’s financial assets and liabilities are summarised by category below. Amounts applied - (218) (218)

At 31 December 2019 22,347 2,694 25,041 Group BHC

BHC 2019 2018 2019 2018 (£’000) (£’000) (£’000) (£’000) At 1 January 20,765 1,722 22,487 Financial assets Adjustment in respect of prior periods 72 - 72 Investments 52,850 59,950 52,850 59,950 Charged to income statement 1,825 1,190 3,015 Cash 2,646 2,554 2,077 2,088

Charged to other comprehensive income 220 - 220 Loans and receivables 20,181 21,093 20,822 21,769 Amounts applied - (218) (218) 75,677 83,597 75,749 83,807

At 31 December 2019 22,882 2,694 25,576 Financial liabilities

Accruals and deferred income 16,362 18,349 16,031 18,041 Deferred Tax Deferred tax is provided as follows: 2019 2018 16,362 18,349 16,031 18,041

(£’000) (£’000) At the end of the reporting period, there are no significant concentrations of credit risk Fixed asset timing differences 7,744 6,500 for loans and receivables. The carrying amount reflected above represents the entity’s maximum exposure to credit risk for such loans and receivables. Short Term timing differences (662) (693) c) Credit risk management Investment properties held at fair value and rollover relief 14,405 14,350 Credit risk refers to the risk a counterparty will default on its contractual obligations Trading Losses - (124) resulting in a financial loss to the entity. The entity has adopted a policy of only dealing with creditworthy counterparties. Pension 860 637 Trade receivables consist of a large number of customers, spread across diverse Provision for deferred tax 22,347 20,670 industries. Ongoing credit evaluation is performed on the financial condition of accounts receivable and, where appropriate, provisions are made. Classification of Deferred Tax Liabilities The entity does not have any significant credit risk exposure to any single counterparty 2019 2018 or any group of counterparties having similar characteristics. The entity defines counterparties as having similar characteristics if they are related entities. The credit risk (£’000) (£’000) on liquid funds is limited because the counterparties are banks with high credit-ratings Within 12 months - - assigned by international credit-rating agencies. The carrying amount of financial assets recorded in the financial statements, which is After 12 months 22,347 20,670 net of impairment losses, represents the entity’s maximum exposure to credit risk.

Deferred tax assets and liabilities are offset only where the Group has a legally enforceable d) Liquidity risk management right to do so and where the assets and liabilities relate to income taxes levied by the Ultimate responsibility for liquidity risk management rests with the Commissioners, same taxation authority and the same taxable entity or other entity within the Group. which has established on appropriate liquidity risk management framework for the There is no expiry date on timing differences, unused tax losses or tax credits. management of the entity’s short-, medium- and long-term funding and liquidity management requirements. The entity manages liquidity risk by maintaining adequate Maintenance Dredging reserves, banking facilities and by continuously monitoring forecast and actual cash The provision for maintenance dredging reflects the Commissioners’ obligation to flows, and by matching the maturity profiles of the financial assets liabilities. 54 maintain channels and berths within the port at a minimum depth. 55 Annual Report Notes to the Consolidated & Accounts 2019 Financial Statements Annual Accounts Annual Accounts

Assumed life expectancy on retirement at age 65 20. Capital 2019 2018 21. Employee Benefits commitments (continued) (£’000) (£’000) Male years Female years

Group and BHC Retiring today (member age 65) 22.3 21.3 Retiring in 20 years (member at 45 today) 23.9 23.0 Capital expenditure which has been contracted for 76,163 23,829 but has not been provided for in the accounts The principal assumption used to measure the scheme liabilities are the Capital expenditure which has been authorised by discount rate, rate of inflation, rate of salary growth and rate of mortality. 39,551 113,526 the Commissioners but has not yet been contracted for Amounts recognised in the income statement in respect of the defined benefit The above amounts do not take account of any future grants or contributions which scheme are as follows: may be receivable. 2019 2018

(£’000) (£’000)

Group and BHC

21. Employee Benefits Defined contribution scheme Current service cost 254 281

The Commissioners operate a defined contribution pension scheme. The total charged Net interest income (108) (111) to the income statement of £853k (2018: £764k) represents contributions payable to the defined contribution section of the scheme at rates specified in the Schedule of 146 170 Contributions. As at 31 December 2019, contributions of £82k (2018: £76k) due in respect Recognised in other comprehensive income (1,294) 604 of the current reporting period had not been paid over to the scheme. Amounts owed to the Commissioners by the Pension Scheme are disclosed in note 14 to these accounts. Total income / (cost) relating to defined benefit scheme (1,148) 774

Defined benefit scheme The amount included in the balance sheet arising from BHC’s obligations in The Commissioners operate a defined benefit scheme. The last full actuarial valuation respect of its defined benefit scheme is as follows: was carried out at 31 December 2017 by a qualified independent actuary. The present value of the defined benefit obligation, the related current services cost and past service 2019 2018 cost were measured using the projected unit credit method. (£’000) (£’000)

Present value of defined benefit obligation 46,971 44,423 Weighted average assumptions to determine benefit obligations of: Fair value of plan assets (52,030) (46,168) 31/12/2019 31/12/2018 Asset recognised in the balance sheet (5,059) (3,745) Discount rate 2.00% 2.80% Rate of compensation increase 3.50% 3.80% Movement in the present value of defined benefit obligation were as follows:

Rate of pension increase 2.90% 3.20% At year end At year end Rate of inflation increase 3.00% 3.30% 31/12/19 31/12/19 (£’000) (£’000) Weighted average assumptions to cost relating to defined benefit plans at: At 1 January 44,423 46,284 31/12/2019 31/12/2018 Service cost 254 281 Discount rate 2.80% 2.50% Interest cost 1,211 1,128 Rate of compensation increase 3.80% 3.80% Participant contributions 27 26 Rate of pension increase 3.20% 3.10% Actuarial losses / (gains) 3,387 (961) Rate of inflation increase 3.30% 3.30% Benefits Paid (2,331) (2,335)

At 31 December 46,971 44,423

56 57 Annual Report Notes to the Consolidated & Accounts 2019 Financial Statements Annual Accounts Annual Accounts

Movements in the fair value of plan assets were as follows: 21. Employee Benefits 22. Related Party The Belfast Harbour Commissioners pay, on behalf of the Belfast Harbour (continued) Transactions Commissioners’ Pension Scheme, pensions payable to pensioner At year end At year end members and benefits payable to members both of which are reimbursed 31/12/19 31/12/18 by the scheme. In addition, administration expenses of £763k (2018: £681k) were borne by the Belfast Harbour Commissioners on behalf of the (£’000) (£’000) scheme. Amounts owed by the Belfast Harbour Commissioners Pension At 1 January 48,168 50,642 Scheme are disclosed in note 14.

Service cost 1,319 1,239 All board members, directors and certain senior employees who have authority and responsibility for planning, directing and controlling activities Interest cost 4,681 (1,565) are considered to be key management personnel. The total remuneration Participant contributions 166 161 in respect of these individuals is £3,361k (2018: £3,330k).

Actuarial losses / (gains) 27 26 During the year Belfast Harbour Commissioners made payments totalling £515,000 to OH (Office) Developments Limited. This amount is held as an Benefits Paid (2,331) (2,335) Investment in Associate at 31 December 2019 (2018: £nil). See note 13. At 31 December 52,030 48,168

Plan Assets

The weighted-average asset allocations at the year-end were as follows:

At year end At year end 31/12/19 31/12/18

(£’000) (£’000)

Asset category

Equities 17% 15%

Debt instruments 71% 66%

Property 9% 9%

Other 3% 10%

Total 100% 100%

58 59 Harbour Office Corporation Square Belfast BT1 3AL +44 28 9055 4422 (Text phone) +44 28 9032 2013 belfast-harbour.co.uk