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Annual Report of the Sri Lanka Ports Authority for the Year of 2016

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Annual Report of the Sri Lanka Ports Authority for the Year of 2016 SRI LANKA PORTS AUTHORITY SRI LANKA PORTS Forging . Ahead Annual ReportAnnual 2016 SRI LANKA PORTS AUTHORITY Annual Report 2016 Forging Ahead Over the past few years, the Sri Lanka Ports Authority (SLPA) has focused on achieving a complete turnaround, in terms of productivity, growth and profitability. Today, we are very confident that this vision is on the way to being realized over the next few years, as the value creating activities described in these pages will show. The SLPA has had a good year of operations, with year on year growth shown in several key performance indicators, demonstrating that the commitment and hard work of the SLPA team is taking us closer to our aspiration to be the busiest and best port in the region. Future plans include investments into new technologies and equipment, with targets set to increase the number of containers handled through the port as well. As always, the SLPA has met its challenge head-on, progressing and expanding our operations and developing new strategies for sustainable growth in the years ahead. We are confident that with our long-term plans and strategies, we will forge ahead to our future success. Content Our Vision and Mission 3 Aspirations 4 Corporate Objectives 5 SRI LANKA PORTS AUTHORITY SRI LANKA PORTS About the SLPA 6 Operational Highlights 7 Forging Financial Highlights 9 Chairman’s Review 10 . Ahead Annual ReportAnnual 2016 Our Ministers 13 Board of Directors 14 Management Team and Audit Committee 19 Business Development 20 Milestones 22 Operational Review 35 Financial Review 59 SRI LANKA PORTS AUTHORITY Human Capital 62 Annual Report 2016 Corporate Social Responsibility 63 Corporate Governance Report 64 Ports Statistics 67 Financial Statements 71 Report of the Board of Directors 72 Directors’ Responsibility for Financial Reporting 73 Audit Committee Report 74 Statutory Compliance Statement 75 Operational Highlights 76 Statement of Financial Position 78 Statement of Comprehensive Income 80 Statement of Changes in Equity 81 Cash Flow Statement 82 General Accounting Policies 83 Notes to the Financial Statements 89 Graphical Review 121 Auditor General’s Report 122 Corporate Information IBC Vision ‘Logistic excellence in the silk route.’ Envisioning the future of Sri Lankan Ports, (SLPA) is making a paradigm shift from being a container hub to becoming a global logistics hub, anticipating a boom in international trade that will open up a range of opportunities as well as challenges. The Ports Authority plans to strengthen its complex logistic approaches with a “one touch” information flow of all processes, while benchmarking National and International best practices at every level, in order to improve the overall economic environment of Sri Lanka. Mission ‘Delivery of world class port services in a sustainable environment’ With a view to create a global logistics hub port in Sri Lanka, the Ports Authority is expected to construct a multi–dimensional logistics system to integrate logistic functions by launching a deep-water sea port with excellent maritime access that will enable Sri Lanka to receive and operate large vessels in sophisticated, specialized terminals. In anticipation of exponential growth in both the port and the region, the SLPA plans to create and manage a logistics platform serving the biggest players in the ports, maritime, industrial and logistics sectors; a world-class industrial and logistics zone free of urban restrictions, with the potential and capacity for future expansion. The SLPA will keep its pledge of value to thousands of stakeholders we serve by operating an economically efficient and environmentally sound organization of port facilities and terminals that will benefit all visitors while creating wealth for the nation. Aspirations Strategies 1. Develop Infrastructure and Super Structure Facilities in Colombo. 2. Consolidate the Port of Colombo’s ranking as a Centre of Maritime Excellence. 3. Introduce sector specific Marketing and Business Development Programmes. 4. Develop the Magam Ruhunupura Mahinda Rajapaksa Port (MRMR Port) as an international services, industrial and container handling Port. 5. Enhance safety and security for cargo and port users. By 2020... 1. To become a centre of maritime 6. Mark our global presence in strategic locations. excellence. 7. Restructure and re-design organizational administrative 2. To achieve 200 Million Tonnage in cargo procedures. handling. 8. Implement advanced financial management 3. To achieve US$ 1 Billion in Revenue. systems. 4. To achieve US$ 10 Billion in port 9. Reduce our carbon footprint. investments (within the Ports). 10. Develop other regional Ports with regard to their 5. To become a leading contributor to the individual strengths and competitive advantages. national economy. 11. Diversify our business activities. 6. To be a ‘green’ port operator. 12. Provide facilities for oil and gas supply. 13. Deliver efficient Vessel Oriented Services. 14. Increase focus on corporate social responsibility. 4 Sri Lanka Ports Authority Corporate Objectives 1. To develop and maintain state of the art 11. To contribute towards regional facilities in the commercial Ports of Sri development of Sri Lanka by providing Lanka. necessary Port facilities in order to act as a catalyst in hinterland development. 2. To maintain effective and efficient Port Services. 12. To enhance the administration and organizational aspects of the Sri Lanka 3. To provide a competitive edge to importers Ports Authority including the revision and exporters by ensuring a cost effective, of cadres and assessment of manpower requirements. The practice of staff efficient and reliable service. proceeding on No pay Leave for work overseas will once again be encouraged 4. To ensure the safety and security of ships, in view of its benefits to the country’s cargo, port users and port infrastructure economy. Our Mahapola Training Center will further train and re-train staff to 5. To provide a conducive working and service meet the requirements created by this environment for all stakeholders. scheme. 6. To contribute to the Consolidated Fund of 13. To diversify into Port related activities the General Treasury for current and capital such as offshore services, bunkering, fresh expenditure of the government. water supply, and container repairs, etc. 7. To maintain high levels of productivity in 14. To implement a management orientated order to ensure speedy turnaround of financial reform with higher tax efficiency, vessels. better Portfolio management and more aggressive cost control. 8. To improve maritime related ancillary services, thus creating more employment opportunities. 9. To maintain a profitable operation of the Commercial Ports and to develop a good reputation as an efficient and reliable Port operator by providing a high quality customer service. 10. To develop port activities to provide a competitive and quality service for container operations with a view to attracting transshipment activities including relay cargo, entrepôt trade and bonded activities. About the SLPA The SLPA was established by the SLPA Act. • Endeavour to manage the specified ports and No. 51 of 1979 on the 1st August 1979 and each of them as self- supporting enterprise in subsequently amended by Act Nos. 7 and 35 of accordance with the provisions of the Act. 1984. In terms of Section 5 (1) of the SLPA Act, the Ports Authority has a Board of 09 Directors Section 6(1) of the SLPA Act defines its objects appointed by the Hon. Minister. and responsibilities as follows: • Provision of efficient and regular service The Chairman is the Chief Executive and is in for stevedoring, shipping and transshipping, charge of the overall administration of the SLPA. landing and warehousing, wharfage, the supply of water, fuel and electricity to vessels, handling petroleum, petroleum products and lubricating oils to and from vessels and between bunkers and depots, for pilotage and mooring of vessels, for diving and underwater ship repairs and any other services incidental thereto. • Provision of efficient and regular tally and protective services. • Regulation and control of navigation within the limits of and the approaches to the Ports. • Maintenance of Port installations and promotion of the use, improvement and development of the specified ports. • Co-ordination and regulation of all activities within any specified port excluding the functions of the Customs Department. • Establishment and maintenance on and off the coast of Sri Lanka, such lights and other means for the guidance and protection of vessels as necessary for navigation in and out of the specified ports. • Performing such other duties as imposed on the Ports Authority by the Act. • Conducting business of the Ports Authority in such manner and to make in accordance with this Act, such charges for services rendered by the Authority will secure that the revenue of the Authority is not less than sufficient for meeting the charges which are proper to be made to the revenue of the Authority, to replace assets, make new investments and to establish and maintain an adequate general reserve and; 6 Sri Lanka Ports Authority Operational Highlights Ship Arrivals (All Ports) Description 2015 2016 Variance (%) Port of Colombo 4,197 4,405 5.0 Port of Trincomalee 164 216 31.7 Port of Galle 72 96 33.3 KKS, Myliddy, PP & Karainagar 32 25 -21.9 MRMR Port 295 281 -4.7 Total 4,760 5,023 5.5 Container Throughput (TEUs) of Port of Colombo Description 2015 2016 Variance (%) SLPA Imports 261,188 255,557 -2.2 Exports 279,964
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