Annual Report 2019
A year of growth and stability
Maldives Ports Limited Contents Annual Report 2019
CHAIRPERSON’S STATEMENT 1
CEO’S STATEMENT 2
ABOUT THE COMPANY 4
Vision 4
Mission 4
Objectives of the Company 5
Our Services 6
Strategic Business Units & Subsidiaries 8
Board Of Directors 12
Executive Management 16
DIRECTORS’ REPORT 2019 17
ANNUAL ACTIVITYREPORT 2019 25
Organizational Highlights 2019 26
Creating Shared Value 30
CAPITAL PROJECTS 2019 33
CORPORATE GOVERNANCE 37
REPORT 2019 37
AUDITORS’ REPORT 49
FINANCIAL STATEMENTS 2019 49 Annual Report 2020 ANGLE-RIGHTANGLE-RIGHTANGLE-RIGHT 1
CHAIRPERSON’S STATEMENT
2019 marks a transformative year for the Maldives Ports Limited (MPL). This was achieved by reviving the Company’s focus towards its core mission, and strategically reconfiguring its portfolio to this effect. We can look back at 2019, with a guarded degree of satisfaction. During 2019, the Company responded adeptly to the dampened economic growth, reflected by a reported operational revenue of MVR 796.5 million, which is a 5% shortfall in earnings forecast for confidence and trust of our Clients in the Company’s 2019. The muted economic growth is largely attributed ability to handle cargo reliably and in a timely manner. to receding investments in major capital infrastructure Across the board, new safety and security policies are projects and a slow-down in tourist arrivals towards being enacted, enforced and monitored to redefine our the latter half of 2019. Notwithstanding, we identified work-culture. By the end of the year, our workplace is major obstacles that impaired the organization’s true safer, our processes are streamlined and automated potential, and were able to adopt new measures to to ensure smooth, and uninterrupted provision of exact proportionate redress. services to our Clients on all fronts. Port management development and operation The Company could not have achieved the milestones characteristically defines our core business. Recent in the year, had it not been for the enthusiasm and additions to the portfolio, including Greater Malé fortitude of MPL’s staff. On behalf of the Board of Transport Link (GMTL), Ha’ddhunmathi Transport Directors, I sincerely thank all our employees for Link (HTL), and Southern Transport Link (STL) extending their cooperation and support to reach the and the Maamingilli International Port (MIP), were goals during 2019. determined mostly by policy-directives of the outgoing It would be remiss not to mention the catastrophic Government in 2018, rather than by organic expansion shock and ensuing economic loss and operational into the transport sector. There is now consensus risks we have sustained from the ongoing COVID–19 that a long-term strategy needs to be adopted to pandemic. We would like to assure all our stakeholders relinquish the operation of these SBUs from MPL's that we are making systemic changes in response to Corporate Structure. In 2019, extensive discussions the pandemic. The safety of our employees and the were held to establish the legal foundations to spin continuity of core business functions remain the off the Transportation Network SBUs and the MIP. It utmost priority. is expected that such a strategy will harmonize the financial position of the Company to better reflect its There is no might and no power except by Allah’s leave, core-business activities and strategic direction in the the Exalted, the Mighty. I offer my humble prayers to years to come. seek His refuge throughout these trying times, and thank Allah s.w.a. for the blessings conferred upon us In 2019, the Government has commenced work on to carry out our tasks in the past year. its most ambitious capital investment project; the International Port at Gulhifalhu (IPGF) proposed to be Looking ahead, it is my firm conviction that the current built on the reclaimed land at Kaafu Atoll Gulhifalhu. The trajectory of transformation MPL is undergoing will capacity expansions and modern facilities provided at have a significant economic impact for both industry IPGF will help to resolve the spatial shortages that have and the daily lives of our communities. plagued performance during the last decade. MPL is collaborating closely with the Ministry of Economic Development and other stakeholders to provide key insights and perspectives for the development of this monumental project. Safety for people and property; this is a dominating Dato Mohamad Zaki theme that shapes operational aspects of all our Chairman of the Board of Directors business activities in 2019. Strengthening safe and secure workplace practices can boost greater
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logistics-supply chain market and identifying how major existing skillsets, by conducting vocational trainings, ILO importers and consignees can consolidate their markets certifications and in-house trainings for our workers. in the regions. We proposed to our major clients, citing CEO’S various opportunities for mutual cooperation, especially by IPGF STAKEHOLDER CONSULTATIONS leveraging regional ports as distribution hubs. Importers The Government appointed consultant for IPGF–the can consolidate cargo for the markets in the North and Consortium of NIRAS/MTBS–convened a series of sessions STATEMENT South, and ship them directly upon arrival to the regional with the MPL to understand the scope of its operations, and Ports. Additionally, warehousing can further be provided at identify the challenges and obstacles of operating ports discounted rates to incentivize private sector’s participation and commercial harbours within the Company’s purview. TRANSFORM TODAY FOR TOMORROW. in this initiative. MPL had expanded in detail, the current scope of its operations. This part of the consultation is very important The World is becoming more integrated, accessible and The project is currently under review, following the ongoing to MPL’s future; as such, we contested strongly, for the instantaneous with each passing day. Increased migration COVID–19 pandemic; this said, we will continue to pursue need of an expansive quay wall, draught to accommodate of commerce to web-based technologies, virtualization of the details of implementation, including a considerable the largest vessels and flexible expansion of warehousing business and logistics processes are placing strenuous investment in capital expenditure to acquire container- and CFS facilities. We further addressed the gearing the demands on supply-chains and the drive for reducing ferries between MCH and regional ports. IPGF to “Go Green”; our proposals included implementing shipping and logistics of cargo around the world. shore-power for Port-vessels and provision of shore-power by marginal increase of 5,754 freight-tonnes of freight SAFE PORT MPL is at the centre of the movement of both inbound infrastructure for main quay. Enabling a safe and secure work environment has been and outbound cargo from the Maldives Economy. The handled. one of the highest priorities for us during 2019. From The joint efforts between NIRAS/MTBS and MPL lay the strategic significance of MPL’s Port operations must be The decline in financial performance is mainly attributed an operational perspective, it provides safety for Port’s foundations of the Port’s future operations. The early appreciated against our economic reality, that nearly 99% to the sharp increase in payroll expenditure which rose workers as much as it improves the safety and security of indicators we picked up from these consultations provide of all commodities are imported into the Maldives. We can from 55% in 2018 to 61% in 2019. Again, this was largely cargo and cargo-handling processes. us with further incentive to increase our workforce’s surmise how closely then, the country’s economic growth as a result of expansion into external sectors such as preparedness to migrate MCH operations, while will depend on the Port’s capacity and efficacy with which public transport (STL, HTL and GMTL Bus Network) During the year, special-exercises were carried out with consolidating the operations carried out at Hulhumalé it can cope with the growing demand for cargo handling and investments in MIP, which did not contribute to any external agencies, such as MNDF, Customs and the Bonded Warehouse, Malé South-West Jetty, and Malé services, fuelled by economic growth. marginal revenues to the company. The cost implications Fire-Service to improve contingency preparedness and North Harbour at one site. responsiveness. We have further begun enforcing safety We rise to the challenge of transforming the organization of staff hiring for these projects during latter part of 2018 procedures and workplace guidelines to ensure that all to meet the needs of our economy for today, tomorrow had fully felt in 2019. CONCLUDING REMARKS port-users are appropriately equipped with safety gear in and beyond. Our approach would involve a rigorous These outcomes while worrying, are not entirely unexpected; We are at an early stage of reversing the crippling designated areas. reconfiguration of our internal processes, deploying improper or non-existent strategy in previous years while inefficiencies borne out of structural and spatial constraints available technologies and conforming to industry best- undertaking long-term investments and projects has put the The year ended with a special “Port Safety Week”, a week- that have remained a huge burden on MPL’s operations practices to achieve these results. We will leverage the company in a difficult, but not altogether an insurmountable long programme of awareness and training activities for decades. Together, we strive to consolidate alliances strengths and skills of our workers, rewarding innovation impasse. To tackle these lingering problems, we took a involving both internal and external stakeholders as well as from within our organization, and from the private sector and fostering a culture of passion, dedication and the multipronged approach to identify the source of each the general public. and Government agencies, as a group of like-minded pursuit of excellence in everything we do. issue, and work our way towards an amicable solution for people and institutions striving to enhance and improve ONGOING COLLABORATION WITH BINTULU PORT all stakeholders, in as much possible. the Port’s effectiveness. The economic benefits of reduced The International Port at Gulhifalhu (IPGF) Project demands It has been widely contested that the scope of expansion for cost of logistics, improved accessibility of services and that we prepare ourselves to hone the Institutional and GOVERNANCE OF HPL/KPL MPL not only lies within; vertical and horizontal expansion decentralized operation of ports can potentially have a individual competencies to deliver the value expected During this year, we addressed the question of how to into the global maritime shipping industry is a theme that profound impact on business and industry. Innovating by our Customers and Clients. A 600-meter international untangle the unorthodox arrangement between MPL, its we were excited to pursue this year. together, with the private sector, we improve the mutual quay-wall equipped with post-panamax ship-to-shore (STS) subsidiaries and other Port Management Companies. MPL gains from collaborative and cooperative efforts to drive quay cranes and supporting infrastructure demands a huge Enthusiastic discussions were held between the Company currently provides financial support for both Hithadhoo down cost of the supply chain for all sectors. leap in the skillsets required to handle operations of such and Bintulu Port Authority in 2019, to jointly seek areas of Port Limited and Kulhudhuffushi Port Limited, without a scale. mutual interest and cooperation to explore the possibility Despite the setbacks we have had in 2019, we could any mechanisms for accountability and governance at of building a service port, targeting the supply of Liquified not have reached our objectives without the unfaltering either one of those Companies. A proposal has been put If the Company is to be geared for concentrating its efforts Natural Gas to for the global maritime market. Leveraging commitment of the Company’s employees; I thank you for forward to the Privatization and Corporatization Board to and value creation processes to meet these demands, then both the strategic location in the North of Maldives and your service, on behalf of the Management. I would also formally re-arrange the Governance structures at HPL and it must accordingly, re-structure its portfolio to concentrate the cost-advantages, an understanding was reached to like to express my gratitude on behalf of the Management KPL, while relinquishing MPL’s control and unburdening the its efforts on its primary business activity; port operations, mutually commit to areas of cooperation. to all our partners and stakeholders who confided in our financial responsibility for the aforesaid companies. This management and development. Organization to rise to a promising new future. We wish to will significantly improve the financial standing of MPL, PERSONNEL DEVELOPMENT AND SKILLS AUDIT Our activities and performance throughout 2019 reflect continue to earn the trust of our customers and the public, while providing more flexibility and independent control that such a wide-gamut of transformation is not merely a One of the more challenging aspects has been to identify which relies on our services, and maintain the relationships for the Regional Port Companies to seek out markets and choice; but a necessity for us to competitively deliver value the optimal level of staffing requirements at the port, as we head in to the future. opportunities for value creation in those regions. and match the pace of economic growth in the Maldives. and improve the available skillset in every aspect of port GENERATING NEW INCOME STREAMS FROM operations. To address this, we have conducted a survey AN YEAR IN PERSPECTIVE REGIONAL PORTS among all departments, in an effort to better understand This year ended with less than favourable outcomes in optimal requirements of skills and personnel against the Until such time that the changes proposed to Governance terms of financial performance. We recorded an operating current staffing status. The response to this exercise has materializes, MPL has some inherent responsibilities in the profit of MVR 160.5 million in 2019, which is a 41% reduction been mixed, and at times obfuscated. It is our view, that operational and financial sustenance of the regional port from 2018 by MVR 113.0 million. Profit after tax in 2019 such an exercise must be carried out independently, to try companies. From a policy perspective, this falls in line with was recorded at MVR 116.5 million, a 49% reduction (by and gain an understanding of the present circumstances, the Government of Maldives’ Strategic Action Plan (SAP) to MVR 112 million) from 2018. and provide an unbiased set of recommendations to move boost local regional economies by developing new markets forward. Shahid Ali From an operational perspective, the containerized cargo and services. Chief Executive Officer traffic (inbound/outbound) grew by 5% in 2019, followed Additionally, we have concentrated our efforts in developing We approached this problem by taking a holistic view of the
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ABOUT THE COMPANY Objectives of the Company Maldives Ports Limited (MPL), the former Maldives Ports Authority (MPA), was formed by Presidential Being a profitable business enterprise, providing safe, efficient port services to port users. decree with the mandate to develop, manage and operate the ports of Maldives. Under this decree, Male’ Formulating corporate governance policies, procedures and codes to assist the Board in the exercise Commercial Harbor was relocated from the area now known as ’Jumhooree Maidhaan’ to its current location of its duties and responsibilities and to serve the best of Maldives Ports Limited and its stakeholders. on 15th September 1986. The first ever cargo vessel to arrive to Male Commercial Harbor was M.V. Ruthuris, which arrived with 38 containers on 10th January 1989. Establishing a reputation for quality by maintaining the highest possible technical, operating and service standards. Maldives Ports Limited (MPL) was incorporated on 31st July 2008 as a 100% government owned company under the Company’s Act of Maldives. The core purpose of the company is to ensure the efficient management Responding to the needs of customers by continual assessment and development of the ports of and operation of government owned ports and port facilities in the Maldives. the Maldives. MPL is the primary backbone for importation and exportation of manufactured goods between the Maldives Maintaining a friendly environment, recognizing port users as the basis for the existence of the and international destinations. As a commercial service provider, the key business approach of MPL is to ports. fast-track our services without compromising time and quality. The challenge lies in keeping pace with the Achieving a satisfactory return on shareholders funds and maintaining a sound policy of adequate dynamic and evolving business environment and identifying opportunities that strengthen the economy and retention of earnings for future growth. cultivate sustainable commercial development. Establishing economically viable port related services. Harmonizing the development and operations in ports and port land areas with protection of the environment Vision Ensuring that all operations in ports and all port land areas are conducted safely Operating commercially as a financially self-sufficient and autonomous body Ensuring that all income collected and expenditure incurred by MPL are properly accounted for “ Developing a skilled and an efficient work force able to achieve the objectives of the Company Your World-Class Port In the Indian Ocean, bridging Providing advice and assistance to the government in the formulation of a National Ports Policy and in planning and administrative matters and otherwise in relation to any matter concerning ports or the East and West port land areas ”
Mission
“ Providing safe, efficient and reliable port services through innovation, sustainable best practices and stakeholder engagement. ”
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Our Services
Port Services Value added services in the handling of containerized cargo, reefer services, general cargo, specialized and dangerous goods, and depot services.
Marine Services Provision of Pilotage services, dockage services at berths, towage services with provision of tug services and salvage and rescue operations.
Technical Services Mechanical and marine engineering workshop, Civil and electric work carried out in our mechanical and marine engineering workshops and Thilafushi vessel repair yard.
Cargo Services A variety of services from stevedoring, cargo handling, wharfing and storage, to shifting, sorting, measuring, stuffing, stripping, lashing and unlashing.
Safety & Security Services Monitoring of Ports perimeter, attending work and accident related emergencies, implementing ISPS code and conducting safety drills and assessments.
Port Training Centre Offers useful trainings and port work development programs for employees as well as MQA approved Diploma and Certificate level courses.
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Strategic Business Units & Subsidiaries
Hithadhoo Port Limited (HPL) HPL is located in the southern most atoll of Maldives, and was opened for service on 6th December 2005. Hithadhoo island; the second most densely populated among all islands the country, is Malé Commercial Harbour (MCH) placed on the top north western edge of Addu atoll making it easily accessible from other atolls and also directly from the Indian Ocean. MCH is the main port in the Maldives and is considered the core international maritime gateway into the Maldives, and it’s a very unique port. All port activities, from docking, clearing all the way to storage are provided from the same small facility. The services and activities provided from MCB are extensive, including the port yards, harbor basins, wharves and anchorages. PORTS
Maamigili International Port (MIP) MIP is a strategic port located in the hospitality center of Ari Atoll, officially opened for operations on 2nd May 2018. Maamigili International Port is adequate for immediate operation of vessels Hulhumalé International Terminal size 7000DWT and below with ample land for storage and handling loose cargo. PORTS Hulhumalé Terminal has been operational since 27th June 2013 and consists of an international and local terminal fully compliant with ISPS standards. Hulhumalé Terminal is a strategic venture of MPL to create a balance and a good flow of cargo preventing container congestion at MCH and to boost the economic activities relating to the second phase of Hulhumale’ development. Currently, the terminal has an open storage volume of 500TEUs and two warehouses of 100x30ft, and 3 plug points for reefer containers.
Malé South West Harbour (MSWH/T- Jetty) T-Jetty is a key logistical and distribution point for most commercial cargo after clearance from Malé Commercial Harbor. T- Jetty is also a place for anchorage of larger local vessels, sand mining boats and the permanent parking area for fueling and other heavy vehicles used for construction.
Kulhudhuffushi Port Limited (KPL) HARBOURS It also provides priority services for basic necessities required by the public, such as water, gas KPL was opened for business on 5th December 2005. Facilities available at this port include a and STO staple food supply. 171.5m berth with cargo handling equipment. An average of 4 vessels call to the Kulhudhuffushi port per month in addition to the smaller Indian wooden ships that carries aggregates, river sand and perishables from Tuticorin during late and early months of the year. MPL holds 51% of shares in KPL and the rest by the Government. Maldives Port Limited | 2020 Maldives Port Limited | 2020 10 Angle-LeftAngle-LeftAngle-Left Annual Report 2020 ANGLE-RIGHTANGLE-RIGHTANGLE-RIGHT 11
Malé North Harbour (MNH) Hahdhunmathi Transport Link (HTL) MCH is the main port in the Maldives and is considered the core international maritime gateway The second subsidiary, HTL was established on 13th October 2017. Equipped with a total of 3 buses into the Maldives, and it’s a very unique port. All port activities, from docking, clearing all the way to operating in the 17km Laamu link road bridging from Fonadhoo to Kahdhoo (domestic airport base)
HARBOURS storage are provided from the same small facility. The services and activities provided from MNH. on to Maandhoo (Industrial Island) and ends at Gan, the largest island in the Maldives. are extensive, including the port yards, harbor basins, wharves and anchorages. Bus operation is also extended to Isdhoo Island as well. Our regional office is located in Fonadhoo. Upon request, we also provide private hire services for interest parties within the region. However, our private services depend highly on the availability of buses. TRANSPORT
Greater Malé Transport Link (GMTL) Southern Transport Link (STL) Recently added to our Transport Link, GMTL is the largest subsidiary providing public bus service Operated at the southernmost atoll of Maldives, STL is the first subsidiary which was launched in for nearly an average of 4500 civilians and foreigners per day. Comprehensive of 23 buses fleet, mid-2016. Currently equipped with 4 speed boats and 3 ferries for sea transportation and 9 air- GMTL operates between Male’, Hulhumale and Hulhule via Sinamale’ Bridge. The GMTL bus service conditioned buses are operational for land transportation. Our offices are in Feydhoo, Hulhumeedhoo, accustom an international standard Touch Link system through which passengers can use easily Dhoogas and Fuvahmulah. Among the notable functions of STL, it serves the important role of
TRANSPORT rechargeable cards for cashless transections, a card exclusive for GMTL. ` public transport including (but not limited to): private and public hire of Buses, daily ferry services between Feydhoo and Hulhudhoo– daily ferry and express launch between Addu and Fuvahmulah. On a regular basis, our buses are scheduled on every 15 minutes within Male’ and Hulhumale, and airport bus scheduled on an hourly basis. During peak hours, buses are scheduled in every 10 minutes to cater for the excessive demand. Apart from the scheduled trips, GMTL provides with private hire services upon request on Credit and cash basis. Under CSR, special hire trips are also sponsored by MPL.
OTHERS Port Complex Port Complex consists of staff accommodation for those living away from family, commercial office spaces and a staff recreational club with a gym as well as additional storage space for documents, and machinery and equipment kept for auction and disposal.
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Board Of Directors
Dato Mohamad Zaki Ibrahim Abdhulla Chairman Deputy Chief Executive Officer Dato Mohamed Zaki was appointed as the Chairman of the Board of Directors of MPL on 14th February 2019. Mr. Ibrahim Abdhulla was appointed to the Board as a non- executive member on 6th January 2019, and was appointed Dato Zaki is one of the most influential industrialists in the as an Executive Director of the Board on 15th April 2019 with Maldives and is the Chairman of the prestigious Nazaki Group, the dual responsibility of Deputy Chief Executive Officer. one of the oldest and most affluent group of companies within the Maldivian commercial sector. Mr. Abdhulla is an entrepreneur, having spearheaded multiple companies in different industries over a long and highly Dato Zaki held the post of Managing Director of Maiden Voyage successful career. Mr. Abdhulla held the position of Senior SDN BHD from 1992 to 2008 and has served at several different Executive Officer at Maldives Industrial Fisheries Company positions within the Government of Maldives, most notably as for two decades, during which time he delivered invaluable the High Commissioner to Malaysia for 5 years during which services in a manifold of departments and divisions including time he earned the exalted Datoship from the King of Pahang, human resources, administration, information technology and Malaysia. engineering. Dato Zaki also served as the Non-Residential Ambassador of Mr. Abdhulla served as the Managing Director of Atoll Seven Maldives to Brunei, Thailand and Indonesia. Pvt. Ltd in 2014 while simultaneously managing the Human Resources and Administrative Department. He currently serves as the Director of Operations at Atoll Seven.
Shahid Ali Captain Mohamed Shareef Chief Executive Officer Director
Mr. Shahid Ali was appointed as the Chief Executive Officer of Captain Mohamed Shareef was appointed to the Board of the MPL on 4th December 2018. Directors on 6th February 2019. Mr. Shahid Ali has a rich academic background with extensive Capt. Shareef is a Master Mariner with close to three in-depth knowledge of different aspects of management and decades of knowledge and proficiency in the maritime sector, administration. Prior to his appointment as CEO of MPL, Mr. including at MNSL between the years 1986 and 2005. Capt. Ali held numerous influential positions including CEO/MD Shareef accumulated hands-on experience in the maritime of State Trading Organization (STO) and Addu International industry with years of partaking in onboard duties, as well Airport. as participating in a multitude of vocational and professional training programs in maritime auditing, safety and navigation. Mr. Shahid has served the Maldives Government in several This includes courses such as Radar, ARPA & Navigation, key managerial positions at prestigious establishments Master (FG) of Ships COC, and Internal Auditor ISM-ISPS-MLC such as Maldives Tourism Development Corporation Plc, for Shipping Companies. Capt. Shareef also took on several Ministry of Finance and Treasury, and Ministry of Planning managerial duties in addition to this, including educating and National Development. Moreover, he has contributed his trainees and providing expert advice to local and international expert knowledge to several international and local organizations such as The World Bank, Asian Development parties. Bank and UNDP, Villa Group, and Sun Travel & Tours. Capt. Shareef is founder and Chairman of Sanco Maldives Pvt ltd since 1982. He has also previously served Mr. Ali holds a Master of Management (Specializing in Project Management), and a Master of Business at leading managerial posts at prominent local and international companies in the commercial and maritime Administration (MBA) from the Australian National University (ANU), Australia. sectors, such a DPA of Transfuel Maldives Pvt. Ltd, and Managing Director of Arks Marine, Malco Internation and Konnect International. Capt. Shareef was also an elected member of the Maldives Parliament from 2005 to 2011.
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Jadulla Nazim Ibrahim Arif Director Director
Jadulla Nazim was appointed to the board of directors on Ibrahim Arif was appointed to the board of directors on 14th 14th October 2019. October 2019. Mr. Nazim is highly experienced in the specialist field of Mr. Arif has an illustrious career in data-infrastructure Criminal Investigations, Safety and Risk Management. After implementation and management projects within the country. 12 years serving at Maldives Police Service, he joined Alarms Notably, he has led similar projects at Trans Maldivian Airways, Pvt Ltd as the General Manager and dedicated his expertise Maldivian Air Taxi Data Centre Integration Project, UNDP and knowledge in managing high level projects for a period Maldives Data Centre Migration Project. of 4 years. He founded his own Company, Secura Pvt Ltd, which soon His in-depth knowledge in leading and implementing IT became the market leader in the Fire-Safety and Private- infrastructure and software solutions in Government and Security Industry of Maldives. Under Mr. Nazim’s leadership private sector is extensive, and instructive to critical business for eight years, he secured forty retainer clients and completed environments that utilize highly integrated Information more than fifty projects in the Maldives and abroad whilst Communication and Technology Systems in the Maldives. Currently he is serving Maldives Association of managing a vast workforce of more than 30 employees. Tourism Industry (MATI) and Maagiri Hotel in various capacities. He is also a member of the Board of Directors at Blue sea Line Maldives Pvt Ltd, which he has held for five years.
Ahmed Laisham Director
Ahmed Laisham was appointed to the board of directors on 14th October 2019. Mr. Laisham has gained immersive experience in Maritime and Logistics field, during his employment as Executive Director at Lily Shipping & Trading Pvt Ltd and The Hawks Pvt Ltd. He was appointed as the Chief Executive Officer at Maicon Shipping Pvt Ltd in 2017, a company which handles Contracting, Project Cargo Handling, Transportation, Liner and Ship Agency Services. Mr. Laisham provided a comprehensive logistics services via a fleet of vessels along with a fully-fledged arsenal of cargo handling and transportation equipment. Bestowing leadership contributions in the area of Business and product development, he further contemplated knowledge and expertise in management of operational and fiscal relationships.
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Executive Management
Shahid Ali Chief Executive Officer
Ibrahim Abdulla Deputy Chief Executive Officer
Mohamed Muizzu Chief Financial Officer Finance Dept.
Ahmed Rasheed Harbour Master Harbour Master’s Office
Ibrahim Zahir Chief Risk Officer
Ahmed Inaan Asst. General Manager Cargo Operations Dept.
Mohamed Maseeh Abdul Sattar Asst. General Manager Cargo Clearance Dept.
Ibrahim Afzal Asst. General Manager Logistics Dept.
Hassan Muzni Mohamed Asst. General Manager Regional Ports Dept. Mujahid Anees Asst. General Manager Procurement Dept. DIRECTORS’ REPORT Ahmed Saleem Asst. General Manager Hulhumale’ Terminal Ibrahim Rasheed General Manager Mechanical & Electrical Engineering Dept. 2019 Hassan Zareer General Manager Marine Engineering & Thilfushi Dept.
Adam Mohamed Chief Engineer Project Management Dept.
Mohamed Ameez Asst. General Manager Business Development Dept.
Adam Shifan Asst. General Manager I.T Dept.
Aishath Shimla Asst. General Manager Administration Dept.
Fathimath Ali Asst. General Manager Human Resources Dept.
Aishath Neesha Khaleel Asst. General Manager Port Training Center
Mohamed Wajeeh Ibrahim General Manager Thilafushi Vessel Repair Yard
Mohamed Mahjoob Asst. General Manager Transport Dept.
Hamid Ahmed Lawyer Legal Dept
Ahusal Mohamed Asst. Internal Auditor Internal Audit Dept.
Hawwa Iman Company Secretary
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The Board of Directors of Maldives Ports Limited is pleased to present the Directors’ report along with the During the year under review the company total income recorded for the financial year was MVR 796.5 million, audited financial statements of the company and the Group for the financial year ending 31st December 2019. compared to MVR 792 million in 2018. This is an increase of MVR 4.5Million (0.01 % increase) compared The Group of Companies (henceforth the ‘Group’) consist of the Maldives Ports Limited (MPL) and its Subsidiary, with last financial year. Major income for the financial year was recorded from Loading & unloading of cargo Kulhudhuffushi Ports Limited (KPL). represents 62% of the total Revenue (MVR 493.1 Million), Ship Arrival & pilotage recorded 9.8% of the Total Revenue (MVR 78 Million). The Chairman’s Message and the Chief Executive Officer’s Statement, in combination expounds—by way of review, management discussion and analysis of the operational and financial performance—the strategies and future Furthermore, during the year revenue growth from other earnings increased compared to the previous year, from outlook of the Company and the Group. These reviews and reports taken together with the audited Financial MVR 33.8 million to MVR 38.3 million in 2019. Statements of the Company and the Group reflect the conclusive state of affairs of the Company and the Group. Global economic activities slowed down significantly in 2019 after recording a strong growth in 2018. Consequently, the MPL achieved only a slight increase in revenue compared with previous financial year. Rent Other The Company restructured the Payroll allowances of staff during the financial year to be in line with the current income income Ship arrivals 2018 4% & pilotage cost of living of the country. This is consistent with MPL’s continued efforts to maintain a good relationship with Vessel & other 5% equipment hiring charges 11% its employees, which it considers as the central driving force of the Company’s progress and achievements. The 1% increase in Payroll cost by 38% compared with previous financial year has had an impact on the bottom line of 11% Ship arrivals & pilotage Services Clearing of the Company during the financial year goods 8% Clearing of goods Empty Container & 8% vessel departure Against the less than desired macroeconomic outlook, the Management’s persistent efforts to harmonize and 62% Loading / unloading of cargo 9% improve the efficacy of internal processes, the Company produced a reasonable performance during the year, and recorded a net profit. 9% Empty Container & vessel departure Principal Activities and Business Review 1% Vessel & other equipment hiring charges Principal business activity of the Company includes providing port and harbor facilities, storage, supplies and 5% Rent income repair and maintenance services to ships and other ocean-going vessels. In Addition to this the company also 0% Revenue from transport engaged in providing ferry and public transport services since 2015. Land transport services expanded in the 0% Revenue from ferry transport Malé region, commencing the Malé-Hulhumalé bus-route following the opening of Sinamalé Bridge in late 2018. 4% Other income The financial statements of MPL and its Group has been prepared in accordance with International Financial Reporting Standards. Financial Performance Loading / unloading of cargo 62% The Company has performed well in all key areas of business activities during 2019 and maintained its Revenue Income in an extremely challenging environment compared to 2018. After three successive years of rapid expansion, the real GDP growth of the Maldives decelerated to 5.2 percent in 2019 due to a slowdown in retail trade and construction. The COVID-19 outbreak has had a debilitating effect Revenue from Other on tourism, which directly and indirectly accounts for two-thirds of GDP, but also due to suppressed construction Transport Income 3% 4% activity. This will have a profound impact on the 2020 performance of the Company as well as the Group. Rent Revenue from Ship arrivals income ferry Transport & pilotage The forecast for inflation in 2020 is expected to increase from 1.31% up to 1.52% (ADO). The improvements in 5% 2019 Vessel & other 1% 10% the economic situation in 2019 were mainly due to the upsurge in tourist arrivals by 14.7% compared with last equipment hiring charges 1% year. However, the growth in exports had been drastically lower than the growth in imports thereby widening the Clearing of trade deficits. (MMA statistics). 10% Ship arrivals & pilotage Services goods Empty Container & 9% Notwithstanding, the MPL was able to uphold its performance reasonably well in comparison to the previous years. 9% Clearing of goods vessel departure 5% 62% Loading / unloading of cargo 5% Empty Container & vessel departure 1% Vessel & other equipment hiring charges 5% Rent income 3% Revenue from transport 1% Revenue from ferry transport 4% Other income
Loading / unloading of cargo 62%
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Expenditure profit margin has decreased significantly from 35% in 2018 to 20% during the year. The main contributor for the The total expenditure of the company under review has increased by MVR 124.3 Million (28.9 % increase) decrease in operating profit margin is increase in payroll cost which surpassed increase in Revenue during the compared to last financial year. The payroll expenditure has increased by 113.53 Million compared with last year. year. This is mainly attributed to the revision of staff allowances during the financial period under review. Depreciation amount for the financial year has increased by 8.07 Million (8.1% increase). The profit after tax amount has fell by 112.2 Million (49% reduction) compared to last financial year. Similar trend is observed in retained profit margin which has also reduced from 29% in 2018 to 15% in 2019. The However the Operational expenses has been reduced by MVR 15 Million due to change of Intentional financial Earnings per share has also reduced from 53.82 per share in 2018 to 27.43 per share in 2019, standard on recording the Lease on Land. This has reduced the operating cost while increasing the financing cost. Financing cost has increased by MVR 8 Million during the year.
Composition of Expenditure 2019 2019 % 2018 2018 % Variance Var %
Payroll 409,610,947 61.3% 296,080,167 54.5% 113,530,779 91.3% Operating Expenses 152,989,253 22.9% 168,507,940 31.0% (15,518,687) -12.5% Depreciation 87,673,525 13.1% 69,370,328 12.8% 18,303,197 14.7% Finance costs 17,435,209 2.6% 9,367,603 1.7% 8,067,606 6.5% Total 667,708,934 100.0% 543,326,037 100.0% 124,382,897 100.0%
2019 2018
Financial Costs Depreciation 2% Operating Depreciation 12% Expenses 13% 23% Operating Expenses Financial 31% Statutory Payments Cost 3% The Directors, to the best of their knowledge and belief are satisfied all statutory payments in relation to employees and the Government of Maldives have been made up-to-date. The company had been categorized by MIRA as one of the largest tax payers in the Maldives. A total of MVR 29.7 million is computed as the Business Profit Tax for 2019. Furthermore, the Company collected and made payment amounting to MVR 47.3 Million for Goods and Services tax to MIRA during the financial year ended 2019. MPL has also contributed to Employee Pension Scheme an amount of MVR 8.3 Million, paid to Maldives Pension Payroll Administrative Office (MPAO) for the year. Payroll 61% 55%
Operating Profits
2019 2018 VARIANCE Revenue 796,540,922 792,042,761 4,498,160 Operating Profit 160,544,683 273,639,233 (113,094,549) Net Profit 146,369,179 267,824,604 (121,455,426) Profit After Tax 116,587,929 228,753,152 (112,165,223) Business Profit Tax 29,781,250 39,071,452 (9,290,203)
Operating profit saw a reduction of 41% by MVR 113.5 Million compared to previous financial year. The Operating
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Furthermore, the Company collected and made payment amounting to MVR 47.3 Million for Goods and Services tax to MIRA during the financial year ended 2019. MPL has also contributed to Employee Pension Scheme an amount of MVR 8.3 Million, paid to Maldives Pension Administrative Office (MPAO) for the year.
Balance Sheet The overall financial position of the Company remained sound. The Company’s objective is to maintain a healthy capital ratio in order to support the business and maximize the shareholder value. The stated share capital of the Company as at 31st December 2019 is MVR 425 Million and the reserves as at 31st December is reported as 588.9 Million The company maintained a good liquidity position with a quick ratio of 1.01 and also the debt to equity ratio has marginally Increase to 19% in 2019 compared with 18% in 2018. The main reason for the increase in debt to of containers handled was 122,358 TEUs. As highlighted above 5% growth recorded for the financial year on equity ratio is due to a loan acquired during the financial year from Bank of Maldives during the financial year. handling number of containers during the year. However there is only a marginal increase in the volume of cargo handled during the financial year. The total volume of cargo handled for the financial year was recorded as 2,348,641 compared to cargo handled in 2018 was 2, 332, 871, An Increase of 15,522 FT was recorded during the The net book value of property plant and equipment of Maldives ports Limited as at 31st December 2019 was year. The number of International vessels handled saw a decrease from 374 in 2018 to 367 in 2019. MVR744.7 Million. Total additions of property plant and equipment for the year was MVR 73.6 Million. The breakup of the property plant and equipment are given in Note 13 of the financial statements. The return on investment reduced to 14.3% in 2019 from 21% in 2018. As highlighted earlier due to change in CORPORATE GOVERNANCE/INTERNAL CONTROL AND MANAGEMENT’S RESPONSIBILITY Allowance structure of employees there is a reduction in Return on Investment. Adoption of good governance practices has become an essential requirement in today’s corporate world. MPL is governed by the Board of Directors. Board members are appointed by the Government of Maldives. The Operational Performance Board has overall responsibility for the corporate governance of Maldives Ports Limited. The corporate objective of the Board of Directors is to provide leadership and guidance to the management team of Maldives Ports Limited. UOM 2019 2018 The Directors acknowledge their responsibility to Maldives Ports Limited system of internal control. The system Inbound containers TEUs 62,719 62,796 is designed to provide assurance, inter alia and safe guarding the assets. The maintenance of proper accounting records and reliability of financial information generated. However, any system can ensure only reasonable and not absolute assurance. Outbound containers TEUs 65,393 59,562 The Audit committee focuses primarily on assisting the Board in full filling its duties by providing an independent Inbound Freight FT 2,280,310 2,274,171 and objective review of financial reporting process, the process of risk identification and mitigation, internal controls, adequacy and effectiveness of internal Audit function.
Outbound freight FT 68,331 58,704 The Board is satisfied with the effectiveness of the system of internal control for the period up-to-date of signing the financial statements. Ship Turnaround Days 4.22 3.42 Environmental Protection No Of Vessels Handled No 367 374 The ports business activities can have direct and indirect effects on the environment. It is the Company policy to keep adverse effects on the environment to a minimum and to promote co-operation and compliance with the relevant authorities and regulations. Although the container throughput has increased by 5% in 2019 the cargo handled during the year has only increased by 5,754 FT. The main reason for the slight increase is due to increase in empty outbound containers handled, the inbound containers has reduced by 77 TEUs. Human Resources/Employment Policies Total number of containers handled in 2019 was 128,112 TEUs, whereas as in the previous year the number Human resource division plays a vital role in achieving organizational objectives by attracting and hiring skilled of containers handled was 122,358 TEUs. As highlighted above 5% growth recorded for the financial year on and qualified personnel into identified positions in order to achieve the set objectives of the organization. handling number of containers during the year. However there is only a marginal increase in the volume of cargo handled during the financial year. The total volume of cargo handled for the financial year was recorded as Once the right employees have been hired to the right designations, it is important to retain them by maintaining 2,348,641 compared to cargo handled in 2018 was 2, 332, 871, An Increase of 15,522 FT was recorded during the human resource functions at optimum levels. At the beginning of 2019, the total workforce of the MPL was year. The number of International vessels handled saw a decrease from 374 in 2018 to 367 in 2019. 1,866 including executives, non-executives, technical and, non-technical categories. The total workforce as at the yearend was 1,962. Total number of containers handled in 2019 was 128,112 TEUs, whereas as in the previous year the number
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The company continued to invest in human capital development and implement effective workforce aligned around new business priorities and ensure the employees are developing the skills and knowledge required for the future success of the company. The Total Investment on training activities for 2019 was MVR 6.7 Million. Employment policy of the company is to respect individual and offer equal career opportunities regardless of sex, race or religion. Occupational health and safety standards receive substantial attention. Three 14-storey apartment buildings (534 apartments) construction Project for Maldives Ports Limited staff was initiated during the 2018 financial year at an estimated cost of MVR 566 Million. 55% of the project was completed as at 31st December 2019 Subsidiaries Kulhudhuffushi Port Limited (KPL) is a 51% subsidiary of Maldives Ports Limited and was acquired in 2011. Government of Maldives is the holder of remaining 49% of shares. 46% of the consideration settled in 2011 by the way of asset transfer and the balance appearing as a current liability on the balance sheet as at 31 December 2018. For the first time the consolidated accounts has been prepared according to International Accounting Standards.
PORT INFRASTRUCTURE AND PROJECTS Maldives Ports Limited gives a great priority in investing in port infrastructure so as to cater for the ever-increasing demand and to deliver competent service using the cutting-edge technological advancements. As such, the development of Hulhumale’ port and Male’ North Harbor (Meeru Bahuru Bandharu) had gradually increased its income and operation year by year. In addition the Government had handed over T-Jetty operation to MPL in 2015, which had reflected a significant contribution to increase in income during the year 2018. Furthermore, the CORPORATE GOVERNANCE government also had handed over the public transportation of the southern transport project to provide public transportation via land and Sea, the operation of ferry began towards the end of 2015 while the busses started its operation in 2016. The Male Regional transport was introduced in late 2018.It should be noted that these projects REPORT are under review by management to increase the profitability of these sectors. 2019 Future Digitalization Information technology is a major strength and catalyst for growth for an organization working in the maritime business. Therefore, having the appropriate IT systems in place for spurring port business. The IT function has concentrated all its strength and competitive edge in deploying innovative e-initiatives and strategic IT Systems to improve productivity and provide uninterrupted services to its clientele. Maldives Ports Limited IT team strives to drive innovation and transformation through integrating information and communication technology (ICT). One of the key future digitalization on the cards for the financial year 2020 is the introduction of a fully integrated Enterprise Resource Planning (ERP) software to increase efficiency throughout the Company. MPL IT team intends to digitalize most of the manual processes carried out by the operation staff and monitor fleet management through the new ERP software. During 2019 IT team introduced ‘My Bandharu’ to make booking for clearance and to make online payments. MPL IT team also introduced a platform to make booking and payments for Southern transport link services.
External Auditors The external auditor of MPL is the Auditor General. The Auditor General appoints a contract auditor to carry out the field work of the audit on his behalf, For the financial year 2019, Ernst and Young Maldives were the contract Auditor, appointed by the Auditor General.
Internal Auditors MPL has its own internal audit function, which has carried out few assignments during the year, despite several difficulties the function faced in terms of staffing and space. The Board and managements intends to widen its function and the works will be expanded in 2020, hoping to improve the effectiveness of risk management, control, and governance processes.
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1.2 Frequency of Board meetings
The Board held 33 meetings during the year, and the Directors’ attendance is as follows: 1. CORPORATE GOVERNANCE STATEMENT The prime responsibility of the Board of Directors of MPL is to manage the company in a fair, transparent and Appointed Terminated/ Name Position Attendance responsible manner and to ensure sustainable growth and create value for its shareholder and investors. Date Resigned Date MPL is a company operating in compliance with the Companies Act 10/96, and the Company’s Memorandum of Association and Article of Association. Dato. Mohamed Zaki Chairman, Non-Executive 26/33 14 Feb 2019 - To protect and enhance the interests of our shareholder and other stakeholders, the Board regularly reviews the governance arrangements and the company now adheres to the principles and guidelines set by the Corporate Managing Director /CEO, Governance Code for State-Owned Enterprises (CG code for SoEs), issued by Ministry of Finance. The Board’s Mr. Shahid Ali 33/33 04 Dec 2018 - Corporate Governance, Nomination and Remuneration Committee is responsible for periodical review and Executive progress of the CG Code to ensure the practices conform to regulatory standards.
Mr. Ibrahim Abdulla Director, Executive 31/33 06 Jan 2019 -
1.1 Composition of Board of Directors Mr. Mohamed Shareef Director, Non-executive 28/33 06 Feb 2019 - The composition of the Board of Directors of the company is determined in the Articles of Association of the company. The Board comprises of 7 Directors including Chairman and Managing Director/ Chief Executive Officer, appointed by the Government of Maldives. The Chairman and Managing Director’s roles and responsibilities are Uz. Jaufar Rasheed Director, Non-executive 19/33 06 Feb 2019 09 Jul 2019 stated in the Company’s Article of Association. The current composition of the Board, date of appointment are shown below.
Ms. Aishath Shaufa Director, Non-executive 2/33 06 Nov 2014 06 Feb 2019 NAME Position Appointed Date
Dato. Mohamed Zaki Chairman, Non-executive 14 February 2019 Mr. Ahmed Asbaab Ali Naseer Director, Non-executive 4/33 09 Jan 2018 12 Feb 2019
Mr. Shahid Ali Managing Director /CEO, Executive 04 December 2018 Ms. Mariyam Sheeneez Shakir Director, Non-executive 3/33 09 Jan 2018 06 Feb 2019
Mr. Ibrahim Abdulla Director, Executive 06 January 2019
Ms. Aishath Rayaheen Shareef Director, Non-executive 4/33 22 Jan 2018 06 Feb 2019 Mr. Mohamed Shareef Director, Non-executive 06 February 2019
Mr. Jadhulla Nazim Director, Non-executive 14 October 2019 Mr. Jadhulla Nazim Director, Non-executive 6/33 14 Oct 2019 -
Mr. Ibrahim Laisham Director, Non-executive 16 October 2019 Mr. Ibrahim Laisham Director, Non-executive 6/33 16 Oct 2019 - Mr Ibrahim Arif Director, Non-executive 16 October 2019
Mr Ibrahim Arif Director, Non-executive 6/33 16 Oct 2019 -
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1.3 Board proceeds and key decisions 1.5 Conflict of interest and materially significant related party transactions The Board determines the strategic and policy outlook of the company, and oversees the effectiveness of the As per the declaration of interest statement adopted by the Board, all the directors must disclose any company, senior management to implement such policies and strategies. The Board has adopted an Annual Work Plan association or other affiliation where he/she and his/her immediate family members hold a significant interest. for the Board this year and the plan ensures that the Board covers all the necessary areas of its work during All known substantial or material third party transactions, monetary transactions or relationships between the the year. The agendas for the meetings are set in advance with the consultation of Chairperson and the Chief Company and its Directors, subsidiaries have been disclosed in the note 28 of audited financial statements. Executive Officer. . The Directors are given notice for the Board meetings as per the Articles of Association and are authorized to suggest any additional items in the agenda with the consultation of Chairman. Board papers of the meetings are shared in prior to the meeting, providing an opportunity for Directors to prepare for the 1.6 Declaration by Board of Directors meetings. On specific matters that require the Board’s urgent attention, special meetings are held in between In compliance with the relevant laws and regulations the Board of Directors declare that to the best of our regular board meetings Management members who can provide additional information to the items are invited knowledge and belief, the information presented in this Annual Report is true and accurate and that there are no to attend the Board meeting. Some of the major key decisions taken during the year include other facts, the omission of which would make any statement herein misleading or inaccurate. In accordance with the principles of corporate governance, Company’s Act, while performing the duties and Reviewed and approved Business Plan 2019 responsibilities of the Company, the Board of Directors and the management of the Company have made all efforts to ensure that the Company is governed and managed in a fair and transparent manner and has worked Approve to harmonize allowance structure towards creating the best value for the shareholder. Budget approval of MCH workshop relocation On behalf of the Board of Directors: Reviewed and approved Articles of Association and Memorandum of Association Approval of attendance and overtime policy Approved budget of MCH paving project Review and recommendation of Audited Financial Statement of 2018 Review and recommendation of quarterly financial reports for the financial year 2019 Revision of organizational structure Review and approval of Internal Audit Department’s structure ------ Appointment of Chief Risk Officer Dato. Mohamad Zaki Shahid Ali Adopted the Corporate Governance Code for State Owned Enterprises Chairman Chief Executive Officer & Approval of the Requirement of Chief Internal Auditors of State Owned Enterprises Managing Director Approval of Leave policy Approval of TOR for Grievance Committee Approval of disciplinary and termination policy Approval of code of conduct and dress code policy Approval of training policy and policy on apprentice program Adoption of Declaration of Interest of Board members and senior management members Approval of Internal Audit Plan 2020
1.4 Board Directors remuneration The remuneration provided to the Board Directors is determined by the policy on remuneration of Board members by Ministry of Finance. The remuneration of the members of the Board consist of the following elements; Monthly remuneration A fee for attendance per meeting A chairman allowance for the Chairman of the Board
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2.0 Board Committees Roles and Responsibilities of the Committee The Board delegates its work to the respective Committees of the Board. All committees function in accordance The purpose of the Audit Committee is to assist the Board in fulfilling its responsibilities relating to: with the approved Terms of References. Discussions and recommendations of the Committee meetings are The integrity of the Company’s financial statements and financial reporting process and its systems of submitted for the Board for approval before passing for implementation. internal accounting and financial controls. As of now, there are active 4 (Four) Committees of the Board. The Audit Committee, Risk and Safety Committee, The adequacy of the Internal Audit function, including reviewing the scope and results of audits carried out Corporate Governance, Nomination and Remuneration Committee and the Grievance Committee. The chairperson with respect to the operations of the Company. and members of the committees are appointed by the Board. The engagement of the external auditors and the evaluation of the external auditors’ qualifications, In October 2019, there were some revisions to the Committees. The Corporate Governance Committee independence, objectivity, and performance and Nomination and Remuneration Committee was combined as Corporate Governance, Nomination and Remuneration Committee. Audit and Risk Committee was revised as Audit Committee and a new Committee, Risk and Safety Committee was formed. Recommendations of the committees are then submitted to the entire Board for approval before management is assigned the work for implementation. Committee Activities during the year AUDIT COMMITTEE REPORT During the previous year the key decisions made include: The Audit Committee functioned as a combined Committee from beginning of the year until October 2019. In October 2019, Audit and Risk Committee was revised as Audit Committee. Therefore, the attendance of Audit Reviewed and recommendations were given to Audit Report and Audited Financial Statements for 2019 and Risk Committee and Audit Committee is shown separately. The Audit Committee held 11 meetings during Approval of internal audit plan for 2019 and 2020 2019. Revised internal audit department’s structure Approval of the Requirement of Chief Internal Auditors of State Owned Enterprises Audit and Risk Committee Attendance (Until October 2019) Approved the training budget of Internal Audit Department Name Position Attendance Tenure Reviewed the issues raised in Management Letter of 2018 Followed up on the progress of ERP implementation project Ms. Aishath Rayaheen Shareef Chairperson 1/5 01 January 2019- 06 February 2019
Ms. Aishath Shaufa Member 1/5 01 January 2019- 06 February 2019
Mr. Ahmed Asbaab Ali Naseer Member 0/5 01 January 2019- 12 February 2019
Ms. Mariyam Sheeneez Shakir Member 0/5 01 January 2019- 06 February 2019
Mr. Ibrahim Abdullah Member 5/5 07 January 2019- 31 October 2019 ------Uz. Jaufar Rasheed Chairperson 4/5 06 February 2019-09 July 2019 Ibrahim Arif Mr. Mohamed Shareef Member 4/5 06 March 2019-present Chairperson of the Committee
Audit Committee Attendance (After October 2019)
Name Position Attendance Tenure
Mr Ibrahim Arif Chairperson 6/6 28 October 2019-present
Mr. Jadhulla Nazim Member 2/6 28 October 2019-12 November 2019
Mr. Ahmed Laisham Member 6/6 28 October 2019-present
Mr Mohamed Shareef Member 5/6 06 March 2019-present
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Key activities of 2019 CORPORATE GOVERNANCE, NOMINATION & REMUNERATION During the year the key decisions made include: COMMITTEE Adoption of Nomination and Remuneration Committee’s charter The Corporate Governance Committee functioned separately until October 2019 and was later combined to three Reviewed the Sponsorship and Donations policy functions as Corporate Governance, Nomination and Remuneration Committee after October 2019. The Committee held 3 meetings during 2019. Reviewed the Installment policy Corporate Governance Committee Attendance (Until October 2019 Recommendations were given to proposed amendment to Financial Assistance policy Reviewed Director’s Induction and Training policy Name Position Attendance Tenure Assisted the Board in preparing annual work plan of the Board
Ms. Mariyam Sheeneez Shakir Chairperson 1/1 01 January 2019- 06 February 2019 Reviews grading and salary structure of the Company
Ms. Aishath Rayaheen Shareef Member 1/1 01 January 2019- 06 February 2019
M. Ibrahim Abdullah Member 1/1 07 January 2019- 31 October 2019
Corporate Governance Nomination and Remuneration Committee Attendance (After October 2019) ------Name Position Attendance Tenure Mohamed Shareef Chairperson of the Committee Ms. Mariyam Sheeneez Shakir Chairperson 1/1 01 January 2019- 06 February 2019
Ms. Aishath Rayaheen Shareef Member 1/1 01 January 2019- 06 February 2019
M. Ibrahim Abdullah Member 1/1 07 January 2019- 31 October 2019
Roles and Responsibilities of the Committee The major responsibilities of the Committee is to Review and make recommendations on Remuneration Policy with compliance with legal and regulatory requirements Ensure that contractual terms on termination, and any payments made, are fair to the individual, and the Company Establish succession planning for senior executives and employees taking into account the challenges and opportunities facing the company, and the skills and expertise needed in the future. Assist the Board in implementing the most appropriate corporate governance policies while meeting applicable corporate governance requirements. Develop and monitor the Company’s overall approach to corporate governance issues and, implement, administer, and continue to develop a system of corporate governance within the company Undertake an annual review of corporate governance issues and practices for the company and make recommendations for improvements where necessary.
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GRIEVANCE COMMITTEE RISK AND SAFETY COMMITTEE The Committee met 7 times during the year. Committee membership and attendance are as follows: For the purpose of cultivating a risk aware culture, during October 2019 a new Board Committee was formed as Grievance Committee Attendance (Until October 2019) Risk and Safety Committee. The Committee met once during the year.
Committee membership and attendance are as follows Committee membership and attendance are as follows
Name Position Attendance Tenure Name Position Attendance Tenure
Mr. Ibrahim Abdullah Chairperson 3/3 18 February 2018- 26 December 2018 Mr. Ibrahim Abdullah Chairperson 3/3 18 February 2018- 26 December 2018
Uz. Jaufar Rasheed Member 3/3 18 February 2018- 06 February 2019 Uz. Jaufar Rasheed Member 3/3 18 February 2018- 06 February 2019
Mr. Mohamed Shareef Member 3/3 18 February 2018- 06 February 2019 Mr. Mohamed Shareef Member 3/3 18 February 2018- 06 February 2019
Grievance Committee Attendance (After October 2019) Key roles of the Committee Name Position Attendance Tenure Ensure an appropriate framework is developed and executed for the management physical, operational, human resources, technology, business continuity, financial, compliance, reputational Mr. Ahmed Laisham Chairperson 4/4 28 October 2019-present Advise the Board on the process of risk management within the company and supporting the management Mr Ibrahim Arif Member 3/4 28 October 2019-present in the process of managing the risk Review and approve the risk management infrastructure and the critical risk management policies adopted Mr. Jadhulla Nazim Member 4/4 28 October 2019-present by the Company
Key roles of the Committee Key Activities during the year To consider and provide recommendations to Board about matters related to staff grievance procedure in Discussion of Committee Charter accordance with the policies and procedures of the Company. Reviewed the risk assessment reports prepared for Hulhumale’ Port, MCH, MNH, MSWH, GMTL and Provides a mechanism to deal with the staff grievance at various levels of authority in accordance with the Thilafushi Boat Yard terms of reference of the committee. Develop and advise proactive measures to prevent staff grievances
Key Activities during the year During the previous year the key decisions made include: Approval of terms of reference of the Committee Recommendations were given to staff grievances matters such as promotions, termination, transfers etc. ------Jadhulla Nazim Chairperson of the Committee
------Ahmed Laisham Chairperson of the Committee
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Commencement of Apprenticeship Organizational Highlights 2019 MPL initiated its Apprenticeship Program in collaboration with TVET Authority for individuals interested in attaining Working Experience in the Port Services Sector. The Apprenticeship Program is Allowance harmonization scheduled for a duration of six months, with a primary Inconsistencies in the allowance structures were focus on training in (but not limited to): Terminal addressed by ensuring a more equitable share of the vehicle operation, Mechanical engineering, Electrical Company’s revenues; with these new revisions, the engineering, marine engineering, and welding and allowances will be based on merit, performance and bus drivers. This program marks the beginning of a notable and consistent staffs’ contributions. long-term strategy to develop human resources and skills in the field of Port Management, Logistics and Maritime Services.
Arrival of New Forklifts We have expedited the process of acquiring forklifts, Gulhifalhu Port Consultants’ Visit in a continuous effort to improve the port services. MPL commenced its collaborative efforts as a key- All the handling and container-services facilities stakeholder to provide contextual and operational are heavily capital-intensive; we understand that perspectives on the current Port Operations this investment will greatly enhance customer to the Consultants appointed by the Economic experiences, and ultimately, cost of logistics for all Ministry. The Consortium of NIRAS and MTBS were our port-users. appointed on 29th September 2019 by the Economic Ministry to undertake Consultancy Services for the International Port Development at K. Gulhifalhu. Visit by ADB President The Consultants met with MPL on a site-visit on President Takehiko Nakao visited the Malé North 7th October, 2019. During these visits, MPL assured Harbor on 26th August 2019. CEO Shahid Ali received its constant support in all design efforts and data President Takehiko, and briefed the delegation about collection processes required throughout the Design the recent developments in the Harbor’s operations Process. and its future role in the integrated development planning of Greater Malé. We met with the MoED and its consultant (Consortium of NIRAS-UK/MTBS) on 7th October 2019. During the meeting, the Consultants presented the terms of reference of the Project, describing their scope Southern Maldives Expo 2019 and the role of various stakeholders throughout the progression of the Consultation Project of the MPL exhibited in the Southern Maldives Business Expo proposed Port at K. Gulhifalhu. held in Addu City, which was held from the 1st to 3rd August of 2019. During the Exhibition, CEO Shahid Ali took part in a panel along with the Economic Minister Uz. Fayyaz Ismail and the Business Community in Bintulu Port Authority Visit Addu City. The CEO addressed future prospects of Hithadhoo Ports Limited and concerns of the The Board of Directors held high-level meetings with the business Community. MPL was the official transport- Bintulu Port Authority, in further efforts to explore areas partner of this event, providing Bus-services and of mutual business interests. During these meetings, the ferry services between islands for visiting dignitaries Board of Directors discussed further the prospects of and exhibitors. MPL values the synergy created establishing an LNG repository in the Nothern most atoll by such events, whereby important perspectives, of the Maldives, which would target the LNG network, ideas and challenges can be discussed directly with traversing the East-West trading global commercial stakeholders and clients. maritime trading routes. These investment prospects are estimated to inject USD 200 million directly over a five-year period, and another USD 100 million into the project indirectly.
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Customer Service Training Program Customer service training was provided to staff of Greater Male’ Bus Terminal on 9th October 2019. The training was conducted by Mr. Masood Ali in collaboration with Port training Centre. The main purpose of this training was to improve the customer care standards of bus operation and ensure that the Bus attendants, Bus drivers and cash officers are equipped with full discipline promoting excellent customer service. The training was conducted for three batches involving all staff of Greater Male’ Bus Terminal.
Workshop on ISPS National workshop on International Ship and Port Facility Security Code (ISPS) for administrators and PFSO’s was held on 13th October 2019. The workshop was inaugurated by Honourable Minister of Transport and Civil Aviation Mrs. Aishath Nahula. ISPS code is necessary to be maintained in all Conference on Port Logistics – Addu City International Ports hence, the workshop’s main Special Conference on Integrated Port Logistics was held at Addu City on 8th December 2019. The Conference outcome is to refresh the ISPS code of conduct at was held to gather perspectives and discuss the issues present at HPL, and how MPL can leverage a port-centric MCH. logistics solutions. Among the participants of the conference include major stakeholders such as shipping agents, Merchants from Addu City and Addu City Council.
Vendor Portal, New Website and Bus Application launching Ceremony MPL hosted a ceremony on 25th MPL Anniversary Staff Night December 2019 to launch the Vendor On the occasion of MPL’s 33rd Anniversary, a staff Portal Application, New Website and Bus night was held on 1st November 2019 at Hiriya Application. The website and Application School. The event was held to all staff of MPL in was inaugurated by Honourable Minister recognition of their hard work and contribution. of Transport Mrs. Aishath Nahula. Major Remarkable achievements made by our staffs from stakeholders of MPL participated in this the past year was also celebrated in this event event held at Champa Central Hotel. along with entertainment and staff engagement During this event, the application features activities as well. The night was a successfully and usage was introduced to the users of organized in collaboration with Port Club and many vendor portal as well. other departments.
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Donation to The Class of Hope Port Recreation Club (PRC) Appreciation Night Creating Shared Value MPL donates to gifts and equipment to the class A special token of recognition was presented by the of HOPE at Jamaluddin School. This is part of the CEO Mr. Shahid Ali to our Staff Fathimath Shaliya Company’s continued efforts for social and economic and Aminath Shaamila who played exceptionally well Ooredoo #ColorRun Partner MOU signed with TVET Authority inclusion of differently abled persons. MPL’s for the Maldives women’s National Football Team. recruitment and staffing policy reflects its values Securing a historic bronze medal in the South Asian and has established minimum quotas in employing Games 2019 held in Nepal from December 1st – differently abled persons throughout its operations. December 11th. MPL is proud of the players for the National level achievement.
We provided special fares to participants of the We signed an MoU with the Technical and Vocational Ooredoo Color Run, organized by Ooredoo Maldives Education and Training Authority (TVET), to facilitate plc. People from all ages travelled to Addu to take part training programme for learners and school-leavers in the run. At our special discounted fares, Ooredoo gain experience and skills in Port Management, provided free transport to participants from the pilotage and other career opportunities available at connected islands to Hithadhoo, where the race took MPL. off. Police Awareness program Staff workshop on Strategy, Vision and Mission MPL’s 33rd Anniversary Flag Hoisting Ceremony At “Hunaruveni” 2019 A special workshop was carried out by Business Development department for Head-of- Departments and middle-management to familiarize and understand the Company’s fowardlooking, strategic direction. This exercise was also carried out for the benefit of gaining insight into perspectives of departments with regards to the upcoming year, and the long-term planning objectives of the Company.
Maldives police service conducted a crime prevention awareness program of MPL staff. The program aimed On the occasion of the 33rd Anniversary of MPL, a in team building and creating awareness of road We showcased career opportunities to visitors at the special flag-hoisting ceremony was held to celebrate safety and impressing upon the importance of civic Hunaruveni 2019 skill show, hosted by the Technical the Company’s achievements over its long and duty. The Program’s extended activities include a and Vocational Education and Training Authority. At illustrious history. With presence of beloved team-building event among MPL staffs, in an effort to this show, we gave insight into career-building employees a token of appreciation for each strengthen workplace culture and values. opportunities available in maritime commercial port department was given by CEO. Over the following management, marine-pilotage, and engineering days, the Ports Recreation Club organized and held a services. series of staff-led sports competitions to celebrate the occasion.
Maldives Port Limited | 2020 Maldives Port Limited | 2020 CAPITAL PROJECTS 2019 46 Angle-LeftAngle-LeftAngle-Left Annual Report 2020 ANGLE-RIGHTANGLE-RIGHTANGLE-RIGHT 47
Port Hiyaa Project Hulhumalé Paving Project Pending several directives and guidance from regulating agencies and government ministries, MPL is discussing The Hulhumalé Paving Project is expected to alleviate some of the structural issues arising from y ard-level i issues related to the Port Hiyaa Project. The Project costing a total value of MVR 566.6 million is at 57% completion, ntegrity t hat s ignificantly detracts performance efficiency and increases the maintenance cost of yard machinery with a completed value of MVR 323 million. and vehicles. The paving project which was commmenced on 23rd July 2019, is expected to be completed by mid-January in 2020. The project’s total value is MVR 9.3 milion, of which MVR 7.9 million has been completed.
Washing Bay Relocation Relocation of the Washing Bay to MCH will allow freeing up more space for port-side operations. Washing bay relocation was commenced on 29th April 2019, but due to unexpected delays and other setbacks, the project has prolonged. The total cost of the project is MVR 1.44 million, of which 65% is completed at a value of MVR 932,466.00.
Maldives Port Limited | 2020 Maldives Port Limited | 2020 AUDITORS’ REPORT FINANCIAL STATEMENTS 2019
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TABLE OF CONTENTS
Auditor General’s Report ...... 1 Financial Statement AUDITOR GENERAL’S REPORT Statement of Comprehensive Income ...... 4 Statement of Financial Position ...... 5 TO THE SHAREHOLDERS AND BOARD OF DIRECTORS OF MALDIVES Statement of Changes in Equity ...... 6 PORTS LIMITED Statement of Cash Flow ...... 7 Qualified Opinion Notes to the Financial Statement ...... 8 We have audited the financial statements of Maldives Ports Limited (the “Company”) which comprise the statement of financial position as at 31 December 2019, and the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies. In our opinion, except for the effects of the matter described in the basis for the qualified opinion section of our report, the accompanying financial statements give a true and fair view of the financial position of the Company as at 31 December 2019, and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards.
Basis for qualified opinion 1. The carrying value of the investment made in Kulhudhufushi Port Limited as stated in these financial statements is stated at MVR. 52,040,800/- (Note 15 to the financial statements). The investee incurred recurring losses since incorporation and the operational revenue has been decreasing over the years. Consequently, KPL has recorded an accumulated net loss of MVR. 69,176,392/- as at the year-end resulting in net assets to MVR. 32,864,408/- based on financial statements prepared by the management. As required by IAS 36; Impairment of assets, the Company should assess at the end of each reporting period whether there is any indication that an asset may be impaired. If any such indication exists, the Company should estimate the recoverable amount of the asset. Given the continuous losses, the management has not adequately assessed whether there is any indication that the said assets may be impaired. Accordingly, we were unable to sufficiently satisfy ourselves as to the valuation of the said balances stated in these financial statements. 2. An amount of MVR. 24,004,229 is stated under capital work in progress being expenditure incurred in the construction of a Tug Boat. Since the construction has been suspended in 2010 due to a dispute with the contractor and we were not allowed access to the premises verify the physical existence of the asset, we are unable to satisfy ourselves whether the amount shown under capital work in progress in the statement of financial position is fairly stated. 3. Related party receivables at the date of the statement of financial position includes receivables amounting to MVR. 13,073,636/- (Note 18.1 to the financial statements) from Maldives National Shipping Limited, which has been outstanding for more than eight years and therefore, doubtful of recovery. Hence, we are unable to satisfy ourselves whether the amount shown under related party receivables in the statement of financial position is fairly stated. 4. Other receivables include MVR. 85,137,999/- (Note 18 to the financial statements) due from Maldives Marketing and Public Relation Corporation. The Company has been unable to recover
Auditor General’s Office | Ghaazee Building | Ameer Ahmed Magu | Male’, Republic of Maldives +960 332 3939 | [email protected] | www.audit.gov.mv -1- two promissory notes originally matured on 31 March and 27 April 2015 respectively as of our opinion date. Based on the information available, the recoverability of these amounts is doubtful.
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA Code), and we have fulfilled our other ethical responsibilities in accordance with the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. This report is made solely to the Company’s members, as a body, in accordance with section 71 of the Companies Act No. 10 of 1996. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditors’ report and for no other purpose. Therefore, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Responsibilities of management for the financial statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with International Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. The Board of Directors is responsible for overseeing the Company’s financial reporting process.
Auditor’s responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Auditor General’s Office | Ghaazee Building | Ameer Ahmed Magu | Male’, Republic of Maldives +960 332 3939 | [email protected] | www.audit.gov.mv -2-