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 Maldives Port Limited | 2020 2 Angle-LeftAngle-LeftAngle-Left Annual Report 2020 ANGLE-RIGHTANGLE-RIGHTANGLE-RIGHT 3 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.