CONTENTS · { 14 – REACH STACKERS { 1 – EMPTY CONTAINER HANDLERS { 1 – TOPLOADERS { 15 –...

|| 1for more information please visit: www.kingstonwharves.com.jm PREPARED FOR THE FUTURE

CONTENTS

KWLat a Glance

MD&A

MISSION 2

Core Values 3

Notice of Annual General Meeting 4

KWL at a Glance 6

2013 Performance Summary 8

Ten Year Statistical Review 10

Chairman & CEO’s Report 12

Board of Directors 16

Directors’ Report 20

Corporate Governance 22

Leadership Team 26

Management Discussion & Analysis 30

STRATEGIC ASCENT 31

LOCAL STRENGTH 33

Delivering Value to Our Customers 33

Building Our Capacity 33

Developing Our Human Capital 34

Serving Our Community 35

Business Highlights 38

Corporate Social Responsibility 39

GLOBAL RELEVANCE 40

2013 PERFORMANCE 40

The Group 40

Kingston Wharves Limited 41

The Subsidiaries 43

PREPARED FOR TOMORROW:

Realising The Vision 44

Top Ten Shareholders 46

DIRECTORS’ AND EXECUTIVES’ SHAREHOLDINGS 46

Corporate Data 47

Index to Financial Statements 49

Independent Auditors’ Report 50

Advisory to Shareholders

Proxy Form

12

6

Chairman& CEO’s Report

28

2 || KINGSTON WHARVES LIMITED ANNUAL REPORT - 2013

MISSIONTo be the multipurpose port of choice for the movement of cargo in the western hemisphere by providing consistently high quality service to the benefit of all stakeholders

VISIONTo become the world’s leadingmulti-purpose port operator


Integrity Our actions and decisions shall reflect the highest ethical standards, professionalism and honesty.

Customer Focus We are deeply committed to meeting the needs of our customers, and we will constantly focus on customer satisfaction.

Respect We will respect the dignity and rights of our employees and customers.

Teamwork We know that to be a successful company we must work together, frequently transcending organizational and departmental boundaries to meet the changing needs of our customers.

Social Responsibility We play an active role in making our country and the community in which we operate a better place to live and work, knowing that the ongoing vitality of our country and community has a direct impact on the long-term success of our business. Performance We strive for continuous improvement in our performance, measuring results carefully and ensuring that integrity and respect for people are never compromised.

CORE VALUES

NOTICEof Annual General Meeting


NOTICE is hereby given that the Annual General Meeting of Kingston Wharves Limited will be held at the Jamaica Conference Centre, 14-20 Port Royal Street, Kingston on Wednesday, June 18, 2014 at 10 a.m. for the following purposes:

1. To receive the Audited Financial Statements for the year ended December 31, 2013 and the Reports of the Directors and Auditors circulated herewith:

To consider and (if thought fit) pass the following resolution:

“THAT the Audited Financial Statements for the year ended December 31, 2013 and the Reports of the Directors and Auditors circulated with the Notice convening the meeting be adopted”.

2. To declare the dividend of ten cents ($0.10) paid on March 28, 2013 and final dividend of eight cents ($0.08) paid on December 20, 2013 as final.

To consider (if thought fit) pass the following resolution:

“THAT as recommended by the Directors, the dividend of ten cents ($0.10) per share paid on March 28, 2013 and final dividend of eight cents ($0.08) per share paid on December 20, 2013 be and are hereby declared as final and that no further dividend be paid in respect of the year under review.

3. Rotation of Directors

(a) The directors retiring from office by rotation pursuant to Article 107 of the Company’s Articles of Incorporation are Messrs. Alvin Henry, Jeffrey Hall and Ramon Pitter and Mrs. Kathleen Moss who being eligible offer themselves for re-election.

To consider (if thought fit) pass the following resolutions:

(i) “THAT Mr. Alvin Henry be and is hereby re-elected a Director of the Company.”

(ii) “THAT Mr. Jeffrey Hall be and is hereby re-elected a Director of the Company.”

(iii) “THAT Mr. Ramon Pitter be and is hereby re-elected a Director of the Company.”

(iv) “THAT Mrs. Kathleen Moss be and is hereby re-elected a Director of the Company.”

4. To appoint auditors and authorise the Directors to fix the remuneration of the Auditors.

To consider and if thought fit pass the following resolution:

“THAT PricewaterhouseCoopers, Chartered Accountants, having agreed to continue in office as auditors, be and are hereby appointed Auditors of the Company to hold office until the next Annual General Meeting at a remuneration to be fixed by the Directors of the Company.”

5. To fix the fees of the Directors or to determine the manner in which such fees are to be fixed.

To consider and (if thought fit) pass the following resolution:

“THAT the amount shown in the audited accounts of the Company for the year ended December 31, 2013 as fees of the Directors for their service as directors, be and is hereby approved.”

Dated this 25th day of April 2014.By Order of the Board

Roger HindsCompany Secretary

REGISTERED OFFICEKingport BuildingThird Street Newport WestKingston, Jamaica

NB: A member entitled to vote at the meeting is entitled to appoint a proxy to vote in his stead. A proxy need not be a member of the company. Enclosed is a proxy form for your convenience, which must be lodged at the office of the Registrar and Transfer Agent of the company, KPMG Regulatory & Compliance Services, 6 Duke Street, Kingston, Jamaica at least forty-eight hours before the time appointed for holding the meeting. The Proxy Form shall bear the stamp of $100.00. The stamp duty may be paid by adhesive stamp (s) to be cancelled by the person executing the proxy

STACKERTerex TFC45


KWLat a Glance

KINGSTON WHARVES LIMITED (KWL) is consistently recognized as the Region’s leading Multipurpose Port Terminal Operator, connecting our nation’s importers and exporters to over 20 international ports in the Caribbean, Latin and North America.

ACHIEVEMENT KWL is the recipient of numerous awards and accolades for excellence:

ɻ Best in Chamber Nominee 2011 - Jamaica Chamber of Commerce

ɻ Growth & Development awardee for 2010 - Caribbean Shipping Association (CSA)

ɻ Most Efficient Port awardee for 2010 and 2008 - CSA

ɻ ‘Best Multi-purpose Terminal of the Year’ Award for 2006, 2007 and 2009 - CSA

OUR BUSINESS A listed company on the Jamaica Stock Exchange with Net Assets Value of US$119.91 million, the KWL Group has experienced steady growth through prudent management and a commitment to continuous

improvement that has ensured competitiveness, since its inception in 1945. In addition to its core business of terminal

operations, the KWL Group includes two subsidiaries:

ɻ SECURITY ADMINISTRATORS LIMITED, provider of industrial and port security services

ɻ HARBOUR COLD STORES LIMITED, a public bonded cold storage facility

KWL Facility

|| Google Earth Image ||

Berth 3Berth 4Berth 5Berth 6Berth 7Berth 8

Berth 9

1,655-metre continuous quay with draft of up to 13m

12-acre Transshipment Car Park

2,605,000-square foot open storage


WE DELIVER The port terminal provides full-range cargo handling and logistics services 24-hours per day, 7 days per week, including:

TERMINAL INFRASTRUCTURE Strategically located on the Port of Kingston 17º58’W, 76º48’N, the Terminal operates 24 hours per day, 365 days per year.

ɻ CONTINUOUS QUAY measuring 1,655 metres (5,430 feet) ɻ 9 DEEPWATER BERTHS for ro-ro, lo-lo, container,

general break bulk and bulk cargoes ɻ VESSEL DRAFT 9 metres (29 feet) to 13 metres (32 feet)ɻ ON-DOCK OPEN STORAGE: Approximately 242,000

square metres or 2,605,000 square feetɻ ON-DOCK TRANSSHIPMENT CAR PARK: 48,562 square

metres or 522, 720 square feet ɻ ON-DOCK WAREHOUSE STORAGE: 21,225 square

metres or 228,000 square feet.ɻ OFF-DOCK STORAGE: 20,000 square metres or 215,000

square feetɻ REEFER PLUGS: 173 at 440 Volts

HOW WE WORK The Equipment & Supporting Systems include:

ɻ 4 – GOTTWALD MOBILE HARBOUR CRANESɻ 14 – REACH STACKERSɻ 1 – EMPTY CONTAINER HANDLERSɻ 1 – TOPLOADERS ɻ 15 – TRUCKSɻ 15 – BOMB CARTS ɻ 1 – TERBERG TUG MASTER ɻ TIDEWORKS TERMINAL OPERATING SYSTEM

OPERATIONAL HIGHLIGHTS (2013) ɻ 295,000 Twenty-foot Equivalent Units (TEUs)ɻ 1.5 Million Tonnes Domestic Tonnage ɻ 65,000 Motor Units Moves

Jamaica is positioned to take advantage of the PANAMA CANAL EXPANSION, based on its strategic location in the Caribbean; it is predicted that the expansion will bring increased business to Jamaica, especially in transshipment. The Group is committed to furthering the scope of its existing growth and development strategies as it charts a steady course of action for the future, and is ready to capitalize on this opportunity.

For more information visit www.kingstonwharves.com.jm

ɻ MOORING AND UNMOORING OF VESSELS ɻ STEVEDORING ɻ EQUIPMENT RENTAL ɻ STRIPPING AND STUFFING OF CONTAINERS ɻ STORAGE AND WAREHOUSING

ɻ RECONSOLIDATION OF CONTAINERS ɻ CARGO HANDLING SERVICES ɻ TRANSSHIPMENT ɻ REFRIGERATED CONTAINER MANAGEMENT & SUPPORT

TRANSSHIPMENT KWL’s transshipment service has achieved exponential growth over the last decade. ɻ Two of the Region’s premier shipping lines utilize KWL’s terminal as their transshipment hub, operating weekly

feeder services to Caribbean and Latin American Ports.

ɻ The regional transshipment hub for one of the world’s leading motor vehicle carriers is managed by KWL, the first direct service of its kind from Europe to Jamaica.

IN ADDITION TO THESE RESOURCES, WE ARE ABLE TO SOURCE ADDITIONAL CHASSIS, TRUCKS, TRAILERS AND FORKLIFTS, UPON REQUEST


Con

tain

er T

eu’s

Han

dled

2009 2010 2011 2012 2013

79,1

37

124,

303

98,5

12

156,

836

90,2

37

152,

628

96,9

39

90,8

68

204,

244

186,

065

DOM

ESTI

C

*T

RANS

SHIP

MEN

T

2013PerformanceSummary

2009 2010 2011 2012 2013

SHAREHOLDERS’ EQUITY ($M)9,

536.

2

12,1

36.2

12,6

89.4

7,90

8.4

7,43

4.4

2009 2010 2011 2012 2013

EARNINGS PER SHARE ($)

0.31

0.41

0.59

0.56

0.14

2009 2010 2011 2012 2013

Group Operating Profit ($M)

640.

8

1,07

5.7

1,47

7.0

921.

7

693.

1

SHAREHOLDERS’ Interest

Financial

Operational

2009 2010 2011 2012 2013

KWL - Operating Profit ($M)

770.

1

1,18

5.5

1,49

8.3

865.

1

584.

9

*Restated to include restows


Mot

or U

nit M

oves

2009 2010 2011 2012 2013

7,72

6

3,54

1 9,06

3

47,7

73

11,4

07

51,6

75

21,0

87

17,0

98

47,4

01

59,2

37

DOM

ESTI

C

T

RANS

SHIP

MEN

T

2009 2010 2011 2012 2013

Stock Price at Year End ($)

6.065.00

5.92

4.003.08

2009 2010 2011 2012 2013

Market Capitalisation ($M)6,

350.

1

7,15

1.0

8,66

7.0

4,29

0.6

3,30

3.8

2009 2010 2011 2012 2013

Dividends Declared ($M)

45.5

143.

0

257.

4

128.

7

2009 2010 2011 2012 2013

SAL - Operating Profit ($M)

34.0

28.8 30.9

39.9

44.3

2009 2010 2011 2012 2013

HCS - Operating Profit ($M)

51.7

36.7

16.2

70.1

116.

7



PREPARED for the FUTURE

TEN YEAR Statistical Review 2013 *2012 *2011 2010 2009 2008 2007 2006 2005 2004 No. of Stock Units @ 20 cents each (000’s) 1,430,200 1,430,200 1,072,650 1,072,650 1,072,650 1,072,650 1,072,650 1,072,650 1,072,650 1,072,650 Total Assets ($’000) 16,716,664 16,386,680 14,369,707 12,317,049 12,160,635 12,233,560 8,854,977 7,677,911 6,343,594 4,487,008Net Current Assets ($’000) 2,911,375 2,844,769 800,995 912,786 896,221 836,735 604,910 565,202 516,432 453,571Deposit & Cash Balance ($’000) 3,159,899 3,100,658 1,076,655 1,282,678 1,120,133 1,182,095 976,178 677,137 633,945 515,491Capital Expenditure ($’000) 579,447 52,168 638,022 111,172 141,950 390,520 1,222,946 1,335,957 718,468 384,402Total Gearing ($’000) 1,998,940 2,046,359 2,390,675 2,462,422 3,007,277 3,110,254 2,606,776 1,643,036 756,797 265,118Shareholders’ Equity ($’000) 12,689,393 12,136,160 9,536,247 7,908,397 7,434,373 7,289,040 4,890,156 4,707,122 4,405,831 3,332,754 PROFIT AND LOSS ACCOUNT Revenue ($’000) 4,232,408 3,670,177 3,168,802 3,025,883 2,570,325 2,774,922 2,568,778 2,319,431 1,875,955 1,536,215% Increase/(Decrease) over prior year 15.32 15.82 4.72 17.72 -7.37 8.02 10.75 23.64 22.12 31.90 Operating Profit (J$’000) 1,477,042 1,075,667 640,764 921,723 693,091 717,528 576,428 612,360 503,822 349,652% Increase/(Decrease) over prior year 37.31 67.87 (30.48) 32.99 -3.41 24.48 -5.87 21.54 44.09 345.24 Finance Costs ($’000) 325,746 266,330 173,465 34,442 497,056 500,043 166,111 99,288 41,540 18,552% Increase/(Decrease) over prior year 22.31 53.54 403.64 -93.07 -0.60 201.03 67.30 139.02 123.91 -58.37 Profit Before Income Tax ($’000) 1,151,296 809,337 467,299 887,281 196,035 217,485 410,317 513,072 462,282 331,100% Increase/(Decrease) over prior year 42.25 73.19 (47.33) 352.61 -9.86 -47.00 -20.03 10.99 39.62 159.93 Net Profit Attributable to Equity Stockholders ($’000) 839,255 550,203 337,604 602,741 145,333 160,705 339,771 426,103 314,981 242,844% Increase/(Decrease) over prior year 52.54 62.97 (43.99) 314.73 -9.57 -52.70 -20.26 35.28 29.71 282.22 Dividends Declared ($’000) 257,436 143,020 45,512 128,717 - 53,632 85,812 85,812 85,812 75,085% Increase/(Decrease) over prior year 80.00 214.25 (64.64) 100.00 -100.00 -37.50 0.00 0.00 14.29 250.00 IMPORTANT RATIOS Return on Sales 19.83% 14.99% 10.65% 19.92% 5.65% 5.79% 13.23% 18.37% 16.79% 15.81%Return on Equity 6.58% 4.51% 3.52% 7.62% 1.95% 2.20% 6.95% 9.05% 7.15% 7.29%Current Ratio 3.94:1 3.63:1 1.95:1 2.02:1 2.24:1 2.12:1 1.91:1 2.19:1 2.48:1 2.62:1Debt to Equity Ratio 15.70% 16.88% 25.08% 31.14% 40.45% 42.67% 53.31% 34.91% 17.30% 8.04%Profit Before Tax to Sales 27.20% 22.05% 14.75% 29.32% 7.63% 7.84% 15.97% 22.12% 24.64% 21.55%Dividend Cover - Times 3.26 3.85 7.42 4.68 0.00 3.00 3.96 4.97 3.67 3.23Earnings Before Interest & Income Tax (EBIT) - Times 4.53 4.04 3.69 26.76 1.39 1.43 3.47 6.17 12.13 18.85Total No. of Employees (Permanent and Contractual) 819 756 481 458 434 347 202 186 191 157Net Profit After Income Tax per Employee ($’000) 1,024.7 727.8 701.9 1,316.0 334.9 463.1 1,682.0 2,290.9 1,649.1 1,546.8 MARKET STATISTICS Stock Price at year end $6.06 $5.00 $5.92 $4.00 $3.08 $4.80 $7.65 $7.94 $6.00 $4.90Earnings per Sock Unit $0.59 $0.41 $0.31 $0.56 $0.14 $0.15 $0.32 $0.40 $0.29 $0.23Price Earnings Ratio 10.27 12.20 19.10 7.14 22.00 32.00 23.91 19.85 20.69 21.30Net Worth per Stock Unit at year end $8.91 $8.52 $8.93 $7.37 $6.93 $6.80 $4.56 $4.39 $4.11 $3.11Net Worth to Total Assets 76.26% 74.38% 66.68% 64.21% 61.13% 59.58% 55.22% 61.31% 69.45% 74.28%Market Capitalisation ($’000) 8,667,012 7,151,000 6,350,088 4,290,600 3,303,762 5,148,720 8,205,773 8,516,841 6,435,900 5,255,985

*Restated for the adoption of amendments to IAS 19.


2013 *2012 *2011 2010 2009 2008 2007 2006 2005 2004 No. of Stock Units @ 20 cents each (000’s) 1,430,200 1,430,200 1,072,650 1,072,650 1,072,650 1,072,650 1,072,650 1,072,650 1,072,650 1,072,650 Total Assets ($’000) 16,716,664 16,386,680 14,369,707 12,317,049 12,160,635 12,233,560 8,854,977 7,677,911 6,343,594 4,487,008Net Current Assets ($’000) 2,911,375 2,844,769 800,995 912,786 896,221 836,735 604,910 565,202 516,432 453,571Deposit & Cash Balance ($’000) 3,159,899 3,100,658 1,076,655 1,282,678 1,120,133 1,182,095 976,178 677,137 633,945 515,491Capital Expenditure ($’000) 579,447 52,168 638,022 111,172 141,950 390,520 1,222,946 1,335,957 718,468 384,402Total Gearing ($’000) 1,998,940 2,046,359 2,390,675 2,462,422 3,007,277 3,110,254 2,606,776 1,643,036 756,797 265,118Shareholders’ Equity ($’000) 12,689,393 12,136,160 9,536,247 7,908,397 7,434,373 7,289,040 4,890,156 4,707,122 4,405,831 3,332,754 PROFIT AND LOSS ACCOUNT Revenue ($’000) 4,232,408 3,670,177 3,168,802 3,025,883 2,570,325 2,774,922 2,568,778 2,319,431 1,875,955 1,536,215% Increase/(Decrease) over prior year 15.32 15.82 4.72 17.72 -7.37 8.02 10.75 23.64 22.12 31.90 Operating Profit (J$’000) 1,477,042 1,075,667 640,764 921,723 693,091 717,528 576,428 612,360 503,822 349,652% Increase/(Decrease) over prior year 37.31 67.87 (30.48) 32.99 -3.41 24.48 -5.87 21.54 44.09 345.24 Finance Costs ($’000) 325,746 266,330 173,465 34,442 497,056 500,043 166,111 99,288 41,540 18,552% Increase/(Decrease) over prior year 22.31 53.54 403.64 -93.07 -0.60 201.03 67.30 139.02 123.91 -58.37 Profit Before Income Tax ($’000) 1,151,296 809,337 467,299 887,281 196,035 217,485 410,317 513,072 462,282 331,100% Increase/(Decrease) over prior year 42.25 73.19 (47.33) 352.61 -9.86 -47.00 -20.03 10.99 39.62 159.93 Net Profit Attributable to Equity Stockholders ($’000) 839,255 550,203 337,604 602,741 145,333 160,705 339,771 426,103 314,981 242,844% Increase/(Decrease) over prior year 52.54 62.97 (43.99) 314.73 -9.57 -52.70 -20.26 35.28 29.71 282.22 Dividends Declared ($’000) 257,436 143,020 45,512 128,717 - 53,632 85,812 85,812 85,812 75,085% Increase/(Decrease) over prior year 80.00 214.25 (64.64) 100.00 -100.00 -37.50 0.00 0.00 14.29 250.00 IMPORTANT RATIOS Return on Sales 19.83% 14.99% 10.65% 19.92% 5.65% 5.79% 13.23% 18.37% 16.79% 15.81%Return on Equity 6.58% 4.51% 3.52% 7.62% 1.95% 2.20% 6.95% 9.05% 7.15% 7.29%Current Ratio 3.94:1 3.63:1 1.95:1 2.02:1 2.24:1 2.12:1 1.91:1 2.19:1 2.48:1 2.62:1Debt to Equity Ratio 15.70% 16.88% 25.08% 31.14% 40.45% 42.67% 53.31% 34.91% 17.30% 8.04%Profit Before Tax to Sales 27.20% 22.05% 14.75% 29.32% 7.63% 7.84% 15.97% 22.12% 24.64% 21.55%Dividend Cover - Times 3.26 3.85 7.42 4.68 0.00 3.00 3.96 4.97 3.67 3.23Earnings Before Interest & Income Tax (EBIT) - Times 4.53 4.04 3.69 26.76 1.39 1.43 3.47 6.17 12.13 18.85Total No. of Employees (Permanent and Contractual) 819 756 481 458 434 347 202 186 191 157Net Profit After Income Tax per Employee ($’000) 1,024.7 727.8 701.9 1,316.0 334.9 463.1 1,682.0 2,290.9 1,649.1 1,546.8 MARKET STATISTICS Stock Price at year end $6.06 $5.00 $5.92 $4.00 $3.08 $4.80 $7.65 $7.94 $6.00 $4.90Earnings per Sock Unit $0.59 $0.41 $0.31 $0.56 $0.14 $0.15 $0.32 $0.40 $0.29 $0.23Price Earnings Ratio 10.27 12.20 19.10 7.14 22.00 32.00 23.91 19.85 20.69 21.30Net Worth per Stock Unit at year end $8.91 $8.52 $8.93 $7.37 $6.93 $6.80 $4.56 $4.39 $4.11 $3.11Net Worth to Total Assets 76.26% 74.38% 66.68% 64.21% 61.13% 59.58% 55.22% 61.31% 69.45% 74.28%Market Capitalisation ($’000) 8,667,012 7,151,000 6,350,088 4,290,600 3,303,762 5,148,720 8,205,773 8,516,841 6,435,900 5,255,985

*Restated for the adoption of amendments to IAS 19.

Kingston Wharves Limited Group (KWL Group) has taken a bold step in defining and assessing our performance. In addition to our usual annual performance review, we have completed a comprehensive 5-year performance assessment, a longer-term time horizon that

is better aligned to our journey to achieving our vision of Best Multipurpose Port in the World. The Group’s performance can be described as excellent: the results show exceptional financial performance over the period and all indicators are moving in the right direction.

The HKND Group reports that by 2030 – just over 16 years from now – the volume of addressable trade will have grown by 240%. The Americas are expected to remain a vital supplier of commodities, particularly energy, to meet Asia’s growing demand. There is, and will continue to be, increasing movement of goods such as coal and LNG on the international market to meet the demands of economies such as China. The total value of goods transiting the combined Nicaragua and Panama Canals will exceed $1.4 trillion, making this one of the most important trade routes in the world. The Caribbean Region, Jamaica in particular, is strategically located to capitalize on this movement.The development of port infrastructure, the expansion of the Panama Canal and the planned Logistics Hub in Jamaica, support this movement.

An examination of the KWL Group’s domestic versus transshipment business indicates that opportunities are within the transshipment arm of the business. While revenue margins for domestic TEUs and motor cars handled are greater than their transshipment counterparts, volumes are greater in transshipment and has been so for the last ten or more years. Domestic growth is entangled in the overriding macroeconomic issues and challenges that are beyond the KWL Group. Therefore, our focus must be on growing transshipment business and also strategically diversifying our business to meet the full range of our customers’ needs.

To position ourselves to capitalize on the opportunities presented by these trends, the Group has been acting locally but thinking globally for the last 5 years, our world-class vision a clear indication of our commitment to making this strategic shift. The KWL Group accepted the challenge that it was no longer business as usual as the emerging trends meant dealing with more global partners and competitors. The Group’s future would have to be supported by two strategic pillars; local strength with global relevance, driven by a world-class port.

|| LOCAL STRENGTH ||

THE KWL GROUP’S STRONG FINANCIAL PERFORMANCE OVER THE LAST FIVE YEARS DEMONSTRATES ITS LOCAL STRENGTH - A STRONG PERFORMING BRAND. Between 2009 and 2013, the Group had a sterling performance: revenue increased by 62%, from J$2.6 billion to J$4.2billion; Operating Profit by 117 %, from $693 million to $1.5 billion; Net Profit by 478%., from 145 million to 839million; and Earnings per Share by 321% from $0.14 to $0.59. This is a very commendable performance indeed. Growth in market share in terms of domestic tonnage has been marginal but steady; from 10% in 2009 to approximately 13% in 2013. Against the background of continuing world recession and extreme challenges in the global, regional and national economies, maintaining market share while simultaneously positioning for global relevance is worthy of note. As we indicated in 2011, we have a firm hold on the future and we continue to prove this to be true.

The Group’s track record as a responsible corporate citizen is unquestionable. During the last five years we focused on numerous

CHAIRMAN& CEO’s Report


GRANTLEYSTEPHENSON

Chairman & CEO


educational and sports activities and initiatives. Sponsorship for 2009-2013 valued more than J$15 million to the Annual Cricket Competition, J$4 million to United Gardens Christian Academy, an early Childhood Institution in Greenwich Farm, and J$2million to Father Ho Lung and Friends.

|| GLOBAL RELEVANCE ||

GLOBAL RELEVANCE IN AN ERA OF GLOBALIZATION IS NOT ONLY STRATEGIC BUT AN IMPERATIVE. OUR COMMITMENT TO BEING WORLD-CLASS IN ALL WE DO MEANS THAT WE MUST NOT ONLY HAVE A WORLD-CLASS PORT BUT ALL THE ATTENDING PILLARS: world-class service and operational excellence benchmarked against global standards. We are far along the journey because our people have what it takes and are committed to world-class performance.

We have embraced a world-class service vision and have begun to develop our people to deliver on this promise. Customer service training, underpinned by a world-class orientation and customer-driven service standards, was a main focus of people development in 2013. Employees at all levels participated in the series of training modules.

To ensure that our operations supported our vision of delivering world-class service, four mobile harbour crane operators successfully completed a 160 –hr. accreditation course for mobile crane operations at the Freeport Container Port in the Bahamas. The team received glowing commendations from the Instructors for their performance, especially Kavelle Campbell who had the highest score ever achieved in this course. Prudent management of cost has been an ongoing component of our strategy to achieve

operational excellence. Contracts with multiple fuel, maintenance and equipment

rental contractors were consolidated and more competitive and longer term contracts negotiated with some suppliers. Major investment in capital projects and fixed-asset acquisition over the past five years, including cargo handling equipment and terminal management software, (exceed J$3.5 billion) demonstrate the confidence KWL has in its future.

The hallmark project, the redevelopment of Berths 8 and 9 to create a modern container terminal complete with gantry crane rails represents 70% of that total spend. The operational and productivity gains have significantly increased the demand and use of these berths to the extent that most of the vessels calling at KWL are now serviced there.

Technology has been harnessed to improve productivity and efficiency - integral elements in the transformation of port operations. During the 2009-2013 period, $13.2 Million was invested in Maintenance/Stores, Integrated Payroll and HR Information Systems, all with a view to enabling our people and achieving operational excellence.

|| PREPAREDFOR THE FUTURE ||

Our 5-year performance indicates that we are prepared for the future and our 2013 performance cements that preparation. Key performance indicators for 2013 confirm that the Group has a solid foundation upon which the future can be confidently built. The Group achieved a 15.32% increase in revenue from J$3.7 billion in 2012 to J$4.2 billion in 2013. Operating profit increase by 37% - from J$1.1 billion in 2012 to 1.5 billion in 2013. Profit Before Income Tax increased by 42% - from J$809.3 million in 2012 to J$1.2 billion in 2013 and Net Profit (attributable to Equity Stockholders) increased by 53% from J$550.2 million in 2012 to


CHAIRMAN & CEO Report cont’d

J$839.3 million in 2013.In preparation for the overall upgrading of the multi-purpose terminal fleet, facilities and business processes geared at maintaining the Group’s competitive edge in the region were significantly improved. In 2013, approximately J$461.5 million was spent on cargo handling equipment and terminal management software. Three Taylor Reach Stackers and 6 Truck heads are the newest addition to the terminal equipment fleet. We continued our tradition of demonstrable commitment to our community in 2013 through several activities; chief amongst them a major re-tooling and refurbishing exercise at the United Gardens Christian Academy. The Group is pleased to have extended its sponsorsahip of the National Under-15 Cricket Team in the West Indies Cricket Board’s Regional Competition, hosted in Jamaica. We look forward to a milestone celebration of 25 years in flagship sponsorship of the national Under 15 Cricket Competition in 2014. In keeping with our plans to provide greater value-added services to our clients and accelerate our ability to offer guaranteed standards, the stevedoring operations of Shipping Services Stevedoring Limited (SSSL), a long-standing stevedoring provider on the Port of Kingston, were acquired. This acquisition puts us well on the way to becoming the only full-suite logistics services provider within the framework of Jamaica’s logistics hub initiative. With the mission of being the multipurpose port of choice sharply in focus, we were proactive in pursuing the designation of free-zone status for warehouse space that we intend to develop into a ‘Total Logistics Facility’. THE KWL GROUP IS PREPARED FOR THE FUTURE.

Jamaica’s economic recovery is now under way. So said Brian Wynter, Governor of the Bank of Jamaica, during a presentation at the Shipping Association of Jamaica’s Lunch and Learn Seminar in March 2014. Among the key factors that the Governor outlined that should increase the country’s growth potential and keep Jamaica on this path are the plans for shipping and port activities. Referring to the Government’s plan to make Jamaica a logistics hub, the Governor said the shipping sector is at the core of this initiative and, therefore, critical to its success.

We fully support the thrust by the Government to enhancing Jamaica’s profile as a competitive shipping destination.

However, we are keen on seeing a fast-tracked legislative

agenda to facilitate the implementation of a Port Community System (PCS) for Jamaica. While significant progress was made in 2013 in support of its introduction, established laws governing electronic transactions, customs, wharfage and the functioning of regulatory bodies such as the Port Authority should occupy central focus as the work to establish the PCS continues.

As population changes, shifts in economic activity, the demand and allocation of resources and the impact of the environment gather momentum, the world around us will continue to be transformed in ways that we have yet to imagine. While we may not be able to predict the future with certainty, the KWL Group is prepared for the future, prepared to embrace the new norm of a rapidly changing industry and the opportunities that such transformation will bring. Our employees, management and Board of Directors are to be applauded for their performance and ability to navigate a dynamic and ever-changing business and operational environment. THE NEXT TWO YEARS, 2014 AND 2015, WILL BE PIVOTAL YEARS FOR THE CONTINUED POSITIONING OF THE GROUP TO REAP THE BENEFITS OF OUR WORLD-CLASS VISION AND STRATEGIC DIRECTION. Our Diversified Business Model of Port Operations /Logistics, coupled with a Special Economic Zone, means that we will be able to meet the full range of our customers’ needs. The next 5-years will demand even more of our people. The Group will need to leap-step from global relevance to global competitiveness and to be ready for the implications of this - new customers, new service expectations, increased productivity and operational efficiency. We are prepared and are positioned to take full advantage of the opportunities which are being created in the shipping sector in Jamaica, the region, and the global economy.



Grantley Stephenson joined Kingston Wharves as the Managing Director in 2003 and has carefully crafted the modernization and growth strategies of the Company. He has also headed various shipping companies over the past 30 years including Seaboard Freight and Shipping Jamaica Limited and Jamaica Merchant Marine. In 2010 Mr. Stephenson was ranked the No.1 CEO by the Businessuite Magazine. He holds a Master of Business Administration from the University of the West Indies. He is also a graduate of the University of Technology in Jamaica and the University of Plymouth in England.

In 2013, Mr. Stephenson was reelected as the President of the Caribbean Shipping Association. He is Dean of the Consular Corps of Jamaica and the Honorary Consul General for the Kingdom of Norway. For his outstanding work in this role, he was conferred with the Jamaican National Award of the Order of Distinction - Commander Class and the Royal Norwegian Order of Merit, the highest non-national award.

OTHER BOARD AND COMMITTEE ASSOCIATION: Security Administrators Limited, Shipping Association of Jamaica, Shipping Association of Jamaica Property Limited. He is a fellow of the Jamaica Institute of Management.

LENGTH OF DIRECTORSHIP: 10 YEARS

GRANTLEY StephensonC.D., J.P. CHAIRMAN AND CEO

COMMITTEES: ALL

Karlene Bailey is a Management Consultant and was appointed to the Board of Directors of Kingston Wharves Limited in 2009.

Miss Bailey worked in the financial services sector for more than 9 years in organizations such as the Bank of Jamaica and NCB Capital Markets Limited where she was Vice President for Investments. Miss Bailey was also most recently a Lecturer in the Finance Department of the School of Business at the University of Technology (UTECH).

She holds a Master’s Degree in Economics from La Universidad Católica Santo Domingo and is currently pursuing a Doctorate of Business Administration (DBA) at the University of the West Indies.

OTHER BOARD AND COMMITTEE ASSOCIATIONS: Advantage General Insurance Company Limited.


KARLENE Bailey

COMMITTEES: AUDIT, BUSINESS DEVELOPMENT, CONTRACTS – CHAIR

Kim Clarke is the President of the Shipping Association of Jamaica and Managing Director of the Maritime and Transport Group of Companies. The Maritime and Transport Group consists of Maritime & Transport Services Limited, Maritime Towing Company Limited, Maritime General Insurance Brokers Limited, A.E. Parnell & Company Limited, Parnell Investment Limited and Seaport Equipment Limited.

He is also the Managing Director of Boat Services Limited as well as Chairman of Amalgamated Stevedores Limited and Caribbean Crewing and Manning Services Ltd.

Mr. Clarke is a graduate of the University of Miami.

OTHER BOARD AND COMMITTEE ASSOCIATION: R.S. Gamble Limited, Arnold L. Malabre & Company Limited, Newport Fersan Jamaica Limited, Caribbean Shipping Association, Shipping Association of Jamaica Property Limited, Jamaica Customs Advisory Board.


KIM Clarke

COMMITTEE: BUSINESS DEVELOPMENT

BOARDof Directors


Jeffery Hall is the Chief Executive Officer and a Director of Jamaica Producers Group (JP). Before joining JP, he was a founding partner of the Caribbean Investment Fund and senior executive of FINSAC, where he was involved in the acquisition and restructuring of various Jamaican financial institutions.

Mr. Hall received his Juris Doctorate degree, with honours, from Harvard University and practiced banking and securities law at Davis Polk and Wardwell in New York. He holds a Master of Public Policy degree (International Finance) from Harvard University and a Bachelor of Arts degree in Economics from Washington University.

OTHER BOARD AND COMMITTEE ASSOCIATION: Scotia Group Jamaica Limited, Scotia Investments Jamaica Ltd, Blue Power Group Limited, JAMPRO - Jamaica, Council of the Institute of Jamaica, Jamaica Producers Group. He has also served as a Director of the Bank of Jamaica and the Jamaica Stock Exchange. LENGTH OF DIRECTORSHIP: 2 YEARS

JEFFERY Hall

COMMITTEES: AUDIT, CONTRACTS, BUSINESS DEVELOPMENT – CHAIR

Alvin Henry is an Industrial Relations Consultant to the Shipping Association of Jamaica (SAJ). He retired from the SAJ in 2001 as its longest serving General Manager, having held that position for 20 years of a total 32 years of service to that organization.

Mr. Henry, who is also a Chartered Accountant and member of the Institute of Chartered Accountants of Jamaica, has also served as the Executive Vice President of the Caribbean Shipping Association. With his expertise and negotiation skills, he remains actively involved in the shipping industry.


ALVIN HenryJ.P.

COMMITTEES: HUMAN RESOURCES AND REMUNERATION, CONTRACTS, AUDIT – CHAIR

Roger Hinds is the Company Secretary for Kingston Wharves Limited. He has worked in Jamaica’s maritime sector for more than 30 years and is currently the Chairman and Chief Executive Officer of Transocean Shipping Limited and the founding Chairman of Transport Logistics Limited and Marine Haulage Service Limited.

A Past President of the Shipping Association of Jamaica, he is also the Chairman for ADVANTUM, formerly Port Computer Services and a Director of Assessment Recoveries Limited.

Mr. Hinds is a graduate of the University of the West Indies. OTHER BOARD AND COMMITTEE ASSOCIATION: Shipping Association of Jamaica, Shipping Association of Jamaica Property Limited, and the Caribbean Shipping Association. LENGTH OF DIRECTORSHIP: 10 YEARS

ROGER HindsEXECUTIVE CORPORATE SECRETARY

COMMITTEES: BUSINESS DEVELOPMENT, HUMAN RESOURCES AND REMUNERATION

STEPHEN Lyn Kee ChowJ.P.

COMMITTEES: AUDIT, CONTRACTS, HUMAN RESOURCES AND REMUNERATION

HARRIAT Maragh

COMMITTEES: BUSINESS DEVELOPMENT, AUDIT

CHARLES JohnstonC.D.


Stephen Lyn Kee Chow joined the Board of Kingston Wharves Limited on February 22, 2004. He is the CEO and Managing Director of Pickapeppa Company Limited, a world-famous producer of Jamaican sauces that have pride of place among gourmet connoisseurs.

Mr. Lyn Kee Chow was knighted by Pope John Paul II in 2000. He is a past student of the DeCarteret College in Manchester and remains an active member of the community where he serves as a Justice of the Peace and a Lay Magistrate.

OTHER BOARD AND COMMITTEE ASSOCIATION: The Catholic College of Mandeville, Holy Spirit Catholic Church (Maggoty) and St. Vincent DePaul Society


Charles Johnston is the Chairman and Managing Director of Jamaica Fruit and Shipping Company Limited. He is the Chairman of Jamaica Producers Group Limited, Seaboard Freight & Shipping Co. Limited and T.S. Crane Services. In 2013, he was also appointed Deputy Chairman of Scotia Group Jamaica Limited, having served as a Director of the Board since 2007.

In 2006, Mr. Johnston was conferred with the National Award of the Order of Distinction, Commander Class and in 2008 he was inducted in the Hall of Fame of the Private Sector Organization of Jamaica. He holds a Bachelor of Science Degree in Economics, specializing in International Trade and Finance from the University of Pennsylvania’s Wharton School of Finance and Commerce.

OTHER BOARD AND COMMITTEE ASSOCIATION: Shipping Association of Jamaica, Shipping Association of Jamaica Property Limited, Kingston Port Workers Superannuation Fund, Bank of Nova Scotia Jamaica Limited, Jamaica Public Service Company Limited, B & D Trawling Ltd., Lennox Portland Ltd., Kingston Logistics Centre LENGTH OF DIRECTORSHIP: 10 YEARS

Harriat Maragh is the Chairman and Chief Executive Officer of Lannaman & Morris Shipping Limited. He is also Chairman of the Kingston Port Workers Superannuation Fund and Metro Investments Limited and a Past President of the Shipping Association of Jamaica. Mr. Maragh is a graduate of the Humber College of Applied Arts and Technology in Toronto, Canada and a member of the Institute of Chartered Shipbrokers.

OTHER BOARD AND COMMITTEE ASSOCIATIONS: Shipping Association of Jamaica, Shipping Association of Jamaica Property Limited, Seafreight Agencies Inc., ADVANTUM, National Cruise Council of Jamaica, Assessment Recoveries Limited


BOARDof Directors cont’d

RAMON Pitter

COMMITTEES: AUDIT, CONTRACTS, HUMAN RESOURCES AND REMUNERATION

KATHLEEN Moss

COMMITTEE: HUMAN RESOURCES AND REMUNERATION – CHAIR


Ramon Pitter is currently the Head of Mergers, Acquisitions and Business Development at National Commercial Bank Jamaica Limited (NCB).

Before joining NCB, Mr. Pitter worked in senior management positions with companies such as Grace Kennedy Limited, Bank of America Merrill Lynch and J.P. Morgan Chase & Company. His background includes expertise in mergers and acquisitions, equity and debt transactions, restructuring, financial budget planning, business strategy consulting, business development, and portfolio management within a number of industries including real estate, gaming, leisure, shipping, transportation and financial services.

He holds a Masters of Business Administration with majors in Marketing and Finance from the Wharton School of Business, University of Pennsylvania.


Kathleen Moss is a Management Consultant and Chartered Business Valuator with Sierra Associates, an independent advisory and business valuation firm which she established in 1993. She is a member of the Canadian Institute of Chartered Business Valuators and the Deputy Chairman of JN General Insurance Company Limited.

A graduate of the University of the West Indies and McGill University, she is a trustee of the Violence Prevention Alliance and a member of the Finance Committee of the Archdiocese of Kingston. Mrs. Moss joined the Board of Directors of Kingston Wharves in 2012.

OTHER BOARD AND COMMITTEE ASSOCIATION: Jamaica Producers Group Limited, Assurance Brokers Jamaica Limited, JN General Insurance Company Limited, Pan Jamaican Investment Trust Limited and Jamaica National Building Society. Mrs. Moss Chairs the Audit Committees of Jamaica Producers Group and Pan Jamaican Investment Trust and is a member of the Audit and Finance Committees of Jamaica National Building Society.


DIRECTORS’ReportThe directors are pleased to submit the Group results for Kingston Wharves Limited for the year 2013.

Operating Results:- The Profit for the Group before income tax was $1,151,296,000.

- The Profit for the Group after Tax and Minority Interest was $839,255,000.

Dividends: The directors recommend that the following dividends paid during 2013 be declared as final:

- Ten cents ($0.10) per share paid on March 28, 2013

- Eight cents ($0.08) per share paid on December 20, 2013

Messrs. PricewaterhouseCoopers, the present auditors will continue in office pursuant to Section 153 of

the Companies Act, 1965.

The directors wish to express their sincere appreciation to the management and employees for their

contribution.

On behalf of the Board April 25, 2014

ROGER HINDSCompany Secretary


BERTH 8Berthing Facility and

Container Yard


CORPORATEGovernance


Effective corporate governance is a major priority of the Kingston Wharves Group and consequently the central responsibility of its eleven member Board of Directors. The Board aims to maintain strong corporate governance and comply with the Group’s Corporate Governance Charter available on the KWL Website - www.kingstonwharves.com.jm.

The Board recognizes its role in providing entrepreneurial leadership and strategic direction as critical components in the creation of shareholder value and maintaining the confidence of its shareholders, management, employees, stakeholders and the community.

Board Stewardship

There were seven scheduled meetings of the full board during 2013 which included a strategic planning retreat, convened to develop and ratify plans for the KWL Group over the medium to long-term.

The board focused on enhancing shareholder value and ensuring the long-term viability of the Company across all aspects of its operations through its provision of guidance and strategic direction to management on areas, including:

long term strategic plans

risk management

controls

reports and budgets

Board Meetings

COMMITTEE ATTENDANCE ATMEMBERS MEETINGS

Grantley Stephenson, Chairman 7/7

Karlene Bailey 7/7

Kim Clarke 6/7

Jeffery Hall 5/7

Alvin Henry 7/7

Roger Hinds 6/7

Charles Johnston 4/7

Stephen Lyn Kee Chow 7/7

Harriat Maragh 4/7

Kathleen Moss 7/7

Ramon Pitter 7/7

The Board of Directors is comprised of ten non-executive directors and one executive director, Mr. Grantley Stephenson who performs the dual role of Chairman and Chief Executive Officer. The Board of Directors section of the 2013 Annual Report provides the names of the directors and includes details of their qualifications and experience.

Independent Directors

The Board continuously looks at how it can achieve best balance between independent and non-independent directors within the structure of the company’s ownership; however, it recognizes that such balance is not easily obtained as a result of the nature of the business of KWL. The four non-executive directors affirmatively declared as “independent” by the Board in 2013 are:


For the year 2013, the Board of Directors was assisted by the following four Board Committees:

Business Development Committee

The Business Development Committee held one meeting during 2013 with its principal mandate being to advise the Board of Directors on strategic planning and business development matters in Kingston Wharves Limited, including specific capital projects, the Company’s Strategic Plan, and the Company’s business and non-financial asset portfolio. The Committee also made recommendations to the Board on decisions that needed to be made with regard to these matters, and provided guidance, direction and oversight to management with respect to existing and new business development opportunities.


Jeffery Hall, Chairman 1/1

Karlene Bailey 1/1

Kim Clarke 1/1

Roger Hinds 1/1

Harriat Maragh 1/1

Grantley Stephenson 1/1

Contracts Committee

The Contracts Committee had one meeting in 2013 and provided direction to the Board on substantial contractual relationships between the Company and its commercial counterparties and where potential conflict of interest may arise. The Committee is committed to maintaining the Company’s high standards of

corporate conduct and governance. A key aspect of that commitment is to ensure that substantial contractual dealings are conducted in a balanced and sensitive manner with proper regard to the overall best interests of the Company and all shareholders.


Karlene Bailey, Chairman 1/1

Jeffery Hall 1/1

Alvin Henry 1/1


Ramon Pitter 1/1


Audit Committee

The Audit Committee comprises at least three members, who are non-executive directors and a minimum of 50% of the members identified as independent directors.

The Audit Committee had nine meetings in 2013 in which it reviewed, the integrity of the financial statements, including the annual and interim consolidated information, formal announcements relating to the company’s financial performance, significant management reports, budgets, financing for capital projects, the effectiveness of internal controls and risk management systems among other matters which fall within its commission.

The Committee supervises, monitors, and advises the Board of Directors on risk management and control systems and reviews the effectiveness of the internal audit function. The Committee monitors and reviews the independence, objectivity and effectiveness of the relationship with the external auditor on behalf of the Board. It also makes recommendation to the Board in relation to the reappointment of the external auditor each year as well as remuneration and other terms of engagement.

CORPORATEGovernance cont’d



Alvin Henry , Chairman 9/9

Karlene Bailey 8/9


Harriat Maragh 9/9

Ramon Pitter 7/9


Human Resources and Remuneration Committee

The Human Resources and Remuneration Committee consists of not less than three members and includes at least one independent non-executive director.

The Human Resources and Remuneration Committee had five meetings during 2013 in which it developed a policy and framework for executive compensation to provide performance-based reward opportunities in support of the Company’s business objectives and long-term financial returns to investors, as well as to attract, retain and motivate the executive director and senior executives.


Kathleen Moss, Chairman 5/5

Alvin Henry 5/5

Roger Hinds 4/5



STACKERTaylor TS9972


LEADERSHIPTeam


GRANTLEY STEPHENSON, C.D., J.P.Chairman and Chief Executive Officer – KWL

Grantley Stephenson has the overall responsibility of charting and maintaining the Group’s businesses on the course of steady growth, profitability and sustainability through the planning and implementation of strategic objectives set out by the Board.

Additionally, he is charged with developing, enhancing and sustaining an effective strategic relationship with key stakeholders of the business. Mr. Stephenson drives the effort towards the achievement of the Group’s vision by providing leadership, planning and direction towards the formulation of business development on a macro level.

LENGTH OF TENURE: 10 years

MARK WILLIAMSChief Operating Officer – KWL

Mark Williams is responsible for the development and execution of corporate strategy for the KWL Group. He ensures the efficient running of the Company and leads the monitoring and assessment of business performance to ensure the achievement of corporate goals and objectives.

In addition to managing the Group’s strategic planning process, he also has responsibility for domestic and international business development, marketing, customer service, terminal operations, safety and security as well as Human Resources.


CLOVER MOODIEGroup Chief Financial Officer – KWL

Clover Moodie is primarily responsible for planning, directing and controlling the Group’s financial operations as well as all strategic and tactical matters as they relate to budget management, cost benefit analysis and financial forecasting.

Additionally, Ms. Moodie oversees the management and coordination of all fiscal reporting activities for the group and provides advice on asset acquisitions and management, as well as other major revenue and expense considerations. In addition, she makes projections for future growth opportunities for the Group.

LENGTH OF TENURE: 3 months

STEVE WHYTEGroup Information Systems Manager – KWL

Steve Whyte is charged with the development of computer information resources, data security and control, as well as strategic computing, and disaster recovery for the Group.

He administers the systems analysis and implementation of computer applications and hardware including upgrading, data back-ups and proper recording of the systems on a daily basis. Mr. Whyte also evaluates the company’s technology use and needs and recommends improvements as well as to ensure that the security and integrity of systems and data are maintained at the highest standards.


VALRIE CAMPBELLOperations Manager - Receival & Delivery – KWL

Valrie Campbell is responsible for the implementation and monitoring of the systems, procedures and standards which support the efficient running of Kingston Wharves’ warehouse and landside terminal operations.

Ms. Campbell is KWL’s Port Facility Security Officer (PFSO) and in this capacity provides oversight to the Terminal’s Security and Safety portfolio. She also manages the investigation of all liability claims made to KWL and recommends appropriate action to management.


RYAN PEARTOperations Manager - Stevedoring & Planning – KWL

Ryan Peart assists and advises the executive team on all matters relating to the port terminal to ensure its efficient and profitable operations. He assists with developing strategic programmes to facilitate achievement of long and short term benefits of port operations. Mr. Peart manages all daily operations of the port terminal, which involve vessel planning, and stevedoring.


Kingston Wharves Limited and its subsidiaries are being led by a team of seasoned professionals with years of experience in the shipping industry. The following is a summary of their respective roles and responsibilities of members of the Leadership Team:


LLOYD SMITHTechnical Services Manager – KWL

Lloyd Smith is responsible for the monitoring and management of all electrical related systems, as well as mechanical construction and maintenance activities. He ensures that all electrical installations and systems are maintained at the highest level and also develop and implement effective electrical maintenance and mechanical engineering programmes for the facilities of the Company. Mr. Smith handles the procurement services of contractors to effect repairs on electrical installations and fixtures.


CAPTAIN GEORGE REYNOLDSManaging Director – SAL

Captain George Reynolds is charged with leading the company and structuring all resources strategically to increase profitability. Captain Reynolds directs all aspect of management for the company and is primarily responsible for the designing, developing and implementing strategic plans in alignment with the main objectives and targets.

He also ensures that adequate security measures are implemented and maintained in order to protect the property of the terminal, shipping agents and consignees and reducing illicit use of the port


JULIET CRAWFORDAdministration & Human Resources Manager – SAL

Juliet Crawford directs all human resources and administration related matters for Security Administrators Limited. She also manages the activities of the National Port Identification Processing Centre, which includes the production of port identification card.

Her portfolio includes recruitment and staffing, preparation of employee contracts, performance evaluation and management, employee compensation, benefits, development and training.


PAULINE BURTONFinance and Facilities Manager – SAL

Pauline Burton is charged with managing all the company’s accounting affairs including treasury management and the co-ordination and preparation of budgets and financial statements.

Ms. Burton also monitors the acquisition and maintenance of the company’s assets and facilitates internal and external auditors. By extension, she provides supervision to multi-disciplinary teams to include the accounting and maintenance staff


OMAR WALKER Safety & Security Manager – KWL

Omar Walker manages all aspects of the Company’s safety and security policies and procedures in order to safeguard KWL personnel and property. He ensures periodic strategic review of all safety and security measures, monitors and investigates all safety and security breaches and implements corrective measures to improve effectiveness. Mr. Walker is also responsible for developing safety programmes and conducting employee training to ensure compliance with the Company’s objectives.

LENGTH OF TENURE: 6 months

MARCELLO RICHARDSEngineering Manager – KWL

Marcello Richards has responsibility for the overall operations of all engineering and fleet maintenance function within the company. He ensures that the infrastructure, electrical systems and equipment are maintained at the highest level.

Mr. Richards also develops and implement maintenance programs, develops and monitor the maintenance budget, develops and execute capital projects as well as design and plan the layout of buildings, design structure and oversee the preparation of ‘Bill of Quantities’ for construction works.


LEADERSHIPTeam cont’d


MAJOR TALBERT MORRISON Operations Manager – SAL

Major Talbert Morrison is responsible for the co-ordination and supervision of all security activities at client locations, as well as security systems for vessels at the relevant port facilities in conjunction with other support agencies. He undertakes continuous auditing of all the agreed Systems and Procedures for Security Officers, making recommendations and highlighting weaknesses and breaches in security arrangements. In addition, he helps to enforce the safety requirements at the terminal. Major Morrison also assesses the training needs of the staff, designs and conducts appropriate training programmes as needed.


CALVIN WATSONAssistant Operations Manager – SAL

Calvin Watson assists and advises the Operations Manager in overseeing all security and safety activities. Mr. Watson manages all daily operations at client locations, vessel security systems at the relevant port facilities of the port terminal. He is responsible for assisting the operations manager in coordination of security and safety requirements, as well as managing, training, and assessing performance of the entire security personnel. He is also responsible for assisting with internal investigations.


BERTH 2Container Yard

for more information please visit: www.kingstonwharves.com.jm PREPARED FOR THE FUTURE || 29

MANAGEMENTDISCUSSION & Analysis 2013

KINGSTON WHARVES LIMITED ANNUAL REPORT - 201330 ||

|| LOCAL STRENGTH || - Delivering Value to Our Customers - Building Our Capacity - Developing our Human Capital - Serving Our Community

|| GLOBAL RELEVANCE || - ACE - Business Processes - Safety and security

|| 2013 PERFORMANCE ||

- The Group - Kingston Wharves Limited - The Subsidiaries

|| PREPARED FOR TOMORROW: REALISING THE VISION ||

- Increased use of Technology - Terminal and Warehouse Redevelopment


STRATEGICAscent “In the mountain of truth, one never climbs in vain, you either reach a higher step today or exercise your strength to climb higher tomorrow.” – Nietzsche

HIGH PERFORMANCE PEOPLE: Mobilise the skills and capabilities of high potential employees committed to world-class performance.

THE WORLD’S LEADINGMULTI-PURPOSE PORT OPERATOR.

LEAD LOGISTICS PROVIDER:Leverage a strong performing brand to expand Supply Chain and Service offerings and thereby satisfying the full range of customer needs.

WORLD CLASS SERVICE:Achieve customer-driven service standards honed

to actualize excellence in customer service and built on a foundation of accountability and commitment

benched marked against world-class standards. World Class Service Everyday… All Day.

OPERATIONAL EXCELLENCE: Improve operational efficiency

within a performance-driven and technology enabled environment

to increase productivity.

1

2

3

4

5

The Management of Kingston Wharves Limited (KWL) is responsible for the reliability of the

information disclosed in the Management and Discussion Analysis (MD&A). The MD&A provides an overview of the financial performance of the Group and its subsidiaries which is consistent with previous disclosures made by the Group and its audited financial statements for the Financial Year 2013. This MD&A includes forward-looking statements based on our current strategic plans and expectations about future events. In light of the risks, uncertainties and assumptions discussed in the Chairman’s Message (Page 2-5) and discussed in this section, there are risks that our actual experience will differ materially from the expectations and beliefs reflected in the forward-looking statements in this section and throughout this report. The KWL Group is a publicly listed company on the Jamaica Stock Exchange with net

assets of US$119.9 million. The principal activities of the KWL Group are wharf operations, cold storage, and provision of security services. These activities are carried out through Kingston Wharves Limited (KWL) which operates and manages the multipurpose wharf operations on the Port of Kingston; Harbour Cold Stores Limited (HCS) which operates cold storage facilities and provides complimentary ancillary services; and Security Administrators Limited (SAL) which provides security services to marine-related companies.

The dynamic environment in which we operate demands constant, careful, and rapid reassessment of the internal and external business environments to ensure greater gains than losses for customers, employees, and shareholders. Over the past five years, every milestone on the journey to becoming the World’s Best has been defined by strategic focus and commitment informed by constant assessment. Our achievements have been predicated on CHANGE and a fervent appreciation of the critical success factors that determine how well we navigate an environment defined by uncertainty. Leveraging our strength domestically and regionally while positioning our capabilities to be globally relevant is the platform on which the Company will transition from vision to the reality of becoming a Global Leader.


MD&Acont’d

CRITICAL SUCCESS Factors

LEADERSHIP

TransformationalAccountableCommitted

PANAMA CANAL

EXPANSIONIncreased

transshipment traffic anticipated

via Kingston

FINANCINGDebt/Equity

INFRA-STRUCTUREREADINESSRefurbishing

of BerthsRelocation of Warehouses

Application of InformationTechnology

|| LOCAL STRENGTH ||

Delivering Value to our CUSTOMERS

KWL’s vision of being a world-class port was elevated several notches in 2013

through some key activities.

KW STRIP.SCAN.GO Full Container Load (FCL) product was re-launched under the brand KW Strip.Scan.Go with new value-added services establishing it as the priority service for stripping full container load. The re-launch coincided with a change in the customs regulations which allows FCL containers to be stripped on either terminals or bonded warehouses regardless of which terminal the containers landed. A new and dedicated management team was formed to direct operations at the Berth 5 stripping station where the service is housed. To differentiate the product, several value-added services were introduced, including an air-conditioned Customs Broker Lounge, with wireless internet access, for Brokers or Clerks to observe stripping activities. FCL customers are able to monitor the stripping status of their containers in addition to having 24/7 access to stripping schedules via the Kingston Wharves Website.

A PRIORITY SERVICE FOR STRIPPING &STUFFING FULL CONTAINER LOAD

IMPROVING CUSTOMER EXPERIENCEAND PROCESSINGTo enhance the customer experience, customer lounges were installed at Berths 6 and 7. Upgrades made to the Cargo retrieval and queuing system used by the warehouses, improved the management of customer flow and wait time. This earned the commendation of our customers, especially during the Christmas peak period. The placement of a Kingston Wharves Cashier in the Customs Manifest Area has eliminated time-consuming processes and enhanced the experience for a significant number of our customers who must make amendments to their cargo documentation.

KWL’s representation on the Quality Assurance Committee, a grouping of key industry stakeholders’ associations chaired and facilitated by the Jamaica Customs Agency, provides a means of communication through which the Company can actively engage with its stakeholders and be responsive to service delivery issues.

Building our CAPACITY The acquisition of the Shipping Services (Stevedoring) Limited business involved expanding the operations, a transition seamlessly achieved by the consistent effort of the stevedoring and maintenance teams. The efficient management of our capacity and resources as well as the maintenance of quality service delivery, has preserved the business opportunity of this acquisition.

PROVIDING A NEW EXPERIENCE: One of three Customer Lounges installed during 2013 with conveniences to accommodate commercial and personal effects customers.


On the container and general cargo delivery side of operations, a new Management Team was assigned to Warehouse and R&D Operations. Improvements achieved in container receival and delivery processing resulted in a 16% or 8-minute reduction in truck-turnaround time.

During the year, improvements were made in both maintenance personnel and equipment fleet. A Maintenance Planner was hired to improve equipment maintenance, project planning and execution. Additions to the equipment fleet valued over $300 million include:

- 1 Genie 125 ft. man lift - 3 Taylor TS 9972 reach stackers- 6 Busby bomb carts - 4 Kalmar Ottawa 4x2 terminal tractors - 1 Kalmar 4x4 terminal tractor ordered

for delivery in 2014

The implementation of information systems to enhance the maintenance management and inventory will be completed in 2014. Major facilities projects successfully completed in 2013 include the surface rehabilitation of Berth 9 to the tune of J$40M, construction of customer lounge areas, rehabilitation of Berth 3 and the installation of new 70,000 litre ultra-low sulphur diesel (ULSD) tank and fuel pumps to support the increase in fleet and operations.

Developing Our Human Capital

Performance management and development, succession planning, employee training, and employee career development were central themes in human capital development in 2013. These are important drivers of our objectives of enhancing competence, productivity, service quality, and compliance. HRA IMPLEMENTATION - In March 2013, the HRA Professional software from Advantum was acquired and was fully implemented in October. It assists in improving data entry, data tracking and information management in the Human Resources Department and facilitates employee management, knowledge development, career and succession planning. SAFETY ORIENTATION TRAINING - Conducted in September 2013, it was geared towards educating the Warehouse staff about risk management specific to their jobs and encouraging the adaptation of better safety practices in their day-to-day activities.

CRANE OPERATOR TRAINING - Kavelle Campbell, Leon Hunt, Claude Mullings and Alan Edwards participated in an Occupational Health & Safety Advisory Services (OHSAS) certified course for Gottwald Crane Operators at the Freeport Container Terminal in the Bahamas. The participants successfully completed the 160-hour course involving a range of knowledge and skills training, in-class, simulator practice, and hands-on crane operations. Safety in the operations of the crane and personnel working within the operations area is an integral component of the course. Kavelle Campbell, the youngest

MD&Acont’d

PERFORMANCE DRIVEN:With operational excellence

as a major goal, building a strong team is key;

Operations Coordinators (l-r) Rohan Williams and

Anthony Tingle are leaders in the Stevedoring Arm of the

Operations Team.

RAISING THE BAR FOR SERVICE DELIVERY:(l-r) Latham Spence,

Operations Officer follows through on container delivery

with Kemar McKenzie, Delivery Clerk and Christine Bryan,

Gate Pass Clerk.


member of the delegation received outstanding commendation from the Accredited Instructors for his performance, enthusiasm and dedication.

MANAGEMENT TRAINEEPROGRAMME - The programme is a key component of the Company’s comprehensive succession planning strategy and its second cohort has been in place since 2013. KWL continues to facilitate the growth & development of employees through this programme with a view to developing managers who can perform at the senior level within 8-10 years. The programme identifies and develops leadership skills of high-potential candidates with the right competence, skills set and aptitude.

The main objective of the programme is to provide the trainees with broad exposure through a rotational programme. Trainees are rotated throughout various departments and gain on-the-job and specialized training and skills development including port operations, maintenance, finance, safety and security. The four employees who are currently part of this programme are Kieron Rose, Sadrean Williams, Everton Thomas and Giovan O’Connor.

EDUCATION ASSISTANCE PROGRAMMEA management programme designed to assist with workforce development, it provides opportunities for employees to further develop their education in line with required organizational competencies. UTECH JOB FAIR - The Company participated in the annual Career and Job Placement Fair in March 2013 which provides the opportunity to KWL to partner with the University in identifying and selecting appropriate candidates for their human resource pool.

Serving Our Community

The KWL Group remains committed to Jamaica and while we strategize to move our business forward, we also extend our focus, year-after-year, to ensure we positively impact future generations, the most vulnerable and our wider community. In 2013, our tradition of support for initiatives in education, sport and social outreach continued as we supported a number of organizations, and individuals to inspire, and facilitate meaningful change.

TRANSFORMATIONAL LEADERSHIP DEMANDS SUCCESSORS: Training Managers (l-r) Sadrean Williams, Everton Thomas, Kieron Rose and Giovan O’Connor exemplify our culture of accountability, commitment and excellence and are becoming change leaders in key operational areas.

ENABLING HIGH PERFORMANCE PEOPLE:Top performing training Crane Operator Kavelle Campbell, and fellow trainees pictured below (l-r) Allan Edwards, Claude Mullings and Leon Hunt are aiming for world-class performance.


EDUCATION

Kingston Wharves’ unwavering commitment to nation-building is evidenced by, among other things, a solid partnership with the Union Gardens Christian Academy, an Early Childhood Institution located close to our corporate offices in Newport West, Kingston. We are proud of our association with the Institution and, even moreso, of the resulting improvement demonstrated by both students and faculty. Over the last five years the KWL Group has invested more than $15Million in the school, supporting physical plant upgrades, equipment acquisitions, annual treats and the certification of staff. In our 2013 renovation and retooling initiative, more than $700,000 was spent on infrastructure upgrades as well as the purchase of teaching instruments and furniture. During 2013, we disbursed our final payment to the Shortwood Teachers’ College in support of a full scholarship for Ms. Vanette Smith, Teacher and Vice Principal of the school since 2004. Ms. Smith graduated during the year and is now a qualified early education instructor.

‘Kingston Wharves has given me the opportunity to fulfill my lifelong dream of becoming a trained teacher; I have been exposed to many techniques and am now equipped to introduce modern teaching methods to my colleagues and our students’.

– VANETTE SMITH, Teacher & Vice Principal, Union Gardens Christian Academy.

This is a major feat for the developing school as the introduction of a formally trained educator has taken them a step closer to realizing their goal of total compliance with the requirements of the Early Childhood Commission and the Ministry of Education. Also, of equal importance, is the fact that we successfully lobbied stakeholder support for the school. We facilitated donations in cash and kind from Dennis Shipping, a long-standing KWL customer and Coldax Mart, supplier of school furniture and equipment through its Principal Colin Williams.

Our outlook for the foreseeable future will see this support growing stronger while we continue our leading role in the discussions and plans to transform the School into a substantial and sustainable institution.

In keeping with our support for education, KWL ensured year-round access was made possible for groups wishing to gain exposure to operations on our world-class facility. In this regard, several school tours were facilitated.The Group also participated in the University of Technology (UTECH) and Caribbean Maritime Institute’s (CMI) Career Days during which valuable insights were shared by KWL Staff on career opportunities and shipping industry operations. CMI’s Career Day was held during their annual celebration of Maritime Week which also benefited from KWL’s support. SPORTIn acknowledgement of the transformative power of sports, evidenced in the participation of hundreds of youngsters in the Kingston Wharves Under-15 Cricket Competition, the

MD&Acont’d

Trisshanna Dayes,Class 2 Teacher - Union

Gardens Christian Academy, listens to her eager students.


Group renewed its sponsorship of the annual event in 2013. The competition received tremendous support from cricket enthusiasts throughout the Caribbean. But, more importantly, it has opened up long-term career opportunities for participants, some of whom now represent Jamaica at regional and international levels. Courtney Walsh, Chris Gayle, Jimmy Adams, and current West Indies Under-19 players Ramaal Lewis and Marquino Mindley, are but a few of the distinguished players who are alumnae of this critically developmental competition.

The parish teams were true to form in 2013. Displaying commendable discipline and resolve, they competed to the finish with Manchester emerging as the overall winner, clipping the title from St. Andrew who won in 2012.

Kingston Wharves also extended its involvement in youth cricket to include sponsorship of the Jamaican Under-15 Team who participated in the West Indies Cricket Board’s 2013 regional competition. The games were hosted in St. Elizabeth, Jamaica after several consecutive years of being held in Trinidad and Tobago. The competition was a showcase of remarkable talent and sportsmanship, very befitting of an association with the KWL Brand. OUTREACHMissionaries of the Poor (MOP) received support from the KWL Group for a second year. Given the reach of the Father Richard Ho Lung Founded group, it was easy to support the MOP’s 2013 theatre production, ‘The Greatest Hits – Candles in the Dark’. Proceeds from the event support the Missionaries’ ongoing work with the most vulnerable groups – the provision of meals, housing, basic health-care, among other things. Social responsibility is a central part of the core values of the KWL Group and we will continue to maintain our presence in our local community, and our support for worthy causes.

Simone Murdock, KWL Group Marketing Executive and the JAMAICA UNDER-15 CRICKET TEAM pose for photos at the launch of the 2013 West Indies Cricket Board (WICB) Regional Under-15 Tournament staged in Jamaica.

Members of the MANCHESTER UNDER-15 CRICKET TEAM lift the Kingston Wharves trophy after defeating St Ann in the 2013 finals held at Sabina Park

2013 squad of the “BEST OF THE BEST” Cricket Camp, an intensive all-round training for the Competition’s top performers.


BUSINESShighlights

BIGGER AND BETTER: The 2013 Annual Customer Appreciation Day welcomed new exhibitors and included a Lunch Time Concert which featured popular comedians, Ity and Fancy Cat.

PROOF IS IN THE EATING: KWL introduced its new Strip Scan Go FCL Service to customers at a luncheon launch hosted at the Berth 5 Container Stripping Station. Customers and

stakeholders enjoyed a first-look at the new service and the convenience it provides.

ACHIEVING A SHARED SERVICE VISION:

Customer Service Programme Briefing introduced the goals and mechanisms of the ACE Programme to the leadership teams of KWL and key service delivery stakeholders; Security Administrators Limited and Jamaica Customs Agency.


CORPORATEsocial responsibility

The Children of UNION GARDENS CHRISTIAN ACADEMY and KWL employees enjoy the Annual Christmas Treat put on by the Company.

Snaps from the launch of the Missionaries of the Poor’s 2013 theatre production, ‘The Greatest Hits – Candles in the Dark’.

KWL big-hearted employees represented with a growing team at the Annual Sigma Run which raised funds for the Cardiac Unit of the Bustamante Hospital for Children.

Students of the 2013 Summer Employment Programme were exposed to the various functions involved in terminal operations.


|| GLOBAL RELEVANCE ||

A Customer Satisfaction Survey, the voice of the KWL customers, provided the foundation upon which the KWL-ACE Service Programme was built. During the year, KWL-ACE, our customer service programme designed to help us achieve our vision of delivering world-class service through employees that are Accountable, Committed, and who always strive for Excellence, was rolled out to our employees and to selected employees of our important partners including the Jamaica Customs Department. A customized, focused, Customer Service Training programme was implemented with over 150 employees from both organizations to ensure consistency in treatment and delivery to customers who must use the services of both institutions to complete their transactions.

The inventory module of our financial software Great Plains (GP) was implemented in the first quarter of 2013, the first of a two-phased approach to improving the management of our inventory. The final phase, the integration of a third-party solution to manage equipment maintenance, will be implemented in 2014.

Towards the fourth quarter of 2013, the Gate Pass Request System (GPRS), in-house developed software that manages requests for temporary gate passes for contractors who need access to the facility, was implemented. All requests are made via a secure web portal

and these requests can be approved using mobile technology with an accompanying electronic notification sent to access point workstations.

Significant improvements were made in the use of electronic messaging transfers, especially between ourselves and a key customer. These improvements in EDI messaging resulted in tangible operational efficiencies, a tremendous benefit to both parties. Increased collaboration with law enforcement in the employment of a multi-layered approach to security, allowed the terminal to access and to benefit from the full range of tools available in the security architecture. In 2013, KWL was one of three local ports that benefitted from the establishment of a Container Control Programme (CCP), a partnership with the Government of Jamaica and the United Nations Office on Drugs and Crime. The Programme strengthen linkages with key local, regional and international security experts and implements measures to combat the use of legitimate maritime trade to conduct illicit activities. The implementation of the (CCP) allows the terminal to benefit from the multi-agency information sharing that facilitates a more strategic approach, thus enabling improved security and efficiencies for customers.

|| 2013 PERFORMANCE ||

The Group

The financial performance of the Group in 2013 is impressive - an increase of $341.96 million or 42.3% in Profit before Tax – an increase from $809.34 million in 2012 to $1.15 billion in 2013. In 2013, group revenue increased by $562.23 million or 15% over the prior year due to a $551.93 million rise in income from terminal operations. Approximately $316.09 million of the increase in revenue is directly attributable

MD&Acont’d

ENGAGED AND INSPIRED TO DELIVER WORLD CLASS SERVICE

EVERYDAY… ALL DAY:Expert Service Consultant and

Trainer, Dr. Paulette Henry delivers ACE Training Session to KWL service team members (l-r)

Marsha Turner, Alicia Hamilton, Robert Lindsay, Norman Mogg and

Dian Cole.


to increase in stevedoring activities. The increased revenue allowed for an increase in Gross Profit Margin from 42% in 2012 to 45% in 2013.

2009 2010 2011 2012 2013

Revenue ($M)

3,16

8.8 3,67

0.2 4,

232.

4

3,02

5.9

2,57

0.3

2009 2010 2011 2012 2013

Operating Profit ($M)

640.

8

1,07

5.7

1,47

7.0

921.

7

693.

1

The continuous decline in the demand for outsourced cold storage, and, consequently the declining contribution made by Harbour Cold Storage to Group Revenue and Profit, resulted in the restructuring of the subsidiary in 2013. The refrigeration management and support segment of the business is being directly managed by KWL while the cold storage operations and the facilities have been leased to a third party company.

Kingston Wharves Limited

KWL revenue of $3.61 billion in 2013 compared to $3.06 billion for the previous year represents an increase of $552.36 million or 18%. Stevedoring was the main contributor to the growth in revenue primarily as a result of an increase in TEUs handled and the acquisition of the stevedoring business of Shipping Services (Stevedoring) Limited. The acquisition simultaneously expands revenue opportunity and strengthens the Company’s position as a full-service terminal operator. A 14% depreciation in the Jamaican Dollar and a general increase in terminal handling rates also contributed to the increase in revenue in 2013. Operating Profit increased by $312.76 million or 26% in 2013 from $1.19 billion in 2012 to $1.50 billion.

COLD STORAGEOPERATIONS

SECURITY OPERATIONSTERMINAL OPERATIONS

Segment Operating Revenue

84% 11%

5%


Container activity showed marginal increase for 2013 with only Transshipment volumes exceeding that of the prior year. Transshipment containers handled increased by 9%, from 106,860 TEUs while domestic containers decreased by 5%, from 58,417 teus in 2012 to 54,995 in 2013.

In 2013 there was a reduction in both Transshipment and Domestic Motor Vehicle Moves. 2012 was an extraordinary year which saw a significant increase in Motor Vehicle arrivals for both transshipment and domestic units. There was a 20% decrease in total moves for 2013 compared with 2012; total transshipment and domestic motor unit moves for 2013 were 59,237 and 17,098, respectively.

MD&Acont’d

Con

tain

er T

eu’s

Han

dled

2009 2010 2011 2012 2013

79,1

37

124,

303

98,5

12

156,

836

90,2

37

152,

628

96,9

39

90,8

68

204,

244

186,

065

DOM

ESTI

C

*T

RANS

SHIP

MEN

T

2009 2010 2011 2012 2013

KWL - Operating Profit ($M)

770.

1

1,18

5.5

1,49

8.3

865.

1

584.

9

2009 2010 2011 2012 2013

KWL - Revenue ($M)

2,50

3 3,06

0.7 3,

613.

1

2,44

0.6

1,94

8.2

*Restated to include restows


The Subsidiaries

HARBOUR COLD STORESLIMITED (HSCL)The restructuring of the operations at HSCL took effect in August 2013 which negatively impacted the annual results of the subsidiary. In 2013 revenue decreased by $53.56 million or 22% in comparison to 2012. As a result, operating profit declined from $36.66 million in 2012 to $16.16 million in 2013, a reduction of $20.50 million or 56%.

2009 2010 2011 2012 2013

HCS - Revenue ($M)

307.

4

249.

6

196.

1

254.

2270

A redundancy cost of $31.28 million was incurred as a result of the termination of the cold storage operations. The refrigeration management and support segment of HCSL presently is managed directly by KWL. These services will continue to support the position of KWL as a full-service terminal operator for container shipping lines.

2009 2010 2011 2012 2013

HCS - Operating Profit ($M)

51.7

36.7

16.2

70.1

116.

7

SECURITY ADMINISTRATORSLIMITED (SAL) The positive revenue trend of the industrial and port security subsidiary continued in 2013 with an increase of $52.14 million or 12% over the previous year. Pre-tax profits, which totaled $31 million, were above prior year by $2.1 million or 7.3%. SAL continued to focus on service delivery standards and the containment of expenses, and also expanded its customer base. These remain top priorities for the coming year. The training segment of its operations was expanded in 2013 to include the SAL Training Centre, a Newport West facility established to offer a full-range of training and certification services for the security industry. This City and Guilds-approved Training Centre will initially focus on

Mot

or U

nit M

oves

2009 2010 2011 2012 2013

7,72

6

3,54

1 9,06

3

47,7

73

11,4

07

51,6

75

21,0

87

17,0

98

47,4

01

59,2

37

DOM

ESTI

C

T

RANS

SHIP

MEN

T


delivering security courses with the view of expanding course offerings in 2014.

2009 2010 2011 2012 2013

SAL - Revenue ($M)

410

439.

1 491.

2

385.

9

357.

2

|| PREPARED FOR THE FUTURE: REALISING THE VISION ||

The increased use of technology to automate processes, enhance efficiency and meet exacting service standards to operate at world-class standards of productivity and efficiencies, continued in 2013. Emphasis will also be placed on identifying appropriate Business Intelligence (BI) tools that will integrate the data from all production systems into a single data repository. Business Intelligence tools will also facilitate improvements in forecasting and budgeting,

cost management and scenario planning. Cost containment opportunities such as alternatives to current data replication and remote data storage solutions will be implemented.

Implementation of an electronic appointment and reservation system for container delivery will enable efficiencies in the deployment of equipment and personnel resources to target a 26-minute truck- turnaround time, presently unrivaled by our domestic and regional competitors.

The substantial investment made in the terminal fleet and the planned changes in equipment mix demand a first-class maintenance area which is proposed for construction in 2014. The new facility will allow our maintenance and operations team to safely achieve the targeted equipment reliability and availability of 98%.

It is likely that container traffic will decrease in 2014. However, our multipurpose capability provides the opportunity to expand on this short fall by capitalizing on expected to increases in targeted niche markets General, Break Bulk and Project Cargo. Since the start of 2014, there has been an increase in the importation of these cargoes and many more are expected to come. Cluster opportunities within the motor vehicle transshipment service, with particular focus on heavy duty equipment and auto parts transshipment, are being pursued. To ensure that we are in an operational position to handle all types of cargo with the greatest efficiency, it is our plan to continuously train all operational staff in 2014. This constant training is in keeping with our aim of becoming a world-class organization. Enhancement of the security architecture is anticipated in 2014 through the introduction of a team of specialist security supervisors. The team of supervisors will provide oversight of security operations under the direction of the Safety & Security Manager.

MD&Acont’d

2009 2010 2011 2012 2013

SAL - Operating Profit ($M)

34

28.8 30.9

39.9

44.3


Technology-based security systems will be introduced and used to integrate existing systems in one platform. An electronic platform for the processing of security passes and the initiation of cargo claims will be deployed in 2014. Safety and Security training and certification will continue to be reinforced for employees and awareness programmes employed for other regular port users. KWL strategic thrust is to grow its international business while simultaneously leveraging its assets and traditional capabilities. The continuing upgrading of KWL facilities and capabilities is key to achieving this strategic goal. The terminal and warehouse redevelopment is an ambitious suite of capital projects designed to transform KWL to achieve that goal. The berth redevelopment, a modernisation programme which started in 2006 with the rehabilitation and re-development of Berths 8 and 9, is to be extended to other berths. This will involve considerable renewal of the port area inclusive of dredging, construction and extension of the berthing facility and the introduction of new equipment required to berth larger vessels expected to operate in the Region.

The warehouses and other buildings presently located within the terminal operational area will be demolished and their operations relocated off the wharf. A purpose-built “all-in-one” global logistics complex with Special Economic Zone benefits will be constructed, enabling KWL to offer a level of service to cargo consolidation and freight forwarding customers not seen in Jamaica before.


46 ||


KINGSTON WHARVES LIMITED ANNUAL REPORT - 2013

TOP TENShareholders

as at December 31, 2013

DIRECTORS’ &Executives’ Shareholdings

PercentageShareholders Shareholding of Ownership

Jamaica Producers Group Limited 431,777,188 30.19

National Commercial Bank Jamaica Limited 360,807,145 25.23

Shipping Association of Jamaica Property Limited 168,933,715 11.81

Kingston Port Workers Superannuation Fund 159,405,130 11.15

NCB Capital Markets A/C No. 2231 105,283,757 7.36

Maritime and Transport Services Limited 71,475,924 5.00

Lannaman and Morris (Shipping) Limited 28,845,258 2.02

Sagicor Pooled Equity Fund 10,617,902 0.74

NCB Insurance Company Limited - A/C WT 181 10,000,000 0.70

Seafreight Line 6,029,108 0.42

Directors Total Direct Connected PartiesKarlene Bailey - - -Kim Clarke 244,687,415 - 244,687,41Roger Hinds 1,481,481 - 1,481,48Charles Johnston 432,495,153 24,458 432,486,695Jeffery Hall 431,777,188 - 431,777,188Alvin Henry 91,333 91,333 -Stephen Lyn Kee Chow 150,000 150,000 -Harriat Maragh 34,874,366 - 34,874,366Kathleen Moss 432,777,188 2,000 432,777,188Ramon Pitter 466,090,902 - 466,090,902Grantley Stephenson 331,369 331,369 -

Executives Total Direct Connected PartiesPauline Burton 17,109 17,109 -Valrie Campbell - - - Juliet Crawford 17,109 17,109 -Clover Moodie - - - Major Talbert Morrison - - - Ryan Peart - - - Captain George Reynolds - - - Marcello Richards 2,500 -- 2,500Lloyd Smith - - - Grantley Stephenson 331,369 331,369 -- Omar Walker - - - Calvin Watson - - -Mark Williams - - - Steve Whyte - - -

as at December 31, 2013


Chairman & Chief ExecutiveOfficer Grantley Stephenson

Directors Karlene BaileyKim Clarke Jeffery Hall Alvin Henry Roger Hinds

Charles Johnston Stephen Lyn Kee Chow Harriat Maragh Kathleen Moss Ramon Pitter

Auditors PRICEWATERHOUSECOOPERS Scotiabank CentreCorner of Duke & Port Royal StreetsKingston

Attorneys-At-Law DUNNCOX48 Duke Street Kingston

GARCIA & COMPANY Unit 2, Building BArdenne House11 Ardenne Road Kingston 10

HART MUIRHEAD FATTA 2nd Floor 53 Knutsford Boulevard Kingston 5

HYLTON & HYLTON31 Upper Waterloo RoadKingston 10

LIVINGSTON ALEXANDER & LEVY72 Harbour StreetKingston

MICHAEL HYLTON & ASSOCIATES11A Oxford RoadKingston 5

MYERS, FLETCHER & GORDON21 East StreetKingston

NICHOLSON PHILLIPS 22 Trafalgar Road Kingston 10

PATTERSON MAIR HAMILTON63-67 Knutsford Boulevard Kingston 5

Registrar &Transfer AgentKPMG REGULATORY & COMPLIANCE SERVICES 6 Duke Street Kingston

Administrative Offices KINGPORT BUILDING Third Street Newport West Kingston 11, Jamaica Tel: (876) 923-9211 Fax: (876) 923-5361

Corporate Secretary ROGER HINDS 90 First Street Newport West Kingston 11Tel: (876) 923-5719 Fax: (876) 923-9301

BankersBANK OF NOVA SCOTIA (JAMAICA) LIMITED Scotiabank CentreCorner of Duke & Port Royal Streets Kingston FIRST CARIBBEAN INTERNATIONAL BANK (JAMAICA) LIMITED 23 Knutsford Boulevard Kingston 5

FIRST GLOBAL BANK 2 St. Lucia Avenue Kingston 5

NATIONAL COMMERCIAL BANK JAMAICA LIMITED The Atrium 32 Trafalgar Road Kingston 10

CORPORATEData



FINANCIAL STATEMENTS31 December 2013


INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS

FINANCIAL STATEMENTS

Group statement of comprehensive income 52

Group statement of financial position 53

Group statement of changes in equity 55

Group statement of cash flows 56

Company statement of comprehensive income 57

Company statement of financial position 58

Company statement of changes in equity 60

Company statement of cash flows 61

Notes to the financial statements 62

INDEXto FINANCIAL Statements



PricewaterhouseCoopers, Scotiabank Centre, Duke Street, Box 372, Kingston, Jamaica T: (876) 922 6230, F: (876) 922 7581, www.pwc.com/jm

C.D.W. Maxwell P.W.Pearson E.A. Crawford J.W. Lee P.E. Williams G.L. Lewars L.A. McKnight A.K. Jain B.L. Scott B.J. Denning G.A. Reece P.A. Williams R.S. Nathan

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K I N G S T O N W H A R V E S L I M I T E D

GROUP STATEMENT OF COMPREHENSIVE INCOMEYEAR ENDED 31 DECEMBER 2013 || EXPRESSED IN JAMAICAN DOLLARS UNLESS OTHERWISE INDICATED ||

Page 1

Kingston Wharves LimitedGroup Statement of Comprehensive IncomeYear ended 31 December 2013(expressed in Jamaican dollars unless otherwise indicated)

Note2013$’000

Restated2012$’000

Revenue 4,232,408 3,670,177Direct costs (2,428,476) (2,118,034)Gross Profit 1,803,932 1,552,143Other operating income 8 488,902 309,420Administration expenses (815,792) (785,896)Operating Profit 1,477,042 1,075,667Finance costs 9 (325,746) (266,330)Profit before Income Tax 1,151,296 809,337Income tax expense 10 (304,322) (252,863)Net Profit for Year 846,974 556,474Other Comprehensive IncomeItems that will not be reclassified to profit or lossRe-measurements of post-employment benefits (38,114) (41,476)Deferred tax effect on other comprehensive income 9,528 10,369

Total other comprehensive income, net of taxes (28,586) (31,107)Total Comprehensive Income for Year 818,388 525,367

Net Profit Attributable to:Equity holders of the company 11 839,255 550,203Non-controlling interest 12 7,719 6,271

846,974 556,474Total Comprehensive Income Attributable to:

Equity holders of the company 810,669 519,096Non-controlling interest 12 7,719 6,271

818,388 525,367Earnings per stock unit for profit attributable to the equity holders

of the company during the year 13 $0.59 $0.41


PREPARE for the FUTURE

|| 53


GROUP STATEMENT OF FINANCIAL POSITION31 DECEMBER 2013 || EXPRESSED IN JAMAICAN DOLLARS UNLESS OTHERWISE INDICATED ||

Page 2

Kingston Wharves LimitedGroup Statement of Financial Position31 December 2013(expressed in Jamaican dollars unless otherwise indicated)

Note2013$’000

Restated2012$’000

Restated2011$’000

ASSETSNon-current Assets

Property, plant and equipment 15 11,981,800 11,841,077 12,116,385Intangible assets 16 98,172 3,116 3,773Recoverable from The Port Authority of Jamaica 18 - 3,101 23,187Due from related party 21 81,291 - -Deferred income tax assets 29 1,122 1,261 1,128Retirement benefit asset 19 653,321 612,710 579,660

12,815,706 12,461,265 12,724,133Current Assets

Inventories 20 137,902 30,026 23,275Trade and other receivables 22 586,285 782,881 480,894Taxation recoverable 16,872 11,850 64,750Short term investments 23 2,099,333 2,984,835 1,033,894Cash and bank 23 1,060,566 115,823 42,761

3,900,958 3,925,415 1,645,574Total Assets 16,716,664 16,386,680 14,369,707

for more information please visit: www.kingstonwharves.com.jm PREPARED FOR THE FUTURE



GROUP STATEMENT OF FINANCIAL POSITION (CONTINUED)31 DECEMBER 2013 || EXPRESSED IN JAMAICAN DOLLARS UNLESS OTHERWISE INDICATED ||

Page 3

Kingston Wharves LimitedGroup Statement of Financial Position (Continued)31 December 2013(expressed in Jamaican dollars unless otherwise indicated)

Note2013$’000

Restated2012$’000

Restated2011$’000

EQUITYStockholders’ Equity

(attributable to equity holders of the company)Share capital 24 2,079,398 2,079,398 291,648Capital reserves 25 7,177,601 7,165,022 6,716,356Asset replacement/rehabilitation and depreciation

reserves 26 215,391 215,168 214,796Retained earnings 3,217,003 2,676,572 2,313,447

12,689,393 12,136,160 9,536,247Non-controlling Interest 12 59,534 51,815 45,544

12,748,927 12,187,975 9,581,791LIABILITIESNon-current Liabilities

Borrowings 27 1,498,689 1,581,508 1,953,538Deferred income tax liabilities 29 1,299,521 1,333,236 1,814,745Retirement benefit obligations 19 179,944 203,315 175,054

2,978,154 3,118,059 3,943,337Current Liabilities

Trade and other payables 30 359,029 493,064 395,262Taxation 127,634 118,733 -Borrowings 27 502,920 468,849 449,317

989,583 1,080,646 844,579Total equity and liabilities 16,716,664 16,386,680 14,369,707

Approved for issue by the Board of Directors on 1 March 2014 and signed on its behalf by:

Grantley Stephenson Chairman and CEO Alvin Henry Director



|| 55


GROUP STATEMENT OF CHANGES IN EQUITYYEAR ENDED 31 DECEMBER 2013 || EXPRESSED IN JAMAICAN DOLLARS UNLESS OTHERWISE INDICATED ||

Page 4

Kingston Wharves LimitedGroup Statement of Changes in EquityYear ended 31 December 2013(expressed in Jamaican dollars unless otherwise indicated)

Attributable to equity holders of the company

Non-controlling

InterestTotalEquity

NoteShareCapital

CapitalReserves

AssetReplacement/Rehabilitation

andDepreciation

ReservesRetainedEarnings Total

$’000 $’000 $’000 $’000 $’000 $’000 $’000Balance at 31 December 2011, asrestated 33 291,648 6,716,356 214,796 2,313,447 9,536,247 45,544 9,581,791

Total comprehensive income for theyear - - - 519,096 519,096 6,271 525,367

Adjustment to deferred income taxeson surplus on revaluation 29 436,087 - - 436,087 - 436,087

Transfer of net interest to assetreplacement/rehabilitation anddepreciation reserves 26 - - 372 (372) - - -

Transfer to asset replacement/rehabilitation anddepreciation reserves 26 - - 12,579 (12,579) - - -

Transfer from assetreplacement/rehabilitation anddepreciation reserves 26 - 12,579 (12,579) - - - -

Transactions with owners:

Issue of shares 24 1,787,750 - - - 1,787,750 - 1,787,750

Dividends 14 - - - (143,020) (143,020) - (143,020)Balance at 31 December 2012, asrestated 33 2,079,398 7,165,022 215,168 2,676,572 12,136,160 51,815 12,187,975

Total comprehensive income for theyear - - - 810,669 810,669 7,719 818,388

Transfer of net interest to assetreplacement/rehabilitation anddepreciation reserves 26 - - 223 (223) - - -

Transfer to asset replacement/rehabilitation anddepreciation reserves 26 - - 12,579 (12,579) - - -

Transfer from assetreplacement/rehabilitation anddepreciation reserves 26 - 12,579 (12,579) - - - -

Transactions with owners:

Dividends 14 - - - (257,436) (257,436) - (257,436)

Balance at 31 December 2013 2,079,398 7,177,601 215,391 3,217,003 12,689,393 59,534 12,748,927




GROUP STATEMENT OF CASH FLOWSYEAR ENDED 31 DECEMBER 2013 || EXPRESSED IN JAMAICAN DOLLARS UNLESS OTHERWISE INDICATED ||

Page 5

Kingston Wharves LimitedGroup Statement of Cash FlowsYear ended 31 December 2013(expressed in Jamaican dollars unless otherwise indicated)

Note2013$’000

Restated2012$’000

Cash flows from operating activitiesNet profit 846,974 556,474Adjustments for:

Amortisation 16 10,166 1,258Depreciation 15 330,496 326,074Foreign exchange adjustment on loans 198,307 114,947Foreign exchange gains on operating activities (319,191) (116,839)Loss on disposal of property, plant and equipment 617 130Retirement benefit asset (86,812) (63,870)Retirement benefit obligations (15,284) 17,605Interest income 8 (84,634) (113,695)Interest expense 9 127,439 151,383Taxation 10 304,322 252,863

1,312,400 1,126,330Changes in operating assets and liabilities:

Inventories (107,876) (6,751)Trade and other receivables 175,458 (305,371)Due from related party (81,291) -Trade and other payables (127,125) 121,343Recoverable from The Port Authority of Jamaica 3,101 20,086

Cash provided by operations 1,174,667 955,637Tax paid (324,491) (116,416)Net cash provided by operating activities 850,176 839,221Cash flows from investing activitiesPurchase of property, plant and equipment 15 (474,225) (51,567)Purchase of intangible asset (105,222) (601)Proceeds from sale of property, plant and equipment 2,389 671Short term deposits with maturity greater than 90 days 68,037 39,729Interest received 103,821 121,477Net cash (used in)/provided by investing activities (405,200) 109,709Cash flows from financing activitiesDividends paid to equity holders of the company (264,346) (166,170)Interest paid (125,820) (150,724)Loans received 250,000 -Loans repaid (495,726) (459,263)Issue of shares - 1,787,750Net cash (used in)/provided by financing activities (635,892) 1,011,593Net (decrease)/increase in cash and cash equivalents (190,916) 1,960,523Net cash and cash equivalents at beginning of year 2,847,720 774,756Exchange adjustment on foreign currency cash and cash equivalents 321,142 112,441NET CASH AND CASH EQUIVALENTS AT END OF YEAR 23 2,977,946 2,847,720



|| 57


COMPANY STATEMENT OF COMPREHENSIVE INCOMEYEAR ENDED 31 DECEMBER 2013 || EXPRESSED IN JAMAICAN DOLLARS UNLESS OTHERWISE INDICATED ||

Page 6

Kingston Wharves LimitedCompany Statement of Comprehensive IncomeYear ended 31 December 2013(expressed in Jamaican dollars unless otherwise indicated)

Note2013$’000

Restated2012$’000

Revenue 3,613,083 3,060,724Direct expenses (1,971,885) (1,675,473)Gross Profit 1,641,198 1,385,251Other operating income 8 439,736 373,877Administration expenses (582,661) (573,619)Operating Profit 1,498,273 1,185,509Finance costs 9 (333,662) (277,947)Profit before Income Tax 1,164,611 907,562Income tax expense 10 (308,785) (220,057)Net Profit for the Year 855,826 687,505Other Comprehensive IncomeItems that will not be reclassified to profit or lossRe-measurements of post-employment benefits (38,114)

-(41,476)

Deferred tax effect on other comprehensive income 9,528 10,369Total other comprehensive income, net of taxes (28,586) (31,107)

Total Comprehensive Income for Year 827,240 656,398




COMPANY STATEMENT OF FINANCIAL POSITION31 DECEMBER 2013 || EXPRESSED IN JAMAICAN DOLLARS UNLESS OTHERWISE INDICATED ||

Page 7

Kingston Wharves LimitedCompany Statement of Financial Position31 December 2013(expressed in Jamaican dollars unless otherwise indicated)

Note2013$’000

Restated2012$’000

Restated2011$’000

ASSETSNon-current Assets

Property, plant and equipment 15 8,852,592 8,625,550 8,813,594Intangible assets 16 98,172 3,116 3,773Investments in subsidiaries 17 75,731 75,731 75,731Recoverable from The Port Authority of Jamaica 18 - 3,101 23,187Due from related party 21 81,291 - -Retirement benefit asset 19 653,321 612,710 579,660

9,761,107 9,320,208 9,495,945Current Assets

Inventories 20 130,803 22,392 13,994Trade and other receivables 22 472,292 493,422 306,296Group companies 21 18,693 169,446 66,064Taxation recoverable - - 50,828Short term investments 23 1,480,273 2,449,478 435,182Cash and bank 23 1,006,759 85,906 15,142

3,108,820 3,220,644 887,506Total assets 12,869,927 12,540,852 10,383,451



|| 59


COMPANY STATEMENT OF FINANCIAL POSITION (CONTINUED)31 DECEMBER 2013 || EXPRESSED IN JAMAICAN DOLLARS UNLESS OTHERWISE INDICATED ||

Page 8

Kingston Wharves LimitedCompany Statement of Financial Position (Continued)31 December 2013(expressed in Jamaican dollars unless otherwise indicated)

Note2013$’000

Restated2012$’000

Restated2011$’000

EQUITYStockholders’ Equity

Share capital 24 2,079,398 2,079,398 291,648Capital reserves 25 3,992,736 3,980,157 3,740,130Asset replacement/rehabilitation and depreciationreserves 26 212,968 212,968 212,968

Retained earnings 3,069,880 2,512,655 2,011,8569,354,982 8,785,178 6,256,602

LIABILITIESNon-current Liabilities

Borrowings 27 1,497,237 1,603,824 2,001,054Deferred income tax liabilities 29 790,641 804,684 1,078,785Retirement benefit obligations 19 179,944 203,315 175,054

2,467,822 2,611,823 3,254,893Current Liabilities

Trade and other payables 30 317,432 434,993 331,330Group companies 21 77,112 96,076 66,109Taxation payable 125,891 118,733 -Borrowings 27 526,688 494,049 474,517

1,047,123 1,143,851 871,956Total equity and liabilities 12,869,927 12,540,852 10,383,451

Approved for issue by the Board of Directors on 1 March 2014 and signed on its behalf by:

Grantley Stephenson Chairman and CEO Alvin Henry Director




COMPANY STATEMENT OF CHANGES IN EQUITYYEAR ENDED 31 DECEMBER 2013 || EXPRESSED IN JAMAICAN DOLLARS UNLESS OTHERWISE INDICATED ||

Page 9

Kingston Wharves LimitedCompany Statement of Changes in EquityYear ended 31 December 2013(expressed in Jamaican dollars unless otherwise indicated)

NoteShareCapital

CapitalReserves

AssetReplacement/Rehabilitation

and DepreciationReserves

RetainedEarnings Total

$’000 $’000 $’000 $’000 $’000Balance at 31 December 2011, as restated 33 291,648 3,740,130 212,968 2,011,856 6,256,602

Total comprehensive income for the year - - - 656,398 656,398Adjustment to deferred income taxes on surplus

on revaluation 29 - 227,448 - - 227,448Transfer to asset replacement/rehabilitation

and depreciation reserves 26 - - 12,579 (12,579) -Transfer from asset replacement/ rehabilitation

and depreciation reserves 26 - 12,579 (12,579) - -

Transactions with owners:Issue of shares 24 1,787,750 - - - 1,787,750

Dividends 14 - - - (143,020) (143,020)

Balance at 31 December 2012, as restated 33 2,079,398 3,980,157 212,968 2,512,655 8,785,178

Total comprehensive income for the year - - - 827,240 827,240Transfer to asset replacement/rehabilitation

and depreciation reserves 26 - - 12,579 (12,579) -Transfer from asset replacement/ rehabilitation

and depreciation reserves 26 - 12,579 (12,579) - -

Transactions with owners:Dividends 14 - - - (257,436) (257,436)

Balance at 31 December 2013 2,079,398 3,992,736 212,968 3,069,880 9,354,982



|| 61


COMPANY STATEMENT OF CASH FLOWSYEAR ENDED 31 DECEMBER 2013 || EXPRESSED IN JAMAICAN DOLLARS UNLESS OTHERWISE INDICATED ||

Page 10

Kingston Wharves LimitedCompany Statement of Cash FlowsYear ended 31 December 2013(expressed in Jamaican dollars unless otherwise indicated)

Note2013$’000

Restated2012$’000

Cash flows from operating activitiesNet profit 855,826 687,505Adjustments for:

Amortisation 16 10,166 1,258Depreciation 15 235,505 232,034Foreign exchange adjustment on long term loans 198,307 114,947Foreign exchange gains (305,282) (113,925)Loss/(gain) on disposal of property, plant and equipment 1,229 (474)Retirement benefit asset (86,812) (63,870)Retirement benefit obligations (15,284) 17,605Interest income 8 (51,076) (78,319)Interest expense 9 135,355 163,000Taxation 10 308,785 220,057

1,286,719 1,179,818Changes in operating assets and liabilities:

Inventories (108,411) (8,398)Group companies 47,407 (72,493)Trade and other receivables 16,188 (182,311)Trade and other payables (110,651) 127,204Recoverable from The Port Authority of Jamaica 3,101 20,086

Cash provided by operations 1,134,353 1,063,906Tax paid (306,142) (86,780)Net cash provided by operating activities 828,211 977,126Cash flows from investing activitiesPurchase of property, plant and equipment 15 (465,350) (44,169)Purchase of intangible asset (105,222) (601)Proceeds from sale of property, plant and equipment 1,574 653Interest received 54,067 73,504Net cash (used in)/provided by investing activities (514,931) 29,387Cash flows from financing activitiesDividends paid to equity holders of the company (264,346) (166,170)Interest paid (130,645) (158,865)Loans received 250,000 -Loans repaid (520,926) (484,463)Issue of shares - 1,787,750Net cash (used in)/provided by financing activities (665,917) 978,252Net (decrease)/increase in cash and cash equivalents (352,637) 1,984,765Net cash and cash equivalents at beginning of year 2,499,536 405,244Exchange adjustment on foreign currency cash and cash equivalents 307,233 109,527NET CASH AND CASH EQUIVALENTS AT END OF YEAR 23 2,454,132 2,499,536





NOTES TO THE FINANCIAL STATEMENTS31 DECEMBER 2013 || EXPRESSED IN JAMAICAN DOLLARS UNLESS OTHERWISE INDICATED ||

Page 11

Kingston Wharves LimitedNotes to the Financial Statements31 December 2013(expressed in Jamaican dollars unless otherwise indicated)

1. Identification and Principal Activities

The company and its subsidiaries (the Group) are incorporated and domiciled in Jamaica. The principal activitiesof the company and its subsidiaries comprise the operation of public wharves, security services and the provisionand installation of cold storage facilities.

The wharfage rates and penal charges billed to customers by the company are subject to regulation by the PortAuthority of Jamaica. The tariff rate structure which was approved by the Port Authority of Jamaica becameeffective in April 1998.

The company’s registered office is located at the Kingport Building, Third Street, Newport West, Kingston.

The company is a public company listed on the Jamaica Stock Exchange.

2. Summary of Significant Accounting Policies

The principal accounting policies applied in the preparation of these financial statements are set out below. Thesepolicies have been consistently applied to all the years presented, unless otherwise stated.

(a) Basis of preparationThese financial statements have been prepared in accordance and comply with International FinancialReporting Standards (IFRS), and have been prepared under the historical cost convention as modified bythe revaluation of certain items of property, plant and equipment.

The preparation of financial statements in conformity with IFRS requires the use of certain criticalaccounting estimates. It also requires management to exercise its judgement in the process of applying theGroup’s accounting policies. Although these estimates are based on management’s best knowledge ofcurrent events and actions, actual results could differ from those estimates. The areas involving a higherdegree of judgement or complexity, or areas where assumptions and estimates are significant to thefinancial statements are disclosed in Note 4.

Standards, interpretations and amendments to published standards effective in the current yearCertain new accounting standards, interpretations and amendments to existing standards have beenpublished that became effective during the current financial year. The Group has assessed the relevanceof all such new standards, interpretations and amendments and has put into effect the following IFRS,which are immediately relevant to its operations. The pronouncements were effective from 1 January 2013,unless otherwise indicated.

x Amendment to IAS 1, ‘Financial statement presentation’ regarding other comprehensive income.The main change resulting from these amendments is a requirement for entities to group itemspresented in ‘other comprehensive income’ (OCI) on the basis of whether they are potentiallyreclassifiable to profit or loss subsequently (reclassification adjustments).

x IAS 19, ‘Employee benefits’ was revised in June 2011. The changes on the Group’s accountingpolicies have been as follows: to immediately recognise all past service costs; and to replace interestcost and expected return on plan assets with a net interest amount that is calculated by applying thediscount rate to the net defined benefit liability/(asset).

x Amendment to IFRS 7, ‘Financial instruments: Disclosures’, on asset and liability offsetting. Thisamendment includes new disclosures to facilitate comparison between those entities that prepareIFRS financial statements to those that prepare financial statements in accordance with US GAAP.





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2. Summary of Significant Accounting Policies (Continued)

(a) Basis of preparation (continued)Standards, interpretations and amendments to published standards effective in the current year(continued)

x IFRS 10, ‘Consolidated financial statements’ builds on existing principles by identifying the conceptof control as the determining factor in whether an entity should be included within the consolidatedfinancial statements of the parent company. The standard provides additional guidance to assist in thedetermination of control where this is difficult to assess.

x IFRS 12, ‘Disclosures of interests in other entities’ includes the disclosure requirements for all formsof interests in other entities, including joint arrangements, associates, structured entities and other offbalance sheet vehicles.

x IFRS 13, ‘Fair value measurement’, aims to improve consistency and reduce complexity by providinga precise definition of fair value and a single source of fair value measurement and disclosurerequirements for use across IFRS. The requirements, which are largely aligned between IFRS and USGAAP, do not extend the use of fair value accounting but provide guidance on how it should be appliedwhere its use is already required or permitted by other standards within IFRS.

Standards, amendments and interpretations to existing standards that the Group has not yetadoptedAt the date of authorisation of these financial statements, certain new accounting standards, amendmentsand interpretations to existing standards have been issued which are mandatory for the Group’s accountingperiods beginning on or after 1 January 2014 or later periods, but were not effective for the current period,and which the Group has not early adopted. The Group has assessed the relevance of all such newstandards, interpretations and amendments, has determined that the following may be relevant to itsoperations. The impact of the changes is still being assessed by management.

x IFRS 9, ‘Financial instruments’ part 1: Classification and measurement (effective for annual periodsbeginning on or after 1 January 2015). The standard introduces new requirements for the classification,measurement and recognition of financial assets and financial liabilities, in order to ensure that relevantand useful information is presented to users of financial statements. It replaces the multipleclassification and measurement models in IAS 39 with a single model that has only two classificationcategories: amortised cost and fair value. The determination of classification will be made at initialrecognition, and depends on the entity’s business model for managing its financial instruments and thecontractual cash flow characteristics of the instrument.

While adoption of IFRS 9 is mandatory from 1 January 2015, earlier adoption is permitted for financialassets without adopting the requirements for financial liabilities. The Group is considering theimplications of the standard, the impact on the Group and the timing of its adoption.

There are no other IFRS or IFRIC interpretations that are not yet effective that would be expected to have asignificant impact on the Group.





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(b) ConsolidationSubsidiariesSubsidiaries are all entities (including structured entities) over which the Group has control. The Groupcontrols an entity when the Group is exposed to, or has rights to, variable returns from its involvement withthe entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fullyconsolidated from the date on which control is transferred to the Group. They are deconsolidated from thedate that control ceases.

The Group applies the acquisition method to account for business combinations. The considerationtransferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilitiesincurred to the former owners of the acquiree and the equity interests issued by the Group. Theconsideration transferred includes the fair value of any asset or liability resulting from a contingentconsideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed ina business combination are measured initially at their fair values at the acquisition date. The grouprecognises any non-controlling interest in the acquiree on an acquisition- by-acquisition basis, either at fairvalue or at the non-controlling interest’s proportionate share of the recognised amounts of acquiree’sidentifiable net assets.

Acquisition-related costs are expensed as incurred. If the business combination is achieved in stages, theacquisition date carrying value of the acquirer’s previously held equity interest in the acquiree isremeasured to fair value at the acquisition date; any gains or losses arising from such re-measurement arerecognised in profit or loss.

Any contingent consideration to be transferred by the Group is recognised at fair value at the acquisitiondate. Subsequent changes to the fair value of the contingent consideration that is deemed to be an assetor liability is recognised in accordance with IAS 39 either in profit or loss or as a change to othercomprehensive income. Contingent consideration that is classified as equity is not remeasured, and itssubsequent settlement is accounted for within equity.

The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree andthe acquisition-date fair value of any previous equity interest in the acquiree over the fair value of theidentifiable net assets acquired is recorded as goodwill. If the total of consideration transferred, non-controlling interest recognised and previously held interest measured is less than the fair value of the netassets of the subsidiary acquired in the case of a bargain purchase, the difference is recognised directly inthe income statement.

Inter-company transactions, balances and unrealised gains on transactions between group companies areeliminated. Unrealised losses are also eliminated. When necessary amounts reported by subsidiaries havebeen adjusted to conform with the Group’s accounting policies.

When the Group ceases to have control any retained interest in the entity is re-measured to its fair value atthe date when control is lost, with the change in carrying amount recognised in profit or loss. The fair value isthe initial carrying amount for the purposes of subsequently accounting for the retained interest as anassociate, joint venture or financial asset. In addition, any amounts previously recognised in othercomprehensive income in respect of that entity are accounted for as if the Group had directly disposed of therelated assets or liabilities. This may mean that amounts previously recognised in other comprehensiveincome are reclassified to profit or loss.





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(b) Consolidation (continued)The subsidiaries, which are all incorporated and domiciled in Jamaica, are as follows:

Subsidiaries Principal ActivitiesHoldingby Parent

Holdingby Group

FinancialYear End

TradingHarbour Cold Stores Limited Provision and installation of

cold storage facilities 100% 100% 31 December

6HFXULW\�$GPLQLVWUDWRUV�/LPLWHG� 6HFXULW\�VHUYLFHV� ��ѿ� ��Ҁ� 31 DecemberWestern Storage Limited Property rental 100% 100% 31 DecemberWestern Terminals Limited Property rental 100% 100% 31 DecemberNon-TradingKingston Terminal OperatorsLimited Dormant 100% 100% 31 December

Sub-SubsidiariesJamaica Cooling Stores Limited Non-Trading - 100% 31 DecemberSecurity AdministratorsSpecialist Services Limited Security services - ��Ҁ� 31 December

Transactions with non-controlling interestsTransactions with non-controlling interests that do not result in loss of control are accounted for as equitytransactions – that is, as transactions with the owners in their capacity as owners. The difference betweenfair value of any consideration paid and the relevant share acquired of the carrying value of net assets of thesubsidiary is recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded inequity.

(c) Revenue and income recognitionRevenue comprises the fair value of the consideration received or receivable for the provision of servicesin the ordinary course of the Group’s activities. Revenue is shown net of General Consumption Tax,rebates and discounts and after eliminating sales within the Group. The Group recognises revenue whenthe amount of revenue can be reliably measured, it is probable that future economic benefits will flow tothe entity and specific criteria have been met for each of the Group’s activities.

ServicesThese are charges made for wharfage operations, port security, installation of cold storage facilities, storageand warehousing of goods after deduction of discounts and other reductions applicable to such charges.

Wharfage and other revenue items are accounted for on an accrual basis, except penal charges which areaccounted for on a cash basis.

Interest incomeInterest income is recognised on a time-proportion basis using the effective interest method. When areceivable is impaired, the Group reduces the carrying amount to its recoverable amount, being theestimated future cash flow discounted at original effective interest rate of the instrument, and continuesunwinding the discount as interest income.





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(d) Property, plant and equipmentPlant and buildings comprise mainly walls, piers, dredging facilities, roadways, warehouses and offices.Land, plant and buildings are shown at fair value, based on periodic, but at least triennial, valuations byexternal independent valuers, less subsequent depreciation for buildings. Any accumulated depreciation atthe date of revaluation is restated proportionately with the change in the gross carrying amount of the assetso that the asset’s carrying amount after revaluation equals its revalued amount. Fair value represents openmarket value for land while buildings are shown at depreciated replacement cost as there is no market-basedevidence of fair value because of the specialised nature of the buildings and the buildings cannot be soldexcept as part of a continuing business. All other property, plant and equipment are stated at cost lessdepreciation. Cost includes expenditure that is directly attributable to the acquisition of the items.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, asappropriate, only when it is probable that future economic benefits associated with the item will flow to theGroup and the cost of the item can be measured reliably. The carrying amount of the replaced part isderecognised. All other repairs and maintenance are charged to profit or loss during the financial period inwhich they are incurred.

Increases in the carrying amount arising on revaluation of land and buildings are credited to othercomprehensive income and shown as capital reserves in stockholders’ equity. Decreases that offset previousincreases of the same asset are charged in other comprehensive income and debited against capitalreserves directly in equity; all other decreases are charged to the income statement.

Land is not depreciated. Depreciation on other assets is calculated using the straight-line method toallocate their cost or revalued amounts to their residual values over their estimated useful lives. The annualrates in use are:

Plant and buildings comprising buildings, leaseholdproperties, walls, piers, dredging and roadways 1.33% - 5%

Machinery and equipment 3% - 20%Cold room and air conditioning equipment 10%Furniture and fixtures 5% - 10%Motor vehicles 10% - 20%

Assets held under finance leases are depreciated over their expected useful lives on the same basis asowned assets or where shorter the term of the relevant lease.

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each statement offinancial position date.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carryingamount is greater than its estimated recoverable amount (Note 2(f)).

Gains and losses on disposal of property, plant and equipment are determined by comparing proceeds withtheir carrying amounts and are included in profit or loss. When revalued assets are sold, the amountsincluded in other reserves are transferred to retained earnings.





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(e) Intangible assetsSeparately acquired rights and benefits under third party contracts with a finite useful life are shown athistorical cost less subsequent amortisation. Amortisation is calculated using the straight-line method toallocate the cost of the rights and benefits over their estimated useful lives of ten years.

Separately acquired computer software licences are shown at historical cost less subsequent amortisation.Acquired computer software licences are capitalised on the basis of the costs incurred to acquire and bring touse the specific software. These costs are amortised over their estimated useful lives of five years.

(f) Impairment of non-financial assetsAssets that have an indefinite useful life, for example land, are not subject to amortisation and are testedannually for impairment. Assets that are subject to amortisation are reviewed for impairment wheneverevents or changes in circumstances indicate that the carrying amount may not be recoverable. Animpairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverableamount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. Forthe purposes of assessing impairment, assets are grouped at the lowest levels for which there are largelyindependent cash flows. Non-financial assets that suffer impairment are reviewed for possible reversal of theimpairment at each statement of financial position date.

(g) Foreign currency translationFunctional and presentation currencyItems included in the financial statements of each of the Group’s entities are measured usingthe currency of the primary economic environment in which the entity operates (‘the functional currency’).The financial statements are presented in Jamaican dollars, which is the Group’s presentation currencyand the functional currency of all the entities in the Group.

Transactions and balancesForeign currency transactions are translated into the functional currency using the exchangerates prevailing at the dates of the transactions. Foreign exchange gains and losses resultingfrom the settlement of such transactions and from the translation at year-end exchange rates of monetaryassets and liabilities denominated in foreign currencies are recognised in profit or loss. Foreign exchangegains and losses that relate to borrowings are presented in profit or loss with ‘finance costs’.

(h) Trade receivablesTrade receivables are recognised initially at fair value and subsequently measured at amortised cost usingthe effective interest method, less provision for impairment. A provision for impairment of trade receivables isestablished when there is objective evidence that the Group will not be able to collect all amounts dueaccording to the original terms of the receivables. Significant financial difficulties of the debtor, probabilitythat the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments areconsidered indicators that the trade receivable is impaired. The amount of the provision is the differencebetween the asset’s carrying amount and the present value of estimated future cash flows, discounted atmarket interest rate. The carrying amount of the asset is reduced through the use of an allowance account,and the amount of the loss is recognised in profit and loss. When a trade receivable is uncollectible, it iswritten off against the allowance account for trade receivables. Subsequent recoveries of amountspreviously written off are credited in profit or loss.

(i) Investments in subsidiariesInvestments by the company in subsidiaries are stated at cost.





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(j) InventoriesInventories are stated at the lower of cost and net realisable value. Cost is determined on the first-in, first-outbasis. Net realisable value is the estimated selling price in the ordinary course of business, less the cost ofselling expenses.

(k) Cash and cash equivalentsCash and cash equivalents include cash in hand, deposits held at call with banks, other short term highlyliquid investments with original maturities of three months or less net of bank overdrafts.

(l) ProvisionsProvisions are recognised when the Group has a present legal or constructive obligation as a result of pastevents, when it is probable that an outflow of resources will be required to settle the obligation, and a reliableestimate of the amount can be made. Where the Group expects a provision to be reimbursed, thereimbursement is recognised as a separate asset but only when the reimbursement is virtually certain.

(m) Trade payablesTrade payables are obligations to pay for goods or services that have been acquired in the ordinary course ofbusiness from suppliers. Trade payables are recognised initially at fair value and subsequently measured atamortised cost using the effective interest method.

(n) Share capitalOrdinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares areshown in equity as a deduction, net of tax, from the proceeds.

(o) LeasesLeases of property, plant and equipment where the Group has substantially all the risks and rewards ofownership are classified as finance leases. Finance leases are capitalised at the inception of the lease at thelower of the fair value of the leased property or the present value of the minimum lease payments. Each leasepayment is allocated between the liability and finance charges so as to achieve a constant rate on the financebalance outstanding. The corresponding rental obligations, net of finance charges, are included in otherlong term payables. The interest element of the finance cost is charged to the income statement over thelease period so as to produce a constant periodic rate of interest on the remaining balance of the liability foreach period. The property, plant and equipment acquired under finance leases is depreciated over theshorter of the useful life of the asset and the lease term.

Leases where a significant portion of the risks and rewards of ownership are retained by the lessor areclassified as operating leases. Payments made under operating leases (net of any incentives received fromthe lessor) are charged to profit and loss on a straight-line basis over the period of the lease.

(p) DividendsDividend distribution to the company’s equity holders is recognised initially as a liability in the Group’sfinancial statements in the period in which the dividends are approved.

(q) Segment reportingOperating segments are reported in a manner consistent with the internal reporting provided to the chiefoperating decision-maker. The chief operating decision-maker, who is responsible for allocating resourcesand assessing performance of the operating segments, has been identified as the Chief Executive Officerwho makes strategic decisions as it relates to operations.





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(r) Employee benefitsPension obligationsThe Group participates in two retirement plans, the assets of which are generally held in separate trustee-administered funds. The pension plans are funded by payments from employees and by the Group, takinginto account the recommendations of qualified actuaries. The Group has a defined benefit and a definedcontribution plan.

A defined benefit plan is a pension plan that defines an amount of pension benefit that an employee willreceive on retirement, usually dependent on one or more factors, such as age, years of service andcompensation.

The asset or liability recognised in the statement of financial position in respect of the defined benefitpension plan is the present value of the defined benefit obligation at the statement of financial position dateless the fair value of plan assets, together with adjustments for past service costs. The defined benefitobligation is calculated annually by independent actuaries using the projected unit credit method. Thepresent value of the defined benefit obligation is determined by discounting the estimated future cashoutflows using interest rates of high-quality corporate bonds that are denominated in the currency in whichthe benefits will be paid, and that have terms to maturity approximating the terms of the related pensionliability.

Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions arecharged or credited to equity in other comprehensive income in the period in which they arise.

Past-service costs are recognised immediately in the income statement.The Group, through a subsidiary, also participates in a defined contribution plan whereby it payscontributions to a privately administered pension insurance plan on a contractual basis. Once thecontributions have been paid, the subsidiary has no further payment obligations. The contributions arecharged to the income statement in the period to which they relate.

Other retirement obligationsThe Group provides post-employment health care and life insurance benefits to its retirees. Theentitlement to these benefits is usually conditional on the employee remaining in service up to retirementage and the completion of a minimum service period. The expected costs of these benefits are accruedover the period of employment using an accounting methodology similar to that for defined benefit pensionplans. Actuarial gains and losses arising from experience adjustments, and changes in actuarialassumptions are charged or credited to equity in other comprehensive income in the period in which theyarise. These obligations are valued annually by independent qualified actuaries.

Termination benefitsTermination benefits are payable when employment is terminated by the Group before the normalretirement date, or whenever an employee accepts voluntary redundancy in exchange for these benefits.The Group recognises termination benefits at the earlier of the following dates: (a) when the Group can nolonger withdraw the offer of those benefits; and (b) when the entity recognises costs for a restructuring thatis within the scope of IAS 37 and involves the payment of termination benefits. In the case of an offer madeto encourage voluntary redundancy, the termination benefits are measured based on the number ofemployees expected to accept the offer. Benefits falling due more than 12 months after the end of thereporting period are discounted to their present value.





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(s) BorrowingsBorrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings aresubsequently stated at amortised cost; any difference between the proceeds (net of transaction costs) andthe redemption value is recognised in profit and loss over the period of the borrowings using the effectiveinterest method. Borrowings are classified as current liabilities unless the Group has an unconditional right todefer settlement of the liability for at least twelve months after the statement of financial position date.

Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to theextent that it is probable that some or all of the facility will be drawn down. In this case, the fees aredeferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or allof the facility will be drawn down, the fees are capitalised as a pre-payment for liquidity services andamortised over the period of the facility to which it relates.

(t) Borrowing costsGeneral and specific borrowing costs directly attributable to the acquisition, construction or production ofqualifying assets, which are assets that necessarily take a substantial period of time to get ready for theirintended use or sale, are added to the cost of those assets, until such time as the assets are substantiallyready for their intended use or sale.

Investment income earned on the temporary investment of specific borrowings pending their expenditureon qualifying assets is deducted from the borrowing costs eligible for capitalisation. All other borrowingcosts are recognised in profit or loss in the period in which they are incurred.

(u) TaxationThe tax expense comprises current and deferred income taxes. Tax is recognised in the incomestatement, except to the extent that it relates to items recognised in other comprehensive income or directlyin equity. In this case, the tax is also recognised in other comprehensive income or directly in equity,respectively.

Current income tax charges are based on taxable profit for the year, which differs from the profit before taxreported because it excludes items that are taxable or deductible in other years, and items that are nevertaxable or deductible. The Group’s liability for current income tax is calculated at tax rates that have beenenacted at the statement of financial position date. Management periodically evaluates positions taken intax returns with respect to situations in which applicable tax regulation is subject to interpretation. Itestablishes provisions where appropriate on the basis of amounts expected to be paid to the taxauthorities.

Deferred income tax is the tax expected to be paid or recovered on differences between the carryingamounts of assets and liabilities and the corresponding tax bases. Deferred income tax is provided in full,using the liability method, on temporary differences arising between the tax bases of assets and liabilitiesand their carrying amounts in the financial statements. Currently enacted tax rates are used in thedetermination of deferred income tax.

Deferred income tax assets are recognised to the extent that it is probable that future taxable profit will beavailable against which the temporary differences can be utilised.

Tax assets and liabilities are offset when they arise from the same taxable entity, relate to the same TaxAuthority and when the legal right of offset exists.





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(v) Financial instrumentsA financial instrument is any contract that gives rise to both a financial asset in one entity and a financialliability or equity of another entity. Financial assets and liabilities are offset and the net amount reported inthe statement of financial position when there is a legally enforceable right to offset the recognisedamounts and there is an intention to settle on a net basis or realise the asset and settle the liabilitysimultaneously.

Financial assetsThe Group classifies its financial assets as loans and receivables. The classification depends on thepurpose for which the financial assets were acquired. Management determines the classification of itsfinancial assets at initial recognition and re-evaluates this designation at every reporting date.

Loans and receivables are non-derivative financial assets with fixed or determinable payments that arenot quoted in an active market. They are included in current assets, except for maturities greater than 12months after the statement of financial position date. These are classified as non-current assets andcomprise recoverable from The Port Authority of Jamaica in the statement of financial position. Loans andreceivables included in current assets comprise trade and other receivables, group balances, cash andshort-term investments in the statement of financial position.

The Group assesses at the end of each reporting period whether there is objective evidence that afinancial asset or group of financial assets is impaired. A financial asset or a group of financial assets isimpaired and impairment losses are incurred only if there is objective evidence of impairment as a result ofone or more events that occurred after the initial recognition of the asset (a ‘loss event’) and that lossevent (or events) has an impact on the estimated future cash flows of the financial asset or group offinancial assets that can be reliably estimated.

Evidence of impairment may include indications that the debtors or a group of debtors is experiencingsignificant financial difficulty, default or delinquency in interest or principal payments, the probability thatthey will enter bankruptcy or other financial reorganisation, and where observable data indicate that thereis a measurable decrease in the estimated future cash flows, such as changes in arrears or economicconditions that correlate with defaults.

For loans and receivables category, the amount of the loss is measured as the difference between theasset’s carrying amount and the present value of estimated future cash flows (excluding future creditlosses that have not been incurred) discounted at the financial asset’s original effective interest rate. Thecarrying amount of the asset is reduced and the amount of the loss is recognised in profit or loss.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be relatedobjectively to an event occurring after the impairment was recognised (such as an improvement in thedebtor’s credit rating), the reversal of the previously recognised impairment loss is recognised in profit orloss.

Financial liabilitiesThe Group’s financial liabilities are initially measured at fair value, and are subsequently measured atamortised cost using the effective interest method. They are included as trade and other payables, groupcompany balances, bank overdrafts and long term loans on the statement of financial position.





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3. Financial Risk Management

The Group’s activities expose it to a variety of financial risks: market risk (including currency risk, fair valueinterest rate risk and cash flow interest rate risk), credit risk and liquidity risk. The Group’s overall riskmanagement programme focuses on the unpredictability of financial markets and seeks to minimise potentialadverse effects on the Group’s financial performance.

The Group’s risk management policies are designed to identify and analyse these risks, to set appropriate risklimits and controls, and to monitor the risks and adherence to limits by means of reliable and up-to-dateinformation systems. The Group regularly reviews its risk management policies and systems to reflect changesin markets, products and emerging best practice.

The Board of Directors is ultimately responsible for the establishment and oversight of the Group’s riskmanagement framework. The Board provides guidance for overall risk management, covering specific areas,such as foreign exchange risk, interest rate risk, credit risk and investment of excess liquidity.

Management seeks to minimise potential adverse effects on the financial performance of the Group by applyingprocedures to identify, evaluate and manage these risks, based on guidelines set by the Board.

The Board, through the Audit Committee, oversees how management monitors compliance with the Group’srisk management policies and procedures and reviews the adequacy of the risk management framework inrelation to the risks faced by the Group. The Audit Committee is assisted in its oversight role by Internal Audit.Internal Audit undertakes both regular and ad hoc reviews of risk management controls and procedures, theresults of which are reported to the Audit Committee.

The most important types of risk are credit risk, liquidity risk, market risk and other operational risk. For theGroup, market risk includes currency risk and interest rate risk.





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3. Financial Risk Management (Continued)

(a) Credit riskThe Group is exposed to credit risk where one party to a financial instrument fails to discharge an obligationand causes the other party to incur a financial loss. The Group manages its concentrations of credit risk andplaces its cash and cash equivalents with high quality financial institutions. The Group limits the amount ofcredit exposure to any one financial institution. The Group’s choice of financial institution is based primarilyon its high asset base, stability over the years and its strong overseas connections. The Group's customerbase comprises a number of shipping lines represented by their local agents and numerous other customersin a variety of business sectors. The Group has policies in place to ensure that sales of services are madeto customers with an appropriate credit history.

Worst case scenario of credit risk exposureThe worst case scenario of the Group’s and Company’s exposure to credit risk is as follows:

The Group The Company2013$’000

2012$’000

2013$’000

2012$’000

Due from related party 81,291 - 81,291 -Trade receivables 394,090 652,806 308,278 389,900Other receivables 176,016 115,809 155,812 96,290Group companies - - 18,693 169,446Short term investments 2,099,333 2,984,835 1,480,273 2,449,478Cash and bank 1,060,566 115,823 1,006,759 85,906

3,811,296 3,869,273 3,051,106 3,191,020

Credit review processManagement performs regular analyses of the ability of customers and other counterparties to meetrepayment obligations.

(i) Aging analysis of trade receivables that are past due but not impairedTrade receivables that are less than thirty-one (31) days past due are not considered impaired. As of31 December 2013, trade receivables of $172,853,000 (2012 - $437,149,000) for the Group and$122,918,000 (2012 - $210,986,000) for the company were past due but were not considered to beimpaired. These relate to a number of independent customers for whom there is no recent history ofdefault. The aging analysis of these trade receivables is as follows:


2012$’000

2013$’000

2012$’000

31 - 60 days 136,285 171,141 99,515 128,556Over 60 days 36,568 266,008 23,403 82,430

172,853 437,149 122,918 210,986





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(a) Credit risk (continued)(ii) Aging analysis of trade receivables that are past due and are impaired

As of 31 December 2013, trade receivables of $14,541,000 (2012 - $9,377,000) and $6,402,000(2012 - $3,482,000) for the Group and company respectively were past due and considered to beimpaired. These receivables were fully provided for.

The aging of these receivables is as follows:The Group The Company

2013$’000

2012$’000

2013$’000

2012$’000

Over 60 days 14,541 9,377 6,402 3,482

Movements on the provision for impairment of trade receivables are as follows:The Group The Company

2013$’000

2012$’000

2013$’000

2012$’000

At 1 January 9,377 9,385 3,482 7,914Provision for impairment 10,093 5,743 6,402 -Receivables written off during the year as

uncollectible (4,929) (1,157) (3,482) -Amounts recovered/reversed - (4,594) - (4,432)At 31 December 14,541 9,377 6,402 3,482

Additionally, $694,000 of trade receivables was written off directly for the Group and company.

The creation and release of provision for impaired receivables have been included in expenses in profit orloss in the statement of comprehensive income. Amounts charged to the allowance account are generallywritten off when there is no expectation of recovering additional cash.

There are no financial assets other than those listed above that were individually impaired.





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(a) Credit risk (continued)Concentrations of risk(i) Trade receivables

The following table summarises the Group and company’s credit exposure for trade receivables attheir carrying amounts, as categorised by the concentration of customers:


2012$’000

2013$’000

2012$’000

Top ten customers 380,621 617,798 300,878 366,949Other 28,010 44,385 13,802 26,433

408,631 662,183 314,680 393,382Less: Provision for impairment (14,541) (9,377) (6,402) (3,482)

394,090 652,806 308,278 389,900

(ii) Short term investmentsThe Group’s short term investments comprise repurchase agreements held with financial institutions.

(b) Liquidity riskLiquidity risk is the risk that the Group may be unable to meet its payment obligations associated with itsfinancial liabilities when they fall due. Prudent liquidity risk management implies maintaining sufficientcash and marketable securities, the availability of funding through an adequate amount of committedcredit facilities and the ability to close out market positions.

Liquidity risk management processThe Group’s liquidity management process, as carried out within the Group and monitored by the Board ofDirectors, includes:

(i) Monitoring future cash flows and liquidity on a daily basis. This incorporates an assessment ofexpected cash flows and the availability of high grade collateral which could be used to securefunding if required.

(ii) Maintaining committed lines of credit;

(iii) Optimising cash returns on investment;

(iv) Managing the concentration and profile of debt maturities.

The matching and controlled mismatching of the maturities and interest rates of assets and liabilities isfundamental to the management of the Group.

The maturities of assets and liabilities and the ability to replace, at an acceptable cost, interest-bearingliabilities as they mature, are important factors in assessing the liquidity of the Group and its exposure tochanges in interest rates and exchange rates.





Page 25



(b) Liquidity risk (continued)

Financial liabilities cash flowsThe tables below summarise the maturity profile of the Group’s and company’s financial liabilities at31 December based on contractual undiscounted payments at contractual maturity dates.

The GroupWithin 1Month

1 to 3Months

3 to 12Months

1 to 5Years

Over5 Years Total

$’000 $’000 $’000 $’000 $’000 $’0002013

Long term loans 57,519 114,603 448,646 1,645,988 85,008 2,351,764Trade and other payables 359,029 - - - - 359,029Total financial liabilities 416,548 114,603 448,646 1,645,988 85,008 2,710,793

2012Long term loans 51,277 99,098 440,984 1,655,850 189,940 2,437,149Trade and other payables 493,064 - - - - 493,064Bank overdrafts 2,948 - - - - 2,948Total financial liabilities 547,289 99,098 440,984 1,655,850 189,940 2,933,161

The CompanyWithin 1Month

1 to 3Months

3 to 12Months

1 to 5Years

Over5 Years Total

$’000 $’000 $’000 $’000 $’000 $’0002013

Long term loans 59,881 119,234 466,998 1,645,989 83,556 2,375,658Trade and other payables 317,432 - - - - 317,432Group companies 77,112 - - - - 77,112Total financial liabilities 454,425 119,234 466,998 1,645,989 83,556 2,770,202

2012Long term loans 53,918 104,259 463,238 1,681,200 188,488 2,491,103Trade and other payables 434,993 - - - - 434,993Group companies 96,076 - - - - 96,076Bank overdrafts 2,948 - - - - 2,948Total financial liabilities 587,935 104,259 463,238 1,681,200 188,488 3,025,120

Assets available to meet all of the liabilities and to cover financial liabilities include cash and short terminvestments.





Page 26



(c) Market riskThe Group takes on exposure to market risk, which is the risk that the fair value or future cash flows of afinancial instrument will fluctuate because of changes in market prices. Market risk mainly arise fromchanges in foreign currency exchange rates and interest rates.

There has been no change to the Group’s exposure to market risk or the manner in which it manages andmeasures the risk.

(i) Currency riskCurrency risk is the risk that the value of a financial instrument will fluctuate because of changes inforeign exchange rates. The Group is primarily exposed to such risks arising from its significant level offoreign currency borrowings. This is partially offset by its US dollar revenue transactions and itsholdings in US dollar cash and other accounts.

The Group manages its foreign exchange risk by ensuring that the net exposure in foreign assets andliabilities is kept to an acceptable level by monitoring currency positions. The Group further managesthis risk by maximising foreign currency earnings and holding foreign currency balances.





Page 27



(c) Market risk (continued)(i) Currency risk (continued)

Concentrations of currency risk

The table below summarises the Group and company exposure to foreign currency exchange rate riskat 31 December.

The GroupJamaican$ US$ Total

J$’000 J$’000 J$’0002013

Financial AssetsShort term investments 677,066 1,422,267 2,099,333Trade and other receivables 243,833 326,273 570,106Cash and bank 89,190 971,376 1,060,566Total financial assets 1,010,089 2,719,916 3,730,005Financial LiabilitiesLong term loans 670,309 1,331,300 2,001,609Trade and other payables 335,815 23,214 359,029Total financial liabilities 1,006,124 1,354,514 2,360,638Net financial position 3,965 1,365,402 1,369,367

2012Financial AssetsShort term investments 740,575 2,244,260 2,984,835Trade and other receivables 390,133 378,482 768,615Cash and bank 31,536 84,287 115,823Total financial assets 1,162,244 2,707,029 3,869,273Financial LiabilitiesLong term loans 523,816 1,523,593 2,047,409Trade and other payables 476,182 16,882 493,064Bank overdrafts 2,948 - 2,948Total financial liabilities 1,002,946 1,540,475 2,543,421Net financial position 159,298 1,166,554 1,325,852





Page 28




Concentrations of currency risk (continued)The Company

Jamaican$ US$ TotalJ$’000 J$’000 J$’000

2013Financial AssetsShort term investments 188,578 1,291,695 1,480,273Trade and other receivables 140,371 323,719 464,090Group companies 18,673 20 18,693Cash and bank 64,572 942,187 1,006,759Total financial assets 412,194 2,557,621 2,969,815Financial LiabilitiesLong term loans 692,625 1,331,300 2,023,925Trade and other payables 294,218 23,214 317,432Group companies 77,112 - 77,112Total financial liabilities 1,063,955 1,354,514 2,418,469Net financial position (651,761) 1,203,107 551,346

2012Financial AssetsShort term investments 284,090 2,165,388 2,449,478Trade and other receivables 114,369 371,821 486,190Group companies 169,446 - 169,446Cash and bank 18,130 67,776 85,906Total financial assets 586,035 2,604,985 3,191,020Financial LiabilitiesLong term loans 571,332 1,523,593 2,094,925Trade and other payables 418,365 16,628 434,993Group companies 96,076 - 96,076Bank overdraft 2,948 - 2,948Total financial liabilities 1,088,721 1,540,221 2,628,942Net financial position (502,686) 1,064,764 562,078





Page 29




Foreign currency sensitivityThe following tables indicate the currency to which the Group and company had significant exposureon its monetary assets and liabilities and its forecast cash flows. The change in currency rate belowrepresents management’s assessment of the possible change in foreign exchange rates. Thesensitivity analysis represents outstanding foreign currency denominated monetary items and adjuststheir translation at the year end for a 1% (2012 - 1%) appreciation and a 15% (2012 - 10%)depreciation change in foreign currency rates. The sensitivity of the profit was primarily as a result offoreign exchange gains/losses on translation of US dollar-denominated trade receivables, short terminvestments and US dollar-denominated borrowings. Profit is more sensitive to movements inJamaican dollar/US dollar exchange rates because of the significant level of US-dollar denominatedborrowings. The correlation of variables will have a significant effect in determining the ultimate impacton market risk, but to demonstrate the impact due to changes in variables, variables had to be on anindividual basis. There is no direct impact on other comprehensive income or equity.

Change inCurrency Rate

Effect onProfit before

TaxationChange in

Currency Rate


Taxation2013%

2013$’000

2012%

2012$’000

The GroupCurrency:USD +1 13,654 +1 11,666USD -15 (204,810) -10 (116,655)

The Company

USD +1 12,031 +1 10,648

USD -15 (180,466) -10 (106,476)

(ii) Interest rate riskInterest rate risk is the risk that the value or future cash flows of a financial instrument will fluctuatebecause of changes in market interest rates.

Floating rate instruments expose the Group to cash flow interest risk, whereas fixed interest rateinstruments expose the Group to fair value interest risk.

The Group’s interest rate risk policy requires it to manage interest rate risk by maintaining anappropriate mix of fixed and variable rate instruments. The policy also requires it to manage thematurities of interest bearing financial assets and liabilities.

The following tables summarise the Group’s and the company’s exposure to interest rate risk. Itincludes the Group and company financial instruments at carrying amounts, categorised by the earlierof contractual repricing or maturity dates.





Page 30



(c) Market risk (continued)(ii) Interest rate risk (continued)

The Group

Within 1Month

1 to 3Months

3 to 12Months 1 to 5 Years

Over5 Years

Non-InterestBearing Total

$’000 $’000 $’000 $’000 $’000 $’000 $’0002013

AssetsShort term investments 1,145,952 771,428 181,953 - - - 2,099,333

Trade and other receivables 10,585 - - - - 559,521 570,106

Cash and bank 124,756 - - - - 935,810 1,060,566

Total financial assets 1,281,293 771,428 181,953 - - 1,495,331 3,730,005

LiabilitiesLong term loans 48,457 91,228 360,993 1,417,890 77,440 5,601 2,001,609

Trade and other payables - - - - - 359,029 359,029

Total financial liabilities 48,457 91,228 360,993 1,417,890 77,440 364,630 2,360,638

Total interest repricing gap 1,232,836 680,200 (179,040) (1,417,890) (77,440) 1,130,701 1,369,367

2012AssetsShort term investments 556,016 2,178,829 249,990 - - - 2,984,835

Trade and other receivables - - - - - 768,615 768,615

Cash and bank 72,004 - - - - 43,819 115,823

Total financial assets 628,020 2,178,829 249,990 - - 812,434 3,869,273



Bank overdrafts 2,948 - - - - - 2,948


Total interest repricing gap 585,616 2,101,778 (99,406) (1,404,169) (174,405) 316,438 1,325,852





Page 31




The Company

Within 1Month

1 to 3Months

3 to 12Months 1 to 5 Years

Over5 Years

Non-InterestBearing Total

$’000 $’000 $’000 $’000 $’000 $’000 $’0002013

AssetsShort term investments 716,901 763,372 - - - - 1,480,273

Trade and other receivables 4,017 - - - - 460,073 464,090

Group companies - - - - - 18,693 18,693

Cash and bank 94,748 - - - - 912,011 1,006,759

Total financial assets 815,666 763,372 - - - 1,390,777 2,969,815



Group companies - - - - - 77,112 77,112


Total interest repricing gap 767,209 666,204 (378,821) (1,417,890) (77,440) 992,084 551,346

2012AssetsShort term investments 342,446 2,107,032 - - - - 2,449,478

Trade and other receivables - - - - - 486,190 486,190

Group companies - - - - - 169,446 169,446

Cash and bank 67,776 - - - - 18,130 85,906

Total financial assets 410,222 2,107,032 - - - 673,766 3,191,020



Group companies - - - - - 96,076 96,076

Bank overdrafts 2,948 - - - - - 2,948


Total interest repricing gap 365,719 2,025,781 (368,296) (1,427,937) (174,406) 141,217 562,078





Page 32




Interest rate sensitivity

The following table indicates the sensitivity to a possible change in interest rates, with all other variablesheld constant, on the Group’s and company’s statement of comprehensive income and stockholders’equity.

The Group’s interest rate risk arises mainly from short term deposits and borrowings. The sensitivity ofthe profit or loss is the effect of the assumed changes in interest rates on net income based on floatingrate deposits and borrowings. The correlation of variables will have a significant effect in determiningthe ultimate impact on market risk, but to demonstrate the impact due to changes in variables,variables had to be on an individual basis. It should be noted that movements in these variables arenon-linear. There was no direct impact on other comprehensive income or equity.

The Group The CompanyEffect on

Profit beforeTaxation


Taxation


Taxation


Taxation2013$’000

2012$’000

2013$’000

2012$’000

Change in basis points2013 2013 2012 2012JMD USD JMD USD+250 +200 +400 +250 4,895 35,536 (11,040) 6,512-100 -50 -100 -50 1,466 (7,426) (4,429) (297)





Page 33



(d) Capital managementThe Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a goingconcern in order to provide returns for stockholders and benefits for other stakeholders, to effectivelyservice its customers and to maintain an optimal capital structure to reduce the cost of capital as well asmeet externally imposed capital requirements. The Board of Directors monitors the return on capital,which the Group defines as net operating income divided by total stockholders’ equity and non-controllinginterests. The Board of Directors also monitors the level of dividends to ordinary stockholders.

The Group monitors capital on the basis of the gearing ratio. This ratio is calculated as total debt dividedby total stockholders’ equity. Debt is calculated as total borrowings (including ‘current and non-currentborrowings’ as shown in the consolidated statement of financial position) less bank overdraft. Totalstockholders’ equity is calculated as capital and reserves attributable to company’s equity holders asshown in the consolidated statement of financial position.

During 2013, the Group’s strategy, which was unchanged from 2012, was to maintain the gearing ratio nohigher than 75%. The gearing ratios at 31 December 2013 and 2012 were as follows:

2013$’000

Restated2012$’000

Total long term borrowings (Note 28) 1,998,940 2,046,359

Total stockholders’ equity 12,689,393 12,136,160

Gearing ratio (%) 15.8% 16.9%

There were no changes to the Group’s approach to capital management during the year.

The company and its subsidiaries complied with all externally imposed capital requirements to which theywere subjected.

(e) Fair Value of Financial Instruments

In assessing the fair value of financial instruments, the Group uses a variety of methods and makesassumptions that are based on market conditions existing at the statement of financial position date. Theestimated fair values have been determined using available market information and appropriate valuationmethodologies. However, considerable judgement is necessarily required in interpreting market data todevelop estimates of fair value.

(i) The fair values of the Group’s financial instruments were estimated at the face value, less anyestimated credit adjustments. The carrying values of financial assets and liabilities with a maturity ofless than one year are estimated to approximate their fair values due to the short term maturity ofthese instruments. These financial assets and liabilities are cash and bank balances, tradereceivables and payables, related companies balances, short term investments and bank overdrafts.

(ii) The fair values of the long term receivables (due from related party and The Port Authority ofJamaica) could not be reliably determined as no reliable active market exists.

(iii) The carrying values of long term loans closely approximate amortised cost, which is estimated to betheir fair value as they attract terms and conditions available in the market for similar transactions.





Page 34


4. Critical Accounting Estimates and Assumptions in Applying Accounting Policies

Judgements and estimates are continually evaluated and are based on historical experience and other factors,including expectations of future events that are believed to be reasonable under the circumstances.

Key sources of estimation uncertaintyThe Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, bydefinition, seldom equal the related actual results. The estimates and assumptions that have a significant risk ofcausing a material adjustment to the carrying amounts of assets and liabilities within the next financial year arediscussed below.

Depreciable assetsEstimates of the useful life and residual value of property, plant and equipment are required in order to applyan adequate rate of transferring the economic benefits embodied in these assets in the relevant periods. TheGroup applies a variety of methods including the use of certified independent valuators in an effort to arrive atthese estimates. Any changes in estimates of residual value will directly impact the depreciation charge.

Income taxesEstimates are required in determining the provision for income taxes. There are some transactions andcalculations for which the ultimate tax determination is uncertain during the ordinary course of business. TheGroup recognises liabilities for possible tax issues based on estimates of whether additional taxes will be due.Where the final tax outcome of these matters is different from the amounts that were initially recorded, suchdifferences will impact the income tax and deferred tax provisions in the period in which such determination ismade.

Pension and other retirement benefitsThe cost of these benefits and the present value of the pension and the other post-employment liabilitiesdepend on a number of factors that are determined on an actuarial basis using a number of assumptions. Theassumptions used in determining the net periodic cost (income) for pension and post-employment benefitsinclude the expected long-term rate of return on the relevant plan assets, the discount rate and, in the case ofthe post-employment medical benefits, the expected rate of increase in medical costs. Any changes in theseassumptions will impact the net periodic cost (income) recorded for pension and other post-employmentbenefits and may affect planned funding of the pension plans. The expected return on plan assets assumptionis determined on a uniform basis, considering long-term historical returns, asset allocation and future estimatesof long-term investment returns. The Group determines the appropriate discount rate at the end of each year,which represents the interest rate that should be used to determine the present value of estimated future cashoutflows expected to be required to settle the pension and other post-employment benefit obligations. Indetermining the appropriate discount rate, the Group considered interest rate of high-quality corporate bondsthat are denominated in the currency in which the benefits will be paid, and that have terms to maturityapproximating the terms of the related pension liability. The expected rate of increase of medical costs hasbeen determined by comparing the historical relationship of actual medical cost increases with the rate ofinflation in the economy. Past experience has shown that the actual medical costs have increased on averageby one time the rate of inflation. Other key assumptions for the pension and other post-employment benefitcosts and credits are based in part on current market conditions.

If the actual health care trend rates for the post-employment obligations varied by 1% from estimates applied invaluation of the benefits, the consolidated net profit would be an estimated $20,423,000 lower or $25,625,000higher (Note 19). Variations in the other financial assumptions can cause material adjustments in the nextfinancial year, if it is determined that actual experience differed from the estimate (Note 19).





Page 35


5. Segment Financial Information

The Chief Executive Officer is the Group’s chief operating decision maker (CODM). Management has determinedthe operating segments based on the information reviewed by the CODM for the purposes of allocating resourcesand assessing performance. The Group is organised into the following business segments:(a) Terminal operations - Operation of public wharves(b) Cold storage operations - Provision and installation of cold storage facilities(c) Security operations - Security services(d) Other - Property rental.

Transactions between the business segments are on normal commercial terms and conditions.

The Group’s operations are located at Newport West, Kingston, Jamaica.

TerminalOperations

Cold StorageOperations

SecurityOperations Other Eliminations Group

Year ended 31 December 2013 $’000 $’000 $’000 $’000 $’000 $’000External operating revenue 3,604,476 191,485 436,447 - - 4,232,408

Operating revenue from segments 8,607 4,571 54,791 1,940 (69,909) -

Total revenue 3,613,083 196,056 491,238 1,940 (69,909) 4,232,408

Operating profit/(loss) 1,498,273 16,159 30,893 (59,838) (8,445) 1,477,042

Interest expense (135,355) - - (529) 8,445 (127,439)

1,362,918 16,159 30,893 (60,367) - 1,349,603

Foreign exchange loss (198,307)

Profit before income tax 1,151,296

Income tax expense (304,322)

Profit before non-controlling interest 846,974

Non-controlling interest (7,719)Net profit attributable to equity

holders of the company 839,255

Segment assets 12,216,606 976,458 221,721 2,832,818 (202,254) 16,045,349

Unallocated assets 671,315

Total assets 16,716,664

Segment liabilities 2,418,470 8,323 50,849 13,220 (130,224) 2,360,638

Unallocated liabilities 1,607,099

Total liabilities 3,967,737

Other segment items:Interest income (Note 8) 51,076 29,668 3,255 9,080 (8,445) 84,634

Capital expenditure (Note 15) 465,350 - 8,875 - - 474,225

Capital expenditure (Note 16) 105,222 - - - - 105,222

Amortisation (Note 16) 10,166 - - - - 10,166

Depreciation (Note 15) 235,505 19,802 4,674 70,515 - 330,496





Page 36


5. Segment Financial Information (Continued)

TerminalOperations

Cold StorageOperations

SecurityOperations Other Eliminations Group

Year ended 31 December 2012,as restated $’000 $’000 $’000 $’000 $’000 $’000

External operating revenue 3,059,286 245,344 365,547 - - 3,670,177

Operating revenue from segments 1,438 4,273 73,553 1,940 (81,204) -

Total revenue 3,060,724 249,617 439,100 1,940 (81,204) 3,670,177

Operating profit/(loss) 1,185,509 36,658 28,810 (59,701) (115,609) 1,075,667

Interest expense (163,000) - - (559) 12,176 (151,383)

1,022,509 36,658 28,810 (60,260) (103,433) 924,284

Foreign exchange loss (114,947)

Profit before income tax 809,337

Income tax expense (252,863)

Profit before non-controlling interest 556,474

Non-controlling interest (6,271)Net profit attributable to equity

holders of the company 550,203

Segment assets 11,928,142 982,542 349,956 2,894,800 (394,581) 15,760,859

Unallocated assets 625,821

Total assets 16,386,680

Segment liabilities 2,628,942 21,191 202,599 13,240 (322,551) 2,543,421

Unallocated liabilities 1,655,284

Total liabilities 4,198,705

Other segment items:Interest income (Note 8) 78,319 35,111 2,722 9,719 (12,176) 113,695

Capital expenditure (Note 15) 44,169 126 7,272 - - 51,567

Capital expenditure (Note 16) 601 - - - - 601

Amortisation (Note 16) 1,258 - - - - 1,258

Depreciation (Note 15) 232,034 19,846 3,678 70,516 - 326,074





Page 37


6. Expenses by Nature

Total direct and administration expenses:The Group The Company

2013$’000

2012$’000

2013$’000

2012$’000

Advertising and public relations 25,125 23,818 22,643 21,946Amortisation (Note 16) 10,166 1,258 10,166 1,258Auditors' remuneration 10,448 9,857 7,179 6,754Bad debts 10,787 5,743 7,096 -Bank charges 27,915 27,786 27,843 27,548Claims 28,394 11,726 26,318 11,640Cleaning and sanitation 19,525 15,258 9,925 13,175Customs overtime 30,773 38,022 30,773 38,022Depreciation (Note 15) 330,496 326,074 235,505 232,034Directors’ fees 23,562 32,710 23,404 32,518Equipment rental 103,388 64,419 103,388 64,419Fuel 159,659 115,005 157,335 115,005Information technology 68,159 64,404 65,773 59,623Insurance 143,742 134,105 126,333 111,584Irrecoverable General Consumption Tax 54,967 54,580 50,907 50,070Legal and consultation expenses 44,460 41,642 39,761 34,647Occupancy: property taxes and rent 10,404 10,234 10,426 8,220Repairs and maintenance 378,650 370,683 342,688 329,088Security 28,424 57,193 47,464 65,992Staff costs (Note 7) 1,284,048 1,090,833 852,892 724,165Terminal transfers 96,436 71,010 96,436 71,010Utilities 264,076 261,499 203,901 181,615Other 90,664 76,071 56,390 48,759

3,244,268 2,903,930 2,554,546 2,249,092





Page 38


7. Staff CostsThe Group The Company

2013$’000

2012$’000

2013$’000

2012$’000

Wages and salaries 1,048,030 855,572 728,372 554,294Payroll taxes – employer’s contributions 112,098 89,532 74,355 56,503Pension costs – defined benefit plan (Note 19) (57,176) (37,317) (57,176) (37,317)Pension costs – defined contribution plan 8,007 3,064 - -Other retirement benefits (Note 19) 5,778 24,106 5,778 24,106Meal and travelling allowances 69,137 68,456 69,137 68,171Termination costs 31,281 - - -Other 66,893 87,420 32,426 58,408

1,284,048 1,090,833 852,892 724,165

8. Other Operating Income


2012$’000

2013$’000

2012$’000

Dividends - - - 100,000Interest 84,634 113,695 51,076 78,319Management fees - - - 5,334Bad debts recovered 1,995 4,594 1,995 4,432Foreign exchange gains 319,191 116,839 305,283 113,925Proceeds from insurance claims 82,611 71,394 82,611 71,394Other 471 2,898 (1,229) 473

488,902 309,420 439,736 373,877

9. Finance CostsThe Group The Company

2013$’000

2012$’000

2013$’000

2012$’000

Interest expense -Loans 127,439 151,383 135,355 163,000

Foreign exchange losses 198,307 114,947 198,307 114,947325,746 266,330 333,662 277,947





Page 39


10. Income Tax Expense

The tax on profit differs from the theoretical amount that would arise using the basic statutory rate of 30%��ѿ��DV�IROORZV��

The Group The Company

2013$’000

Restated2012$’000

2013$’000

Restated2012$’000

Profit before tax 1,151,296 809,337 1,164,611 907,562

Tax calculated at a tax rate of 30%(2012 - 33ѿ�) 345,389 269,779 349,383 302,521

Adjusted for the effects of:Income not subject to tax - - - (33,333)Expenses not deductible for tax purposes 5,439 8,480 5,352 8,109Change in rate for deferred income taxes (13,120) (7,904) (13,639) (40,780)Special tax allowances (32,452) (8,828) (32,452) (8,828)Other (934) (8,664) 141 (7,632)

Income tax expense 304,322 252,863 308,785 220,057

During the 2012/13 budget presentation, the Government of Jamaica announced a reduction in the corporateLQFRPH�WD[�UDWH�IRU�XQUHJXODWHG�HQWLWLHV��IURP��ѿ��WR��HIIHFWLYH��-DQXDU\��7KH�FKDQJH�LQ�WKH�WD[�rate was signed into law on 28 December 2012 and as such was applied in determining the amounts fordeferred taxation in the financial statements for the year ended 31 December 2012 (Note 29).

On 12 February 2013, the Minister of Finance and Planning announced in Parliament that a surtax of 5% willbe imposed on the taxable income of "large unregulated companies" effective from 1 April 2013. Thisrepresents an addition to the 25% tax rate to be levied as at 1 January 2013. Based on Ministry Paper 15 of2013 issued by the Ministry of Finance and Planning, "large unregulated companies" are to be defined as thosecompanies with gross income equal to or greater than $500,000,000, that are not regulated by the FinancialServices Commission, the Bank of Jamaica, the Ministry of Finance and Planning or the Office of UtilitiesRegulation.

These changes have been applied in determining the amounts for current income taxation in these financialstatements.

During the year, the Government of Jamaica continued its reform of taxes. As a result of this, The FiscalIncentives Act dated 20 December 2013 was signed into law. Under this Act the tax rate for large unregulatedcompanies was reduced from 30% to 25% effective 1 January 2014. As such this rate was applied indetermining the amounts for deferred taxation in the financial statements for the year ended 31 December 2013(Note 29).


2013$’000

Restated2012$’000

2013$’000

Restated2012$’000

Current tax on profit for the year 328,370 288,049 313,300 256,341Deferred income tax (Note 29) (24,048) (35,186) (4,515) (36,284)

304,322 252,863 308,785 220,057





Page 40


11. Profit Attributable to Equity Holders of the Company

2013$’000

Restated2012$’000

(a) Net profit is dealt with as follows in the financial statements of:

Holding company 855,826 687,505

Inter-group dividends from subsidiaries eliminated on consolidation - (100,000)

Adjusted net profit – holding company 855,826 587,505

Subsidiaries (16,571) (37,302)

839,255 550,203

(b) Retained earnings are dealt with as follows in the financial statements of:

Holding company 3,069,880 2,512,655

Subsidiaries 147,123 163,917

3,217,003 2,676,572

12. Non-controlling Interest

The non-controlling interest is comprised as follows:2013$’000

2012$’000

At beginning of year 51,815 45,544Share of net profit of subsidiary 7,719 6,271

59,534 51,815

13. Earnings Per Stock Unit

Basic earnings per stock unit is calculated by dividing the net profit attributable to equity holders by theweighted average number of ordinary stock units in issue during the year.

2013Restated

2012Net profit attributable to equity holders of the company ($’000) 839,255 550,203

Weighted average number of ordinary stock units in issue (thousands) 1,430,200 1,340,812

Basic earnings per stock unit $0.59 $0.41

14. Dividends

During the year, the company declared dividends to registered holders on record as follows.2013$’000

2012$’000

Ordinary dividends, gross - 10 cents 143,020 143,020

Ordinary dividends, gross - 8 cents 114,416 -

257,436 143,020





Page 41


15. Property, Plant and EquipmentThe Group

FreeholdLand

Plant andBuildings

Machineryand

Equipment

Cold Roomand Air

ConditioningEquipment

Furnitureand

FixturesMotor

VehiclesWork InProgress Total

$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

2013

Cost or Valuation -At 31 December 2012 3,178,153 12,486,459 1,616,381 267,404 317,816 90,629 29,641 17,986,483

Additions - 432 9,454 - 10,839 12,422 441,078 474,225

Transfers - 10,297 259,714 - 16,559 67,695 (354,265) -

Disposals - (340) (33,429) - - (2,528) - (36,297)

At 31 December 2013 3,178,153 12,496,848 1,852,120 267,404 345,214 168,218 116,454 18,424,411

Depreciation -

At 31 December 2012 - 5,112,836 517,301 230,110 227,926 57,233 - 6,145,406

Charge for the year - 219,230 73,278 10,333 16,698 10,957 - 330,496

Relieved on disposals - (136) (30,627) - - (2,528) - (33,291)

At 31 December 2013 - 5,331,930 559,952 240,443 244,624 65,662 - 6,442,611

Net Book Value -

At 31 December 2013 3,178,153 7,164,918 1,292,168 26,961 100,590 102,556 116,454 11,981,800

2012

Cost or Valuation -At 31 December 2011 3,178,153 12,469,333 1,612,310 266,949 307,533 81,835 23,221 17,939,334

Additions - 2,793 5,479 455 7,875 10,563 24,402 51,567

Transfers - 15,488 - - 2,494 - (17,982) -

Revaluation

Disposals - (1,155) (1,408) - (86) (1,769) - (4,418)

At 31 December 2012 3,178,153 12,486,459 1,616,381 267,404 317,816 90,629 29,641 17,986,483

Depreciation -

At 31 December 2011 - 4,896,171 437,611 220,273 212,885 56,009 - 5,822,949


Relieved on disposals - (748) (1,209) - (70) (1,590) - (3,617)

At 31 December 2012 - 5,112,836 517,301 230,110 227,926 57,233 - 6,145,406

Net Book Value -

At 31 December 2012 3,178,153 7,373,623 1,099,080 37,294 89,890 33,396 29,641 11,841,077





Page 42


15. Property, Plant and Equipment (Continued)The Company

FreeholdLand

Plant andBuildings

Machineryand

Equipment

Cold Roomand Air

ConditioningEquipment

Furnitureand

FixturesMotor

VehiclesWork inProgress Total

$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’0002013

Cost or Valuation -

At 31 December 2012 2,091,153 8,207,044 1,594,143 19,137 306,243 73,877 29,641 12,321,238

Additions - - 5,395 - 9,701 9,176 441,078 465,350

Transfers - 10,297 259,714 - 16,559 67,695 (354,265) -

Disposal - - (33,311) - - - - (33,311)

At 31 December 2013 2,091,153 8,217,341 1,825,941 19,137 332,503 150,748 116,454 12,753,277

Depreciation -

At 31 December 2012 - 2,919,684 501,985 9,010 219,495 45,514 - 3,695,688


On disposal - - (30,508) - - - - (30,508)

At 31 December 2013 - 3,067,004 534,337 10,281 235,105 53,958 - 3,900,685

Net Book Value -

At 31 December 2013 2,091,153 5,150,337 1,291,604 8,856 97,398 96,790 116,454 8,852,592

2012

Cost or Valuation -

At 31 December 2011 2,091,153 8,190,832 1,589,653 18,682 296,285 69,012 23,221 12,278,838

Additions - 724 4,490 455 7,464 6,634 24,402 44,169

Transfers - 15,488 - - 2,494 - (17,982) -

Disposal - - - - - (1,769) - (1,769)

At 31 December 2012 2,091,153 8,207,044 1,594,143 19,137 306,243 73,877 29,641 12,321,238

Depreciation -

At 31 December 2011 - 2,782,907 423,295 7,708 205,176 46,158 - 3,465,244

Charge for the year - 136,777 78,690 1,302 14,319 946 - 232,034

On disposal - - - - - (1,590) - (1,590)

At 31 December 2012 - 2,919,684 501,985 9,010 219,495 45,514 - 3,695,688

Net Book Value -

At 31 December 2012 2,091,153 5,287,360 1,092,158 10,127 86,748 28,363 29,641 8,625,550





Page 43


15. Property, Plant and Equipment (Continued)

(a) Freehold land of the Group was revalued as at 31 December 2011 on the basis of open market value byD.C. Tavares and Finson Reality Limited, independent qualified valuators. The freehold plant and buildings ofthe Group were also revalued as at 31 December 2011 on the depreciated replacement cost basis whichapproximates fair value, by Stoppi, Cairney and Bloomfield, quantity surveyors and construction costconsultants. The carrying value of these assets has been adjusted upwards and the increase in value net ofdeferred income taxes has been recognised in capital reserves (Note 25).

The property, plant and equipment that, subsequent to initial recognition, are measured at fair value aregrouped into Levels 1 to 3 based on the degree to which the fair value is observable. The levels are asfollows:

x� Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active marketsfor identical assets or liabilities;

x� Level 2 fair value measurements are those derived from inputs other than quoted prices includedwithin Level 1 that are observable for the asset or liability, either directly (that is, as prices) orindirectly (that is, derived from prices);

x� Level 3 fair value measurements are those derived from inputs for the asset or liability that are notbased on observable market data (that is, unobservable inputs).

The items of property, plant and equipment of the Group and the company shown at revalued amounts areincluded in Level 2. There were no transfers between levels for both years.

(b) A fixed charge totalling US$26.6 million has been placed over the property, plant and equipment of thecompany as well as mortgages totalling $638 million over certain premises and equipment owned by thecompany in keeping with the terms of certain loan agreements (Note 28).

(c) If freehold land, plant and buildings were stated on the historical cost basis, the amounts would be as follows:


2012$’000

2013$’000

2012$’000

Cost 3,989,983 3,979,686 3,946,812 3,936,515Accumulated depreciation (716,423) (642,960) (699,835) (627,376)Net book value 3,273,560 3,336,726 3,246,977 3,309,139





Page 44


16. Intangible AssetsThe Group and Company

ComputerSoftware

$’000

Rights toCustomerContracts

$’000Total$’000

At Cost -At 31 December 2011 6,288 - 6,288Additions 601 - 601At 31 December 2012 6,889 - 6,889Additions 664 104,558 105,222At 31 December 2013 7,553 104,558 112,111

AmortisationAt 31 December 2011 2,515 - 2,515Amortisation charge for year 1,258 - 1,258At 31 December 2012 3,773 - 3,773Amortisation charge for year 1,453 8,713 10,166At 31 December 2013 5,226 8,713 13,939

Net Book Value31 December 2013 2,327 95,845 98,17231 December 2012 3,116 - 3,116

During the year the Group acquired the stevedoring operations of an operator at Port Bustamante.

The total charge of $10,166,000 (2012 - $1,258,000) is included in administration expenses in profit or loss.





Page 45


17. Investments in Subsidiaries

2013$’000

2012$’000

Harbour Cold Stores Limited 13,335 13,335Security Administrators Limited 6 6Western Storage Limited 16,301 16,301Western Terminals Limited 46,039 46,039Kingston Terminal Operators Limited 50 50

75,731 75,731

18. Recoverable from the Port Authority of Jamaica

The Port Authority of Jamaica requires the company to allocate 16% of wharfage collected to a special reserve.This reserve, that was created in 1976 can only be utilised for retroactive labour costs and special expenditure inaccordance with directives from The Port Authority of Jamaica and must be represented by cash, deposits oreasily realisable securities. The interest earned on the investments representing the reserve may be used by thecompany in the furtherance of its business.

The recoverable from The Port Authority of Jamaica represents the amount spent in excess of the balance of thereserve and is recoverable from future collection of wharfage allocated to the reserve. A total of $19,016,000(2012 - $20,086,000) was allocated to the reserve during the year.

The Group and Company2013$’000

2012$’000

Balance at 1 January 3,101 23,18716% of wharfage collections for year (19,016) (20,086)Transferred to accounts payable (Note 30) 15,915 -Balance at 31 December - 3,101

This comprises:Donations and security related costs - 1,000Severance payments - 2,101

- 3,101





Page 46


19. Retirement Benefit Asset and Obligations

The Group and Company

2013$’000

Restated2012$’000

Statement of financial position (asset)/obligations for:Pension benefits (653,321) (612,710)Other retirement benefits 179,944 203,315

Profit or loss for (Note 7):Pension benefits (57,176) (37,317)Other retirement benefits 5,778 24,106

Remeasurements for:Pension benefits 46,201 30,820Other retirement benefits (8,087) 10,656

38,114 41,476

(a) Pension benefits

The Group has established two pension schemes covering all permanent employees, a defined benefit planand a defined contribution plan. The assets of the funded plans are held independently of the Group’s assetsin separate trustee administered funds.

Defined benefit planThe Group operates a joint contributory defined benefit pension scheme which is fully funded. The scheme isopen to all permanent employees of the Group and is administered by trustees. Under the scheme,retirement benefits are based on average salary during the five years preceding retirement. The scheme isfunded by employee contributions at 5% and employer contribution of 10% of salary, as recommended byindependent actuaries.

The assets of the scheme are held independently of the Group’s assets in a separate trustee-administeredfund. The scheme is valued by independent actuaries annually using the projected unit credit method. Thelatest actuarial valuation was carried out as at 31 December 2013.

Additionally, the plan is valued by independent actuaries triennially to determine the adequacy of funding.The latest such valuation being as at 31 December 2011 revealed that the scheme was adequately fundedas at that date.

Defined contribution planThe Group, through a subsidiary, participates in a defined contributory pension scheme which wasestablished in May 2001 and is open to security personnel and administrative personnel contracted to thesubsidiary. The scheme is administered by trustees. The scheme is funded by employer’s contribution of 5%as well as contractor mandatory contributions of 5%. Members may also make voluntary contribution of up to5% of their earnings, as recommended by independent actuaries.





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19. Retirement Benefit Asset and Obligations (Continued)

(a) Pension benefits (continued)

The defined benefit asset amounts recognised in the statement of financial position are determined asfollows:

The Group and Company

2013$’000

Restated2012$’000

Fair value of plan assets (1,713,046) (1,603,570)Present value of funded obligations 1,048,612 916,494Surplus of funded plan (664,434) (687,076)Limitation of asset due to uncertainty of obtaining economic benefits 11,113 74,366Asset in the statement of financial position (653,321) (612,710)

Movements in the amounts recognised in the statement of financial position:The Group and Company

2013$’000

Restated2012$’000

Asset at beginning of year (612,710) (579,660)Amounts recognised in statement of comprehensive income (10,975) (6,497)Contributions paid (29,636) (26,553)Asset at end of year (653,321) (612,710)

The movement in the defined benefit asset recognised in the statement of financial position is as follows:The Group and Company

2013$’000

Restated2012$’000

Balance at beginning of year (1,603,570) (1,540,840)Interest income (168,017) (154,303)Re-measurements -Return on plan assets, excluding amountsincluded in interest (expense)/income 51,718 95,943

Members’ contributions (25,297) (22,134)Employer’s contributions (29,636) (26,553)Benefits paid 67,985 44,317Transfers in (6,229) -Balance at end of year (1,713,046) (1,603,570)





Page 48




The movement in the present value of the funded obligations over the year is as follows:The Group and Company

2013$’000

Restated2012$’000

Balance at beginning of year 916,494 854,628Current service cost 34,791 32,898Interest cost 96,706 86,967Re-measurements -Loss/(gain) from change in financial assumptions 67,724 (2,646)Experience gains (2,179) (19,636)

Members’ contributions 9,948 8,600Benefits paid (67,985) (44,317)Transfers in 6,229 -Gain on curtailment (13,116) -Balance at end of year 1,048,612 916,494

As at the last valuation date, the present value of the defined benefit obligation was comprised of approximately$461,587,000 relating to active employees, $46,476,000 relating to deferred members, $536,342,000 relatingto members in retirement and $4,207,000 representing other liabilities.

The movement on the effect of asset ceiling during the year is as follows:The Group and Company

2013$’000

Restated2012$’000

Balance at beginning of year 74,366 106,552Interest (expense)/income 7,808 10,655Change in asset ceiling, excluding amounts included in interest expense (71,061) (42,841)

11,113 74,366

The amounts recognised in profit or loss are as follows:The Group and Company

2013$’000

Restated2012$’000

Current service cost 19,443 19,364Interest expense/income (63,503) (56,681)Gain on curtailment (13,116) -Total, included in staff costs (Note 7) (57,176) (37,317)





Page 49




Plan assets are comprised as follows:

The Group and Company2013 2012

$’000 % $’000 %Quoted securities:

Equity securities 314,711 18.4 289,733 18.1Government of Jamaica securities 998,922 58.3 946,513 59.0

Corporate bonds and promissory notes 85,309 5.0 110,159 6.9Repurchase agreements 110,286 6.4 44,299 2.8Leases 19,995 1.2 26,406 1.6Real estate 85,000 4.9 85,000 5.3Other 98,823 5.8 101,460 6.3

1,713,046 100.0 1,603,570 100.0

The pension plan assets include ordinary stock units of the company with a fair value of $60,600,000(2012 - $50,000,000).

Expected contributions to the post-employment plan for the year ending 31 December 2014 are$24,438,000.

The significant actuarial assumptions used were as follows:2013 2012

Discount rate 9.50% 10.5%Future salary increases 5.50% 6.50%Expected pension increase 3.75% 4.00%

Assumptions regarding future mortality are set based on actuarial advice in accordance with publishedstatistics and experience in each territory. These assumptions translate into an average life expectancy inyears for a pensioner retiring at age 65.

The sensitivity of the defined benefit obligation to changes in the weighted principal assumptions is:Impact on Post-employment obligations

Change inAssumption

Increase inAssumption

Decrease inAssumption

$’000 $’000Discount rate 1% Decrease by 10.3% Increase by 12.9%Future salary increases 1% Increase by 2.7% Decrease by 2.4%Expected pension increase 1% Increase by 8.9% Decrease by 7.4%





Page 50




Sensitivity (continued):Increase

Assumption by OneYear

DecreaseAssumption by

One YearLife expectancy Increase by 1% Decrease by 1%

The above sensitivity analyses are based on a change in an assumption while holding all otherassumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions maybe correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarialassumptions the same method (present value of the defined benefit obligation calculated with theprojected unit credit method at the end of the reporting period) has been applied as when calculating thepension liability recognised within the statement of financial position.

The methods and types of assumptions used in preparing the sensitivity analysis did not changecompared to the previous period.

(b) Other retirement benefits

The Group operates both a group health plan and a group life plan. The parent company covers 100% ofthe premiums of both plans. However pensioners under the health plan have the option to pay anadditional premium for single dependant or multiple dependants’ coverage.

The method of accounting and the frequency of valuations for these plans are similar to those used for thepension scheme. In addition to the assumptions used for the pension scheme, the main actuarialassumption is a long term increase in health costs of 7.5% per year (2012 – 9.5%) for the insured grouphealth plan. The insured group life plan assumes a salary rate increase of 5.5% per year (2012 – 6.5%).

The amounts recognised in the statement of financial position were determined as follows:The Group and Company

2013$’000

Restated2012$’000

Present value of unfunded obligations 179,944 203,315

Movement in the amounts recognised in the statement of financial position:The Group and Company

2013$’000

Restated2012$’000

Liability at beginning of year 203,315 175,054Amounts recognised in the statement of comprehensive income (2,309) 34,762Contributions paid (21,062) (6,501)Liability at end of year 179,944 203,315





Page 51



(b) Other retirement benefits (continued)

The movement in the present value of the defined benefit obligation over the year is as follows:The Group and Company

2013$’000

Restated2012$’000

Balance at beginning of year 203,315 175,054Current service cost 8,077 6,296Interest cost 20,299 17,810Gain on curtailment (22,598) -Included in staff costs in profit or loss (Note 7) 5,778 24,106Re-measurements -Gain from change in financial assumptions (24,378) (694)Experience losses 16,291 11,350

Total, included in other comprehensive income (8,087) 10,656Benefits paid (21,062) (6,501)Balance at end of year 179,944 203,315

The sensitivity of the defined benefit obligation to changes in the weighted principal assumptions is:Impact on Post-employment Obligations - Life

Change inAssumption


$’000


$’000Discount rate 1% (1,903) 2,273Future salary increases 1% 788 (710)

Impact on Post-employment Obligations - Medical

Change inAssumption


$’000


$’000Discount rate 1% (20,423) 25,625Future medical cost rate 1% 25,625 (20,423)





Page 52



(c) Risks associated with pension plans and other post-employment plans

Through its defined benefit pension plans and post-employment medical plans, the company is exposed to anumber of risks, the most significant of which are detailed below:

Asset volatility

The plan liabilities are calculated using a discount rate set with reference to Government of Jamaica bondyields; if plan assets underperform this yield, this will create a deficit.

As the plan matures, the company intends to reduce the level of investment risk by investing more in assetsthat better match the liabilities. The Government bonds largely represent investments in Government ofJamaica securities.

However, the company believes that due to the long-term nature of the plan liabilities, a level of continuingequity investment is an appropriate element of the company’s long term strategy to manage the plansefficiently. See below for more details on the company’s asset-liability matching strategy.

Changes in bond yields

A decrease in Government of Jamaica bond yields will increase plan liabilities, although this will be partiallyoffset by an increase in the value of the plans’ bond holdings.

Inflation risk

Higher inflation will lead to higher liabilities (If there is a plan in place to cap this state). The majority of theplan’s assets are either unaffected by fixed interest bonds, meaning that an increase in inflation will reducethe surplus or create a deficit.

Life expectancy

The majority of the plan’s obligations are to provide benefits for the life of the member, so increases in lifeexpectancy will result in an increase in the plan’s liabilities. This is particularly significant, where inflationaryincreases result in higher sensitivity to changes in life expectancy.

The company ensures that the investment positions are managed within an asset-liability matching (ALM)framework that has been developed to achieve long-term investments that are in line with the obligationsunder the pension scheme. Within this framework, the company’s ALM objective is to match assets to thepension obligations by investing in long-term fixed interest securities with maturities that match the benefitpayments as they fall due. The company actively monitors how the duration and the expected yield of theinvestments are matching the expected cash outflows arising from the pension obligations. The companyhas not changed the processes used to manage its risks from previous periods. The company does not usederivatives to manage its risk. Investments are well diversified, such that the failure of any single investmentwould not have a material impact on the overall level of assets. A large portion of assets in 2013 consists ofbonds and equities.

Funding levels are monitored on an annual basis and the current agreed contribution rate is 5% ofpensionable salaries for the employees and 10% for the company. The next triennial valuation is due to becompleted as at 31 December 2014. The company considers that the contribution rates set at the lastvaluation date to be sufficient to prevent a deficit and that regular contributions, which are based on servicecosts, will not increase significantly.





Page 53



(c) Risks associated with pension plans and other post-employment plans (continued)Life expectancy (continued)

The weighted average duration of the defined benefit obligation for pension scheme is 13 years.

The weighted average duration of the defined benefit obligation for post employment medical and lifeinsurance benefits is 15 years.

20. Inventories


2012$’000

2013$’000

2012$’000

Refrigeration equipment 5,583 6,090 - -Fuel 5,624 644 5,624 644Spares 126,695 23,292 125,179 21,748

137,902 30,026 130,803 22,392

21. Related Party Transactions and Balances

(a) During the year the Group had normal business transactions with related parties with which there arecommon directors, as follows:


2012$’000

2013$’000

2012$’000

(i) Revenue earned from sales of servicesSubsidiaries - - 8,606 12,221Companies controlled by directors/members or

related by virtue of common directorships 2,258,840 1,793,100 1,881,883 1,490,5492,258,840 1,793,100 1,890,489 1,502,770

Services provided to related parties are negotiated as is with non-related party customers. Servicesare sold on basis of the price lists in force with non-related parties.

(ii) Interest income earnedCompanies controlled by directors/members orrelated by virtue of common directorships 38,445 51,635 36,303 40,338

(iii) Other income - dividendsSubsidiaries - - - 100,000

(iv) Purchases of goods and servicesSubsidiaries - - 56,005 55,341Companies controlled by directors/membersrelated by virtue of common directorships 173,069 152,534 173,069 150,751

173,069 152,534 229,074 206,092

Services are bought from related parties on the basis of the prices offered to non-related parties.





Page 54


21. Related Party Transactions and Balances (Continued)

(a) Transactions with related parties (continued)


2012$’000

2013$’000

2012$’000

(v) Interest paidSubsidiaries - - 7,915 11,617

(b) Year-end balances with related parties:


2012$’000

2013$’000

2012$’000

(i) Due from related companiesSubsidiaries - - 18,693 169,446Companies controlled by directors/membersor related by virtue of common directorshipsLong term 81,291 - 81,291 -Current (Note 22) 270,925 587,383 259,461 349,121

352,216 587,383 359,445 518,567

The long term amount receivable from a related company is interest free and has no fixed repaymentterms. Management has however represented that the loan will not be called within the next twelvemonths.

(ii) Due to related companiesSubsidiaries - - 77,112 96,076Companies controlled by directors/membersand related by virtue of commondirectorships (Note 30) 69,683 213,901 69,683 213,901

69,683 213,901 146,795 309,977

Included in the amount due to subsidiaries is $32,900,000 (2012 - $32,900,000), representing fundsbeing held on deposit for a subsidiary (Note 23).

(iii) Short term investmentsCompanies controlled by directors/members or

related by virtue of common directorships 1,467,443 1,530,790 1,130,904 1,286,727

These investments currently attract interest at rates between 2.90% and 6.50% per annum(2012 – 3.25% and 5.80%) and have an average maturity of ninety (90) days (Note 23).

(iv) Bank balancesCompanies controlled by directors/members or

related by virtue of common directorships 95,328 103,984 41,534 80,837

The bank balances with related parties comprise foreign currency savings accounts which currentlyattract interest of 0.25% - 0.75% (2012 – 0.75% to 1.2%) per annum (Note 23).





Page 55


21. Related Party Transactions and Balances (Continued)

(b) Year-end balances with related parties (continued):


2012$’000

2013$’000

2012$’000

(v) BorrowingsSubsidiaries – long term loans - - 23,768 48,968Companies controlled by directors/membersor related by virtue of common directorships– long term loans 93,172 91,545 91,720 90,093

93,172 91,545 115,488 139,061

(c) Key management compensation:


2012$’000

2013$’000

2012$’000

Salaries and other short term employee benefits 59,983 55,879 48,364 42,648Payroll taxes – employer’s contributions 4,969 4,791 4,236 3,680

Pension benefits 4,515 5,588 3,193 4,265

Termination costs 10,482 - - -Other 5,618 5,794 4,862 3,898

85,567 72,052 60,655 54,491Directors' emoluments –Fees

Current year 23,562 32,710 23,404 32,518Management remuneration (included in

salaries above) 25,336 19,367 25,336 19,367

22. Trade and Other Receivables


2012$’000

2013$’000

2012$’000

Trade receivables 408,631 662,183 314,680 393,382Less: Provision for impairment (14,541) (9,377) (6,402) (3,482)

394,090 652,806 308,278 389,900Prepayments 16,179 14,266 8,202 7,232Other 176,016 115,809 155,812 96,290

586,285 782,881 472,292 493,422

Trade receivables include amounts receivable from related parties (Note 21). The fair values for trade and otherreceivables equal the carrying values.





Page 56


23. Cash and Cash EquivalentsThe Group The Company2013$’000

2012$’000

2013$’000

2012$’000

Short term investments - deposits 2,099,333 2,984,835 1,480,273 2,449,478

Less : Short term investments with maturity periodsin excess of 90 days (181,953) (249,990) - -

Less: Investments held for subsidiary (Note 21) - - (32,900) (32,900)1,917,380 2,734,845 1,447,373 2,416,578

Cash and bank 1,060,566 115,823 1,006,759 85,9062,977,946 2,850,668 2,454,132 2,502,484

Bank overdraft (Note 27) - (2,948) - (2,948)2,977,946 2,847,720 2,454,132 2,499,536

The weighted average effective interest rate on short term deposits was 2.93% (2012 – 3.32%) per annum forUnited States dollar denominated deposits and 6.49% (2012 – 4.78%) per annum for Jamaican dollar deposits.These short term deposits have an average maturity of ninety (90) days.

Cash and bank and short term investments include amounts placed with related parties (Note 21). Cash at bankincludes an interest earning current account. Interest is currently 1% per annum.

The bank overdraft attracted interest at 16.25%.per annum. The Group has undrawn credit facilities via bankoverdrafts totalling $65 million. Security for the facilities is described in Note 28.

24. Share CapitalNumberof Stock

Units

OrdinaryStockUnits

’000 $’000Issued share capital at:

At 31 December 2012 1,430,200 2,079,398

At 31 December 2013 1,430,200 2,079,398

The total authorised number of ordinary shares is 1,507,550,000 (2012 - 1,507,550,000) units. All issuedshares are fully paid.

By Ordinary Resolution passed at an Extraordinary General Meeting of the company held on 29 March 2012,the company’s share capital was increased by the issue of 357,550,000 ordinary shares and the newly issuedshares were allotted to Jamaica Producers Group Limited for a total purchase price of $1,787,750,000.

The no par shares in issue comprise the stated capital of the company.





Page 57


25. Capital ReservesThe Group The Company

2013$’000

2012$’000

2013$’000

2012$’000

Unrealised surplus on revaluationof property, plant and equipment 8,036,654 8,036,654 4,389,851 4,389,851

Less: Deferred taxation (1,308,265) (1,308,265) (682,344) (682,344)6,728,389 6,728,389 3,707,507 3,707,507

Realised gain on sale of assets 30,188 30,188 5 5Capital distributions received 3,612 3,612 3,612 3,612Capitalisation of profits 130,325 130,325 - -

Replacement Reserve 281,602 269,023 281,602 269,023Capitalisation of Depreciation Reserve 66 66 10 10Arising on consolidation 3,419 3,419 - -

7,177,601 7,165,022 3,992,736 3,980,157

26. Asset Replacement/Rehabilitation and Depreciation Reserves

The Port Authority of Jamaica under the Wharfage Act mandated the creation of a special reserve to beprovided through the tariff of wharfage rates, for the replacement and/or rehabilitation of the wharf facilities.

The Port Authority of Jamaica also stipulated that the depreciation charged on the historical cost of property,plant and equipment be matched with amounts placed in a Depreciation Fund.

The requirement for these reserves became effective in 1998.

The Authority requires that both the Asset Replacement/Rehabilitation and the Depreciation Reserves berepresented by a Fund consisting of cash, deposits or highly liquid securities. The net interest arising on suchFunds should be transferred to the Asset Replacement/Rehabilitation and Depreciation Reserves, respectively.Amounts from these reserves are used for capital projects in accordance with guidelines set by The PortAuthority of Jamaica.

The balance of the reserves comprises:


2012$’000

2013$’000

2012$’000

Asset Replacement/Rehabilitation

Reserve - - - -

Depreciation Fund 215,391 215,168 212,968 212,968

215,391 215,168 212,968 212,968





Page 58


26. Asset Replacement/Rehabilitation and Depreciation Reserves (Continued)

The movement in each category of reserves was as follows:

(a) Asset Replacement/Rehabilitation ReserveThe Group and Company

2013$’000

2012$’000

At beginning of year - -

Transfers from profit or loss account during the year 12,579 12,579

Transfer to capital reserves - utilised for capital expansion (12,579) (12,579)

At end of year - -

(b) Depreciation FundThe Group The Company

2013$’000

2012$’000

2013$’000

2012$’000

At beginning of year 215,168 214,796 212,968 212,968Transfer from retained earnings (netinterest) 223 372 - -

At end of year 215,391 215,168 212,968 212,968

(c) Value of Reserve Funds Represented by Cash and Short Term Investments

The dollar amount of approvals received by the company from The Port Authority of Jamaica to undertakecapital projects to date, exceeds the required provisions. As such, all related cash, deposits or highly liquidsecurities pertaining to reserves have been fully utilised.

27. BorrowingsThe Group The Company

2013$’000

2012$’000

2013$’000

2012$’000

Non-CurrentLong term loans (Note 28) 1,498,689 1,581,508 1,497,237 1,603,824

Current

Bank overdraft (Note 23) - 2,948 - 2,948Current portion of long term loans (Note 28) 502,920 465,901 526,688 491,101

502,920 468,849 526,688 494,0492,001,609 2,050,357 2,023,925 2,097,873





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28. Long Term LoansThe Group The Company2013$’000

2012$’000

2013$’000

2012$’000

(a) The Port Authority of Jamaica 1,480 1,480 1,480 1,480(b) The Port Authority of Jamaica 1,452 1,452 - -(c) Harbour Cold Stores Limited - - 23,768 48,968(d) Development Bank of Jamaica/First Global

Bank Limited 114,701 176,855 114,701 176,855(e) Development Bank of Jamaica/First Global

Bank Limited 213,600 242,400 213,600 242,400(f) Development Bank of Jamaica/CIBC

FirstCaribbean International Bank (Jamaica)Limited 8,429 13,016 8,429 13,016

(g) Development Bank of Jamaica/CIBCFirstCaribbean International Bank (Jamaica)Limited 250,000 - 250,000 -

(h) CIBC FirstCaribbean International Bank(Jamaica) Limited 61,439 160,061 61,439 160,061

(i) CIBC FirstCaribbean International Bank(Jamaica) Limited 1,269,861 1,362,482 1,269,861 1,362,482

(j) Kingston Portworkers Superannuation Fund 77,978 88,613 77,978 88,6131,998,940 2,046,359 2,021,256 2,093,875

Add: Interest payable 2,669 1,050 2,669 1,0502,001,609 2,047,409 2,023,925 2,094,925

Less: Current portion (502,920) (465,901) (526,688) (491,101)1,498,689 1,581,508 1,497,237 1,603,824

(a) These loans, which are interest free and unsecured, were obtained to build a security wall and are repayableonly if the wharf is sold.

(b) This comprises a loan towards the partial cost of construction of a security wall. This interest-free andunsecured loan is repayable only in the event of the asset being sold.

(c) This represents a $194 million draw down on a $200 million loan facility. The loan is unsecured and attractsinterest at 13%. The principal is repayable over a seven-year period with a one year moratorium on principalrepayment.

(d) This represents a loan granted by the Development Bank of Jamaica through First Global Bank Limited for thecompany’s capital expenditure program. The interest rate is fixed at 11.85% per annum for the life of the loan.After a two year moratorium on principal repayments, thereafter, payments are to be amortised over sixtymonths at $6,651,000 per month.

(e) This represents a loan of $288 million granted by the Development Bank of Jamaica through First Global BankLimited. Interest rate is fixed at 11% per annum. The principal is repayable in one hundred and twenty monthlyinstalments of $2,400,000.





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28. Long Term Loans (Continued)

(f) This represents a loan of $32 million granted by the Development Bank of Jamaica through CIBCFirstCaribbean International Bank (Jamaica) Limited. Interest rate is fixed at 11.85% per annum. The principalis repayable in eighty-three monthly instalments of $382,000.

(g) This represents a credit facility granted by the Development Bank of Jamaica through CIBC FirstCaribbeanInternational Bank (Jamaica) Limited towards the company's capital expenditure program. The interest rateis fixed at 8.25% and the loan is repayable over seven (7) years.

(h) This represents a credit facility through CIBC FirstCaribbean International Bank (Jamaica) Limited towardsthe company's capital expenditure program. Interest is currently computed based on US six-month LIBORplus 4.50% per year. The loan will be repaid over forty equal monthly installments of US$95,000 per month.

(i) This represents a credit facility of US$26.6 million through CIBC FirstCaribbean International Bank (Jamaica)Limited towards the company's capital expenditure program. Interest is currently computed based on US six-month LIBOR plus 4.50% per year. The loan principal is payable by eighty four monthly payments ofUS$224,000. The last payment is due June 2018.

(j) This represents a loan of $100 million granted by the Kingston Port Workers Superannuation Fund. Theinterest rate is fixed at 10% per annum. The principal is repayable over a seven year period.

The loan facilities with First Global Bank Limited (d) – (e) above are secured by mortgages over property ownedby the Group, bills of sale over certain pieces of machinery and assignment of insurance over these pieces ofmachinery. Security for the loan facilities with CIBC FirstCaribbean Bank (Jamaica) Limited (f)-(i) above andincluding the bank overdrafts (Notes 3 and 23) and guarantees (Note 32), is a registered demand debentureproviding fixed and floating charges over the company’s fixed and floating assets stamped to cover US$26.6million, assignment of insurance proceeds and promissory notes stamped in the sums of $32 million andUS$ 10 million. The facility with Kingston Portworkers Superannuation Fund is secured by mortgages overproperty owned by the Group and bill of sales over certain pieces of machinery (Note 15).





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29. Deferred Income Tax

Deferred income taxes are calculated on all temporary differences under the liability method using a tax rate of25%.


2013$’000

Restated2012$’000

2013$’000

Restated2012$’000

Statement of financial position (assets)/liabilities for:Deferred income tax assets (1,122) (1,261) - -Deferred income tax liabilities 1,299,521 1,333,236 790,641 804,684

Net deferred income tax liabilities 1,298,399 1,331,975 790,641 804,684

The movement in the net deferred income tax assets and liabilities during the year is as follows:


2013$’000

Restated2012$’000

2013$’000

Restated2012$’000

Net liabilities at beginning of year 1,331,975 1,813,617 804,684 1,078,785Profit or loss (Note 10) (24,048) (35,186) (4,515) (36,284)Other comprehensive income (9,528) (10,369) (9,528) (10,369)Effect of change in tax rate on revaluation

surplus - (436,087) - (227,448)Net liabilities at end of year 1,298,399 1,331,975 790,641 804,684

The deferred tax movement in the profit or loss comprises the following temporary differences:The Group The Company

2013$’000

Restated2012$’000

2013$’000

Restated2012$’000

Vacation leave accrual 254 1,971 317 1,857Other payables - 277 - 24Employee benefit obligations 3,821 10,186 3,821 10,186Unrealised foreign exchange losses (17,645) 23,940 (17,645) 23,940Interest payable (666) 1,076 (666) 1,076Property, plant and equipment (29,330) (42,924) (7,681) (47,216)Unrealised foreign exchange gains (3,669) 5,219 (3,615) 5,165Interest receivable 1,485 (2,594) (748) 1,021Retirement benefit asset 21,702 (32,337) 21,702 (32,337)

(24,048) (35,186) (4,515) (36,284)





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29. Deferred Income Tax (Continued)

The deferred tax movement in other comprehensive income comprises:The Group The Company

2013$’000

Restated2012$’000

2013$’000

Restated2012$’000

Employee benefit obligations (11,550) (2,664) (11,550) (2,664)Retirement benefit asset 2,022 (7,705) 2,022 (7,705)

(9,528) (10,369) (9,528) (10,369)

Deferred income tax assets and liabilities are due to the following items:The Group The Company

2013$’000

Restated2012$’000

2013$’000

Restated2012$’000

Deferred income tax assets -Vacation leave accrual 4,646 4,900 3,191 3,508Other payables 533 533 - -Employee benefit obligations 44,986 50,829 44,986 50,829Unrealised foreign exchange losses 117,870 100,225 117,870 100,225Interest payable 8,030 7,364 8,030 7,364Property, plant and equipment - 292 - -

176,065 164,143 174,077 161,926Deferred income tax liabilities -

Property, plant and equipment 1,298,175 1,327,797 798,834 806,515Unrealised foreign exchange gains 1,550 5,219 1,550 5,165Interest receivable 11,409 9,924 1,004 1,752Retirement benefit asset 163,330 153,178 163,330 153,178

1,474,464 1,496,118 964,718 966,610Net deferred income tax liabilities 1,298,399 1,331,975 790,641 804,684

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current taxassets against current tax liabilities and when the deferred income taxes relate to the same fiscal authority.

The offset amounts shown in the statement of financial position include the following:The Group The Company

2013$’000

2012$’000

2013$’000

2012$’000

Deferred income tax assets to be recovered -After more than 12 months 162,856 145,891 162,856 151,054

Deferred income tax liabilities to be extinguished -After more than 12 months 1,461,505 1,476,276 962,164 954,994





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30. Trade and Other Payables


2012$’000

2013$’000

2012$’000

Trade payables 103,387 78,705 67,386 61,218Dividends payable 6,666 13,576 6,666 13,576Provision for 16% wharfage reserve 15,915 - 15,915 -Other payables and accruals 233,061 400,783 227,465 360,199

359,029 493,064 317,432 434,993

Trade and other payables include amounts payable to related parties (Note 21).

31. Operating Lease

A subsidiary company has entered into an operating lease arrangement, with the subsidiary being the lessor.

The future minimum lease payments receivable under operating leases are as follows:2013$’000

2012$’000

No later than 1 year 30,000 -Later than 1 year and no later than 5 years 22,500 -

52,500 -

32. Contingent Liabilities

Litigation

The company and its subsidiaries are subject to various claims, disputes and legal proceedings, in the normalcourse of business. Provision is made for such matters when, in the opinion of management and its legal counsel,it is probable that a payment will be made by the Group, and the amount can be reasonably estimated.

In respect of claims asserted against the Group which have not been provided for, management is of the opinionthat such claims are either without merit, can be successfully defended or will result in exposure to the Groupwhich is immaterial to both financial position and results of operations. The Group is not currently involved in anysignificant litigation other than that noted below.

Legal action was brought against Kingston Wharves Limited by companies involved in stevedoring activities atPort Bustamante. The plaintiffs are seeking a declaration that the company’s stated intention to take over all thestevedoring activities on Berths 1-9 is in breach of the Fair Competition Act and is therefore illegal. These arenot monetary claims and if the plaintiffs succeed in obtaining a judgement against the company, it is not likelythat the outcome will have a negative impact on the company's operations. As at statement of financial positiondate judgement had not been decided.

Other

The Group is contingently liable to its bankers in respect of guarantees in the ordinary course of businesstotalling approximately $12.3 million.





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33. Restatement

The consolidated financial statements were restated to reflect the effects of the adoption of IAS 19 (Revised),‘Employee Benefits’ and the consequential adjustments to deferred income tax.

Reconciliation of equity at 31 December 2011The Group

AsPreviously

StatedEffect of

Restatement As Restated$’000 $’000 $’000

Non-Current AssetsRetirement benefit asset 526,360 53,300 579,660Other non-current assets 12,144,473 - 12,144,473

12,670,833 53,300 12,724,133Current Assets 1,645,574 - 1,645,574Total Assets 14,316,407 53,300 14,369,707

Shareholders’ EquityRetained earnings 2,285,354 28,093 2,313,447Other shareholders’ equity 7,222,800 - 7,222,800

9,508,154 28,093 9,536,247Non-controlling Interest 45,544 - 45,544

9,553,698 28,093 9,581,791Non-Current Liabilities

Deferred income tax liabilities 1,800,699 14,046 1,814,745Retirement benefit obligations 163,893 11,161 175,054Borrowings 1,953,538 - 1,953,538

3,918,130 25,207 3,943,337Current Liabilities 844,579 - 844,579Total Equity and Liabilities 14,316,407 53,300 14,369,707





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33. Restatement (Continued)

Reconciliation of equity at 31 December 2011 (continued)The Company

AsPreviously

StatedEffect of



9,442,645 53,300 9,495,945Current Assets 887,506 - 887,506Total Assets 10,330,151 53,300 10,383,451

Shareholders’ EquityRetained earnings 1,983,763 28,093 2,011,856Other shareholders’ equity 4,244,746 - 4,244,746

6,228,509 28,093 6,256,602

Non-Current LiabilitiesDeferred income tax liabilities 1,064,739 14,046 1,078,785Retirement benefit obligations 163,893 11,161 175,054Borrowings 2,001,054 - 2,001,054

3,229,686 25,207 3,254,893Current Liabilities 871,956 - 871,956Total Equity and Liabilities 10,330,151 53,300 10,383,451





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Reconciliation of equity at 31 December 2012The Group

AsPreviously

StatedEffect of




Shareholders’ EquityRetained earnings 2,678,840 (2,268) 2,676,572Other shareholders’ equity 9,459,588 - 9,459,588

12,138,428 (2,268) 12,136,160Non-controlling Interest 51,815 - 51,815

12,190,243 (2,268) 12,187,975Non-Current Liabilities

Deferred income tax liabilities 1,333,992 (756) 1,333,236Retirement benefit obligations 181,498 21,817 203,315Borrowings 1,581,508 - 1,581,508

3,096,998 21,061 3,118,059Current Liabilities 1,080,646 - 1,080,646Total Equity and Liabilities 16,367,887 18,793 16,386,680





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Reconciliation of equity at 31 December 2012 (Continued)The Company

AsPreviously

StatedEffect of




Shareholders’ EquityRetained earnings 2,514,923 (2,268) 2,512,655Other shareholders’ equity 6,272,523 6,272,523

8,787,446 (2,268) 8,785,178Non-Current Liabilities

Deferred income tax liabilities 805,440 (756) 804,684Retirement benefit obligations 181,498 21,817 203,315Borrowings 1,603,824 - 1,603,824

2,590,762 21,061 2,611,823Current Liabilities 1,143,851 - 1,143,851Total Equity and Liabilities 12,522,059 18,793 12,540,852





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Reconciliation of total comprehensive income for year ended 31 December 2012The Group

AsPreviously

StatedEffect of


Gross Profit 1,552,143 - 1,552,143Other operating income 309,420 - 309,420Administration expenses (782,209) (3,687) (785,896)Operating Profit 1,079,354 (3,687) 1,075,667Finance costs (266,330) - (266,330)Profit before Income Tax 813,024 (3,687) 809,337Income tax expense (257,296) 4,433 (252,863)Net Profit for Year 555,728 746 556,474Other Comprehensive IncomeItems that will not be reclassified to profit or loss

Re-measurements of post-employment benefits - (41,476) (41,476)Deferred tax effects on other comprehensive income - 10,369 10,369

Total other comprehensive income, net of taxes - (31,107) (31,107)Total Comprehensive Income for Year 555,728 (30,361) 525,367

Net Profit Attributable to:Equity holders of the company 549,457 746 550,203Non-controlling interest 6,271 - 6,271

555,728 746 556,474Total Comprehensive Income Attributable to:Equity holders of the company 549,457 (30,361) 519,096Non-controlling interest 6,271 - 6,271

555,728 (30,361) 525,367Earnings per stock unit for profit attributable to the

equity holders of the company during the year $0.41 - $0.41





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Reconciliation of total comprehensive income for year ended 31 December 2012 (continued)The Company

Note

AsPreviously

StatedEffect of


Gross Profit 1,385,251 - 1,385,251Other operating income 373,877 - 373,877Administration expenses (569,932) (3,687) (573,619)Operating Profit 1,189,196 (3,687) 1,185,509Finance costs (277,947) - (277,947)Profit before Income Tax 911,249 (3,687) 907,562Income tax expense (224,490) 4,433 (220,057)Net Profit for Year 686,759 746 687,505Other Comprehensive IncomeItems that will not be reclassified to profit or lossRe-measurements of post-employment benefits - (41,476) (41,476)Deferred tax effect on other comprehensive income - 10,369 10,369

Total other comprehensive income, net of taxes - (31,107) (31,107)Total Comprehensive Income for Year 686,759 (30,361) 656,398

34. Subsequent Events

Subsequent to the year end, the Group acquired the stevedoring operations of an operator at Port Bustamante.

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