Embed Size (px)
Citation preview
& Accounts 2012/13
Annual Report
Our Achievements
in 2012/13
UP Market Share
on Western Channel
Turnover: £15.8 million
UP 73% In Year Investment
to £4.8 million
Net profit in excess of
£1.2 million
2
Contents 2012/13
Highlights 2
Vision Statement
4
Chairman’s Statement
5
Port Manager’s Statement
6
Governance 7
Senior Management
9
The Port 10
Financial Results
13
Market Share
14
Objectives
18 Staff 20
Environmental Management
21
Health and Safety
22
Port Marine Safety Code
24
Financial Statements
26
Contents 3
3
Portsmouth International Port should be a thriving and
expanding multi-user port, open to all, that seeks to
exploit its position as the UK’s Best
Connected Ferry Port.
It aims to provide its customers with modern and ever improving facilities whilst yielding
its owners, Portsmouth City Council, a good return on their
investment and a wealth creating enterprise.
Vision Statement 4
Chairman’s Statement
This year has been short of good news as the weather has been a disappointment and the trade in Europe has seen little or no recovery. This has affected the trade throughout the cross channel routes and Portsmouth International Port has also suffered with a reduction in the volumes of trade. The first two years of operation of the new passenger terminal has seen it perform well, and also win recognition from The Portsmouth Society as their ‘Building of the year’. It received much praise from passengers, particularly those joining or leaving the cruise ships that have now become a regular part of the Port’s business. As we progress towards the introduction of the Sulphur Emissions Control Area in January 2015 there is a great deal of nervousness about the way forward and the implications for the ferry industry, but we are committed to working hard with our customers to find a solution. I am certain that Portsmouth, having developed its facilities to provide for a wide range of ships, has taken the right steps towards a secure future. I would like to take this opportunity to thank all of those who work at the Port for their part in making it a success for their customers and the City of Portsmouth. I hope that all stakeholders of the Port will find this report useful and I commend it to them. COUNCILLOR MIKE HANCOCK CBE MP
5
Port The green shoots that may mark the end of the recessionary times have not yet been visible in our trade, with a continuing slow decline throughout our major ferry business. However, the prospects are brighter for cruise ships with more ships this year and more turn around ships than visiting ships. Bookings for 2013 show that the best is yet to come. Our new infrastructure developments have been completed this year with the completion of the move of HMS Bristol and new search bay facilities. We will continue to update signage and other minor infrastructure but the works already carried out bring the ferry port up to date and allow it to deal efficiently with larger vessels.
The completion of the works to relocate HMS Bristol were a tribute to the close working relationship we have with the Royal Navy, MoD and DIO, without which it would not have been possible. At the end of the year we were made aware that Brittany Ferries were reducing their sailings outside of the peak times and this will clearly affect the trade using the Port. However the threat of the imposition of Sulphur Emission controls in 2015 is much more worrying and a constant source of discussions in the ferry trade. It is difficult to prepare for such a potentially calamitous measure, but we hope that we are as prepared as we can be for the future. The Port now has the challenge to work with all stakeholders to provide for the future. M S Putman PORT MANAGER
Statement
2012 saw the Port approached on two occasions by persons wishing to operate new ferry services. This was quite encouraging in the current economic climate, but in the end neither attempt was successful. I believe that the uncertainty for current operators will also mean that the usual enquiries from prospective ferry operators will decline.
Manager’s
6
Governance
Governance is the term used to describe the system by which organisations direct and control their functions. It is about being accountable to stakeholders and openness and transparency.
7
In March 2010, Portsmouth City Council adopted a Local Code of Corporate Governance, which is the framework by which the Council is accountable to its users, stakeholders and wider community. The Local Code holds the organisation to six core principles of governance. The Port's day to day management is under the control of the Port Manager, a Chief Officer of Portsmouth City Council. The Port Manager reports to the Chief Executive of Portsmouth City Council as well as the Executive Member for Planning, Regeneration and Economic Development. For the 12 months ending 31 March 2013 the Executive Member responsible for the Port was Councillor Mike Hancock CBE MP. There is no Board of Directors; strategic decisions and key decisions are reported to the Executive Member and to the City Council as appropriate in accordance with City Council standing orders and the City Council Constitution. A Port Advisory Board was created in June 2009 and provides an informal forum for discussion of the full range of the activities of the Port. The Board is chaired by Mike Hancock, the Cabinet Member with responsibility for the Port.
The following councillors are also members of the board: • Councillor Donna Jones • Councillor Frank Jonas • Councillor Les Stevens • Councillor Lynne Stagg • Councillor Hugh Mason The Port carries out its own business planning and also assesses its risks. The Risk Register and Business Plan are shared with the Port Advisory Board and the highest risks go into the City Council’s Corporate Risk Register.
The Port is subject to external and internal audits that give confidence to the Council of the operations and processes in place at that point in time. The Port maintains its accreditations to ISO 9001, 14001, 27001, OHSAS 18001 and BS25999 The Port and the Portfolio Holder have agreed to review the Executive arrangements (to include the Portfolio Holder and the Port Advisory Board) to assess whether the current system allows sufficient challenge and openness required for good governance principles to be exercised. The Port is active in ensuring it functions in an ethical manner. This includes its relationships with its employees, customers and suppliers. It strives to do the right things, in the right way, for the right people in an open, honest, inclusive and timely way.
8
Senior Management
Staffed by a team of just under 100
direct employees, headed by the Port
Manager, Martin Putman, the
workforce provides both operational and
commercial professional services.
The Port’s
Management Team reports directly to the Executive Member for
the Port, Councillor Mike Hancock CBE
MP. They are supported by other
City Council departments
including Financial Services, Legal and Asset Management
Services.
Martin Putman Port Manager
Appointed in 1995
Martin has responsiblity for the
long-term development of the Port
and heads the management team.
He co-ordinates all City Council
departments working for the Port on strategic issues and top
level liaison with customers to ensure services meet their
requirements. Martin is also a director of MMD (Shipping
Services) Ltd owned by Portsmouth City Council
as a local authority business.
Phil Gadd Ferry Port Manager
Phil has been with the Port since 1986 and is
responsible for operational
management of the Cruise & Ferry Port.
Phil is the Port
Manager’s deputy and plays a key role in the development of Port infrastructure and
strategic development.
Rupert Taylor Harbour Master Rupert has been
Harbour Master since 2000 and is
responsible for the regulation of navigation in the approaches to Portsmouth’s
commercial berths, pilotage of commercial
vessels within the Portsmouth
Competent Harbour Authority and
operational health and safety.
Mark Willcox Business Manager
Appointed in 1998
Mark is responsible for the commercial activities of the
business, working closely with the
Port Manager on the delivery of the Port’s
strategic and business plans. Day to day activities include
control of the Port’s finances,
procurement, HR and management reporting. Mark is also
a director of MMD (Shipping Services) Ltd owned by Portsmouth City Council as a local
authority business.
9
Team
Portsmouth International Port is the UK’s premier ferry port for the Western Channel and the second busiest Cross Channel ferry port overall. It is market led and committed to long-term
growth through the development of infrastructure and resources in line with market needs.
The Port 10
Portsmouth International Port is unique. Being a Municipal Port with a successful business record, it has developed its facilities, throughput and profit. Geographically well placed, with good infrastructure and supported by a good customer base, the Port’s success is built on meeting the requirements of its customers and allowing its customers to expand their business. As well as being the statutory harbour authority for its berths, the Port’s owners Portsmouth City Council, are also the competent harbour authority for the whole of Portsmouth harbour and the approaches (excluding MoD facilities). This includes responsibility for the regulation of navigation in the approaches to Portsmouth’s commercial berths and pilotage of commercial vessels within the Portsmouth Competent Harbour Authority. In the past 35 years the Port has succeeded in building its business against the declining trend of other Municipal Ports, and under the constraints that have seen other ports change their ownership or lose their vitality as port businesses. Whilst the returns received for the investments have been good, the risks have also been high and the capital investment has had to continue at a high level in order to maintain and grow the business. The considerable pressures on the Cross Channel Market have meant that ferry operators in general have demanded a continuous improvement in facilities and good value in port dues.
Today the Port has four main revenue generating areas; namely The Cruise & Ferry Port, Albert Johnson & Flathouse Quays, The Camber and Pilotage. Cruise & Ferry Port The Cruise & Ferry Port built by the City Council was officially opened in June 1976 with one berth. A continued programme of expansion has meant that Portsmouth is now the second busiest Cross Channel ferry port. It covers 44 acres and has 5 operational berths, which between them can accommodate a wide range of ferries. The berths and the linkspans, which join the ship to shore, have been updated and renewed and now represent the best facilities for Cross Channel ferry services other than on the Dover Calais crossing. There were three ferry companies operating from Portsmouth in 2012/13. Brittany Ferries operated regular crossings from Portsmouth to the French ports of Caen, St Malo and Cherbourg, and also to the Spanish ports of Bilbao and Santander. Condor Ferries serviced routes from Portsmouth to the Channel Islands and France. DFDS operated services to Le Havre. The Port is also attracting a growing number of cruise liners. 35 cruise ships visited Portsmouth in 2012. Close to 45 cruise ships are expected to visit Portsmouth in 2013, and this could double in the next 10 years if a designated berth for cruise liners can be
11
found. These calls reflect the growing trend of smaller cruise vessels with a more discerning passenger wishing to explore Northern Europe. Albert Johnson and Flathouse Quays These areas of the Port are leased to MMD (Shipping Services) Ltd, who manage them as berth operators, providing all the services required for their trade. MMD was acquired by Portsmouth City Council in 2008, and is a wholly owned local authority controlled company. The main trade of these quays is the importation of fruit, which is a very competitive market. 60% of all bananas imported into Britain come through MMD. Despite the competitive market MMD has managed to retain key customers including Fyffes and Geest, and from January 2011, Del Monte began using MMD as its sole UK Port for at least three years. Camber The Camber is the oldest part of the International Port and contains a variety of port functions and customers. Eight berths are available for small vessels, primarily fishing boats and private pleasure craft. Each berth can accommodate a number of vessels, and there are also pontoon moorings. Activities are operated through an agent, who collects berthing and storage fees. The newly regenerated waterfront by the Camber is home to Gunwharf Quays, Britain’s first world-class shopping and leisure waterfront.
Two further Camber berths are used by Wightlink, the Isle of Wight car ferry company that operates a year round roll on/roll off service to Fishbourne. The lease for this service has been transferred to Portsmouth City Council’s Asset Management Service Department. Pilotage Portsmouth City Council is the Competent Harbour Authority for commercial vessels using the Port. Charges for acts of pilotage and self pilotage are based on the ship’s overall length in metres. Income is also generated from pilotage exemption certificates.
12
The summarised financial statements are set out on pages 26 to 35. The Port’s turnover in 2012/13 stood at £15.8 million, and the Port generated a profit for the year of £1.2 million. The Port’s capital expenditure in 2012/13 totalled £4.8 million, and the majority of this spend related to the new terminal building capital scheme. The terminal building opened on 1 April 2011 and the whole of the area around the building has been redesigned, including new electronic signage and a large outdoor video screen. The facility can take up to 2,400 passengers and parking and marshalling areas for 1,000 cars and 500 freight lorries. The terminal is built to BREEAM standards, which is the most widely used environmental assessment method for buildings. Another large area of capital
Financial
An economic impact analysis commissioned from Portsmouth University has shown that the Port is responsible for the direct employment of 805 FTE jobs and the injection of £38.7 million of income into the greater Portsmouth economy annually. Indirectly, these figures rise to 1595 FTE jobs supported by port activity and a total estimated £71.3 million output throughout the greater Portsmouth economy.
13 Results
expenditure related to the lengthening of Berth 2. This long term investment will enable the Port to accept new, larger vessels safely on a regular basis, thus facilitating future trade. The other large area of capital expenditure related to repositioning of HMS Bristol, part of a larger capital dredging project. The scheme has deepened the waters at the cruise & ferry port has increased the turning circle for vessels visiting the Port. This investment has increased the range of vessels that can safely use the Port.
0
2
4
6
8
10
12
14
16
18
£ Million
2012/13 2011/12Year
RevenueGross profitProfit for the year
2 million passengers, 630,000 cars and 230,000 freight units came through the Port in 2012. The following section identities the Port’s activity levels over the last 5 years. It analyses activity together with market share by the Western Channel, by the Eastern & Western Channel excluding the Channel Tunnel, and by the Eastern and Western Channel including the Channel Tunnel.
2008 2009 2010 2011
Portsmouth 2,080 2,132 2,224 2,069
Rest Market 1,380 1,155 940 1,002
Total 3,460 3,287 3,164 3,071
% Portsmouth 60.1 64.9 70.3 67.4
2012
1,873
829
2,702
69.3
Source: IRN Research
Passengers Passenger volumes travelling between the UK and the Continent via the Western Channel decreased by 21.9% over the 2008 to 2012 period. Portsmouth’s market share increased by over 9 percentage points over the same period.
Table 2: 000’s – Passenger Volumes
Market
Port Activity (including Channel Islands) Passenger volumes travelling through the Port decreased by 8.9% over the 2008 to 2012 period. The number of cars and freight units travelling through the Port decreased by 3.1% and 12.1% respectively over the same period.
Table 1: 000’s – Port Activity
Source: Portsmouth International Port
PORT ACTIVITY
WESTERN CHANNEL
Share
2008 2009 2010 2011
Passenger volumes
2,160 2,225 2,290 2,153
Cars 655 687 693 701
Freight Units 264 264 257 251
2012
1,968
635
232
14
Source: IRN Research
Table 3: 000’s – Cars
2008 2009 2010 2011
Portsmouth 620 650 658 659
Rest Market 434 371 304 325
Total 1,054 1,021 962 984
% Portsmouth 58.8 63.7 68.4 67.0
2012
592
272
864
68.5
2008 2009 2010 2011
Portsmouth 180 180 174 167
Rest Market 136 102 80 82
Total 316 282 254 249
% Portsmouth 57.0 63.8 68.5 67.1
2012
160
73
233
68.7
Table 4: 000’s – Freight Units
Source: IRN Research
Source: IRN Research
Freight The number of freight units travelling between the UK and the Continent via the Western Channel reduced by 26.3% over the 2008 to 2012 period. Portsmouth’s market share increased over the same period by nearly 12 percentage points.
Cars Activity levels of cars travelling between the UK and the Continent via the Western Channel reduced by 18% over the 2008 to 2012 period. Portsmouth’s market share increased by almost 10 percentage points over the same period.
Source: IRN Research
15
Source: IRN Research
EASTERN AND WESTERN CHANNEL (Excluding Tunnel)
Table 5: 000’s – Passenger Volumes
2008 2009 2010 2011
Portsmouth 2,080 2,132 2,224 2,069
Rest Market 15,274 14,208 14,076 13,752
Total 17,354 16,340 16,300 15,821
% Portsmouth 12.0 13.0 13.6 13.1
2012
1,873
12,736
14,609
12.8
Passengers Passenger volumes travelling between the UK and the Continent decreased by 15.8% from 2008 to 2012. Portsmouth’s market share increased over the same period by almost 1 percentage point.
Cars Activity levels of cars travelling between the UK and the Continent reduced by 16.3% over the 2008 to 2012 period. However, Portsmouth’s market share increased by over 2 percentage points over the same period.
2008 2009 2010 2011
Portsmouth 620 650 658 659
Rest Market 3,264 3,148 3,139 2,993
Total 3,884 3,798 3,797 3,652
% Portsmouth 16.0 17.1 17.3 18.0
2012
592
2,659
3,251
18.2
2008 2009 2010 2011
Portsmouth 180 180 174 167
Rest Market 2,445 2,403 2,172 2,151
Total 2,625 2,583 2,346 2,318
% Portsmouth 6.9 7.0 7.4 7.2
2012
160
2,022
2,182
7.3 Source: IRN Research
Table 7: 000’s – Freight Units
Source: IRN Research
Freight The number of freight units travelling between the UK and the Continent reduced by 16.9% over the 2008 to 2012 period. Portsmouth’s market share increased over the same period by nearly half a percentage point.
16 Table 6: 000’s – Cars
Passengers Passenger volumes travelling between the UK and the Continent decreased by 1.3% over the 2008 to 2012 period. Portsmouth’s market share remained about the same over the period.
Table 8: 000’s – Passenger Volumes EASTERN & WESTERN CHANNEL (Including Tunnel) 2008 2009 2010 2011
Portsmouth 2,080 2,132 2,224 2,069
Rest Market 32,808 31,222 32,379 32,744
Total 34,888 33,354 34,603 34,813
% Portsmouth 6.0 6.4 6.4 5.9
2012
1,873
32,574
34,447
5.4
Source: IRN Research
Cars Activity levels of cars travelling between the UK and the Continent reduced by 1.8% over the 2008 to 2012 period. Portsmouth’s market share remained about the same over the period.
Freight The number of freight units travelling between the UK and the Continent reduced by 6% over the 2008 to 2012 period. Portsmouth’s market share remained around the same over the period.
2008 2009 2010 2011
Portsmouth 620 650 658 659
Rest Market 5,202 5,097 5,300 5,300
Total 5,822 5,747 5,958 5,959
% Portsmouth 10.6 11.3 11.0 11.1
2012
592
5,125
5,717
10.4 Source: IRN Research
Table 9: 000’s – Cars
2008 2009 2010 2011
Portsmouth 180 180 174 167
Rest Market 3,699 3,172 3,261 3,415
Total 3,879 3,352 3,435 3,582
% Portsmouth 4.6 5.4 5.1 4.7
2012
160
3,487
3,647
4.4
Table 10: 000’s – Freight Units
Source: IRN Research
17
Review of Major Objectives
Continue to Provide Portsmouth City Council with a Revenue Stream that achieves Long Term Growth,
in line with Traffic Throughput
2012/13 Key Achievements • Profit for the year over £1.2 million • Revenue stream generated for Portsmouth City Council up 2.2% to £7.4 million
2013/14 Targets • Generate a revenue stream for Portsmouth City
Council in excess of £5.4 million • Net profit to exceed £0.75 million
Major Areas of Risk • Prolonged economic downturn • Reduced customer volumes • Loss of a customer
18
2013/14 Targets • Income to be generated from a greater number of
customers • Continued provision of a high quality service and
achievement of quality standards • Increase market share in the Spanish market • Continued growth in the number of cruise liners calling
at Portsmouth
Maintain the Port as a multi-user port, increase its market share by competing on excellence and value
for money, and grow when the opportunity arises
Major Areas of Risk
• Project overspends and delays • Inability to secure new funding
2012/13 Key Achievements
• Three major ferry companies operated from Portsmouth • 35 cruise liners visited Portsmouth, a 13% increase compared to 2011/12 • Increased market share on the Western Channel
Major Areas of Risk
• Prolonged economic downturn • Reduced customer volumes • Loss of a customer
2012/13 Key Achievements
• Berth 2 extension scheme completed • HMS Bristol repositioned, which has increased the turning
circle for vessels • New electronic signage and a large outdoor video screen
operational • Refurbishment of the passenger search bay • Secured funding for infrastructure investment
2013/14 Targets • Erection of canopies over passenger check-in booths • Installation of automatic mooring machines • Progress the port master system replacement capital
scheme • Secure funding to commence infrastructure improvement
in 2014/15
Improve the Infrastructure of the Port for both Freight and Passengers
19
Staff The Port employs just under 100 direct employees to supply berthing services, pilotage, freight security, engineering, human resources, office support and IT services. Other services such as some building, cleaning and security are contracted out as this provides a more efficient resource. The Port continues to place emphasis on the training and development of all staff. This year the Port has : • Continued its support of ILM Awards and Certificates in Team Leading • Continued to support NVQs in Marine Operations • Supported various courses for personal development such as the Diploma in
Port Management • Provided bite-sized courses for staff, such as providing “Great Customer Service” The Training and Development Working Group (which is made up of staff representatives and members from the senior management team) continues its work of developing new training initiatives and supporting learning and development within the Port. Regular communication with staff is maintained by a cascading briefing system. The Port’s own internal staff newsletter, Port Express, is published regularly on the Port’s intranet. It aims to ensure staff are informed of business developments that may affect them, as well as to actively involve them in the Port’s Internal Communications Plan. Management are continuing to work closely with staff to ensure their well-being and to reduce absenteeism. In 2012/13 1071 days were lost to sickness, of which 755.5 were certified and 265.5 were uncertified. 50 days were lost to industrial injury.
20
Management Environmental
& Sustainability
Portsmouth International Port has been approved to ISO 9001 since 1990. The requirements of this standard are assessed twice a year by the British Standards Institute. Quality Management is a key part of the Port’s commitment to Corporate Governance and Social Responsibility. The continuing compliance to this standard provides stakeholder confidence in managing the quality of our services and provides the framework to continually review and improve our systems and processes, not only for quality, but also for other standards such as health and safety, the environment and sustainability, information security and business continuity. As such the principles of quality management help drive the Port’s commitment towards customer service, a safe working environment, sustainability, information security, business continuity and risk management. Portsmouth International Port is currently approved by the British Standards Institute to ISO 9001 Quality Management, OHSAS 18001 Health and Safety Management, ISO 14001 Environmental Management , ISO 27001 Information Security Management and BS 25999 for Business Continuity Management.
21
Health and
Original Terminal Building and Port Offices being demolished.
Safety 22
Providing adequate amenities for staff and visitors in accordance
with current regulatory
requirements
The establishment of an organisational
framework and culture that cultivates safe practices
and leads by example and is committed to prevention of incidents and ill health
The identification of responsibilities and
performance indicators for the achievement of
health and safety management
The setting of objectives for
incident prevention and the continual
improvement of processes and systems
Safeguarding the welfare
and health of personnel within the
area of the Port’s control
Providing appropriate
training and/or awareness for staff and awareness for
contractors and visitors commensurate to the risks
involved
Developing and maintaining suitable
methods of consultation & communication
with all interested parties
Ensuring that all staff are aware of their
responsibilities with respect to Health & Safety and the consequences to others of their acts and omissions
The development and maintenance of a Health and Safety Management System that is integrated with the Port’s ISO 9001 2008
Quality Management System and ISO 14001 2004 Environmental Management System which meets the requirements of OHAS 18001:2007 & HSG 65. This is focussed on health and safety
planning through risk analysis and risk assessment in order to ensure safe systems of work are in place
Portsmouth International
Port will incorporate, where so far
as it is reasonably practicable
to do so, the following:
Developing and maintaining procedures for incident, near miss reporting, investigation and the application of remedial action
23
Port Marine Safety
Working closely with the Queen’s Harbour Master in Portsmouth, Captain Rupert Taylor has implemented the Port Marine Safety Code for Portsmouth International Port.
This information is made available to the public via the Port’s website at: www.portsmouth-port.co.uk/pmsc Portsmouth International Port is committed to undertake and regulate its marine operations in a way that safeguards the harbour, its users, the public and the environment. It aims to facilitate the public right to use the harbour, and to safeguard the public interest in the safety of the harbour’s operation in the areas under its control. Portsmouth International Port undertakes to support commercial activities in the harbour through the safe and efficient provision of the services identified on the next page and, within its areas of responsibility, the effective regulation of shipping in the harbour.
Code
24
Nature of Incident Number Number 2012 2011
Close Quarters Situation 2 2 Engine / Mechanical Failure 4 1
Failure to take Compulsory Pilot 1 Heavy Contact with Linkspan 1
Heavy Contact with Quay 2 2 Fire 1
Wash 2
Near Miss 1
Injury 1 Collision with Navigational Aid 1
Total 10 11
• Exercising powers and duties in accordance with the Port’s Safety Management System • Providing a safe and efficient pilotage service • Using and maintaining a safety management system • Provision of slot times for Continental Ferries • Ensuring that there are no conflicts of interest between this Code and the Dockyard Port’s, Port Marine Safety Code • Investigating incidents and accidents within its areas of jurisdiction • Working with towage providers to ensure that a safe and efficient towage service is available • Operating a boat and boatman licensing scheme under the Public Health Act • Liaising with/working with the Queen’s Harbour Master in the provision of a safe and efficient harbour
Port Marine Safety Accidents Reported maritime incidents in 2011 and 2012
are highlighted on the right.
25 Safe and Effective Provision of the Following Services
Statements Financial 26 Consolidated income statement for the year ended 31 March 2013
Note 2012/13 2011/12
as restated £ £
Revenue 15,789,319 16,412,711
Cost of sales (7,458,645) (7,599,294)
Exceptional items 3 (1,065,500) 0
Gross profit 7,265,174 8,813,417
Administrative expenses (2,324,766) (2,157,087)
Capital charges 4 (3,536,040) (3,619,744)
Finance costs 5 (164,190) (198,651)
Profit for the year 1,240,178 2,837,935
Retained earnings at start of year 6 0 0
Dividends 6 (1,240,178) (2,837,935)
Retained earnings at end of year 6 0 0
Consolidated statement of comprehensive income for the year ended 31 March 2013 Note 2012/13 2011/12
£ £ Profit for the year 1,240,178 2,837,935
Gain / (loss) on revaluation of properties (460,074) (425,519)
Total comprehensive income for the year 780,104 2,412,416
27 Consolidated statement of financial position at 31 March 2013 Note 2012/13 2011/12
£ £ ASSETS Current assets Cash 272 272 Trade and other receivables 7 3,802,363 3,110,261 Inventories 8 98,205 108,613 Finance lease receivable 21,086 19,983
3,921,926 3,239,129
Non-current assets Property, plant and equipment 9 60,950,935 59,650,746 Investment property 1,062,499 1,067,599 Finance lease receivable 449,477 470,563
62,462,911 61,188,908
Total assets 66,384,837 64,428,037
LIABILITIES AND EQUITY
Current liabilities Trade and other payables 1,068,468 622,893 Current portion of obligations under finance leases 10 704,663 810,812 Provisions 12 23,300 1,796,431 1,433,705 Non-current liabilities Obligations under finance leases 10 2,963,544 3,668,207 Provisions 12 0 625,300 Employee benefit obligations 13 1,661,087 0
4,624,631 4,293,507
Total liabilities 6,421,062 5,727,212
Equity 14 Share capital 55,214,172 53,491,598 Revaluation reserve 4,749,153 5,209,227
59,963,325 58,700,825
Total liabilities and equity 66,384,387 64,428,037
Portsmouth International Port
Portsmouth International Port 28 Consolidated statement of cash flows for the year ended 31 March 2013 2012/13 2011/12
£ £ Cash flows from operating activities Profit for the year 1,240,178 2,837,935
Adjustments for non-cash income and expenses Depreciation of property, plant and equipment 2,862,580 2,813,498 Impairment loss 673,460 806,246
Changes in operating assets and liabilities Decrease (increase) in trade and other receivables (672,118) (276,292) Decrease (increase) in inventories 10,408 19,317 Increase (decrease) in payables 445,575 (1,802,633) Increase (decrease) in provisions (602,000) 14,800 Increase (decrease) in employee benefit obligations 1,661,087 0 Net cash from operating activities 5,619,170 4,412,871
Investing activities Payments to acquire non-current assets (4,780,128) (2,760,096) Investing activities Total (4,780,128) (2,760,096)
Cash flows from financing activities Payment of finance lease liabilities (810,812) (776,351) Financing from Portsmouth City Council 1,211,948 1,961,511 Grant received / (dividends paid) (1,240,178) (2,837,935) Net cash used in financing activities (839,042) (1,652,775)
Net increase (decrease) in cash and cash equivalents 0 0 Cash and cash equivalents at beginning of year 272 272 Cash and cash equivalents at end of year 272 272
Leases Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership of the leased asset to the company. All other leases are classified as operating leases. Rights to assets held under finance leases are recognised as assets of the company at the fair value of the leased property (or, if lower, the present value of minimum lease payments) at the inception of the lease. The corresponding liability to the lessor is included in the statement of financial position as a finance lease obligation. Lease payments are apportioned between finance charges and reduction of the lease obligation. Finance charges are deducted in measuring profit or loss. Assets held under finance leases are included in property, plant and equipment, and are depreciated and assessed for impairment losses in the same way as owned assets. Rentals payable under operating leases are charged to profit or loss on a straight-line basis over the term of the relevant lease. Inventories Inventories largely represent spare parts used in the repair and maintenance of linkspans, and are stated at the lower of cost and selling price less costs to complete and sell. Trade and other receivables Most sales are made on the basis of normal credit terms, and the receivables do not usually bear interest. Trade payables Trade payables are obligations on the basis of normal credit terms and do not bear interest. Trade payables denominated in a foreign currency are translated into sterling using the exchange rate at the reporting date.
Portsmouth International Port Notes to the Financial Statements
Accounting policies and explanatory notes to the financial statements for the year ended 31 March 2013 1. General information Portsmouth International Port is a local authority owned port, which is run as a department of Portsmouth City Council. The business is not registered as a company with Companies House. There is not a legal requirement for the Port to produce accounts in Companies Act format. These accounts, which have been produced in Companies Act format have, therefore, not been audited. 2. Basis of preparation and accounting policies These summary consolidated financial statements have been prepared in accordance with International Financial Reporting Standards issued by the International Accounting Standards Board. They are presented in the currency units (sterling) of Portsmouth International Port. Revenue recognition Revenue from sales of goods is recognised when the goods are delivered and title has passed. Revenue is measured at the fair value of the consideration received or receivable. Non-current assets Property, plant and equipment are used for service provision. Infrastructure assets are included in the balance sheet at historic cost, net of depreciation. Other property, plant and equipment is included in the balance sheet at market value based on existing use. Specialised assets are included at depreciated replacement cost if there is insufficient evidence to determine market value based on existing cost. Depreciation is charged so as to allocate the cost of assets less their residual values over their estimated useful lives, using the straight-line method. If there is an indication that there has been a significant change in depreciation rate, useful life or residual value of an asset, the depreciation of that asset is revised prospectively to reflect the new expectations. Investment properties are held solely for income generation or capital appreciation. They are included on the balance sheet at open market value.
Impairment of assets At each reporting date, property, plant and equipment are reviewed to determine whether there is any indication that those assets have suffered an impairment loss. If there is as indication of possible impairment, the recoverable amount of any affected asset (or group of related assets) is estimated and compared with its carrying amount. If estimated recoverable amount is lower, the carrying amount is reduced to its estimated recoverable amount.
29
Portsmouth International Port Notes to the Financial Statements
4. Capital charges Capital charges are made up of depreciation and impairment charges. 5. Finance costs 2012/13 2011/12 £ £ All other loans (excluding loans from group companies) 0 0 Interest on finance leases 164,190 198,651 164,190 198,651
6. Retained earnings and dividends
7. Trade and other receivables 2012/13 2011/12 £ £ Trade debtors 3,047,023 2,357,421 Prepayments 755,340 752,840 3,802,363 3,110,261
8. Inventories 2012/13 2011/12 £ £ Raw materials 98,205 108,613 98,205 108,613
The Port is equity funded and all the Port's equity is owned by Portsmouth City Council. The Port pays a dividend to the council equal to it's profit for the year, and therefore does not maintain a retained earnings reserve. If the Port makes a loss Portsmouth City Council effectively provides the Port with a grant equal to the loss.
30
3. Exceptional items
When items of income and expense are material, their nature and amount is disclosed separately either on the face of the consolidated income statement or in the notes to the accounts, depending on how significant the items are to an understanding of the Port’s financial performance. The exceptional item for the year ending 31 March 2013 relates to an increased liability recognised in relation to the Pilots' National Pension Fund (PNPF). The amount reflects the liability recognised in accordance with International Accounting Standard 19 'Employee Benefits' (please see note 13) less the reversal of the PNPF provision (please see note 12).
Portsmouth International Port Notes to the Financial Statements
9. Property, plant and equipment Land and Fixtures Assets Total buildings and under
equipment construction £ £ £ £ Cost 01 April 2012 38,608,437 33,441,903 1,216,582 73,266,922 Accumulated depreciation w/o on revaluation (81,350) (90,965) (172,315) Revaluations 148,346 89,825 238,171 Additions 4,441,937 1,463,194 4,780,128 10,685,259 Disposals (185,981) (3,120) (5,905,131) (6,094,232) 31 March 2013 42,931,389 34,900,837 91,579 77,923,805 Accumulated depreciation and impairment 01 April 2012 4,671,420 8,944,757 13,616,177 Accumulated depreciation w/o on revaluation (81,350) (90,965) (172,315) Annual depreciation 960,489 1,913,591 2,874,080 Impairment 585,958 100,876 686,834 Less accumulated depreciation on assets disposed of (28,785) (3,120) (31,905) 31 March 2013 6,107,732 10,865,139 0 16,972,871
Carrying amount 31 March 2013 36,823,658 24,035,698 91,579 60,950,935
The carrying amount of the company's property, plant and equipment includes an amount of £3,256,861 (2011/12: £3,866,663) in respect of assets held under finance leases.
31
10. Obligations under finance leases The company holds a number of assets under finance leases (including a multi-storey car park and linkspans) as set out below: 2012/13 2011/12 £ £ Within one year 704,663 810,812 Later than one year but within five years 2,739,180 2,793,440 Later than five years 224,364 874,767 3,668,207 4,479,019 The obligation is classified as: Current liability 704,663 810,812 Non-current liability 2,963,544 3,668,207 3,668,207 4,479,019
11. Commitments under operating leases The company has operating leases, mainly for land, as set out below: 2012/13 2011/12 £ £ Minimum lease payments under operating leases 280,500 278,000 recognised as an expense during the year At year-end, the company has outstanding commitments under operating leases that fall due as follows: 2012/13 2011/12 £ £ Within one year 280,500 280,500 Later than one year but within five years 1,122,000 1,122,000 Later than five years 17,492,624 16,615,125
18,895,124 18,017,625
Portsmouth International Port Notes to the Financial Statements 32
Portsmouth International Port Notes to the Financial Statements
12. Provisions 01 April 2012 In year movement 31 March 2013 The provision balance as at 31 March 2013 relates to a carbon reduction commitment in respect of emissions. The reduction in the provision reflects the reversal of the Pilots' National Pension Fund (PNPF) provision. The PNPF is a centralised multi-employer defined benefit pension scheme for non-associated employers. The Trustee of the PNPF has previously sought clarification from the High Court on the Trustee's powers under the rules of the PNPF. Until the status of the PNPF was clarified, Portsmouth International Port was unable to identify its share of the liabilities, and the scheme was accounted for as a defined contribution scheme for this reason. Following the court's determination and further information being made available on the extent of the PNPFs liabilities, the Port is now able to determine its share of the liabilities. The PNPF has therefore been accounted for on a defined benefit basis for the year ending 31 March 2013. Therefore, the PNPF provision balance as at 01 April 2012 has been credited back to the consolidated income statement. 13. Employee benefit obligations As part of the terms and conditions of employment of its officers and other employees, the Port makes contributions towards the cost of post employment benefits. Although these benefits will not actually be payable until employees retire, the Port has a commitment to make the payments, and they need to be disclosed at the time that employees earn their future entitlement.
The Port participates in two defined benefit schemes; the Local Government Pension Scheme (LGPS), and the Pilots' National Pension Fund (PNPF).
The LGPS, administered locally by Hampshire County Council, is a funded defined benefit final salary scheme, meaning that the Port and employees pay contributions into a fund, calculated at a level intended to balance the pension liabilities with investment assets.
33 2012/13 £
625,300 (602,000)
23,300
It is not possible to identify the Port's share of the underlying assets and liabilities of the LGPS. Therefore, this scheme has been accounted for as a defined contribution scheme, as permitted by International Accounting Standard 19 'Employee Benefits'. Accordingly, pension contributions for the LGPS are expensed to the consolidated income statement as they fall due. The pension cost charge against profits in relation to the LGPS amounted to £380,918 in 2012/13 (2011/12: £372,062). The most recent actuarial review of the scheme was conducted as at 31 March 2010 by Aon Hewitt Limited, an independent firm of actuaries.
The PNPF is a centralised multi-employer defined benefit pension scheme for non-associated employers. The Trustee of the PNPF has previously sought clarification from the High Court on the Trustee's powers under the Rules of the PNPF.
Until the status of the PNPF was clarified, Portsmouth International Port was unable to identify its share of the liabilities, and the scheme was accounted for as a defined contribution scheme for this reason.
Following the court's determination and further information being made available on the extent of the PNPF liabilities, the Port is now able to determine its share of the liability in the PNPF for the first time. The PNPF has therefore been accounted for on a defined benefit basis for the year ending 31 March 2013.
Portsmouth International Port Notes to the Financial Statements 34
13. Employee benefit obligations (continued) Assets and liabilities in relation to post-employment benefits of the PNPF Reconciliation of present value of the scheme liabilities (defined benefit obligation):
Funded Liabilities 2012/13 2011/12
Opening balance at 01 April 0 0 Current service cost 0 0 Interest cost 0 0 Contributions by scheme participants 0 0 Actuarial gains and (losses) (3,766,000) 0 Benefits paid 0 0 Past service costs 0 0 Curtailments 0 0 Settlements 0 0 Closing balance at 31 March
Reconciliation of present value of the scheme's (plan) assets: 2012/13 2011/12 Opening balance at 01 April 0 0 Expected rate of return 0 0 Actuarial gains and (losses) 2,090,000 0 Employers contributions 14,913 0
Contributions by scheme participants 0 0 Benefits paid 0 0 Settlements 0 0 Closing balance at 31 March
The principal assumptions used by the actuary have been: Funded Funded
2012/13 2011/12
Long-term expected rate of return on assets in the scheme: Equity investments 7.5% n/a Bonds 3.9% n/a Other 5.5% n/a
Mortality assumptions: Longevity at 65 for current pensioners: Men 22.8 n/a Women 25.2 n/a
Longevity at 65 for future pensioners: Men 24.6 n/a Women 27.1 n/a
Rate of inflation 2.6% n/a Rate of increase in salaries 4.0% n/a Rate of increase in pensions 2.6% n/a Rate for discounting scheme liabilities 4.1% n/a
Basis for Estimating Assets and Liabilities for the PNPF Liabilities have been assessed on an actuarial basis using the projected unit credit method, an estimate of the pensions that will be payable in future years dependent on assumptions about mortality rates, salary levels, etc. The Port's PNPF liabilities have been assessed by Aon Hewitt Limited, an independent firm of actuaries. The latest valuation of the PNPF was as at 31 December 2010 (calculations updated to 31 March 2013 by Aon Hewitt Limited).
The expected return on scheme assets is determined by considering the expected returns available on the assets underlying the current investment policy. Expected yields on fixed interest investments are based on gross redemption yields as at the Balance Sheet date. Expected returns on equity investments reflect long-term real rates of return experienced in the respective markets. There was no actual return in the year on scheme assets for the PNPF. This is because for accounting purposes, the PNPF was deemed to be reclassified as a defined benefit scheme at the end of the year, hence its assets and liabilities came into existence on 31 March 2013. The total contributions expected to be made by the Port in the year to 31 March 2014 is £1.07m.
(3,766,000) 0
2,104,913 0
2012/13 2011/12 % %
Equity investments 22.9 0 Bonds 58.5 0 Other assets 18.6 0 Total 100 0
14. Equity The Port forms part of the Planning Regeneration and Economic Development portfolio of Portsmouth City Council. Therefore, all the Port's equity is owned by Portsmouth City Council. % Holding Portsmouth City Council 100
13. Employee benefit obligations (continued)
Commutation: PNPF For the year ending 31 March 2013 it is assumed that 90% of members take maximum cash lump sum available upon retirement. The PNPF consists of the following asset categories, by proportion of the total assets held:
35 Portsmouth International Port Notes to the Financial Statements
Portsmouth International Port
Whale Island Way Portsmouth PO2 8EB
Telephone: + 44 (0)23 9229 7391
Fax: + 44 (0)23 9286 1165 Email: [email protected]
Website: www.portsmouth-port.co.uk
