Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1697722445550.pdf (Fiji)
- 1 - Fiji Ports Corporation Limited – 2018 Annual Report 2018 Annual Report – Fiji Ports Corporation Limited FiJi POrTs Gateway to Future Development An estimated 95% of all imports and exports pass through our Ports of Entry, with the total value of 2018 imports being in the vicinity of FJ$507.2 millioni.

These imports drive the future development of the nation and contribute to the economic well- being of the 884,887ii citizens of Fiji.
Our imports help to build homes and businesses, improve health and education services, and increase the quality of farm produce.

They provide vehicles and fuel, and help construct roads, so people can participate in economic, social, sporting and religious activities and contribute to Fiji’s continuing development as a modern, vibrant nation.

Our tourism figures continue to grow, with 880,814iii tourists contributing FJ$1,944.2 millioniv to the economy in 2018.

Fiji is a destination of choice.


Tourists are assured of a safe and culturally unique experience.

Fiji Ports is providing the Gateway to Future Development for sustainable growth, for the benefit of all Fijians.

i.

Bureau of Statistics, forecast.

ii.

2017 Census.

iii.

2018 Budget Address Summary forecast figures for 2018. iv.

Ibid.
Ibid.

- 1 - Fiji Ports Corporation Limited – 2018 Annual Report Fiji Ports Company Profile Fiji Ports Corporation Limited (FPCL) is a commercial port management company that operates the two main ports of entry into Fiji – Kings Wharf, suva and the Queens Wharf, Lautoka.

FPCL also operates Levuka Wharf, Ovalau.


The Company oversees the operations and international ship and Port Facility security (isPs) requirements for Fiji’s secondary ports of Malau Wharf, Labasa, Vanua Levu (owned by Fiji sugar Corporation); rotuma Port, rotuma (owned by rotuma Council); Wairiki Wharf, Nabouwalu, Vanua Levu (owned by Tropik Wood industries Ltd), and Vuda, Viti Levu (owned by multinational oil companies).
FPCL also oversees and operates a range of port facilities, including local interisland, and fishing, and local and international barge port facilities located at Mua-i-Walu 1 and 2, Walu Bay, suva, and in Lautoka, adjacent to the Queens Wharf, through the provision of Ports infrastructure and related services, delivered in a manner that meets safety and security standards in the maritime industry.
Given Fiji’s strategic location in the centre of the south Pacific, these Ports continue to face an ever increasing demand on services.

FPCL’s overall operational objective is to progressively upgrade all Port facilities and services in ways that will bring benefit to clients, stakeholders and customers, while improving productivity and efficiency levels.
Table of Contents Chairman’s Message – A Guiding Compass CEO’s report – Planning for the Future Corporate Profile - A Better Fiji Ports under Law Board of Directors - Helping to Build a Better Fiji 3-6 7-10 11-12 13 Corporate Governance - Our Fundamental Principles 14-15 Executive Management Team - The Driving Force Organisation structure - The Foundation 2018 Highlights – The Year in Review Port Operations – Linking the Supply Chain Technical services - Maintaining Infrastructure Corporate services – The Human Factor 16 17 18 19-27 28-30 31-32 Health, safety & Environment - Environmental Stewardship 33-38 Finance Division - Balancing Risks and Returns 39-43 risk Management & Compliance Unit - Ensuring Good Governance 44-47 Fiji ships & Heavy industries Ltd – Serving the Region Connecting Fiji Ports to the World Financial statements – Maintaining Fiscal Resilience 48-53 54-55 56-96 - 2 - Fiji Ports Corporation Limited VISION To be the maritime gateway in the Pacific region through facilitating waterborne transport, trade and commerce.
MISSION To develop, maintain and improve key seaport and ship repair facilities to enhance the economic growth and prosperity of Fiji.

OUR VALUES Professionalism Commercial stewardship strategic innovation Progressive Leadership Corporate Citizenship Employees’ Well-Being, Diversity OUR CORPORATE CULTURE Our working environment is defined by openness and maximising the benefits – often unrecorded and unseen – that flow from having a positive workplace.
2018 Annual Report – Fiji Ports Corporation Limited Chairman’s Message A Guiding Compass it gives me great pleasure to present the 2018 Annual report for the Fiji Ports Corporation Limited (FPCL) and its subsidiary company, Fiji ships and Heavy industries Limited (FsHiL).

Strong Financial Performance i am pleased to report that the Fiji Ports Corporation Limited Group (Group) performance for the 2018 Financial Year maintains an upward trajectory, with a Net Profit After Tax (NPAT) of $28.04 million.
This represents a 6% increase compared to the reported NPAT of $26.35 million for 2017.

The Group total revenue increased by 4% for the 2018 Financial Year, compared to 2017, and there was also an increase in other service income.

The increased port efficiencies led to a reduction in dockage hours, which increased the dockage revenue and core marine service revenue.

The prudent cash management strategy has significantly increased the Net interest earnings by 233%, in comparison with 2017.
This was mainly achieved through creating a new interest Bearing Account of $15 million and increasing the amount on fixed term deposit to $37 million, with interest rates favourable to the Group.

in addition, the Group recorded zero external borrowings and a current liquidity ratio of 8.

The impressive performance follows the dividend payment of $15.23 million to the shareholders for the 2017 Financial Year.
Total Expenses have increased, which was attributed to the increase in employee expenses following the first two phases of the Job Evaluation Exercise, and provision for the third phase.

Other increases have been recorded in property expenses and operating expenses.
Successful Transition The successful transition to Public Private Partnership (PPP) by FPCL in 2013, has proven an astute decision, one that is in keeping with the Fijian Government’s commitment to encouraging investment in Fiji, while retaining significant Fijian ownership of the Company.

The Board is also cognisant of the crucial role played by FPCL in promoting and facilitating international trade.
Therefore, it is essential that FPCL focuses on its core business to ensure that Fiji continues on its journey to sustainable growth and development.

it is also incumbent upon us as Directors, to act in the best interest of the Company, with full regard for FPCL, as both a commercial maritime entity of national significance and one that functions as an essential link within the regional and global supply chains.
The Board supports FPCL in its drive to develop as an effective, efficient Landlord Port, responsible for Port Planning, with services that can be benchmarked against the world’s best.

shaheen Ali Chairman retained Earnings 29% Liquidity 5.5to8 Profitability 6% in addition, the Group recorded zero external borrowings and a current liquidity ratio of 8.

The impressive performance follows the dividend payment of $15.23 million to the shareholders for the 2017 Financial Year.
- 3 - Fiji Ports Corporation Limited – 2018 Annual Report Integrated Planning in recognition of the importance of long-term and integrated planning, the Board and Management of FPCL have formulated the 5-Year strategic Plan, 2019–2023.

The Plan sets out strategies to achieve the vision, which is, ‘To be the maritime gateway in the Pacific region through facilitating waterborne transport, trade and commerce’.

We are cognisant of the space constraints at the suva and Lautoka Ports.
Whilst the close proximity of the city to the port is an advantage in promoting the tourism and cruise vessel industries, with easily accessible linkages between the port and the city, this can also create challenges for the day-to-day operations of the ports.

The Board together with the Management is looking at sites for relocating the suva cargo, fishing and shipbuilding operations.

The Board supports FPCL efforts to forecast the future requirements of FPCL’s infrastructure, yard and equipment needs.
This will determine our ability to connect to the global logistics network directly.

To fulfil our vision, ‘To be the maritime gateway in the Pacific region through facilitating waterborne transport, trade and commerce.

FPCL is ready to address key challenges and take the optimum advantage of favourable circumstances.

it will impact our capacity to reap the benefits of opportunities for growth.

The importance of reliable logistics remains key to the nation’s continued economic development.
Climate Change Mitigation total and absolute commitment to climate change action that is at the core of Government’s national policies and its medium and long-term development plans.

Fiji is one of the first two nations to commit to reaching net zero emissions by mid-century.

Fiji is the 11th nation to have submitted its Low Emission Development strategy to the UN, in line with Article 4 of the Paris Agreement.
The FPCL Board acknowledges a major area of focus of this comprehensive strategy is the energy sector and the reduction in carbon emissions in land and maritime transport.

As such, the Board and management remain committed to seeking and implementing ways to reduce our carbon footprint and reducing greenhouse gas emissions in our operations.

We also applaud the inclusion of wetlands in Government’s Low Emissions Development strategy.
Fiji is the first small island Developing state to do so, as this involves the preservation and restoration of our mangroves.

Not only do mangroves contribute to the overall emissions reduction effort, an estimated 75% of commercially caught fish either spend time in mangroves at some stage of their development, or depend on food chains that can be traced back to the mangroves.

Mangroves also stabilise our shores and protect them from erosion, contributing to the well- being of coastal communities.
Strengthened Relationships FPCL welcomes the opportunities to strengthen international and regional relationships and participate in the formulation and implementation of international regulations and controls to protect and promote the role of Ports, as the interface between the sea- going vessels and the land-based stakeholders in the international and national supply chains.
FPCL has strengthened its relationships with key stakeholders, such as the Maritime safety Authority of Fiji (MsAF), Fiji revenue and Customs services (FrCs) and Biosecurity Authority of Fiji (BAF).

These relationships ensure continued cooperation and communication to provide the best service possible to our international, regional and local customers.
FPCL also continues to disseminate information and exchange knowledge with all other essential stakeholders, such as shipping lines and their agents, importers, exporters and cruise line operators.

As Hon.
As Hon.

Prime Minister Josaia Voreqe Bainimarama, President of the COP23 (23rd Conference of the Parties to the United Nations Framework Convention on Climate Change - UNFCCC), handed over his presidency at the COP24 in Katowice, Poland, he reiterated Fiji’s The Board recognises that global economic trends will always be a challenge for FPCL, as too are changes within the industry that require technological and operational innovation for greater energy efficiency and economic competitiveness.
- 4 - 2018 Annual Report – Fiji Ports Corporation Limited The arrival of the Majestic Princess on her maiden voyage to Fiji, at 330metres, the longest vessel to visit our shores.

We also applaud the inclusion of wetlands in Government’s Low Emissions Development strategy.

Fiji is the first small island Developing state to do so, as this involves the preservation and restoration of our mangroves.
With innovation and automation, the latest intelligent iT systems and the latest cargo handling equipment can be utilised by Ports to meet the growing needs of shipping lines.

By leveraging the essential cooperation between the public and private sectors, smaller Ports can take advantage of technological advances to create ‘smart’ systems, which are no longer the exclusive preserve of large, green-field ports.
For example, electronic systems can be used to track container and vehicle movements to remedy congestion or adverse impacts upon normal processes at a reasonable cost.

Strongly Positioned While FPCL’s core business centres on servicing national and regional business and public needs, Fiji is strongly positioned to provide transshipment to other Pacific island states and Territories, while catering to the growing cruise ship industry visiting our ports.
Our future ability to attract larger vessels more frequently, with a commensurate increase in import arrivals to facilitate increased transshipment services to other destinations, will require significant infrastructure advancement to enable the delivery of such services.
- 5 - Fiji Ports Corporation Limited – 2018 Annual Report The continued support of my fellow Directors through the year has been invaluable, and i greatly appreciate their combined experience and business acumen, as we navigate the challenges and opportunities presented by the industry.

The close proximity of the Port of Suva to Suva city helps promote the tourism and cruise vessel industries.

navigate the challenges and opportunities presented by the industry.
i wish to also thank the Fijian Government and, specifically, the Attorney-General and the Minister for Economy, the Ministry of Economy and the Public Enterprise Department, for their continued support, and we look forward to this continuing into the future.

To achieve these goals and keep our promise to be the gateway to Fiji’s future, the FPCL Board and Management will continue to work assiduously to maintain the balance between our environmental stewardship, social responsibilities and economic role.
We strongly believe that by proactively planning for a future, which will provide the best for all Fijians, FPCL will also continue building a resilient and adaptable company that will benefit our shareholders, our staff and management and our customers.

i wish to thank the Chief Executive Officer and the Executive Management for their leadership.
Thank you to all the staff of FPCL, subsidiary FsHiL and associate company FPTL, for your hard work, commitment and dedication throughout the 2018 financial year.
The continued support of my fellow Directors through the year has been invaluable, and i greatly appreciate their combined experience and business acumen, as we Shaheen Ali Chairman - 6 - 2018 Annual Report – Fiji Ports Corporation Limited CEo’s report Planning for the Future Vajira Piyasena Chief Executive Officer return on invested Capital 38.3% to 36.0% Net interest income 233% Pilotage Market share 13% The 2018 Financial Year has been another successful year for Fiji Ports Corporation Limited (FPCL) in preparation for the implementation of the strategic Plan to establish a solid foundation for growth and development.
it is the fifth year since the inauguration of the Public Private Partnership (PPP) in which FPCL has fulfilled its role as the provider of port services.

During the year under review, FPCL has been deliberating upon strategic initiatives that are most efficient and effective, to take the Company forward as the ‘Gateway to the Pacific’ and the ‘Gateway to the Future’ in terms of growth and development, not only of the Company but for its shareholders, as well as for all citizens of Fiji.
Important Role Fiji Ports handles approximately 95% of all imports and exports to Fiji.

This establishes the important role of the company to the nation’s development.
FPCL is aware that in order to continue facilitating the economic development of the nation, while meeting the demands of a developing and increasingly sophisticated supply chain, we need to address the challenges faced by our Ports and logistic partners, and at the same time meet the needs of our shareholders and key stakeholders in the various industry sectors.
internationally and regionally, we face major challenges from growth in trade, as well as the consequences of increasing urbanisation, and the changing condition of traffic in general.

Ensuring adequate future capacity and reconciling the interests of the various parties involved are at the forefront of our agenda.
Planning for the Future An overarching 5-Year strategic Plan 2019– 2023, was developed by the Australian consultancy company, Cardno Limited, a regional provider of a wide range of services including strategic planning and infrastructure development, which are pertinent to the future development of FPCL and subsidiary company, Fiji ships & Heavy industries Limited (FsHiL).
The strategic Plan incorporates a comprehensive set of strategic objectives to be achieved in the areas of finance, infrastructure, resource management, etc., and is essentially cascaded down and reflected in the KPis of management, department heads and staff.

Infrastructure Rehabilitation FPCL undertook a comprehensive condition assessment of Lautoka Wharf and the exercise entrusted us to engage in a realistic and achievable planning partnership with the consultants in 2018.
Other secondary level progress included the renovation of the Harbour Master’s Office which was completed in June 2018, streamlining the Port Control and Harbour Master’s Office functions.

Following the assessment submitted by our contracted Engineering Consultants, the immediate need for maintenance works to the damaged pile and cracked beams at Mua-i-Walu 1 Jetty was highlighted.

A non-budget project was executed because of its high priority and completed successfully by the contractor.
This resulted in the restoration of the load limit that was earlier restricted.

An insurance-funded project to repair damages to link spans at the Kings Wharf in suva, was also awarded, executed and completed by the contactor in mid-2018.
- 7 - Fiji Ports Corporation Limited – 2018 Annual Report in order to fulfil the future demands on our operational capacity and storage space in our multi-purpose Ports of Entry, FPCL is aware that a major investment in infrastructure development will become essential for the on-going economic and social well- being of the nation.

The Lautoka Wharf ramp rehabilitation Project was successfully completed in August 2018.
Through this project, the width of the ramp was doubled to facilitate traffic from the new section to the old one.

rehabilitation work has also been completed at the Lautoka Local Wharf and our Engineering Department has a full rehabilitation work plan that is ongoing into the next financial year.
By implementing this two-pronged approach, FPCL is committed to addressing these issues in the most cost- effective manner, while maintaining all necessary safety and security codes for all Port users and FPCL employees to the highest international standards.
in order to fulfil the future demands on our operational capacity and storage space in our multipurpose Ports of Entry, FPCL is aware that a major investment in infrastructure development will become essential for the ongoing economic and social well-being of the nation.
Energy Management Plan The implementation of the FPCL Energy Management Plan is expected to lead to improvement in areas of importance to FPCL, including profitable operations, conservation of our local environment and a trial installation of solar panels as of the overall FPCL Greenhouse Gas Abatement Green Port initiative.
Long-Term Solutions Port Security FPCL recognises that these projects are part of the first phase of the planned short-term solutions to extend the viability of the wharves for a conservative estimate of five to 10 years, while long- term solutions would provide for the next 25 years.

ISPS Code Audit by the US Coast Guards and NZ Maritime at the Port of Suva.
- 8 - FPCL is pleased to report that with the successful international ships and Ports security (isPs) Code assessments conducted by the Us Coast Guard and again by the Maritime safety Authority of Fiji (MsAF) at the Ports of suva and Lautoka, the Company continues to meet the isPs Code requirements that are essential to our ability to facilitate international trade through our Ports of Entry.
i am also pleased to report the successful Port security-ship security Table Top Exercises facilitated by the FPCL security Department.

such exercises test the ship’s security and the receiving Port Authority in case of various potential scenarios.

They test the Emergency response Plan of the Port state, the deployment and interoperability of local authorities to assist the Port state’s evacuation plan.
One of these exercises was carried out on cruise liner Majestic Princess at the request of the owners, Princess Cruises, and the Australian High Commission, and another on Voyager of the Seas, at the request of owners royal Caribbean international Ltd. Key stakeholders participating in these exercises, at the invitation of FPCL, 2018 Annual Report – Fiji Ports Corporation Limited As a Company that is committed to creating a business environment that is fair, transparent and free of corruption, it was only fitting that FPCL signed the Memorandum of Understanding with the Fiji independent Commission against Corruption (FiCAC).
FPCL was represented at the IAPH 2018 World Conference in Baku by Submission to the Parliamentary Standing Committee on Social Affairs.

included the Ministry of Defence and National security; MsAF; the republic of Fiji Military Forces; Fiji revenue and Customs service; Fiji Naval Forces; Fiji Police Force, the National Fire Authority and the Ministry of Health.
FPCL is also represented at important Government Border security Committees such as the Counter Terrorist Officers Group; the National Maritime security strategy Committee and the National security and Defense Council Border security.

World Port Conference Participation at international conferences ensures that FPCL remains abreast of developments within the maritime sector, while forging and strengthening international relationships.

MOU Signing with FICAC on Corporate Integrity Pledge.
Building Hubs, Accelerating Connectivity’, the four-day conference agenda included high-level discussions on the contribution of free trade zones to domestic economies and those of neighbouring economies.

Also included in the discussions were the concepts of smart Ports and Green Ports in the 21st Century, and the emergence of transport corridors such as the One Belt, One road initiative proposed by China.
Transport Forum Closer to home, it was also an honour to be invited as a guest speaker to the Ministry of infrastructure’s 15th National Transport Consultative Forum at the Novotel Convention Centre in Lami.

i am also appreciative of the opportunity to address the Forum on ‘Promoting Tourism through Accessible and Efficient Transport services,’ as cruise tourism is increasing in Fiji, with immediate economic benefit to the local community as well as contributing to our growing national economy.
Parliamentary Submissions in this regard, i was honoured to accept the invitation to attend the international Association of Ports and Harbors (iAPH) 2018 World Conference in Baku, Azerbaijan, along with Board Director Mr Vijay Maharaj.
With the overarching theme of ‘Ports of the Future: FPCL also welcomed the opportunity to clarify the extent of the Company’s role and responsibilities, as well as items in the 2016 Annual report, to the standing Committee on social Affairs and to the standing Committee on Foreign Affairs.
- 9 - Fiji Ports Corporation Limited – 2018 Annual Report Corporate Integrity Pledge As a Company that is committed to creating a business environment that is fair, transparent and free of corruption, it was only fitting that FPCL signed the Memorandum of Understanding with the Fiji independent Commission Against Corruption (FiCAC).
This signifies FPCL’s commitment to adopting and upholding the anti-corruption principles, as outlined in the Corporate integrity Pledge, of promoting transparency and accountability; strengthening internal systems; complying with laws relating to fighting corruption and supporting FiCAC’s anti- corruption initiatives.

Profitability and Balance Sheet i am pleased to report that the Group Balance sheet remains strong, with a sound cash balance.
The Group holds $37 million in term deposits and has an impressive liquidity ratio of 8.8.

Fiji Ships & Heavy Industries Limited for the 2018 Financial Year.

With a healthy cash flow balance of $2.9 million, a term deposit of $1 million and a low gearing of 0.11, the balance sheet remains strong.
Milestone Achievement During the year, FsHiL was awarded the isO 9001:2015 certification for the provision of services related to ship repair works, ship repair services, slipway facilities and heavy industry services.

The prestigious certification is granted for meeting or exceeding rigorous international standards in quality management.

The audit process and certification was conducted by sri Lanka standard institution.
i wish to congratulate the FsHiL Operations Manager and his workforce for this milestone achievement, as it strengthens the Company’s commitment to meeting and maintaining recognised, world- class standards of business and operational excellence.

Acknowledgements commitment to FPCL and its staff, their incomparable leadership and guidance has been invaluable during 2018, as we conclude what has been another exciting and inspiring year.
To the Executive management team, department heads, supervisors and all employees, my sincere thanks to you all.

Your continued efforts contribute to the success of the Company.

i am also extremely grateful for your dedication and hard work.

i wish to take this opportunity to express my gratitude to our colleagues at the Ministry of Public Enterprises and the Ministry of Finance for your enduring support.
With your continuing support, FPCL looks forward to implementing the plans to take the Company through the 21st Century and into the future, for the benefit of our key stakeholders, our valued customers, and the people of Fiji.

Fiji ships & Heavy industries Limited, a subsidiary of FPCL, recorded a profit of $1.3 million i wish to offer my thanks and appreciation to our Chairman and the Board of Directors.
Their abiding Vajira Piyasena Chief Executive Officer FPCL looks forward to implementing the plans to take the Company through the 21st Century and into the future.

- 10 - 2018 Annual Report – Fiji Ports Corporation Limited Corporate Profile A Better Fiji Ports under Law Fiji Ports Corporation Ltd has successfully transitioned from operating as a ‘process- based’ organisation and has matured in its new role as the Landlord/Port regulator with an increased focus on the development of port facilities.
FPCL continues to work towards meeting expectations as a ‘supervisory body for standards relating to Ports of Entry and other local ports throughout Fiji’.

As such, growing trade through Fiji’s Ports in a sustainable manner that will optimise returns that remain vital to FPCL, moving forward.

FPCL continues to work towards meeting expectations as a ‘supervisory body for standards relating to Ports of Entry and other local ports throughout Fiji’.
As such, growing trade through Fiji’s Ports in a sustainable manner that will optimise returns remains vital to FPCL, moving forward.

Obligation under Law charges; j.

Prosecute offences of evasion of due or rate or Fiji Ports Corporation Limited has significant and growing international and national obligations under law and treaties.

The principal legislation by which FPCL is governed is the sea Ports Management Act 2005.
As a partially Government-owned commercial company, Fiji Ports also has broad responsibilities under the Public Enterprise Act 1996.

FPCL’s objectives and responsibilities under the sea Ports Management Act 2005 are as follows: - To effectively manage sea ports in Fiji; - To create or enhance opportunities in the provision of port services; - To manage operation and regulatory responsibilities that include: a.
To manage the processes, on behalf of the Minister, of declaring of new ports and approaches to ports; b.

Be responsible for management of Fiji’s Ports; c. Taking of action in the event of an emergency; d. Acquiring land required for Port operations: e. To levy charges for provision of its services; f. Detail vessels in breach of Fiji law; g. Exempt, reduce or refund, any vessels for dues and rates; h. Take a lien, and after 21 days (or for perishables after 21 hours) sell goods in relation to charges; i.
Take a lien and after 21 days over vessels in k. License persons to access ports for commercial purposes; l. Chair meetings of stakeholders on Ports issues; m. removal of derelict and dangerous vessels; n. Make rules regulating the use and operation of ports and approaches to ports, and the conduct of persons within ports and approaches to ports, and fine for breach of those rules.

Business Obligations Fiji Ports Corporation Limited operates as a port Landlord and regulator.
strategically situated in the ‘centre’ of the south Pacific region, Fiji Ports is critical to the local interisland and regional sea transport industry.

Further to the transfer of Ports Terminal Limited (PTL), now Fiji Ports Terminal Limited (FPTL), Fiji Ports relinquished freight and storage operations to the associate company, but continues to operate cruise and other vessel operations of the Kings Wharf, suva and the Queens Wharf, Lautoka.
Fiji Ports maintains ownership and operation of Levuka Wharf, Ovalau, and oversees the operations and isPs requirements for the following ports: - Malau Wharf Labasa, Vanua Levu (owned by Fiji sugar Corporation); - rotuma Port, rotuma (owned by rotuma Council); - Wairiki Wharf, Vanua Levu (owned by Tropic Wood industries Ltd) and relation to charges; - Vuda, Viti Levu (owned by oil companies).
- 11 - Fiji Ports Corporation Limited – 2018 Annual Report issues under the heavily regulated global cruise industry is a continuing responsibility for FPCL, given the number of cruise ships in our ports continues to increase each year.
FPCL continues to oversee and operate port facilities located at Mua- i-Walu i and ii, Walu Bay, suva, and Local Wharf at Lautoka, through the provision of ports infrastructure and related services to ensure industry safety and security, and maintains its head office located at Mua-i-Walu House, Walu Bay, suva, Fiji.
Obligations in Partnership FPCL works with the Maritime safety Authority of Fiji (MsAF) with respect to the obligation of ports in Fiji under the international Maritime Organisation (iMO) including Ports state Control, iLO/ iMO requirements for port reception facilities (discharge of sewerage and rubbish) and Code of Practice on security in Ports.
issues under the heavily regulated global cruise industry is a continuing responsibility for FPCL, given the number of cruise ships in our ports continues to increase each year.

Any country whose ports, or waters, are visited by cruise ships has authority to examine and take measures to ensure compliance with relevant laws, regulations and international treaties.
The cruise industry is subject to the international ship and Port Facility security Code (isPs Code), which requires that access to ships and port facilities be tightly controlled.
Our People’s Obligations Fiji Ports’ Board, Management and senior staff are committed to: - Adopting leading planning principles and management systems; - Working cooperatively to ensure safe and secure port environments; - Providing world-class infrastructure; - Behaving, at all times, in concert with FPCL’s Corporate Values; and - At all times adhering to FPCL’s Corporate Values.
Obligations to the Community & our Environment in addition to carrying out its corporate obligations, FPCL works to maintain its commitment to the community, through social activities, with direct and indirect benefit to the broader community and to those in need.

Of importance to the Corporation is its role in environmental protection.

Where possible the Corporation’s staff and management generate stakeholder awareness regarding land and sea pollution as part of their daily activities and duties.
The growth of the mining industry in Fiji brings new responsibilities.

Carrying solid bulk cargoes involves serious risks, which must be managed carefully to safeguard the crew and the ship.

These risks include reduced ship stability, and even capsizing, due to cargo liquefaction; fire or explosion due to chemical hazard; and damage to ship structures due to poor loading procedures.
FPCL continues to oversee and operate port facilities, through the provision of infrastructure and related services, to ensure safety and security.
- 12 - 2018 Annual Report – Fiji Ports Corporation Limited Board of Directors Helping to Build a Better Fiji Government representatives shaheen Ali Chairman Tupoutua’h Baravilala Director Vilash Chand Director Vijay Maharaj Director Fiji National Provident Fund representatives Tevita Kuruvakadua Director sashi singh Director sanjay Kaba Director Aitken spence PLC representatives J.M.s.
Brito Director iqram Cuttilan Director - 13 - Fiji Ports Corporation Limited – 2018 Annual Report Corporate Governance Our Fundamental Principles The purpose of Corporate Governance is to facilitate effective, entrepreneurial and prudent management that can deliver the long-term success of the company.

Good Governance is a fundamental principle of Fiji Ports Corporation Limited (FPCL).
The Board of FPCL is aware of the responsibilities of setting the company’s strategic aims, providing leadership to put them into effect, supervising the management of the business and reporting to shareholders on their stewardship.

For Corporate Governance, the Board of FPCL sets the values of the company, and this is distinguished from the day-to-day operational management of the company by Executive Management.
Role of the Board The Board is appointed by the shareholders in accordance with the provisions of the shareholders Agreement: (i) responsible for FPCL’s commercial policy and direction.

(ii) Ensuring that FPCL achieves its principal objective: (a) to operate as a successful business and, to this end, to be as profitable and efficient as comparable businesses which are not owned by the shareholders.

(b) to achieve through the application of the key principles of the port reform and their elements.
Function of the Board The main functions of the Board are: • To provide stewardship over FPCL’s financial affairs, protect its financial position and ensure meeting of its debts as and when they fall due; • To lead the development of and approve an ongoing five-year strategic Plan for FPCL which includes: - general and specific goals; - analysis of risks and opportunities for FPCL; - financial forecasts and projections; • Approving an annual budget to FPCL and comparing actual results against budget on a monthly basis; • Approving a clearly defined division of responsibilities between the Board and the Chief Executive Officer (CEO); • Approving specific delegations of authority to the CEO and other levels of management; • Appointment of the CEO and approving employment terms and conditions for senior management personnel (being all management who report directly to the Chief Executive Officer); • Approving key performance indicators for the CEO and senior management personnel; • Ensuring adequate succession plans for the CEO and senior management personnel; • Determining that FPCL has sound financial and operational reporting systems and internal controls; • Establishing policies to ensure that FPCL complies with all applicable laws, industry regulations and any major ongoing contractual obligations; • Determining that FPCL has sound systems to regularly monitor all relevant laws, industry regulations and major contractual obligations; • Determining that the annual financial statements of FPCL are prepared in conformity with the provisions of the sea Port Management Act and international Financial reporting standards; • Appointment of an external auditor after considering the recommendation of the Audit, Finance and risk Management subcommittee appointment of internal auditors.
reviewing the balance of skills and competence of Board members and making recommendation to the Minister with respect to proposed new Board appointments.

Good Governance is a fundamental principle of Fiji Ports Corporation Limited (FPCL).
The Board of FPCL is aware of the responsibilities of setting the company’s strategic aims, providing leadership to put them into effect... - 14 - 2018 Annual Report – Fiji Ports Corporation Limited Number of meetings entitled to attend Number of meetings attended 2 2 2 2 2 2 2 2 2 2 2 1 2 1 2 1 2 2 Meeting chaired by Number of meetings held Director shaheen Ali Vijay Maharaj Vilash Chand Tupoutua’h Baravilala Tevita Kuruvakadua sashi singh sanjay Kaba J.M.s.
Brito iqram Cuttilan Sub-committee Finance, Audit & risk Management Vilash Chand Human resources Vijay Maharaj infrastructure sashi singh 2 2 2 The purpose of Corporate Governance is to faciliate effective, entrepreneurial and prudent management.
- 15 - Fiji Ports Corporation Limited – 2018 Annual Report Executive Management team The Driving Force an academic and a management consultant, Vajira Piyasena joined Fiji Ports Corporation Ltd (FPCL) in 2011 as the CEO to head the then state- owned entity and its two subsidiary companies, Ports Terminal Ltd (PTL) and Fiji ships & Heavy industries (FsHiL).
With the privatisation of PTL in 2013, after a successful Public Private Partnership and subsequent divestment of FPCL in 2015, he was responsible for providing strategic and transformational leadership to the organisation at a time of unprecedented change.

Qualified in UK as a Marine Chief Engineer in 1987, Vajira had a seagoing career serving with major international shipping companies.
in the area of the maritime industry, his expertise extends to international shipping, marine engineering, maritime education and training, ship repairs and ship building and maritime safety.

As the co-founder of a consultancy company established to provide services primarily to the maritime industry, he has worked with over 100 companies in projects comprising of developing integrated management systems, policy development, corporate restructuring and international business development.
His research work includes developing a ‘Productivity-based Engineering Model for Port Development Policy Analysis and implications’ focused on the government Port Development Policy and competitive effectiveness in productivity to develop Port of Colombo, sri Lanka, as Hub Port in the south Asia region.

He has received Executive Training from Harvard Business school and Goizueta Business school.
in addition, he is also a member of the MBA Advisory Committee of the University of the south Pacific and a Member of the Panel of review for the Fiji Business Excellence Award.

Vajira Piyasena Chief Executive Officer MBA, MSc, PG Dip Management (Prod & Tech), PG Dip international Affairs, PG Dip Business (Quality & Ops Mgmt), CEng (MIE) (Ind)I Eng, FIMarEST (UK), FRINA (UK),FCILT (UK), CQP FCQI (UK), CMgr FCMI (UK), Marine Eng.
(Class 1) DoT UK Following a multi-disciplined international career spanning more than 30 years as a maritime professional, a former Group Accountant of New Zealand Post Group.

At New Zealand Post, he worked as a Commercial Manager for six years, designing and implementing new revenue-generating projects.

For four years he was CFO of Dispute resolution services Limited, responsible for leading finance, iT, risk, property, commercial and administration functions in five major cities in New Zealand.
Mr Abeyesundere has extensive experience in commercial projects design, negotiation and implementation; he has provided leadership to change management and business strategy development initiatives in many organisations to enhance shareholder value.

roshan Abeyesundere Chief Finance Officer MBA (NZ), FCMA(UK), FCPA(AU), MCIM(UK), CGMA Appointed as CFO in 2017, roshan Abeyesundere is a strategic commercial finance leader who has significant international exposure.
He is passionate about enhancing value in organisations by focusing and improving key business processors and value drivers.

He is He brings with him hands-on experience in business continuity planning, risk and knowledge management.

- 16 - Captain Laisiasa Gonewai Acting Chief Operating Officer Master Mariner Class 2 FG COC (NZ) Appointed as Acting Chief Operating Officer, February 2017, Captain Gonewai has been the Harbour Master for the Port of suva since 2014.
His qualifications include: Gazetted Marine surveyor (MsAF); Certificate of Competency for Class 1 Mates and Class 2 Masters, FC COC (NZ Maritime College), and Certified Marine Deck Examiner.

He has more than 25 years’ experience in the domestic and international maritime industry.
2018 Annual Report – Fiji Ports Corporation Limited organisation structure The Foundation ceo Board cHieF FinanciaL oFFicer cHieF oPerating oFFicer Finance FPcL Human resources Port engineering Finance FsHiL ict Projects HaBour masters suva/Lautoka oPerations FPcL Port oPerations Production & works Finance Lautoka audit & comPLiance LegaL saFety, security & environment traning & QuaLity customer & PuBLic reLations ProPerty management LocaL wHarves suva/Lautoka Levuka oFFice Finance Hr & training estimation Finance division centraLised corPorate services tecHnicaL services division Port oPerations division FsHiL FPCL is headed by the Chief Executive Officer, who oversees operations carried out by the Corporation’s two Divisions, Finance and Operations, under the leadership of their respective executive managers, the Chief Financial Officer (CFO) and the (Acting) Chief Operating Officer (COO).
Finance Division Governed by the Finance Policy and Procedures Manual, positioned in the centre of all business activities, and responsible for all FPCL Group financial activities, including: - Financial reporting; - stock control and asset management; - Payroll processing; - Credit management; - Accounts payable and internal controls; - Operating and capital budget preparation; - Financial planning; - Tariff negotiations; - investment analysis; and - Financials of subsidiary company, Fiji ships & Heavy industries Ltd. responsible for Departments: - Compliance; - risk; and - iT.
Operations Division includes: Port Operations - supporting the working operations of the Ports; - Working with port service providers to provide customer service delivery in an efficient operating environment.

Managing: - Harbour Masters; - Pilots; - Docking; - Mooring; - 17 - - Tug operations; - security; - Emergency preparedness; and - Local wharves.

Technical services responsible for: - Engineering; - Ports infrastructure and maintenance; and - Property management.
Corporate Services including: - Human resources; - Customer and Public relations; - Legal; - Training; and - Health, safety and the Environment.

Fiji Ships & Heavy Industries Ltd (FSHIL) FPCL subsidiary company FsHiL operates as a commercial, self- funded company, specialising in ship repairs and heavy industry services.
Fiji Ports Corporation Limited – 2018 Annual Report 2018 Highlights The Year in Review Group NPAT of $28.04 million, representing a 6% increase over the 2017 NPAT of $26.35 million A Total Dividend of $15.23 million was paid for 2017 in 2018 implementation of Job Evaluation Exercise Phase ii has positioned FPCL to ensure that all employees are paid on the Upper Quartile of the PWC Market Fixed renumeration implementation of the FPCL Energy Management Plan FPCL subsidiary FsHiL reported a profit of $1.3 milllion successful refurbishment and return to service of the FsHiL 1000 tonne slipway Accreditation of isO 9001:2015 awarded to FsHiL FsHiL continues drive to expand regional reach, reconnecting with samoa after a 30-year lapse removal of sunken vessel m.v.
Southern Phoenix in progress - 18 - 2018 Annual Report – Fiji Ports Corporation Limited Port operations Linking the Supply Chain The efficient management of Port Operations is vital as it maintains the effective and crucial connection between sea and land transport that supports business growth and economic development throughout the nation.
Our Port Operations cover a wide range of activities that include the Harbour Master’s Office, Piloting Movements, Tug Boat Movements, the Ports of suva and Lautoka, operations at the Port of Levuka, the Local Wharf infrastructure management and all Ports’ security.

No.

of PUL issued by Categories – 2018 Category Port service Providers importers & Exporters shipping Agents/Freight Forwarders Cruise ship related Activities Fishing Activities Tenants Others Technical service Providers Contractors No.
142 75 59 57 26 18 7 5 Port Users by Categories - 2018 1 7 19 5 2 15 % 15 36 Port service Providers importers & Exporters shipping Agents/Freight Forwarders Cruise ship related Activities Fishing Activities Tenants Others Technical service Providers Contractors The 2018 port user groups have remained relatively steady in comparison with the 2017 figures, with the increase of 3% for shipping agents being the largest change, followed by the 2% decrease in fishing activities.
The other port users have remained the same or show an increase or decrease of only 1%.
Vessel Calls by Type for all Fiji Ports: 2016–2018 Dry Bulk Liquid Bulk Fishing Cruise Liner LOLO RORO/LOLO Car Carrier Other Total Total Throughput 2016 2017 2018 Total Foreign import 2,687,014 3,012,496 1,720,275 Total Foreign Export 1,774,148 2,190,808 1,744,750 Total Local import/Export 216,292 435,149 - Total import & Export 4,677,454 5,638,453 3,465,025 - 19 - Fiji Ports Corporation Limited – 2018 Annual Report Overall, there was a decrease of 278 vessel arrivals at all Ports of Entry, with only car carrier vessels showing an increase of five vessel calls and rOrO/LOLO showing an increase of three vessel calls for the year.
The Port of Suva Vessel Calls for Port of Suva 2016–2018 No.

GrT (000) 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 2016 2017 2018 Vessel Calls for Port Suva 2016–2018 2016 1,275 2017 1,477 2018 1,298 11,417 11,948 10,516 Port of Suva by Category – 2018 No.

GrT (000) Category Dry Bulk Liquid Bulk Fishing Cruise Liner General Cargo - LOLO General Cargo - rOrO/LOLO Car Carrier Other No.
14 78 820 41 238 24 29 54 GRT (000) 267 1,558 210 3,157 3,223 415 1,405 281 Port of Suva Vessel Calls by Category – 2018 2 2 4 1 6 19 3 % Fishing General Cargo - LOLO Liquid Bulk Other Cruise Liner General Cargo - rOrO/LOLO 63 Car Carrier Dry Bulk - 20 - Removal of MV Southern Phoenix salvage operations to remove the sunken MV Southern Phoenix from its location in suva Harbour, in front of the Handicraft Centre, commenced in November 2018, and should be completed within the following three months.
The removal of the wreck is a collaborative effort between FPCL, the Maritime safety Authority of Fiji (MsAF), and the vessel owner, Cruz Holdings Limited.

The Australian company Pacific Towing Limited (PNG), has been engaged for the removal of the remaining cargo on board the vessel, along with the 88-metre-long, 4,285 DWT cargo vessel.

Suva Harbour Master’s Office Refurbishment in November 2017, the suva Harbour Master’s Office in the Tower building relocated to shed 3 while renovations took place.
These were completed, with the Harbour Master’s Office staff reoccupying the newly refurbished office in the Tower in July 2018.

Pilot and Tourist Lounges After the temporary Harbour Master’s Office in shed 3 was vacated, work began in November 2018 to revamp the space, to house the pilot lounge on the first floor and a tourist lounge on the ground floor.

This was expected to be completed by early 2019.


Piloting Movements Five years ago, FPCL obtained 40% of pilotage revenue whereas sea Pilots (Fiji) Ltd took 60%, over the last three years, and as predicted, FPCL has gradually increased its percentage share of the piloting allocation.

in 2018, FPCL received 81% of the pilot allocation, compared with the 19% allocated to outsourcing services providers or contractors.

2018 Annual Report – Fiji Ports Corporation Limited Total No.
Allocation – Month Of Vessels FPCL Piloted Allocation – Sea Pilot (Fiji) Ltd (SPL) Jan Feb Mar Apr May Jun Jul Aug sep Oct Nov Dec 42 38 37 32 38 44 34 33 40 45 35 34 33 29 32 26 30 37 26 25 33 38 27 30 TOTAL 452 366 FPCL - 81% sPL - 19% 9 9 5 6 8 7 8 8 7 7 8 4 86 This remarkable increase in pilot revenue for 2018 can be attributed in part to the recruitment of a Class 1 pilot to be permanently based in Lautoka and the re-engagement of a veteran pilot who has vast experience in piloting throughout Fiji waters.
Piloting by FPCL in other declared ports, including Wairiki (woodchips), Galoa (bauxite) and Denarau (cruise liners), also contributed to the increased piloting revenue, with the Pilot Team working to attain licences to perform piloting duties in other ports.

Robust Piloting Division The FPCL initiative to attract and retain suitably qualified pilots with improved salary and entitlement packages is creating a robust Piloting Division.
Three years ago, there were only two pilots based in Lautoka and four in suva.

in 2018, there was an increase, with three pilots now based in Lautoka and seven in suva.

Five years ago, FPCL obtained 40% of pilotage revenue whereas sea Pilots (Fiji) Ltd took 60%, over the last three years, and as predicted, FPCL has gradually increased its percentage share of the piloting allocation.
Increasing Size of Ocean Going Vessels - Impact to Ports Mega vessel size may rise to 22,000 TEUs in the near future (21,100 TEUs end 2017) Key impacts from mega vessels include: - Fewer calls - Demand for deeper draft & port facilities upgrade - Preference on higher performing ports - requirement on connectivity, whether the ports provides enough feeder routes 20,000 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 $0 2017 2018 Pilot Boat Revenue Suva 2017–2018 2017 2018 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov 6,540 2,943 4,251 8,502 7,194 4,251 2,616 4,251 5,559 5,886 2,616 17,215 5,232 5,559 17,331 7,194 11,831 6,213 8,175 3,270 9,156 3,270 Dec 4,905 4,822 - 21 - Fiji Ports Corporation Limited – 2018 Annual Report Pilot Boat Revenue Lautoka 2017–2018 2017 2018 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec $0 2017 2018 Calibre of Pilots Tug Services The calibre of the FPCL pilots was endorsed when Lautoka-based senior Port Pilot Captain Mosese Cirikisuva received the ‘Pilot of the Year Award’ at the MsAF Awards Night.
The purchase of three Voith schneider Propeller Tugs by our contracted service provider, south sea Towage Ltd, provides better tug services and ease of manoeuvring of vessels by pilots in terms of berthing and unberthing.

Pilots Attaining their Licences for other Ports Pilot Port Class Pollution 1 2 3 4 Lautoka savusavu & Malau Lautoka suva 3 3 2 3 Pollution within the harbour continues to be a concern for FPCL.
several reminders have been issued to members of the public and all port users that FPCL does not and will not condone any form of pollution within the waters of any Fiji Port.

in 2018, pollution or infringement fines collected totalled $117,026.

Senior Port Pilot Captain Mosese Cirikisuva (R) receives the Pilot of the Year Award at the MSAF Awards Night.
- 22 - 2018 Annual Report – Fiji Ports Corporation Limited The Port of Lautoka Vessel Calls for Lautoka Port 2016–2018 Port of Lautoka Vessel Calls by Category – 2018 10,000 8,000 6,000 4,000 2,000 0 No.

GrT (000) 3 3 5 2016 2017 2018 Port of Lautoka by Category–2018 46 38 % 5 General Cargo - LOLO Liquid Bulk General Cargo - rOrO/LOLO Cruise Liner Dry Bulk Other Category Dry Bulk Liquid Bulk Fishing Cruise Liner General Cargo - LOLO General Cargo - rOrO/LOLO Car Carrier Other No.
10 167 0 23 202 23 0 13 GRT (000) 223 1,868 0 1,681 2,609 548 0 11 Port of Lautoka Vessel Movements and Vessel GRT for 2016, 2017 & 2018 Year 2016 2017 2018 Notes: No.

of Vessels GRT (000) 380 500 438 6,106 8,647 6,940 1.

There was an increase of 41.7% in vessels’ GRT in 2017, compared with the previous year, 2016.

In 2018, there was a decline in GRT by 19.7%, due to the cancellation of visits by cruise liners because of the arrival of Cyclone Josie, followed closely by Cyclone Keni.

2.
2.

The number of visiting vessels increased by 31.6%, from 2016 to 2017, while there was a decline in vessel arrivals of 12.4% in 2018.

This is attributable to cruise vessel cancellations and also to larger GRT vessels replacing smaller GRT vessels.

The Port of Lautoka.


YEAR PASS LOLO RORO/LOLO DRY BULK LIQUID BULK FISHING NAVAL OTHERS TOTAL Notes: • Passenger vessel arrivals decreased by 15% over the last three years, while container vessels increased by 13%, oil and gas tankers increased by 20%, and notably, there was a 100% decline in fishing vessels.
• For the period 2017–2018, passenger vessels recorded a decline of 16 calls, equivalent to a 41% decrease.

• The other types of vessels showed very little increase.
- 23 - Fiji Ports Corporation Limited – 2018 Annual Report Lautoka Piloting Movements 2016 Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec Port Pilot sea Pilot Total Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Port Pilot sea Pilot Total Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Port Pilot sea Pilot Total 42 38 80 53 27 80 65 44 109 45 36 81 50 38 88 51 32 83 Lautoka Port.
47 43 90 55 36 91 86 20 106 60 14 74 64 6 70 45 35 80 Note: • There was a notable increase in the Port Pilot attendance for the months of October to December 2018, compared with the same three-month period in 2017.

Lautoka Tug Movements 2016–2018 Year 2016 2017 2018 TOTAL Tug Movements 840 1018 897 2755 Note: • As per the FPCL Tug Regulation 2009, all vessels of 3000GRT and above shall engage a tug and all Medium Range Tankers mooring at Vuda Oil Terminal are to engage two tugs.
Monthly Pilot Boat Senibiau Runs for 2016, 2017, 2018 Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Notes: Port of Wairiki Year Vessel# Vessel GRT (000) 2016 2017 2018 3 7 6 109,566 275,958 236,860 • In the final months of 2018, the pilot boat runs almost doubled, due to the retirement of a senior Sea Pilot employee.
• Pilot boat runs have increased to 165 over the last three years, which is a 69% increase.

Also, there has been an increase of 85 runs in 2018, or 33%, compared with 2017.

• At Lautoka, the pilot boat usually charges shipping agents $900 for a run from the wharf to Navula pilot station, as it is a distance of 27 nautical miles.

- 24 - 2018 Annual Report – Fiji Ports Corporation Limited Port of Malau Vessel Calls for Port of Malau 2016–2018 400 350 300 250 200 150 100 50 0 No.
GrT (000) 2016 2017 2018 Port Mua-i-Walu FPCL Board Chairman, Mr Shaheen Ali, reviews the effectiveness of traffic management strategies at Port Muaiwalu 2 with Enforcement Officer Captain Pauliasi Vakaloloma.

Vessel Calls for Port of Malau 2016–2018 2016 2017 2018 47 216 59 338 57 326 No.

GrT (000) Port of Levuka Vessel Calls for Port of Levuka 2016–2018 120 100 80 60 40 20 0 No.
GrT (000) 2016 2017 2018 FPCL worked closely with the Fiji roads Authority (FrA), the Land Transport Authority (LTA), the Fiji Police Force and the suva City Council (sCC) to address traffic and pedestrian congestion on and around Port Mua-i-Walu 2. strategies were introduced during the peak holiday seasons, December 2017 to January 2018, December 2018 to January 2019, to complement control measures already implemented by FPCL.
Officers from FrA, sCC, and LTA were deployed daily during this period to control traffic, while police officers assisted FPCL staff in directing and controlling crowds in and outside the area of operations.
implemented strategies included: • Re-routing traffic at Tofua Street through Matua street, to ease congestion and improve traffic flow; • Only ticket-holding passengers or those with documentation to send or receive cargo allowed access to the wharf area; • All others to wait in the waiting shed area, outside Vessel Calls for Port of Levuka 2016–2018 the wharf security boundaries; 2016 2017 2018 • Ship operators are required to submit arrival and No.
GrT (000) 71 36 112 37 78 26 departure schedules at least 48 hours in advance, to assist FPCL in making the appropriate arrangements with relevant stakeholders.
Number of vessels at Port Mua-i-Walu 1 and Port Mua-i-Walu 2 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total Fishing Foreign Fishing Local rOrO Conventional Others M2 Foreign Total 71 64 44 24 14 - 41 96 28 14 26 - 68 81 32 17 28 - 84 67 30 16 39 5 90 72 31 14 30 2 45 100 35 12 26 - 64 82 33 10 34 - 70 67 23 17 28 - 53 47 36 9 30 - 63 63 33 23 43 - 44 68 33 12 18 - 46 46 29 15 23 - 739 853 387 183 339 7 217 205 226 241 239 218 223 205 175 225 175 159 2,508 - 25 - Fiji Ports Corporation Limited – 2018 Annual Report Security – Safeguarding our Borders Detecting security threats and taking preventative measures against security incidents affecting ships or port facilities used in international trade is one of the key responsibilities of the security Unit under the international ship and Port security (isPs) Code.
FPCL plans to implement continuous security improvements, combined with the support and cooperation of the entire port community, to help facilitate the achievement of isPs compliance.

The focus of 2018 for the security Department was the consolidation of the changes that took place within the last three months of 2017 and the first two months of 2018.
These included: • The changing of security procedures and the implementation of security measures at Mua-i-Walu 1, to curb the criminal activities that were prevalent within the area; • A changeover of security procedures for Mua-i-Walu 2, in relation to the changing operating procedures for the wharf; exercises to strengthen our isPs Code compliance in conjunction with FPCL security staff and MsAF, Fiji Customs and revenue services, FPCL security Contractors, and the Defence Ministry partners.
The senior Port Facility security Officer (sPFsO) continues the task of implementing security exercises within suva Port and the continued implementation and review of the contents of the Port Facility security Plan in order to meet isPs Code compliance, to the satisfaction of MsAF, for all Port Facility Compliant certification.

Additional duties include the following: • Conducting an initial, comprehensive security survey of Port facilities, taking into account relevant port facility security assessments.
• Ensuring that the current Port Facility Security Plan is further developed and strictly maintained.

• Implementing and exercising the Port Facility security Plan by undertaking regular security checks in all sections of FPCL designated Port facilities.

• Increasing security awareness and vigilance of all Port personnel.
• Following the security evaluation report conducted • Coordinating all relevant Company-related activities by the Us Coast Guard in 2016, and to strengthen the access procedures and cargo handling procedures, consolidation training in isPs compliance and duties at the Port took place for our contracted security company, Guard Force; • The continuation of security reassessments within suva and Lautoka Ports, due to the infrastructure upgrade conducted at both major Ports; • The completion of the upgrade for Fiji Ports communications system to enable all major centres (suva, Lautoka and Levuka) to communicate with each other on VHF and UHF radios.
This is also a backup service during natural disasters and emergencies; • The continued partnership for harbour patrols by FPCL, the Fiji Navy and the Fiji Police Force, giving a greater area of responsibility for the security Department to cover the whole demarcated, regulated Port area; • The continued monitoring of the two major Ports on CCTV, ensuring compliance to the isPs code; • The continued upgrade for both major ports’ public address systems for the purpose of addressing Port Users on matters relating to safety and emergencies; • The conducting of the ISPS Code security assessment by the Us Coast Guard at both suva and Lautoka Port Facilities, and passing the isPs Audit; • MSAF also conducted an ISPS Code audit for Suva and Lautoka Ports; • The continuation of ISPS security drills and tabletop with security services.
• Conducting training and awareness programmess for all licensed Port users intending to conduct commercial operations/business activities at FPCL designated Ports.

The training required under FPCL’s security Policy now requires all persons seeking access to Ports to conduct business to be familiar with OHs and safety Laws, and understand user requirements under the isPs Code.

Access to Ports is provided only to Port users who have attended awareness training sessions.
Border Security Committee Representation As FPCL is a member of important Border security Committees, the sPFsO represented the Company at the following Government committees; a. CTOG (Counter Terrorist Officers Group); b.

National Maritime security strategy (NMss); c. National security and Defense Council Border security, and d. Attended border security workshops throughout the year with border security partners from Government, foreign government representatives and NGOs.
- 26 - 2018 Annual Report – Fiji Ports Corporation Limited Safety and Security Training Programme Apart from standard in-house training sessions for FPCL employees, FPCL’s security officers continue to provide security and safety Awareness training for Port users.

in 2018, the Unit provided training for well over 1,000 Port users in suva alone, with more applying to take advantage of the instruction.
Much of this training is carried out at the Company’s level 2 training facility at Mua-i-Walu House and is undertaken in groups of between 20 to 60 people.

This specialist training is conducted in programmes that can require up to three sessions a day, including weekends.

Fiji Ports also continues to provide Outreach Training Programmes to accommodate companies that are unable to release their employees to attend the Mua-i-Walu House training sessions.
Security Unit Initiatives Notable amongst safety and security initiatives undertaken across the designated Ports during the year were the following: • The current reassessment of performance by the contracted security company in accordance with their security standard Operating Procedures.

• Updated Safety and Security training programmes and additional schedules undertaken for Port users and stakeholders.
• Conducting of Maritime Security Guard training and Maritime security Awareness Training by the security Department.

• Introduction and issuance of new ID Cards for Port users, with follow up campaigns.
• Continual engagement with the United States Coast Guard to conduct follow-up external security audits at both the suva and Lautoka Ports Lautoka Security Activity Highlights 2018 • Continued enhancement of all safety and security requirements across all FPCL designated Ports, including new energy-efficient, external lighting and signage upgrades.

• Enhancement and enforcement of safety security requirements on the wharves, including the use of Personal Protective Equipment and reflector vests.
• Continued extension and enforcement of a No smoking policy at all FPCL designated Ports.

• Continued collaboration with MSAF on training sessions for key staff to utilise oil spill equipment and the introduction of emergency drills to ensure continuity amongst first responders.

Lautoka Security Highlights • Continual, weekly, safety security training for Port users.

• Enhancement and enforcement of safety security requirements on the wharf, including the use of PPE and reflector vests.
• Implementation of the No Phones Rule while driving in the Port area.

• Continuous, effective relationship building and communication of all aspects of awareness to all Port users.

• Meeting all safety requirements.

• Meeting all ISPS requirements.

• A minimum of security breach and safety incidents.

• Hazard identification carried out and reported to various relevant departments and stakeholders.

• Continued awareness on all Port requirements.


2 2 30 5 10 14 3 5 3 3 % 52 safety security Training isPs Training Monthly Meeting security Breaches isPs Audit security Exercise security Drill PsAC Meeting Declaration of security safety Breaches Others - 27 - Fiji Ports Corporation Limited – 2018 Annual Report technical services Maintaining Infrastructure The Technical services Division provides the technical support that is essential to maintaining FPCL’s critical role in the global supply chain.
As FPCL is a Landlord Port, the Technical services Division is responsible for all FPCL engineering, the development and maintenance of the Company’s designated Ports and for the management of FPCL’s considerable property assets, leased back from Assets Fiji Limited.

Engineering Department The Engineering Department continues to provide project management and contract administration services that build public confidence in the Company’s services.
The department ensures that it provides professional and cost effective project management, contract administration and engineering services to all FPCL’s ports of entry, following established laws, regulations and policies.

The Engineering Department is responsible for a wide range of services including: • Development and regulation of port design guidelines; • Management, design and construction of FPCL’s capital improvement programme, and • Providing contract administration for Fiji Port‘s operations.
in 2018, major projects were undertaken by the department and were completed in a timely manner.

The Engineering Department ensures that it provides professional and cost effective project management, contract administration and engineering services to all FPCL’s ports of entry, following established laws, regulations and policies.

- 28 - Engineering Highlights Harbour Master’s Office Renovation The project to renovate the Harbour Master’s Office began in 2017 and was completed in June 2018.
The Harbour Master’s Office is now occupied.

Energy Management Plan FPCL uses energy in the form of electricity, and both diesel and petrol energy play an important role in powering and enabling our operations.

The implementation of the FPCL Energy Management Plan is expected to lead to improvement in the following areas of importance to FPCL: • Profitable operations • Care for our local environment • Greenhouse gas abatement.
This prompted FPCL to purchase a new incinerator that reduced emission level to fall in line with our Green Port initiatives.

The incinerator has been purchased, and is being shipped to Fiji.

Port of Mua-i-Walu 1 Repairs FPCL engaged a local engineering consultancy company to submit a structural assessment that highlighted the immediate need for maintenance works to the damaged pile and cracked beams at Port of Mua-i- Walu 1.

This was a non-budget project that was executed because of its high priority.
it was completed successfully and the load restriction has been increased back to 15 tonnes.

A precautionary seven tonnes load restriction had been in place until the repairs were completed.

Broken Link Spans Link spans at the Kings Wharf in suva were damaged due to operational activities by terminal operators.

This is an insurance- funded project and was successfully executed and completed in mid-2018.
2018 Annual Report – Fiji Ports Corporation Limited Lautoka Local Wharf Deck Rehabilitation rehabilitation of the damaged Lautoka Local wharf deck slab was carried out and construction monitoring was done by external consultants.

Additional work to this project at the local wharf was the fabrication of steel covers over expansion gaps.

The project was successfully executed and has been completed.
Lautoka Queens Wharf Ramp Rehabilitation The Queens Wharf ramp rehabilitation Project was completed in August 2018. in the future.

Completion time was delayed due to necessary prioritising of the terminal operations schedule.

Ongoing Projects Ongoing projects for the Engineering Department include: 1.

Lautoka Yards 3 & 4 upgrade; 2.

Mua-i-Walu 2 – deck overlay; 3.

Construction of incinerator building; 4.

Mua-i-Walu House structural analysis; and 5.


Green Port initiative – solar panels installation trial Kings Wharf Yard Steel Drain Cover Replacement Dredging The supply and installation of steel drain covers project on Kings Wharf was awarded to a reputable contractor and work commenced in December 2017.
The project was successfully executed and the contractor has officially handed over the additional steel covers that will be used for replacement works The FPCL Dredging Plan ensures that sufficient draft is maintained in the harbours of our Ports of Entry.

To date, monitoring of the seabed levels at both suva and Lautoka harbours reveals there is sufficient draft for the safe arrival and departure of the largest vessels that frequent our Ports.

Lautoka Local Wharf deck rehabilitation.


Port of Mua-i-Walu 1 repair and inspection.

- 29 - Fiji Ports Corporation Limited – 2018 Annual Report The Company conducts regular audits to ensure that FPCL’s tenants adhere to the Litter, Environment and safety Decrees and Acts that are in place, as all FPCL tenants are obligated to comply with these Decrees and Acts.
The majority of FPCL’s tenants comprise of fishing, fish processing and engineering companies, shipping agents, container storage and Fiji’s only bitumen supplier.

Revenue from Properties The rental income from FPCL assets in 2018 over the three main Ports of suva, Lautoka and Levuka totalled $985,335 from 71 tenancies.

While tenancies in Levuka remained steady at four, suva showed an increase of two and Lautoka, an increase of eight.
There were also six terminated tenancies, bringing the total to 71, compared with 65 in 2017.

Property Managing our Assets The Property Department manages all issues pertaining to the Company’s tenants, located across the three main Ports of suva, Lautoka and Levuka.

The department safeguards the exercising of cultural and environmental stewardship in a manner that is conducive to the protection of Fiji’s heritage and environment.
The Company conducts regular audits to ensure that FPCL’s tenants adhere to the Litter, Environment and safety Decrees and Acts that are in place, as all FPCL tenants are obligated to comply with these Decrees and Acts.

Tenancy Variances for 2018 Suva Lautoka Levuka Total New Tenancies renewals relinquished Terminated 1 4 0 0 8 4 1 6 - 1 - - 9 9 1 6 FPCL’s Rental Income for 2017 and 2018 Port suva Lautoka Levuka TOTAL No.
of Tenancies 2018 Rental Income – 2017 47 20 4 71 $781,997 $112,250 $17,383 $911,630 Rental Income – 2018 $831,637 $134,815 $18,882 $985,334 Tenancy Income Comparison 2017–2018 2017 2018 700,000 600,000 500,000 400,000 300,000 200,000 100,000 $ - Port of suva Port of Mua- i-Walu 1 & 2 Port of Lautoka Port of Levuka Port of Suva Port of Mua-i-Walu 1& 2 Port of Lautoka Port of Levuka Total 2017 2018 $228,795 $254,831 $553,202 $576,806 $112,250 $134,815 $17,383 $911,630 $18,882 $985,334 - 30 - 2018 Annual Report – Fiji Ports Corporation Limited Corporate services The Human Factor Human Resources Our people The Human resources Department oversees the most important component necessary for FPCL to prosper as a successful business, that is, a productive, thriving workforce.
The role of the Department is to support people in the effective performance of their roles within the Company and encourage their professional and personal development.

The Department is central to a productive workplace, the appropriate building of teams and inspiring employee empowerment.
Job Evaluation Exercise (JEE) Phase II The implementation of Phase ii of the JEE was carried out in 2018, ensuring that all employees, whose band level moves up to another level, are paid on the Upper Quartile of 80% of the PwC Market Fixed remuneration.

Recruitment policies FPCL continues to engage women in what is traditionally a male-dominated field.
The department has initiated the recruitment of suitable personnel to critical positions to ensure the achievement of strategic goals, as clearly defined in the 5 Years strategic Goals from 2019.

The department is actively engaged in realigning the Organisation structure to meet the requirements as outlined in FPCL 5 Years strategic Plan.

Competent Staff selected staff participated in Competency Assessments to ascertain their competency levels in relation to their current positions.
This assessment ensures that FPCL has engaged a competent workforce.

Where there are any competency gaps, FPCL provides the knowledge enhancement necessary to support these staff members in their current roles.

Employees by Contract Directorate & Port Training in Brief While our main challenge is to continue to maximise our return on the levy paid to the Fiji National University, our primary objective is to ensure that we provide the right training to our staff.
This will ensure that FPCL employees are well equipped with the up-to-date knowledge, skills and information needed to continue the transformation of the Company, going forward into the future.

The Company’s commitment to the capacity building of all staff at all levels was clearly demonstrated in 2018, with actual training expenditure in 2018 being $219,612, compared with the $132,382 training investment expenditure in 2017.

Best Practices Learning best practices was one of the main objectives for FPCL.
To achieve this we have to send our employees overseas on a short-term attachment and training.

The following staff attended overseas training: 1.

4 Port Pilots attended the Elements of Marine Pilotage training in Malaysia; 2.

Chief Executive Officer attended the 4th Maritime silk road Port international Cooperation Forum in Ningbo, China; 3.
Human Capital services Officer attended the Leadership training in China; 4. senior Port Facility security Officer and other port facility security staff attended the Port Facility security Attachment at the Port of Auckland, New Zealand, and 5.

2 Port Pilots attended the New Zealand Maritime Pilots Association Conference.
Executive Management Operations Services Technical Corporate Services Contract staff support staff 5 1 48 46 6 21 30 3 - 31 - Fiji Ports Corporation Limited – 2018 Annual Report Succession Planning FPCL continues to upskill junior staff to enable them to be ready to take up any supervisory role in the future.

This is part of FPCL succession Planning.

sixteen FPCL employees, identified as leaders and future leaders, attended the Making the Transition to supervision programme conducted by UsP Pacific TAFE.
They were accompanied by another eight employees from our associate company, Fiji Ports Terminal Limited.

Financial Literacy To ensure that all staff are financially literate, FPCL engaged FNPF, HFC Bank and Unit Trust of Fiji to conduct financial literacy training for staff.

Pilot Training Having a robust Port Pilot Training Plan is essential to ensure business continuity and to dominate the market share.

From 2017 to 2018, FPCL engaged three trainee pilots.
By the end of 2018, all three had attained their Class 3 Pilot License for suva.

One of the pilots also attained his Class 3 for Lautoka and another has attained his Class 3 for savusavu Port.

Quality Circles The Fiji National University National Training and Productivity Centre conducted a two-day, quality information seminar for 20 FPCL staff, aimed at improving productivity throughout the Company.
FPCL sees quality circles as an important mechanism for information sharing and benchmarking, with input from successful productivity practitioners.

Absenteeism and Values Workshop Conducted for FPCL staff in two sessions, one at suva the other at Lautoka, by a member of the Training Panel of the Confederation of indian industry, the workshop emphasised customer service and the impact absenteeism has on productivity levels and one’s colleagues.
Building Team Spirit The Hr Department is responsible for organising team- building events for the rest of the FPCL staff, but in 2018, they led the way by participating in river rafting activities in the Namosi interior.

A four-day team bonding event was also held for FPCL staff from around the country, at the Crusoe retreat.

Gala Night The FPCL Annual Gala was taken to the next level, thanks to the support of the FPCL Board of Directors and Executive Management.
A family weekend retreat was held at the Pearl of the south Pacific resort in Pacific Harbour, with a sports Day and Kids’ Activities on saturday, before the Gala dinner on saturday night.

FPCL Training Expenditure 2018 60,000 50,000 40,000 30,000 20,000 10,000 0 Training in-house Training Professional Training Overseas Training FNU/UsP seminars & Conferences Team Building 54,935 32,293 41,476 42,389 38,150 10,367 Company Total No.
of Employees Attended Training FPCL FPTL FsHiL 156 144 73 - 32 - 2018 Annual Report – Fiji Ports Corporation Limited Health, safety & Environment Environmental Stewardship FPCL remains committed to working with the marine sector in the interests of mitigation against the impact of climate change, and supports the regional endorsement of low-carbon, maritime transportation, as a cornerstone of the sustainable development goals of Pacific island Countries and Territories.
The Company is aware of its responsibility to care for our precious marine environment, to provide for the future development and well-being of Fiji and all its citizens.

Works to remove the derelict vessel m.v.

Southern Phoenix began late in 2018 and were expected to be completed by February 2019.

Wreck removal was being carried out in a collaboration between FPCL, FPTL, MsAF, and vessel owner.
An Australian salvage company has been engaged to remove the 88 metre, 4,285 DWT vessel, as well as any cargo remaining on board.

Oil Spill Workshop FPCL employees attended a three-day, Oil spill Command Workshop, conducted by the New Zealand Maritime Authority, at Mua-i-Walu House.

in his address to open the workshop, the Deputy Permanent secretary for Transport commended the relevant authorities, including FPCL and FPTL, for their part in the rapid response to the m.v.
Southern Phoenix emergency in 2017.

National Spill Contingency Plan Fiji has developed and is implementing the National spill Contingency Plan 2015 and the National Marine response strategy 2018–2022 has been finalised by MsAF.

The Company is aware of its responsibility to care for our precious marine environment, to provide for the future development and well-being of Fiji and all its citizens.
Sea Container Hygiene System (SCHS) The Port of Lautoka successfully hosted a trial test of the sCHs, conducted by the Pacific Horticultural and Agricultural Market Access Program (PHAMA), and attended by representatives from FPCL, FPTL, Biosecurity of Fiji and shipping agents and companies.
sCHs is a long-term strategy developed to manage biosecurity risks associated with sea containers at the port of loading, create faster movement of containers at the wharf, increase revenue by reducing the cost of exporting containers and deliver direct savings to the exporter.
OHS Policy The FPCL Occupational Health & safety (OHs) policy has been developed to meet the nation’s legal requirements and the principles of the Health and safety at Work Act (HAsAWA) 1996, which also incorporates all other regulations that are issued to carry out the intent of this legislation.

This policy was to be reviewed and updated before the end of January 2019.

Participants of the Oil Spill Command Workshop conducted by the NZ Maritime Authority.
- 33 - Fiji Ports Corporation Limited – 2018 Annual Report specific policies and procedures, such as the No smoking Policy, have also been created to meet our OHs policy.

smoking is prohibited on all FPCL premises and facilities, for the health and safety of everyone.

As well as the risk of fire or explosions in and around some facilities, there is the damage to the health of active and passive smokers, and also littering issues that impact the environment.
OHS Signage in collaboration with the Properties and Engineering departments demarcated walkways, driveways, parking areas and OHs signage are maintained to better protect our staff and visitors against any possible dangers that may be unnoticed.

such installations help reduce the possibility of industrial incidents and accidents.

OHS Manual The OHs Manual and relevant safe Operational Procedures (sOPs) are in place.
There is also a process in place to ensure that all sOPs are continuously reviewed and updated by the OHs department and relevant stakeholders.

These documented processes and procedures are integral to the organisation’s operations and development as the manual clearly documents items such as emergency plans, the handling of dangerous goods, permit systems and fumigation procedures, for example.

OHS signage at Port of Mua-i-Walu 2.


FPCL OHS Statistics 2018 January February March April May June July August september October November December TOTAL OHS Incidents Occupational Occupational Injuries Deaths OHS Breaches OHS Induction 3 - 2 1 1 1 - 1 1 12 6 3 31 - 1 - - - - - 1 1 3 - - 6 - - - - - - - - - - - - 6 4 1 2 3 - - 1 - - - - Nil 17 - 87 73 33 36 - - 1 2 4 2 42 280 OHS Committees FPCL has established OHs committees comprising staff from various departments in suva and Lautoka.
There is also an OHs representative at Port of Levuka.

The establishment of the committee adheres to OHs regulations.

Committee members are trained in conducting workplace inspections and assisting in incident/ accident investigations; they make recommendations and continuously consult in regard to OHs matters.

The OHs Department and OHs Committee members are committed to ensuring the safety and occupational - 34 - Regular Fire Warden Training is an essential part of the FPCL safety preparedness.
2018 Annual Report – Fiji Ports Corporation Limited health of all employees of the company and to ensure that our business activities do not pose an unacceptable threat to the environment.

This is accomplished through regular meetings and consultation with our stakeholders.

Fire Wardens & First Aiders Fire wardens and first aiders are well trained in basic skills to address fire incidents and first aid matters, respectively.
Both groups receive regular refresher training, to better maintain or increase their skills and knowledge in the responsibility they hold.

More than 25 FPCL fire wardens have undergone training with the National Fire Authority during 2018.

Their skills are tested with regular fire drills at the different buildings and sections of the workplace, with favourable reports on their vigilance and instantaneous responses.
similarly, first aiders are ready to respond to any work-related incidents where first aid attention to injury is required.

Tsunami Drills Tsunami drills were held during the year for FPCL employees at Mua-i-Walu House, to raise levels of preparedness and practise evacuation procedures in the case of a tsunami warning.

New employee and contractor inductions are a vital process that must be completed and assessed, before permission to work is granted.
This ensures that they have the necessary understanding of the introductory information about the company, such as the working environment, the organisational framework, high risks and hazardous areas, policies, and other general, relevant information about FPCL is effectively communicated, using an interactive approach.

‘No inductions; No start’ is a policy where all new workers, contractors, and Port users must undergo induction training prior to starting their work on our facilities.
in 2018, there were more inductions during the first and last quarters of the year.

This is due to Port users having to undergo the induction process before renewing their Port user licences, ready for the new year.

Online OHS Training This year, FPCL has subscribed to safetyhub, an Australian website, which facilitates health and safety trainings via the various video messages they produce.
FPCL will begin incorporating safetyhub online video training into the OHs programmes next year, in order to stay abreast of OHs training at an international level.

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o N 100 90 80 70 60 50 40 30 20 10 0 2018 OHS Inductions and Training 87 73 36 33 42 0 0 1 2 4 2 Jan Feb Mar Apr May Jun Jul Aug sep Oct Nov Dec ‘No inductions; No start’ is a policy where all new workers, contractors and Port users must undergo induction training prior to starting their work on our facilities.
in 2018, there were more inductions during the first and last quarters of the year.

This is due to port users having to undergo the induction process before renewing their Port user licences, ready for the new year.

- 35 - Fiji Ports Corporation Limited – 2018 Annual Report FPCL staff during the International Maritime Dangerous Goods course, organised by the Fiji Maritime Academy.

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o N 3.5 3 2.5 2 1.5 1 0.5 0 2018 OHS Injuries 3 1 1 1 Jan Feb Mar Apr May Jun Jul Aug sep Oct Nov Dec 12 6 3 As can be expected, the increase in incidents shows a corresponding rise in injuries over the year.

To date, any injured workers have fully recovered and have been able to return to work.

Medical advice and reports are followed to assist our injured workers to recover.

During recovery, they may be assigned light duties until they are declared fit to resume their usual daily tasks.
Personal Protective Equipment Personal Protective Equipment (PPE) is a requirement for all workers conducting their duties at the wharf.

Mandatory PPE includes helmets, reflector vests, and safety shoes.

Flip-flops or similar shoes that expose the feet are not allowed.

if required, additional PPE is issued to workers for day-to-day work, according to their various job descriptions.
To help prevent any disease or degeneration of their eyes, workers exposed to working long hours in the sunlight are now issued with sunglasses that are coated with a protective layer to block out ultraviolet (UV) light.

2018 OHS Incidents .

o N 14 12 10 8 6 4 2 0 3 2 1 1 1 1 1 Jan Feb Mar Apr May Jun Jul Aug sep Oct Nov Dec incidents appear to increase over the months and the trend line indicates that this trend might continue to grow in the future.
Alternatively, the graph also indicates that the incident reporting mechanism is effective, with people no longer remaining silent and failing to report incidents.

The peak, end of year season, also contributes to increased incidents during that period.

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o N 7 6 5 4 3 2 1 0 6 4 2018 OHS Breaches 3 2 1 1 Jan Feb Mar Apr May Jun Jul Aug sep Oct Nov Dec it is satisfying to see that our workers understand the risks of breaching OHs policies and practices, which leads to serious fines, and therefore have improved over the year.

OHs awareness is maintained through training, inspections, consultation and communication to better maintain a low or zero practice of breaching OHs policies and procedures.
- 36 - 2018 Annual Report – Fiji Ports Corporation Limited Handling Dangerous Goods Twenty shore-based personnel from FPCL and associate company, FPTL, attended a four-day course on international Maritime Dangerous Goods (iMDG) Code, organised by the Fiji Maritime Academy.
The course enabled participants to contribute to the preparation and execution of the safe carriage of dangerous goods and marine pollutants by sea, and to understand the legal implications of, and correctly apply or verify compliance with, international Maritime Organization and local regulations.

OHS Initiatives The handling and storage of hazardous or flammable substances and working in potentially dangerous conditions is part of the FPCL work environment, just as it is at any port around the world.
Currently in our emergency procedures, the Fiji National Fire Authority is contacted in the case of fires and other such emergencies.

FPCL plans to train an in-house emergency response team, comprising of Company employees, capable of carrying out first responder rescue activities, for example, in cases of workers needing to be evacuated from confined spaces, or hanging from anchorage points, due to falling, when working at heights on vessels.
The OHs Department is introducing a greener process for dispersing documentation and information.

rather than printing multiple copies of information booklets, these will be stored and accessible online.

in the same way, anyone needing, for example, a hot work permit to be completed, can access it online, print it from their own office, and complete the form prior to getting the appropriate checks and approvals.
To reduce smells and vermin, garbage bins with garbage bags inside and proper, fitted lids, are to be introduced on the wharves.

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o N At the Port of Levuka, where three FPCL staff members are employed, our most recent audit in December 2018 revealed the need for a public address system, and a fire alarm system to be mounted on all FPCL buildings.

FPCL provides clients with information to address enquiries.
Public Relations and Customer Service – Talking to the Community The Public relations Department plays an important role in shaping and maintaining the image and reputation of FPCL.

it deliberates plans and sustains the effort to institute and maintain mutual understanding between the Company and the public.
The Department not only deals with Communications, but is also responsible for and manages other vital sections in the Company, such as Customer service, Donation and sponsorships, Event Planning and ensuring that our Corporate social responsibilities are realised.
70 60 50 40 30 20 10 0 Media and Communications Summary 68 61 46 2 5 4 News Updates Press releases Media Queries Public Enquiries Media invites Newsletters - 37 - Fiji Ports Corporation Limited – 2018 Annual Report Media and Communication Customer Feedback Results FPCL has become a regular contributor to the weekly shipping News of the two major print media outlets, raising awareness of the Company’s roles and responsibilities, highlighting achievements and providing an insight into the services rendered to the general public, with particular reference to the works carried out by our subsidiary company, Fiji ships & Heavy industries Ltd.
Awareness was also raised on other platforms, including radio, television, the Company website and social media, especially highlighting the various initiatives of FPCL’s work in giving back to the community.

The Department took ownership of the newsletter production, minimising cost in the process.

FPCL also accessed social media to maximise the Company’s presence, promoting its activities and disseminating relevant information.

FPCL continually works to improve services at all Ports of Entry.
Customer Service The Department continues to interact with the customers and stakeholders to provide them with information to address enquiries regarding the services provided, as well as to emphasise FPCL’s role and responsibilities.

in addition, it deals with and helps resolve any customer complaints received.

Apart from the Customer Feedback Machines in suva and Lautoka, surveys were carried out in order to improve our services to the customers.
Forms were distributed to the customers and relevant stakeholders in order to gauge our performance.

Through the survey, areas of concern were addressed accordingly.

% 55 20 7 18 Happy Disappointed satisfied Not Happy World Maritime Day FPCL and subsidiary FsHiL joined with maritime industry stakeholders to celebrate the World Maritime Day, with the theme, Our Heritage; Better shipping for a Better Future.
The occasion also marked the 70th anniversary of the establishment of the international Maritime Organization.

Social Obligations FPCL continues to commit itself to its Corporate Citizenship Values by supporting worthy causes and initiating events to give back to the wider community.

in partnership with our subsidiary company, FsHiL, another successful Pinktober Charity Drive was staged to raise funds for the Fiji Cancer society.
The Company participated in the Fiji Cancer society’s Bushells Morning Tea, and contributed to the annual appeal for the Fiji society for the Blind and the save the Children Fiji Organisation.

FPCL also contributed towards other charity events and offered continued support at events such as the annual Charity Golf Tournament, organised by the Fiji ship Owners and Agents Association, to raise funds for the Fiji Children’s Overseas Treatment Trust Fund.
FPCL also continued to make donations to assist non-profit organisations and the less fortunate in our society.

in keeping with our concern for the state of our environment, two campaigns were organised to clean up the harbour and foreshore areas surrounding the Port facilities.

These campaigns were supported by our stakeholders in the maritime industry.
- 38 - 2018 Annual Report – Fiji Ports Corporation Limited Finance Division Balancing Risks and Returns FPCL has had a commendable 2018 financial year, engendering successful revenue results with stronger profits, making possible the payment of substantial dividends to its shareholders.
The Company is continuously striding towards being on par with the current regulatory framework and as such, engaged Ernst & Young to conduct an assessment of the impact of new international Financial reporting standards (iFrs) and to provide assistance in implementing the impact of these accounting standards on the accounting operations of Fiji Ports Corporation Limited and Fiji ships and Heavy industries Limited.
There were three new standards – ‘iFrs 15 revenue from Contracts with Customers’, ‘iFrs 9 Financial instruments,’ and ‘iFrs 16 Leases’.

The Fiji Ports Group has successful adopted and implemented the impact of these accounting standards in its accounting system and in its 2018 Consolidated Financial statement, where a few figures of comparative period, the 2017 financial year, were restated in order to comply with the new international Financial reporting standards.
in conjunction with the growing organisational capacity, the company has set up a centralised Procurement Unit.

The Procurement Coordinator, with the assistance of Executive Management and the heads of departments, has developed a Procurement Procedure and Policy Manual.
This manual provides a detailed guideline on the procurement processes and standardises the course for finding capable suppliers or partners who can help deliver a competitive product, reducing cost and helping increase the cash flow for the business.

An internal Audit was performed on procurement processes and the Tender Cycle, and the recommendations are in the process of being implemented.
Summary of Accounts With a prime focus on the 5-Year strategic Plan (2019–2023), the new role of Project Accountant was created and filled in 2018.

The Project Accountant is to be a key person in the Finance Division to work on the 5-Year strategic Plan, to monitor the progress of its implementation, while working in conjunction with various departments of the organisation in identifying key business development areas and making strides towards realising FPCL’s core value of commercial stewardship.
A detailed analysis was performed by the Finance team on the Maritime Transport Decree (MTD) Tariff, against longstanding FPCL tariff charges, to assess and determine associated risks, costs and benefits.

Based on the positive result obtained in favour of the MTD tariffs, and its consistency based on the charges laid out by other agencies, Management made a decision to implement MTD charges, with effect from 1st January 2019.
An External Audit of the Financial statement is conducted each year to obtain a true and fair audit opinion of the Consolidated Financial statement.

Fiji Ports Corporation Limited has continually obtained an Unqualified Audit Opinion and aims to maintain such opinions in the future.

There were no audit issues or findings noted in FPCL’s 2018 External Audit of Financial statement.
FPCL Accounts Year 2018 Year 2017 Change in Change (000) (000) (000) in % Consolidated Group income Holding Group income Group Profits Holding Company Profits share of Profits in Associate 60,422 58,181 59,556 57,605 28,041 26,345 27,065 25,378 5,325 5,818 Dividend Paid in respect to Prior Year 15,227 16,082 2,241 1,951 1,696 1,687 (493) (855) Group shareholders Equity 130,279 117,464 12,815 Group Total Liabilities 19,490 21,463 (1,973) 4 3 6 7 -8 -5 11 -9 - 39 - Fiji Ports Corporation Limited – 2018 Annual Report FPCL – 2018 Profit and Loss Summary The reported NPAT marginally increased by 7%, which is mainly attributed to the gain on sale of assets in June 2018, increased cargo throughput and the increase in interest income from term deposits and interest bearing deposit.
Total income, including finance income, indicated an increase of 5% in comparison with the 2017 total income.

This is mainly due to: • The transfer of assets to FPTL in June 2018 realised a gain on sale of $3m.

• Finance Interest income has significantly increased by 222% in comparison with 2017, due to the prudent cash management process implemented by Management, via the increased Term Deposit by $15m and the placement of the new interest Bearing Deposit of $15m.
• Wharfage income has increased by 4%, due to the increase in import and export volumes and cargo throughput.

The increase is directly related to Fiji’s economic activity, such as growth in the construction industry and GDP growth.

• There was an increase in other income, which was attributed to the increase in the commission rate from tug services, the increase in rental income from properties and one-off insurance proceeds received for damaged wharf infrastructure.
• However, Dockage income and Marine service income has decreased by 6%, due to the decrease in the number of bigger GrT vessels visiting the Ports, when compared with the 2017 financial year.

The first quarter of 2018 was significantly affected by Cyclones Josie, Keni and Gita, which resulted in the cancellation of some vessels.

Moreover, dockage hours have decreased due to the increase in port efficiency in handling cargos.
Consolidated Income Comparision 2018 against 2017 Group Income Category 2018 $(000) 2017 % Change $(000) Over 2017 Marine services Dockage Wharfage Other service income & Licence Fees ship repair & slipway income Other revenue 19,018 19,535 10,947 12,180 13,195 12,650 6,426 6,231 4,605 5,999 6,272 1,545 TOTAL OPERATING INCOME 60,422 58,181 -3 -10 4 7 -1 198 4 Consolidated Expenses Comparision 2018 against 2017 Group Expenses Category 2018 $(000’) 2017 % Change $(000) Over 2017 Marine services charges Employee Expenses Depreciation Property Expenses Other Operating Expenses 9,002 8,031 6,379 2,900 7,428 9,185 7,479 6,722 2,191 7,327 TOTAL EXPENSE 33,740 32,904 -2 7 -5 32 1 3 Composition of 2018 Income 8 10 31 11 % Marine services Wharfage Dockage Other service income ship repair & slipway income Other revenue 18 22 22 Composition of 2018 Expense 27 8 % Marine services Charges Employee Expenses Other Operating Expenses 19 24 Depreciation Property Expenses - 40 - 2018 Annual Report – Fiji Ports Corporation Limited Group NPAT Contribution by Company Group NPAT Contribution by Company Year FPCL FPTL FsHiL TOTAL 2016 $(000) 2017 $(000) 2018 $(000) 19,883 19,318 21,383 5,349 1,024 5,818 1,209 5,325 1,333 26,256 26,345 28,041 Note: FPCL results are exclusive of dividend received from FSHIL and FPTL. )
0 0 0 ( $ 30 25 20 15 10 5 - Total expenses, including finance costs, have increased by 4% when compared with 2017, which is mainly attributed to: • Employee benefits expenses increased by 12%.

The Job Evaluation salary increment, Phases 2 and 3 provisions, are booked in the accounts, as an increase in staff base salary is anticipated based on the Job Evaluation Exercise performed by PwC, and competency assessment performed by Maxumise – our external Human Capital Management consultancy partner.
The increase in staff base salary would have an impact on other staff benefits such as FNPF employer contribution, bonus, annual leave, sick leave, long service leave and retirement benefits.

The Job Evaluation implementation for Phase 2 was completed in May 2018, while Phase 3 was expected to be completed in early 2019.

• Property expense has increased by 32% due to a number of major burst water pipes at Kings and Queens Wharves during 2018.
Management is in the process of developing an effective monitoring mechanism and the installation of new water pipes, to eliminate burst mains and control water charges.

Moreover, the Company incurred major, one-off repair works for the demolition of the damaged wharf areas and replacing them with precast, prestressed, deck and repair works, at Kings Wharf and Walu Bay Wharf, respectively.
• Operating expenses have increased by 5% due to the high consultancy cost incurred for the assessment and preparation of documents such as the 5-Year strategic Plan Document, 2016 2017 2018 FsHiL FPTL FPCL FPCL Group Profit & Loss Summary for 2018 & 2017 Group Income Category 2018 $(000’s) 2017 % Change $(000’s) Over 2017 Operating income Other income TOTAL iNCOME 55,817 56,636 4,605 1,545 60,422 58,181 Operating Expense (27,361) (26,182) EBiTDA Depreciation EBiT(Loss)/Profit Net interest share of Profit in Associate 33,061 31,999 (6,379) (6,722) 26,682 25,277 1,760 5,325 529 5,818 Net Profit Before Tax (NPBT) 33,767 31,624 income Tax NPAT (5,726) (5,279) 28,041 26,345 -1 198 4 5 3 -5 6 233 -8 7 8 6 Tender assessments and preparation of contracts for the Vessel Traffic Management system, Lautoka Wharf Condition Assessment and Navigational simulation, Dredging of Lautoka Wharf, amongst others, and for professional legal consultancy.
Moreover, major crane repair and maintenance cost was incurred on shore cranes, Mika, roba and Amigo.

• However, the increase in total expenses was partially offset by the following: - Marine services charges have reduced by 3% due to the decrease in the number of bigger GrT vessels visiting the port, and thus, fewer tug services were required.

Moreover, the third party pilotage cost has reduced, as most pilotage services were handled by FPCL Pilots.
- Depreciation expenses have reduced by 5% mainly due to the sale of shore cranes Mika and roba to FPTL, which had high depreciation charges.
- 41 - Fiji Ports Corporation Limited – 2018 Annual Report Balance Sheet Extract (Consolidated 2018–2017) Accounts 2018 $(000) 2017 $(000) Cash at Bank 23,408 27,464 Trade receivables (Current & Non-Current) Financial assets Fixed Assets Total Assets Trade Creditors & Other Payables Total Liabilities shared Capital retained Earnings 11,204 37,000 55,135 3,873 22,000 63,012 149,769 138,927 4,303 19,490 73,155 57,124 7,080 21,463 73,155 44,309 Group Key Performance Indicators Ratio 2018 2017 2016 EBiT/Total income 44.16% 43.45% 47.12% return on invested Capital 38.33% 36.01% 35.89% return on Equity 21.52% 22.43% 24.28% Current Liquidity ratio 8 5.49 4.75 The strong financial results are reflected in the KPIs with the Group reporting an impressive Returns of Invested Capital of 38.33% and current liquidity ratio of 8.
Net Finance (interest) income has significantly increased by 233% in the 2018 financial year when compared with 2017, due to the prudent cash management processes implemented by management... FPCL Group ROE and RIC ) % ( e g a t n e c r e P 45 40 35 30 25 20 15 10 5 0 return on investment Capital return on Equity 2016 2017 2018 The Balance sheet remains strong with a healthy cash balance, (including the interest bearing deposit), of $20.5 million and a Term Deposit of $36 million, with no loan or borrowings, even after the dividend payment of $15.23 million to the shareholders.
The Company has an impressive current liquidity ratio of 8.

Financial Results and Group Commentary The financial performance for the Fiji Ports Group 2018 reflects a consistent and resilient outcome.

This year being the fifth full year of operations after the 2013 partial divestment of shares and transfer of the control of previously subsidiary, now associate, company FPTL.

Group Net Profit After Tax (NPAT) of $28.04m represents a 6% increase from the 2017 reported NPAT of $26.35.
This is mainly attributed to the increase in cargo throughput, gain on sale of assets in June 2018, and the increase in interest income from term deposits and the interest bearing deposit.

The Group operating revenue showed an increase of 4% over 2017.

This is largely due to the increase in cargo throughput (wharfage income), and the gain on sale of assets in June 2018.
There was also an increase in other service income such as commission on tug services, rental income and one-off insurance proceeds for wharf damages.

However, the increase was partially reduced due to the decline in the number of bigger GrT vessels and dockage hours, affecting core marine service revenue and dockage revenue.

Moreover, there was a breakdown of the 500t and 1000t slipways in the first half of 2018, which led to major revenue losses of over $400k for subsidiary company, FsHiL.
The slipway was fully booked, but the breakdowns caused major backlogs and customers opted for other ship repair service providers.

Net Finance (interest) income has significantly increased by 233% in the 2018 financial year when compared with 2017, due to the prudent cash management processes implemented by management, via the increased Term Deposit to $37 million with great interest rates and the placement of the new interest Bearing Deposit of $15 million.
The share of profits from associate company, FPTL, has declined by 8% when compared with the 2017 financial year, which is also attributed to the increase in depreciation charges, due to procurement of three reach stackers, one empty handler and two shore cranes.

Moreover, there is an increase in the cost of tyres, spare parts and fuel for machinery, and the cost to perform major overhaul repairs on TL05 and TL06, to be sent for use at the Lautoka Port.
Total expenses have increased by 3%, which is attributed to the increase in employee expenses (JEE second phase payouts and booking of provision for Phase 3), - 42 - 2018 Annual Report – Fiji Ports Corporation Limited The multi-purpose Port of Lautoka will play a strategic role in FPCL’s future development.
FPCL Dividends 2016-2018 FPCL Dividends 2016-2018 (000) Dividends 2016 $(000) 2017 $(000) 2018 $(000) Ordinary Dividend 5,071 16,082 15,226 special Dividend 5,458 - - TOTAL 10,529 16,082 15,226 2018 Dividend Payout In 2018, the total dividend paid by FPCL in respect of the prior year’s (2017) profitability, amounted to $15,226,505.

This represents a 5% decrease from the prior year.
increase in repair and maintenance costs for damaged wharf areas, higher water charges, as the result of major waterpipes that burst at Kings and Queens Wharves, increased cost for shore crane repairs and high consultancy incurred for assessment and preparation of documents such as the 5-Year strategic Plan Document, Tender Assessments and preparation of contracts for the Vessel Traffic Management system, the Lautoka Wharf Condition Assessment and Navigational simulation, Dredging of Lautoka Wharf, and for professional legal consultancy.
However, the increase in expenses was partially offset by subsidiary FsHiL’s lower production costs, due to the breakdown of slipways, whereby fewer 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 $ - 16,082 15,226 5,458 5,071 2016 2017 2018 special Dividend Ordinary Dividend vessels were uphauled.
The Balance sheet remains strong, with a sound cash balance, (including the interest bearing deposit), of $23.41 million with zero external borrowings, even after the dividend payment of $15.23 million to shareholders.

The group holds $37 million in term deposits and has recorded an impressive current liquidity ratio at 8.
- 43 - Fiji Ports Corporation Limited – 2018 Annual Report risk Management & Compliance Unit Ensuring Good Governance risk management applies to, and is practised in accordance with, accepted risk Management Principles as a part of all of FPCL’s activities, including developing strategic plans, preparing operational plans and capital budgets, completing detailed project approval requests, designing and managing project plans, and operating FPCL’s facilities including wharves and Ports.
As a critical service provider, FPCL actively engages in this process as a commitment to ensure a robust approach is maintained towards providing a greater understanding of risk management practices at all departmental levels.

The following risk management principles are in practice: • Risk Management Policy – provides the mandate for implementing a standardised ErM framework throughout FPCL and its subsidiary company, Fiji ships & Heavy industries Limited.
it also outlines roles and responsibilities for the Board, Executive Management and staff, who are critical for the risk management framework to work effectively within the organisation.
• Risk Management Framework – implementation of the risk management framework and control systems provides reasonable assurance that strategic and business objectives for the company are achieved and its resources are effectively used to ensure business success, continuing financial strength and continuous quality improvement within the organisation.
• Standard Operating Procedure (SOP) – comprehensive sOP’s are in place to set out FPCL’s approach to risk and the management of risk in fulfilment of its overall objectives.

This is to ensure commitment to risk management at all levels and every effort is made by staff to manage risk appropriately.
The Board, supported by the Finance, Audit & risk Management sub-committee, management and dedicated risk management employees, are committed to identifying and mitigating different types of enterprise risks, which FPCL has managed and is currently exposed to: • Regulatory Risks; • Reputational Risks; • Financial Risks; • Environmental Risks including Health and Safety; • Strategic Risk; and • Operational Risk.
Compliance As part of the compliance function, the Company has carried out departmental reviews, with the participation of key stakeholders, to review areas of non-compliance and the outcomes related to each review were documented in the form of action plans.

This saw the items identified being assigned to the respective divisions with an appropriate timeline for implementation.
in a similar manner, regular compliance checks and investigations were also carried out in order to achieve continual improvement, with a view to strengthening internal control mechanisms within the organisation.

investigations related to non-compliance and breach of Company policies and procedures were reported to the Executive Management and also to the Board Finance Audit & risk Management sub-committee.
The Company further explored opportunities to develop a comprehensive Business Continuity and recovery Plan, in order to cope with the effects of an emergency or crisis such as cyclones, earthquakes, floods, fire, or power interruptions etc.

Moreover, this was included as part of the 2016–2018 strategic Goals, which will ensure business continuity, disaster recovery, risk management, and crisis/emergency management all feeding into over- arching organisational resilience strategies.
As a result, wider conversations were held with key stakeholders and insurance Brokers, where this initiative is being explored with them.

Legal and Insurance On a regular basis, management has presented to the Board and the Finance, Audit & risk Management subcommittee on specific updates related to each case, including pending or potential litigation and exposures that could pose significant risks to FPCL and FsHiL.
in view of this, management presented these updates to ensure that the Finance, Audit & risk Management subcommittee remains fully informed of litigation and other legal issues.

in order to deal with some of the litigation issues, management continuously involved relevant Department Heads to identify and monitor issues such as allegations of errors, omissions, violations of law, damages, inappropriate employment practices, or cases of personal injury to FPCL staff and other Port users.
This is to ensure that Department Heads are also aware of risks associated with litigation and other legal - 44 - 2018 Annual Report – Fiji Ports Corporation Limited matters, so that they have the required capacity to assess the effect in a consistent and inclusive manner to manage potential exposures.

This has resulted in some of the emerging cases being concluded, rather than be subject to prolonged court cases, which also saves the costs of defending or proceeding with legal actions.
While management dealt appropriately with some of these issues, there are cases that are more structurally complex, involve higher-risk counterparties, or are sensitive in nature and that need to be settled through lawsuits.

Management has determined that FPCL does not have the required expertise to deal with these issues and as such, has engaged reputable law firms to examine material exposures and associated liabilities and their impact on the organisation.
ICT Strategy The ICT Department provides secure IT infrastructure while minimising costs.

The information Technology Department (iCT) ensures that the efficiency and effectiveness of FPCL’s functions and operations is enhanced through the strategic use of information technology.

The Department continues to plan, operate and support the Company’s iT infrastructure, enabling business users to carry out their roles efficiently, productively and securely.
With the appointment of qualified and experienced individual to the position of iCT Manager towards the end of the year, a strategic Plan was formulated and implemented to deliver enhanced iT infrastructure, Border security, Monitoring and response.

The Department focuses on meeting multiple business and technical requirements, provide a secure iT infrastructure and in the process, minimising costs.
Major projects to be implemented for the first quarter of 2019 includes hardware infrastructure upgrade, an internet bandwidth upgrade and meeting room communication systems, wireless presentation gateway, corporate Wi-Fi blanket, hardware refresh and enhanced iT Helpdesk solution.

The reorganisation of iCT department workspace has also been prioritised.
ICT Strategic Plan Formulation – Dec 2018 (2019–2022 inclusive) Challenge 1: Deliver enhanced IT Border Security infrastructure, monitoring and response 2019 2020 2021 2022 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Reduce Insider Threat Educate staff on security risks Ensure up-to-date client antivirus review and secure guest internet access Locate and secure vulnerable network nodes/connections Reduce Cyber Threat Footprint secure website forms Test for sQL injection vulnerability Ensure patch management Ensure server antivirus is active and up to date Ensure offline backups regular iT audits strengthened security at internet gateway Optimum Performing Inventory Maintain hardware life-cycle Proactive Reporting on Systems Deploy reporting tools for up-to-date periodic reports Embrace Current Technologies to Maximise Uptime and Production saas and iaas implementations - 45 - Fiji Ports Corporation Limited – 2018 Annual Report Challenge 2: Enhanced organisation-wide IT policies and procedures 2019 2020 2021 2022 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 identify relevant iCT policies Develop policies Obtain endorsement implement policies Periodic review and implementation checks Challenge 3: Deliver Core IT Trainings Develop training portals for in house trainings Core security standards and awareness programmes 2019 2020 2021 2022 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Challenge 4: Embed professional services automation system and processes 2019 2020 2021 2022 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Automated work flow identification of workflows for automation Design automated process flows and implementation Identification and development of application for mobility Virtual meetings/video conferencing enabling telecommuting review infrastructure for teleconferencing implement videoconferencing facilities Challenge 5: Create a Smart Port Facility implement VTMs (Vessel Tracking Management system) Assess needs and requirements for smart Port introduce technologies like blockchain and artificial intelligence 2019 2020 2021 2022 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Challenge 6: Revitalise our Corporate Identity, both internally and externally 2019 2020 2021 2022 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Strengthen our corporate identity review social media branding review digital branding (letter heads, email signatures, business cards, etc.)
review website user experience and user interface designs Develop internal presentation templates Develop social media skillset with Public relations Challenge 7: Unification of Systems Full integration of all iCT applications single sign-on Anytime, anywhere access to Fiji Ports infrastructure to authenticated users 2019 2020 2021 2022 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 - 46 - 2018 Annual Report – Fiji Ports Corporation Limited 2019 2020 2021 2022 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 The Port of Suva.
Challenge 8: Adhere to International Best Practice international standard Compliance – information security Management international standard Compliance – information Technology service Management international standard Compliance – Business Continuty Prerequisites for Strategic Plan Implementation Major Projects for 1st Quarter of 2019 1.
Current Hardware infrastructure upgrade - internet bandwidth upgrade - Office, meeting rooms, cable tidy-up - Wireless presentation gateway - Corporate Wi-fi blanket - Hardware refresh - iT Helpdesk solution Other Projects - iCT department workspace reorganisation - 47 - Fiji Ports Corporation Limited – 2018 Annual Report Fiji ships & Heavy industries Limited Serving the Region Financial Performance Fiji ships & Heavy industries Limited, a subsidiary of FPCL, has recorded a net profit of $1.3 million for the 2018 Financial Year.
The balance sheet remains strong, with healthy cash flow balance of $2.9 million, a term deposit of $1 million and a low gearing of 0.12.

The dividend paid in 2018, with respect to the 2017 financial year, increased by 18%, due to the higher income generated by project-based works in 2017.

Total income exhibited a decrease by $86k, or 1.3%, compared with 2017.

This was due to the slipway breakdown in the first half of the year.
As fewer vessels were uphauled because of the breakdown, expenses decreased by $223k or 4.39% compared with 2017, mainly attributed to the resulting lower production costs.

Also, for 500t project work, the vessel owner purchased steel plates not available in Fiji from China.

Due to the ageing of the three slipways, there were increases in repair and maintenance.
The dividend paid in 2018, with respect to the 2017 financial year, increased by 18%, due to the higher income generated by project-based works in 2017.

The dividend paid in 2017, with respect to the 2016 financial year, declined by 32%.

This reflected the impact and aftermath of Tropical Cyclone Winston, with continued wet weather, power cuts, and low numbers of vessel using our services during that period.
Income Statement Comparison for Last 5 Years 7,000 6,000 5,000 4,000 3,000 2,000 1,000 $(000) - Total income Total Expenses EBiT NPAT 2014 5,564 4,121 1,446 1,106 2015 6,751 4,848 1,902 1,508 2016 5,747 4,452 1,296 1,024 2017 6,634 5,081 1,538 1,209 2018 6,548 4,858 1,689 1,333 - 48 - 2018 Annual Report – Fiji Ports Corporation Limited Dividends Paid - Last 5 Years 754,128 544,792 555,876 604,355 511,780 800 700 600 500 400 300 200 100 $(000) - 2014 2015 2016 2017 2018 Return on Investment Compared with 2017, the return on investment, the return on Assets and the return on Equity ratios have improved in 2018, as the result of the strong incomes and the increase in NPAT.
Strategic Goals Our strategic goals are: • To build on strategic partnerships to improve upon quality and responsiveness; • To modernise infrastructure; and • To maximise shareholder returns, The Lady Samoa on the slipway.
while meeting our major shareholder’s expectations, and supporting our mission to ‘Develop, maintain and improve key ship repair facilities to enhance the economic growth and prosperity of Fiji.’ Client Base Our client base continues to include our Pacific island neighbours, such as Kiribati, Vanuatu, Tonga, solomon islands, Tuvalu, Marshall islands, and for the first time in 30 years, samoa, as well as Fiji-based and -owned vessels.
Onemato, a vessel belonging to Eua sea Transport Council in Nuku’alofa, and the interlink shipping vessel, m.v.

Westerland.

After a lapse of 30 years, FsHiL once more saw a vessel from samoa on the slipway, with the arrival of the samoan Government vessel, Lady Samoa III.

From Vanuatu, the l.c.t.

Kalyara underwent a major overhaul, followed by three more vessels on the FsHiL slipways: f.v.

Faimanu, l.c.

Tiwi Trader and police boat r.v.s.

Tukoro.


Regional Vessels Serviced Amongst the regional vessels benefitting from the FsHiL slipway and repair and maintenance service were m.v.

Tongiaki, an inter-island vessel belonging to the Friendly island shipping Agency, a wholly owned public enterprise of the Government of Tonga.

Also at FsHiL for repairs from Tonga were the m.v.


Steelworks for Tiko’s The Lycianda, a well-known feature of the suva Harbour, spent time on the FsHiL slipway for steelworks on the underwater hull.

Better known as Tiko’s Floating restaurant, the Lycianda was one of the Blue Lagoon vessels built in the 1980s by the Government shipyard, the forerunner of FsHiL.
- 49 - Fiji Ports Corporation Limited – 2018 Annual Report Auditors from the Sri Lankan Standards Institution conduct the quality systems audit at FSHIL.

The milestone achievement of isO 9001:2015 certification assures FsHiL clients that the Company is ambitious, reliable and motivated, with high quality products.
ISO 9001:2015 Certification in 2018, Fiji ships & Heavy industries Limited (FsHiL) was awarded the isO 9001:2015 certification for the provision of services related to ship repair works, ship repair services, slipway facilities and heavy industry services.

The prestigious certification, the latest iteration of the world’s leading quality assurance standard, isO 9001:2015, is granted for meeting or exceeding rigorous international standards in quality management.
Evaluation criteria include a strong customer focus, motivation and involvement by top management, a focus on internal processes and continual improvement.

The milestone achievement of isO 9001:2015 certification assures FsHiL clients that the Company is ambitious, reliable and motivated, with high-quality products.

Internal Quality Auditor Training FsHiL was able to host a workshop for 35 internal auditors from four companies on internal Auditing for isO 9001:2015 Quality Training.
The training, conducted by facilitators from the sri Lanka standards institution, was an initial key to improving the quality and effectiveness of the whole internal audit function of the participating companies.

Slipway Refurbishment repair works of larger vessels experienced delay when the 1000 tonne slipway underwent refurbishment.
repair works included removal and replacement of the worn-out cradle rails; removal and renewal of the defective diagonal and cross ’C’ channel brace; replacement of worn-out and damaged wheels and brackets; and the realignment of the cradles to the existing rails.

Slipways FsHiL facilities include 3 dry docks.


These are: - 200 tonne slipway (to be upgraded to 500 tonne for 46 metre vessels with 11 metre beams) - 500 tonne slipway (46 metre vessels with 11 metre beams) - 1000 tonne slipway (65 metre vessels with 13 metre beams) FsHiL’s core function is the slipping of marine vessels, the carrying out of ship repairs and maintenance, heavy industrial and engineering work.
- 50 - 2018 Annual Report – Fiji Ports Corporation Limited Slipway Usage 2018 Slipway Income Composition 2018 6.6 % 51.46 53.48 200t 500t 1000t Heavy Industries FsHiL undertakes steel, engineering, electrical, timber and technical works.

We have the capacity for steel fabrication up to 300 tonnes, making it possible for FsHiL to design multipurpose, roll-on, roll-off vessels, specifically for interisland trade and transport.
The design includes a bulbous bow, in response to the need for vessels to be able to navigate through the often- narrow passageways found in the coral reefs encircling many of the Pacific islands.

Steel This includes steel and aluminum ship construction and repairs, industrial fabrication and heavy machinery welding.

Engineering Engineering includes general pipework, machining and turning stern gear servicing, installation and repair of deck machinery, valve and pump repairs.
Electrical This includes marine electrical services, industrial electrical services, servicing and repair of electrical generators and motors, auto electrical services, including marine, industrial and heavy mobiles, and the rewinding of generators and motors.
Timber Timber includes ship repair outfitting, wooden boat building, machining and installation of timber decking, marine and industrial $469,433 36% 200t 500t 1000t % $277,319 22% $542,840 42% Income per Vessel per Income Category 60,000 50,000 40,000 30,000 20,000 10,000 $ - slipway steel Engineering/ Electrical Water Blasting/ Painting 2018 2017 2016 2015 $15,436 $12,615 $11,035 $14,990 $8,455 $6,098 $6,625 $9,720 $14,796 $13,405 $10,770 $13,172 $15,588 $11,190 $9,223 $9,164 painting, fibreglassing, building construction, office renovation and furniture making.
Technical This includes ship designing, ship calculations, conducting of inclining experiments, compiling of visibility data, hull ultrasonic gauging and general estimating.

Fibreglass Boat Manufacture FsHiL manufactures two sizes of fibreglass boat using the Wr 23D and 23sr hull designs, with redesigned internal structures, which meet the compliance and approval of the Maritime safety Authority of Fiji (MsAF).
All FsHiL fibreglass boats are fitted with grabbers, in case of capsizing, and are equipped with a safety of Life at sea compliant kit of oars and rowlocks, flares, life jackets and a first aid kit.

Each boat must also pass a swamp test conducted by MsAF officials, in compliance with isO 12217-2 Boat Building standards of the international Classification society (iACs) of which Fiji is a member.
- 51 - Fiji Ports Corporation Limited – 2018 Annual Report Our People FsHiL is committed to acquiring, retaining and developing the right people with the right skills, and prides itself on having a stable, professional and well-qualified workforce that adheres to national and international codes of Occupational Health and safety.
Departments The FsHiL Functional and Operational Departments and sections consist of: Steel - ship repairs and Heavy Engineering Works Slipways - Dry Docking Engineering - Fitting, Machining, Electrical and Plumbing Production - Projects and Quality Control Painting - Painting and Water Blasting Estimating - Estimating and Planning Stores - Purchasing, inventory Control and Transport Finance - Accounts and Financial Management Administration - Human resources, Central registry, Property and security Specialised Services FsHiL also offers other specialised services that include: - Vessel conversion, upgrading and reconstruction - Diving services - Berthing - Garbage disposal - Three-tonne crane hire - Pontoon hire - Gangway hire Training At FsHiL, we regard our employees as the heart of the Company, who have contributed to its development and growth, from inception to date.
We recognise that the training and development of our staff is fundamental to the ongoing improvement of our operational performance and the achievement of our strategic goals.

We believe in empowering our people by investing in their development, and the Company supports our people in attaining academic and practical tertiary professional qualifications from local and overseas educational institutions.
A systematic approach to identifying training needs was maintained through the year by administering and reviewing the Training Needs survey and through the continual and effective analysis of Performance Assessments in order to identify skills and knowledge transfer needs.

The Training budget allocation for 2018 was $41,000, of which $31,120 was utilised.

The Grant Claimable for 2018 will be realised in 2019, while the 2017 Grant Claimable received in 2018 totalled $20,621.
Our investment in training recognises the imperative need to maintain standards of service delivery for customer satisfaction with a skilled and professional workforce and to support our staff in their professional development, for their personal growth as well as for the benefit of FsHiL.
We believe in empowering our people by investing in their development, and the Company supports our people in attaining academic and practical tertiary professional qualifications from local and overseas educational institutions.
10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 $- FSHIL Investment in Training - 2018 $9,320 $5,425 $4,980 $3,600 $3,938 $2,477 $190 $156 $- $2,075 $310 $- Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec - 52 - 2018 Annual Report – Fiji Ports Corporation Limited Here at FsHiL, we are also committed to strengthening the industry within the region.
We provide practical work experience attachments to students from neighbouring Pacific island nations who are studying for maritime-related trade qualifications at tertiary institutions in Fiji.

The exposure and skills gained through this initiative benefit FsHiL, Fiji and the region.

Protecting the Environment FsHiL has introduced control measures to manage ships’ biofouling, to minimise the transfer of invasive aquatic species.
The Company’s water recycling system captures, filters and recycles the water used in operating the company’s 40kpsi water blaster.

The process means that FsHiL is not discharging paint or chemical-laden water into the surrounding marine environment.

This is of vital importance as our business and the livelihoods of our team depend upon the continued health of the marine environment.
FsHiL is also protecting the trees already growing in our areas of operation, and has initiated a ‘Greener Gardens’ project, to contribute to the reduction of noise, pollutants and carbon emissions.

An employee of FSHIL attends to the green initiative project.

Christopher’s, and fundraising for the annual Pinktober cancer awareness initiative.

Customer Focus Corporate Social Responsibility FsHiL also supports worthy causes within the wider community, often in partnership with our parent company, FPCL.
These efforts include fundraising and the distribution of materials for cyclone relief, assistance to families who have lost homes through fire, supporting children’s homes, such as Dilkusha and st At FsHiL, we strive to promote and maintain a customer-focussed business culture that will continue to reinforce the trusted reputation the Company has established through a consistent track record of reliability, quality and on-time delivery, and so to meet our customers’ needs in a manner that exceeds their expectations.
Fiji Ships & Heavy Industries Limited Organisation Chart chief executive Officer Chief Financial Officer Chief Operations Officer Operations Manager Personal Assistant to OM Quality Assurance/ Audit ISO Compliance Finance Department Technical Department Productions & Works Human Resources Department Heavy Industries Division Ship Repair & Refit Division Ship Building / Boat Building Department Engine Overhaul & Maintenance Department Engineeering Department Slipway Department Steel Department Water Blasting & Painting Dept.
- 53 - Fiji Ports Corporation Limited – 2018 Annual Report - 54 - 2018 Annual Report – Fiji Ports Corporation Limited Our Services Impacts the Nation’s Future Development Development Construction Recreation Green Energy Health Tourism - 55 - Fiji Ports Corporation Limited – 2018 Annual Report Fiji Ports Corporation Limited Consolidated Financial statements FOR THE YEAR ENDED 31 DECEMBER 2018 Contents Directors’ report Directors’ Declaration Auditor’s independence Declaration independent Audit report Consolidated statement of Comprehensive income Consolidated statement of Changes in Equity Consolidated statement of Financial Position Consolidated statement of Cash Flows 57-60 61 62 63-65 66 67 68 69 Notes to the Consolidated Financial statements 70-96 - 56 - 2018 Annual Report – Fiji Ports Corporation Limited and its Subsidiary Directors’ report For the Year ended 31 December 2018 in accordance with a resolution of the Board, the Directors present their report on the consolidated entity consisting of Fiji Ports Corporation Limited (‘the Holding Company’) and its subsidiary (collectively ‘the Group’) as at 31 December 2018.
Financial comparisons used in this report are of results for the year ended 31 December 2018 compared with the year ended 31 December 2017.

The historical financial information included in this Directors’ report has been extracted from the audited Financial statements accompanying this Directors’ report.
information in this Directors’ report is provided to enable shareholders to make an informed assessment of the operations, financial position, performance and other aspects of the Holding Company and the Group, and whether the Holding Company and the Group are a going concern.

Principal activity The principal activity of the Holding Company is providing and managing the port infrastructure and services within declared ports.
The principal activity of the subsidiary trading as ‘Fiji ships and Heavy industries Limited’ is the provision of ship repair and slipway services.

There has been no significant change in these activities during the year.

Review and results of operations The operating Group profit for the year was $28,041,359 (2017: $26,345,307) after providing for income tax expense of $5,725,731 (2017: $5,278,875).
The operating profit for the Holding Company for the year was $27,065,479 (2017: $25,377,509) after providing for income tax expense of $5,369,473 (2017: $4,949,859).

Our values At Fiji Ports Corporation Limited and its subsidiary, we have six key values that are the core of our business, as listed below: - Professionalism - We are guided by the highest level of honesty and integrity in everything we do and will always demonstrate fair, open, honest and ethical business practices.
We aim to treat our people, customers and stakeholders with respect.

Our people and our conduct is a measurement of high standards of professional integrity; - Commercial stewardship - We will manage our business and activities in a commercial manner and ensure that competitive and compensatory financial returns provide for a long and prosperous future for the Organisation.
We will commit to being accountable to effective business planning, and reward our people for achieving success; - strategic innovation - Through our people and our development strategy, we will challenge the status quo of the maritime transportation and logistic sector and become recognised leaders in the industry by being responsive to the changing needs of maritime and industrial sectors, and by bringing value to our customers through being an effective link in the supply chain; - Progressive Leadership - We will promote a proactive and creative environment that supports a work culture of collaboration and teamwork, and aim to develop leaders who enthusiastically embrace achievement and innovation.
We will encourage the continuous learning, training and development of our people.

We will always try to do better; - Corporate Citizenship - We will integrate corporate citizenship and social responsibility into every aspect of our operations.
We recognise that it is a privilege to share the marine and land assets of Fiji Ports with the community, and the people in the various associated regions, and that we have a responsibility to the community to communicate openly with residents, participate in, and support development, and ensure that our actions protect the environment and Fiji culture; and - Employees Well-Being Diversity - As a company we hold advancing the health, safety and well-being of our workforce as an absolute priority.
it’s a commitment that encompasses the environments in which employees work, and the communities in which they live.

We aim to be a leader in diversity, aiming always to be non-discriminatory with respect to culture, race, sex or age, and consequently providing a fair and accepting workplace.
- 57 - Fiji Ports Corporation Limited and its Subsidiary – 2018 Annual Report Directors’ report Continued For the Year ended 31 December 2018 Our strategy Our strategy is focused on driving shareholder value through sustaining profitability whilst enhancing longer-term operational capabilities.
it has 14 key strategic objectives as stated below: - Oversee and drive support for the 15-year Fiji Ports Development Plan; - Develop and maintain relationships with government officials, especially those involved in transportation, environmental, security policy and funding decisions; - Ensure adequate insurance coverage on all key strategic FPCL resources, including personnel and operating risks; - identify investment options including development of properties, other projects through joint ventures, PPPs etc.
; - Prioritize projects that diversify FPCL’s income and support base; - implement a Clean Air Action Plan and promote FPCL’s ‘Green’ policies to stakeholders and tenants; - Develop plan for the removal of all derelict vessels in the Port boundary; - Develop Port Emergency Operations Contingency Plan; - improve the capability of Ports to prevent or detect an event, to respond to an incident, mitigate its effects on both the Port and the community, and resume critical operations; - Develop a Port security Management system aligned with standards; - Develop marketing collateral and maintain an online presence to promote FPCL’s business development activities; - increase company’s reputation within the maritime industry through participation in trade fairs and exhibitions in coordination with the Ministry of Trade, Trade Pasifika Exhibitions, workshops, conferences, and functions for stakeholders; - Drive Productivity through innovation and Training; and - Ensure Fiji Ports’ properties and facilities meet current and future operational needs, and ensure FPCL infrastructure and capabilities are measurable and aligned with the highest business excellence standards.
Our priorities this year in Financial year 2018, we have been progressively working towards delivering results for our key priorities as identified within our strategy.
These key priorities were: - implementation of Phase 2 of the Job Evaluation Exercise which was successfully completed; - Tender was awarded to acquire a Vessel Traffic Management system; - Engagement of Cardno Australia to facilitate 5-year strategic plan; - Conducting assessments and reviewing options for the rehabilitation of the Lautoka Wharf; - Engaged Cardno Australia as our consultant to gather their opinion on the general upgrade of the wharf structures of suva and Lautoka ports; - renovation of the Harbour Master’s Office at suva Port; - initiated priority repair works at Mua-i-Walu 1; - ramp rehabilitation at Lautoka Wharf; - Purchased a new incinerator for suva Port; - Tender was awarded for the installation of Ticketing Access Control system at Mua-i-Walu 2 to improve access and compliance to international standards; - Tender was awarded for upgrade works of Harbour pilots cruise passenger lounge; - A procurement unit was formed and its functions are/were centralised; and - Continue to build internal capacity amidst challenge in recruiting unfilled positions.
- 58 - 2018 Annual Report – Fiji Ports Corporation Limited and its Subsidiary Directors’ report Continued For the Year ended 31 December 2018 Key statistics Group Company Number of employees Dividend per share 263 $0.21 163 $0.21 Total income Net Assets $60,421,556 $59,556,348 $130,279,071 $124,294,889 The future Major future strategies of the Group are: - initiate and deliver results for the key deliverables as outlined in the 5-year strategic plan.
; - Extend the Job Evaluation Exercise (JEE) to the next phase – competency assessment and change management; - Upgrade Navision 2016 that incorporates Electronic Fund Transfer (EFT) for vendor payments; - initiate a tariff review for local wharves; - Upgrade pilot boats to meet the international standards; - installation of Vessel Traffic Management system; - renovation of sunny Brooke building; - Procure vehicle and cargo scanning equipment to enhance the security at our facilities; - Lautoka Yard 3 and 4 development programme; - implement a Clean Air Action Plan and promote FPCL’s ‘Green’ policies to stakeholders; - investigate and develop an Asset management system and/or Computerised Maintenance; and - Position systems in place that electronically capture the revenue streams and consolidate the information to the Financial Management system (Navision) Dividends On 11th september 2018, the Directors resolved to pay a Dividend of twenty-one cents per share ($0.21) for the 2017 financial year.
Dividends paid out during the year were as follows: Dividend Date resolved Date paid Dividend per share Total dividends Final Dividend 11/09/2018 6/11/2018 $ 0.21 $ 15,226,505 significant changes in the state of affairs There were no significant changes in the state of affairs of the Holding Company and the Group during the year ended 31 December 2018.
Events occurring after the end of the financial year The Directors are not aware of any matter or circumstance that has arisen since the end of the financial year, that, in their opinion, has significantly affected, or may significantly affect in the future years, the Holding Company’s and the Group’s operations and the expected results of those operations or the state of the Holding Company’s and the Group’s affairs.
- 59 - Fiji Ports Corporation Limited and its Subsidiary – 2018 Annual Report Directors’ report Continued For the Year ended 31 December 2018 Details of Directors and Executives Directors of the Holding Company and the Group during the financial year and up to the date of this report were: - shaheen Ali (Chairman) - Vijay Maharaj (Director) - Vilash Chand (Director) - Tupoutua’h Baravilala (Director) - Tevita Kuruvakadua (Director) - sanjay Kaba (Director) - sashi singh (Director) - Joseph Brito (Director) - iqram Cuttilan (Director) reappointed 18th November 2018 reappointed 3rd July 2018 reappointed 3rd July 2018 reappointed 28th April 2018 Appointed 16th November 2015 served till 27th November 2018 Appointed 16th November 2015 Appointed 16th November 2015 Appointed 1st July 2017 None of the directors had shareholding in the company as at 31 December 2018.
Board and Board sub-Committee meeting attendance Details of the number of meetings held by the Board and its committees during the financial year ended 31 December 2018, and attendance by Board members, are set out below: Directors Mr shaheen Ali Mr Vijay Maharaj Mr Vilash Chand Ms Tupoutua’h Baravilala Mr Tevita Kuruvakadua Mr sashi singh Mr sanjay Kaba Mr J.M.s.
Brito Mr iqram Cuttilan A 2 2 2 2 2 2 2 2 2 Board B 2 2 1 2 1 2 1 2 2 Board Finance Audit, Risk and Management Subcommittee A 2 2 B 1 1 Committees Board HR Sub Committee Board Technical and Infrastructure Development Subcommittee A 1 1 1 1 B 1 1 1 A 2 2 2 2 2 B 1 2 2 1 2 Column A: number of meetings held while being a member Column B: number of meetings attended Auditor independence The Directors have obtained an independence declaration from the Company’s auditor, Ernst & Young.
A copy of the auditor’s independence declaration is set out in the Auditor’s independence Declaration to the Directors of Fiji Ports Corporation (Fiji) Limited on page 7.

For and on behalf of the Board of Directors and in accordance with a resolution of the Directors.

Dated this 22 day of March 2019.


............................................................. Director ............................................................. Director - 60 - 2018 Annual Report – Fiji Ports Corporation Limited and its Subsidiary Directors’ Declaration For the Year ended 31 December 2018 This Directors’ Declaration is required by the Companies Act 2015.
The Directors of Fiji Ports Corporation Limited (“the Holding Company”) and its subsidiary (collectively “the Group”) have made a resolution that declared: a) in the Directors’ opinion, the financial statements and notes of the Holding Company and the Group for the financial year ended 31 December 2018: i) give a true and fair view of the financial position of the Holding Company and the Group as at 31 December 2018 and of the performance of the Holding Company and the Group for the year ended 31 December 2018. ii) have been made out in accordance with the Holding Company and the Group of Companies Act 2015. b) they have received declarations as required by section 395 of the Companies Act 2015. c) at the date of this declaration, in the Directors’ opinion, there are reasonable grounds to believe that the Holding Company and the Group will be able to pay its debts as and when they become due and payable.
For and on behalf of the Board of Directors and in accordance with a resolution of the Directors.

Dated this 22 day of March 2019.
............................................................. Director ............................................................. Director - 61 - Fiji Ports Corporation Limited and its Subsidiary – 2018 Annual Report Auditor’s Independence Declaration to the Directors of Fiji Ports Corporation Limited As lead auditor for the audit of Fiji Ports Corporation Limited (“the Holding Company”) and its subsidiary (collectively “the Group”) for the financial year ended 31 December 2018, i declare to the best of my knowledge and belief, there have been: a. no contraventions of the auditor independence requirements of the Companies Act 2015 in relation to the audit; and b. no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Fiji Ports Corporation Limited and the entities it controlled during the financial year.
Ernst & Young Chartered Accountants Sikeli Tuinamuana Partner suva, Fiji 2019 - 62 - 2018 Annual Report – Fiji Ports Corporation Limited and its Subsidiary Independent Auditor’s Report To the members of Fiji Ports Corporation Limited Report on the Audit of the Financial Statements Opinion We have audited the financial statements of Fiji Ports Corporation Limited (‘the Holding Company’) and its subsidiary (collectively ‘the Group’), which comprise the statement of financial position as at 31 December 2018, the statement of comprehensive income, the statement of changes in equity and the statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies.
in our opinion, the accompanying financial statements give a true and fair view of the financial position of the Holding Company and the Group as at 31 December 2018, and of its financial performance and its cash flows for the year then ended in accordance with international Financial reporting standards (iFrs).

Basis for Opinion We conducted our audit in accordance with international standards on Auditing (isA).
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the Audit of the Financial statements section of our report.
We are independent of the Holding Company and the Group in accordance with the international Ethics standards Board for Accountant’s Code of Ethics for Professional Accountants (iEsBA Code) together with the ethical requirements that are relevant to our audit of the financial statements in Fiji and we have fulfilled our other ethical responsibilities in accordance with these requirements and the iEsBA Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Responsibilities of the Directors and management for the Financial Statements The Directors and management are responsible for the preparation and fair presentation of the financial statements in accordance with iFrs, and for such internal control as the Directors and management determine is necessary to enable the preparation of the financial statements that are free from material misstatement, whether due to fraud or error.
in preparing the financial statements, the Directors and management are responsible for assessing the Holding Company’s and the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors and management either intend to liquidate the Holding Company and the Group or to cease operations, or have no realistic alternative but to do so.
The Directors and management are responsible for overseeing the Holding Company’s and the Group’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with isA will always detect a material misstatement when it exists.

Misstatements can arise from fraud and error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.
- 63 - Fiji Ports Corporation Limited and its Subsidiary – 2018 Annual Report Independent Auditor’s Report continued Auditor’s Responsibilities for the Audit of the Financial Statements continued As part of an audit in accordance with isAs, we exercise professional judgement and maintain professional skepticism throughout the audit.
We also: ▪ identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.
The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
▪ Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Holding Company’s and the Group’s internal control.

▪ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Directors and management.
▪ Conclude on the appropriateness of the Directors’ and management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Holding Company’s and the Group’s ability to continue as a going concern.
if we conclude that material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures, are inadequate, to modify our opinion.

Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report.
However, future events or conditions may cause the Holding Company and the Group to cease to continue as a going concerns; and ▪ Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with the Directors and management regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide the Directors and management with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
- 64 - 2018 Annual Report – Fiji Ports Corporation Limited and its Subsidiary Independent Auditor’s Report continued report on Other Legal and regulatory requirements in our opinion, the consolidated financial statements have been prepared in accordance with the requirements of the Companies Act 2015 in all material respects, and; a. we have been given all information, explanations and assistance necessary for the conduct of the audit; and b. the Holding Company and the Group has kept financial records sufficient to enable the financial statements to be prepared and audited.
Ernst & Young Chartered Accountants Sikeli Tuinamuana Partner suva, Fiji 2019 - 65 - Fiji Ports Corporation Limited and its Subsidiary – 2018 Annual Report Consolidated statement of Comprehensive income For the Year ended 31 December 2018 Operating revenue Other revenue Total income Depreciation Employee benefit expenses Property expenses Marine service charges Operating expenses Total expenses Profit from operations Finance income Finance costs share of profit in associate Profit before income tax income tax expense Net profit for the year Notes 2(a) 2(b) 3(a) 3(b) 3(c) 3(d) 3(e) 3(f) 20 Group Company 2018 $ 2017* $ 2018 $ 2017* $ 55,816,679 4,604,877 56,636,254 1,544,524 49,585,436 9,970,912 50,364,086 7,241,320 60,421,556 58,180,778 59,556,348 57,605,406 (6,379,223) (8,031,031) (2,899,713) (9,001,745) (7,428,165) (33,739,877) (6,721,754) (7,478,817) (2,191,418) (9,184,981) (7,326,743) (32,903,713) (5,762,259) (5,896,476) (2,899,713) (9,001,745) (5,321,847) (28,882,040) (6,093,058) (5,271,693) (2,191,418) (9,184,981) (5,081,648) (27,822,798) 26,681,679 25,277,065 30,674,308 29,782,608 1,762,243 (2,247) 5,325,415 531,129 (1,902) 5,817,890 1,762,891 (2,247) - 546,662 (1,902) - 33,767,090 31,624,182 32,434,952 30,327,368 4 (5,725,731) (5,278,875) (5,369,473) (4,949,859) 28,041,359 26,345,307 27,065,479 25,377,509 Total comprehensive income for the year, net of tax 28,041,359 26,345,307 27,065,479 25,377,509 * Certain amounts shown here do not correspond to the 2017 financial statements and reflect adjustments made as described in note 28.
The accompanying notes form an integral part of this Statement of Comprehensive Income.
- 66 - 2018 Annual Report – Fiji Ports Corporation Limited and its Subsidiary Consolidated statement of Changes in Equity For the Year ended 31 December 2018 Share capital As at 1 January At 31 December Retained earnings As at 1 January Operating profit after income tax Dividends At 31 December Notes Group 2018 $ 2017* $ Company 2018 $ 2017* $ 18(a) 73,154,852 73,154,852 73,154,852 73,154,852 73,154,852 73,154,852 73,154,852 73,154,852 18(b) 44,309,365 28,041,359 (15,226,505) 57,124,219 34,046,256 26,345,307 (16,082,198) 44,309,365 39,301,063 27,065,479 (15,226,505) 51,140,037 30,005,752 25,377,509 (16,082,198) 39,301,063 Total shareholders’ equity 130,279,071 117,464,217 124,294,889 112,455,915 * Certain amounts shown here do not correspond to the 2017 financial statements and reflect adjustments made as described in note 28.
The accompanying notes form an integral part of this Statement of Changes in Equity.
- 67 - Fiji Ports Corporation Limited and its Subsidiary – 2018 Annual Report Consolidated statement of Financial Position As at 31 December 2018 Assets Current assets Cash and cash equivalents Trade and other receivables Financial assets inventories Other assets Loan to subsidiary Loan to associate company income tax asset Total current assets Non-current assets Trade and other receivables Property, plant and equipment intangible asset right of use asset investment property Loan to subsidiary Loan to associate company investment in subsidiary investment in associate company Deferred tax assets Total non-current assets Total assets Liabilities and equity Current liabilities Trade and other payables Lease liability Provisions Employee benefit liability income tax liability Total current liabilities Non-current liabilities Deferred income Lease liability Employee benefit liability Total non-current liabilities Total liabilities Net assets Shareholders’ equity share capital retained earnings Notes Group 2018 $ 2017* $ Company 2018 $ 2017* $ 16 5 6 7 8 19(e) 19(f) 5 9 11 10 12 19(e) 19(f) 20 4 13 17 14 15 24 17 15 23,408,479 4,434,032 37,000,000 1,422,285 1,804,923 - - 21,910 68,091,629 6,769,883 55,068,961 631 44,624 20,396 - - - 12,042,619 7,730,364 81,677,478 27,464,203 3,873,049 22,000,000 1,543,393 1,088,895 - 405,906 435,647 56,811,093 - 62,900,388 1,992 64,582 44,854 - 1,165,105 - 11,795,602 6,143,452 82,115,975 20,498,183 3,268,870 36,000,000 1,235,589 1,150,570 125,076 - 21,910 62,300,198 6,769,883 48,722,216 - 44,624 20,396 974,577 - 6,660,000 8,950,230 7,597,674 79,739,600 24,138,004 2,536,003 21,000,000 1,366,081 946,691 120,190 405,906 384,936 50,897,811 - 57,325,684 - 64,582 44,854 1,099,642 1,165,105 6,660,000 8,950,230 6,034,555 81,344,652 149,769,107 138,927,068 142,039,798 132,242,463 4,302,554 19,233 3,294,028 886,386 6,934 8,509,135 7,080,134 18,480 2,485,758 762,991 - 10,347,363 3,594,939 19,233 3,294,028 782,633 - 7,690,833 6,441,587 18,480 2,485,758 671,334 - 9,617,159 10,523,246 26,868 430,787 10,980,901 10,747,543 46,102 321,843 11,115,488 9,619,316 26,868 407,892 10,054,076 9,824,346 46,102 298,941 10,169,389 19,490,036 21,462,851 17,744,909 19,786,548 130,279,071 117,464,217 124,294,889 112,455,915 18(a) 73,154,852 57,124,219 73,154,852 44,309,365 73,154,852 51,140,037 73,154,852 39,301,063 Total shareholders’ equity 130,279,071 117,464,217 124,294,889 112,455,915 * Certain amounts shown here do not correspond to the 2017 financial statements and reflect adjustments made as described in note 28.
The accompanying notes form an integral part of this Statement of Financial Position.
- 68 - 2018 Annual Report – Fiji Ports Corporation Limited and its Subsidiary Consolidated statement of Cash Flows For the Year ended 31 December 2018 Notes Group 2018 $ 2017* $ Company 2018 $ 2017* $ 57,217,341 (27,815,437) (2,247) 958,284 (7,292,987) 401,014 - 23,465,968 57,231,557 (23,641,592) (1,902) 481,163 (6,016,239) 81,043 - 28,134,030 50,490,935 (23,137,314) (2,247) 987,890 (6,922,111) 352,546 5,682,753 27,452,452 51,336,734 (19,679,918) (1,902) 515,473 (5,610,230) - 6,058,799 32,618,956 Operating Activities receipts from customers Payments to suppliers and employees interest paid interest received income tax paid income tax refund Dividend income received Net cash provided by Operating Activities Investing Activities Acquisition of property, plant and equipment Proceeds from sale of property, plant and equipment Placement of Term deposits redemption of Term deposits Dividend from investment in associate Proceeds from repayment of borrowings by related parties Net cash (used in) Investing Activities (3,620,858) 1,767,583 (23,000,000) 8,000,000 5,078,398 1,669,072 (10,105,805) (2,133,279) 55,963 (15,000,000) 3,000,000 5,547,019 390,018 (8,140,279) (2,233,220) 1,767,583 (22,000,000) 7,000,000 - 1,789,251 (13,676,386) (1,697,841) 55,963 (14,000,000) 2,000,000 - 505,492 (13,136,386) Financing Activities Payment of special and final dividends repayment of lease on right of use asset Net cash (used in) Financing Activities 18 (b) (17,397,407) (18,480) (17,415,887) (16,470,918) (11,916) (16,482,834) (17,397,407) (18,480) (17,415,887) (16,470,918) (11,916) (16,482,834) Net increase/(decrease) in cash and cash equivalents (4,055,724) 3,510,917 (3,639,821) 2,999,736 Cash and cash equivalents at the beginning of the year 27,464,203 23,953,286 24,138,004 21,138,268 Cash and cash equivalents at the end of the year 16 23,408,479 27,464,203 20,498,183 24,138,004 * Certain amounts shown here do not correspond to the 2017 financial statements and reflect adjustments made as described in note 28.
The accompanying notes form an integral part of this Statement of Cash Flows.

- 69 - Fiji Ports Corporation Limited and its Subsidiary – 2018 Annual Report Notes to the Consolidated Financial statements For the Year ended 31 December 2018 1.0 Corporate Information Fiji Ports Corporation Limited was incorporated under the Fiji Companies Act and is domiciled in Fiji.
Until 12 November 2015, Fiji Ports Corporation Limited was a Government owned entity incorporated as a Government Commercial Company under the Public Enterprises Act of 1996.

The Minister for Public Enterprises, via a gazette on 13 November 2015, declared Fiji Ports Corporation Limited (“the Holding Company”) and Fiji ships and Heavy industries Limited (collectively “the Group”) a re-organisation Enterprise under the Public Enterprise Act 1996.
This facilitated the changes under the privatisation and divestment initiative of the Government.

The registered office of the Holding Company is located at Muaiwalu House, Walu Bay.

The principal place of business is suva Kings Wharf, Port of suva, Fiji.

The consolidated financial statements of the Holding Company and the Group for the year ended 31 December 2018 were authorised for issue in accordance with a resolution of the Directors on 22 March 2019.
1.1 Basis of preparation The consolidated financial statements of the Group have been drawn up in accordance with the provisions of the international Financial reporting standards (“iFrs”) as issued by the international Accounting standards Board (“iAsB”).

The consolidated financial statements have been prepared primarily on the basis of historical costs and except where specifically stated, do not take into account current valuations of non-current assets.
The consolidated financial statements provide comparative information in respect of the previous financial year.

Where necessary, comparative information has been reclassified to achieve consistency in disclosure with the current financial year amounts and other disclosures.
in addition, the Group presents an additional statement of financial position at the beginning of the preceding period when there is a retrospective application of an accounting policy, a retrospective restatement, or a reclassification of items in financial statements.

The accounting policies have been consistently applied, and except where there is a change in accounting policy, are consistent with those of the previous year.
1.2 Principles of consolidation The Group financial statements consolidate the financial statements of the Holding Company and its subsidiary and are drawn up to 31 December 2018.

Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.
specifically, the Group controls an investee if, and only if, the Group has: - Power over the investee (i.e., existing rights that give it the current ability to direct the relevant activities of the investee) - Exposure, or rights, to variable returns from its involvement with the investee - The ability to use its power over the investee to affect its returns Generally, there is a presumption that a majority of voting rights results in control.
To support this presumption and when the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including: - The contractual arrangement(s) with the other vote holders of the investee - rights arising from other contractual arrangements - The Group’s voting rights and potential voting rights The Group reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control.
Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary.

Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated financial statements from the date the Group gains control until the date the Group ceases to control the subsidiary.
Profit or loss and each component of Other Comprehensive income (OCi) are attributed to the equity holders of the parent of the Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance.

When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with the Group’s accounting policies.
All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.

A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction.
if the Group loses control over a subsidiary, it derecognises the related assets (including goodwill), liabilities, non- controlling interest and other components of equity, while any resultant gain or loss is recognised in profit or loss.

Any investment retained is recognised at fair value.
- 70 - 2018 Annual Report – Fiji Ports Corporation Limited and its Subsidiary Notes to the Consolidated Financial statements (Cont’d) For the Year ended 31 December 2018 1.2 Principles of consolidation continued The financial statements of the subsidiary are prepared for the same reporting year as the parent company, using consistent accounting policies.

From 1 August 2013, Fiji Ports Terminal Limited was assessed to be an associate company and is accounted for using equity accounting.
1.3 Significant accounting judgments, estimates and assumptions The preparation of the Holding Company’s and the Group’s financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenue, expenses, assets and liabilities, and the disclosure of contingent liabilities at the reporting date.
However, uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amount of the asset or liability affected in the future.
Judgments in the process of applying the Holding Company’s and the Group’s accounting policies, management has made the following judgment, apart from those involving estimations, which has the most significant effect on the amounts recognised in the financial statements: Estimations and assumptions The key assumptions concerning the future and other key sources of estimation uncertainty at the balance date, that have a significant risk of causing a material adjustments to the carrying amount of assets and liabilities within the next financial year.
Impairment of non-financial assets The Holding Company and the Group assesses whether there are any indicators of impairment for all non-financial assets at each reporting date.

Non-financial assets are tested for impairment when there are indicators that the carrying amounts may not be recoverable.

Provision for expected credit losses (ECL) of trade receivables The Holding Company and the Group uses a provision matrix to calculate ECLs for trade receivables.
The provision rates are based on days past due for groupings of various customer segments that have similar loss patterns (i.e., by geography, product type, customer type and rating).

The provision matrix is initially based on the Holding Company and the Group’s historical observed default rates.

The Holding Company and the Group will calibrate the matrix to adjust the historical credit loss experience with forward- looking information.
At every reporting date, the historical observed default rates are updated and changes in the forward- looking estimates are analysed.

The assessment of the correlation between historical observed default rates, forecast economic conditions and ECLs is a significant estimate.

The amount of ECLs is sensitive to changes in circumstances and of forecast economic conditions.
The Holding Company and the Group’s historical credit loss experience and forecast of economic conditions may also not be representative of customer’s actual default in the future.

The information about the ECLs on the Group’s trade receivables is disclosed in Note 5.

Performance obligations The performance obligation from provision of port related services, which are detailed in note 2(a), is satisfied upon provision of these services and payment is generally due within 30 to 90 days from delivery.
in the event of sale of assets, performance obligation is satisfied when the buyer obtains control of the asset.

Methods, inputs and assumptions used in allocating transaction price to performance obligation is determined after considering factors identified in note 1.4(z).

1.4 Summary of significant accounting policies (a) Functional and presentation currency These financial statements are presented in Fiji dollars (“FJD”), which is the Holding Company’s and the Group’s functional currency.
Except as indicated, financial information presented in FJD has been rounded to the nearest dollar.

(b) Foreign currencies Transactions in foreign currencies are initially recorded at the functional currency rate ruling at the date of the transaction.

Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency rate of exchange ruling at the balance date.

All differences are taken to the statement of comprehensive income.
Non monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the date of the initial transaction.

Non monetary items measured at fair value in a foreign currency are translated using the exchange rates when the fair value is determined.
- 71 - Fiji Ports Corporation Limited and its Subsidiary – 2018 Annual Report Notes to the Consolidated Financial statements (Cont’d) For the Year ended 31 December 2018 1.4 Summary of significant accounting policies continued (c) Revenue recognition income comprising sales revenue from providing port services and managing port infrastructure is brought to account on an accrual basis as services are provided.

Details of revenue recognition criteria is outlined in note 1.4(z).
The following specific recognition criteria must also be met for the subsidiary (Fiji ships and Heavy industries Limited) before revenue is recognised: slipway charges some slipping charges are received in advance.

The revenue is recognised in the statement of comprehensive income when the vessels actually come on the slipway.

ship repair charges revenue is recognised when work on the vessel has been performed.

Billing is performed/done upon completion of work on stages.
(d) Expense recognition All expenses are recognised in the statement of comprehensive income on an accrual basis.

(e) Property, plant and equipment Property, plant and equipment is stated at cost less accumulated depreciation and accumulated impairment losses.

such costs includes the cost of replacing part of the plant and equipment when that cost is incurred, if the recognition criteria is met.
Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied.

All other repair and maintenance costs are recognised in the statement of comprehensive income as incurred.
Depreciation is calculated on a straight line basis over the useful life of the asset as follows: Wharves Buildings Motor vehicles and motorised equipment Plant and equipment Office equipment Furniture and fittings 5%-20% 5%-20% 10% - 33% 10% - 33% 10% - 33% 10% - 33% An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal.
Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in statement of comprehensive income in the year the asset is derecognised.

The asset’s residual values, useful lives and methods of depreciation are reviewed, and adjusted if appropriate, at each financial year end.
(f) Impairment of non-financial assets The Holding Company and the Group assesses at each reporting date whether there is an indication that an asset may be impaired.

if any such indication exists, or when annual impairment testing for an asset is required, the Holding Company and the Group estimates the asset’s recoverable amount.
An asset’s recoverable amount is the higher of an asset’s or cash- generating unit’s fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets.

When the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
in assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

in determining fair value less costs to sell, an appropriate value model is used.

For assets, an assignment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased.
if such indication exists, the Holding Company and the Group makes an estimate of recoverable amount.

A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised.

if that is the case the carrying amount of the asset is increased to its recoverable amount.
The increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years.

such a reversal is recognised in the statement of comprehensive income.
- 72 - 2018 Annual Report – Fiji Ports Corporation Limited and its Subsidiary Notes to the Consolidated Financial statements (Cont’d) For the Year ended 31 December 2018 1.4 Summary of significant accounting policies continued (g) Taxes Current income tax Current income tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities.
The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the balance date.

Current income tax relating to items recognised directly in equity is recognised in equity and not in the statement of comprehensive income.

Deferred income tax Deferred income tax is provided, using the liability method, on all temporary differences at the balance date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences: - where the deferred income tax liability arises from goodwill amortisation or the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and - in respect of taxable temporary differences associated with investments in subsidiaries, associates and interest in joint ventures, except where the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised except: - where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that it is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and - in respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.
The carrying amount of deferred income tax assets is reviewed at each balance date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.

Unrecognised deferred income tax assets are reassessed at each balance date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance date.

Deferred income tax relating to items recognised directly in equity is recognised in equity and not in the statement of comprehensive income.
Deferred income tax assets and deferred income tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current income tax liabilities and the deferred income taxes related to the same taxable entity and the same taxation authority.
Value Added Tax revenue, expenses and assets are recognised net of the amount of Value Added Tax (VAT) except: - where the VAT incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case the VAT is recognised as part of the acquisition of the asset or as part of the expense item as applicable; and - receivables and payables are stated with the amount of VAT included.
The net amount of VAT recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the statement of financial position.

(h) Cash and cash equivalents Cash and cash equivalents comprises of cash at bank and in hand and short term deposits with an original maturity of three months or less.

For the purposes of the statement of cash flows, cash and cash equivalents consist of cash and cash equivalents as defined above.
- 73 - Fiji Ports Corporation Limited and its Subsidiary – 2018 Annual Report Notes to the Consolidated Financial statements (Cont’d) For the Year ended 31 December 2018 1.4 Summary of significant accounting policies continued (i) Financial assets Initial recognition and measurement Financial assets within the scope of iFrs 9 are classified, at initial recognition, as subsequently measured at amortised cost, fair value through other comprehensive income and fair value through profit and loss.
The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics and the Holding Company and the Group’s business model for managing them.
With the exception of trade receivables that do not contain a significant financing component or for which the Holding Company and the Group has applied the practical expedient, the Holding Company and the Group initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs.
Trade receivables that do not contain a significant financing component or for which the Group has applied the practical expedient are measured at the transaction price determined under iFrs 15. in order for a financial asset to be classified and measured at amortised cost, it needs to give rise to cash flows that are ‘solely payments of principal and interest (sPPi)’ on the principal amount outstanding.

This assessment is referred to as the sPPi test and is performed at an instrument level.
The Holding Company and the Group’s business model for managing financial assets refers to how it manages its financial assets in order to generate cash flows.

The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both.
Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e., the date that the Holding Company and the Group commits to purchase or sell the asset.

Subsequent measurement Financial assets at amortised cost This category is the most relevant to the Holding Company and the Group.
The Holding Company and the Group measures financial assets at amortised cost if both of the following conditions are met: - The financial asset is held within a business model with the objective to hold financial assets in order to collect contractual cash flows; and - The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Financial assets at amortised cost are subsequently measured using the effective interest rate (Eir) method and are subject to impairment.

Gains and losses are recognised in profit or loss when the asset is derecognised, modified or impaired.

The Holding Company and the Group’s financial assets at amortised cost includes trade receivables, and loan to subsidiary and associate companies.
Derecognition A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised when: - The rights to receive cash flows from the asset have expired or - The Holding Company and the Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a) the Group and the Holding Company has transferred substantially all the risks and rewards of the asset, or (b) the Holding Company and the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset When the Holding Company and the Group has transferred its rights to receive cash flows from an asset or has entered into a pass- through arrangement, it evaluates if, and to what extent, it has retained the risks and rewards of ownership.
When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Holding Company and the Group continues to recognise the transferred asset to the extent of its continuing involvement.

in that case, the Holding Company and the Group also recognises an associated liability.
The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Holding Company and the Group has retained.
Impairment of financial assets Further disclosures relating to impairment of financial assets are also provided in the following notes: - Disclosures for significant assumptions (note 1.3) - 74 - 2018 Annual Report – Fiji Ports Corporation Limited and its Subsidiary Notes to the Consolidated Financial statements (Cont’d) For the Year ended 31 December 2018 1.4 Summary of significant accounting policies continued (i) Financial assets continued Impairment of financial assets continued The Holding Company and the Group recognises an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through profit or loss.
ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Holding Company and the Group expects to receive, discounted at an approximation of the original effective interest rate.

The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.

ECLs are recognised in two stages.


For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL).
For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).

For trade receivables and contract assets, the Holding Company and the Group applies a simplified approach in calculating ECLs.
Therefore, the Holding Company and the Group does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date.

The Holding Company and the Group has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment.

(j) Inventories inventories are measured at the lower of cost and net realisable value.
The cost of inventories is based on the first-in-first- out principle.

The cost of the inventories includes expenditure incurred in acquiring the inventories and bringing them to their existing location and condition.

(k) Trade and other receivables Trade receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market.

Trade receivables are initially recognised at original invoice (inclusive of VAT where applicable).
(l) Other assets Other assets include insurance and other prepayments, Energy Fiji Limited and other deposits, and VAT receivable.

(m) Investment property investment property is stated at cost less depreciation and impairment losses.

When an item of property, plant and equipment becomes an investment property following a change in its use, any difference arising at the date of transfer between the carrying amount of the item and its fair value is recognised directly in equity if it is gain.
Upon disposal of the item, the gain is transferred to retained earnings.

Any loss is recognised in the statement of comprehensive income immediately.

(n) Intangible assets intangible assets acquired separately are measured on initial recognition at cost.

Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses.
internally generated intangible assets, excluding capitalised development costs, are not capitalised and expenditure is reflected in statement of comprehensive income in the year in which the expenditure is incurred.

The useful lives of intangible assets for the Holding Company and the Group are assessed to be finite.

intangible assets with finite lives are amortised over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired.
The amortisation period and the amortisation method for an intangible asset with a finite useful life is renewed at least at each financial year end.

Changes in the expected useful life or expected pattern of consumption in future economic benefits embodied in the asset is accounted for by changing the amortisation period or method, as appropriate, and are treated as changes in accounting estimates.
The amortisation expense on intangible assets with finite lives is recognised in the statement of comprehensive income in the expense category consistent with the function of the intangible assets.

Gains or losses arising from the derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the statement of comprehensive income when the asset is derecognised.
- 75 - Fiji Ports Corporation Limited and its Subsidiary – 2018 Annual Report Notes to the Consolidated Financial statements (Cont’d) For the Year ended 31 December 2018 1.4 Summary of significant accounting policies continued (o) Trade and other payables Liabilities for trade payables and other amounts are carried at cost (inclusive of VAT where applicable) which is the fair value of the consideration to be paid in the future for goods and services received whether or not billed to the entity.
Amounts payable that have been denominated in foreign currencies have been translated to local currency using the rates of exchange ruling at the end of the financial year.

(p) Employee entitlements Provisions are made for wages and salaries, incentive payments, annual and long service leave estimated to be payable to employees at balance date on the basis of statutory and contractual requirements.
(q) Deferred income An unconditional grant related to assets is recognised in statement of comprehensive income as other income when the grant becomes receivable.

Other grants are recognised initially as deferred income at fair value when there is reasonable assurance that they will be received and the Group will comply with the conditions associated with the grant and are then recognised in the statement of comprehensive income as other income on a systematic basis over the useful life of the asset.
Grants that compensate the Group for expenses incurred are recognised in the statement of comprehensive income on a systematic basis in the same periods in which the expenses are recognised.
(r) Provisions Provisions are recognised when the Holding Company and the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and reliable estimate can be made of the amount of the obligation.
Where the Holding Company and the Group expects a provision to be reimbursed, the reimbursement is recognised as a separate asset but only when reimbursement is virtually certain.

if the effect of time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.
Where discounting is used, the increase in the provision due to the passage of time is recognised as an interest expense.

(s) Financial liabilities Initial recognition and measurement Financial liabilities within the scope of iFrs 9 are classified at initial recognition, as loans and borrowings or payables, as appropriate.

All financial liabilities are recognised initially at net of directly attributable transaction costs.
The Group’s financial liabilities include trade and other payables and loans and borrowings.

Subsequent measurement The measurement of financial liabilities is described below: Loans and borrowings This is the category most relevant to the Group.

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the Effective interest rate (Eir) method.
Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the Eir amortisation process.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the Eir.

The Eir amortisation is included as finance costs in the statement of profit or loss.
(t) Dividend distribution Dividends are recorded in the Holding Company’s and the Group’s financial statements in the year in which they are paid.

Dividends paid during the year are subject to the provisions of the Fiji income Tax Act 2015.

(u) Leased assets Previously, the Company determined at contract inception whether an arrangement is or contains a lease.

Under iFrs 16, the Company assesses whether a contract is or contains lease based on definition of a lease.
A contract is, or contains, a lease if it conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

Control is conveyed where the customer has both the right to direct the identified asset’s use and to obtain substantially all the economic benefits from that use.
- 76 - 2018 Annual Report – Fiji Ports Corporation Limited and its Subsidiary Notes to the Consolidated Financial statements (Cont’d) For the Year ended 31 December 2018 1.4 Summary of significant accounting policies continued (u) Leased assets continued Holding Company and the Group as a lessee Leases classified as operating leases Under iFrs 16, the Company recognises right-of-use assets and lease liabilities i.e.

these leases are on-balance sheet.


rights-of-use assets are measured at either: - their carrying amounts as if iFrs 16 had been applied since the commencements date, discounted using lessee’s incremental borrowing rate at the date of initial application; or - an amount equal to the lease liability, adjusted by the amount of prepaid or accrued lease payments.

The Company applied the second approach.
The Company used the following practical expedients when applying iFrs 16 to lease previously classified as operating leases under iAs 17: - applied a single discount rate to a portfolio of leases with similar characteristics; - adjusted the right-of-use assets by the amount of onerous contract provision immediately before the date of initial application, as an alternative to an impairment review; - applied the exemption not to recognise the right-of-use assets and liabilities for leases with less than 12 months of lease term; - excluded initial direct costs from measuring the right-of-use asset at the date of initial application; and - used hindsight when determining the lease term if the contract contains options to extend or terminate the lease.
Leases previously classified as finance leases For leases that were classified as finance leases under iAs 17, the carrying amount of the right-of-use asset and the lease liability at 1 July 2017 are determined at the carrying amount of the lease asset and lease liability under iAs 17 immediately before that date.

The Company had no finance leases under iAs 17.


Holding Company and the Group as a lessor The Holding Company and the Group as a lessor classifies each lease as an operating lease or a finance lease.

A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership of an underlying asset.

Otherwise a lease is classified as an operating lease.
Upon lease commencement, the Company recognises assets held under a finance lease as a receivable at an amount equal to the net investment in the lease.

The Company recognises finance income over the lease term of a finance lease, based on a pattern reflecting a constant periodic rate of return on the net investment.

For leases classified as operating lease, the Company was not required to make any adjustments on transition to iFrs 16, except for a sub-lease.
The Company had accounted for its leases in accordance with iFrs 16 from date of initial application.

(v) Comparative figures Where necessary, comparative information has been re-classified to achieve consistency in disclosure with current financial year amounts.

(w) Segment information A business segment is a group of assets and operations engaged in providing products or services that are subject to risks and returns that are different from those of other business segments.
A geographical segment is engaged in providing products and services within a particular economic environment that are subject to risks and returns that are different from those of segments operating in other economic environment.

(a) industry segment The Holding Company and the Group operates predominantly in the shipping industry.

(b) Geographical segment The Holding Company and the Group operates predominantly in Fiji and has therefore one geographical area for reporting purposes.
- 77 - Fiji Ports Corporation Limited and its Subsidiary – 2018 Annual Report Notes to the Consolidated Financial statements (Cont’d) For the Year ended 31 December 2018 1.4 Summary of significant accounting policies continued (x) Investment in associates An associate is an entity over which the Group has significant influence.

significant influence is the power to participate in the financial and operating policy decisions of the investee, but is not control or joint control over those policies.
The considerations made in determining significant influence are similar to those necessary to determine control over subsidiaries.

The Group’s investment in its associate are accounted for using the equity method.

Under the equity method, the investment in an associate is initially recognised at cost.

The carrying amount of the investment is adjusted to recognise changes in the Group’s share of net assets of the associate since the acquisition date.
Goodwill relating to the associate is included in the carrying amount of the investment and is not tested for impairment separately.

The statement of profit or loss reflects the Group’s share of the results of operations of the associate.

Any change in OCi of those investees is presented as part of the Group’s OCi.
in addition, when there has been a change recognised directly in the equity of the associate, the Group recognises its share of any changes, when applicable, in the statement of changes in equity.

Unrealised gains and losses resulting from transactions between the Group and the associate are eliminated to the extent of the interest in the associate.
The aggregate of the Group’s share of profit or loss of an associate is shown on the face of the statement of profit or loss outside operating profit and represents profit or loss after tax and non-controlling interests in the subsidiaries of the associate.

The financial statements of the associate are prepared for the same reporting period as the Group.

When necessary, adjustments are made to bring the accounting policies in line with those of the Group.
After application of the equity method, the Group determines whether it is necessary to recognise an impairment loss on its investment in its associate.

At each reporting date, the Group determines whether there is objective evidence that the investment in the associate is impaired.
if there is such evidence, the Group calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value, and then recognises the loss within ‘share of profit in associate’ in the statement of profit or loss.

Upon loss of significant influence over the associate, the Group measures and recognises any retained investment at its fair value.
Any difference between the carrying amount of the associate upon loss of significant influence and the fair value of the retained investment and proceeds from disposal is recognised in profit or loss.

(y) Current versus non-current classification The Group presents assets and liabilities in the statement of financial position based on current/non-current classification.
An asset is current when it is: - Expected to be realised or intended to be sold or consumed in the normal operating cycle; - Held primarily for the purpose of trading; - Expected to be realised within twelve months after the reporting period; or - Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

All other assets are classified as non-current.


A liability is current when: - - - it is expected to be settled in the normal operating cycle; it is held primarily for the purpose of trading; it is due to be settled within twelve months after the reporting period; or - There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.

The Group classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.

(z) Revenue from contracts with customers The Group is in the business of providing and managing the port infrastructure and services within declared ports, as well as provision of ship repair and slipway services.
revenue from contracts with customers is recognised when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Group expects to be entitled in exchange for those goods or services.

The Group has generally concluded that it is the principal in its revenue arrangement because it typically controls the goods or services before transferring them to the customer.
sale of equipment revenue from sale of equipment is recognised at the point in time when control of the asset is transferred to the customer, generally on delivery of the equipment.

The normal credit term is 30 to 90 days upon delivery.
- 78 - 2018 Annual Report – Fiji Ports Corporation Limited and its Subsidiary Notes to the Consolidated Financial statements (Cont’d) For the Year ended 31 December 2018 1.4 Summary of significant accounting policies continued (z) Revenue from contracts with customers continued The Group considers whether there are other promises in the contract that are separate performance obligations to which a portion of the transaction price needs to be allocated (e.g., warranties, customer loyalty points).
in determining the transaction price for the sale of equipment, the Group considers the effects of variable consideration, the existence of significant financing components, non-cash consideration, and consideration payable to the customer (if any).
iFrs 15 requires that an entity considers the effects of all of the following in determining the transaction price: - Variable consideration - Constraining estimates of variable consideration - The existence of a significant financing component in the contract - Non-cash consideration - Consideration payable to a customer The Group did not incur any consideration payable to a customer.

Consideration payable to a customer includes cash amounts that an entity pays, or expects to pay, to the customer.
The consideration payable to a customer is accounted for as a reduction of the transaction price unless the payment to the customer is in exchange for a distinct good or service that the customer transfers to the entity.
(aa) Offsetting of financial instruments Financial assets and financial liabilities are offset and the net amount is reported in the consolidated statement of financial position if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
1.5 Changes in accounting policies and disclosures New and amended standards and interpretations The Holding Company and the Group applied iFrs 15, iFrs 9 and iFrs 16 for the first time.

The nature and effect of the changes as a result of adoption of these new accounting standards are described below.

The Holding Company and the Group early adopted iFrs 16.
IFRS 15 Revenue from Contracts with Customers iFrs 15 supersedes iAs 11 Construction Contracts, iAs 18 revenue and related interpretations and it applies, with limited exceptions, to all revenue arising from contracts with its customers.
iFrs 15 establishes a five-step model to account for revenue arising from contracts with customers and requires that revenue be recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer.

iFrs 15 requires entities to exercise judgement, taking into consideration all of the relevant facts and circumstances when applying each step of the model to contracts with their customers.
The standard also specifies the accounting for the incremental costs of obtaining a contract and the costs directly related to fulfilling a contract.

in addition, the standard requires extensive disclosures.

The Holding Company and the Group adopted iFrs 15 using the full retrospective method of adoption.

Based on the Company’s assessment, the Company is not impacted by the application of iFrs 15 as there are no complex revenue contracts maintained.
IFRS 9 Financial Instruments iFrs 9 Financial instruments replaces iAs 39 Financial instruments: recognition and Measurement for annual periods beginning on or after 1 January 2018, bringing together all three aspects of the accounting for financial instruments: classification and measurement; impairment; and hedge accounting.
With the exception of hedge accounting, which the Group applied prospectively, the Group has applied iFrs 9 retrospectively, with the initial application date of 1 January 2018 and adjusting the comparative information for the period beginning 1 January 2017.

The nature of these adjustments are described below: (a) Classification and measurement Under iFrs 9, debt instruments are subsequently measured at fair value through profit or loss, amortised cost, or fair value through OCi.
The classification is based on two criteria: the Group’s business model for managing the assets; and whether the instruments’ contractual cash flows represent ‘solely payments of principal and interest’ on the principal amount outstanding.

The assessment of the Group’s business model was made as of the date of initial application, 1 January 2018, and then applied retrospectively to those financial assets that were not derecognised before 1 January 2018.
The assessment of whether contractual cash flows on debt instruments are solely comprised of principal and interest was made based on the facts and circumstances as at the initial recognition of the assets.
- 79 - Fiji Ports Corporation Limited and its Subsidiary – 2018 Annual Report Notes to the Consolidated Financial statements (Cont’d) For the Year ended 31 December 2018 1.5 Changes in accounting policies and disclosures continued New and amended standards and interpretations continued IFRS 9 Financial Instruments continued The classification and measurement requirements of iFrs 9 did not have a significant impact on the Group.
The Group continued measuring at fair value all financial assets previously held at fair value under iAs 39.

(b) Impairment The adoption of iFrs 9 has fundamentally changed the Group’s accounting for impairment losses for financial assets by replacing iAs 39’s incurred loss approach with a forward-looking expected credit loss (ECL) approach.

iFrs 9 requires the Group to recognise an allowance for ECLs for all debt instruments not held at fair value through profit or loss and contract assets.
The adoption of iFrs 9 has had an immaterial impact on the Group’s financial assets and liabilities.
The following table shows clasisfication of financial assets under iAs 39 to the new classification required under iFrs 9 on 1 January 2017: Financial assets Cash and cash equivalents Trade and other receivables Held-to-maturity investments Financial liabilities Note 15 5 6 Original classification under iAs 39 New classification under iFrs 9 Loans and receivables Loans and receivables Term deposits Amortised cost Amortised cost Amortised cost Trade and other payables 13 Other financial liabilities Other financial liabilities IFRS 16 Leases iFrs 16 was issued in January 2016 and it replaces iAs 17 Leases, iFriC 4 Determining whether an Arrangement contains a Lease, siC- 15 Operating Leases-incentives and siC-27 Evaluating the substance of Transactions involving the Legal Form of a Lease.
iFrs 16 sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to account for all leases under a single on-balance sheet model similar to the accounting for finance leases under iAs 17.

On transition to iFrs 16, the Group recognised an additional $76,498 of right-of-use assets and lease liabilities.

When measuring lease liabilities, the Company discounted lease payments using its incremental borrowing rate at 1 January 2018.
The weighted average rate applied is 4%.
- 80 - 2018 Annual Report – Fiji Ports Corporation Limited and its Subsidiary Notes to the Consolidated Financial statements (Cont’d) For the Year ended 31 December 2018 Notes Group Company 2018 $ 2017 $ 2018 $ 2017 $ REVENUE 2 (a) Operating revenue Dockage Licence fees Marine services Other service income ship repair and heavy industries slipway Wharfage (b) Other revenue release of deferred income Dividend income Gain on sale of assets Management fees Doubtful debt recovered Other income rent income EXPENSES 3 (a) Employee benefit expenses Allowances Annual leave FNPF and FNU levy Fringe benefit tax Long service leave Medical expenses retirement benefit salaries and wages sick leave staff incentive pay staff welfare staff training (b) Property expenses Cleaning and sanitation Electricity Property rates repairs and maintenance Water Mini assets replacement cost (c) Marine service charges Tug/pilot/lines boat hire Dredging Linesman hire Pilotage service - external security hire 10,947,155 232,502 19,017,994 6,192,355 4,113,407 2,117,836 13,195,430 55,816,679 12,179,990 234,680 19,535,214 5,764,645 4,382,796 1,889,372 12,649,557 56,636,254 10,947,155 232,502 19,017,994 6,192,355 - - 13,195,430 49,585,436 12,179,990 234,680 19,535,214 5,764,645 - - 12,649,557 50,364,086 224,297 - 3,001,604 72,000 - 65,179 1,241,797 4,604,877 246,932 226,990 748,330 46,032 35,137 310,717 112,183 5,440,893 216,829 325,403 118,019 203,566 8,031,031 191,212 792,356 120,706 729,819 1,015,096 50,524 2,899,713 8,263,132 - 164,433 99,380 474,800 9,001,745 224,297 - - 72,000 95,214 44,055 1,108,958 1,544,524 223,106 226,016 687,203 66,054 54,541 305,074 101,550 5,160,825 137,862 299,551 75,962 141,073 7,478,817 163,353 803,208 102,415 567,296 522,686 32,460 2,191,418 7,645,332 (178) 182,774 880,363 476,690 9,184,981 205,030 5,682,753 3,001,604 72,000 - - 1,009,525 9,970,912 41,726 169,256 573,414 27,619 32,416 239,710 112,183 3,994,713 162,734 273,594 98,017 171,094 5,896,476 191,212 792,356 120,706 729,819 1,015,096 50,524 2,899,713
 8,263,132 - 164,433 99,380 474,800 9,001,745 205,030 6,058,799 - 72,000 - - 905,491 7,241,320 27,833 168,776 508,878 51,521 47,533 231,227 101,550 3,620,552 90,986 248,020 66,088 108,729 5,271,693 163,353 803,208 102,415 567,296 522,686 32,460 2,191,418 7,645,332 (178) 182,774 880,363 476,690 9,184,981 - 81 - Fiji Ports Corporation Limited and its Subsidiary – 2018 Annual Report Notes to the Consolidated Financial statements (Cont’d) For the Year ended 31 December 2018 Notes Group Company 2018 $ 2017 $ 2018 $ 2017 $ EXPENSES continued 3 (d) Operating expenses (e) (f) 4 Advertising and publicity expense Auditors’ remuneration Direct material cost Directors fees Doubtful debts insurance expense Loss on disposal of asset Professional legal fees repairs and maintenance - cranes repairs and maintenance - others Other expenses Finance income interest income on term deposits and inter-company loans Finance costs interest charges on borrowings INCOME TAX The major components of income tax expenses for the years ended 31 December 2018 and 2017 are: Operating profit before tax Prima facie tax thereon at 20% Under-provision from prior years Adjustment to statement of tax account restatement of deferred tax balances Tax effect of items treated as non-deductible difference income tax expense reported in the statement of comprehensive income Deferred tax assets reflected in the statement of financial position as follows: Deferred tax assets Net deferred tax assets at 31 December relates to the following: Deferred tax assets Doubtful debts Employee entitlements Legal claims Decelerated depreciation for tax purposes 106,447 91,282 804,353 60,500 120,561 1,587,103 - 139,089 1,151,606 626,069 2,741,155 7,428,165 126,677 55,395 826,389 66,916 666,763 1,423,811 80,975 45,110 1,401,483 556,934 2,076,290 7,326,743 95,608 58,492 - 60,500 39,322 1,442,386 - 123,057 1,151,606 181,114 2,169,762 5,321,847 89,707 47,745 - 66,916 404,405 1,285,295 80,975 33,940 1,401,483 177,199 1,493,983 5,081,648
 1,762,243 531,129 1,762,891 546,662 2,247 1,902 2,247 1,902 33,767,090 6,753,418 (5,265) 1,506 (30,082) (993,846) 31,624,182 6,324,836 42,566 - (89) (1,088,438) 32,434,952 6,486,990 (6,025) 622 (27,891) (1,084,223) 30,327,368 6,065,474 38,301 - - (1,153,916) 5,725,731 5,278,875 5,369,473 4,949,859 7,730,364 6,143,452 7,597,674 6,034,555 192,224 263,434 18,752 7,255,954 7,730,364 168,111 216,968 20,752 5,737,621 6,143,452 123,504 238,105 18,752 7,217,313 7,597,674 115,639 194,056 20,752 5,704,108 6,034,555 - 82 - 2018 Annual Report – Fiji Ports Corporation Limited and its Subsidiary Notes to the Consolidated Financial statements (Cont’d) For the Year ended 31 December 2018 Notes Group Company 2018 $ 2017 $ 2018 $ 2017 $ 5 TRADE AND OTHER RECEIVABLES Current Trade receivables Less: Provision for doubtful debts staff advances shore crane sale receivables Other receivables receivable from associate [note 19(d)] receivable from subsidiary [note 19(d)] Provision for doubtful on accrued income Non-Current shore crane sale receivables Total trade and other receivables 2,566,982 (725,042) 1,841,940 14,218 804,343 1,943,886 2,713 - (173,068) 4,434,032 3,228,932 (604,481) 2,624,451 274 - 1,259,508 161,884 - (173,068) 3,873,049 1,686,378 (554,512) 1,131,866 14,218 804,343 1,310,678 2,713 5,052 - 3,268,870 2,594,664 (515,191) 2,079,473 274 - 291,843 161,884 2,529 - 2,536,003 6,769,883 11,203,915 - 3,873,049 6,769,883 10,038,753 - 2,536,003 For terms and condition relating to related party receivables, refer to Note 19.
Trade receivables are non-interest bearing and are generally on terms of 30 days.
Movement in the provision for impairment of receivables were as follows: Balance at 1 January Additional provision Unused amount reversed Balance at 31 December 777,549 348,723 (228,162) 898,110 380,210 492,553 (95,214) 777,549 515,191 165,052 (125,731) 554,512 111,928 403,263 - 515,191 At 31 December, the ageing analysis of trade receivables is as follows: Group Company Year Total 2018 2017 2018 2017 $ 2,566,982 3,228,932 1,686,378 2,594,664 Neither past due nor impaired $ 1,460,074 1,319,719 898,166 869,708 30 - 60 days 60 - 90 days >90 days $ 423,555 351,374 393,664 335,064 $ 168,813 43,157 $ 514,540 1,514,682 133,806 (23,873) 260,742 1,413,765 6 7 8 FINANCIAL ASSETS Term deposits - held to maturity INVENTORIES Parts Goods in transit OTHER ASSETS Prepayments Provision for doubtful debts Deposits VAT receivable 37,000,000 22,000,000 36,000,000 21,000,000 947,009 475,276 1,422,285 495,775 1,047,618 1,543,393 760,313 475,276 1,235,589 318,463 1,047,618 1,366,081 1,198,485 (63,006) 1,135,479 469,802 199,642 1,804,923 593,197 (63,006) 530,191 456,680 102,024 1,088,895 585,601 (63,006) 522,595 424,431 203,544 1,150,570 495,939 (63,006) 432,933 411,734 102,024 946,691 - 83 - Fiji Ports Corporation Limited and its Subsidiary – 2018 Annual Report Notes to the Consolidated Financial statements (Cont’d) For the Year ended 31 December 2018 Notes Group Company 2018 $ 2017 $ 2018 $ 2017 $ 9 PROPERTY, PLANT AND EQUIPMENT Land Cost: At 1 January At 31 December Depreciation, impairment and amortisation At 1 January Depreciation charge for the year At 31 December Net book value Building Cost: At 1 January Additions Transfers Disposals At 31 December Depreciation and impairment At 1 January Depreciation charge for the year Disposals At 31 December Net book value Wharves Cost: At 1 January Additions Transfers At 31 December Depreciation and impairment At 1 January Depreciation charge for the year At 31 December Net book value Plant and equipment Cost: At 1 January Additions Transfers At 31 December Depreciation and impairment At
 1 January Depreciation charge for the year At 31 December 16,944,157 16,944,157 16,944,157 16,944,157 15,980,821 15,980,821 15,980,821 15,980,821 479,369 212,213 691,582 242,988 236,381 479,369 427,146 205,030 632,176 222,116 205,030 427,146 16,252,575 16,464,788 15,348,645 15,553,675 14,547,156 71,096 271,623 (3,571) 14,886,304 10,265,327 466,771 (3,213) 10,728,885 14,714,890 3,650 235,305 (406,689) 14,547,156 10,125,672 458,665 (319,010) 10,265,327 9,997,999 - 271,623 (3,571) 10,266,051 8,358,770 223,090 (3,213) 8,578,647 10,165,733 3,650 235,305 (406,689) 9,997,999 8,453,036 224,744 (319,010) - 10,002,347 7,805,012 533,392 8,338,404 7,325,881 479,131 7,805,012 3,094,332 208,082 56,021 3,358,435 2,513,841 222,210 2,736,051 2,763,676 330,656 - 3,094,332 2,311,642 202,199 2,513,841 Net book value 2,320,058 2,197,335 622,384 580,491 - 84 - 2018 Annual Report – Fiji Ports Corporation Limited and its Subsidiary Notes to the Consolidated Financial statements (Cont’d) For the Year ended 31 December 2018 9 PROPERTY, PLANT AND EQUIPMENT continued Notes Group Company 2018 $ 2017 $ 2018 $ 2017 $ Furniture and fittings Cost: At 1 January Additions At 31 December Depreciation and impairment At 1 January Depreciation charge for the year At 31 December Net book value Motor vehicles Cost: At 1 January Additions Disposals At 31 December Depreciation and impairment At 1 January Depreciation charge for the year Disposals At 31 December Net book value Cranes Cost: At 1 January Disposals At 31 December Depreciation and impairment At 1 January Depreciation charge for the
 year Disposals At 31 December 329,835 34,076 363,911 245,778 37,287 283,065 80,846 581,487 59,633 - 641,120 309,767 84,970 - 394,737 246,383 288,702 41,133 329,835 208,680 37,098 245,778 84,057 575,281 153,945 (147,739) 581,487 295,098 113,151 (98,482) 309,767 271,720 210,820 13,954 224,774 174,937 15,103 190,040 34,734 398,182 59,633 - 457,815 126,462 84,970 - 211,432 246,383 187,548 23,272 210,820 160,162 14,775 174,937 35,883 391,976 153,945 (147,739) 398,182 144,682 80,262 (98,482) 126,462 271,720 19,203,329 (12,365,064) 6,838,265 19,203,329 - 19,203,329 19,203,329 (12,365,064) 6,838,265 19,203,329 - 19,203,329 11,254,726 566,732 (7,323,600) 4,497,858 10,327,346 927,380 - 11,254,726 11,254,726 566,732 (7,323,600) 4,497,858 10,327,346 927,380 - 11,254,726 Net book value 2,340,407 7,948,603 2,340,407 7,948,603 Office equipment and software Cost: At 1 January Additions At 31 December Depreciation and impairment At 1 January Depreciation charge for the year At 31 December 2,132,176 68,201 2,200,377 1,842,747 147,682 1,990,429 2,005,111 127,065 2,132,176 1,689,841 152,906 1,842,747 1,966,452 58,056 2,024,508 1,735,255 116,309 1,851,564 1,844,294 122,158 1,966,452 1,612,269 122,986 1,735,255 Net book value 209,948 289,429 172,944 231,197 - 85 - Fiji Ports Corporation Limited and its Subsidiary – 2018 Annual Report Notes to the Consolidated Financial statements (Cont’d) For the Year ended 31 December 2018 Notes Group Company 2018 $ 2017 $ 2018 $ 2017 $ 9 PROPERTY, PLANT AND EQUIPMENT continued Work in progress At 1 January Additions Transfers reversed At 31 December 939,564 2,804,062 (1,313,731) (50,242) 2,379,653 195,651 1,308,900 (289,172) (275,815) 939,564 641,823 1,857,081 (1,261,019) (50,242) 1,187,643 186,888 1,019,923 (289,172) (275,816) 641,823 Net written down value at 31 December 55,068,961 62,900,388 48,722,216 57,325,684 As part of the share divestment agreement signed on 5th November 2015, the Group during the financial year 2018 transferred $963,336 worth of
 interests in two pieces of land recorded under Property, Plant and Equipment to a Government owned holding company (“Assets Fiji Limited”) for $nil consideration.
Both land pieces were required by the Group for its operational use.

Thus, it was assigned to the Group from Assets Fiji Limited in form of Government grant.

The opening balances of the statement of financial position and changes in equity were restated to effect these asset transfers on the date on which the share divestment agreement was signed.

As at 31 December 2018, the Group is yet to transfer 7 land titles of written down value $5,199,318 to Assets Fiji Limited.
10 RIGHT OF USE ASSET $ $ $ $ Cost At 1 January Additions At 31 December Accumulated depreciation At 1 January Depreciation charge for the year At 31 December Net book value at 31 December 76,498 - 76,498 11,916 19,958 31,874 44,624 76,498 - 76,498 - 11,916 11,916 64,582 76,498 - 76,498 11,916 19,958 31,874 44,624 - 76,498 76,498 - 11,916 11,916 64,582 As part of new iFrs accounting standard (iFrs 16 Leases), the Holding Company was required to re-classify and Engineering Truck as “right of use” asset via lease liability and re-measure it at Net Present Value.
This asset was previously treated as operating lease with ANZ Bank and any repayment made was recorded as finance lease expenses.

right to Use Asset is depreciated over its useful life of 48 years (from May 2017), while Lease liability would amortised through monthly lease repayment (after subtracting associated interest cost).

The opening balances of the statement of financial position and changes in equity were restated to effect this transaction.
information on depreciation charge, interest expense and total cash outflow for leases are disclosed in note 10 above, note 17 and the statement of cash flows.
11 INTANGIBLE ASSET Cost At 1 January At 31 December Accumulated depreciation At 1 January Depreciation charge for the year At 31 December Net book value at 31 December $ $ $ $ 45,349 45,349 43,357 1,361 44,718 631 45,349 45,349 41,997 1,360 43,357 1,992 - - - - - - - - - - - - - 86 - 2018 Annual Report – Fiji Ports Corporation Limited and its Subsidiary Notes to the Consolidated Financial statements (Cont’d) For the Year ended 31 December 2018 Notes Group Company 2018 $ 2017 $ 2018 $ 2017 $ 12 INVESTMENT PROPERTY Cost At 1 January At 31 December Accumulated depreciation At 1 January Depreciation charge for the year At 31 December Net book value at 31 December 13 TRADE AND OTHER PAYABLES Trade creditors Payable to subsidiary [Note 19(d)] Payable to associate [Note 19(d)] VAT payable sundry creditors Dividend payable 14 PROVISIONS a) Legal Claims At 1 January Utilised during the year At 31 December 588,835 588,835 543,981 24,458 568,439 20,396 730,330 - 9,396 - 3,562,828 - 4,302,554 588,835 588,835 500,534 43,447 543,981 44,854 947,243 - - 27,670 3,934,319 2,170,902 7,080,134 588,835 588,835 543,981 24,458 568,439 20,396 560,183 2,977 9,396 - 3,022,383 - 3,594,939 588,835 588,835 500,534 43,447 543,981 44,854 784,191 48,327 - - 3,438,167 2,170,902 6,441,587 103,760 (10,000) 93,760 103,760 - 103,760 103,760 (10,000) 93,760 103,760 - 103,760 Provision for legal claim at balance date represents the legal claims brought against the Holding company and the Group by former employees.
The provision is reflected in the statement of comprehensive income as an administrative expense.
The Directors are of the opinion that the outcome of these legal claims will not give rise to any significant loss beyond the amounts provided as at 31 December 2018. b) Rental Income External $ $ $ $ At 31 December 3,006,092 2,051,586 3,006,092 2,051,586 Provision for rental income represents rental income (less property expenses) received by the Holding Company for the year 2018 that will be remitted to a Government’s asset holding company (“Assets Fiji Limited”).
The net rental income received are from properties that have or will be transferred to Assets Fiji Limited as part of the share divestment agreements signed on 5 November 2015.
The Directors are of the opinion that the outcome of these rental income remittance will not give rise to any significant loss beyond the amounts provided as at 31 December 2018. c) Job Evaluation Exercise $ $ $ $ At 31 December 194,176 330,412 194,176 330,412 Provision for job evaluation exercise at balance date presents the expected overall increase in staff salary due to Job Evaluation Exercise.
Total Provision as at 31 December 3,294,028 2,485,758 3,294,028 2,485,758 - 87 - Fiji Ports Corporation Limited and its Subsidiary – 2018 Annual Report Notes to the Consolidated Financial statements (Cont’d) For the Year ended 31 December 2018 15 EMPLOYEE BENEFIT LIABILITY At 1 January Arising during the year Utilised/reversed during the year At 31 December Analysis of employee benefit liability Current Non-current 16 CASH AND CASH EQUIVALENTS Notes Group Company 2018 $ 2017 $ 2018 $ 2017 $ 1,084,834 971,806 (739,467) 1,317,173 1,011,579 652,109 (578,854) 1,084,834 970,275 893,809 (673,559) 1,190,525 901,690 577,607 (509,022) 970,275 886,386 430,787 1,317,173 762,991 321,843 1,084,834 782,633 407,892 1,190,525 671,334 298,941 970,275 Cash and cash equivalents consist of cash on hand and balances with banks net of bank overdraft.
Cash and cash equivalents included in the statement of cash flows comprise the following amounts: Cash on hand Cash at bank 17 LEASE LIABILITY Beginning of the year Lease repayments interest charged End of the year Comprising: Current Non-current 18 SHARE CAPITAL a) Issued and paid up capital 73,154,852 ordinary shares $ $ $ $ 4,580 23,403,899 23,408,479 4,580 27,459,623 27,464,203 3,580 20,494,603 20,498,183 3,580 24,134,424 24,138,004 64,582 (20,728) 2,247 46,101 19,233 26,868 46,101 76,498 (13,818) 1,902 64,582 18,480 46,102 64,582 64,582 (20,728) 2,247 46,101 19,233 26,868 46,101 76,498 (13,818) 1,902 64,582 18,480 46,102 64,582 73,154,852 73,154,852 73,154,852 73,154,852 The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at the meetings of the Company.
$ $ $ $ b) Dividends At 1 January 2018/2017 Add: dividends declared during the year Less: special dividend paid to Government of Fiji from sale of land and building proceeds Less: special dividend paid to Government of Fiji from Fiji Ports Terminal Limited loan repayment proceeds Less: dividends paid during the year At 31 December 2018/2017 * 2,170,902 15,226,505 2,559,622 16,082,198 2,170,902 15,226,505 2,559,622 16,082,198 (574,475) - (574,475) - (1,596,427) (15,226,505) - (388,720) (16,082,198) 2,170,902 (1,596,427) (15,226,505) - (388,720) (16,082,198) 2,170,902 * This dividend payable amount is reflected in Trade and Other Payables (Note 13).
- 88 - 2018 Annual Report – Fiji Ports Corporation Limited and its Subsidiary Notes to the Consolidated Financial statements (Cont’d) For the Year ended 31 December 2018 19 RELATED PARTY TRANSACTIONS Directors The names of persons who were directors of Fiji Ports Corporation Limited and its subsidiary at any time during the reporting period were as follows: shaheen Ali (Chairman) Vijay Maharaj (Director) Vilash Chand (Director) Tupou Baravilala (Director) Tevita Kuruvakadua (Director) sanjay Kaba (Director) sashi singh (Director) Joseph Brito (Director) iqram Cuttilan (Director) Key Management Personnel reappointed 18th November 2018 reappointed 3rd July 2018 reappointed 3rd July 2018 reappointed 28th April 2018 Appointed 16th November 2015 served till 27th November 2018 Appointed 16th November 2015 Appointed 16th November 2015 Appointed 1st July 2017 Key Management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the entity directly or indirectly, including any director (whether executive or otherwise) of that entity.
During the financial year the following persons were identified as key management personnel, with the greatest authority and responsibility for the planning, directing and controlling the activities of the company: Name Title Vajira Piyasena roshan Abeyesundere identity of related parties Chief Executive Officer Chief Financial Officer The Holding Company has a related party relationship with its subsidiary, Fiji ships and Heavy industries Limited (100% equity interest) and its associate, Fiji Ports Terminal Limited (49% equity interest).
Transactions with related parties All transactions with related parties are made on normal commercial terms and conditions.

The following transactions were carried out with related parties: Notes Group Company 2018 $ 2017 $ 2018 $ 2017 $ (a) Key management personnel compensation Directors short-term benefits Management short-term benefits 60,500 66,916 60,500 66,916 665,950 600,344 602,712 537,106 The aggregate compensation of the key management personnel comprises only of salary and short term benefits.
(b) Sales of goods and services Management fees income from associate rental income from associate sale of services to associate 72,000 2,447,071 83,436 72,000 2,447,071 228,146 72,000 2,447,071 83,436 72,000 2,447,071 228,146 (c) Purchases of goods and services Purchase of services from subsidiary - - 107,499 261,929 - 89 - Fiji Ports Corporation Limited and its Subsidiary – 2018 Annual Report Notes to the Consolidated Financial statements (Cont’d) For the Year ended 31 December 2018 Notes Group Company 2018 $ 2017 $ 2018 $ 2017 $ 19 RELATED PARTY TRANSACTIONS continued (d) Receivable from/(payable to) subsidiary/associate Fiji Ports Terminal Limited Fiji ships and Heavy industries Limited Associate Subsidiary Disclosed as: receivable from associate (Note 5) Payable to associate (Note 13) receivable from subsidiary (Note 5) Payable to subsidiary (Note 13) (e) Loan to subsidiary Beginning of the year Loan repayments received interest charged End of the year Comprising: Current Non-current (6,683) - (6,683) 2,713 (9,396) - - (6,683) - - - - - - - 161,884 - 161,884 161,884 - - - 161,884 (6,683) 2,075 (4,608) 2,713 (9,396) 5,052 (2,977) (4,608) 161,884 (45,798) 116,086 161,884 - 2,529 (48,327) 116,086 - - - - - - - 1,219,832 (166,785) 46,606 1,099,653 1,335,308 (166,786) 51,310 1,219,832 125,076 974,577 1,099,653 120,190 1,099,642 1,219,832 The loan to the subsidiary Company is unsecured and based on approval from the Board of the Holding Company, subject to interest at the fixed rate of 4.0% per annum.
This is repayable by monthly installments of $13,899.

The repayment schedule is reviewed annually.


(f) Loan to associate Beginning of the year Loan repayments received interest charged Comprising: Current Non-current $ $ $ $ 1,571,011 (1,622,465) 51,454 - 1,961,027 (461,358) 71,342 1,571,011 1,571,011 (1,622,465) 51,454 - 1,961,027 (461,358) 71,342 1,571,011 - - - 405,906 1,165,105 1,571,011 - - - 405,906 1,165,105 1,571,011 The loan to Fiji Ports Terminal Limited ($4,000,000) was unsecured and subject to interest at the fixed rate of 4.0% per annum.
This was repayable by monthly installments of $38,447 per month.

in December 2018, the outstanding loan balance was fully repaid by the associate company.
- 90 - 2018 Annual Report – Fiji Ports Corporation Limited and its Subsidiary Notes to the Consolidated Financial statements (Cont’d) For the Year ended 31 December 2018 Notes Group Company 2018 $ 2017 $ 2018 $ 2017 $ 19 RELATED PARTY TRANSACTIONS continued (g) Receivable from associate - for sale of Shore Cranes Beginning of the year Arising during the year Payments received during the year - 8,767,334 (1,193,108) 7,574,226 - - - - - 8,767,334 (1,193,108) 7,574,226 - - - - shore crane Mika and roba were sold to FPTL on 1 June 2018. repayment is on monthly basis on the term of 10 years effective from date of shore crane transfer.
repayment is on interest-free term.

(h) Other related parties Fiji National Provident Fund - member contribution 675,092 621,009 522,820 465,373 $ $ $ $ 20 INVESTMENT IN AN ASSOCIATE The Group has a 49% interest in Fiji Ports Terminal Limited at balance date, which is involved in terminal operations including stevedoring at the Ports of suva and Lautoka.

The Group’s interest in Fiji Ports Terminal Limited is accounted for using the equity method in the consolidated financial statements.
The following table illustrates the summarised financial information of the Group’s investment in Fiji Ports Terminal Limited.
Company 2018 $ 2017 $ 11,587,146 16,610,688 (3,197,470) (8,042,117) 16,958,247 49% 8,309,541 3,733,078 12,042,619 37,580,985 (23,872,578) (51,454) 27,469 13,684,422 (2,816,228) 10,868,194 5,325,415 15,333,784 6,576,404 (3,117,998) (2,338,059) 16,454,131 49% 8,062,524 3,733,078 11,795,602 36,510,210 (21,413,195) (71,342) 29,499 15,055,172 (3,181,927) 11,873,245 5,817,890 Current assets Non-current assets Current liabilities Non-current liabilities Equity Proportion of the Group’s ownership Goodwill Carrying amount of the investment revenue Operating expenses Finance costs Finance income Profit before tax income tax expense Profit for the year Group’s share of profit for the year - 91 - Fiji Ports Corporation Limited and its Subsidiary – 2018 Annual Report Notes to the Consolidated Financial statements (Cont’d) For the Year ended 31 December 2018 Notes Group Company 2018 $ 2017 $ 2018 $ 2017 $ 21 22 23 CAPITAL COMMITMENTS Capital expenditure: - approved by the Board and committed RENTAL INCOME COMMITMENTS Not later than one year Later than one year but not later than five years Later than five years CONTINGENT LIABILITIES Guarantee given on behalf of the subsidiary company Bank guarantee for HM Customs and FEA bonds Bank guarantee for Ministry of Primary industries - 883,900 800,000 83,900 - 883,900 24 DEFERRED INCOME Deferred income represents assets assigned to the Group to use in its operations by the Government of Fiji through Assets Fiji Limited.
The assets assigned to the Group are based on conditions that these would only be used for the operating activities of the Group.
Opening balance Less: Amortisation charges during the year Closing balance Movement in the accumulated amortisation are as follows: As at 1 January Amortisation charge for the year As at 31 December 10,747,543 (224,297) 10,523,246 10,971,840 (224,297) 10,747,543 9,824,346 (205,030) 9,619,316 10,029,376 (205,030) 9,824,346 467,285 224,297 691,582 242,988 224,297 467,285 427,146 205,030 632,176 222,116 205,030 427,146 25 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES The principal financial liabilities comprises interest bearing borrowings, trade payables and other accruals.
The financial liabilities are the result of the Group’s operations.

The Group has various financial assets such as trade receivables and cash, which also arise directly from its operations.

The Group’s activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk.

The Group’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on financial performance.
risk management is carried out by finance executives and management of controlled entities of the Group.

Management and finance executives identify, and evaluate financial risks in close co-operation with the Group’s operating units.

The Board provides direction for overall risk management covering specific areas, such as mitigating credit risks, and investment of excess liquidity.
(a) Market risk Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the group’s income or the value of its holdings of financial instruments.

The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return on risk.
(i) Political climate The Group operates in Fiji and changes to governments and the policies they implement affect economic situation and ultimately the revenues of the group.

To address this, the Group reviews its pricing and product range regularly and responds to change in policies appropriately.
- 92 - 2018 Annual Report – Fiji Ports Corporation Limited and its Subsidiary Notes to the Consolidated Financial statements (Cont’d) For the Year ended 31 December 2018 25 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES continued (a) Market risk continued (ii) Currency risk Foreign currency risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.
(iii) Interest rate risk At the reporting date, the interest rate profile of the Group’s interest-bearing financial instruments was: Fixed rate instruments Financial assets (term deposits and interest bearing deposits) Financial liabilities Carrying amount 2018 $ 52,000,000 - 22,000,000 2017 $ 52,000,000 - 22,000,000 Fair value sensitivity analysis for fixed instruments The Group does not account for any fixed rate financial assets and liabilities at fair value through profit and loss.
Therefore a change in interest rates at the reporting date would not affect the statement of comprehensive income.

(b) Credit risk Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group’s receivables from customers.

The Group has no significant concentrations of credit risk.
The Group has policies in place to ensure that services are provided to customers with an appropriate credit history.

The Group has policies that limit the amount of credit exposure to any one customer or group of customers.

Credit levels accorded to customers are regularly reviewed to reduce the exposure to risk of bad debts.

The Group establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade and other receivables.
The main component of this allowance is a specific loss component that relates to individually significant exposures.

The carrying amount of financial assets represents the maximum credit exposure.
Cash and cash equivalents Trade and other receivables Held-to-maturity investments Carrying amount Notes 16 5 6 2018 $ 23,408,479 4,434,032 37,000,000 64,842,511 2017 $ 27,464,203 3,873,049 22,000,000 53,337,252 - 93 - Fiji Ports Corporation Limited and its Subsidiary – 2018 Annual Report Notes to the Consolidated Financial statements (Cont’d) For the Year ended 31 December 2018 25 (c) FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES continued Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due.
The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.

Prudent liquidity risk management implies maintaining sufficient cash, marketable securities, and the availability of funding through an adequate amount of committed credit facilities.
The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of netting agreements: 31 December 2018 Trade and other payables 31 December 2017 Trade and other payables (d) Capital risk management On demand $ - - < 1 year $ 4,302,554 4,302,554 1 to 5 years $ > 5 years $ Total $ - - - - 4,302,554 4,302,554 On demand $ < 1 year $ 1 to 5 years $ > 5 years $ Total $ - - 5,880,708 5,880,708 1,199,426 1,199,426 - - 7,080,134 7,080,134 The board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business.
The Group’s objectives when obtaining and managing capital are to safeguard the Group’s ability to continue as a going concern and provide shareholders with a consistent level of returns and to maintain an optimal capital structure to reduce the cost of capital.

The Group monitors capital on the basis of the gearing ratio.

This ratio is calculated as debt divided by total capital.
Debt is calculated as total borrowing (including ‘current and non- current borrowing’ as shown in the Group statement of financial position).

Total capital is calculated as ‘equity’ as shown in the Group statement of financial position plus debt.
interest bearing borrowings Debt Equity Capital and debt Gearing ratio Notes Carrying amount 2018 $ - - 2017 $ - - 130,279,071 130,279,071 117,464,217 117,464,217 0% 0% - 94 - 2018 Annual Report – Fiji Ports Corporation Limited and its Subsidiary Notes to the Consolidated Financial statements (Cont’d) For the Year ended 31 December 2018 26 EVENTS SUBSEQUENT TO BALANCE DATE There has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the directors, to affect significantly the operations of the Holding Company or the Group, the results of those operations or the state of affairs of the Holding Company or the Group in the subsequent financial year.
27 PRINCIPAL ACTIVITIES The principal activity of the Holding Company is providing and managing the port infrastructure and services within declared ports.

The principal activity of the subsidiary trading as “Fiji ships and Heavy industries Limited” is the provision of ship repair and slipway services.

There has been no significant change in these activities during the year.
28 RESTATEMENT OF 2017 FINANCIAL STATEMENT As part of the share divestment agreement signed on 5 November 2015, the Group during the financial year 2018 transferred $963,336 worth of interests in two pieces of land recorded under Property, Plant and Equipment to a Government owned holding company (“Assets Fiji Limited”) for $nil consideration.

Both land pieces were required by the Group for its operational use.

Thus, it was assigned to the Group from Assets Fiji Limited in form of Government grant.
Moreover, as part of new iFrs accounting standard (iFrs 16 Leases), holding company (“FPCL”) was required to re-classify and recognise 3 Tonne Engineering Truck as “riGHT OF UsE” asset via lease liability and re-measured at Net Present Value.

The opening balances of the statement of financial position and changes in equity were restated to effect these asset transfers on the date on which the share divestment agreement was signed and recognition of right of Use asset.
Statement of financial position retained earnings Total equity Property, plant and equipment right of use asset Total non-current assets Total assets Lease liability Total current liabilities Lease liability Deferred income Total non-current liabilities Total liabilities Statement of changes in equity retained earnings Total equity Statement of comprehensive income Other revenue Total income Depreciation Operating expenses Total expenses Profit from operations Finance costs Profit before income tax Net profit for the year 2017 Restated $ 44,309,365 117,464,217 62,900,388 64,582 82,115,975 138,927,068 18,480 10,347,363 46,102 10,747,543 11,115,488 21,462,851 Group 2017 Previously reported $ 45,259,610 118,414,462 62,927,436 - 82,078,441 138,889,534 - 10,328,883 - 9,824,346 10,146,189 20,475,072 2017 Increase/ (decrease) $ (950,245) (950,245) (27,048) 64,582 37,534 37,534 18,480 18,480 46,102 923,197 969,299 987,779 44,309,365 117,464,217 45,259,610 118,414,462 (950,245) (950,245) 1,544,524 58,180,778 (6,721,754) (7,326,743) (32,903,713) 25,277,065 (1,902) 31,624,182 26,345,307 1,525,257 58,161,511 (6,690,570) (7,340,562) (32,886,348) 25,275,163 - 31,624,182 26,345,307 19,267 19,267 31,184 (13,819) 17,365 1,902 1,902 - - - 95 - Fiji Ports Corporation Limited and its Subsidiary – 2018 Annual Report Notes to the Consolidated Financial statements (Cont’d) For the Year ended 31 December 2018 28 RESTATEMENT OF 2017 FINANCIAL STATEMENT continued Statement of cash flows Operating Activities Payments to suppliers and employees interest paid Net cash provided by operating activities Financing Activities repayment of lease on right of use asset Net cash used in Financing Activities Cash and cash equivalents at the end of the year Statement of financial position retained earnings 3 Total equity right of use asset Total non-current assets Total assets Lease liability Total current liabilities Lease liability Total non-current liabilities Total liabilities Statement of changes in equity retained earnings Total equity Statement
 of comprehensive income Total income Depreciation Operating expenses Total expenses Profit from operations Finance costs Profit before income tax Net profit for the year 2017 Restated $ Group 2017 Previously reported $ 2017 Increase/ (decrease) $ (23,641,592) (1,902) 28,134,030 (23,655,410) - 28,122,114 (13,818) 1,902 (11,916) (11,916) (16,482,834) 27,464,203 - (16,470,918) 27,464,203 9,301,063 39,301,063 112,455,915 112,455,915 64,582 - 81,280,070 81,344,652 132,242,463 132,177,881 - 9,598,679 - 10,123,287 19,721,966 18,480 9,617,159 46,102 10,169,389 19,786,548 39,301,063 39,301,063 112,455,915 112,455,915 57,605,406 (6,093,058) (5,081,648) (27,822,798) 29,782,608 (1,902) 30,327,368 25,377,509 57,605,406 (6,081,142) (5,095,466) (27,824,700) 29,780,706 - 30,327,368 25,377,509 11,916 11,916 - - - 64,582 64,582 64,582 18,480 18,480 46,102 6,102 64,582 - - - 11,916 (13,818) (1,902) 1,902 1,902 - - Statement of cash flows Operating Activities Payments to suppliers and employees interest paid Net cash provided by operating activities Financing Activities repayment of lease on right of use asset Net cash used in Financing Activities Cash and cash equivalents at the end of the year (19,679,918) (1,902) 32,618,956 (19,693,736) - 32,607,040 (13,818) 1,902 (11,916) (11,916) (16,482,834) 24,138,004 - (16,470,918) 24,138,004 11,916 11,916 - - 96 - 2018 Annual Report – Fiji Ports Corporation Limited and its Subsidiary Fiji Ports Cargo & Vessel Statistics Foreign Vessels (excluding Fishing) Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Nos GRT 100GRT/HRS Foreign Vessels (excluding Fishing) Vessel Type Nos GRT 100GRT/HRS Cruise Dry Bulk Liquid Bulk LOLO LOLO/RORO Car Carrier Others Total 81 32 263 407 47 26 80 936
 6,710,691 733,502 3,044,724 4,545,076 790,210 1,364,598 448,629 819,613 670,088 479,635 1,180,001 120,736 145,683 143,276 17,637,430 3,559,033 2017 Foreign Vessels (excluding Fishing) Vessel Type Nos GRT 100GRT/HRS Cruise Dry Bulk Liquid Bulk LOLO LOLO/RORO Car Carrier Others Total 92 45 309 496 44 24 73 7,788,188 1,090,650 3,492,014 6,285,380 773,673 1,265,394 279,021 821,927 699,849 557,823 1,562,496 127,527 93,358 177,707 1,083 20,974,320 4,040,687 Local Vessels 2017 Vessel Type RORO/Passenger Conventional Fishing/Others Total Local Vessels 2018 Vessel Type RORO/Passenger Conventional Fishing/Others Total Nos 368 295 2,036 2,699 Nos 392 183 1,980 2,555 Cargo Throughput 2016 GRT 100GRT/HRS 1,293,096 98,299 373,195 1,764,590 405,831 64,924 311,520 782,275 GRT 100GRT/HRS 1,419,547 2,785,878 45,508 494,605 223,755 1,573,862 1,959,659 4,583,495 Vessel Type Import Export Total Break Bulk Dry Bulk Liquid Bulk MV Bulk 70,924 391,768 808,030 245,070 Total Foreign Cargo 1,515,792 Total Local Cargo 97,494 9,359 245,977 624,570 58,350 938,256 118,798 80,283 637,745 1,432,600 303,420 2,454,048 216,292 Total Cargo Fiji 1,613,286 1,057,054 2,670,340 Cargo Throughput 2017 Vessel Type Import Export Total Break Bulk Dry Bulk Liquid Bulk MV Bulk 67,592 439,092 817,812 151,148 Total Foreign Cargo 1,475,643 Total Local Cargo 147,007 9,665 369,341 205,802 3,177 587,986 288,142 77,257 808,433 1,023,614 154,325 2,063,629 435,149 Total Cargo Fiji 1,622,650 876,128 2,498,778 Cargo Throughput 2018 Vessel Type Import Export Total Break Bulk Dry Bulk Liquid Bulk MV Bulk 89,924 5,841 287,221 392,248 460,144 191,811 178,557 1,703 Total Foreign Cargo 1,015,846 591,603 Total Local Cargo 113,727 163,478 95,765 679,469 651,955 180,260 1,607,449 277,205 2018 Foreign Vessels (excluding Fishing) Total Cargo Fiji 1,406,041 755,081 1,884,654 Vessel Type Nos GRT 100GRT/HRS Containerised Cargo 2016 Cruise Dry Bulk Liquid Bulk LOLO LOLO/RORO Car Carrier Others Total 64 34 298 440 47 29 67 4,837,799
 821,172 3,657,892 5,831,296 808,998 1.404,504 292,455 496,315 549,915 645,839 1,444,402 143,735 167,848 207,104 979 17,654,116 3,655,158 Local Vessels 2016 Vessel Type Nos GRT 100GRT/HRS RORO/Passenger Conventional Fishing/Others Total 346 254 2,035 2,635 1,454,175 58,024 347,688 1,859,887 407,133 57,841 263,567 728,541 Type 20Ft 40Ft Total Laden Empty TEUs 69,926 15,578 85,504 35,600 9,347 44,947 105,526 49,850 155,376 Containerised Cargo 2017 Type 20Ft 40Ft Total Laden Empty TEUs 75,569 16,887 92,456 42,858 11,269 54,127 118,427 56,312 174,739 Containerised Cargo 2018 Type 20Ft 40Ft Total Laden Empty TEUs 77,512 17,476 94,988 43,219 12,653 55,872 120,731 60,258 180,989 Fiji Ports Corporation Limited Muaiwalu House, Walu Bay, Suva, Fiji.
GPO Box 780 Suva, Fiji.

T + 679 331 2700 www.fijiports.com.fj AnnuAl RepoR t 2018 - 98 - 2018 Annual Report – Fiji Ports Corporation Limited