PORT OF WATERFORD CO -2000 · SOLICITORS M.J. O’Connor Confederation House Waterford Business...

Port of Waterford Company & Subsidiaries

Annual report for the year ended 31 December 2014

PORT OF WATERFORD COMPANY & SUBSIDIARIES

DIRECTORS’ REPORT AND CONSOLIDATED FINANCIAL STATEMENTS

for the year ended 31 December 2014

TABLE OF CONTENTS PAGE

CHAIRMAN’S STATEMENT 1 - 3

COMPANY INFORMATION 4

DIRECTORS’ REPORT 5 - 10

DIRECTORS’ RESPONSIBILITIES STATEMENT 11

INDEPENDENT AUDITOR’S REPORT 12 - 13

CONSOLIDATED PROFIT AND LOSS ACCOUNT 14

MOVEMENTS ON CONSOLIDATED PROFIT AND LOSS ACCOUNT 15

CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES 15

BALANCE SHEETS

- CONSOLIDATED 16

- COMPANY 17

CONSOLIDATED CASH FLOW STATEMENT 18

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 19 – 35


CHAIRMAN’S STATEMENT


INTRODUCTION

The Port of Waterford Company is the statutory authority vested with the responsibility for the operation

and development of the Port of Waterford under the Harbours’ Act, 1996. The State is the sole

shareholder in the company.

The company’s remit as set down in Sc.11 of the Harbours Act 1996 and underscored by the

Memorandum and Articles of Association of the Company, is to manage, control, operate and develop

its harbour.

Mission Statement

‘‘The Port of Waterford will compete for as many customers and throughput as possible by

providing the infrastructure and service required by the markets, at an attractive but

commercially realistic price. We shall do this by ensuring the port is accountable to its

customers and stakeholders, is operated safely and efficiently and to the highest

environmental standards. It will remain financially sound and make best use of core and non

core assets, and so doing maximise regional and national economic contribution’’.

PERFORMANCE

In line with improved economic forecasts and a buoyant agricultural sector 2014 saw a considerable

improvement in trading performance of bulk commodity to 1,115,972 tonnes, a 4.9% increase on 2013.

Current developments and future planned investment in both warehousing and equipment by port

stevedores will drive future growth in this sector in the medium term, generating additional income for

the port without the requirement for additional port investment in infrastructure.

During 2014, the company stevedored 36,173 teu at Waterford Container Terminal (WCT), a decrease

of 9% on the previous year (39,834 teu). This is disappointing and is indicative of the South East

Region lagging behind the rest of the country’s economic performance. Despite the ESRI announcing

that consumer sentiment is improving and the expectation that the economy will grow by circa 5% in

2015, a significant increase in container volumes is not anticipated in 2015 however the Port Company

is confident that container traffic will improve in 2016 & 2017.

2014 2013

Lo-lo 36,173 teu Lo-lo 39,834 teu -9.2%

Bulk 1,115,972 tonnes Bulk 1,063,720tonnes +4.9%

The continuing challenge for the group is to sustain its business activity in the short‒term and to

position the port for the economic recovery which is now underway. In terms of infrastructure

investment there remains a requirement to complete the river training wall from Drumdowney to

Snowhill for which the company has planning consent in order to significantly reduce the cost of

maintenance dredging. A foreshore lease and the consent of the Marine Vetting Licence Committee

are required and efforts are underway to secure these necessary consents. Following storm force

winds in late 2013 and early 2014 Port of Waterford incurred maintenance dredging costs of

€1,138,643 in 2014, an increase of 173% on 2013, emphasising the need to complete the river training

wall as quickly as possible.

Fixed costs are significant and minimum levels of throughput are required to sustain operations.


CHAIRMAN’S STATEMENT (Continued)


PERFORMANCE (continued)

The Directors remain confident of the fundamental benefits to both the South East Region and

nationally of the location of the port in terms of access, ability to expand, efficient modern facilities, a

flexible workforce, reduced cost base and vastly improved infrastructure, in particular the proximity of

the motorway to Dublin. This is supported by the following planning consents acquired by third parties:

150,000 sq ft of warehousing recently constructed

The €185,000,000 Glanbia development at IDA park adjacent to Belview which is in

commissioning phase

An anticipated planning application for a further 150,000 sq ft of warehousing during the first

half of 2015

It is a resounding confidence vote in the port company and the region that such prestigious and capital

intensive projects were offered for planning consent.

Exploitation of assets will secure the success of the port as a commercial entity into the future bringing

immense economic benefits to both the regional and national economies. The directors are motivated

and committed to taking necessary decisions to achieve this success.

Success will ultimately be achieved through the combined effort of the Port of Waterford Company,

the shareholder, Kilkenny County Council, Waterford City Council, other stakeholders and an

appropriate policy environment. Efforts continue to attract a deep sea container operator and this

initiative is supported strongly by the regions and we are hopeful that this can be achieved during

2015.

Increased revenues together with substantial cost savings resulted in a profit from operations of

€828,496 (2013: Profit € 927,669) excluding exceptional income/cost items. Exceptional items for the

year consisted of residual income from Bell Lines Limited liquidation of €205,900.

INTERNAL FINANCIAL CONTROLS

I hereby acknowledge on behalf of the Directors, the responsibility for ensuring that the company has

adequate internal control procedures. The implementation of a proper and practical system of internal

financial control can provide reasonable but not absolute assurance against material error.

The internal control system encompasses the policies, processes, tasks, behaviours and other aspects

of the company that, taken together, will facilitate effective and efficient operations by enabling the

company to respond to risks, help ensure the quality of internal and external reporting and also help

ensure compliance with applicable laws, regulations and internal policies.

Key procedures, which have been applied by the company, include the following: -

Properly defined management structure and responsibilities.

Preparation of budgets and their review by the Audit Committee and the Board.

Preparation of monthly financial statements and control accounts to identify discrepancies (if

they arise) in a timely manner. Comparison of actual performance against budget and prior

year and regular reporting of same to the Board.

Preparation of a monthly cash flow statement together with forecast of cash flows to year‒end

to determine in advance financing requirements.

Defined limits of authorization approved by the board.

Board approval required for all major projects.

To further strengthen compliance with audit requirements under the Code of Practice an

Internal Audit Charter has been written and adopted by the Board.

I believe that the extent of monthly controls and reporting provide sufficient assurance as to the

effectiveness of internal financial controls.


CHAIRMAN’S STATEMENT (Continued)


DONATIONS

The company is aware of the importance of social capital, its corporate social responsibility and

community support and is committed to supporting, where appropriate, regional and national

organizations.

During 2014 the company supported the following community projects and organizations:-

Alzheimers Society

South East Simon Community

Little Sisters of the Poor

South East Cancer Foundation

Waterford Hospice

Bone Marrow Trust

Oasis House Women’s Refuge

ACKNOWLEDGEMENTS

I would take this opportunity to thank my fellow directors for their advice and support and the

management and employees who continually demonstrate ability and determination to sustain and

grow the business.

Des Whelan

Chairman

26 March 2015


COMPANY INFORMATION

DIRECTORS Mr. Des Whelan – Chairman *^

(appointed 6 October 2014)

Mr. Michael Flynn - Chairman *^

(resigned 1 July 2014)

Mr. Stan McIlvenny (British) OBE - CEO

Mr. Derek Donnelly *

(resigned 12 February 2014)

Ms. Helen Noble (British) *^

Ms. Noreen McDonnell ^

(resigned 6 April 2014)

Ms. Fiona Ormond *^

(resigned 6 April 2014)

Mr. Patrick Heffernan

Mr. Joe Dreelan *

(appointed 25 June 2014)

Ms. Louise Grubb ^


Ms. Mary Mosse *


Mr. Jack Walsh


* Members of Audit Committee

^ Members of Remuneration Committee

SECRETARY Mr. Stan McIlvenny (British) OBE

REGISTERED OFFICE 3rd Floor, Marine Point

Belview Port

Slieverue

Waterford

REGISTERED NUMBER

OF INCORPORATION 299445

AUDITOR Ernst & Young

The Atrium

Maritana Gate

Canada Street

Waterford

BANKERS Allied Irish Banks plc

Bank of Ireland

Permanent TSB

SOLICITORS M.J. O’Connor

Confederation House

Waterford Business Park

Cork Road

Waterford


DIRECTORS’ REPORT


The directors present their report and audited financial statements for the year ended 31

December 2014.

PRINCIPAL ACTIVITY AND REVIEW OF THE DEVELOPMENT OF THE BUSINESS

The principal activity of the company is the management, control and development of the Port of

Waterford.

Commentary on the operating performance of the group during 2014 is set out in the Chairman’s

Statement.

RISKS AND UNCERTAINTIES

Under Irish Company Law (Statutory Instrument 116.2005 - European Communities (International

Financial Reporting Standards and Miscellaneous Amendments) Regulations 2005) the group

and the company are required to give a description of the principal risks and uncertainties faced,

as well as listing the key performance indicators used to monitor performance.

The company is the holding company for the group, so the risks below apply to both the company

and the group.

The principal risks and uncertainties that the business faces include:-

Defined benefit pension scheme

National and International economic outlook

Loss of a major customer

Damage to or loss of the company’s fixed assets

Legal actions by third parties

The company maintains a risk register which is reviewed at every meeting of the board.

The key performance indicators focused upon by management are:-

Analysis of volumes/revenues by category against prior year and budget

Monthly review under each cost heading against budget

Measurement of ROCE

Monitoring of employee statistics

Assessment of port throughput in context of national market trends

Monitoring and investment of cash flows

RESULTS FOR THE YEAR, DIVIDENDS AND STATE OF AFFAIRS

The profit and loss account, statement of total recognised gains and losses, cash flow statement

and balance sheet for the year ended 31 December 2014 and the notes thereon are set out on

pages 14 to 35.

The company, which is a company limited by shares, as a matter of policy approves the

declaration of a dividend when appropriate and in accordance the Memorandum and Articles of

Association. Any dividend paid will have to take account of the overall financial circumstances of

the company and its future financial obligations.

The directors of the company do not propose the payment of a dividend.


DIRECTORS’ REPORT (Continued)


PORT OPERATIONS

Human Resources

The average number of people employed by the group in 2014 was 31 (2013: 29).

Restructuring and reorganisation are a constant theme with all employees having accepted

changes to contracts of employment, reductions in wages/fees, additional working hours, reduced

holiday entitlement, removal of overtime premiums, bonuses and maximum flexibility in working

practices in the last few years.

Safety, Health & Welfare at Work Act

The Act is designed to assist in the prevention of workplace accidents, illnesses and dangerous

occurrences.

Safety statements for both group companies were revised in 2014. Risk assessments for

employee activity were updated and the review is ongoing. Consultants were appointed to provide

a traffic management plan with a first site visit in late 2014. A safety management system audit

was undertaken and no issues were identified.

The Health & Safety Annual Report for 2014 is summarised as follows:

No lost work time incidents occurred during the year.

There were no H.S.A. Improvement Notices issued.

There were 6 Port User Safety Meetings during the year.

The company has an online induction training module for everyone who has business in

the port environs.

The following safety courses were completed by Port employees:

Manual Handling

Occupational first aid course

Safe Pass Course

Information Communications Technology (ICT) Over the course of the year, an upgrade programme was undertaken for to replace various ICT equipment such as computers, file server, switches and a telephone system. In Q3, a review of network security was carried out as part of the IT maintenance regime and no major issues were identified.

Social Media In 2014, there were approximately 6,000 unique visits to the company website. In addition to the company Facebook page, its Twitter account @PortofWaterford is now used as part of the company social media strategy of promoting port operations, news and events.

Security Security equipment was rehoused as part of an office relocation project. This work involved the installation of over 1.5km of new fibre optic cabling and the termination over 400 individual fibre optic connections. This substantially future-proofs the port security and data systems.

https://twitter.com/PortofWaterford




PORT OPERATIONS (continued)

Port Emergency Plan The plan was updated in 2014 and remains fully compatible with the requirements of the Major Emergency Management Framework 2006.

The Environment

An inspection of the port’s discharge licence was carried out during a site visit in December 2013.

It was determined that the current licence is to be examined in full as it was issued in 1995. This

is ongoing.

Energy Usage The Port of Waterford group company employs 31 staff. Electricity is the main energy source in Marine Point and may be broken into the following categories:

Heating the offices

Lighting of yard areas and offices

Container terminal (including two container gantry cranes and refrigerated plug-in points)

Powering of electronic and electrical equipment

Vehicular and water-borne operating equipment

In 2014, the Port of Waterford consumed:

Energy Consumption MWh

Electricity 152

Fossil Fuels 4,273

Renewable Fuels -

Total Energy Consumed 4,425

Consumption was attributed to the container terminal operations and lighting at Belview. An annual review of pricing was undertaken. The electricity to the group is supplied by Airtricity and Electric Ireland. The average occupancy of the offices over the period from January to December 2014 was 13 persons so the average energy consumption was:

49,014 kWh per person/per year 4,084 kWh per person/per month

In 2014, where possible, energy efficient bulbs were used for any new lighting installed or replaced. Energy awareness increased with the use of timer-switches and individual heating controls.




CORPORATE PLAN 2015-2019

A corporate plan for 2015-2019 has been prepared. Continuing economic uncertainty remains,

however the plan reflects an expected improved trading performance from 2016 onwards.

EVENTS SINCE THE BALANCE SHEET DATE

There have been no events since the balance sheet date that require comment.

FUTURE DEVELOPMENTS

There are no developments requiring comment.

POLITICAL DONATIONS

The company did not make any political donations during the year.

PROMPT PAYMENT OF ACCOUNTS

In accordance with the Prompt Payments of Accounts Act 1997 and the European Communities

(Late Payment in Commercial Transactions) Regulations, 2002 it is group policy to pay all

creditors within the limits prescribed in legislation or limits agreed in advance with suppliers.

Invoices are recorded on receipt and cheques are issued as required to ensure timely payment.

The system of internal financial control incorporates such controls and procedures as are

considered necessary to ensure compliance with the legislation.

CORPORATE GOVERNANCE

The directors are committed to maintaining high standards of corporate governance including

compliance with the guidelines set out for port companies in the Corporate Governance

Framework issued by the Department of Communications, Marine and Natural Resources in

February 1997, the Code of Practice for Governance of State Bodies (as updated in May 2009)

and the UK combined Code of Practice.

The main areas covered by the corporate governance framework are as follows:

Directors’ Code of Conduct

It is the company’s aim to ensure that all directors are aware of, and in compliance with, the code

of conduct for directors.

The directors are subject to the rigours of the ‘Combined Code.’

Procurement procedures, advertising and awards of contracts

The company has procedures in place to ensure compliance with public procurement guidelines.

Travel Policy

The company has procedures in place to achieve economy and efficiency in expenditure on

official travel.




CORPORATE GOVERNANCE (continued)

Chief Executive’s Remuneration

The Chief Executive’s salary and benefits package is subject to ratification by the Board of

Directors by virtue of Section 35 (5) of the Harbours Act 1996.

A Remuneration Committee of the Board meets for this purpose. There are 3 non‒executive

directors nominated to this Committee.

Remuneration Committee members are listed separately on page 4 of the report.

Investment appraisal procedures

All investments of a material nature are approved by the Board of Directors.

Procedure for the disposal of fixed assets

All asset disposals of a material nature are ratified by the Board of Directors.

Reporting arrangements and requirements

It is the company’s aim to comply with the agreed reporting requirements of the Department of

Transport, Tourism and Sport and other government departments in a timely and accurate

manner.

Audit Committee

The audit committee met 3 times during 2014. This committee has terms of reference, approved

by the board and is composed entirely of non‒executive directors and they are listed on page 4

of the report.

Internal Audit

The establishment of an internal audit function is considered inappropriate in the context of the

size of the organisation. In order to meet the requirements of the code in relation to internal audit,

a three year rolling programme (as approved by the audit committee) covering various aspects of

the business has been put in place. The programme as outlined is complete to date with the

exception of two items deferred. All reviews were carried out independently. All reports were

reviewed by the audit committee who concluded, on the basis of the reports, that the controls

operating and the level of compliance in these specific areas were satisfactory. The audit

committee reported accordingly to the main Board.

DIRECTORS

The directors of the company in 2014 are listed on page 4. Mr. Derek Donnelly resigned as a

director of the company on 12 February 2014. Ms. Noreen McDonnell and Miss Fiona Ormond

resigned on 6 April 2014. Mr. Michael Flynn resigned on 1 July 2014. Mr. Joe Dreelan, Ms. Louise

Grubb, Ms. Mary Mosse and Mr Jack Walsh were appointed on 25 June 2014. Mr. Des Whelan

was appointed on 6 October 2014.

DIRECTORS’ AND SECRETARY’S INTERESTS IN SHARES

None of the directors or secretary or their immediate families holds shares in the company or

group at the balance sheet date.




BOOKS OF ACCOUNT

The directors are responsible for ensuring that proper books and accounting records, as outlined

in Section 202 of the Companies Act, 1990 are kept by the group. To achieve this, the directors

have appointed a professionally qualified accountant who reports to the board and ensures that

the requirements of Section 202 of the Companies Act, 1990 are complied with.

The books and accounting records are maintained at the company’s premises:

Port of Waterford Company

3rd Floor, Marine Point

Belview Port

Slieverue

Waterford.

AUDITOR

The auditor, Ernst & Young, Chartered Accountants, will continue in office in accordance with

Section 160(2) of the Companies Act, 1963.

On behalf of the Board:

Des Whelan

Chairman

Stan McIlvenny

Chief Executive

26 March 2015


DIRECTORS' RESPONSIBILITIES STATEMENT

The directors are responsible for preparing the Directors’ Report and the financial statements

in accordance with Irish law and regulations.

Irish company law requires the directors to prepare financial statements giving a true and fair

view of the state of affairs of the company and of the profit or loss for each financial year. Under

that law the directors have elected to prepare financial statements in accordance with Irish

Generally Accepted Accounting Practice (accounting standards issued by the Financial

Reporting Council and promulgated by the Institute of Chartered Accountants in Ireland and

Irish law).

In preparing these financial statements, the directors are required to:

• Select suitable accounting policies and then apply them consistently;

• Make judgements and estimates that are reasonable and prudent;

• Prepare the financial statements on the going concern basis unless it is inappropriate to

presume that the company will continue in business.

The directors are responsible for keeping proper books of account that disclose with reasonable

accuracy at any time the financial position of the company and enable them to ensure that the

financial statements comply with the Companies Acts, 1963 to 2013. They are also responsible

for safeguarding the assets of the company and hence for taking reasonable steps for the

prevention and detection of fraud and other irregularities.

The directors are responsible for the maintenance and integrity of the corporate and financial

information included on the company’s website. Legislation in Ireland governing the preparation

and dissemination of financial statements may differ from legislation in other jurisdictions.

Approved by the Board on 26 March 2015

Des Whelan

Chairman

Stan McIlvenny

Chief Executive


CONSOLIDATED PROFIT AND LOSS ACCOUNT


2014 2013

Note € €

Turnover – continuing operations 2 6,300,874 5,999,303

Other operating income – profit on sale of landbank 85,182 –

Exceptional items 3 205,900 1,053,696

Operating and maintenance costs - (1,207,458) (1,091,843)

Dredging costs (1,138,643) (416,427)

Staff costs 4 (1,615,143) (1,556,546)

Depreciation 8 (1,247,313) (1,726,957)

Grant amortisation 13 328,662 335,208

Other operating charges (677,665) (615,069)

________ ________

Operating profit – continuing operations 5 1,034,396 1,981,365

Profit on disposal of fixed assets 234,945 (91,469)

________ ________

1,269,341 1,889,896

Interest receivable 64,965 64,950

Interest payable and similar charges 6 (7,963) (12,403)

Other financing costs 15 (250,335) (234,771)

________ ________

Profit on ordinary activities before taxation 1,076,008 1,707,672

Tax on profit on ordinary activities 7 157,243 (159,142)

________ ________

Profit on ordinary activities after taxation 17 1,233,251 1,548,530

========== ==========


Des Whelan

Chairman

Stan McIlvenny

Chief Executive


MOVEMENTS ON CONSOLIDATED PROFIT AND LOSS ACCOUNT


2014 2013

Note € €

At 1 January 9,960,572 8,705,287

Profit for the year 1,233,251 1,548,530

Pension scheme actuarial losses 15 (536,319) (151,872)

Deferred tax charge in relation to pension scheme 15 (38,668) (141,373)

________ _________

At 31 December 10,618,836 9,960,572

========== ==========

CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES.

2014 2013

Note € €

Profit for the year 1,233,251 1,548,530

________ ________

Pension scheme actuarial losses

Return on scheme assets

greater than/(less than) expected return 2,132,154 (245,310)

Experience (losses)/gains (2,668,473) 93,438

________ ________

15 (536,319) (151,872)

________ ________

Deferred tax charge in relation to pension scheme 15 (38,668) (141,373)

________ ________

Total recognised gains and losses for year 658,264 1,255,285

========== ==========


CONSOLIDATED BALANCE SHEET

at 31 December 2014

2014 2013

ASSETS EMPLOYED Note € €

FIXED ASSETS

Tangible assets 8 37,609,369 38,383,744

_________ _________

CURRENT ASSETS

Stock 10 1,369,601 1,805,000

Debtors 11 2,007,371 3,091,399

Cash at bank and in hand 5,647,729 3,516,943

_________ _________

9,024,701 8,413,342

CREDITORS (amounts falling due within one year) 12 (1,439,461) (1,504,158)

_________ _________

NET CURRENT ASSETS 7,585,240 6,909,184

_________ _________

TOTAL ASSETS LESS CURRENT LIABILITIES 45,194,609 45,292,928

_________ _________

CAPITAL GRANTS 13 (9,929,139) (10,257,801)

DEFERRED TAXATION 14 (395,213) (552,456)

DEFINED BENEFIT PENSION LIABILITY 15 (5,483,095) (5,753,773)

_________ __________

(15,807,447) (16,564,030)

_________ __________

29,387,162 28,728,898

========== ==========

CAPITAL AND RESERVES

Called up share capital 16 18,675,803 18,675,803

Capital reserves 17 92,523 92,523

Profit and loss account 17 10,618,836 9,960,572

_________ __________

Shareholders’ funds 17 29,387,162 28,728,898

========== ==========


Des Whelan

Chairman

Stan McIlvenny

Chief Executive


COMPANY BALANCE SHEET

at 31 December 2014

2014 2013

ASSETS EMPLOYED Note € €

FIXED ASSETS

Tangible assets 8 37,599,329 38,379,004

Financial assets 9 100 100

_________ _________

37,599,429 38,379,104

_________ _________

CURRENT ASSETS

Stock 10 1,369,601 1,805,000

Debtors 11 1,867,413 2,986,346

Cash at bank and in hand 5,582,426 3,456,196

_________ _________

8,819,440 8,247,542

CREDITORS (amounts falling due within one year) 12 (1,349,613) (1,401,247)

_________ _________

NET CURRENT ASSETS 7,469,827 6,846,295

_________ _________

TOTAL ASSETS LESS CURRENT LIABILITIES 45,069,256 45,225,399

_________ _________

CAPITAL GRANTS 13 (9,929,139) (10,257,801)

DEFERRED TAXATION 14 (395,213) (552,456)

DEFINED BENEFIT PENSION LIABILITY 15 (5,483,095) (5,753,773)

_________ _________

(15,807,447) (16,564,030)

_________ _________

29,261,809 28,661,369

========== ==========

CAPITAL AND RESERVES

Called up share capital 16 18,675,803 18,675,803

Capital reserves 17 92,523 92,523

Profit and loss account 17 10,493,483 9,893,043

_________ _________

Shareholders’ funds 17 29,261,809 28,661,369

========== ==========


Des Whelan

Chairman

Stan McIlvenny

Chief Executive


CONSOLIDATED CASH FLOW STATEMENT


2014 2013

Note € € € €

Net cash inflow from

operating activities 20 3,195,396 2,132,191

Returns on investments and

servicing of finance

Interest paid (8,027) (12,860)

Interest received 54,693 68,917

________ ________

46,666 56,057

Pension liabilities

Payments of past service pension liabilities

and contributions (1,164,105) (977,631)

Taxation

Corporation tax repaid/(paid) 542 (542)

Capital expenditure and

financial investment

Net Proceeds from sale of

tangible fixed assets 354,248 2,000

Disposal costs (9,501) (37,687)

Purchase of tangible fixed assets (292,460) (77,881)

________ _________

52,287 (113,568)

Financing

Loans repaid 21 – (230,647)

________ ________

Increase in cash 21 & 22 2,130,786 865,860

========== ==========


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

31 December 2014

1. ACCOUNTING POLICIES

(a) Basis of preparation of financial statements

The financial statements have been prepared in accordance with Generally Accepted

Accounting Principles and comply with Financial Reporting Standards approved by the

Accounting Standards Board for use in Ireland and the UK, and promulgated in Ireland by

the Institute of Chartered Accountants in Ireland, and have been prepared under the

Historical Cost Convention. The profit and loss account of the company departs from the

formats prescribed under the Companies Act, 1986, in order to reflect the special nature of

the company’s business.

The fixed assets of the Waterford Harbour Commissioners were revalued in consultation

with the Minister for Communications, Marine and Natural Resources. The revalued assets

were transferred to the company on vesting day 11 January 1999, under the Harbours’ Act,

1996.

(b) Basis of consolidation

The consolidated accounts incorporate the accounts of the company and each of its

subsidiaries for the year ended 31 December 2014. No profit and loss account is presented

for Port of Waterford Company as is permitted by Section 148 (8) of the Companies Act,

1963 and Section 7 (1A) of the Companies Amendment Act, 1986.

(c) Turnover

Turnover, which is stated net of value added tax, comprises charges to port users, rents

and income from car parking.

(d) Tangible fixed assets

Freehold land is stated at cost. Other tangible fixed assets are stated at cost less

accumulated depreciation. Fixed assets acquired from the company’s predecessor entity,

Waterford Harbour Commissioners, are stated at their vesting day transfer values.

Depreciation is calculated in order to write off the cost of tangible fixed assets other than

freehold land over their estimated useful lives by equal annual instalments as follows:

Buildings 40 years

Dock structures 50 years

Floating craft up to 30 years

Cranes 12 years

Plant, machinery and equipment 4 - 15 years

Capital dredging 5 years

Motor vehicles 5 years

Computer and office equipment 4 - 7 years



31 December 2014 (continued)

1. ACCOUNTING POLICIES (continued)

(e) Development land

Development land comprises land which is not held for long-term business usage, but

which is held for development or re-sale purposes. It is carried as stock on the balance

sheet and is stated at the lower of cost and net realisable value. Net realisable value is

based on estimated market value.

(f) Leases

Operating lease rentals are charged to the profit and loss account as they fall due.

(g) Taxation

Current tax is recognised on the basis of tax rates and laws in place during the year.

Deferred tax is recognised in respect of all timing differences that have originated but not

reversed at the balance sheet date where transactions or events that result in an obligation

to pay more, or a right to pay less, tax, with the exception that deferred tax assets are

recognised only to the extent that the directors consider that it is more likely than not that

there will be suitable taxable profits from which the future reversal of the underlying timing

differences can be deducted.

Timing differences are differences between profit as computed for taxation purposes and

profit as stated in the financial statements, which arise because certain items of income

and expenditure in the financial statements are dealt with in different periods for taxation

purposes.

Deferred tax is measured on an undiscounted basis at the tax rates that are expected to

apply in the periods in which timing differences reverse, based on tax rates and laws

enacted or substantively enacted at the balance sheet date.

(h) Grants and contributions to tangible fixed asset costs

Grants and contributions to the cost of tangible fixed assets are treated as deferred credits,

which are amortised to the profit and loss account on the same basis as the related tangible

fixed assets are depreciated.

Grants to subvent revenue expenditure are treated as deferred credits and released to the

profit and loss account over the period that the grants are subventing.

(i) Foreign currencies

The financial statements are denominated in Euro (€).

Monetary assets and liabilities denominated in foreign currencies are translated at the

exchange rates ruling at the balance sheet date and revenues, costs and non‒monetary

assets at the exchange rates ruling at the dates of the transactions.

Profits and losses arising from foreign currency translations and on settlement of amounts

receivable and payable in foreign currency are dealt with in the profit and loss account.

Monetary assets are money held and amounts to be received in money; all other assets

are non‒monetary assets.




1. ACCOUNTING POLICIES (continued)

(j) Pension costs

Defined benefit scheme

Pension scheme assets are measured using market value. Pension scheme liabilities are

measured using the projected unit actuarial method and are discounted at the current rate

of return on a high quality corporate bond of equivalent terms and currency to the liability.

The increase in the present value of the liabilities of the group’s defined benefit pension

schemes expected to arise from the employee service in the period is charged to operating

profit. The expected return on the schemes’ assets and the increase during the year in the

present value of the schemes’ liabilities arising from the passage of time are included in

other finance income. Actuarial gains and losses are recognised in the statement of total

recognised gains and losses. Pension schemes’ surpluses to the extent that they are

considered recoverable, or deficits are recognised in full and presented on the face of the

balance sheet, net of the related deferred tax.

Defined contribution scheme

The group operates defined contribution pension schemes. Contributions are charged to

the profit and loss account as they become payable in accordance with the rules of the

scheme.

2. TURNOVER 2014 2013

€ €

Turnover comprises the following:

Port dues and other port related income 5,589,580 5,278,203

Car parking and other revenues 711,294 721,100

_________ _________

6,300,874 5,999,303

========== ==========

3. EXCEPTIONAL ITEMS 2014 2013

€ €

Bell Lines Limited – Final liquidation

dividend 205,900 2,013,203

Write down of Development Land - (959,507)

_________ _________

205,900 1,053,696

========== ==========




4. EMPLOYEES, (INCLUDING PILOTS) AND REMUNERATION

The average number of persons employed (including pilots) during the year was as follows:

2014 2013

No. No.

Administration 9 9

Operations and maintenance 22 20

___ ___

31 29

___ ___

The payroll costs of these persons were as follows: € €

Wages and salaries 1,309,638 1,260,019

Social welfare costs 147,976 140,424

Pension cost – defined benefit 63,765 58,038

Pension cost ‒ defined contribution 93,764 98,065

________ _________

1,615,143 1,556,546

========== ==========

5. OPERATING PROFIT 2014 2013

€ € € €

This is stated after charging/(crediting):

Directors’ remuneration

- For management services

Basic salary 122,059 122,059

Bonus - -

Additional benefits 7,824 7,824

Pension contributions – regular 30,515 30,515

- For services as directors 53,851 58,762

- Pensions paid to past directors 124,309 124,309

Auditors’ remuneration

- Audit of Group Accounts 18,228 15,000

- Other Assurance Services 1,150 5,710

- Other non‒audit services 1,600 1,600

Depreciation (note 8) 1,247,313 1,726,957

Grant amortisation (note 13) (328,662) (335,208)

________ ________

918,651 1,391,749

========== ==========




6. INTEREST PAYABLE AND SIMILAR CHARGES 2014 2013

€ €

Bank overdraft interest and bank charges 7,963 7,065

Bank loans repayable within five years by instalments - 5,338

________ ________

7,963 12,403

========= ==========

7. TAX ON PROFIT ON ORDINARY ACTIVITIES 2014 2013

€ €

(a) Analysis of charge/(credit) for the year:

Current tax

Corporation tax – –

________ ________

Current tax (Note 7 (b)) – –

Deferred tax (credit)/charge (Note 14) (157,243) 159,142

________ ________

Tax on profit on ordinary activities (157,243) 159,142

========= ==========

(b) Factors affecting tax charge for the year:

The tax assessed for the year differs from that

calculated using the standard rate of corporation tax

in the Republic of Ireland (12.5%).

The differences are explained below:

Profit on ordinary activities before taxation 1,076,008 1,707,672

========= ==========




7. TAX ON PROFIT ON ORDINARY ACTIVITIES 2014 2013

(continued) € €

Profit on ordinary activities before tax

multiplied by standard rate of corporation

tax in the Republic of Ireland 12.5% 134,501 213,459

Effects of:

Expenses not allowable for tax purposes 1,183 (196)

Depreciation in excess of capital allowances (14,642) 99,905

Estate and investment income @ 25% 12,386 35,683

Pension payment in excess of charge (174,944) (160,356)

Other timing differences – 6,313

Losses brought forward from prior periods (10,648) (247,269)

Losses carried forward to future periods 52,164 52,461

________ ________

Current tax charge for the year (Note 7 (a)) - -

========= ==========

8. TANGIBLE FIXED ASSETS

Motor

Land Vehicles,

Wharves Cranes Capital Office

& Buildings & Plant Dredging Equipment Total

Group € € € € €

Cost

At 1 January 2014 49,345,223 13,175,007 1,577,572 142,439 64,240,241

Additions during year 361,186 170,362 43,727 7,465 582,740

Disposals during year (160,757) (750) - - (161,507)

_________ _________ ________ _______ _________

At 31 December 2014 49,545,652 13,344,619 1,621,299 149,904 64,661,474

_________ _________ ________ _______ _________

Accumulated depreciation

At 1 January 2014 12,183,910 12,658,184 874,110 140,293 25,856,497

Charge for year 1,022,776 183,647 39,238 1,652 1,247,313

On disposals (50,955) (750) - - (51,705)

_________ ________ _______ _______ _________

At 31 December 2014 13,155,731 12,841,081 913,348 141,945 27,052,105

_________ ________ _______ _______ _________

Net book value

At 31 December 2014 36,389,921 503,538 707,951 7,959 37,609,369

=========== ========== ========== ========= ==========

At 31 December 2013 37,161,313 516,823 703,462 2,146 38,383,744

=========== ========== ========== ========= ==========

Land, wharves and buildings include land in the amount of €1,657,173 on which no

depreciation is charged.




8. TANGIBLE FIXED ASSETS

Motor

Land Vehicles,

Wharves Cranes Capital

& Buildings & Plant Dredging Total

Company € € € €

Cost:

At 1 January 2014 49,345,223 12,140,624 1,577,572 63,063,419

Additions during year 361,186 170,362 43,727 575,275

Disposals during year (160,757) (750) - (161,507)

_________ _________ ________ _________

At 31 December 2014 49,545,652 12,310,236 1,621,299 63,477,187

_________ _________ ________ _________

Accumulated

Depreciation:

At 1 January 2014 12,183,910 11,626,395 874,110 24,684,415

Charge for year 1,022,776 183,134 39,238 1,245,148

On disposals (50,955) (750) - (51,705)

_________ ________ _______ _________

At 31 December 2014 13,155,731 11,808,779 913,348 25,877,858

_________ ________ _______ _________

Net book value:

At 31 December 2014 36,389,921 501,457 707,951 37,599,329

=========== ========== ========== ==========

At 31 December 2013 37,161,313 514,229 703,462 38,379,004

=========== ========== ========== ==========

Land, wharves and buildings include land in the amount of €1,657,173 on which no

depreciation is charged.




9. FINANCIAL FIXED ASSETS Company

2014 2013

€ €

Group undertakings – unlisted

Shares at cost 100 100

========= ==========

The investment comprises 100% of the share capital of Waterford Container Terminal

Limited, whose registered office is at 3rd Floor, Marine Point, Belview Port, Slieverue,

Waterford. Waterford Container Terminal Limited is engaged in the provision of stevedoring

services. The investment comprises 100 Ordinary Shares of €1 each.

In the opinion of the directors, the value to the company of the unlisted investment is not

less than the book amount shown above.

10. STOCK Group and Company

2014 2013

€ €

Development land:

Land bank 1,369,601 1,805,000

========= ==========

The company is engaged in the development of land adjacent to the port for industrial

purposes. The amount stated above for 2013 is the revalued amount at the end of that year.

15 acres of this land was sold in 2014.

11. DEBTORS Group Company

(amounts falling due within one year) 2014 2013 2014 2013

€ € € €

Trade debtors and prepayments 2,007,371 1,077,861 1,826,173 968,922

Other debtors – 2,013,203 – 2,013,203

Amounts due by subsidiary

undertaking - trade – – 41,240 3,886

Corporation tax – 335 – 335

________ ________ ________ ________

2,007,371 3,091,399 1,867,413 2,986,346

========= ========= ========= =========




12. CREDITORS Group Company

(amounts falling due within one year) 2014 2013 2014 2013

€ € € €

Trade creditors and accruals 1,351,829 1,414,075 1,249,435 1,313,155

Amount due to subsidiary

undertaking - trade - - 7,957 4,188

PAYE 45,547 50,707 39,447 45,082

PRSI 17,235 16,753 10,926 11,163

VAT 24,645 22,623 41,643 27,659

Corporation tax 205 - 205 -

________ ________ ________ ________

1,439,461 1,504,158 1,349,613 1,401,247

========= ========= ========= =========

13. CAPITAL GRANTS: Group and Company

Government and EU Grants 2014

€

Receivable

At 1 January 2014 and

at 31 December 2014 17,906,486

_________

Amortisation

At 1 January 2014 7,648,685

Credited in year 328,662

_________

At 31 December 2014 7,977,347

_________

Net book amounts

At 31 December 2014 9,929,139

=========

At 31 December 2013 10,257,801

=========

Prior to vesting day Waterford Harbour Commissioners had received capital grants

amounting to €24,319,608.




14. DEFERRED TAXATION Group and Company

2014 2013

€ €

Principally on accelerated capital allowances

and unutilised tax losses

At 1 January 552,456 393,314

(Credit)/charge for the year (Note 7) (157,243) 159,142

_______ ________

At 31 December 395,213 552,456

========= ==========

A deferred tax asset of €204,442 in respect of losses forward in relation to the company’s

landbank is not recognised in these financial statements due to the uncertainty surrounding

future taxable profits against which these losses can be utilised. A potential deferred tax

asset of €106,499 (2013: €233,509) in respect of trading losses carried forward to future

periods has not been recognised as there is uncertainty over the timing of future taxable

profits arising from the company’s subsidiary undertaking’s principal activity.

15. PENSION COMMITMENTS

Defined contribution schemes

The group operates defined contribution pension schemes for certain employees. The

assets of the schemes are held separately from those of the group in independently

administered funds. The advice of a professionally qualified actuary was taken in the setting

up and maintenance of the schemes. Total pension costs of the defined contribution

schemes for the year ended 31 December 2014 amounted to €93,764 (2013: €98,065).

Defined benefit scheme

The company operates defined benefit schemes for certain of its permanent employees,

including employees and former employees of the company’s predecessor entity Waterford

Harbour Commissioners. Contributions to the scheme are based on the advice of an

independent qualified actuary. The scheme is funded by the payment of contributions to a

separately administered fund.

The company has agreed with the Pensions Board, the funding of the scheme over a period

which is longer than the maximum normally allowed. To facilitate this extended funding

period the company has granted a charge over certain non-core assets in favour of the

Trustees of the Pension Scheme. This charge is granted as security for any deficit of funds

as certified by the scheme actuary in relation to the Pension Scheme until such time as the

Trustees are satisfied that the deficit is unconditionally and irrevocably paid in full.

The overall expected rate of return on plan assets of 1.35% has been derived from the

weighted expected return of each of the major categories of assets after allowing for the

pension levy deduction of 0.75%. In particular the expected annual return on bonds has

been taken to be 1.5%. The expected annual return on cash has been taken to be 0.25%.

This has been derived from the average yield on long term Eurozone Government debt.




15. PENSION COMMITMENTS (continued)

The amounts recognised in the balance sheet are as follows:

2014 2013

€’000 €’000

Present value of funded obligations 16,220 14,039

Fair value of plan assets (9,954) (7,463)

________ ________

Deficit 6,266 6,576

Related deferred tax asset (783) (822)

________ ________

Net liability 5,483 5,754

========= ==========

The amounts recognised in the profit and loss account are as follows:

2014 2013

€’000 €’000

In staff costs:

Current service cost 64 58

________ ________

In other financing costs:

Interest on obligation 436 453

Expected return on plan asset (185) (218)

________ ________

251 235

________ ________

Total 315 293

========= ==========

Actual return on plan assets 2,318 (27)

========= ==========





Changes in present value of the defined benefit obligation are as follows:

2014 2013

€’000 €’000

Opening defined benefit obligation 14,039 14,585

Current service cost 64 58

Employees’ contribution 4 4

Interest cost 436 453

Actuarial losses/(gains) 2,668 (93)

Benefits paid (991) (968)

________ ________

Closing defined benefit obligation 16,220 14,039

========= ==========

Changes in the fair value of plan assets are as follows:

2014 2013

€’000 €’000

Opening fair value of plan assets 7,463 6,878

Expected return 185 218

Employers contributions 1,160 1,576

Employees’ contribution 4 4

Actuarial experience gains/(losses) 2,133 (245)

Benefits paid (991) (968)

________ ________

Closing fair value of plan assets 9,954 7,463

========= ==========





The company expects to contribute a total of €1.16m to the defined benefit plan including

€0.92m contribution in 2015. This is in accordance with the funding plan agreed in 2013.

The major categories of plan assets as a percentage of total plan assets are as follows:

2014 2013

Bonds 99.5% 92%

Cash 0.5% 8%

Principal actuarial assumptions at the balance sheet date (expressed as weighted

averages)

2014 2013

Discount rate at 31 December 1.75% 3.20%

Inflation 2.00% 2.00%

Salary increases 2.50% 2.50%

Increase in pensions 0.50% 0.50%

Expected return on assets (net of pension levy) 1.35% 2.45%

Base mortality table:

Active members: M - 62% PMNL 2000 F - 70% PNFL 2000

Current pensioners: M - 62% PMNL 2000 F - 70% PNFL 2000

The mortality basis for Active Members and Current Pensioners is updated to mortality basis

set out in Actuarial Standards of Practice – Pensions No.3.

Amounts for the current and previous four periods are as follows:

2014 2013 2012 2011 2010

€’000 €’000 €’000 €’000 €’000

Fair value of assets 9,954 7,463 6,878 5,498 4,656

Defined benefit of obligation (16,220) (14,039) (14,585) (15,116) (15,124)

Deficit (6,266) (6,576) (7,707) (9,618) (10,468)

Experience adjustments in assets 2,133 (245) 712 5 (111)

Experience adjustments in liability (2,668) 93 210 732 (220)

====== ====== ====== ====== ======

16. CALLED UP SHARE CAPITAL 2014 2013

€ €

Authorised:

32,000,000 Ordinary Shares of €1.25 each 40,000,000 40,000,000

========== ==========

Allotted, called up and fully paid:

14,940,642 Ordinary Shares of €1.25 each 18,675,803 18,675,803

========== ==========




17. RECONCILIATION OF MOVEMENTS

IN SHAREHOLDERS' FUNDS

Capital

Issued conversion Profit Total

share reserve and loss shareholders’

capital fund account funds

Group € € € €

At 1 January 2014 18,675,803 92,523 9,960,572 28,728,898

Profit for the year – – 1,233,251 1,233,251

Pension scheme actuarial

losses – – (536,319) (536,319)

Deferred tax charge in relation

to pension scheme – – (38,668) (38,668)

_________ ________ ________ _________

At 31 December 2014 18,675,803 92,523 10,618,836 29,387,162

========== ========== ========== ==========

Capital

Issued conversion Profit Total

share reserve and loss shareholders’

capital fund account funds

Company € € € €

At 1 January 2014 18,675,803 92,523 9,893,043 28,661,369

Profit for the year – – 1,175,427 1,175,427

Pension scheme actuarial

losses – – (536,319) (536,319)

Deferred tax charge in relation

to pension scheme – – (38,668) (38,668)

_________ ________ ________ _________

At 31 December 2014 18,675,803 92,523 10,493,483 29,261,809

========== ========== ========== ==========




18. CONTINGENCIES

Company

(i) Contingent liabilities

Section 17, Companies (Amendment) Act, 1986:

The company has guaranteed the liabilities (as defined in Section 5 (c) (ii) of the

Companies Amendment Act, 1986) of its subsidiary set out at Note 9 and consequently,

the subsidiary undertaking does not file its financial statements.

19. COMMITMENTS

Under the terms of a sales contract entered into by the company during the year, for the

sale of a site from its landbank, the company is committed to paying a contribution of up

to €175,000 to the purchaser of the site in respect of an access road.

20. RECONCILIATION OF OPERATING PROFIT TO 2014 2013

NET CASH INFLOW FROM OPERATING ACTIVITIES € €

Operating profit 1,034,396 1,981,365

Depreciation 1,247,313 1,726,957

Grants amortised (328,662) (335,208)

Decrease in stock 435,399 –

Decrease/(increase) in debtors 1,093,965 (2,045,086)

Decrease in creditors (355,118) (217,720)

Pension cost 63,765 58,038

Pension ‒ Regular employee contributions 4,338 4,338

Write down of development land – 959,507

________ _________

Net cash inflow from operating activities 3,195,396 2,132,191

========== ==========

21. RECONCILIATION OF NET CASH FLOW 2014 2013

TO MOVEMENT IN NET FUNDS € €

Increase in cash for year 2,130,786 865,860

Cash outflow from term loan repayments - 230,647

_________ _________

Increase in net funds for the year 2,130,786 1,096,507

Net funds at 1 January 3,516,943 2,420,436

_________ _________

Net funds at 31 December 5,647,729 3,516,943

========== ==========




22. ANALYSIS OF CHANGES IN NET FUNDS

At At

1 Jan Cash Other 31 Dec

2014 Flows Movements 2014

€ € € €

Cash at bank and in hand 3,516,943 2,130,786 – 5,647,729

========== ========== ========= ==========

23. PROFIT FOR THE YEAR ATTRIBUTABLE TO MEMBERS OF THE PARENT COMPANY

AND AUDITOR’S REMUNERATION

(i) As provided under Section 148(8) of the Companies Act, 1963 and Section 7(1A) of the

Companies Amendment Act, 1986 a separate profit and loss account of the holding

company is not presented.

The amount of the profit dealt with in the accounts of the holding company for the year

ended 31 December 2014 was €1,175,427.

(ii) The fees paid to Ernst & Young for the audit of the parent company were €14,464 and

€12,750 for 2014 and 2013 respectively. Note 5 provides additional information regarding

auditors’ remuneration applicable to the group.

24. RELATED PARTY TRANSACTIONS

- Mr. Derek Donnelly, a director of the company during the year, is also a director of Passage

East Car Ferries Limited, a port user, with which the company had transactions on normal

commercial terms.

- Mr. Patrick Heffernan is a full time employee of the company. Mr. Heffernan’s terms of

employment are the same as those applying to other employees in a similar position.

- The only other transactions between the company and its directors were the payment for

services as executive, director or chairman.




25. DIRECTORS’ DISCLOSURES

Meetings* Fees

Director attended €

Des Whelan (Chairman) 2/2 2,961

Michael Flynn (Chairman) 6/6 5,595

S. McIllvenny (CEO) 9/9 8,100

D. Donnelly 0/1 888

Fiona Ormond 3/3 2,010

N. McDonnell 3/3 2,010

Pat Heffernan 8/9 7,766

Helen Noble 8/9 7,766

Joe Dreelan 2/2 4,189

Louise Grubb 2/2 4,189

Mary Mosse 2/2 4,189

Jack Walsh 0/2 4,189

*Meetings attended/meetings eligible

The total of expenses paid to directors (excluding the CEO) was €390 broken down as follows:

€

Travel expenses 5

Conference Fee 385

_____

390

======

26. CONTROLLING PARTY

The company’s immediate and ultimate controlling party is the Minister for Transport, Tourism

and Sport.

27. APPROVAL OF FINANCIAL STATEMENTS

The financial statements were approved and authorised for issue by the board of directors on

26 March 2015.

PORT OF WATERFORD CO -2000 · SOLICITORS M.J. O’Connor Confederation House Waterford Business...

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Transcript of PORT OF WATERFORD CO -2000 · SOLICITORS M.J. O’Connor Confederation House Waterford Business...