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Annual Report and Accounts 2014

PERFORMANCEOPPORTUNITY

DP W

orld

An

nu

al Rep

ort an

d A

ccou

nts 2014

Group CEO’s Review 10–11

Corporate Governance50–58

Chairman’s Statement02–05

Group CFO’s Review 44–45

DP World is a global operator of container and marine terminals with a network of more than 65 terminals spanning six continents.

DP World Jebel Ali (UAE)

Contents

OVERVIEW01 Overview

STRATEGIC REPORT02 Chairman’s Statement06 At a Glance08 Company Milestones10 Group CEO’s Review12 Market Review14 Business Model16 Our Strategy34 Corporate Responsibility38 Principal Risks and

Uncertainties44 Group CFO’s Review

CORPORATE GOVERNANCE46 Board of Directors48 Report of the Directors50 Corporate Governance59 Statement of Directors’

Responsibilities

FINANCIAL STATEMENTS60 Independent Auditors’ Report61 Consolidated Statement of

Profit or Loss62 Consolidated Statement of

Other Comprehensive Income63 Consolidated Statement of

Financial Position64 Consolidated Statement of

Changes in Equity66 Consolidated Statement of

Cash Flows67 Notes to Consolidated

Financial Statements

Who we are

DP World Annual Report and Accounts 2014 01Overview

Corporate Governance

Strategic Report


www.dpworld.com

Operational Highlights • 60 million twenty foot equivalent container units

(TEU) were handled across our global portfolio in 2014, with gross container volumes up by 8.9% on a reported basis.

• Increase in gross volumes included new volume at the DP World London Gateway Port (UK), Embraport (Brazil) and Jebel Ali (UAE).

• Gross capacity across our portfolio is now over 76 million TEU and is expected to increase to over 100 million TEU of gross capacity by 2020, subject to market demand.

• We continued to invest in quality long-term assets, with $807 million invested across our portfolio during 2014.

• Our focus on safety reduced our lost time injury frequency rate by 18% in 2014.

• CO2e emissions intensity reduced by 3% from our 2013 figures to 15.8kgCO2e/ModTEU.

• We announced the acquisition of Economic Zones World FZE for $2.6 billion (subject to adjustments), to create the Middle East’s leading integrated port and free zone.

A YEAROF GROWTH

Revenue USD million

Adjusted EBITDA USD million

Profit attributable to owners of the Company USD million

Adjusted EBITDA margin %

Financial Highlights

3,411m 1,588m 675m 46.6%

Revenue is in USD million before separately disclosed items. The results of the Group are set out in detail in the Consolidated Financial Statements and accompanying notes commencing on page 60.

Growing adjusted EBITDA (Earnings before Interest, Tax, Depreciation and Amortisation) is a key measure of value delivered to shareholders. Adjusted EBITDA is calculated including our share of profit from equity-accounted investees before separately disclosed items.

Profit attributable to owners of the Company is before taking separately disclosed items into account and excludes any profit attributable to non-controlling interests (minorities).

The adjusted EBITDA margin is calculated by dividing EBITDA by revenue, including our share of profit from joint ventures and associates.

13121110

3,0733,1212,9783,078

13121110

1,4141,4041,3071,240

13121110

604545459374

13121110

46.045.043.940.3

02 DP World Annual Report and Accounts 2014

IntroductionI am pleased to report that DP World performed well this year, delivering profit of $675 million and an increase in like-for-like earnings per share of 25%.

Our focus on faster growing markets and our continued investment in world-class technology and automation ensured that we outperformed the industry in 2014. Our growth was underpinned by new volume at DP World London Gateway (UK) and Embraport (Brazil), which came on stream in 2013. We also added to our capacity during the year, with the launch of Terminal 3 at Jebel Ali (UAE) and a new container berth at Southampton (UK).

Delivering Our StrategyIn 2014, we continued to successfully implement our global strategy, which is based on four strategic priorities: driving sustained long-term shareholder value; creating a satisfied and profitable customer experience; ensuring our operations are efficient, safe and secure; and creating a learning and growth environment for our people. We also undertook a global engagement programme to improve the alignment of regional and local strategies with our global Balanced Scorecard Framework.

DP World invests in opportunities that deliver shareholder value. This positions us to exploit the long-term trends in the global economy, such as faster growth in emerging markets and ongoing globalisation. It also enables us to meet our customers’ evolving needs, for example by achieving greater efficiency through automation and the ability to handle larger vessels.

Through our strategy, we create value and opportunities for all our stakeholders, including our customers, employees, communities and investors. One way we do this is by looking ‘beyond the gate’, to provide value-added services that support the movement of cargo beyond our terminals. The acquisition of Economic Zones World FZE (EZW), which we announced in 2014, is an important part of this approach. On a smaller scale, we have also begun to add ancillary services at other terminals around the world. The case study on pages 22 to 23 provides more detail of these initiatives.

“ We have ambitious strategic goals to maximise financial returns, strengthen global supply chains and create sustainable economic growth around the world.”Sultan Ahmed Bin Sulayem Chairman

Chairman’s Statement

25% Increase in like-for-like earnings per share

Pusan Newport Company (South Korea)

03DP World Annual Report and Accounts 2014 Overview


Strategic Report


We are also working closely with the Expo2020 team following Dubai’s successful bid for the event. During the year, we jointly convened a meeting with maritime and logistics industry stakeholders to explore industry trends, opportunities and potential areas of participation for Expo2020.

Generating Value for Shareholders and CustomersDP World’s concessions run for an average of 40 years, so we can invest for the long term. Return on capital employed (ROCE1) and our adjusted EBITDA margin2 are key measures of how well our investment strategy is delivering for shareholders.

In 2014, we increased our ROCE to 7.1% and our adjusted EBITDA margin also expanded, from 46.0% to 46.6%, as we continued to benefit from our operational leverage. We anticipate that we will reach our 2020 targets of a 15% ROCE and 50% adjusted EBITDA margin based on our current port assets.

Our success depends on having capacity in the right places, supported by the right services. We therefore invest significant amounts in expanding our terminals and developing new ones. This year marked the end of our 2012–2014 capital expenditure programme, during which we spent over $2.6 billion on strategically important projects, including DP World London Gateway and a substantial expansion at Jebel Ali.

This investment is bearing fruit. Our new capacity is helping us to deliver stronger top and bottom line growth, with good progress at DP World London Gateway and Embraport during 2014. The portfolio’s gross capacity at the end of the year was 76 million TEU3.

We also invest to enhance our services. We launched our upgraded facility at the Port of Brisbane, Australia’s most advanced semi-automated terminal, offering improved safety, productivity and energy efficiency through the use of remotely operated automated stacking cranes. The new berth at Southampton can handle the world’s largest and deepest vessels, and is fully equipped to turn ships around quickly and efficiently. Terminal 3 at Jebel Ali will be amongst the world’s largest semi-automated facilities when it is

completed in 2015. This port is the model for our global portfolio and one of the leaders in the industry by pioneering large-scale automation.

Enhancing Our SustainabilityAs a long-term business, sustainability must be central to our operations. We aim to provide a secure and safe working environment, reduce our environmental impact and enhance the long-term future of the communities in which we operate.

We continued to reduce our lost time injury frequency rate4, which fell by 18% from 6.4 in 2013 to 5.2 in 2014. We were, however, deeply saddened by three fatalities at our terminals during the year. We have investigated these incidents and communicated the findings around the Group to prevent reoccurrences.

DP World’s environmental footprint improved with our CO2e emissions intensity falling by 3% to 15.8kg/CO2e per modified TEU5. We also calculated our water footprint, which will give us a baseline for measuring our reductions in water usage.

11% Increase in revenue on a like-for-like basis

PLANNING AHEAD

DP World Annual Report and Accounts 201404

We invest strategically in our community relationships, by identifying our stakeholders’ needs and applying investment to benefit our communities and DP World on a sustainable basis. We have developed tools to assist us with analysing the social return from our investments so that we can more effectively measure and manage our community initiatives.

In 2014, we were involved in more than 300 community initiatives across our portfolio. DP World also again co-convened an international conference on countering maritime piracy.

More details of our approach to responsible business can be found on pages 34 to 37.

Our PeopleOur success in 2014 could not have been achieved without the commitment, skills and experience of our people. On behalf of the Board, I would like to thank every member of our team for their outstanding efforts over the last 12 months.

As described on pages 24 to 27, we have a clear strategy for maximising our people’s performance so they continue to be a business differentiator for DP World. In particular, we have honed our skills for any challenges ahead, by continuing to invest in training and development, with the DP World Institute providing online and on-site programmes.

Board A key responsibility of the DP World Board is to ensure adequate succession planning for the Board and senior management.

The close of 2013 saw long-standing Board member Cho Ying Davy Ho step down from his role as an Independent Non-Executive Director. He joined the Board in May 2007, just a few months before we publicly listed on Nasdaq Dubai.

Robert Woods, CBE, was appointed to the Board from 1 January 2014 as an Independent Non-Executive Director. As the former Chief Executive Officer of The Peninsular & Oriental Steam Navigation Company, Robert’s considerable experience in our industry will be of great value to our organisation as we continue to drive our business forward with strong governance and sound counsel, focused on delivering shareholder value.

Mark Russell also joined the Board of Directors as an Independent Non-Executive Director, effective from 11 August 2014. He replaced the retired director David Williams who served as an Independent Non-Executive Director from May 2007 until 28 April 2014. Mark is a Non-Executive Director of London and Continental Railways Limited and Eurostar International Limited, and Chairman of Eurostar’s Audit Committee. He is also Chief Executive of the Shareholder Executive in the UK. Mark’s 30 years of experience in the financial industry will add a valuable perspective to our Board.

On behalf of the Board, I would like to thank Davy and David for their valuable contribution to the successful strategic development of our business during their time on the Board. It has been a privilege to work with them both.

Details of the Directors of the Company as at 31 December 2014 are given on pages 46 to 47.

Delisting from the London Stock ExchangeIn 2014, we sought shareholder approval to cancel the listing of the Company’s shares from the premium listing segment of the Official List of the Financial Conduct Authority and remove the shares from trading on the London Stock Exchange (the delisting). The Company’s shares have been admitted to trading on NASDAQ Dubai since 2007 and a key driver for us obtaining the dual listing in 2011 was to allow investors who at that time were unable to invest in the Company through NASDAQ Dubai access to the Company through an alternative stock exchange. However, having monitored

the situation closely, the DP World Board believed that a significantly higher number of international investors were able to invest in shares listed on NASDAQ Dubai and as at 30 September 2014, approximately 99% of DP World’s shares were held by individuals and institutions investing through the NASDAQ Dubai listing, with less than 1% being held in depository interest form through the LSE. Furthermore, in May 2014 the UAE was moved from frontier to emerging market status under the MSCI index classification system. It is understood that this will help companies listed on NASDAQ Dubai and the country’s other stock exchanges attract even more interest from international investors.

Against this backdrop, the Directors formed the view that the Dubai listing was a sound base for DP World’s international shareholders and accordingly sought shareholder approval to effect the delisting, which was granted at an Extraordinary General Meeting held on 18 December 2014. The delisting came into effect on 21 January 2015. The Company’s shares continue to be listed on the official list of securities maintained by the Dubai Financial Services Authority and to be traded on NASDAQ Dubai.

Corporate GovernanceGood corporate governance is an essential component of DP World’s long-term success and our Corporate Governance report on pages 50 to 58 sets out how we conduct our operations in accordance with internationally accepted principles of good corporate governance. We are delighted that DP World has again topped the S&P Hawkamah Pan Arab ESG Index which ranks the transparency and disclosure of regional listed companies based on environmental, social and corporate governance metrics.

Chairman’s Statement continued

DP World Annual Report and Accounts 2014 05Corporate Governance Financial Statements

Overview Strategic Report

Following the delisting, the Board remains committed to maintaining high standards of corporate governance. We continue to be bound by the NASDAQ Dubai Rules on continuous disclosure, periodic financial reporting, disclosure of interests in shares, related party transactions, insider dealing, market manipulation and the disclosure of price sensitive information, as well as the DIFC Takeover Rules and the takeover provisions of the DIFC Companies Law. The Company’s financial statements will continue to be prepared and audited in accordance with International Financial Reporting Standards, and we will continue to report on our corporate governance arrangements in our Annual Report in accordance with the NASDAQ Dubai Rules.

Furthermore, the Board remains committed to maintaining our comprehensive annual investor relations programme to facilitate ongoing communication between management, shareholders and potential investors. In addition, we will continue to announce throughput statistics from our global port portfolio on a quarterly basis, to provide investors and analysts with an update on our quarterly operational performance.

The Directors believe that the laws and regulations underpinning the NASDAQ Dubai listing regime, coupled with the skills and experience of our executive management team, will enable us to

continue to operate our business effectively and successfully in the best interests of shareholders.

DividendThe Board is recommending an annual dividend of 23.5 US cents per share up from 23.0 US cents in the prior year. Subject to shareholder approval, the dividend will be paid on 5 May 2015 to shareholders on the register as at close of business on 31 March 2015.

OutlookWe have made an encouraging start to 2015 and current trading is in line with Group expectations. Whilst, macro-economic conditions and geopolitical issues across some locations remain uncertain, we believe our portfolio is well positioned to deliver volume growth in line with or slightly ahead of the market this year. The addition of new capacity combined with improving consumer confidence in the United States, Middle East and India are expected to be key growth drivers.

2015 is also expected to be our peak year for capital expenditure as we deliver significant new capacity in markets with attractive long-term growth prospects. In the short term, the business will absorb a number of new projects to the cost base and consequently we do not expect the business to demonstrate the same historic level of operational leverage. We anticipate stronger bottom line

growth from 2016 and beyond as new developments increase their utilisation.

The business remains well positioned to grow in the medium to long term, and we are confident that we will make further progress towards our 2020 targets.

Sultan Ahmed Bin SulayemChairman

1 Return on capital employed (ROCE) is EBIT (earnings before interest and taxation) before separately disclosed items as a percentage of total assets less current liabilities.

2 The adjusted EBITDA margin is calculated by dividing EBITDA (earnings before interest, taxation, depreciation & amortisation) by revenue, and includes our share of profit from joint ventures and associates.

3 TEU means twenty foot equivalent container units.

4 The lost time injury frequency rate is the total number of lost time injuries divided by the total hours worked and then multiplied by one million.

5 Kg CO2e per modified TEU (kilograms of carbon dioxide equivalent per twenty-foot equivalent unit) is the sum of our direct and indirect emissions normalised against Modified TEU for business to business comparative measurement.

DP World Melbourne (Australia)


Current terminals

Development terminals

At a Glance

GLOBAL CONNECTIONS

DP World Limited is incorporated in the Dubai International Financial Centre, has been listed on NASDAQ Dubai since 2007 and is the world’s most diverse listed container port operator.

Container handling is our core business and generates more than three quarters of our revenue. In 2014, we handled 60 million TEU around the world and over 70% of our volumes were origin and destination cargo.

Our portfolio of more than 65 container and non-container terminals spans six continents6. We operate our portfolio under three regions:

• Middle East, Europe and Africa • Asia Pacific and Indian Subcontinent • Australia and Americas

We continue to invest in developments and expansions, with new developments to come in India, Africa, Europe and the Middle East. Many of our existing terminals also have the ability to increase capacity, as utilisation and customer demands grow. Our investment pipeline is anticipated to increase our gross capacity to more than 100 million TEU by 2020, subject to market demand.

6 All figures regarding teminals and developments are as at 31 December 2014.



DP World handles approx. 9% of the world’s container trade

We operate more than 6,000 container handling cranes.

We handle more than 150,000 containers on a day across our portfolio.

Our yard area covers 1,374 hectares.

We serve around 66,000 vessels a year – or nearly 180 a day.

We are the 4th largest marine terminal operation in the world by throughput.79%

1,374

Our team of 36,000 people is truly global, made up of more than 90 nationalities.

DP World has more than 55 kilometres ofquay wall globally

+55

Middle East, Europe and Africa

Australia and Americas

16 countries

30 operatingterminals 13 operating

terminals

34 million TEU gross capacity 9 million TEU

gross capacity

7 countries

Asia Pacific and Indian Subcontinent

• In the Middle East, we have six terminals in the UAE including Jebel Ali, which is one of the world’s largest terminals. We also operate a terminal in Jeddah (Saudi Arabia).

• In Africa, we operate 12 terminals in six countries, with development projects underway in Egypt and Senegal.

• In Europe, we operate 11 terminals in eight countries. We also have development projects in Turkey, the Netherlands, France and Belgium.

• Our Asia Pacific portfolio comprises 12 terminals in six countries. We are the largest container terminal operator in the Indian Subcontinent, with five terminals and two development projects in India and one terminal in Pakistan.

• Our Australian container terminals include the Port of Melbourne, which is the country’s busiest and largest, as well as Brisbane, Sydney and Fremantle.

• Our Americas portfolio consists of nine terminals across six countries, including Embraport in Brazil.

18 operatingterminals

33 million TEU gross capacity

8 countries

7 Based on Equity TEU. Source: Drewry Global Container Terminal Operators Annual Report 2014.

08 DP World Annual Report and Accounts 2014

Local Port OperatorWe began by serving local trade in Dubai, starting with the development of Port Rashid in 1972, followed by the opening of Jebel Ali Port in 1979. In 1991, the operations of Port Rashid and Jebel Ali Port were combined to create the Dubai Ports Authority.

Regional Port OperatorIn 1999, Dubai Ports International FZE was formed to manage and operate container terminals and other facilities outside the UAE, winning concessions in Jeddah (Saudi Arabia) and Doraleh (Djibouti) in 2000, Visakhapatnam (India) in 2002, Constanta (Romania) in 2003 and Cochin (India) in 2004.

1972 – 1998

1999 – 2004

Doraleh Container Terminal (Djibouti)DP World Jebel Ali (UAE)

Company Milestones

OUR JOURNEY

From our beginnings in 1972 in Dubai (UAE), we now have a team of over 36,000 people around the world.

DP World has a heritage to be proud of. In a little over 30 years, we have grown from a local port operator to one with a global presence.

09Overview


Strategic Report



Global Port OperatorIn 2005, we acquired CSX World Terminals, a leading global container terminal operator. In 2006, we bought The Peninsular & Oriental Steam Navigation Company, increasing our global network and market position in Asia, India, Australia, the Americas, Europe and Africa.

DP World was listed on NASDAQ Dubai in 2007.

Our Journey Continues2014 was another year of significant milestones. We added 2 million TEU of capacity by opening the first phase of Terminal 3 at Jebel Ali, one of the world’s largest semi-automated facilities. We also opened Australia’s most advanced semi-automated terminal in Brisbane and the UK’s newest container berth at Southampton. We continued to invest to add capacity at Nhava Sheva (India), Yarimca (Turkey) and Rotterdam (Netherlands).

Another landmark was our announcement to acquire Economic Zones World (EZW) FZE. EZW owns Jebel Ali Free Zone, a commercial and industrial logistics park, which is integral to our customers’ supply chains. The acquisition will create the Middle East’s leading integrated port and free zone.

2005 – 2014

2015 onwards

DP World London Gateway Port (UK)

Empresa Brasileira de Terminais Portuários S.A. (Brazil) before and after

construction photos


DP World’s strong performance in 2014 once again demonstrates that operating a diversified portfolio with a greater focus on faster growing markets and origin and destination cargo will deliver above-industry growth and enhance shareholder value.

Trading conditions in 2014 improved on the previous year as volume growth increased approximately 5% across the industry. Our portfolio outperformed the market, delivering 8.9% gross volume growth. The UAE achieved another record performance, while growth in Europe was strong and consistent. Asia and the Indian Subcontinent recovered after a challenging 2013, while performance in the Australia and Americas region was resilient despite tougher market conditions.

Our solid performance in 2014 is a result of the substantial investment programme we initiated in 2012 to enhance our infrastructure to meet our customers’ demands. While the number of vessels calling at Jebel Ali (UAE) increased by a relatively modest 3% in 2014, the number of 9,000+ TEU vessels it handled increased by nearly 50%. This resulted in additional volume of 1.6 million TEU at Jebel Ali during the year, reinforcing our view that adding relevant capacity at the right locations continues to be the correct strategy.

We continue to demonstrate significant operational leverage in our business. In 2014, on a like-for-like basis, we have delivered 25.1% attributable earnings growth and 16.0% adjusted EBITDA growth on consolidated volume growth of 9.5%. Capital Expenditure We continued to invest in our portfolio for future growth. Over the course of 2014, we spent $807 million in capital expenditure, predominately at our flagship Jebel Ali facility in the UAE, where we added two million TEU of new capacity at Terminal 3. We also

Group Chief Executive Officer’s Review

made good progress on our new developments in Mumbai (India) and Yarimca (Turkey), both of which are expected to open in 2015.

The 2014 total capital expenditure was below our initial projection mainly due to equipment delays, which meant the second phase of investment in Terminal 3 at Jebel Ali was postponed to 2015. We now expect this to be fully operational by the second half of 2015 which will add another two million TEU capacity and take the total capacity at Jebel Ali to 19 million TEU. We also look forward to adding further capacity in Rotterdam (Netherlands), Mumbai (India) and Yarimca (Turkey), while we continue our work on the third berth at DP World London Gateway (UK).

Globally we added approximately five million TEU of new gross capacity and three million TEU of consolidated capacity during 2014 to take our total gross and consolidated capacity to 76.1 million and 37.9 million TEU respectively. By 2015 we anticipate that we will have approximately 85 million TEU of gross capacity across our portfolio and our aim is to be operating over 100 million TEU of gross capacity by 2020, subject to demand. We will maintain the existing shape of our portfolio with a 70% exposure to origin and destination cargo and 75% exposure to faster growing markets.

Economic Zone World (EZW) Acquisition During the year we announced the acquisition of EZW for a consideration of $2.6 billion (subject to adjustments), which closed in the first quarter of 2015. EZW owns Jebel Ali Free Zone (JAFZ), the leading industrial freezone in the Middle East. We believe this acquisition enhances our competitive advantage by delivering a first-class customer experience through a strengthened integrated product offering. This is consistent with our strategy of providing port-centric integrated logistics solutions at key gateway locations.



Strategic Report


JAFZ is a major industrial and commercial development in Dubai (UAE) that is strategically located adjacent to Jebel Ali Port. The 57 square kilometre site is home to over 7,000 companies, including approximately 100 Fortune 500 companies and seven out of ten of the world’s largest logistics companies.

The EZW business is highly attractive as it delivers recurring revenues, healthy margins and is highly cash generative. We believe there are significant growth opportunities, particularly leading up to Expo2020 and we expect the business to generate strong long-term sustainable value for all our stakeholders.

InnovationInvesting in technology is central to our dynamic and innovative approach to global business. During 2014, we made substantial progress in developing state of the art equipment and upgrading terminals across our global portfolio with unique technology. This technology allows us to provide even better customer service and achieve greater operational efficiencies. Moving workers off the quayside and into the control room is safer and gives them a more comfortable working environment.

There are also environmental benefits, with carbon emissions that are 30% lower than a traditional terminal.

In Australia, we established the country’s most advanced semi-automated terminal at the Port of Brisbane improving safety, productivity and energy use. In the UK, we launched new berths at DP World London Gateway and Southampton designed to handle the world’s largest and deepest vessels more quickly and efficiently than ever seen before. Terminal 3 in Jebel Ali will be amongst the world’s largest semi-automated terminals, with 19 of the largest and most modern quay cranes operated remotely from a sophisticated control room.

EfficiencyWe continue to focus on increasing our productivity across our portfolio and last year was another successful year. Berth moves per hour (BMPH), which measures the turn-around time for a vessel, increased further during 2014 and we have achieved a 28% improvement over the past five years. Our gross moves per hour (GMPH), which measures the productivity of our cranes, has improved 11% over the same period.

2020 TargetsWe continue to work towards achieving our 2020 targets of 50% adjusted EBITDA margins and 15% ROCE on our existing port assets. While our reported adjusted EBITDA margin was 46.6% in 2014, the margin on a like-for-like basis was 48.3%. Our ROCE improved to 7.1%, up from 4.4% in 2010. It is worth noting that the large amount of cash on our balance sheet continues to act as a drag on our ROCE and excluding this, ROCE would have been 9.2% in 2014.

2015 is expected to be a year of consolidation as our capital expenditure peaks and we deliver substantial new capacity. This is likely to dilute our adjusted EBITDA margins in the short term but we expect adjusted EBITDA margins to accelerate from 2016 onwards as our new projects ramp-up.

Mohammed SharafGroup Chief Executive Officer

INVESTING IN OUR MARKETS

DP World Jebel Ali (UAE)

INVESTING IN OUR MARKETS


450m Berth Length

The effect on port requirements

300m Berth Length 300m Berth Length

900m Quay900m Quay

900m Quay

300m Berth Length

2004

2014

450m Berth Length

Market Review

Ports are highly beneficial assets for the countries they are based in, creating employment, boosting the economy and improving living standards. There are also powerful long-term trends that are increasing demand for our services. Together, these factors underpin our industry’s attractive prospects.

In conjunction with associated transportation industries, ports contribute to economic growth by:

Reinforcing trade relationships: approximately 80% of global trade by volume and over 70% by value is carried by sea and handled by ports worldwide8.

Supporting economic diversification: the ports and transportation industry aids the growth of other sectors, broadening a country’s economic base.

Generating employment: for every job created inside a well-run port, up to five jobs are created outside the port.

Increasing competitiveness: by increasing local expertise and knowledge, the ports and transportation industry improves a country’s ability to compete.

In addition to the economic benefits, ports raise living standards by enabling the importation of goods at lower cost. These benefits mean ports are extremely attractive assets with attractive prospects for the long term.

Ports Add Value to Economies

Powerful Trends are Driving Growth

Long-term trends are driving the growth of our industry. These include:

The outcome of these trends is that the growth in container movements is typically faster than the growth in global Growth Domestic Product (GDP), with the growth multiplier estimated at 1.5 times in 2014.

Containerisation: containers protect cargo from damage and theft and are more efficient to load and unload than bulk cargo. As economies create transportation infrastructure around container movements, the types of goods shipped in containers also broadens. The result is that the rate of containerisation is increasing.

Urbanisation: around the world, populations are becoming more concentrated in urban areas and mega cities are emerging. Today, approximately half of the world’s population lives in urban areas, a proportion that is expected to increase to 66% by 2050. Projections show that urbanisation combined with the overall growth of the world’s population could add another 2.5 billion people to urban populations by 20509. Additional port capacity and infrastructure will be needed to handle this population density and associated container volume.

Globalisation: the world is becoming increasingly interconnected, as rising per capita incomes and lower trade barriers encourage worldwide trade. Containerisation assists this trade.

Customer demands: shipping lines are demanding that ports are more productive and have the infrastructure to cater for larger, more efficient vessels. This favours major port operators such as DP World, who can make the required investments.

Rapidly developing economies: new, faster growing economies are emerging. They have young, growing populations and expanding middle classes with considerable purchasing power and demand for the types of goods that are shipped in containers.

Source: Drewry Global Container Terminal Operators 2014



201420112007200319991995

18,270TEU15,550TEU15,550TEU

8,063TEU7,060TEU

4,960TEU

Shipping Lines Continue to Evolve

The shipping lines continue to respond to excess capacity in the shipping industry by forming alliances. In an unexpected development during the year, the Chinese authorities denied permission for the three largest shipping lines, Maersk, MSC and CMA CGM, to form an alliance called P3.

As a result, Maersk and MSC formed the 2M alliance, while CMA CGM joined China Shipping and UASC to form Ocean Three. Evergreen Line, a top five global shipping line, joined the CKYH alliance, which is now known as CKYHE. Along with the G6 alliance, these alliances dominate the three big trade routes: Asia-Europe, Asia-North America, and Europe-North America.

However, these alliances have not yet addressed the issue of industry overcapacity, which has led to fierce rate competition and a reduction in the shipping lines’ revenues.

These shifts have a number of consequences for terminal operators. Compared to single shipping lines, alliances are more complicated to deal with when it comes to winning and managing business. Alliances also result in larger chunks of business, so winning or losing business has a greater effect on the terminal operator.

Conversely, this greater size reduces the number of terminals that can effectively service the alliances’ needs, giving them less choice and favouring major port operators such as DP World.

Deployment of ever larger container ships

18,270TEU

Market Developments in 2014

Market conditions in 2014 were generally positive, with volumes estimated to have grown at around 5% across the industry. Stronger economies in the United States and the Gulf states contributed to this growth, while demand in Europe was also resilient, despite its relative economic weakness. Quantitative easing around the world contributed to consumer demand and gave businesses the confidence to restock.

Business Development Trends

Another important factor in our markets is competition among port operators to win new concessions. In recent years, more terminal operators have built a global footprint and the shipping lines have increasingly focused on controlling their own terminals. These two factors mean there is significant competition for any new business opportunity, a trend we expect to continue in the coming years.

8 UNCTAD – The Review of Maritime Transport 2014.9 United Nations Department of Economic and Social Affairs

– 2014 revision of the World Urbanization Prospects, 10 July 2014.

Source: Drewry Global Container Terminal Operators 2014

Eurofos Container Terminal (France)


ORIGIN

14

Business Model

DP World is a global operator of container and marine terminals. We enhance our customers’ supply chain efficiency by effectively handling container, bulk and general cargo across our network.

The key features of our business model are as follows:

High Barriers to Entry We operate our container terminals through long-term concession arrangements with the owner of each port. These concessions average 40 years but they are effectively perpetual, as historically concessions have always been renewed. This creates very high barriers to entry and allows us to build strong relationships with port authorities, shipping lines and joint venture partners.

Rising Returns and Long-term Cash FlowThe length of our concessions allows us to invest to meet growing demand and changing customer needs, and to improve our efficiency and profitability.

Our returns on investment increase as our assets mature and we are able to deliver stable and long-term cash flows.

Focus on Growth AreasWe focus on origin and destination (O&D) cargo, where the container’s journey starts or ends at one of our terminals, rather than transhipment cargo, where containers are transferred from one ship to another on their way to their destination. O&D cargo delivers higher margins, is less affected by competition than transhipment and creates opportunities to provide ancillary services beyond the terminal gate. Our portfolio is also focused on faster growing emerging markets, which helps us outperform growth in the industry as a whole.

INCREASINGVALUE



Strategic Report


DESTINATION

World-class OperationsWe are market leaders in automated technology, with exceptional standards of operational performance and productivity. We manage our terminals locally, so they can respond to customer needs, and support their operations through the advantages of our global network.

“ Our robust set of results for 2014 was driven by DP World’s long-term strategic approach, the company’s focus on faster growing markets and continued investment in its people, innovation and world-class technology, and sustainable investments in new capacity in response to market demand.”Mohammed Sharaf Group Chief Executive Officer

World-class PeopleOur dedicated, experienced and innovative people serve customers in some of the world’s most dynamic economies. We invest in developing our people and providing a workplace that encourages continuous learning and growth.

Strong BrandDP World is recognised for delivering excellent customer service, for our commitment to strong governance and being a good corporate citizen.

Our strategy (see pages 16 to 33) builds on and reinforces the strengths inherent in our business model, with the aim of creating value for shareholders for many years to come.

DP World Sokhna (Egypt)


Peop

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d Learning

Customer

Internal & O

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Financial

VisionMissionValues

Com

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atio

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Stra

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ResponsibilityCorporate

CorporateGovernance

Our Strategy

Our ambition is to facilitate trade through strengthening global supply chains, generating sustainable economic growth and maximising shareholder value.

We communicate our ambitions and business purpose and define our corporate culture through our Vision, Mission and Values. We plan our strategy and measure our performance globally through the DP World Balanced Scorecard Framework.

DP World Global Strategy

Road Map

Strategy Implementation

Financial

Corporate Responsibility

Internal & Operational


Customer

Communications

People & Learning

Our Vision, Mission and ValuesOur Vision, Mission and Values define our purpose, how we will achieve it and the principles that govern how we behave.

Our VisionSustainable value through global growth, service and excellence.

Our MissionA global approach to a local business environment, where excellence, innovation and profitability drive our core business philosophy of exceptional customer service.

Our Values • Commitment to our people and our customers

• Profitable global growth • Responsible corporate and personal behaviour

• Excellence and innovation

The DP World Balanced Scorecard FrameworkOur Balanced Scorecard Framework comprises strategic pillars, which we implement across the Group, and strategic priorities, which we measure against Key Performance Indicators (KPIs). Delivering the strategic priorities in our Balanced Scorecard and our organisation-wide strategic pillars enables us to achieve our Mission and Vision.

Strategic Priorities

Strategic Pillars

Our Vision looks to our future. It gives direction to where we are going and what we want to become.

Our Mission describes our purpose. It says what we exist to do and how this takes us towards achieving our Vision.

Our Values are the common principles that shape our culture. They describe how we do things at DP World.



DP World Global Leadership Meeting, Dubai, February 2015

Strategic PillarsOur strategic pillars define the objectives we need to achieve across the Group. They enable us to build a sustainable business model, develop robust risk and compliance processes, communicate effectively to all stakeholders and implement our strategy.

The four strategic pillars are:

• Strategy Implementation: communicating key messages and defining measurable performance milestones.

• Corporate Governance: ensuring good corporate governance and adhering to international best practice.

• Communication: enhancing communication with our people and external audiences.

• Corporate Responsibility: building and sustaining strong communities through strategic investment, to leave a sustainable legacy and take the lead in being a good corporate citizen.

Strategic PrioritiesOur strategic priorities explain our strategy and describe how we create value for our stakeholders. Each of the four priorities are broken down into key goals to facilitate the setting of Group-wide objectives and allow us to measure our progress.

The four strategic priorities are:

• Financial: driving sustained long-term shareholder value.

• Customer: creating a satisfied and profitable customer experience.

• People & Learning: creating a learning and growth environment.

• Internal & Operational: developing efficient, safe and secure methods of managing our operations.

Developing and Communicating Our StrategyTo achieve our strategic priorities, we must effectively develop and communicate our strategy so everyone in the Group understands the part they play.

Our global strategy is set by the DP World Board, based on input from our regions and head office functions. This includes an annual review of five-year business plans with the regions, which are presented to the Board. The global strategy is then cascaded to the regions, to allow translation of our global strategy into regional objectives, and then to our terminals and finally our people.

During the year, we engaged with our regional and terminal teams to enhance local alignment with the global DP World Balanced Scorecard Framework and to further develop regional and local balanced scorecards. This improved the local communication and implementation of our global strategy and assisted with the measurement of implementation across our portfolio. During the year, we also appointed regional strategy champions who received in-depth training to further assist in communicating our strategy in their respective terminals.

The following explains our strategic priorities in more detail and describes our progress during 2014.


Our Strategic Priorities

Key Goals and Targets Key Achievements in 2014

We set challenging financial targets to optimise productivity and deliver sustainable value.

Our terminals contribute to our financial performance by:

• increasing asset utilisation;

• increasing productivity;

• reducing costs; and

• increasing current and new sources of revenue.

By actively managing our global portfolio and ensuring access to the best sources of long-term capital, we manage our leverage and investment grade to ensure we remain competitive.

By operating our terminals through long-term concessions and strategically investing in value-adding terminals where we have management control, we manage our portfolio by strategically investing and divesting to maximise value for tomorrow and beyond.

In 2014 we:

• took advantage of very attractive conditions in the financing markets, issuing a $1 billion convertible bond. This facilitated the securing of long-term funding on attractive terms while preserving existing pools of liquidity. It also allows us to diversify our funding sources and access a broader investment base;

• refinanced our Revolver Credit Facility, increasing the size of the facility and reducing the margin, along with some adjustments to the terms of the loan. It was acknowledged as a landmark financing by the banks involved;

• continued to improve productivity at our terminals, including an 8.4% improvement in berth moves per hour from our 2013 figures;

• grew costs at a lower rate than revenue growth, showing our ability to attract revenue while maintaining costs; and

• continued to focus on price making origin and destination (O&D) cargo rather than cost taking transhipment cargo with over 70% of our volumes being O&D cargo. Where capacity was constrained, we pushed away low margin containers in favour of higher margin revenues.

We measure our progress against our strategic priorities by using a variety of key performance indicators in the DP World Balanced Scorecard, including those KPIs set out below. Our performance against our KPIs is continually monitored by management at a global, regional and local level. This is supported by regular dialogue between management and the Board on Group performance. The DP World Board receives regular updates from management on our progress against targets which helps to inform and shape the Board’s strategic decisions throughout the year and the direction they provide to management.

13121110 4.4%

6.0%6.8%6.7% 13

121110 45.0

55.365.772.8

DefinitionROCE is earnings before interest and tax and before separately disclosed items (SDI), as a percentage of total assets less current liabilities.

CommentOur ROCE is reduced by the very low age profile of our portfolio and the consequent up-front capital investment required. In 2014, ROCE reached 7.1%. It is currently anticipated that by 2020 we will reach our target of 15% on our existing port assets.

DefinitionEPS is calculated by dividing the profit after tax attributable to the owners of the Company (before separately disclosed items) by the weighted average number of shares outstanding.

CommentIn 2014, our EPS grew by 11.8%, reflecting our ability to grow revenue and control costs, as well as the operational leverage in our business.

Return on Capital Employed (ROCE)

Earnings Per Share (EPS) Excluding SDI

7.1% 81.4

Key Performance Indicators

FinancialDriving Sustained Long-term Shareholder Value




To continue to be a leader in quality and reliability, we:

• develop and innovate services that offer superior performance for our customers;

• deliver value for money on time;

• deliver the right capacity to meet the right demand; and

• enhance value-adding services both inside and outside the terminal to grow ancillary revenue.

As part of our aim to deliver a satisfied and profitable customer experience, we will also develop and grow sustainable, high-value customer relationships and provide access to a global network. Through this focus, we will be known as a trusted brand that our customers can rely on to deliver at all of our locations.

In 2014, we:

• continued to focus on having the right capacity at the right locations to meet our customers’ needs, opening the first phase of Terminal 3 at Jebel Ali Port (UAE) to increase its capacity to 17 million TEU, and opening a new 500 metre quay wall at DP World Southampton (UK), designed to handle the world’s largest and deepest vessels;

• showcased our ability to meet our customers’ needs, welcoming some of the world’s largest vessels at our terminals, from the newly dredged Sao Rap River channel in Vietnam to Laem Chabang in Thailand;

• set industry benchmarks and reached new milestones. The Journal of Commerce rated Jebel Ali Port the most productive port globally, while at the Mundra terminal in India we celebrated handling one million TEU for the first time;

• continued to focus on our integrated port and logistics model using the latest technology to deliver the best possible service. This was illustrated by our announced acquisition of Economic Zones World in Dubai, a unique opportunity to acquire a strategically located asset integral to Jebel Ali’s continued success as the leading gateway port in the Middle East region; and

• established our customer engagement programme, with the aim of reducing vessel port stays and waiting in anchorage and improving customer communication.


CustomerCreating a Satisfied and Profitable Customer Experience

DefinitionGross capacity is the total capacity of our global portfolio of terminals. Gross capacity utilisation is the total throughput in the year divided by the total capacity.

CommentGross capacity increased by approximately 6 million TEU to 76 million TEU at the year-end, reflecting additional capacity at Jebel Ali. Our utilisation remains high and above the industry average.

DefinitionCapital expenditure is the total cost of property, plant, equipment and port concession rights added during the year.

CommentCapital expenditure totalled $807 million during the year and was predominantly related to adding new facilities and expanding existing ones. Our 2014 capital expenditure was below initial projections due to equipment delays which resulted in some planned expenditure being pushed to 2015.

Gross Capacity mTEU Gross Capacity Utilisation %

Capital Expenditure in 2014

Maintenance 16%New Facilities 23%Existing Facilities 61%

1077%64.1

11

12

78%70.7

80%69.7

79%69.4

13

Capacity (mTEU) Utilisation (%)

76.1/79%


Our Strategic Priorities continued


Our aim is to be consistently recognised as an employer of choice with a competitive reward strategy that recognises performance and retention levels that are above the industry norm. We focus on:

• managing talent in an innovative, performance-driven culture;

• building a competent workforce that is able to meet the needs of the business;

• succession planning for all critical roles; and

• implementing a recruitment policy that supports internal applicants over external candidates.

By promoting the DP World culture we will:

• align leadership styles to the DP World Leadership Pillars and raise employee satisfaction with our leadership;

• encourage feedback as part of an open, innovative and collaborative environment; and

• encourage an innovative culture amongst our people and the wider community.

We will also provide an open learning environment to:

• foster continuous learning, including using technology to support learning across regions and terminals; and

• promote the sharing of information and statistics across our portfolio.

In 2014 we:

• created a new executive role, the SVP of Corporate Culture, to ensure our Vision, Mission and Values are embedded and that we achieve our global strategic objectives;

• developed and launched our Global Diversity & Inclusion Policy and launched an executive-level diversity and inclusion programme;

• continued to invest in developing our people, which included new eLearning courses and a 290% increase in the number of eLearning sessions. We also focused on increasing competencies in asset management, safety and human capital;

• completed the first full year of implementing DP World Leadership Journeys, including developing local facilitators and training specialists, so our terminals can benefit from bespoke learning content aligned to the business strategy; and

• continued the roll out of our Planning Terminal Operations programme, reaching six terminals during the year. The programme aims to improve planning skills and capabilities by giving participants the opportunity to experiment with best practices in various operational scenarios.


People & LearningCreating a learning and growth environment

DefinitionThe number of participants who took part in training programmes run by the DP World Institute across the Group.

CommentDuring 2014, the DP World Institute ran 117 training programmes around the world, delivering training to more than 1700 participants on a broad range of leadership and operational courses. This represents a significant increase in training participation and reflects our ongoing investment in developing our people and our desire to create an environment of continuous learning and growth.

DefinitionThis is the total expenditure on learning and development initiatives during 2014 across the Group. It consists of costs recovered by the DP World Institute for corporate training, and costs incurred locally by terminals for in-house and third-party training activities.

CommentWe consider our dynamic and professional team of more than 36,000 people to be our biggest competitive advantage. Our investment in their learning and development is therefore an investment in our corporate success. Benchmarking of training costs is difficult to establish across different industries, given the wide variation in how they are measured. In 2015, we will work on benchmarking our training expenditure for future comparisons.

DP World Institute Training Participants in 2014

DP World Learning & Development Expenditure in 2014

$13 millionAustralia & Americas

Asia Pacific & Indian Subcontinent

Middle East, Europe & Africa 532352

23498

403105

Leadership Operations




We will develop efficient, safe and secure methods of managing our operations, by:

• providing a safe and secure workplace and contributing to a sustainable environment;

• growing revenue profitably by excelling in customer service, retaining existing customers and targeting a pipeline of new customers;

• growing sustainably and profitably, winning projects in markets with strong economic growth drivers and focusing on origin and destination cargo;

• managing risk intelligently and optimising opportunities, reducing operations downtime and non-operational risks, and complying with applicable laws and regulations;

• focusing on operational excellence and extracting the maximum value from our resource base, to increase cost productivity; and

• creating the culture and infrastructure needed to encourage innovation through research and development.

In 2014, we:

• launched Australia’s most advanced semi-automated terminal at the Port of Brisbane. The upgraded facility includes 14 automated stacking cranes, which are operated remotely, taking workers off the quayside to the safety of the control room, and improving productivity. The new equipment is also more energy efficient, using 30% less energy than conventional terminal equipment;

• launched our Terminal Performance Analytics (TPA), an enterprise business intelligence solution that regularly gathers data from terminal operating systems across our portfolio, helping us perform advanced data analysis and continually monitor global performance. TPA automates previously time-consuming manual work and allows us to spend more time on analytics and process optimisation;

• acquired World Security FZE, a company providing security services and solutions to corporates in Dubai and Dubai Trade FZE, a premier trade facilitation entity that offers integrated electronic services for Jebel Ali Port and our customers. Both businesses are fundamental to the operation of Jebel Ali Port and the Free Zone, and their acquisition was a unique opportunity to acquire strategically important assets on commercial terms; and

• rolled out nine new health, safety and environment engagement programmes across our portfolio. We also delivered accident investigation training at all our terminals to improve risk management and strengthen our safety culture.

Key performance indicators

Internal/OperationalDeveloping efficient, safe and secure methods of managing our operations

–1%6%8%8%13

121110

8.88.07.36.413

121110

DefinitionGMPH is the number of containers moved over the quay from and to a ship divided by the sum of hours in the period, for all cranes, between first and last lift.

CommentWe have calculated the GMPH as an average across our portfolio and the graph shows our GMPH improvement as a percentage against our 2009 baseline.

DefinitionThe LTIFR is the total number of lost time injuries divided by the total hours worked and then multiplied by one million.

CommentOver the course of 2014, we reduced our LTIFR, with an 18% reduction from our 2013 figures. This is consistent with our performance over the past five years where we have achieved a reduction of more than 40% and reflects our commitment to ensuring the safety of our people. We will continue to strive towards our goal of zero harm.

Increase in Gross Moves per Hour (GMPH) Against Our 2009 Baseline

Lost Time Injury Frequency Rate (LTIFR)

11% 5.2


We aim to enhance our competitive advantage and deliver shareholder value through a superior customer experience and by strengthening our integrated product offering.

DP World invests in opportunities that will deliver shareholder value. One way we look to achieve this is by looking ‘beyond the gate’ in order to provide value-added services and infrastructure to support the movement of cargo beyond our terminals. A significant part of this strategy involves offering a “port-centric” solution. This is defined as a distribution centre that is located at a port, bringing companies closer to the markets they serve and decreasing freight miles. In land-locked countries we also focus on how to connect supply chains with an efficient port.

We believe that there is a strong business case for creating distribution centres at or near a port, rather than trucking containers to distant warehouses only for goods to then be redistributed to consumer markets that are often close to the original port of entry. This can significantly increase

mileage and the number of times goods are handled, thereby increasing security risks, as well as costs. Any steps that can be taken to enhance supply chain efficiencies will reduce time and costs for businesses and ultimately consumers. Environmental objectives are also achieved through less road congestion, fewer emissions and decreased levels of pollution.

Our global portfolio provides many examples of port-centric solutions in both developed and emerging markets.

Jebel Ali Port in Dubai was built on a port-centric integrated logistics model. The Dubai Logistics Corridor links Jebel Ali Port with Jebel Ali Free Zone, a 57km2 modern commercial and industrial logistics park, and the new Al Maktoum Airport. This corridor creates connectivity between sea, land and air transport routes for the first time in the Middle East. Supply chain efficiencies are also supported by a single customs zone and integrated electronic services, allowing for the fluid movement of cargo between sea-port and airport via rail and road. Our acquisition of Economic Zones World FZE, is an important part of our beyond the gate

strategy in Dubai. As a combined entity, Jebel Ali Port and Free Zone will have unrivalled multi-modal connectivity, allowing customers to access and serve a market of more than two billion people.

Our newly opened DP World London Gateway facility is another example of a port-centric logistics solution with easy access into the UK hinterland. The new facility combines the UK’s most advanced deep sea port with a large logistics park, common user facility and train link. This allows our customers to minimise handling costs by warehousing goods next to the Port rather than trucking goods to distant warehouses and accommodates a faster dispatch of goods by either road or rail. With 15 million consumers living within 80km of the site, the facility aims to transform logistics operations at the heart of the UK’s largest consumer market. It is anticipated that the project will create approximately 36,000 jobs in the coming years, with DP World also forecast to contribute £3.2bn (US$5bn) to the UK’s GDP per annum, according to a study by Oxford Economics.

Our Opportunities

INCREASED CONNECTIVITY



Strategic Report



The Indian Subcontinent represents important market opportunities for us. We currently operate five terminals in India, with another two development projects underway. We believe that the ability to deliver timely capacity underpins India’s economic growth. Our beyond the gate strategy in India is demonstrated by our investment in container trains to improve the connectivity between our multiple ports and respective hinterlands. Additionally, the freight station operated by DP World in Mundra has pioneered the “container revolution” in the Kutch region and established a gateway for the North and North-West regions of the country. We are also committed to beyond the gate initiatives in Pakistan. DP World Karachi is a premier gateway port and one of the largest port privatisation projects in Pakistan, directly linked by rail to our inland container terminal DP World Lahore more than 1,000km away. DP World Lahore offers the local trading community a fully equipped container freight station and provides local haulage services beyond the gate to serve Pakistan’s largest hinterland market. Looking ahead, we will continue to work in partnership with

the governments and port authorities in the Indian Subcontinent to ease the congestion concerns of the shipping community and improve the efficient handling of goods throughout this area.

The volume and complexity of global trade demands ever-increasing efficiency from port operators as ports continue to play a major role in the

movement of goods. We believe our international experience and expertise in developing port-centric solutions beyond the gate will contribute positively to the global economy by generating supply chain efficiencies and ultimately reduce the costs of moving goods worldwide.

Jebel Ali port (UAE)

INCREASED CONNECTIVITY


DP World has a dynamic and committed team of more than 36,000 people. We believe they are our greatest asset and that they differentiate us from our competitors.

We emphasise engagement, ensuring we keep lines of communication open and that we encourage dialogue between individuals and their line managers. This approach gives our people the opportunity to directly engage with DP World. Every two years we carry out an employee engagement survey (MyWorld) and use the valuable data we derive from it to address concerns and show that we are listening. The last engagement survey was in 2013.

Effective leadership is vital. We see our leaders as role models and look to them to display the behaviours we expect throughout the Group. We offer structured leadership development, built around our four strategic leadership pillars – translating strategy, innovation and collaboration, corporate responsibility and leading change. Leadership development programmes are run in partnership with leading business schools.

DP World Brisbane (Australia)

Our Opportunities

INCREASED INCLUSIVITY

DP World Annual Report and Accounts 2014 25Strategic Report


Overview


Providing people with opportunities to grow is also essential. We invest in their skills and knowledge through a wide range of training programmes, whether at their home terminals, elsewhere in our network or through our iLearn web-based learning management system. This offers e-learning courses, tutor-led webinar sessions and work-based assignments.

Following the introduction of our integrated talent management suite, iTalent, we can track the growth of our employees and they can determine potential career paths and the competencies they will need for future roles. This enables focused and structured development, subject to our business needs.

Objectives Progress

Launch our “Women are a Valuable Asset” initiative, supporting our commitment to increasing diversity amongst our team.

We conducted focused interviews with female employees across the Group. The results supported the design and delivery of an Executive Diversity & Inclusion development programme and the launch of our DP World Diversity & Inclusion Policy.

Introduce a new talent management system, to streamline the management of our global talent pool.

We developed and piloted new talent management processes and procedures, receiving positive feedback across the Group. Following Board approval, this is now being implemented for top management team positions.

Introduce a new state of the art performance management, succession and career planning system.

We launched the new Talent Management system, iTalent, during 2014, aligned to the mid-year performance review cycle. At the end of the year, we added learning management to further integrate our systems.

DP World London Gateway Team (UK)

OUR OBJECTIVES FOR 2014


Our Opportunities Increased Inclusivity continued

Forum. This reflects our commitment to diversity and encouraging women into our industry.

• Continued to offer opportunities and support for disadvantaged groups considering careers in our industry. For example, DP World London Gateway Port hosted a visit for wounded ex-servicemen where we presented information about our organisation, what we look for in employees and the breadth of work we can offer. This was an important part of their programme of transitioning to civilian life.

• Held a DP World Alumni meeting in Dubai, which saw former employees come together with senior management, including our Chairman and Group Chief Executive Officer. This reflects our belief that our alumni are important ambassadors for DP World.

Other Initiatives in 2014Some of our key initiatives during 2014 are described in the Our Strategic Priorities section on page 20. In addition to these, during 2014 we:

• Greatly increased the number of e-learning courses undertaken, with new courses including a revised anti-bribery and corruption course, asset management training, and subjects covering DP World’s corporate strategy and an introduction to corporate responsibility at DP World.

• Continued our Safe Place to Work initiatives, including ergonomic assessments of workstations, health programmes and first aid training for staff and family members.

• Signed the CEO Statement of Support for the UN Women Empowerment Principles and sponsored the 16th Women in Leadership Economic

Sheikh Mohammed bin Rashid Al Maktoum’s visit to DP World Jebel Ali (UAE)

Our Global Team

+36,000

DP World Institute Training Programmes delivered during 2014

117

Increase in participation of e-learning courses

290%

Global investment in the learning and development of our people

$13million

OUR OBJECTIVES FOR 2015Our people and learning objectives for 2015 include:

• Further roll out the executive and senior leadership development programme.

• Introduce a global e-learning module which will include subjects covering leadership, personal skills and safety and will be available in a number of languages to increase participation across the Group.

• Focus on initiatives such as encouraging and creating workplaces suitable for disabled workers.



Employee Metrics

Region %

Asia Pacific & Indian Subcontinent 30

Australia & Americas 15

Middle East, Europe & Africa 55

Job Level %

Executive Management 3

Middle Management 16

Operational and Support Staff 81

Years of Service %

Between 0 to 5 years 42

Between 6 to10 years 32

Between 11 to 20 years 19

Above 20 years 7

Gender Diversity of our Team

%

Male 94

Female 6

The regional spread of our workforce reflects our business focus on growing markets. With 28 operating terminals across our Middle East, Europe & Africa region, compared with 18 in the Asia Pacific & Indian Subcontinent region and 13 in Australia & America, this metric is indicative of the number of terminals we currently have operating across the regions. The shift in percentage against our 2013 figures also reflects the acquisitions made during 2014, particularly in the Middle East, Europe & Africa region.

Reflecting the operational nature of our business, a large majority of our workforce is employed in an operational capacity. We manage this workforce by having an appropriate proportion of middle management who support our executive management in achieving our strategic priorities.

Age of Employee %

Up to 30 years 26

31 years to 50 years 63

51 years and above 11

We continue to have a well-diversified age profile across our Group. A strong emphasis on succession planning, which is overseen by the Board, reflects the importance of having a sustainable work force with the right people who have the skills to meet our needs today and in the future. A framework of performance management, individual development and succession planning supports our business.

The development of new business and business expansion continues to be reflected in the increase in our workforce. With 42% of our people being considered new joiners, we ensure that our outlook remains fresh, while retaining 58% of our staff for more than five years ensures we maintain a stable workforce providing operational and functional expertise.

This graph shows the gender diversity of our people as at 31 December 2014.

Our commitment to diversity was further strengthened in 2014 with the launch of our Diversity & Inclusion Policy which details our approach to diversity and inclusion for employees, contractors, suppliers and consultants globally. We are a global group, and wherever we operate we strive to create an inclusive culture in which diversity is recognised and valued. By bringing together people from diverse backgrounds and giving them the opportunity to contribute their skills, experience and perspectives, we believe that we can deliver the best solutions and sustainable value for DP World and our stakeholders. While we are proud of our achievements in developing a diverse and inclusive team, gender diversity is one area that we will continue to focus on in 2015 and beyond.


Our people are the key to our success. Their safety, security and wellbeing is our top priority. Our goal is zero harm, with safety as a business-wide objective at the heart of our operations.

Our Committment to SafetyWe have a Global Safety and Environment Department, supported by regional safety teams. Global policies and guidelines are implemented to achieve the safest and most efficient methods of operation. Our policies and guidelines meet or exceed national health and safety legislation in the markets in which we operate. We comply with all aspects of the internationally recognised certification system OHSAS 18001.

We have zero tolerance of conditions and behaviours that contribute to workplace incidents. To help us improve our processes and move towards our goal of zero harm, we regularly audit compliance with our policies and guidelines.

We have a set of global engagement programmes to ensure our terminals manage high-risk activities across our organisation. These stringent programmes protect all personnel onsite, as well as our assets and the environment. The programmes identify, assess and control seven key areas: working at heights, vessel safety, terminal equipment, isolation, yard and quay operations, and terminal access gates.

Accident and incident data is collected, analysed, reported and monitored on a monthly basis and used to measure the safety performance across the Group. All incidents are thoroughly investigated and we have established a working group to highlight trends associated with any recurring incidents, reduce risk factors and identify and implement control measures aimed at eliminating future incidents. We report on all safety and environmental impacts over which we have operational control or if one of our subsidiaries has the authority to introduce and implement our operating policies at the terminal.

Our Opportunities

INCREASED SAFETY

Corporate Governance Financial Statements

Overview Strategic ReportOverview

Corporate governance Financial statement29DP World Annual Report and Accounts 2014

During 2014, we updated the vessel safety inspection checklist, in line with the International Labour Organization requirements. The checklist aims to ensure our employees are safe while carrying out vessel operations and identifies minimum requirements to operate safely while aboard the vessels. Some terminals have additional requirements due to local legislation or port regulations. The checklist is completed in the presence of a vessel representative and before any work is carried out on the vessel. We have supported the roll out of the checklist with guidelines and a training video, to build employee competence and demonstrate our best practice standards.

DP World Jebel Ali Port (UAE)

Objectives Progress

Roll out health, safety and environment programmes to improve understanding and strengthen the safety culture at our terminals.

We introduced nine new engagement programmes in 2014, aimed at managing safety risks. To support the achievement of this objective we also developed a best practice toolkit, to help terminals further control their risks.

Complete safety and environment assessments.

We continued our rolling programme of assessments through which we review each terminal once every three years. During 2014, we assessed 11 sites.

Deliver accident investigation training to all terminals to enhance quality investigations and improve risk management.

We introduced training for our safety and environment managers at every terminal, to improve our ability to learn from incidents. It covers how accidents happen, preliminary investigation, interviewing skills, analysing information and controls for prevention.

We also introduced a number of investigation programmes through the DP World Institute, to allow our people to earn qualifications and become trainers themselves.

DP World Cochin (India)OUR OBJECTIVES FOR 2014


Our Opportunities Increased Safety continued

Our PerformanceDespite increased volumes during 2014, we again reduced Lost Time Injuries, which fell by 12%. This contributed to a reduction in the Lost Time Injury Frequency Rate from 6.4 in 2013 to 5.2 in 2014. The number of Reportable Injuries also fell, continuing the trend established over several years.

Reportable Injuries were 8% lower, leading to a Reportable Injury Frequency Rate of 9.3 compared with 10.8 in 2013.

DP World Paramaribo (Suriname)

reduction in our Lost Time Injury Frequency Rate compared with 2013

18%reduction in our Reportable Injury Frequency Rate compared with 2013

14%new health, safety and environment programmes rolled out across our portfolio during 2014

9sites completed safety and environment assessments during 2014

11



1110

1213

773846

724609

1110

1213

16671892

13251029

1110

1213

8.08.8

7.36.4

1110

1213

17.219.1

13.410.8

OUR OBJECTIVES FOR 2015Our safety objectives for 2015 include:

• Enhancing our reporting through our critical incident reporting system.

• Continuing to reduce risk through engagement programmes and developing our risk control capabilities as our operational profile changes.

• Focusing on raising the competency of our safety and environment team, by providing industry specific training programmes.

Lost Time Injuries

Reportable Injuries

Lost Time Injury Frequency Rate

Reportable Injury Frequency Rate

A Lost Time Injury is an injury directly related to a workplace incident resulting in injury or illness where, through medical direction or personnel circumstances, the person is unable to return and complete their next scheduled work shift.

A Reportable Injury includes fatalities, Lost Time Injuries and injuries or illness from a workplace incident where the person can only receive prescribed medical attention either onsite or offsite by an authorised medical practitioner. Following treatment, this person can return to either normal or restricted duties without the loss of a full shift.

The Lost Time Injury Frequency Rate is the total number of Lost Time injuries divided by the total hours worked and then multiplied by one million:

LTIFR = Number of LTIs x 1000000

Number of hours worked

The Reportable Injury Frequency Rate is the number of Reportable Injuries divided by the total hours worked and then multiplied by one million:

RIFR = Number of RIs x 1000000

Number of hours worked

DP World Cochin (India)

948

537

9.3

5.2



Objectives Progress

Complete detailed energy consumption assessments across the Group.

We conducted energy assessments at 14 terminals to identify initiatives to save energy and reduce CO2 emissions. Sixty initiatives were identified, which are in varying stages of implementation.

Develop a comprehensive water usage footprint to enhance our ability to reduce freshwater consumption.

We identified our water footprint across the Group, with buildings identified as the main areas of water consumption, accounting for more than 50% of our water use. Using this information, we can now develop and implement targeted programmes to reduce our water consumption.

Introduce and pilot renewable and alternative energy options into our core business functions.

We conducted six feasibility studies into alternative energy options, exploring the potential use of alternative fuels across our operational fleet. Piloting the use of alternative fuels has resulted in significant savings and reduced CO2 and particulate emissions.

Develop and expand our capability to recycle and manage waste, including working with stakeholders across the supply chain.

We joined forces with Hutchinson Port Holdings Limited in a joint waste reduction campaign that saw employees from both companies engage in waste reduction activities where we operate terminals within the same port complex such as Laem Chabang (Thailand), Ho Chi Minh City (Vietnam), Busan (South Korea) and Buenos Aires (Argentina).

The EnvironmentWe focus on responsible environmental management, with a goal of zero harm. We seek to constantly improve our understanding of our environmental impact and the risks and opportunities related to our operations. We actively look for ways to reduce our environmental footprint and prioritise impact reduction initiatives by directing our resources to those areas where we believe we can realise the greatest environmental benefits. We manage our environmental impact by setting targets at a global level, which are then cascaded to the regions and finally to our terminals.

The Board receives a safety and environment report at each Board meeting to monitor the Group’s performance against key performance metrics.

Our Opportunities

OUR OBJECTIVES FOR 2014




Our focus on emissions further reduced our intensity10 by 3% in 2014. This calculation captures our direct11 and indirect emissions.12

We continued to cut our energy use, which we measure as mega joules of energy used per total terminal move (MJ Energy/TTM). This metric fell by 3% in 2014, following reductions in each of the previous four years.


10 KgCO2e/Mod TEU (kilograms of carbon dioxide equivalent per twenty-foot equivalent unit) is the sum total of both scope 1 and 2 emissions normalised against Modified TEU for business to business comparative measurement. An example of this calculation is displayed below.

11 Examples include emissions from fuel burned onsite, such as diesel, gas, petrol, LPG and oil.

12 Examples include emissions associated with the generation of electricity (grid) purchased for own consumption.

Other Initiatives in 2014Our commitment to improving our environmental performance is reflected in the significant increase in our Carbon Disclosure Project score. This rose from 70C in 2013 to 81B in 2014, placing DP World above average for the transportation industry.

We also became strategic partners of the Carbon Ambassador Programme, a scheme to encourage Emirati university students to create a culture of sustainable development, improve their interest and knowledge of sustainability and prepare them to be future leaders.

Emissions Intensity

Energy Use

1110

1213

18.018.3

17.516.4

1110

1213

79.083.2

75.772.3

70.3 MJ Energy /TTM

15.8 kgCO2e /ModTEU

OUR OBJECTIVES FOR 2015Our environment objectives for 2015 include:

• Continue our efforts to reduce our carbon emission and energy use through new programmes and initiatives.

• Focus on water conservation and waste management initiatives to reduce our water footprint and increase the percentage of recycled waste at our terminals.

• Broaden our programmes to other areas of environmental concern such as air quality, ecosystems and supply chains and consider the potential for large scale environmental controls at our terminals.

INCREASED RESPONSIBILITY


The Importance of Being a Responsible BusinessWe believe responsible corporate citizenship achieves sustainable benefits in the communities where we operate. Corporate responsibility (CR) is therefore one of our four strategic pillars and is essential for our responsible development and sustainable growth.

Our Approach to Corporate ResponsibilityWe base our CR effort on the four quadrants of community, environment, people and safety, and marketplace. The global reach of our business makes it diverse, so our terminals apply our framework to suit the needs of the communities in which they operate. Having a global framework provides consistency and allows us to promote responsible practices, while local action enables each terminal to consider what will provide the greatest benefit to it and its stakeholders.

We assess our investment decisions carefully, analysing possible impacts and investing conscientiously for the sustainable benefit of our business and the communities in which we operate.

Managing Corporate ResponsibilityThe Corporate Responsibility Advisory Committee leads the integration of CR into our business. The Committee is chaired by the Group Chief Executive Officer, Mohammed Sharaf, and includes our Chief Operating Officer, the Senior Vice President for Human Capital, and the Chief Operating Officer of our UAE business.

The Committee receives updates from the regions and monitors CR initiatives across the Group to ensure we adopt a consistent approach to CR initiatives.

To help us share best practice and integrate CR throughout our business, we have a network of corporate responsibility champions across our regions and terminals. During 2014, we appointed additional champions, bringing the total to 71 across the Group. Regionally, we are also establishing CR committees, with committees now formed in our Middle East, Europe and Africa region as well as in the Australia and Americas region.

Measuring ProgressOur CR champions across the Group use our CR Scorecard as a tool to measure progress against our four-quadrant framework. The results are then reported to the Corporate Responsibility Advisory Committee.

At DP World, we believe in being a responsible corporate citizen and making a sustainable difference in the communities in which we operate.

Corporate Responsibility

CORPORATE RESPONSIBILITY



The Board also receives annual reports on our CR progress.

We also look to measure changes in behaviour and to embed these changes through individual performance objectives, including with our senior management.

Stakeholder EngagementStakeholder engagement is essential for the successful implementation of our corporate responsibility initiatives. Increasingly our terminals are undertaking stakeholder engagement mapping so that we can better engage with the wider community, especially at our new developments.

Our Four Quadrant Framework • The following pages provide further explanation of our approach and performance in two of our four quadrants – community and the marketplace.

• Information about our approach to people and learning can be found on pages 24 to 27. Our internal and operational strategic priority, discussed further on pages 28 to 33, contains detailed information regarding our safety and environment initiatives and performance.

DP World Corporate

Responsibility

Com

m

unityEnvironm

ent

Marketpl

ace

People and Safety

Build sustainable communities through strategic community investment

Reduce our impact on the environment through innovation, new technologies and behavioural change

Build an inclusive, supportive and safe work environment that develops the progression of our people and creates a culture of diversity, safety and well-being

Be recognised as a sector leader in corporate responsibility and governance, thought leadership and innovation

DP World Head Office volunteering event at English College (Dubai)

OUR FOUR QUADRANT FRAMEWORK


Corporate Responsibility continued

COMMUNITY

DP World’s community investment is focused on supporting areas that are most relevant to our business. These are:

• education; • health; • marine conservation; and • community development.

We aim to make a sustainable contribution, which means developing alliances with our community partners rather than simple philanthropic donations. One way we achieve this is through volunteering, where our people share their skills and expertise and get involved in hands-on activities. Further information regarding the volunteering work carried out by our people is available on the Sustainability section of our website, www.dpworld.com.

OUR OBJECTIVES FOR 2014Objectives Progress

Further invest in the communities in which we operate based on identified key areas of education, health, marine conservation and community development.

We implemented two new polices, a Contributions Policy and an Expenditure Policy to improve the focus of our community investments. During the year, we took part in more than 300 community initiatives around the world.

We also used our sponsorship of the DP World Golf Championship to raise awareness of male cancers.

Identify and develop appropriate tools to measure social return on investment.

In conjunction with our IT department, we developed an online data collection system, to better record our CR investments. This will assist us with assessing whether we are focusing our efforts on the right issues and identify potential areas to concentrate on in the future. Training has been provided across the Group to enable data to be collected through the year.

Build our volunteering programme across our global network.

We continued to develop our volunteering programme, including developing policies for terminals across the Group.

We also held a Global Volunteer Week, with every terminal holding a volunteering event. The week ran from 1 to 5 December and we aimed to get 500 volunteers involved. 540 employees participated in Global Volunteer Week, contributing 2,338 hours to support 3,113 beneficiaries in the communities in which we operate.

Build capability across our Group to further improve the management of strategic community investment.

We continued to work closely with our network of CR champions to develop their knowledge and build their capabilities.

Our Performance

Key Performance Indicators 2014 2013

Community initiatives across our global network 300+ 230+

Corporate responsibility champions globally 71 13

Hours volunteered for community projects by our Head Office team 516 231

Our Objectives for 2015Our community objectives for 2015 include:

• Focus on collecting and reporting the right data, to ensure we can effectively measure and manage our community investments, and inform management decisions.

• Further build on the success of DP World’s first Global Volunteer Week. • Continue to encourage and support our people getting involved in our communities. • Continue to develop frameworks and share guidelines across the Group to improve our global CR progress.



THE MARKETPLACE

We work with our customers and suppliers across our markets to implement responsible business operations and we drive performance improvements and change to positively impact our stakeholders.

OUR OBJECTIVES FOR 2014Objectives Progress

To introduce appropriate internal controls with regards to CR initiatives.

In conjunction with our audit team, audit processes have been implemented to monitor CR spending across the Group. We will also carry out a review of previous CR expenditure over the past five years.

Continue to enhance our internal and external communication.

We have continued to improve our communication internally and externally. Detailed information regarding our CR initiatives is available on the DP World website, www.dpworld.com

Identify appropriate forums for DP World to be an active participant in corporate responsibility debate and policy development.

During the year, we identified and participated in a number of discussions and debates on issues important to the Group. For example, we took part in a side meeting at a United Nations Contact Group on Piracy off the Coast of Somalia and presented on engaging leadership in CR strategy at the 12th CR Summit in Dubai.

DP World also continued to co-convene an anti-piracy conference, in conjunction with the UAE Ministry of Foreign Affairs.

Our Performance

Key Performance Indicators 2014 2013

Government and industry leaders attending the Counter-Piracy Conference 741 750+

Our Objectives for 2015Our marketplace objectives for 2015 include:

• Develop a framework and value proposition for regions and terminals when working with customers to understand their CR issues.

• Develop a framework for working constructively with suppliers to assess their CR approach. • Develop tools for our terminals to engage locally with stakeholders on CR issues and initiatives.

DP World Head Office (Dubai) Ramadan “Got Food” Appeal


Principal Risks and Uncertainties

Risk is an inherent part of doing business. Our approach is to identify and assess all significant risks which could affect the Group’s ability to achieve its business objectives and to identify management actions and internal controls which can address and mitigate them to an acceptable level.

The Board establishes the control environment, sets the risk appetite, approves policies and delegates responsibilities under our risk management framework.

The Group Head of Risk works to establish and implement our risk management policy, independently reviews and challenges risk information throughout the business, compiles and analyses risk profiles and monitors risk management processes within the Group and regularly reports on risks to our oversight bodies including the Board.

Our Risk Management FrameworkOur risk management framework recognises that the long-term success of our Company is contingent on our

ability to effectively understand, accept and manage risk within our business.

Our risk management framework includes:

• a risk management policy which is communicated throughout the Group and reviewed annually;

• a standard set of key risk areas, categories and definitions;

• a standardised and automated risk assessment and reporting tool, including standard risk assessment criteria, evaluation of “gross” and “net” risks and the determination of our risk appetite;

• consolidation of risk assessments for each business at Group level to identify organisation-wide impacts and trends;

Corporate Oversight Functions

Business Units

BoardAudit

Committee

Assurance Functions

Rep

ort

ing

• a six-monthly risk assessment, action planning and reporting cycle, which includes a review of current and emerging risks and their mitigation by regional and executive management, the Audit Committee and the Board;

• reporting to the Board on any matters which have arisen from the Audit Committee’s review of risk management and internal control processes and any exceptions to these processes;

• periodic reviews of terminals’ risk mitigation by the Group Head of Risk and by the Group Internal Audit function; and

• a dedicated Group Head of Risk to lead and work with a network of local and regional management to continuously improve risk management.

Risk Roles and Responsibilities

Business units (including container and non-container terminals) perform day-to-day risk management activities, with quarterly risk reviews by management and the creation of risk response plans. Practices are thus adapted as required in line with changing risk levels and the emergence of new risks.

Various corporate oversight mechanisms monitor our significant risks. Regional management and other corporate functions including Finance, Safety & Environment, Human Capital, IT, Company Secretariat, Tax, Insurance, Risk and Treasury develop policies and procedures and undertake other activities which mitigate a wide range of risks including employee retention, financial control, bribery and corruption and business continuity. They also provide support to the terminals to ensure objectives are met within risk tolerance levels,as well as hold regular updates with risk management and executive management.

Group Internal Audit provides independent assurance to the Board, in addition to other assurance functions. During 2014, the team reviewed and tested core internal controls in a number of core business processes across the Group including billing, procurement activities, payroll and compliance with our anti-bribery and fraud policy.

The Board regularly monitors the implementation of strategy and financial performance of the Group. The Board reviews strategic plans and objectives annually prior to approving budgets and receives frequent reports on our current and emerging key risks and status of internal controls from the Audit Committee. More information on the activities undertaken by the Board and the Audit Committee is contained in the Corporate Governance section, commencing on page 50.

Ove

rsig

ht



During 2014, we continued to monitor and review the principal risks and uncertainties relating to the Group’s business performance that could have material adverse effects on our business, financial condition and reputation. While other risks exist outside those listed, a conscious effort has been made to disclose those of greatest importance to the business.

We employ various controls and mitigation strategies to reduce these inherent risks to an acceptable level. Our principal risks and uncertainties will evolve as these controls and mitigating activities succeed in reducing the residual risk over time, or as new risks emerge.

Many risk factors remain beyond our direct control. The risk management framework, however effective, can only provide reasonable but not absolute assurance that key risks are managed to an acceptable level.

Key Risk Description and Impact How We Manage the Risk

Strategic Priority – Financial

Macro Risk and Economic Instability

Economic uncertainty or a slowdown in GDP and the resulting impact on trade could impact our volume growth and profitability.

There is uncertainty surrounding the resilience of the global economy. Some economic stagnation, including downgrading of the Eurozone’s growth potential may result in declining consumer spending and industry confidence.

• Measures have been taken to minimise exposures and mitigate any downturn in the macroeconomic environment. Our business focus is on origin and destination cargo which is less susceptible to economic instability and we are predominantly focused on the faster growing emerging markets. We have a continuous focus on delivering high levels of service that meet our customers’ expectations and we proactively manage costs.

• We also have a well-diversified global portfolio of investments across a number of jurisdictions which spreads our concentration risk due to an even geographical spread of our business activity.

Financial Risks Principal financial risks include liquidity needs, availability of capital to achieve our growth objectives, foreign currency and exchange rate volatility.

The outlook for the banking and capital markets, particularly in the context of emerging markets, remains uncertain. This is in large part due to differing, albeit somewhat coordinated, policy by the various Central Banks (including the Federal Reserve) on quantitative easing and the tapering thereof.

• Our balance sheet remains strong with a net debt to adjusted EBITDA of 1.3 times in 2014 and the only major refinancing due in 2017.

• The leverage ratio is expected to rise post the EZW acquisition but the Group has significant headroom for further investment if required.

• The group has a five year $3bn revolver / term loan facility which remained undrawn at year-end.

• With our tariffs being predominantly USD based, we have a natural hedge against foreign exchange risk. Our internal policy is to mitigate all asset-liability mismatch risk where possible and hedge against interest rate risk.

Our Principal Risks and Uncertainties


Principal Risks and Uncertainties continued


Strategic Priority – Financial

Industry Capacity

Overcapacity can occur when port authorities tender many projects simultaneously and create capacity beyond medium-term demand. This can lead to weak pricing power and low return on investment.

• Barriers to entry are typically high in the container terminal industry due to the highly capital intensive nature of the business.

• Our focus on gateway locations means we are usually the terminal of choice.

• The Group’s investment in deep-sea capacity allows us to handle ultra-large vessels and offers a competitive advantage.

Project Risk – Development and Planning

We are involved in large, long-term projects that can take months or years to complete, which can expose the Group to the risk of reduced profitability and potential losses. These projects can be subject to delays and cost overruns due to delays in technology development, equipment deliveries, engineering problems, work stoppages, unanticipated cost increases, shortages of materials or skilled labour or other unforeseen problems.

• We have established internal processes with clear delegated authorities for approving major contracts. Contracts with large monetary value require Board approval. Systems are in place to monitor risk metrics in the execution of such contracts.

• Skilled technical and project management teams are assigned to oversee large projects and actively monitor risks throughout the process in line with best practice project management standards.

• Rigorous strategic equipment procurement controls are in place throughout the duration of projects.

• We continuously upgrade contractual terms and conditions, reflecting lessons learned from previous projects.

• Where multilateral or bank finance is a source of funding, the projects are also required to meet internationally established project financing requirements. Where appropriate, financing packages are structured and covenants set to ensure sufficient headroom to accommodate non-material delays.

Political Stability Risk

Political instability or direct or indirect interference in some of the emerging markets in which we operate creates a risk to the Group’s operations in those countries in terms of operations, service, revenues and volumes.

• We have a well-diversified global portfolio of investments across a number of geographical jurisdictions which spreads our risk.

• Our experienced business development team undertakes initial due diligence and we analyse current and emerging issues and maintain business continuity plans to respond to threats and safeguard our operations and assets.

• Ongoing security assessments and continuous monitoring of geopolitical developments worldwide along with engagement with governments, local authorities and joint venture partners, ensures we are well positioned to respond to changes in political environments.




Strategic Priority – Customer

Customer Consolidation

Major and middle-tier customers are forming alliances and changing their strategy on preferred ports and hubs which could lead to downward pressure on tariffs and profit margins.

• We focus on high levels of customer service and develop sustainable, high-value and trusted customer relationships throughout our portfolio.

• We have a customer contract strategy in place. Senior executive sponsors are in constant dialogue with our customers and we maintain a watching brief on the markets.

• We have a number of specific customer engagement projects ongoing to improve and extend supply chain relationships.

• We remain focused on origin and destination cargo, which is less affected by competition than transhipment cargo.

Strategic Priority – Internal & Operational

Safety Risk The nature of our operations exposes us to various operational and safety risks that could affect our business operations, financial results and our reputation.

• The Board and Senior Management are committed to creating a safe culture throughout the Group and regularly monitor the implementation of our safety strategy which includes employee training, regular audits and management objectives in relation to the safety of our people.

• Terminal management are responsible for local terminal safety risks and are supported by safety guides, operational manuals, detailed procedures and oversight from our Global Safety team, who co-ordinate consistent and complete responses to safety risks.

• These risks are stabilised through rigorous and continuous monitoring by management and by having review processes, policies, guidance documents and specific operational procedures in place.

• We have established a safety auditing programme which is conducted across the entire portfolio.

• Contractors must sign up to specific requirements, standards and procedures to align with our safety policies.

Environmental – Climate

Change

DP World’s operations are fuel-intensive and our mobile equipment fleet largely depends on fossil fuels. 98% of our CO2e emissions (including direct and indirect emissions) result from the use of fossil fuels in the form of diesel and electricity.

We currently operate under numerous national and regional regulations, with increasing laws governing environmental protection matters such as carbon emissions.

• We have a dedicated team responsible for continually reviewing regulatory risks, with a strategy focussed on innovation towards cleaner, more efficient technologies and a focus on best practices, policies and procedures as well as risk reduction, energy efficiency initiatives and researching alternative energy sources.

• We monitor and report our carbon emissions globally.

• Further information on our environmental initiatives and performance is available on pages 32 to 33.


Principal Risks and Uncertainties continued


Strategic Priority – Internal & Operational

Damage To IT Systems, Information Security and Cyber Risk

The continued operation of our IT systems and infrastructure is threatened by natural risks including floods and hurricanes and the unforeseen impact of IT changes to new and existing systems may disrupt business operations.

The increased pace of technological innovation and change heightens the risk of cyber terrorism including information and intelligence theft. Cybercrime is increasing in sophistication, consequences and incidence, with risks including virus infection, unauthorised access, phishing email-based frauds and insider threats. This could result in liabilities, including claims, loss of revenue, litigation and harm to the Group’s reputation.

• We analyse current and emerging issues and maintain business continuity plans to respond to threats and safeguard our operations and assets, including having developed and tested IT disaster recovery plans in place.

• We focus on maintaining a robust and secure IT environment that protects our corporate data.

• We have established quality information security processes, procedures and controls in place to address IT security risks across the Group. Global IT and Group Internal Audit work together to provide assurance on IT security across the Group.

• Risk is mitigated through a decentralised approach, with a spread of servers and networks across the business.

Legal and Regulatory

Our businesses operate under increasingly stringent regulatory regimes around the world and are subject to various legal and regulatory obligations.

New legislation and other evolving practices could impact our operations and increase the cost of compliance.

Failure to comply with legislation could lead to substantial financial penalties, disruption to business, personal and corporate liability and loss of reputation.

• The Group monitors changes to regulations across its entire portfolio to ensure that the effect of changes are minimised and compliance is continually managed.

• Comprehensive policies, procedures and training are in place to promote legal and regulatory compliance.

Bribery and Corruption

As an international marine terminal operator, bribery and corruption represents an ongoing risk to our business which could expose us to risk of non-compliance and liabilities in the event of breaches of anti-corruption and anti-bribery legislation in the countries we operate in.

Examples include commission payments to third parties, acceptance of gifts and facilitation payments which may be considered normal local practice in some markets.

• DP World has a Code of Conduct and an Anti-Bribery policy in place, with a zero tolerance approach to bribery and fraud and has developed online training and fraud risk workshops across the Group to raise awareness and promote compliance.

• We have an anti-fraud framework in place for preventing, detecting and responding to frauds to meet the stringent requirements of the UK Bribery Act. This is particularly focused on higher risk regions to ensure the Group’s policies are understood and enforced.

• We have a confidential Anti-Bribery and Compliance officer advice hotline and a Whistleblowing hotline for people to raise any concerns. These are investigated and reported to the Audit Committee on a quarterly basis.

• We provide new starters and existing employees with training on anti-bribery and corruption as part of the induction process.

• We have a gift and hospitality register and approvals process.




Strategic Priority – People and Learning

Employee Attraction and Retention

Our people are fundamental to the long-term success and growth of our Company. Shortages in employees possessing specific skill sets are a risk in some regions and can affect our business continuity and productivity levels.

• This risk is reducing as we invest further in our people and their performance.

• Retention strategies are in place for identified scarce skills.

• We promote a safe working environment for our employees and have a “health and wellbeing” programme which is rolled out globally.

• We continuously monitor and benchmark our remuneration packages in order to attract and retain employees of a suitable calibre and skill set.

• The DP World Institute develops and delivers training programmes across all levels which are focused on improving operational and managerial competencies.

• Effective performance management remains a high priority for us, and is monitored across the Group on a regular basis.

• Staff turnover rates are monitored and are currently stable.

Labour Unrest Labour disputes and unrest pose a risk to our operational continuity.

• We have an engagement strategy with unions and employees in those areas most affected by employee disputes. This includes multi-year agreements and clearly assigned responsibilities for maintaining close relationships with unions locally and nationally. We are proactive and timely in our responses to the needs of the unions. A senior management representative holds a Chairperson role on the European Works Council which provides a forum to interact directly with union representatives on a timely and continuous basis.

• We continue to monitor operational downtime arising from local disputes.

• We conduct employee engagement surveys bi-annually, with a formal process for following up on employee concerns.


Group Chief Financial Officer’s Review

On a like-for-like basis, 2014 revenues grew by 11.3%, largely helped by like-for-like consolidated volume growth of 9.5% as we delivered above industry growth. Given the more benign trade environment, we focused our efforts on translating improved volume and top line growth into stronger bottom line performance. We have been largely successful in this strategy as we are able to report like-for-like adjusted EBITDA growth of 16%; like-for-like adjusted EBITDA margin of 48.3% and like-for-like EPS growth of 25.1%.

Middle East, Europe and Africa

Results before separately disclosed items2014

(US$m)2013

(US$m) % change

Like-for-like at constant currency %

change13

Consolidated throughput14 (TEU ‘000) 20,973 18,993 10.4% 9.3%Revenue 2,386 2,124 12.3% 10.3%Share of profit from equity-accounted investees 18 8 115.8% 117.2%Adjusted EBITDA 1,260 1,095 15.0% 16.9%Adjusted EBITDA margin 52.8% 51.6% – 55.0%15

Market conditions in the Middle East, Europe and Africa region were favourable with the UAE delivering another record year of throughput at 15.2 million TEU. Europe delivered a consistent and strong performance albeit from a relatively low base. This resulted in revenue of $2,386 million, up 12.3% year-on-year with containerised revenue growing 9.2%. Our share of profit from equity-accounted investees increased to $18 million due to a stronger performance in Europe.

Adjusted EBITDA was $1,260 million, 15.0% ahead of the same period last year due to strong throughput growth which helped drive the adjusted EBITDA margin to 52.8%. Like-for-like revenue and adjusted EBITDA growth on prior year at constant currency was 10.3% and 16.9% respectively. Like-for-like adjusted EBITDA margins stood at 55.0%.

The UAE delivered a solid performance with containerised revenue growing by 10.2% and non-container revenue by 13.3% as the economy in the UAE and wider region remained robust. Growth continued to be driven by tourism and logistics, while the benefits of the Expo2020 are still to come.

We invested $663 million in our terminals across this region during the year. Investment was focused across the Middle East and Europe terminals including Jebel Ali (UAE), DP World London Gateway Port (UK) and Yarimca (Turkey).

DP World delivered another solid set of financial results in 2014 with profit attributable to owners of the Company growing 11.7% to $675 million. Our adjusted EBITDA was $1,588 million, while adjusted EBITDA margins reached a new high of 46.6%. Reported revenue grew by 11.0% to $3,411 million.

Yuvraj NarayanChief Financial Officer

13 Like-for-like at constant currency is without the addition of (1) New capacity at Embraport (Brazil), DP World London Gateway (UK), Mumbai (India), Yarimca (Turkey), Rotterdam (Netherlands) (2) Acquisition of Dubai trade and World Security (3) The impact of exchange rates as financial results are translated into US dollars for reporting purposes.

14 Consolidated throughput is throughput from all terminals where we have control under IFRS.15 Like-for-like adjusted EBITDA margin.



Strategic Report


Asia Pacific and Indian Subcontinent

Results before separately disclosed items2014

(US$m)2013

(US$m) % change


change13

Consolidated throughput14 (TEU ‘000) 4,897 4,604 6.4% 16.5%Revenue 397 355 11.7% 23.2%Share of profit from equity-accounted investees 97 90 8.1% 16.9%Adjusted EBITDA 257 220 16.7% 27.6%Adjusted EBITDA margin 64.7% 61.8% – 63.3%15

The Asia Pacific and Indian Subcontinent region reported a much stronger performance relative to the prior period as trade volumes recovered. Volume growth in Asia was driven by increased consumer demand from the United States, while the economy in India continued to benefit from a positive macro outlook following the recent elections.

Revenue grew by 11.7% to $397 million, well ahead of consolidated throughput growth of 6.4% as we focused on higher-margin cargo. Our share of profit from equity-accounted investees rose 8.1% to $97 million mainly due to the strong performance in China and South Korea.

Adjusted EBITDA of $257 million was 16.7% higher than the same period last year, reflecting the recovery in revenue, while the adjusted EBITDA margin increased to 64.7%. Like-for-like growth was significantly stronger as currency fluctuations adversely impacted top line growth. However, the currency impact at the adjusted EBITDA level was minimal as our cost base is largely in local currency.

Capital expenditure in this region during the year was $46 million, mainly focused on the capacity expansion in Mumbai (India).


Reported results before separately disclosed items2014

(US$m)2013

(US$m) % change


change13

Consolidated throughput14 (TEU ‘000) 2,471 2,480 (0.4%) (0.4%)Revenue 628 594 5.7% 8.4%Share of profit from equity-accounted investees (38) (14) – –Adjusted EBITDA 217 195 11.3% 16.1%Adjusted EBITDA margin 34.6% 32.9% – 37.3%15

Market conditions in the Australia and Americas region were mixed. Volatile currency and weaker commodity prices led to softer economic growth in the region but, despite these headwinds, we delivered a resilient performance. Revenue grew by 5.7% to $628 million, despite flat throughput growth as containerised revenue per TEU rose 8.5%. The loss from equity-accounted investees increased to $38 million, reflecting a full year contribution from Embraport and a softer performance in Australia.

Adjusted EBITDA was $217 million, up 11.3% on the prior period due to strong growth in higher margin ancillary revenues. Like-for-like total revenue growth at constant currency was 8.4% ahead of the prior year whilst like-for-like adjusted EBITDA increased 16.1%.

Cash Flow and Balance Sheet Cash generation remained strong with cash from operations standing at $1,486 million for 2014. Our capital expenditure reached $807 million as we delivered the first phase of Terminal 3 at Jebel Ali (UAE). Gross debt rose to $5,855 million as we added the $1 billion convertible bond during the course of the year, while net debt declined to $2,132 million. Cash on the balance sheet at the year-end was $3,723 million but a significant portion of that has now been used to fund the EZW acquisition.

Our year-end balance sheet shows leverage (net debt to adjusted EBITDA) at 1.3 times. However, this excludes the impact of the EZW acquisition which closed in the first quarter of 2015. Including the EZW acquisition, we expect the leverage ratio to rise to approximately three times on a pro-forma basis, which is more optimal for our business given its high cash generation. Overall, the balance sheet remains strong with ongoing strong cash generation and we have plenty of headroom and flexibility to add to our portfolio should favourable assets become available at attractive prices.

Capital ExpenditureCapital expenditure in 2014 was $807 million, with maintenance capital expenditure of $126 million. The total spend was below our initial guidance of $1,900 million due to delays in some projects, particularly in the UAE. Due to the timing delay, we now expect 2015 to be a peak capital expenditure year in the range of $1,400 – $1,700 million and we look forward to adding further capacity at Jebel Ali (UAE), Rotterdam (Netherlands) Yarimca (Turkey) and Mumbai (India).

Yuvraj NarayanChief Financial Officer


Board of Directors

SULTAN AHMED BIN SULAYEMCHAIRMAN

SIR JOHN PARKER SENIOR INDEPENDENT NON-EXECUTIVE DIRECTOR AND VICE CHAIRMAN

JAMAL MAJID BIN THANIAHNON-EXECUTIVE DIRECTOR AND VICE CHAIRMAN

ROBERT WOODSINDEPENDENT NON-EXECUTIVE DIRECTOR

DEEPAK PAREKHINDEPENDENT NON-EXECUTIVE DIRECTOR

MOHAMMED SHARAFGROUP CHIEF EXECUTIVE OFFICER

YUVRAJ NARAYANGROUP CHIEF FINANCIAL OFFICER

MARK RUSSELLINDEPENDENT NON-EXECUTIVE DIRECTOR

His Excellency Sultan Ahmed Bin Sulayem became Chairman of DP World on 30 May 2007. He is a leading UAE and international businessman whose visionary leadership spearheaded the rapid expansion of Dubai’s infrastructure, including ports and free zones, contributing significantly to the stellar growth trajectory of the United Arab Emirates. Mr Bin Sulayem was previously Chairman of Dubai World and in this role oversaw businesses in industries as diverse as real estate development, hospitality, tourism, retail, e-commerce, commodities, transportation and logistics. He previously served as Chairman of Port & Free Zone World FZE and remains one of the two representatives of DP World’s majority shareholder on the Board.

Highlights of his career, spanning three decades, comprise DP World’s international expansion, including the $6.85 billion acquisition of P&O Group to become a leading global marine terminals operator, establishing and leading Nakheel, a real estate and tourism property development firm that created many iconic Dubai projects including The Palm, the world’s largest man-made islands; establishing and leading Istithmar World, a major global private equity investment house; and pioneering the Dubai Multi Commodities Centre. Mr Bin Sulayem holds a BS in Economics from Temple University, United States. A citizen of the United Arab Emirates, he is 59 years old.

Sir John Parker has served as an Independent Non-Executive Director and Vice Chairman of the Company since 30 May 2007. He also acts as Senior Independent Director and is Chairman of the Company’s Nominations and Governance Committee and Chairman of the Company’s Remuneration Committee. He serves as Chairman of Anglo American plc. He is also Non-Executive Director of Carnival plc, Carnival Corporation and Airbus Group. He previously served as Chair of the Court of the Bank of England, Non-Executive Chairman of BVT, Joint Chairman of Mondi plc, Chairman of National Grid plc, Non-Executive Director and Deputy Chairman and, subsequently, Chairman of P&O and Vice Chairman of Port & Free Zone World. He served as the President of the Royal Academy of Engineering from 2011 to 2014. He was a Member of the Prime Minister’s Business Council for Britain. A British citizen, he is 72 years old.

Jamal Majid Bin Thaniah has served as a Director and Vice Chairman of the Company since 30 May 2007. He joined Dubai Ports in 1981 and, from 2001, led Dubai Ports Authority. He also serves as a Non-Executive Director of Etihad Rail (Abu Dhabi) and was appointed as an Independent Non-Executive Director of Emaar Properties PJSC on 23 April 2012. He previously served as a Director of Port & Free Zone World FZE and he remains one of the two representatives of DP World’s majority shareholder on the Board of DP World. A citizen of the United Arab Emirates, he is 56 years old.

Robert Woods was appointed as an Independent Non-Executive Director of the Company on 1 January 2014. He is the Chairman of P&O Ferries and DP World Southampton, and currently holds Non-Executive Directorship at John Swire & Sons and Caledonia Investments. He was formerly the Chief Executive of The Peninsular and Oriental Steam Navigation Company and a Non-Executive Director of Cathay Pacific and Tilbury Container Services Limited. In 2012, he was appointed President of the Chartered Institute of Shipbrokers. He is an Honorary Captain of the Royal Naval Reserve. A British citizen, he is 68 years old.

Deepak Parekh was appointed as an Independent Non-Executive Director of the Company on 22 March 2011. He is also Chairman of the Company’s Audit Committee. He is the Non-Executive Chairman of HDFC Ltd, GlaxoSmithkline Pharmaceuticals Ltd Siemens India and BAE Systems India (Services) Private Limited.

He serves on the board of several other leading corporations including, Mahindra and Mahindra, The Indian Hotels Co Ltd, Network18 Media & Investments ltd and Vedanta Resources plc. He is also on the Advisory Board of several Indian corporate and multinational corporations. He has been a member of numerous Indian Government appointed advisory committees and task forces on matters ranging from infrastructure reform to capital markets and financial services.

In 2006, he was awarded the Padma Bhushan. Some important recent awards include ‘Bundesverdienstkreuz’, Germany’s Cross of the Order of Merit one of the highest distinctions of the Federal Republic of Germany, in 2014, “Knight in the Order of the Legion of Honour” one of the highest distinctions of the French Republic, in 2010; and the First international recipient of the Outstanding Achievement Award from the Institute of Chartered Accountants in England and Wales, in 2010. A citizen of the Republic of India, he is 70 years old.

Mohammed Sharaf has served as Group Chief Executive Officer of the Group since 2005 and as a Director of the Company since 30 May 2007. He joined Dubai Ports Authority in 1992, and in 2001 he became Managing Director of DP World FZE. In this position, he oversaw the Group’s growth into an international business and performed central roles in developing its first international operations at the terminals of Jeddah (Saudi Arabia), Constanta (Romania) and Vizag (India) and in developing its national operations at Jebel Ali and Port Rashid terminals. He began his shipping career at Holland Hook terminal in The Port of New York/New Jersey and has more than 20 years’ experience in the transport and logistics business. He is also Chairman of Tejari World FZ LLC. He is Joint Vice Chairman of the US-UAE Business Council and a member of the UAE-Canada Business Council Board. A citizen of the United Arab Emirates, he is 53 years old.

Yuvraj Narayan has served as Group Chief Financial Officer of the Group since 2005 and as a Director of the Company since 9 August 2006. He joined DP World FZE in 2004. He serves as Non-Executive Director of IDFC Securities Limited. He previously served as Non-Executive Director of Istithmar World PJSC and as ANZ Group’s Head of Corporate and Project Finance for South Asia before becoming Chief Financial Officer of Salalah Port Services in Oman. He is a qualified Chartered Accountant and has a wealth of experience in the ports and international banking sectors. A citizen of the Republic of India, he is 58 years old.

Mark Russell was appointed as an Independent Non-Executive Director of the Company on 11 August 2014. He is a Non-Executive Director of London and Continental Railways Limited and Eurostar International Limited, and Chairman of Eurostar’s Audit Committee. He is also Chief Executive of the Shareholder Executive in the UK and sits on the Departmental Board and Executive Committee of the UK Government’s Department for Business, Innovation & Skills. He was formerly a partner in the corporate finance departments of KPMG in London and Frankfurt and held senior positions at PwC Corporate Finance, Robert Fleming, Lazard Brothers and A.T. Kearney. A British citizen, he is 54 years old.

Member of the Audit Committee

Chairman of the Nominations and Governance Committee

Chairman of the Remuneration Committee

Member of the Nominations and Governance Committee



Member of the Remuneration Committee

Chairman of the Audit Committee









Strategic Report


SULTAN AHMED BIN SULAYEMCHAIRMAN

SIR JOHN PARKER SENIOR INDEPENDENT NON-EXECUTIVE DIRECTOR AND VICE CHAIRMAN

JAMAL MAJID BIN THANIAHNON-EXECUTIVE DIRECTOR AND VICE CHAIRMAN

ROBERT WOODSINDEPENDENT NON-EXECUTIVE DIRECTOR

DEEPAK PAREKHINDEPENDENT NON-EXECUTIVE DIRECTOR

MOHAMMED SHARAFGROUP CHIEF EXECUTIVE OFFICER

YUVRAJ NARAYANGROUP CHIEF FINANCIAL OFFICER

MARK RUSSELLINDEPENDENT NON-EXECUTIVE DIRECTOR

His Excellency Sultan Ahmed Bin Sulayem became Chairman of DP World on 30 May 2007. He is a leading UAE and international businessman whose visionary leadership spearheaded the rapid expansion of Dubai’s infrastructure, including ports and free zones, contributing significantly to the stellar growth trajectory of the United Arab Emirates. Mr Bin Sulayem was previously Chairman of Dubai World and in this role oversaw businesses in industries as diverse as real estate development, hospitality, tourism, retail, e-commerce, commodities, transportation and logistics. He previously served as Chairman of Port & Free Zone World FZE and remains one of the two representatives of DP World’s majority shareholder on the Board.

Highlights of his career, spanning three decades, comprise DP World’s international expansion, including the $6.85 billion acquisition of P&O Group to become a leading global marine terminals operator, establishing and leading Nakheel, a real estate and tourism property development firm that created many iconic Dubai projects including The Palm, the world’s largest man-made islands; establishing and leading Istithmar World, a major global private equity investment house; and pioneering the Dubai Multi Commodities Centre. Mr Bin Sulayem holds a BS in Economics from Temple University, United States. A citizen of the United Arab Emirates, he is 59 years old.

Sir John Parker has served as an Independent Non-Executive Director and Vice Chairman of the Company since 30 May 2007. He also acts as Senior Independent Director and is Chairman of the Company’s Nominations and Governance Committee and Chairman of the Company’s Remuneration Committee. He serves as Chairman of Anglo American plc. He is also Non-Executive Director of Carnival plc, Carnival Corporation and Airbus Group. He previously served as Chair of the Court of the Bank of England, Non-Executive Chairman of BVT, Joint Chairman of Mondi plc, Chairman of National Grid plc, Non-Executive Director and Deputy Chairman and, subsequently, Chairman of P&O and Vice Chairman of Port & Free Zone World. He served as the President of the Royal Academy of Engineering from 2011 to 2014. He was a Member of the Prime Minister’s Business Council for Britain. A British citizen, he is 72 years old.

Jamal Majid Bin Thaniah has served as a Director and Vice Chairman of the Company since 30 May 2007. He joined Dubai Ports in 1981 and, from 2001, led Dubai Ports Authority. He also serves as a Non-Executive Director of Etihad Rail (Abu Dhabi) and was appointed as an Independent Non-Executive Director of Emaar Properties PJSC on 23 April 2012. He previously served as a Director of Port & Free Zone World FZE and he remains one of the two representatives of DP World’s majority shareholder on the Board of DP World. A citizen of the United Arab Emirates, he is 56 years old.

Robert Woods was appointed as an Independent Non-Executive Director of the Company on 1 January 2014. He is the Chairman of P&O Ferries and DP World Southampton, and currently holds Non-Executive Directorship at John Swire & Sons and Caledonia Investments. He was formerly the Chief Executive of The Peninsular and Oriental Steam Navigation Company and a Non-Executive Director of Cathay Pacific and Tilbury Container Services Limited. In 2012, he was appointed President of the Chartered Institute of Shipbrokers. He is an Honorary Captain of the Royal Naval Reserve. A British citizen, he is 68 years old.

Deepak Parekh was appointed as an Independent Non-Executive Director of the Company on 22 March 2011. He is also Chairman of the Company’s Audit Committee. He is the Non-Executive Chairman of HDFC Ltd, GlaxoSmithkline Pharmaceuticals Ltd Siemens India and BAE Systems India (Services) Private Limited.

He serves on the board of several other leading corporations including, Mahindra and Mahindra, The Indian Hotels Co Ltd, Network18 Media & Investments ltd and Vedanta Resources plc. He is also on the Advisory Board of several Indian corporate and multinational corporations. He has been a member of numerous Indian Government appointed advisory committees and task forces on matters ranging from infrastructure reform to capital markets and financial services.

In 2006, he was awarded the Padma Bhushan. Some important recent awards include ‘Bundesverdienstkreuz’, Germany’s Cross of the Order of Merit one of the highest distinctions of the Federal Republic of Germany, in 2014, “Knight in the Order of the Legion of Honour” one of the highest distinctions of the French Republic, in 2010; and the First international recipient of the Outstanding Achievement Award from the Institute of Chartered Accountants in England and Wales, in 2010. A citizen of the Republic of India, he is 70 years old.

Mohammed Sharaf has served as Group Chief Executive Officer of the Group since 2005 and as a Director of the Company since 30 May 2007. He joined Dubai Ports Authority in 1992, and in 2001 he became Managing Director of DP World FZE. In this position, he oversaw the Group’s growth into an international business and performed central roles in developing its first international operations at the terminals of Jeddah (Saudi Arabia), Constanta (Romania) and Vizag (India) and in developing its national operations at Jebel Ali and Port Rashid terminals. He began his shipping career at Holland Hook terminal in The Port of New York/New Jersey and has more than 20 years’ experience in the transport and logistics business. He is also Chairman of Tejari World FZ LLC. He is Joint Vice Chairman of the US-UAE Business Council and a member of the UAE-Canada Business Council Board. A citizen of the United Arab Emirates, he is 53 years old.

Yuvraj Narayan has served as Group Chief Financial Officer of the Group since 2005 and as a Director of the Company since 9 August 2006. He joined DP World FZE in 2004. He serves as Non-Executive Director of IDFC Securities Limited. He previously served as Non-Executive Director of Istithmar World PJSC and as ANZ Group’s Head of Corporate and Project Finance for South Asia before becoming Chief Financial Officer of Salalah Port Services in Oman. He is a qualified Chartered Accountant and has a wealth of experience in the ports and international banking sectors. A citizen of the Republic of India, he is 58 years old.

Mark Russell was appointed as an Independent Non-Executive Director of the Company on 11 August 2014. He is a Non-Executive Director of London and Continental Railways Limited and Eurostar International Limited, and Chairman of Eurostar’s Audit Committee. He is also Chief Executive of the Shareholder Executive in the UK and sits on the Departmental Board and Executive Committee of the UK Government’s Department for Business, Innovation & Skills. He was formerly a partner in the corporate finance departments of KPMG in London and Frankfurt and held senior positions at PwC Corporate Finance, Robert Fleming, Lazard Brothers and A.T. Kearney. A British citizen, he is 54 years old.


Chairman of the Nominations and Governance Committee

Chairman of the Remuneration Committee





Chairman of the Audit Committee








Report of the Directors

The Directors present their report and accounts for the year ended 31 December 2014.

The Corporate Governance section, commencing on page 50, and the Audit Committee report, commencing on page 53, form part of this Directors’ Report. Disclosures elsewhere in the Annual Report and Accounts are cross-referenced where appropriate. Taken together, they fulfil our disclosure requirements as discussed in the Corporate Governance section, commencing on page 50.

The Strategic Report, commencing on page 2, describes the principal activities, operations, performance and financial position of DP World Limited (the Company) and its subsidiaries (collectively referred to as the Group). The results of the Group are set out in detail in the Consolidated Financial Statements and accompanying notes, commencing on page 60.

The principal subsidiaries, joint ventures and associates are listed on pages 116 to 117.

DirectorsOn 11 August 2014, the Company announced Mark Russell’s appointment as an Independent Non-Executive Director and member of the Audit Committee, effectively replacing David Williams who retired at the Annual General Meeting. Mr Russell’s appointment was in turn ratified, confirmed and approved by the shareholders at the Extraordinary General Meeting held on 18 December 2014.

In accordance with the Company’s Articles of Association (the “Articles”), all Directors offer themselves annually for re-appointment.

Biographical details of the Directors of the Company as at 31 December 2014 are given on pages 46 and 47 together with details of Board Committee memberships.

Details of the Directors’ remuneration and their interests in the Company’s shares are given on page 58 in the Corporate Governance section of this Report.

Financial InstrumentsDetails regarding the use of financial instruments and financial risk management are included in the Notes to Consolidated Financial Statements on pages 67 to 117.

ResultsThe Group’s Consolidated Financial Statements for the year ended 31 December 2014 are shown on pages 61 to 66.

DividendsThe Directors recommend a final dividend in respect of the year ended 31 December 2014 of 23.5 US cents per share up from 23.0 US cents in the prior year. Subject to approval by shareholders, the dividend will be paid on 5 May 2015 to shareholders on the Register at close of business on 31 March 2015.

Bernadette Allinson Board Legal Adviser and Company Secretary



Strategic Report


Post-balance Sheet EventsOn 16 March 2015, the Group completed the acquisition of Economic World Zones FZE (EZW) (an entity owned by the ultimate Parent Company) for a total cash consideration of $2.6 billion (subject to certain adjustments).

Corporate ResponsibilityThe Group is committed to integrating responsible business practices across our Group and in all aspects of our operations. Further information regarding our 2014 Corporate Responsibility initiatives is contained in the Corporate Responsibility section commencing on page 34.

Information regarding our global team of over 36,000 people and our commitment to minimising the environmental impact of our global operations, including CO2 emissions, waste and water management can be found in the Strategic Report, commencing on page 18.

Board DiversityThe Company recognises and embraces the benefits of having a diverse Board, and seeks increasing diversity at Board level which it sees as an essential element in maintaining the Company’s competitive advantage. A truly diverse Board includes and makes good use of differences in the skills, regional and industry experience, background, race, gender and other qualities of directors. These differences are considered in determining the optimum composition of the Board.

The Board Nominations and Governance Committee (the Committee) reviews and assesses Board composition on behalf of the Board and recommends the appointment of new Directors. In reviewing Board composition, the Committee considers the benefits of all aspects of diversity including, but not limited to, those described above, in order to maintain an appropriate range and balance of skills, experience and background on the Board. In identifying suitable candidates for appointment to the Board, the Committee considers candidates on merit against objective criteria and with due regard to the benefits of maintaining a balanced and diverse Board.

The Board considered its diversity as part of the annual evaluation of the performance and effectiveness of the Board, Board Committees and individual Directors. The appointments of Robert Woods, with his knowledge of the shipping and container industry, and Mark Russell, with his extensive financial, business and government experience, were made in accordance with the Board diversity policy in order to maintain an appropriate range and balance of skills, experience and background on the Board.

Substantial ShareholdingsAs at the date of this report, the Company has been notified that the following entity has an interest in the Company’s shares amounting to 5% or more.

Class SharesPercentage

of class

Port and Free Zone World FZE Ordinary 667,735,000 80.45%

Going ConcernThe Directors, having made enquiries, consider that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future and therefore they consider it appropriate to adopt the going concern basis in preparing the accounts.

Further details can be found under note 2(c) to the Consolidated Financial Statements.

Audit InformationHaving made the required enquiries, so far as the Directors in office at the date of the signing of this report are aware, there is no relevant audit information of which the auditors are unaware and each Director has taken all reasonable steps to make themselves aware of any relevant audit information and to establish that the auditors are aware of that information.

Articles of AssociationThe Articles set out the internal regulation of the Company and cover such matters as the rights of shareholders, the appointment and removal of Directors and the conduct of the Board and general meetings. Subject to DIFC Companies Law and the Articles, the Directors may exercise all the powers of the Company and may delegate authorities to Committees and day-to-day management and decision making to individual Executive Directors. Details of the main Board Committees can be found on pages 53 to 58.

IndemnityAll Directors are entitled to indemnification from the Company, to the extent permitted by the law, against claims and legal expenses incurred in the course of their duties.

Authority to Purchase SharesAt the Company’s Annual General Meeting (“AGM”) on 28 April 2014, the Company was authorised to make market purchases of up to 29,050,000 ordinary shares (representing approximately 3.5% of the Company’s issued share capital). No such purchases were made during 2014. Shareholders will be asked to approve the renewal of a similar authority at the Company’s AGM to be held on 27 April 2015.

AuditorsThe auditors, KPMG LLP, have indicated their willingness to continue in office. A resolution to re-appoint them as auditors will be proposed at the AGM to be held on 27 April 2015.

Share CapitalAs at 31 December 2014, the Company’s issued share capital was US$1,660,000,000 comprising 830,000,000 ordinary shares of US$2.00 each.

Annual General MeetingThe Company’s AGM will be held on 27 April 2015 at The Wheelhouse, Jebel Ali Port, Dubai, United Arab Emirates. Full details are set out in the Notice of AGM.

By order of the Board

B AllinsonBoard Legal Adviser and Company Secretary19 March 2015



Compliance StatementDP World Limited (the Company) is incorporated in the Dubai International Financial Centre (DIFC). For the year ending 31 December 2014, the Company had a dual primary listing which required it to comply with the regulatory obligations of the DIFC Markets Law and the various rules made by the Dubai Financial Services Authority thereunder (together with DIFC Markets Law, the NASDAQ Dubai Rules) and the UK Financial Conduct Authority (FCA). The Board reviewed and monitored the policies and procedures that were in place to ensure compliance with the Corporate Governance principles of the UK Corporate Governance Code (the Code) and the NASDAQ Dubai Rules.

During the financial year ended 31 December 2014, the Company applied the Corporate Governance principles of the Code and the NASDAQ Dubai Rules.

Throughout the financial year, the Company complied with the provisions of the Code and the NASDAQ Dubai Rules other than provision A.3.1 of the Code and paragraph 20 of App 4 to the NASDAQ Dubai Rules in that the Chairman did not meet the independence criteria laid out in provision B.1.1 of the Code and paragraph 31 of App 4 to the NASDAQ Dubai Rules at the time of his appointment. The Chairman, Sultan Ahmed Bin Sulayem, was Chairman of Dubai World and Port & Free Zone World FZE at the time that DP World was admitted to listing in Dubai and remains one of Port & Free Zone World FZE’s representatives on the DP World Board. David Williams retired on 28 April 2014 and Mark Russell was appointed on 11 August 2014 to ensure our compliance with Code provision B.1.2, which states that at least half the Board, excluding the Chairman, should comprise Independent Non-Executive Directors.

Sir John Parker, Joint Vice Chairman and Senior Independent Non-Executive Director, chairs the Nominations and Governance Committee and, together with the Chairman, leads on governance matters and the annual performance

review of the Board and its Committees. The Board believes that this Senior Independent Non–Executive Director’s support ensures that robust governance is maintained and that appropriate challenge to the Executive Directors is in place.

On 18 December 2014 at an Extraordinary General Meeting, the shareholders approved the de-listing of the Company’s shares from the London Stock Exchange. Following the effective date of the delisting on 21 January 2015, the Company is no longer subject to the regulatory requirements which applied to a London premium listing, namely those set out in the Transparency and Disclosure Rules and the UK Corporate Governance Code.

The Company continues to be subject to the NASDAQ Dubai Rules. The Directors believe that the these rules, including the mandatory corporate governance principles enshrined in them and the best practice standards which support the principles, provide a robust basis on which to maintain corporate governance best practice for the benefit of the Company’s shareholders.

Directors The Company’s Board of eight Directors manages the business of the Company and its subsidiaries (collectively referred to as the Group). The Board’s primary responsibility is to foster the long-term success of the Group.

All Directors have access to the Board Legal Adviser and Company Secretary and independent professional advice at the Company’s expense, if required.

The Board met ten times during the year either in person or via telephone or video conference. In addition, written resolutions (as permitted by the Company’s Articles of Association) were used as required for the approval of decisions that exceeded the delegated authorities provided to Executive Directors and Committees.

Attendance by individual Directors at meetings of the Board and its Committees in 2014

Director Board Audit

Nominations and

Governance Remuneration

Sultan Ahmed Bin Sulayem 10 (10) – – –Jamal Majid Bin Thaniah 10 (10) – 3 (3) –Mohammed Sharaf 10 (10) – 3 (3) –Yuvraj Narayan 10 (10) – – –Sir John Parker 10 (10) 4 (4) 3 (3) 3 (3)Deepak Parekh 10 (10) 4 (4) 3 (3) 3 (3)Robert Woods (Appointed to the Board on 1 January 2014 and to the Audit, Nominations and Governance and Remuneration Committees on 28 April 2014) 10 (10) 0 (1) 2 (2) 2 (2)Mark Russell (Appointed to the Board, the Audit, Nominations and Governance and Remuneration Committees on 11 August 2014) 6 (6) 2 (2) 1 (1) 1 (1) David Williams(Retired on 28 April 2014) 3 (3) 2 (2) 2 (2) 1 (1)

Figures in brackets denote the maximum number of meetings that the Director could have attended.



Strategic Report


Although there is a prescribed pattern of presentation to the Board, including matters specifically reserved for the Board’s decision (which includes strategy, the annual budget, dividends, major transactions, safety and environment policies, insurance and risk management, and internal controls), all Board meetings tend to have further subjects for discussion and decision taking. Board papers, including an agenda, are sent out in advance of the meetings. Board meetings are discursive in style and all Directors are encouraged to offer their opinions.

The Matters Reserved to the Board are available on the Company’s website, www.dpworld.com.

The Board has delegated the following responsibilities to management:

• the development and recommendation of strategic plans for consideration by the Board that reflect the long-term objectives and priorities established by the Board;

• implementation of the Group’s strategies and policies as determined by the Board;

• monitoring the operating and financial results against plans and budgets;

• monitoring the quality of the investment process against objectives, prioritising the allocation of capital and technical resources; and

• developing and implementing risk management systems, subject to the continued oversight of the Board and the Audit Committee as set out on page 54.

Details of the Directors of the Company are given on pages 46 and 47.

Independent Non-Executive DirectorsIn compliance with the Code, at least half the Board (excluding the Chairman) comprised of Independent Non-Executive Directors as at 31 December 2014. On 11 August 2014, in line with the Group’s commitment to best governance practices and in compliance with its corporate governance obligations, the Board appointed Mark Russell as an Independent Non-Executive Director, replacing David Williams who had served as an Independent Non-Executive Director of DP World since 30 May 2007.

In order for the Independent Non-Executive Directors to contribute fully to the Board, and in particular to challenge the Executive Directors over strategic matters where appropriate, it is important that the Independent Non-Executive Directors bring experience, probity and independence to the Board. Accordingly, the independence of the Independent Non-Executive Directors is considered annually.

The Board believes the Independent Non-Executive Directors have retained independent character and judgement. The Board considers that the varied and relevant experience of all the Independent Directors provides an exceptional balance of skills and knowledge which is of great benefit to the Group.

Following the delisting from the London Stock Exchange on 21 January 2015, the Board believes that the Group continues to benefit from the breadth of experience represented by its existing balance of Independent and Non-Independent

Directors. In line with the Company’s Articles of Association, all of the Directors (including the Independent Non-Executive Directors) will retire from office at the Company’s Annual General Meeting. The Board intends, subject to them being available for re-election, for the existing four Independent Non-Executive Directors to be reappointed at this meeting. The Company will continue to review the composition of the Board from time to time to ensure that an appropriate balance of Independent and Non-Independent Directors is maintained.

Roles Of The Chairman, Group Chief Executive Officer And Senior Independent DirectorThe positions of Chairman and Group Chief Executive Officer are held by separate individuals, with separate roles and responsibilities which have been approved by the Board. The Chairman, in conjunction with the Senior Independent Director is responsible for leadership and effective management of the Board in all aspects of its role and its governance. The Chairman chairs the Board meetings ensuring, with the support of the Senior Independent Director, that the agendas are forward looking and that relevant business is brought to the Board for consideration in accordance with the schedule of matters reserved to the Board and that each Director has the opportunity to consider the matters brought to the meeting and to contribute accordingly. The Group Chief Executive Officer, as leader of the Group’s executive team, retains responsibility for the leadership and day-to-day management of the Group and the execution of its strategy as approved by the Board.

Sir John Parker has acted as Senior Independent Director since the initial public offering of the Company in 2007. His responsibilities include supporting the Chairman in leading the Board, meeting with the Independent Non-Executive Directors at least once a year to appraise the Chairman’s performance and holding discussions with the Independent Non-Executive Directors without the executives present.

Senior ManagementIn addition to the executive management appointed to the Board (Group Chief Executive Officer and Group Chief Financial Officer), the day-to-day management of the Company’s business is led by our Senior Management who together with the Group Chief Executive Officer and Group Chief Financial Officer comprise the Company’s Executive Committee:

• Anil Wats• Mohammed Al Muallem• Anwar Wajdi

Board PerformanceBoard EvaluationThe Board undertakes a formal and rigorous annual evaluation of its own performance and that of its Committees and individual Directors. For the financial year ending 31 December 2014, the Board evaluation was facilitated internally by the Board Legal Adviser and Company Secretary. The evaluation was carried out using questionnaires and the key areas of focus were strategy, succession planning, training and development, Board processes and structure, information flow and communication.


Corporate Governance Framework

Audit Committee Remuneration Committee

Owners/Shareholders

Nominations and Governance Committee

Ove

rsig

ht

Rep

ort

ing

Board of Directors Disclosure Panel

Tracking From Previous EvaluationAs a result of the evaluation of the Board’s performance in December 2013 and the action plan that was subsequently developed, the Company concentrated on improving the opportunities for strategic debate by the Board during 2014. Succession planning was also an area of focus for the Board during the year.

Evaluation ProcessThe following actions were taken as part of the December 2014 evaluation process:

• a questionnaire was sent to each Director;• questionnaires were used to perform reviews of the

Committees;• the questionnaire responses from the Board members and

the Committees were shared with the Senior Independent Non-Executive Director (SID);

• the SID subsequently met with Directors to discuss and review their questionnaire responses;

• a paper discussing the key issues raised during the evaluation process was prepared and submitted for Board consideration; and

• following consideration of the Board paper, an action plan for 2015 was set by the Board.

Conclusions and Next Steps For 2015The December 2014 evaluation concluded that the Board continued to display a commitment to good governance and to adopting board best practice, with a focus on continuing to improve its processes and procedures during the year.

The action points arising from the evaluation have been incorporated into a Board action plan for 2015. The principal actions reflect the Board’s continued focus on:

• the strategic direction of the Company;• improving Board debate and challenge by improving

reporting between Board and Management; and• enhancing the skills and competencies of Board members

through a formally documented professional development framework for Directors.

Relations With ShareholdersThe Company is committed to communicating its strategy and activities clearly to its shareholders and, to that end, maintains an active dialogue with investors through a planned programme of investor relations activities.

The Company’s full and half-year results and quarterly throughput announcements are reported to investors through a combination of presentations and conference calls. The full and half-year reporting is then followed by investor meetings in major cities where the Company has or is targeting institutional shareholders. These locations may include Australia, Asia, Europe, the Americas and the UAE.

Regular attendance at industry and regional investor conferences provides opportunities to meet with existing and prospective shareholders in order to update them on performance or to introduce them to the Group. In addition, the Group frequently hosts investor and analyst visits to its ports around the world, offering analysts and shareholders a better understanding of the day-to-day business and the opportunity to meet regional and port management teams.

All presentations and related investor communications are available in a dedicated section of DP World’s website.

The Board receives regular updates on shareholders’ views through briefings from the Chairman, Group Chief Executive Officer and Group Chief Financial Officer as well as reports from the Company’s corporate brokers and investor relations team. In 2014, the Company maintained corporate broking relationships with Citigroup Global Markets Limited, Deutsche Bank AG and Nomura International PLC. Following the delisting from the London Stock Exchange on 21 January 2015, the Company terminated its corporate broking relationship with Nomura International PLC.

The Chairman, the Senior Independent Director and the chairmen of the Board’s Committees are available to meet major investors on request. The Senior Independent Non-Executive Director has a specific responsibility to be available to shareholders who have concerns, and for whom contact with the Chairman, Group Chief Executive Officer or Group Chief Financial Officer has either failed to resolve their concerns, or for whom such contact is inappropriate.

Corporate Governance continued



Strategic Report


AccountabilityThe Board is responsible for the Group’s system of internal control and for reviewing its effectiveness. The internal control system is designed to manage rather than eliminate the risk of failure to achieve business objectives, and can only provide reasonable and not absolute assurance against material mis-statement or loss.

The system of internal control described below has been in place throughout the year.

Board CommitteesThe following is an explanation of the Company’s corporate governance framework, including details of the principal Board Committees.

The Board’s principal Committees include the Remuneration, Audit and Nominations and Governance Committees, with formally delegated duties and responsibilities and written terms of reference. From time to time, the Board may set up additional committees to consider specific issues when the need arises.

The Board considers that the corporate governance framework promotes the prudent and sound management of the Company in the long-term interest of the Company and its shareholders and is effective in promoting compliance with the Corporate Governance principles of the UK Corporate Governance Code and the NASDAQ Dubai Rules.

Audit CommitteeMEMBERS

Deepak Parekh (Chairman)

Sir John Parker

Mark Russell (From 11 August 2014 to 31 December 2014)

David Williams (From 1 January 2014 to 28 April 2014)

Robert Woods (From 28 April 2014 to 18 December 2014)

The Audit Committee assists the Board in discharging its responsibilities with regards to financial reporting and external and internal audits and controls. The ultimate responsibility for reviewing and approving the Annual Report and Accounts and the half-yearly reports remains with the Board.

As at 31 December 2014, the membership of the Audit Committee was comprised of three Independent Non-Executive Directors and was chaired by Deepak Parekh, whom the Board considers has appropriate financial expertise to fulfil this role.

The Audit Committee meets formally at least four times a year and otherwise as required.

External and internal auditors are invited to attend the Audit Committee meetings, along with any other Director or member of staff considered necessary by the Committee to complete its work. The Committee meets with external auditors and internal auditors without Executive Directors or members of staff present at least once a year, and additionally as it considers appropriate.

In accordance with its terms of reference, the principal matters considered by the Audit Committee during 2014 included:

• reviewing the level and constitution of external audit and non-audit fees and the independence and objectivity of external auditors;

• monitoring and reviewing the effectiveness of internal audit activities, including discussions with the Director of Internal Audit;

• reviewing the effectiveness of the Group’s financial reporting, internal controls and compliance with applicable legal requirements;

• monitoring risk and compliance procedures across the Group;

• reviewing the Company’s results statements, interim management statements and Annual Report and Accounts before publication and making appropriate recommendations to the Board following review;

• reviewing accounting policies in light of developments to international accounting standards; and

• receiving reports, in accordance with its terms of reference, on business conduct issues, including any instances of alleged fraud and actions taken as a result of investigation.

The full terms of reference of the Audit Committee can be found on DP World’s website, www.dpworld.com.

External AuditorsThe Audit Committee is responsible for recommending a firm of auditors of appropriate independence and experience and for approving all audit fees and terms of engagement. The Committee’s policy is to undertake a formal assessment of the auditors’ independence each year which includes:

• a review of non-audit services provided to the Group and related fees;

• discussion with the auditors of a written report detailing any relationships with the Company and any other parties that could affect independence or the perception of independence;

• a review of the auditors’ own procedures for ensuring the independence of the audit firm and partners and staff involved in the audit, including the regular rotation of the audit partner; and

• obtaining written confirmation from the auditors that, in their professional judgement, they are independent.


The Audit Committee has implemented the following policy relating to the provision of non-audit services by the Company’s auditors:

1. Audit Related ServicesThese services are undertaken by the auditors:• review of interim financial information; and• formalities relating to borrowings, shareholder and other

circulars.

2. Permitted Non-Audit ServicesProviders of permitted non-audit services are selected through a tender process, where appropriate. Non-audit work and the fees involved are approved in advance by the Audit Committee. Examples of permitted non-audit services include:• tax planning, advice and compliance assistance; and• mergers and acquisitions.

3. Prohibited Non-Audit ServicesThe following are prohibited non-audit services:• bookkeeping or other services related to the accounting

records;• financial information systems design and implementation;

and• investment banking services.

Throughout the year, the Committee monitored the cost and nature of non-audit work undertaken by the auditors and was in a position to take action if it believed that there was a threat to the auditors’ independence through the award of this work.

KPMG LLP are the Company’s external auditors. The Committee has undertaken an annual review of the independence and objectivity of the auditors and an assessment of the effectiveness of the audit process, which included a report from the external auditors of their own internal quality procedures. It also received assurances from the Auditors regarding their independence. On the basis of this review, the Committee recommended to the Board that it recommend that shareholders support the re-appointment of the Auditors at the AGM on 27 April 2015.

Risk Management ProcessThe Group’s risk management process has the following key features:

• all major businesses within the Group identify risks to achieving their business objectives through a structured online risk assessment process. Appropriate risk management activity is determined and any required action plans are implemented. Risks are assessed on the basis of impact and likelihood to enable prioritisation of major and significant risks. This is a continual process, and may be associated with a variety of financial, operational and compliance matters including organisation structures, business strategies, disruption in information technology systems, competition, natural catastrophe and regulatory requirements;

• the risks and associated controls are summarised in the risk portfolios and presented to the Board for review; and

• at the year-end, regional management certifies that the risk management process is in place, that an assessment has been conducted throughout their businesses and that appropriate internal control procedures are in place or in hand to manage the risks identified.

Further details of the risk management process can be found under note 6 to the Consolidated Financial Statements. Details of the Group’s principal risks and uncertainties are set out on pages 38 to 43.

Internal ControlsThe Board is responsible for establishing and maintaining an effective system of internal control and has established a control framework within which the Group operates. This system of internal control is embedded in all key operations and is designed to provide reasonable assurance that the Group’s business objectives will be achieved. The Audit Committee has reviewed the effectiveness of the system of internal controls and risk management framework in accordance with its remit.

The core elements of the Group’s system of internal controls include:

• Organisational structure: a clearly defined organisational structure that provides clear roles, responsibilities and delegated levels of authority to enable effective decision making across the Group;

• Code of Conduct: a code of conduct that sets out how the Group expects its employees to act;

• Whistleblowing policy: a whistleblowing programme for employees to report complaints and concerns about conduct which is considered to be contrary to DP World’s values. The programme is monitored by the Audit Committee;

• Anti-bribery and corruption policy: an anti-bribery and corruption policy implemented by DP World, supported by online training that is directed and proportionate to the identified areas of risk;

• Strategy and financial management: clear strategy and financial management which is consistent throughout the organisation and can be actively translated into practical measures. Comprehensive reporting systems include monthly results, annual budgets and periodic forecasts, monitored by the Board, with Key Performance Indicators produced to summarise and monitor business activity. Annual budgeting and strategic planning processes are in place, along with evaluation and approval procedures for major capital expenditure and significant treasury transactions;

• Policies and procedures: documented policies and procedures which are communicated to all Group functions and terminals;

• Management reporting and self-certification: The Board receives regular management reporting and annual management self-certification which provides a balanced assessment of key risks and controls and is an important component of the Board’s assurance;

• Risk management and performance: risk-profiling is completed for all terminals and the Group to identify, monitor and manage significant risks which could affect the achievement of the Group’s objectives;

• Information and communication: Board meetings take place regularly throughout the year and include a review of Group performance against budget and Group strategy and a review of monthly management accounts and financial reports. Financial forecasts are prepared every quarter. Actual performance is compared to budget, latest




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forecast and prior year on a monthly basis. Significant variances are investigated and explained through normal monthly reporting channels; and

• Assurance: the Group’s assurance activities cover key business risks and contribute to the overall assurance framework. They include an independent Group Internal Audit function responsible for reporting to the Audit Committee on the evaluation of the adequacy of the internal control systems in place. The Board receives updates from the Audit Committee, based on regular information provided by both internal and external audit reports on the Group’s risks and internal controls.

The risk management process and the system of internal control are subject to continuous improvement.

Guidelines Regarding Insider TradingThe Company takes all reasonable steps to avoid the risk of insider trading. It has adopted processes to keep all members of staff informed about their duties with respect to the handling of inside information, as well as dealings in DP World’s shares.

The Company has a share dealing code which sets out the restrictions and close periods applicable to trading in securities. Memoranda and guidelines regarding dealings in shares (either selling or buying) have been circulated within the Group.

FraudThe Company has a fraud policy and a fraud incident response plan, which takes effect in the event of serious incidents to oversee case management and to ensure appropriate actions are taken. Fraud risk assessments are conducted across the Group to identify potential fraud risk scenarios in core business processes and to monitor the internal controls in place to mitigate such risks.

The Audit Committee receives an update at each meeting on any material frauds. The Audit Committee has reviewed the Company’s whistleblowing procedures to ensure that arrangements are in place to enable employees to confidentially raise concerns about possible improprieties.

Anti-Bribery And CorruptionThe Company has an anti-bribery and corruption policy with supporting processes and procedures that implement the requirements of the UK Bribery Act 2010 and underpin its commitment to preventing, detecting and responding to fraud, bribery and all other corrupt practices. The Company promotes and expects from its team the highest standards of personal and professional ethical behaviour.

To strengthen the Company’s zero tolerance to fraud, bribery and corrupt practices, a refreshed online anti-bribery and corruption training course was rolled out in 2014. The course provides an overview of the Company’s anti-corruption policies and procedures, the importance of having an anti-bribery culture, the consequences of breaching anti-bribery legislation, and how employees can report any suspicions of fraud and breaches of anti-bribery legislation. Completing the course was mandatory for selected members of management and key employees across the Group.

The online training was complemented by Group-wide communication from Executive Management to all employees providing guidance on topics such as hospitality and dealing with corporate gifts.

The Company will continue to review its policies, processes and procedures and is networking with other international businesses to share best practice in this area.

Nominations and Governance CommitteeMEMBERS

Sir John Parker (Chairman)

Jamal Majid Bin Thaniah

Mohammed Sharaf

Deepak Parekh

Robert Woods(from 28 April 2014 to 31 December 2014)

Mark Russell (from 11 August 2014 to 31 December 2014)

David Williams (from 1 January 2014 to 28 April 2014)

The Nominations and Governance Committee is comprised of six members, four of whom are Independent Non-Executive Directors. The Chairman of the Nominations and Governance Committee is Sir John Parker.

The Nominations and Governance Committee meets formally at least twice a year and otherwise as required.

The Nominations and Governance Committee is responsible for evaluating the balance of skills, knowledge, experience and diversity of the Board and, in particular:

• recommending individuals to be considered for election at the next Annual General Meeting of the Company or to fill vacancies; and

• preparing a description of the role and capabilities required for a particular appointment.

The Committee is also responsible for periodically reviewing the Board’s structure and identifying potential candidates to be appointed as Directors. As an initial stage in the Director appointment process, the Company collects and reviews potential candidates’ CVs against an established set of appointment criteria, following which the chosen candidate meets with the Company’s Senior Independent Non-Executive Director and Vice Chairman, as the chairman of the Nominations and Governance Committee, as well as with other Board members as appropriate. Alongside this, the Company collects detailed background information regarding the chosen candidate, including their professional experience and qualifications, through the completion of a pre-appointment questionnaire. Following the completion of this process, the candidate is put forward to the Nominations and Governance Committee for consideration. If the Nominations and Governance Committee recommends the candidate’s appointment, the appointment is put to the Board for consideration and, if appropriate, approval.


2014 ActivitiesDuring the year, the Committee:

• identified and nominated candidates for Board approval to replace David Williams who retired 28 April 2014;

• reviewed the Board composition, with particular consideration given to the Board Diversity policy; and

• reviewed the adequacy of the Group’s succession plan.

The full terms of reference of the Nominations and Governance Committee can be found on DP World’s website, www.dpworld.com.

Executive CommitteeThe Executive Committee has primary responsibility for the day-to-day management of DP World’s operations and strategic policy implementation (such policies being established and approved by the Board). The Executive Committee is comprised of the Executive Directors and Senior Management.

The Executive Committee meets regularly as required.

Remuneration CommitteeMEMBERS

Sir John Parker (Chairman)

Deepak Parekh

Robert Woods(from 28 April 2014 to 31 December 2014)

Mark Russell (from 11 August 2014 to 31 December 2014)

David Williams (from 1 January 2014 to 28 April 2014)

The membership of the Remuneration Committee is comprised of four members, all of whom are Independent Non-Executive Directors. The Chairman of the Remuneration Committee is Sir John Parker.

The Remuneration Committee meets formally at least twice a year and otherwise as required.

The Remuneration Committee determines and agrees with the Board the framework and broad policy for the remuneration of the Group Chief Executive Officer and Group Chief Financial Officer and other members of senior management. The Committee’s policy is to review remuneration based on independent assessment and market practice. The remuneration of Independent Non-Executive Directors is a matter for the Chairman and executive members of the Board. No executive is involved in any decisions as to their own remuneration. The Remuneration Committee:

• determines and agrees with the Board, the Company’s framework for remuneration;

• recommends and monitors the level and structure of remuneration to senior management;

• keeps under review its own performance, constitution and terms of reference; and

• considers other matters as referred to it by the Board.

2014 ActivitiesDuring the year, the Committee:

• reviewed cash allowances and salary structures;• reviewed the Company’s Performance Delivery Plan; and• reviewed remuneration disclosure in the Annual Report

and Accounts.

The full terms of reference of the Remuneration Committee can be found on DP World’s website, www.dpworld.com.

RemunerationExecutive Reward PolicyThe reward policy for Executive Directors and senior management is guided by the following key principles:

• business strategy support: aligned with our business strategy with focus on both short-term goals and the creation of long-term value ensuring alignment to shareholders’ interests;

• competitive pay: ensures competitiveness against our target market;

• fair pay: ensures consistent, equitable and fair treatment within the organisation; and

• performance-related pay: linked to performance targets via short and long-term incentive plans and the pay review process.

The reward policy for Executive Directors and senior management consists of the following key components:

1. Market benchmark:• the target market position is between median and upper

quartile on a total remuneration basis;• for Executive Directors and senior management based in

Dubai, practice and policy reflect the structure of the Dubai pay market, whilst at the same time ensuring competitiveness on an international basis. Variable pay is also reviewed and balanced against the total remuneration package; and

• DP World engages the services of Hay Group as the main provider of market information and as advisers on particular remuneration matters. This is subject to periodic review.

2. Base salary:• fixed cash compensation based on level of responsibility as

determined by applying a formal job evaluation methodology;

• reflects local practice in each of the geographies in which DP World operates, but is also set against common market policy positions; and

• reviewed annually on 1 April to take into account market pay movements, individual performance, relativity to market on an individual basis and DP World’s ability to pay.




Strategic Report


Allowances and Benefits• Can either be cash or non-cash elements based on level of

responsibility as determined by applying a formal job evaluation methodology.

• Reflects local practice in each of the geographies in which DP World operates, but are also set against common market policy positions.

• For Executive Directors and senior management based in Dubai, cash allowances are a normal component of the package and typically cover accommodation, utility, transport and club elements in line with Dubai market practice. Benefits include providing children’s education assistance, travel assistance, medical and dental insurance and post-retirement benefits.

• Reviewed annually to ensure that DP World remains competitive within the market place and that it continues to provide the reward mechanisms to aid retention in line with its ability to pay.

Performance Delivery Plan (PDP)• Cash-based incentive plan to motivate, drive and reward

performance over an operating cycle of one year.• The PDP combines business financial performance and

individual performance objectives. Levels of awards, financial and personal measures and weightings will vary depending on the individual’s role, geography and level of responsibility. For individuals outside the Executive Directors and senior management category, the principle is then typically cascaded throughout the terminals’ organisational levels in line with local policies.

• Appropriateness of the levels of awards, financial and personal measures and weightings are reviewed on an annual basis to ensure they continue to support our business strategy.

• Payment is in cash and is expected to be made in April each year for performance over the previous financial year, subject to review and sign-off by the Remuneration Committee.

Long-Term Incentive Plan (LTIP)• Cash-based rolling incentive plan to motivate, drive and

reward sustained performance over the long-term operating cycle of three years.

• The LTIP reflects business financial performance only. Levels of awards, financial measures and weightings will vary depending on the individual’s role, geography and levels of responsibility. In addition to the Executive Directors and senior managers, employees performing the top 100 jobs (as determined by job size) are also eligible to participate in the LTIP in line with the same financial metrics as described for Executive Directors and senior managers with varying levels of award in line with their job size.

• Appropriateness of the levels of awards, financial measures and weightings are reviewed on an annual basis to ensure they continue to support our business strategy.

• Payment is in cash and is expected to be made in April each year for performance over the previous three financial years, subject to review and sign-off by the Remuneration Committee.

Incentive PlansAs described above, the Company has adopted a short-term and a long-term incentive plan for its Executive Directors and senior managers. Details of these plans are outlined below.

The Performance Delivery Plan (PDP) for the financial year ended 2014 (award to be paid in 2015) and 2013 (award paid in 2014) is worth a maximum of 75% of annual base salary. It is made up of two components; a financial component worth 70% of the overall award value and a personal component worth 30% of the overall award value.

The financial component is based on performance assessed against a budgeted Profit After Tax (PAT) measure. Payout on the financial component is triggered if the Company achieves 95% of its target. Maximum payout on the financial component will occur if the Company achieves 105% of its target. The payout for performance between the 95% and 105% of target is on a straight-line basis.

The personal component is based on performance assessed against Specific, Measurable, Achievable, Relevant & Timebound (SMART) objectives. The objectives are particular to each individual role and can include financial based objectives and more qualitative ones.

The LTIP for the 2012–2014 (award to be paid in 2015), 2013–2015 (award to be paid in 2016) and 2014–2016 (award to be paid in 2017) performance cycles is based on performance over three years assessed against two budgeted measures with 70% of the award linked to a Return On Capital Employed measure and 30% linked to an Earnings Per Share measure.

The LTIP for the cycles described above is worth a maximum of 100% of average annual base salary for the Executive Directors and the Chief Operating Officer and a maximum of 75% of average annual base salary for other senior managers.

Executive Directors’ Service Contracts and RemunerationAs mentioned above, the Executive Directors’ remuneration structure follows the market practice in the UAE, and all payments are made tax free reflecting the UAE’s status.Each of the Executive Directors is employed pursuant to a service agreement.

Mohammed SharafMohammed Sharaf’s service agreement is with DP World FZE (a subsidiary of the Company). It can be terminated on six months’ notice by either party. In addition, DP World FZE can terminate the agreement, without notice, on payment of six months’ base salary.

Mohammed Sharaf is entitled to receive a base salary and certain other benefits under his service agreement.

He was also granted a Performance Delivery Plan award of 72.19% (out of a maximum of 75%) for performance linked to the 2013 financial year and a Long-Term Incentive Plan award of 91.58% (out of a maximum of 100%) for performance linked to the 2011–2013 cycle.

His total remuneration for the year ended 31 December 2014 (which includes his base salary and these other benefits) was $1,716,637.

Yuvraj NarayanYuvraj Narayan’s service agreement is with DP World FZE. It can be terminated on six months’ notice by either party. In addition, DP World FZE can terminate the agreement, without notice, on payment of six months’ base salary.


Yuvraj Narayan is entitled to receive a base salary and certain other benefits under his service agreement.

He was also granted a Performance Delivery Plan award of 75% (out of a maximum of 75%) for performance linked to the 2013 financial year and a Long-Term Incentive Plan award of 91.58% (out of a maximum of 100%) for performance linked to the 2011–2013 cycle.

His total remuneration for the year ended 31 December 2014 (which includes his base salary and these other benefits) was $1,411,343.

Post Retirement BenefitsMohammed Sharaf participates in the government pension scheme in accordance with local labour law. Yuvraj Narayan participates in an end of service benefit scheme in accordance with local labour law.

Non-Executive Directors’ Letters of Appointment and FeesThe Non-Executive Directors do not have service contracts with the Company. Their terms of appointment are governed by letters of appointment. The Company has no contractual obligation to provide any benefits to any of the Non-Executive Directors upon termination of their directorship.

Each Non-Executive Director’s letter of appointment is with the Company and is envisaged to be for a period of three years, subject to annual re-appointment by the shareholders at each AGM. It can be terminated on six months’ notice by either party.

For the year ended 31 December 2014, the fees and other remuneration payable to each of the Non-Executive Directors, which includes remuneration for their services in being a member of, or chairing, a Board Committee are set out below:

• Sir John Parker received as Vice Chairman and Senior Independent Non-Executive Director a fee of GBP330,000 (US$543,180)

• Deepak Parekh received a Non-Executive Director fee of GBP87,795.71 (US$143,873)

• Robert Woods received a Non-Executive Director fee of GBP75,000 (US$123,450)

• Mark Russell (who was appointed on 11 August 2014) received a Non-Executive Director fee of GBP28,846 (US$47,480.51)

• David Williams (who retired on 28 April 2014) received a Non-Executive Director fee of GBP31,666.67 (US$52,123.34)

The Chairman, Sultan Ahmed Bin Sulayem, and Non-Executive Vice Chairman, Jamal Majid Bin Thaniah are not remunerated by the Company.

Interests In SharesThe following is a table of the Directors’ and Senior Managers’ shareholdings:

$2.00 ordinary shares held as at

1 January 2014

$2.00 ordinary shares held as at

31 Dec 2014 Change

Mohammed Sharaf 28,221 28,221 –Yuvraj Narayan 13,864 13,864 –Sir John Parker 7,262 7,262 –Robert Woods 2,700 2,700 –Mohammed Al Muallem 4,712 4,712 –




Strategic Report


Statement of Directors’ Responsibilities in respect of the preparation of the Annual Report and the Consolidated Financial Statements

The following statement, which should be read in conjunction with the Auditors’ responsibility section of the Independent Auditors’ Report, is made with a view to distinguishing the respective responsibilities of the Directors and of the Auditors in relation to the Consolidated Financial Statements.

The Directors are required to prepare Consolidated Financial Statements for each financial year which give a true and fair view of the state of affairs of DP World Limited (the Company) and its subsidiaries (collectively referred to as the Group) as at the end of the financial year and of the profit and loss for the financial year.

The Consolidated Financial Statements are prepared in accordance with International Financial Reporting Standards. In preparing the Consolidated Financial Statements, the Directors are required to select appropriate accounting policies and then apply them consistently, make judgements and estimates that are reasonable and prudent and state whether all accounting standards which they consider to be applicable have been followed, subject to any material departures disclosed and explained in the Consolidated Financial Statements. The Directors also use a going concern basis in preparing the Consolidated Financial Statements unless this is inappropriate.

The Directors have responsibility for ensuring that the Company keeps accounting records which disclose with reasonable accuracy at any time the financial position of the Company and which enable them to ensure that the Consolidated Financial Statements comply with the applicable laws in the relevant jurisdiction.

The Directors have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.

The Directors are also responsible for preparing a Directors’ Report and Corporate Governance Statement in accordance with applicable law and regulations.

The Directors consider the Annual Report and the Consolidated Financial Statements, taken as a whole, to be fair, balanced and understandable, and provide necessary information for shareholders to assess the Company’s performance, business model and strategy.

By order of the Board

B AllinsonBoard Legal Adviser and Company Secretary19 March 2014


Independent Auditors’ Report

The Shareholders

DP World Limited

Report on the Consolidated Financial StatementsWe have audited the accompanying consolidated financial statements of DP World Limited (the Company) and its subsidiaries (collectively referred to as the Group), which comprise the consolidated statement of financial position as at 31 December 2014, the consolidated statements of profit or loss, other comprehensive income, changes in equity and cash flows for the year then ended, and notes, comprising a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Consolidated Financial StatementsManagement is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ ResponsibilityOur responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on our judgement, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements 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 entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OpinionIn our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at 31 December 2014, and of its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards.

On behalf of KPMG LLP19 March 2015



Strategic Report


Consolidated Statement of Profit or Lossfor the year ended 31 December 2014

Year ended 31 December 2014 Year ended 31 December 2013

Note

Beforeseparately

disclosed itemsUSD’000

Separatelydisclosed items

(Note 12)USD’000

TotalUSD’000

Before separatelydisclosed items

USD’000

Separatelydisclosed items

(Note 12)USD’000

TotalUSD’000

Revenue 8 3,411,014 52,337 3,463,351 3,073,248 – 3,073,248Cost of sales (1,958,295) (52,337) (2,010,632) (1,849,087) – (1,849,087)

Gross profit 1,452,719 – 1,452,719 1,224,161 – 1,224,161General and administrative expenses (385,878) (19,400) (405,278) (311,243) (101,433) (412,676)Other income 22,363 9,153 31,516 21,458 – 21,458Profit on sale and termination of

businesses 12 – – – – 158,188 158,188Share of profit/(loss) from equity-

accounted investees (net of tax) 16 77,961 (1,754) 76,207 84,366 (4,305) 80,061

Results from operating activities 1,167,165 (12,001) 1,155,164 1,018,742 52,450 1,071,192

Finance income 10 89,765 1,582 91,347 84,493 – 84,493Finance costs 10 (372,841) (4,122) (376,963) (369,439) – (369,439)

Net finance costs (283,076) (2,540) (285,616) (284,946) – (284,946)

Profit before tax 884,089 (14,541) 869,548 733,796 52,450 786,246Income tax expense 11 (127,418) 40,000 (87,418) (59,558) (4,900) (64,458)

Profit for the year 9 756,671 25,459 782,130 674,238 47,550 721,788

Profit attributable to:Owners of the Company 675,430 25,143 700,573 604,421 35,215 639,636Non-controlling interests 81,241 316 81,557 69,817 12,335 82,152

756,671 25,459 782,130 674,238 47,550 721,788

Earnings per shareBasic earnings per share – US cents 24 81.38 84.41 72.82 77.06Diluted earnings per share – US cents 24 80.65 83.61 72.82 77.06

The accompanying notes 1 to 36 form an integral part of these consolidated financial statements.

The Independent Auditors’ Report is set out on page 60.


Consolidated Statement of Other Comprehensive Incomefor the year ended 31 December 2014

Note2014

USD’0002013

USD’000

Profit for the year 782,130 721,788

Other comprehensive incomeItems that are or may be reclassified to profit or loss:Foreign exchange translation differences – foreign operations** (452,563) (133,211)Foreign exchange profit recycled to consolidated statement of profit or loss on disposal of businesses – (4,316)Net change in fair value of available-for-sale financial assets 17 (1,895) 3,160Share of other comprehensive income of equity-accounted investees (10,906) 17,772Cash flow hedges – effective portion of changes in fair value (67,705) 96,743Related tax on fair value of cash flow hedges 16,000 (18,863)Items that will never be reclassified to profit or loss:Re-measurements of post-employment benefit obligations 26 (69,817) 38,880Related tax 3,059 (1,480)

Other comprehensive income for the year, net of tax (583,827) (1,315)

Total comprehensive income for the year 198,303 720,473

Total comprehensive income attributable to:Owners of the Company 129,769 628,586Non-controlling interests 68,534 91,887

198,303 720,473

** A significant portion of this includes foreign exchange translation differences arising from the translation of goodwill and purchase price adjustments which are denominated in foreign currencies at the Group level. The translation differences arising on account of translation of the financial statements of foreign operations whose functional currencies are different from that of the Group’s presentation currency are also reflected here. There are no differences on translation from functional to presentation currency as the Company’s functional currency is currently pegged to the presentation currency (refer to note 2(d)).





Strategic Report


Consolidated Statement of Financial Positionas at 31 December 2014

Note

31 December2014

USD’000

31 December2013

USD’000

AssetsNon-current assetsProperty, plant and equipment 13 6,356,160 6,069,785Goodwill 14 1,448,194 1,532,238Port concession rights 14 2,779,268 2,904,481Investment in equity-accounted investees 16 2,534,320 2,700,703Deferred tax assets 11 169 4,393Other investments 17 70,015 62,923Accounts receivable and prepayments 18 194,322 181,110

Total non-current assets 13,382,448 13,455,633

Current assetsInventories 58,277 51,717Accounts receivable and prepayments 18 740,943 680,694Bank balances and cash 19 3,723,073 2,572,470

Total current assets 4,522,293 3,304,881

Total assets 17,904,741 16,760,514

EquityShare capital 20 1,660,000 1,660,000Share premium 21 2,472,655 2,472,655Shareholders’ reserve 21 2,000,000 2,000,000Retained earnings 3,918,177 3,408,504Hedging and other reserves 21 (88,245) (31,384)Actuarial reserve 21 (404,072) (343,269)Translation reserve 21 (1,061,117) (620,706)

Total equity attributable to equity holders of the Company 8,497,398 8,545,800Non-controlling interests 22 529,262 475,741

Total equity 9,026,660 9,021,541

LiabilitiesNon-current liabilitiesDeferred tax liabilities 11 897,378 935,586Employees’ end of service benefits 25 74,127 61,740Pension and post-employment benefits 26 210,683 169,778Loans and borrowings 27 5,603,658 4,776,690Accounts payable and accruals 28 538,214 281,246

Total non-current liabilities 7,324,060 6,225,040

Current liabilitiesIncome tax liabilities 11 162,495 210,347Bank overdraft 19 – 1,407Pension and post-employment benefits 26 10,175 10,068Loans and borrowings 27 251,330 258,327Accounts payable and accruals 28 1,130,021 1,033,784

Total current liabilities 1,554,021 1,513,933

Total liabilities 8,878,081 7,738,973

Total equity and liabilities 17,904,741 16,760,514

The accompanying notes 1 to 36 form an integral part of these consolidated financial statements. The consolidated financial statements were authorised for issue on 19 March 2015.

Mohammed Sharaf Yuvraj NarayanGroup Chief Executive Officer Group Chief Financial Officer



Consolidated Statement of Changes in Equityfor the year ended 31 December 2014

Attributable to equity holders of the Company

Sharecapital

USD’000

SharepremiumUSD’000

Shareholders’reserve

USD’000

RetainedearningsUSD’000

Hedging andother reserves

USD’000

Actuarialreserve

USD’000

Translationreserve

USD’000Total

USD’000

Non-controllinginterests USD’000

Totalequity

USD’000

Balance as at 1 January 2014 1,660,000 2,472,655 2,000,000 3,408,504 (31,384) (343,269) (620,706) 8,545,800 475,741 9,021,541

Total comprehensive income for the yearProfit for the year – – – 700,573 – – – 700,573 81,557 782,130Total other comprehensive income, net of tax – – – – (69,590) (60,803) (440,411) (570,804) (13,023) (583,827)

Total comprehensive income for the year – – – 700,573 (69,590) (60,803) (440,411) 129,769 68,534 198,303

Transactions with owners, recognised directly in equityDividends paid (refer to note 23) – – – (190,900) – – – (190,900) – (190,900)Additional contribution by owners – – – – 12,729 – – 12,729 – 12,729

Total transactions with owners – – – (190,900) 12,729 – – (178,171) – (178,171)

Transactions with non-controlling interests, recognised directly in equityDividends paid – – – – – – – – (22,323) (22,323)Acquisition of subsidiary with NCI – – – – – – – – 7,047 7,047Derecognition of non-controlling interests on loss of control – – – – – – – – (2,160) (2,160)Additional NCI created on account of conversion of loan – – – – – – – – 2,423 2,423

Total transactions with non-controlling interests (15,013) (15,013)

Balance as at 31 December 2014 1,660,000 2,472,655 2,000,000 3,918,177 (88,245) (404,072) (1,061,117) 8,497,398 529,262 9,026,660


Total comprehensive income for the yearProfit for the year – – – 639,636 – – – 639,636 82,152 721,788Total other comprehensive income, net of tax – – – – 90,845 35,902 (137,797) (11,050) 9,735 (1,315)

Total comprehensive income for the year – – – 639,636 90,845 35,902 (137,797) 628,586 91,887 720,473

Transactions with owners, recognised directly in equityDividends paid (refer to note 23) – – – (199,200) – – – (199,200) – (199,200)

Total transactions with owners – – – (199,200) – – – (199,200) – (199,200)

Transactions with non-controlling interests, recognised directly in equityDividends paid – – – – – – – – (64,064) (64,064)Derecognition of non-controlling interests on loss of control in Asia Pacific and Indian

subcontinent region – – – – – – – – (216,075) (216,075)

Total transactions with non-controlling interests – – – – – – – – (280,139) (280,139)

Balance as at 31 December 2013 1,660,000 2,472,655 2,000,000 3,408,504 (31,384) (343,269) (620,706) 8,545,800 475,741 9,021,541





Strategic Report


Attributable to equity holders of the Company

Sharecapital

USD’000

SharepremiumUSD’000

Shareholders’reserve

USD’000

RetainedearningsUSD’000

Hedging andother reserves

USD’000

Actuarialreserve

USD’000

Translationreserve

USD’000Total

USD’000

Non-controllinginterests USD’000

Totalequity

USD’000


Total comprehensive income for the yearProfit for the year – – – 700,573 – – – 700,573 81,557 782,130Total other comprehensive income, net of tax – – – – (69,590) (60,803) (440,411) (570,804) (13,023) (583,827)

Total comprehensive income for the year – – – 700,573 (69,590) (60,803) (440,411) 129,769 68,534 198,303

Transactions with owners, recognised directly in equityDividends paid (refer to note 23) – – – (190,900) – – – (190,900) – (190,900)Additional contribution by owners – – – – 12,729 – – 12,729 – 12,729

Total transactions with owners – – – (190,900) 12,729 – – (178,171) – (178,171)

Transactions with non-controlling interests, recognised directly in equityDividends paid – – – – – – – – (22,323) (22,323)Acquisition of subsidiary with NCI – – – – – – – – 7,047 7,047Derecognition of non-controlling interests on loss of control – – – – – – – – (2,160) (2,160)Additional NCI created on account of conversion of loan – – – – – – – – 2,423 2,423

Total transactions with non-controlling interests (15,013) (15,013)

Balance as at 31 December 2014 1,660,000 2,472,655 2,000,000 3,918,177 (88,245) (404,072) (1,061,117) 8,497,398 529,262 9,026,660


Total comprehensive income for the yearProfit for the year – – – 639,636 – – – 639,636 82,152 721,788Total other comprehensive income, net of tax – – – – 90,845 35,902 (137,797) (11,050) 9,735 (1,315)

Total comprehensive income for the year – – – 639,636 90,845 35,902 (137,797) 628,586 91,887 720,473

Transactions with owners, recognised directly in equityDividends paid (refer to note 23) – – – (199,200) – – – (199,200) – (199,200)

Total transactions with owners – – – (199,200) – – – (199,200) – (199,200)

Transactions with non-controlling interests, recognised directly in equityDividends paid – – – – – – – – (64,064) (64,064)Derecognition of non-controlling interests on loss of control in Asia Pacific and Indian

subcontinent region – – – – – – – – (216,075) (216,075)

Total transactions with non-controlling interests – – – – – – – – (280,139) (280,139)

Balance as at 31 December 2013 1,660,000 2,472,655 2,000,000 3,408,504 (31,384) (343,269) (620,706) 8,545,800 475,741 9,021,541




Consolidated Statement of Cash Flowsfor the year ended 31 December 2014

Note2014

USD’0002013

USD’000

Cash flows from operating activitiesProfit for the year 782,130 721,788Adjustments for:Depreciation and amortisation 9 420,985 395,499Impairment 9 – 99,153Share of profit from equity-accounted investees (net of tax) (76,207) (80,061)Finance costs 10 376,963 369,439Loss/(gain) on sale of property, plant and equipment and port concession rights 3,419 (6,571)Profit on sale and termination of businesses – (158,188)Finance income 10 (91,347) (84,493)Income tax expense 11 87,418 64,458

Gross cash flows from operations 1,503,361 1,321,024Change in inventories (8,302) 2,110Change in accounts receivable and prepayments (48,019) (88,153)Change in accounts payable and accruals 74,401 59,033Change in provisions, pensions and post-employment benefits (35,861) 4,674

Cash generated from operating activities 1,485,580 1,298,688Income taxes paid (131,365) (86,955)

Net cash from operating activities 1,354,215 1,211,733

Cash flows from investing activitiesAdditions to property, plant and equipment 13 (715,312) (1,025,530)Additions to port concession rights 14 (91,717) (37,892)Proceeds from disposal of property, plant and equipment and port concession rights 6,228 10,103Addition to other investments 17 (10,000) –Net proceeds from monetisation of investment in subsidiaries and equity-accounted investees – 658,685Net cash paid on acquisition of subsidiaries (32,031) –Cash derecognised on loss of control of a subsidiary (2,890) –Receipt of deferred consideration on disposal of equity-accounted investees – 16,140Interest received 40,470 43,103Dividends received from equity-accounted investees 152,036 94,523Additional investment in equity-accounted investees (38,301) (38,256)Net loan (advanced to)/repaid by equity-accounted investees (9,282) 68,323

Net cash used in investing activities (700,799) (210,801)

Cash flows from financing activitiesRepayment of interest bearing loans and borrowings (234,047) (633,090)Drawdown of interest bearing loans and borrowings 309,932 912,987Proceeds from issue of convertible bonds 1,000,000 –Transaction cost paid on convertible bonds (10,900) –Interest paid (323,908) (320,947)Dividend paid to the owners of the Company (190,900) (199,200)Dividend paid to non-controlling interests (22,323) (64,064)

Net cash from/(used in) financing activities 527,854 (304,314)

Net increase in cash and cash equivalents 1,181,270 696,618Cash and cash equivalents as at 1 January 2,571,063 1,881,733Effect of exchange rate fluctuations on cash held (29,260) (7,288)

Cash and cash equivalents as at 31 December 19 3,723,073 2,571,063

Cash and cash equivalents comprise the following:Bank balances and cash 3,723,073 2,572,470Bank overdrafts – (1,407)

Cash and cash equivalents 3,723,073 2,571,063

At 31 December 2014, the undrawn committed borrowing facilities of USD 3,627,235 thousand (2013: USD 1,506,129 thousand) were available to the Group, in respect of which all conditions precedent had been met.





Strategic Report


Notes to Consolidated Financial Statements(forming part of the financial statements)

1 Reporting entityDP World Limited (the “Company”) was incorporated on 9 August 2006 as a Company Limited by Shares with the Registrar of Companies of the Dubai International Financial Centre (“DIFC”) under the Companies Law, DIFC Law No. 3 of 2006. The consolidated financial statements of the Company for the year ended 31 December 2014 comprise the Company and its subsidiaries (collectively referred to as the “Group”) and the Group’s interests in equity-accounted investees. The Group is engaged in the business of international marine terminal operations and development, logistics and related services.

Port & Free Zone World FZE (the “Parent Company”), which originally held 100% of the Company’s issued and outstanding share capital, made an initial public offer of 19.55% of its share capital to the public and the Company was listed on the Nasdaq Dubai with effect from 26 November 2007. The Company was further admitted to trade on the London Stock Exchange with effect from 1 June 2011 and voluntarily delisted from the London Stock Exchange on 21 January 2015.

Port & Free Zone World FZE is a wholly owned subsidiary of Dubai World Corporation (the “Ultimate Parent Company”).

The Company’s registered office address is P.O. Box 17000, Dubai, United Arab Emirates.

2 Basis of preparation(a) Statement of complianceThese consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”).

The consolidated financial statements were approved by the Board of Directors on 19 March 2015.

(b) Basis of measurementThe consolidated financial statements have been prepared on the historical cost basis except for derivative financial instruments and available-for-sale financial assets which are measured at fair value.

The methods used to measure fair values are discussed further in note 5.

(c) Funding and liquidityThe Group’s business activities, together with factors likely to affect its future development, performance and position are set out in the Chairman’s Statement and the Operating and Financial Review. In addition, note 6 sets out the Group’s objectives, policies and processes for managing the Group’s financial risk including capital management and note 30 provides quantitative details of the Group’s exposure to credit risk, liquidity risk and interest rate risk from financial instruments.

The Board of Directors remain satisfied with the Group’s funding and liquidity position. At 31 December 2014, the Group has a net debt of USD 2,131,915 thousand (2013: USD 2,463,954 thousand). The Group’s credit facility covenants are currently well within the covenant limits. The Group generated gross cash of USD 1,503,361 thousand (2013: USD 1,321,024 thousand) from operating activities and its interest cover for the year is 5.6 times (2013: 5 times) (calculated using adjusted EBITDA and net finance cost before separately disclosed items).

Based on the above, the Board of Directors have concluded that the going concern basis of preparation continues to be appropriate.

(d) Functional and presentation currencyThe functional currency of the Company is UAE Dirhams. Each entity in the Group determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency.

These consolidated financial statements are presented in United States Dollars (“USD”), which in the opinion of management is the most appropriate presentation currency of the company in view of the global presence of the Group. All financial information presented in USD is rounded to the nearest thousand.

UAE Dirham is currently pegged to USD and there are no differences on translation from functional to presentation currency.

(e) Use of estimates and judgementsThe preparation of consolidated financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected.


Notes to Consolidated Financial Statements continued

2 Basis of preparation continued(a) Provision for income taxesThe Group is subject to income taxes in numerous jurisdictions. Significant judgement is required in determining the worldwide provision for income taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognises liabilities for anticipated tax payments based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.

(b) Impairment of available-for-sale financial assetsAvailable-for-sale financial assets are impaired when objective evidence of impairment exists. A significant or prolonged decline in the fair value of an investment is considered as objective evidence of impairment. The Group considers that generally a decline of 20% will be considered as significant and a decline of over 9 months will be considered as prolonged.

(c) Fair value of derivatives and financial instrumentsWhere the fair value of financial assets and financial liabilities recorded in the consolidated statement of financial position cannot be derived from active markets, they are determined using valuation techniques including the discounted cash flow model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. The judgements include consideration of inputs such as market risk, credit risk and volatility.

(d) Consolidation of entities in which the Group holds less than 50% shareholdingManagement consider that the Group is able to control Doraleh Container Terminal SARL even though it has only 33.33% of the voting rights. The Group is exposed to, or has rights to, variable returns from its involvement in the relevant activities of this entity and has the ability to affect those returns through its power over the entity.

(e) Contingent liabilitiesThere are various factors that could result in a contingent liability being disclosed if the probability of any outflow in settlement is not remote. The assessment of the outcome and financial effect is based upon management’s best knowledge and judgement of current facts as at the reporting date.

(f) Useful life of property, plant and equipment and port concession rights with finite lifeThe useful life of property, plant and equipment and port concession rights with finite life is determined by the Group’s management based on their estimate of the period over which an asset or port concession right is expected to be available for use by the Group. This estimate is reviewed and adjusted if appropriate at each financial year end. This may result in a change in the useful economic lives and therefore depreciation and amortisation expense in future periods.

(g) Impairment testing of goodwill and port concession rights The Group determines whether goodwill and port concession rights with indefinite life are impaired, at least on an annual basis. This requires an estimation of the value in use of the cash-generating units to which the goodwill is allocated or in which the port concession rights with indefinite life exist. Estimating the value in use requires the Group to make an estimate of the expected future cash flows from the cash-generating unit and also to choose a suitable discount rate in order to calculate the present value of those cash flows.

(h) Impairment of accounts receivableAn estimate of the collectible amount of accounts receivable is made when collection of the full amount is no longer probable. For significant amounts, this estimation is performed on an individual basis. Amounts which are not individually significant, but which are past due, are assessed collectively and a provision applied according to the length of time past due, based on historical recovery rates. Any difference between the amounts actually collected in future periods and the amounts expected, will be recognised in the consolidated statement of profit or loss.

(i) Pension and post-employment benefitsThe cost of defined benefit pension plans and other post-employment benefits is determined using actuarial valuations. The actuarial valuation involves making assumptions about discount rates, expected rates of return on assets, future salary increases, mortality rates and future pension increases. Due to the long-term nature of these plans, such estimates are subject to significant uncertainty.

(j) Business combinationsIn accounting for business combinations, judgement is required in identifying whether an identifiable intangible asset is to be recorded separately from goodwill. Additionally, estimating the acquisition date fair value of the identifiable assets acquired and liabilities assumed, involves management judgment. These measurements are based on information available at the acquisition date and are based on expectations and assumptions that have been deemed reasonable by the management.



Strategic Report


2 Basis of preparation continued(k) Deferred tax assetsDeferred tax assets are recognised for all unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of future taxable profits together with future tax planning strategies.

3 Changes in accounting policiesThe Group has consistently applied the accounting policies set out in note 4 to all periods presented in these consolidated financial statements.

4 Significant accounting policiesThe accounting policies set out below have been applied consistently in the years presented in these consolidated financial statements and have been applied consistently by the Group entities.

(a) Basis of consolidation(i) Business combinationsBusiness combinations (including business combinations under common control) are accounted for using the acquisition method as at the acquisition date – i.e. when control is transferred to the Group. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, the Group takes into consideration potential voting rights that are currently exercisable.

The Group measures goodwill at the acquisition date as:• the fair value of the consideration transferred; plus• the recognised amount of any non-controlling interests in the acquiree; plus• if the business combination is achieved in stages, the fair value of the pre-existing equity interest in the acquiree; less• the net recognised amount (generally fair value) of the identifiable assets (including previously unrecognised port

concession rights) acquired and liabilities (including contingent liabilities and excluding future restructuring) assumed.

In an acquisition, if the purchase price is lower than the fair value of the assets acquired, the resulting gain will be recognised immediately in the statement of consolidated statement of profit or loss.

In case of business combinations under common control, if the purchase price is lower than the fair value of the assets acquired, the resulting gain will be recognised directly in equity.

The consideration transferred does not include amounts related to the settlement of pre-existing relationships.

Transaction costs, other than those associated with the issue of debt or equity securities, that the Group incurs in connection with a business combination are expensed as incurred.

Any contingent consideration payable is measured at fair value at the acquisition date. If the contingent consideration is classified as equity, then it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes in the fair value of the contingent consideration are recognised in the consolidated statement of profit or loss.

(ii) SubsidiariesSubsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. The accounting policies of subsidiaries have been changed where necessary to align them with the policies adopted by the Group.

(iii) Change in ownership interests in subsidiaries without loss of controlChanges in the Group’s interests in a subsidiary that do not result in a loss of control are accounted for as transactions with owners in their capacity as owners and therefore no goodwill is recognised as a result of such transactions. The difference between the fair value of any consideration paid and relevant share acquired in the carrying value of net assets of the subsidiary is recorded in equity under retained earnings.

(iv) Disposal of subsidiaries (loss of control)On the loss of control, the Group derecognises the assets and liabilities of a subsidiary, any non-controlling interests and the other components of equity related to the subsidiary. Any surplus or deficit arising on the loss of control is recognised in the consolidated statement of profit or loss. If the Group retains any interest in the previous subsidiary, then such interest is re-measured at fair value at the date that control is lost. Subsequently, that retained interest is accounted for as an equity-accounted investee or as an available-for-sale financial asset depending on the level of influence retained.


4 Significant accounting policies continued(v) Non-controlling interestsFor each business combination, the Group elects to measure any non-controlling interests at their proportionate share of the acquiree’s identifiable net assets, which is generally at fair value.

Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests even if doing so, causes the non-controlling interests to have a debit balance.

(vi) Structured entities The Group has established DP World Sukuk Limited (a limited liability company incorporated in the Cayman Islands) as a structured entity (“SE”) for the issue of Sukuk Certificates. These certificates are listed on Nasdaq Dubai and London Stock Exchange. The Group does not have any direct or indirect shareholding in this entity.

A SE is consolidated based on an evaluation of the substance of its relationship with the Group and its risks and rewards. The SE was established by the Group under the terms that impose strict limitations on the decision-making powers of the SE’s management thereby resulting into the majority of the benefits related to the SE’s operations and net assets being received by the Group. Consequently, the Group is also exposed to risks incident to the SE’s activities and retains the majority of the residual or ownership risks related to the SE or its assets. Therefore, the Group concludes that it controls the SE. Refer to accounting policy on non-derivative financial liabilities in note 4 (c) (ii).

(vii) Investments in associates and joint ventures (equity-accounted investees)Associates are those entities in which the Group has significant influence, but not control or joint control, over the financial and operating policies. Significant influence is presumed to exist when the Group holds between 20 per cent and 50 per cent of the voting power of another entity.

Joint ventures are those entities over whose activities the Group has joint control, whereby the Group has rights to the net assets of the arrangement, rather than rights to its individual assets and obligations for its individual liabilities.

Investments in equity-accounted investees are accounted for using the equity method and are initially recorded at cost including transaction costs. The Group’s investment includes fair value adjustments (including goodwill) net of any accumulated impairment losses. The consolidated financial statements include the Group’s share of the income and expenses of equity-accounted investees, after adjustments to align the accounting policies with those of the Group, from the date that significant influence or joint control commences until the date that significant influence or joint control ceases.

When the Group’s share of losses exceeds its interest in an equity-accounted investee, the carrying amount of that interest (including any long-term investments) is reduced to nil and the recognition of further losses is discontinued except to the extent that the Group has an obligation or has made payments on behalf of the investee. If the equity-accounted investees subsequently reports profits, the Group resumes recognising its share of those profits only after its share of the profits equals the share of losses not recognised.

The financial statements of the equity-accounted investees are prepared for the same reporting period as the Group. The transactions between the Group and its equity-accounted investees are made at normal market prices.

At each reporting date, the Group determines whether there is any objective evidence that the investments in the equity-accounted investees are impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable amount of the equity-accounted investees and its carrying value and recognises the same in the consolidated statement of profit or loss.

Upon loss of joint control or significant influence, the Group measures and recognises any retained investment at its fair value. The difference between the carrying amount of the equity-accounted investees upon loss of joint control or significant influence and the fair value of the retained investment and proceeds from disposal is recognised as profit or loss in the consolidated statement of profit or loss.

(viii) Transactions eliminated on consolidationIntra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. Unrealised gains arising from the transactions with equity-accounted investees are eliminated against the investment to the extent of the Group’s interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

(b) Foreign currency(i) Functional and presentation currencyThese consolidated financial statements are presented in USD, which is the Group’s presentation currency. Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary environment in which it operates (functional currency).




Strategic Report


4 Significant accounting policies continued(ii) Foreign currency transactions and balancesTransactions in foreign currencies are translated to the respective functional currencies of the Group entities at exchange rates prevailing at the date of the transactions.

Monetary items denominated in foreign currencies at the reporting date are retranslated to the functional currency at the exchange rate at that date and exchange differences, if any are recognised in the income statement.

Non-monetary items in a foreign currency that are measured at historical cost are translated to the functional currency using the exchange rate at the date of initial transaction and is not retranslated at a later date. Non-monetary items that are measured at fair value in a foreign currency are translated into the functional currency using the exchange rates at the date when the fair value was determined.

Foreign currency differences arising on retranslation of monetary items are recognised in the consolidated statement of profit or loss, except for differences arising on the retranslation of available-for-sale equity instruments, of a financial liability designated as a hedge of the net investment in a foreign operation, or qualifying cash flow hedges, which are recognised directly in consolidated statement of other comprehensive income (refer to note 4(b)(iii)).

(iii) Foreign operationsThe results and financial position of all the Group entities (none of which has the currency of a hyper-inflationary economy), that have functional currency different from the presentation currency are translated into the presentation currency as follows:

(a) The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated to USD at exchange rates at the reporting date.

(b) The income and expenses of foreign operations are translated to USD at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions).

(c) All resulting foreign exchange differences arising on translation are recognised in the other comprehensive income and presented in the translation reserve in equity. However, if the foreign operation is not a wholly owned subsidiary, then the relevant proportion of the translation difference is allocated to non-controlling interests.

When a foreign operation is disposed such that control, significant influence or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to the consolidated statement of profit or loss as part of the gain or loss on disposal. When the Group disposes of only part of its interest in a subsidiary that includes a foreign operation while retaining control, the relevant proportion of the cumulative amount is reattributed to non-controlling interests. When the Group disposes of only part of its investment in an associate or joint venture that includes a foreign operation while retaining significant influence or joint control, the relevant proportion of the cumulative amount is reclassified to the consolidated statement of profit or loss.

Foreign exchange gains and losses arising from a monetary item receivable from or payable to a foreign operation, the settlement of which is neither planned nor likely in the foreseeable future, are considered to form part of a net investment in a foreign operation and are recognised in other comprehensive income and presented in the translation reserve in equity.

(iv) Hedge of a net investment in a foreign operationForeign currency differences arising on the retranslation of a financial liability designated as a hedge of a net investment in a foreign operation are recognised in the consolidated statement of other comprehensive income, to the extent that the hedge is effective. To the extent that the hedge is ineffective, such differences are recognised in the consolidated statement of profit or loss. When the hedged net investment is disposed of, the associated cumulative amount in consolidated statement of other comprehensive income is transferred to the consolidated statement of profit or loss as part of the gain or loss on disposal.

(c) Financial instruments(i) Non-derivative financial assetsInitial recognition and measurementThe Group classifies non-derivative financial assets into the following categories: held to maturity financial assets, loans and receivables and available-for-sale financial assets. The Group determines the classification of its financial assets at initial recognition.

All non-derivative financial assets are recognised initially at fair value, plus, any directly attributable transaction costs.

The Group initially recognises loans and receivables and deposits on the date that they originated. All other financial assets are recognised initially on the trade date, which is the date that the Group becomes a party to the contractual provisions of the instrument.



4 Significant accounting policies continuedThe Group’s non-derivative financial assets comprise investments in an unquoted infrastructure fund, debt securities held to maturity, trade and other receivables, due from related parties and cash and cash equivalents.

Subsequent measurementThe subsequent measurement of non-derivative financial assets depends on their classification as follows:

Held to maturity financial assetsIf the Group has a positive intent and ability to hold debt securities to maturity, then these are classified as held-to-maturity. Subsequent to initial recognition, held-to-maturity financial assets are measured at amortised cost using the effective interest method, less any impairment losses. 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 effective interest rate. The effective interest rate amortisation is included in finance cost in the consolidated statement of profit or loss. Gains and losses are also recognised in the consolidated statement of profit or loss when these financial assets are derecognised.

Loans and receivablesLoans and receivables are financial assets with fixed or determinable payments that are not quoted in an active market. Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective interest rate method, less any impairment losses. Loans and receivables comprise bank balances and cash, due from related parties and, trade and other receivables.

Bank balances and cashBank balances and cash in the consolidated statement of financial position comprise cash in hand, bank balances and deposits.

For the purpose of consolidated statement of cash flows, cash and cash equivalents consist of bank balances and cash as defined above and cash classified as held for sale, net of bank overdrafts. Bank overdrafts form an integral part of the Group’s cash management and is included as a component of cash and cash equivalents for the purpose of the consolidated statement of cash flows.

Available-for-sale investmentsAvailable-for-sale financial assets comprise equity securities. Available-for-sale financial assets are non-derivative financial assets that are designated as available-for-sale or are not classified in any of the above categories of financial assets. Subsequent to initial recognition, these are measured at fair value and changes therein, other than impairment losses and foreign currency differences on debt instruments are recognised in the consolidated statement of other comprehensive income and presented in the other reserves in equity. When an investment is derecognised, the balance accumulated in equity is reclassified to the consolidated statement of profit or loss.

De-recognition of non-derivative financial assetsThe Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in transferred financial assets that is created or retained by the Group is recognised as a separate asset or liability.

(ii) Non-derivative financial liabilitiesInitial recognition and measurementThe Group’s non-derivative financial liabilities consist of loans and borrowings, bank overdrafts, amounts due to related parties, and trade and other payables. The Group determines the classification of its financial liabilities at initial recognition.

All non-derivative financial liabilities are recognised initially at fair value less any directly attributable transaction costs.

The Group initially recognises debt securities issued and subordinated liabilities on the date they originated. All other financial liabilities are recognised initially on the trade date, which is the date that the Group becomes a party to the contractual provisions of the instrument.

Fees paid on the establishment of loan facilities are recognised as transaction costs to the extent there is evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over the period of the facility to which it relates.

Subsequent measurementThe subsequent measurement of non-derivative financial liabilities depends on their classification as follows:

Subsequent to initial recognition, these financial liabilities are measured at amortised cost using effective interest rate method. 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 effective interest rate. The effective interest rate amortisation is included in finance costs in the consolidated statement of profit or loss.



Strategic Report


4 Significant accounting policies continuedA substantial modification of the terms of an existing financial liability or a part of it shall be accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. Any gain or loss on extinguishment is recognised in the consolidated statement of profit or loss. If discounted present value of the cash flows (including any fees paid) under a new term arrangement is at least 10% different from the discounted present value of the remaining cash flows of the original liability, this is accounted for as an extinguishment of the old liability and the recognition of a new liability. Furthermore, qualitative assessment to assess extinguishment is also performed. Some of the factors considered in performing a qualitative assessment include change in interest basis, extension of debt tenure, change in collateral arrangements and change in the currency of lending.

Convertible bondConvertible bonds issued by the Group are denominated in USD and can be converted into ordinary shares. Convertible bonds are split into two components: a debt component and a component representing the embedded derivative in the convertible bond. The debt component represents a liability for future coupon payments and the redemption of the principal amount. The embedded derivative, a financial liability, represents the value of the option that bond holders can convert into ordinary shares.

At inception, the net proceeds of the convertible issue are split between the liability element and the derivative component, representing the fair value of the embedded option. The latter has not been recorded within equity due to the existence of cash settlement terms with the Company.

The debt component of convertible bond is initially recognised at the fair value of a similar liability that does not have an equity conversion option. Subsequent to initial recognition, the debt component is measured at amortised cost using effective interest rate method.

The embedded derivative is initially recognised at the difference between the fair value of the convertible bond as a whole and the fair value of the debt component (including interest). Subsequent to initial recognition, the embedded derivative component is re-measured at fair value at each reporting date with the change in the fair value recognised in the consolidated statement of profit or loss.

De-recognition of non-derivative financial liabilitiesThe Group derecognises a financial liability when its contractual obligations are discharged or cancelled or expired.

(iii) Derivative financial instrumentsThe Group holds derivative financial instruments such as forward currency contracts and interest rate swaps to hedge its foreign currency and interest rate risk exposures. On initial designation of the derivatives as the hedging instrument, the Group formally documents the relationship between the hedging instrument and hedged item, including the risk management objective and strategy in undertaking the hedge transaction and hedged risk together with the methods that will be used to assess the effectiveness of the hedging relationship. The Group makes an assessment, both at the inception of the hedge relationship as well as on an ongoing basis, of whether the hedging instruments are expected to be “highly effective” in offsetting the changes in the fair value or cash flows of the respective hedged items attributable to the hedged risk and whether the actual results of each hedge are within the acceptable range.

Derivatives are recognised initially at fair value and attributable transaction costs are recognised in the consolidated statement of profit or loss when incurred. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.

Derivative instruments that are not designated as hedging instruments in hedge relationships are classified as financial liabilities or assets at fair value through profit or loss.

Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are accounted for as described below:

Cash flow hedgesWhen a derivative is designated as the hedging instrument in a hedge of the variability in cash flows attributable to a particular risk associated with a recognised asset or liability or a highly probable forecast transaction or the foreign currency risk in an unrecognised firm commitment that could affect the consolidated statement of profit or loss, then such hedges are classified as cash flow hedges.

Changes in the fair value of the derivative hedging instrument designated as a cash flow hedge are recognised directly in consolidated statement of other comprehensive income to the extent that the hedge is effective and presented in the hedging reserve in equity. Any ineffective portion of changes in the fair value of the derivative is recognised immediately in the consolidated statement of profit or loss.



4 Significant accounting policies continuedWhen the hedged item is a non-financial asset, the amount recognised in the consolidated statement of other comprehensive income is transferred to the carrying amount of the asset when it is recognised. In other cases, the amount recognised in consolidated statement of other comprehensive income is transferred to the consolidated statement of profit or loss in the same period that the hedged item affects the consolidated statement of profit or loss. If the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold, terminated or exercised, or the designation is revoked, then hedge accounting is discontinued prospectively. The cumulative gain or loss previously recognised in consolidated statement of other comprehensive income remains there until the forecast transaction or firm commitment occurs. If the forecast transaction or firm commitment is no longer expected to occur, then the balance in equity is reclassified to profit or loss.

(iv) Offsetting of financial instrumentsFinancial assets and financial liabilities are offset and the net amount presented in the consolidated statement of financial position when, and only when, the Group has a legal right to offset the amounts and intends either to set off on a net basis, or to realise the asset and settle the liability simultaneously.

(d) Property, plant and equipment(i) Recognition and measurementItems of property, plant and equipment are measured at cost less accumulated depreciation and impairment losses (refer to note 4(i)).

Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of a self-constructed asset includes the cost of materials and direct labour, any other costs directly attributable to bringing the asset to a working condition for its intended use and the cost of dismantling and removing the items and restoring the site on which they are located.

Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment.

When parts of an item of property, plant and equipment have different useful lives, they are depreciated as separate items (major components) of property, plant and equipment.

Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment and recognised within ‘other income’ in the consolidated statement of profit or loss.

Capital work-in-progressCapital work-in-progress is measured at cost less impairment losses and not depreciated until such time the assets are ready for intended use and transferred to the respective category under property, plant and equipment.

DredgingDredging expenditure is categorised into capital dredging and major maintenance dredging. Capital dredging is expenditure which includes creation of a new harbour, deepening or extension of the channel berths or waterways in order to allow access to larger ships which will result in future economic benefits for the Group. This expenditure is capitalised and amortised over the expected period of the relevant concession agreement.

Major maintenance dredging is expenditure incurred to restore the channel to its previous condition and depth. On an average, the Group incurs such expenditure every 10 years. At the completion of maintenance dredging, the channel has an average service potential of 10 years. Any unamortised expense is written-off on the commencement of any new dredging activities. Maintenance dredging is regarded as a separate component of the asset and is capitalised and amortised evenly over 10 years.

(ii) Subsequent costsThe cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Group and its cost can be measured reliably. The carrying amounts of the replaced parts are derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in the consolidated statement of profit or loss as incurred.

(iii) DepreciationLand and capital work in progress is not depreciated. Depreciation on other assets is recognised in the consolidated statement of profit or loss on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment and is based on cost less residual value.



Strategic Report


4 Significant accounting policies continuedThe estimated useful lives of assets are as follows:

AssetsUseful life

(years)

Buildings 5–50Plant and equipment 3–25Ships 10–35Dredging (included in land and buildings) 10–99

Dredging costs are depreciated on a straight line basis based on the lives of various components of dredging.

Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Group will obtain ownership by the end of the lease term.

The estimated useful lives of assets are as follows:

Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted prospectively, if appropriate.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount (refer to note 4 (i) (ii)).

(iv) Borrowing costBorrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. Borrowing costs may include:

(a) interest expense calculated using the effective interest method as described in IAS 39;

(b) finance charges in respect of finance leases recognised in accordance with IAs 17; and

(c) exchange differences arising from foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs.

All other borrowing costs are recognised in profit or loss in the period in which they are incurred.

(e) GoodwillGoodwill arises on the acquisition of subsidiaries, associates and joint ventures. Goodwill represents the excess of the cost of the acquisition over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the acquiree. In an acquisition, if the purchase price is lower than the fair value of the assets acquired, the resulting gain will be recognised immediately in the statement of consolidated statement of profit or loss.

Subsequent measurementGoodwill is measured at cost less accumulated impairment losses (refer to note 4(i) (ii)).

In respect of equity-accounted investees, the carrying amount of goodwill is included in the carrying amount of the investment and is not tested for impairment separately.

(f) Port concession rightsThe Group classifies the port concession rights as intangible assets as the Group bears demand risk over the infrastructure assets. Substantially all of the Group’s terminal operations are conducted pursuant to long-term operating concessions or leases entered into with the owner of a relevant port for terms generally between 25 and 50 years (excluding the port concession rights relating to associates and joint ventures). The Group commonly starts negotiations regarding renewal of concession agreements with approximately 5–10 years remaining on the term and often obtains renewals or extensions on the concession agreements in advance of their expiration in return for a commitment to make certain capital expenditures in respect of the subject terminal. In addition, such negotiations may result in the re-basing of rental charges to reflect prevailing market rates. However, based on the Group’s experience, incumbent operators are typically granted renewal often because it can be costly for a port owner to switch operators, both administratively and due to interruptions to port operations and reduced productivity associated with such transactions. Port concession rights consist of:

(i) Port concession rights arising on business combinationsThe cost of port concession rights acquired in a business combination is the fair value as at the date of acquisition. Other port concession rights acquired separately are measured on initial recognition at cost.



4 Significant accounting policies continuedFollowing initial recognition, port concession rights are carried at cost less accumulated amortisation and any accumulated impairment losses (refer to note 4(i) (ii)). Internally generated port concession rights, excluding capitalised development costs, are recognised in the consolidated statement of profit or loss as incurred. The useful lives of port concession rights are assessed to be either finite or indefinite.

Port concession rights with finite lives are amortised on a straight line basis over the useful economic life and assessed for impairment whenever there is an indication that the port concession rights may be impaired. Port concession rights with indefinite lives (arising where freehold rights are granted) are not amortised and are tested for impairment at least on an annual basis.

The amortisation period and amortisation method for port concession rights with finite useful lives are reviewed at least at each financial year end. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the assets are accounted for by changing the amortisation period or method, as appropriate, and treated as changes in accounting estimates. The amortisation expenses on port concession rights with finite useful lives are recognised in the consolidated statement of profit or loss on a straight line basis.

Port concession rights with indefinite useful lives are tested for impairment annually either individually or at the cash-generating unit level. Such port concession rights are not amortised. The useful life of port concession rights with an indefinite life is reviewed annually to determine whether the indefinite life assessment continues to be supportable. If not, the change in the useful life assessment from indefinite to finite is made on a prospective basis.

(ii) Port concession rights arising from Service Concession Arrangements (IFRIC 12)The Group recognises port concession rights arising from a service concession arrangement, in which the grantor controls or regulates the services provided and the prices charged, and also controls any significant residual interest in the infrastructure such as property, plant and equipment, if the infrastructure is existing infrastructure of the grantor or the infrastructure is constructed or purchased by the Group as part of the service concession arrangement.

Port concession rights also include certain property, plant and equipment which are reclassified as intangible assets in accordance with IFRIC 12 ‘Service Concession Arrangements’. These assets are amortised based on the lower of their useful lives or concession period.

Gains or losses arising from de-recognition of port concession rights are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the consolidated statement of profit or loss when the asset is de-recognised.

The estimated useful lives for port concession rights range within a period of 5–50 years (including the concession rights relating to associates and joint ventures).

(g) InventoriesInventories mainly consist of spare parts and consumables. Inventories are measured at the lower of cost and net realisable value. The cost of inventories is based on weighted average method and includes expenditure incurred in acquiring inventories and bringing them to their existing location and condition. Net realisable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses.

(h) LeasesThe determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement at the inception date. The arrangement is assessed for whether fulfilment of the arrangement is dependent on the use of a specific asset or assets or the arrangement conveys a right to use the asset or assets, even if that right is not explicitly specified in an arrangement.

(i) Group as a lesseeAssets held by the Group under leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Assets held under operating leases are not recognised in the Group’s consolidated statement of financial position. Payments made under operating leases are recognised in the consolidated statement of profit or loss on a straight-line basis over the term of the lease. Lease incentives received are recognised as an integral part of the total lease expense, over the term of the lease.

The Group leases certain property, plant and equipment. Leases of property, plant and equipment where the Group has substantially all the risks and rewards of ownership are classified as finance lease. On initial recognition, the leased assets are measured at an amount equal to the lower of its fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the leased asset is accounted for in accordance with the accounting policy applicable to that asset. Minimum lease payments made under finance leases are apportioned between the finance expense and the reduction of the outstanding liability. The finance expense is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability.



Strategic Report


4 Significant accounting policies continuedContingent payments are accounted for by revising the minimum lease payments over the remaining term of the lease when the lease adjustment is confirmed.

(ii) Group as a lessorLeases where the Group retains substantially all the risks and benefits of ownership of the asset are classified as operating leases. Initial direct costs incurred in negotiating an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same basis as rental income. Contingent rents are recognised as income in the period in which they are earned.

(iii) Leasing and sub-leasing transactionsA series of leasing and sub-leasing transactions between the Group and third parties, which are closely interrelated, negotiated as a single transaction, and which take place concurrently or in a continuous sequence are considered linked and accounted for as one transaction when the overall economic effect cannot be understood without reference to the series of transactions as a whole.

These leasing and sub-leasing transactions are designed to achieve certain benefits for the third parties in overseas locations in return for a cash benefit to the Group. Such cash benefit is accounted in the consolidated statement of profit or loss based on its economic substance.

(iv) Leases of land in port concessionLeases of land have not been classified as finance leases as the Group believes that the substantial risks and rewards of ownership of the land have not been transferred. The existence of a significant exposure of the lessor to performance of the asset through contingent rentals is the basis of concluding that substantially all the risks and rewards of ownership have not passed.

(i) Impairment(i) Financial assets(a) Loans and receivables and held to maturity investmentsThe Group considers evidence of impairment for loans and receivables and held to maturity investment securities at both a specific asset level and collective level. All individually significant receivables and held to maturity investment securities are assessed for specific impairment.

An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the original effective interest rate. Impairment losses are recognised in the consolidated statement of profit or loss and reflected in an allowance account against loans and receivables or held to maturity investments. When a subsequent event causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through the consolidated statement of profit or loss.

(b) Available-for-sale financial assetsFor available-for-sale financial investments, the Group assesses at each reporting date whether there is objective evidence that an investment or a group of investments is impaired. A significant or prolonged decline in the fair value of an equity investment is considered as an objective evidence of impairment. The Group considers that generally a decline of 20% will be considered as significant and a decline of over 9 months will be considered as prolonged.

Impairment losses on available-for-sale financial assets are recognised by reclassifying the losses accumulated in the other reserve in equity to the consolidated statement of profit or loss. The cumulative loss that is reclassified from equity to the consolidated statement of profit or loss is the difference between the acquisition cost, net of any principal repayment and amortisation, and the current fair value, less any impairment loss recognised previously in the consolidated statement of profit or loss. Any subsequent recovery in the fair value of an impaired available-for-sale equity security is recognised in consolidated statement of other comprehensive income.

(ii) Non-financial assetsThe carrying amounts of the Group’s non-financial assets, other than inventories and deferred tax assets are reviewed for impairment whenever there is an indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. 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 or cash generating unit. A cash-generating unit is the smallest identifiable asset group that generates cash flows that largely are independent from other assets and groups.

An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its estimated recoverable amount. Impairment losses are recognised in the consolidated statement of profit or loss. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit (group of units) on a pro rata basis.



4 Significant accounting policies continuedFor goodwill and port concession rights that have indefinite lives or that are not yet available for use, recoverable amount is estimated annually and when circumstances indicate that the carrying value may be impaired. Goodwill acquired in a business combination is allocated to groups of cash generating units that are expected to benefit from the synergies of the combination. An impairment loss in respect of goodwill is not reversed.

In respect of non-financial assets (other than goodwill), impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount, which would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

(j) Assets held for saleAssets (or disposal groups comprising assets and liabilities) which are expected to be recovered primarily through sale rather than through continuing use are classified as held for sale. Immediately before classification as held for sale, the assets (or components of a disposal group) are re-measured in accordance with the Group’s accounting policies. Thereafter, generally the assets (or disposal group) are measured at the lower of their carrying amount or fair value less costs to sell. Any impairment loss on a disposal group is first allocated to goodwill, and then to remaining assets and liabilities on a pro rata basis, except that no loss is allocated to inventories, financial assets, deferred tax assets and employee benefit assets which continue to be measured in accordance with the Group’s accounting policies. Impairment losses on initial classification as held for sale and subsequent gains or losses on re-measurement are recognised in the consolidated statement of profit or loss. Gains are not recognised in excess of any cumulative impairment loss.

Port concession rights and property, plant and equipment once classified as held for sale or distribution are not amortised or depreciated. In addition, equity accounting of equity-accounted investees ceases once classified as held for sale.

(k) Share capitalOrdinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are recognised as a deduction from equity. Any excess payment received over par value is treated as share premium.

(l) Employee benefits(i) Pension and post-employment benefitsThe Group’s obligation in respect of defined benefit pension plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods. That benefit is discounted to determine the present value, and the fair value of any plan assets is deducted to arrive at net obligation. The calculation is performed annually by a qualified actuary using the projected unit credit method. The discount rate is the yield at the reporting date on AA credit rated bonds that have maturity dates approximating to the terms of the Group’s obligations.

When the actuarial calculation results in a benefit to the Group, the recognised asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. In order to calculate the present value of economic benefits, consideration is given to any minimum funding requirements that apply to any plan in the Group. An economic benefit is available to the Group if it is realisable during the life of the plan, or on settlement of the plan liabilities. Where the present value of the deficit contributions exceeds the IAS 19 deficit an additional liability is recognised.

Re-measurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest) are recognised directly in the consolidated statement of other comprehensive income. The cost of providing benefits under the defined benefit plans is determined separately for each plan using the projected unit credit method, which attributes entitlement to benefits to the current period (to determine current service cost) and to the current and prior periods (to determine the present value of defined benefit obligation) and is based on actuarial advice. The Group determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset), taking into account any changes in the net defined benefit liability (asset) during the period as result of contributions and benefit payments. Net interest expense and other expenses related to defined benefit plans are recognised in profit or loss.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognised immediately in profit or loss. The group recognise gains and losses on the settlement of a defined benefit plan when the settlement occurs.

Contributions, including lump sum payments, in respect of defined contribution pension schemes and multi-employer defined benefit schemes where it is not possible to identify the Group’s share of the scheme, are charged to the consolidated statement of profit or loss as they fall due.



Strategic Report


4 Significant accounting policies continued(ii) Long-term service benefitsThe Group’s net obligation in respect of long-term service benefits, other than pension plans, is the amount of future benefit that employees have earned in return for their service in the current and prior periods. The obligation is calculated using the projected unit credit method and is discounted to its present value and the fair value of any related assets is deducted. The discount rate is the yield at the reporting date on AA credit rated bonds that have maturity dates approximating to the terms of the Group’s obligations.

(iii) Short-term service benefitsShort-term employee benefits are expensed as the related service is provided. A liability is recognised for the amount expected to be paid if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

(m) ProvisionsProvisions for environmental restoration, restructuring costs and legal claims are recognised when: the group has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated. Restructuring provisions comprise lease termination penalties and employee termination payments. Provisions are not recognised for future operating losses.

Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as a finance cost in the consolidated statement of profit or loss.

Provision for an onerous contract is recognised when the expected benefits to be derived by the Group from a contract are lower than the unavoidable cost of meeting its obligations under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract.

(n) RevenueRevenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duty.

Revenue mainly consists of containerized stevedoring and other containerized revenue. Non-containerized revenue mainly includes logistics and handling of break bulk cargo. The following specific recognition criteria must also be met before revenue is recognised:

Rendering of servicesRevenue from providing containerized stevedoring, other containerized services and non-containerized services is recognised on the delivery and completion of those services.

Service concession arrangements (IFRIC 12)Revenues relating to construction contracts which are entered into with government authorities for the construction of the infrastructure necessary for the provision of services are measured at the fair value of the consideration received or receivable. Revenue from service concession arrangements is recognised based on the fair value of construction work performed at the reporting date.

(o) Finance income and expenseFinance income comprises interest income on funds invested and gains on hedging instruments that are recognised in the consolidated statement of profit or loss. Interest income is recognised as it accrues, using the effective interest method.

Finance costs comprises interest expense on borrowings, unwinding of the discount on provisions, impairment losses recognised on financial assets and losses on hedging instruments that are recognised in the consolidated statement of profit or loss.

Finance income and expense also include realised and unrealised exchange gains and losses on monetary assets and liabilities (refer to note 4(b)(i)).

(p) Income taxIncome tax expense comprises current and deferred tax. Income tax expense is recognised in the consolidated statement of profit or loss except to the extent that it relates to a business combination, or items recognised directly in consolidated statement of other comprehensive income.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date in the countries where the Group operates and generates taxable income. It also includes any adjustment to tax payable in respect of previous years.



4 Significant accounting policies continuedCurrent tax assets and liabilities are offset only if certain criteria are met.

Deferred tax is recognised using the liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for:• the temporary differences arising on the initial recognition of goodwill and the initial recognition of assets or liabilities

in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss; and• the temporary differences relating to investments in subsidiaries and jointly controlled entities to the extent that it is

not probable that they will reverse in the foreseeable future.

The measurement of deferred tax reflects the tax consequences that would follow the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date.

A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

Deferred tax assets and liabilities are offset only if certain criteria are met.

(q) Discontinued operationA discontinued operation is a component of the Group’s business that represents a separate major line of business or geographical area of operations that has been disposed or is held for sale. Classification as a discontinued operation occurs upon disposal or when the operation meets the criteria to be classified as held for sale, if earlier. When an operation is classified as a discontinued operation, the comparative consolidated statement of profit or loss and consolidated statement of comprehensive income is restated as if the operation had been discontinued from the start of the comparative period.

In the consolidated statement of profit or loss of the reporting period, and of the comparable period of the previous year, income and expenses from discontinued operations are reported separately from income and expenses from continuing operations, down to the level of profit after taxes, even when the Group retains a non-controlling interest in the subsidiary after the sale. The resulting profit or loss (after taxes) is reported separately in the consolidated statement of profit or loss and disclosed in the notes to the consolidated financial statements.

(r) Earnings per shareThe Group presents basic and diluted earnings per share (“EPS”) for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the year.

Diluted EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company (after adjusting for interest on the convertible bond and other consequential changes in income or expense that would result from the assumed conversion) by the weighted average number of ordinary shares outstanding during the year including the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares (also refer to note 24).

(s) Segment reportingAn operating segment is a component of the Group that engages in business activities from which it may earn revenue and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. All operating segments’ operating results are reviewed regularly by the Group’s Board of Directors (‘Chief Operating Decision Maker’) to assess performance.

Segment results that are reported to the Board of Directors include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items mainly comprise corporate assets (primarily Company’s head office), head office expenses and income tax assets and liabilities.

Segment capital expenditure is the total cost incurred during the year to acquire property, plant and equipment, and port concession rights other than goodwill.



Strategic Report


4 Significant accounting policies continued(t) Separately disclosed itemsThe Group presents, as separately disclosed items on the face of the consolidated statement of profit or loss, those items of income and expense which, because of the nature and expected infrequency of the events giving rise to them, merit separate presentation to allow users to understand better the elements of financial performance in the period, so as to facilitate a comparison with prior periods and a better assessment of trends in financial performance.

(u) New standards, amendments and interpretations adopted by the GroupThe following standards and amendments have been adopted by the Group for the first time for annual periods beginning on or after 1 January 2014:

• Offsetting Financial Assets and Financial Liabilities – Amendments to IAS 32 Amendment to IAS 32, ‘Financial instruments: Presentation’ on offsetting financial assets and financial liabilities. This amendment clarifies that the right of set-off must not be contingent on a future event. It must also be legally enforceable for all counterparties in the normal course of business, as well as in the event of default, insolvency or bankruptcy. The amendment also considers settlement mechanisms. The amendment did not have a significant effect on the Group’s financial statements.

• Amendments to IAS 36 – Impairment of assetsThis amendment removed certain disclosures of the recoverable amount of cash generating units which had been included in IAS 36 by the issue of IFRS 13. The amendment did not have a significant effect on the Group’s financial statements.

• Amendment to IAS 39 – Financial instruments: Recognition and measurement This amendment considers legislative changes to ‘over-the-counter’ derivatives and the establishment of central counterparties. Under IAS 39 novation of derivatives to central counterparties would result in discontinuance of hedge accounting. The amendment provides relief from discontinuing hedge accounting when novation of a hedging instrument meets specified criteria. The Group has applied the amendment and there has been no significant impact on the Group’s financial statements as a result.

• IFRIC 21 Levies IFRIC 21, ‘Levies’, sets out the accounting for an obligation to pay a levy if that liability is within the scope of IAS 37 ‘Provisions’. The interpretation addresses what the obligating event is that gives rise to pay a levy and when a liability should be recognised. The Group is not currently subjected to significant levies so the impact on the Group is not material.

(v) New standard and interpretation not yet effectiveA number of new standards, amendments to standards and interpretations are not effective for annual periods beginning 1 January 2014, and have not been applied in preparing these consolidated financial statements. Those which may be relevant to the Group are set out below. The Group does not plan to adopt these standards early.

• IFRS 9 Financial Instruments (2010), IFRS 9 Financial Instruments (2009) IFRS 9, published in July 2014, replaces the existing guidance in IAS 39 Financial Instruments: Recognition and Measurement. IFRS 9 includes revised guidance on the classification and measurement of financial instruments, including a new expected credit loss model for calculating impairment on financial assets, and the new general hedge accounting requirements. It also carried forward the guidance on recognition and de-recognition of financial instruments from IAS 39.

IFRS 9 is effective for annual periods beginning on or after 1 January 2018, with early adoption permitted. The adoption of this standard is not expected to have any significant impact on the Group’s financial statements.

• IFRS 15 Revenue from contracts with customers IFRS 15 establishes a comprehensive framework for determining whether, how much and when revenue is recognised. It replaces existing revenue recognition guidance, including IAS 18 Revenue, IAS 11 Construction Contracts and IFRIC 13 Customer Loyalty Programmes.

The standard is effective for annual periods beginning on or after 1 January 2017 and earlier application is permitted. The adoption of this standard is not expected to have any significant impact on the Group’s financial statements.



5 Determination of fair valuesA number of the Group’s accounting policies and disclosures require the determination of fair value, for both financial and non-financial assets and liabilities. Fair values have been determined for measurement and/or disclosure purposes based on the following methods. When applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability.

(i) Property, plant and equipmentThe fair value of property, plant and equipment recognised as a result of a business combination is based on market values. The market value of property is the estimated amount for which a property could be exchanged on the date of valuation between a willing buyer and a willing seller in an arm’s length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion. The market value of items of plant, equipment, fixtures and fittings is based on the quoted market prices for similar items.

(ii) Port concession rightsPort concession rights acquired in a business combination are accounted at their fair values. The fair value is based on the discounted cash flows expected to be derived from the use and eventual sale of the assets.

(iii) Investments in debt securities and available-for-sale financial assetsThe fair values of equity and debt securities are determined by reference to their quoted closing bid price at the reporting date. The fair value of the unquoted infrastructure investment fund classified as available-for-sale is based on the independent valuation of the fund. The fair value of debt securities held to maturity is determined based on the discounted cash flows at a market related discount rate. The fair value of debt securities held to maturity is determined for disclosure purposes only.

(iv) Trade and other receivables/payablesThe fair value of trade and other receivables and trade and other payables approximates to the carrying values due to the short term maturity of these instruments.

(v) Derivatives The fair value of forward exchange contracts and interest rate swaps is based on the bank quotes at the reporting dates. Similar contracts are traded in an active market and the quotes reflect the actual transactions in similar instruments.

(vi) Embedded derivative option liability of convertible bondThe fair value of the embedded derivative option liability of convertible bond is based on a valuation model with market assumptions.

(vii) Convertible bondThe fair value of the host liability component in the convertible bond is arrived at after deducting the fair value of embedded derivative option liability from the stock exchange quoted closing bid price of convertible bond at the reporting date.

(viii) Non-derivative financial liabilitiesFair value for quoted bonds is based on their market price as at the reporting date. Other loans include term loans and finance leases. These are largely at variable interest rates and therefore, the carrying value normally equates to the fair value.

The fair value of bank balances and cash and bank overdrafts approximates to the carrying value due to the short-term maturity of these instruments.

6 Financial risk managementOverviewThe Group has exposure to the following risks from its use of financial instruments:(a) credit risk(b) liquidity risk(c) market risk

This note presents information about the Group’s exposure to each of the above risks, the Group’s objectives, policies and processes for measuring and managing risk. Further quantitative disclosures are included throughout these consolidated financial statements. Also refer to note 30 for further details.

Risk management frameworkThe Board of Directors have overall responsibility for the establishment and oversight of the Group’s risk management framework.



Strategic Report


6 Financial risk management continuedThe Group’s risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. The Group, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.

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

(a) Credit riskCredit risk is the risk of financial loss to the Group if a customer fails to meet its contractual obligations, and arises principally from the Group’s receivables from customers, amounts due from related parties and investment securities.

Trade and other receivablesThe Group trades mainly with recognised and creditworthy third parties. It is the Group’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures and are required to submit financial guarantees based on their creditworthiness. In addition, receivable balances are monitored on an ongoing basis with the result that the Group’s exposure to bad debts is not significant.

The Group establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade and other receivables. The main components of this allowance are a specific loss component that relates to individually significant exposures, and a collective loss component established for groups of similar assets in respect of losses that have been incurred but not yet identified. The collective loss allowance is determined based on historical data of payment statistics for similar financial assets.

Other financial assetsCredit risk arising from other financial assets of the Group comprises cash and cash equivalents and certain derivative instruments. The Group’s exposure to credit risk arises from default of the counterparty, with a maximum exposure equal to the carrying amount of these instruments.

The Group manages its credit risks with regard to bank deposits, throughout the Group, through a number of controls, which include assessing the credit rating of the bank either from public credit ratings, or internal analysis where public data is not available and consideration of the support for financial institutions from their central banks or other regulatory authorities.

Financial guaranteesThe Group’s policy is to consider the provision of a financial guarantee to wholly-owned subsidiaries, where there is a commercial rationale to do so. Guarantees may also be provided to associates and joint ventures in very limited circumstances and always only for the Group’s share of the obligation. The provision of guarantees always requires the approval of senior management.

(b) Liquidity riskLiquidity 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 cash to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.

The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank facilities and by ensuring adequate internally generated funds. The Group’s terms of business require amounts to be paid within 60 days of the date of provision of the service. Trade payables are normally settled within 45 days of the date of purchase.

(c) Market riskMarket risk is the risk that changes in market prices, such as foreign exchange rates and interest rates 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.

The Group buys and sells derivatives and also incurs financial liabilities, in order to manage market risks. All such transactions are carried out within the guidelines set by the Board of Directors in the Group Treasury policy. Generally, the Group seeks to apply hedge accounting in order to manage the volatility in the consolidated statement of profit or loss.


6 Financial risk management continued(i) Currency riskThe proportion of the Group’s net operating assets denominated in foreign currencies (i.e. other than the functional currency of the Company, UAE Dirhams) is approximately 65 % (2013: 69%) with the result that the Group’s USD consolidated statement of financial position, and in particular shareholder’s equity, can be affected by currency movements when it is retranslated at each year-end rate. The Group partially mitigates the effect of such movements by borrowing in the same currencies as those in which the assets are denominated and using cross currency swaps. The impact of currency movements on operating profit is partially mitigated by interest costs being incurred in foreign currencies. The Group operates in some locations where the local currency is fixed to the Group’s presentation currency of USD further reducing the risk of currency movements.

Interest on borrowings is denominated in the currency of the borrowings. Generally, borrowings are denominated in currencies that match the cash flows generated by the underlying foreign operations of the Group. This provides an economic hedge without derivatives being entered into and therefore hedge accounting is not applied in these circumstances.

A portion of the Group’s activities generate part of their revenue and incur some costs outside their main functional currency. Due to the diverse number of locations in which the Group operates there is some natural hedging that occurs within the Group. When it is considered that currency volatility could have a material impact on the results of an operation, hedging using forward foreign currency contracts is undertaken to reduce the short-term effect of currency movements.

When the Group’s businesses enter into capital expenditure or lease commitments in currencies other than their main functional currency, these commitments are hedged in most instances using forward contracts and currency swaps in order to fix the cost when converted to the functional currency. The Group classifies its forward exchange contracts hedging forecast transactions as cash flow hedges and states them at fair value.

(ii) Interest rate riskThe Group’s exposure to the risk of changes in market interest rates relates primarily to the Group’s long-term debt obligations with a fixed/floating interest rate and bank deposits. The Group issued two fixed rate bonds, a 10 year Sukuk with a profit rate of 6.25%, a 30 year Medium Term Note with a coupon of 6.85% and a convertible bond with a coupon rate of 1.75%. These collectively represent USD 3,993,725 thousand of the Group’s outstanding debt as at the reporting date.

The Group’s policy is to manage its interest cost by entering into interest rate swap agreements, in which the Group agrees to exchange, at specified intervals, the difference between fixed and variable rate interest amounts calculated by reference to an agreed-upon notional principal amount. These swaps are designated to hedge underlying debt obligations.

At 31 December 2014, after taking into account the effect of interest rate swaps, approximately 93% (2013: 90%) of the Group’s borrowings are at a fixed rate of interest.

(iii) Equity price riskThe Group’s investment in listed equity instruments are susceptible to market price risk arising from uncertainties about future values of the investment securities. The Group manages the equity price risk through diversification and by placing limits on individual and total equity instruments. Reports on the equity portfolio are submitted to the Group’s senior management on a regular basis. The Group’s Board of Directors reviews and approves all equity investment decisions.

Capital managementThe 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. Capital consists of share capital, share premium, shareholders’ reserve, retained earnings, hedging and other reserves, actuarial reserve and translation reserve. The primary objective of the Group’s capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximise shareholder value. The Board seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowings and the advantages and security afforded by a sound capital position.

Neither the Company nor any of its subsidiaries are subject to externally imposed capital requirements.




Strategic Report


6 Financial risk management continuedThe key performance ratios as at 31 December are as follows:

2014USD’000

2013USD’000

Total interest bearing loans and borrowings (refer to note 27) 5,854,988 5,035,017Less: cash and cash equivalents (refer to note 19) (3,723,073) (2,571,063)

Total net debt 2,131,915 2,463,954

Total Equity 9,026,660 9,021,541

Adjusted EBITDA (refer to note 7) 1,588,150 1,414,241

Net finance cost before separately disclosed items 283,076 284,946

Net debt/Equity 0.24 0.27Net debt/adjusted EBITDA 1.34 1.74

Interest cover before separately disclosed items 5.61 5.0

7 Segment informationThe internal management reports which are prepared under IFRS are reviewed by the Board of Directors (“Chief Operating Decision Maker”) based on the location of the Group’s assets and liabilities. The Group has identified the following geographic areas as its basis of segmentation. The Group measures segment performance based on the earnings before separately disclosed items, interest, tax, depreciation and amortisation (“Adjusted EBITDA”).• Asia Pacific and Indian subcontinent• Australia and Americas• Middle East, Europe and Africa

Each of these operating segments have an individual appointed as Segment Director responsible for these segments, who in turn reports to the Chief Operating Decision Maker.

In addition to the above reportable segments, the Group also reports unallocated head office costs, finance costs, finance income and tax expense under the head office segment.

Information regarding the results of each reportable segment is included below.

The following table presents certain results, assets and liabilities information regarding the Group’s segments as at the reporting date.

Asia Pacific and Indian subcontinent


Middle East, Europe and Africa Head office Inter-segment Total

2014USD’000

2013USD’000

2014USD’000

2013USD’000

2014USD’000

2013USD’000

2014USD’000

2013USD’000

2014USD’000

2013USD’000

2014USD’000

2013USD’000

(Including separately

disclosed items)Revenue 448,990 355,217 628,312 594,183 2,386,049 2,123,848 – – – – 3,463,351 3,073,248

Segment results from

operations* 185,924 267,980 144,518 125,061 975,819 782,004 (238,515) (168,311) – – 1,067,746 1,006,734Finance income – – – – – – 91,347 84,493 – – 91,347 84,493Finance costs – – – – – – (376,963) (369,439) – – (376,963) (369,439)

Profit/(loss) for the year 185,924 267,980 144,518 125,061 975,819 782,004 (524,131) (453,257) – – 782,130 721,788

* Segment results from operations comprise profit for the year before net finance cost.

Net finance cost and tax expense from various geographical locations and head office have been grouped under head office.



7 Segment information continued




2014USD’000

2013USD’000

2014USD’000

2013USD’000

2014USD’000

2013USD’000

2014USD’000

2013USD’000

2014USD’000

2013USD’000

2014USD’000

2013USD’000

Segment assets 3,859,205 3,827,246 1,606,160 1,737,515 10,244,279 9,654,817 11,934,822 9,371,725 (9,739,725) (7,830,789) 17,904,741 16,760,514

Segment liabilities 303,648 237,295 228,742 89,632 2,966,587 1,586,005 7,134,174 5,605,650 (2,814,943) (925,542) 7,818,208 6,593,040

Tax liabilities* – – – – – – 1,059,873 1,145,933 – – 1,059,873 1,145,933

Total liabilities 303,648 237,295 228,742 89,632 2,966,587 1,586,005 8,194,047 6,751,583 (2,814,943) (925,542) 8,878,081 7,738,973

Capital expenditure 46,106 21,496 62,310 72,986 663,432 965,720 35,181 3,220 – – 807,029 1,063,422

Depreciation 25,672 27,478 56,550 62,900 224,366 181,481 5,642 4,988 – – 312,230 276,847

Amortisation/impairment 44,893 75,365 12,083 11,995 51,779 130,445 – – – – 108,755 217,805

Share of profit of equity-accounted investees before separately disclosed items 97,433 90,107 (37,518) (14,105) 18,046 8,364 – – – – 77,961 84,366

Tax expense – – – – – – 87,418 64,458 – – 87,418 64,458

* Tax liabilities and tax expenses from various geographical locations have been grouped under head office.

Earnings before separately disclosed items, interest, tax, depreciation and amortisation (“Adjusted EBITDA”)




2014USD’000

2013USD’000

2014USD’000

2013USD’000

2014USD’000

2013USD’000

2014USD’000

2013USD’000

2014USD’000

2013USD’000

2014USD’000

2013USD’000

Revenue before separately disclosed items 396,653 355,217 628,312 594,183 2,386,049 2,123,848 – – – – 3,411,014 3,073,248

Adjusted EBITDA 256,489 219,700 217,250 195,235 1,259,866 1,095,171 (145,455) (95,865) – – 1,588,150 1,414,241Finance income – – – – – – 89,765 84,493 – – 89,765 84,493Finance costs – – – – – – (372,841) (369,439) – – (372,841) (369,439)Tax expense – – – – – – (127,418) (59,558) – – (127,418) (59,558)Depreciation and amortisation (70,565) (78,843) (68,633) (74,895) (276,145) (236,773) (5,642) (4,988) – – (420,985) (395,499)

Adjusted net profit/(loss) for the year before separately disclosed items 185,924 140,857 148,617 120,340 983,721 858,398 (561,591) (445,357) – – 756,671 674,238

Adjusted for separately disclosed items – 127,123 (4,099) 4,721 (7,902) (76,394) 37,460 (7,900) – – 25,459 47,550

Profit/(loss) for the year 185,924 267,980 144,518 125,061 975,819 782,004 (524,131) (453,257) – – 782,130 721,788

8 Revenue

2014USD’000

2013USD’000

Revenue consists of:Containerized stevedoring revenue 1,502,990 1,396,510Containerized other revenue 1,166,079 1,026,792Non-containerized revenue 741,945 649,946Service concession revenue (refer to note 12) 52,337 –

3,463,351 3,073,248

The Group does not have any customer which contributes more than 10 per cent of the Group’s total revenue.

9 Profit for the year (including separately disclosed items)

2014USD’000

2013USD’000

Profit for the year is stated after charging the following costs:Staff costs 701,566 610,768Depreciation and amortisation 420,985 395,499Operating lease rentals 363,787 352,513Impairment – 99,153



Strategic Report


10 Finance income and costs (including separately disclosed items)

2014USD’000

2013USD’000

Finance incomeInterest income 59,110 54,140Exchange gains 30,655 30,353

Finance income before separately disclosed items 89,765 84,493Separately disclosed items (refer to note 12) 1,582 –

Finance income after separately disclosed items 91,347 84,493

Finance costsInterest expense (325,059) (320,957)Exchange losses (41,026) (40,382)Other net financing expense in respect of pension plans (6,756) (8,100)

Finance costs before separately disclosed items (372,841) (369,439)Separately disclosed items (refer to note 12) (4,122) –

Finance costs after separately disclosed items (376,963) (369,439)

Net finance costs after separately disclosed items (285,616) (284,946)

11 Income taxThe major components of income tax expense for the year ended 31 December:

2014USD’000

2013USD’000

Current income tax expenseCurrent year 93,270 105,500Adjustment for prior periods (6,066) (7,487)

87,204 98,013Deferred tax expense/(credit) 214 (33,555)

87,418 64,458

Income tax expense 87,418 64,458Share of income tax of equity-accounted investees 28,693 18,577

Total tax expense 116,111 83,035

Income tax expense before separately disclosed items 127,418 59,558Tax on separately disclosed items (refer to note 12) (40,000) 4,900

Income tax expense 87,418 64,458

Income tax balances included in the Consolidated Statement of Financial Position:Current income tax receivable (included within accounts receivable and prepayments) 22,640 17,806

Current income tax liabilities 162,495 210,347

Current tax assets and liabilities have been offset if certain criteria are met.

The Group is not subject to income tax on its UAE operations. The total tax expense relates to the tax payable on the profit earned by the overseas subsidiaries and equity-accounted investees as adjusted in accordance with the taxation laws and regulations of the countries in which they operate. The applicable tax rates in the regions in which the Group operates are set out below:

Geographical segments Applicable corporate tax rate

Asia Pacific and Indian subcontinent 16.5% to 34.0%Australia and Americas 26.0% to 36.0%Middle East, Europe and Africa 0% to 34.0%



11 Income tax continuedThe relationship between the total tax expense and the accounting profit can be explained as follows:

2014USD’000

2013USD’000

Net profit before tax 869,548 786,246

Tax at the company’s domestic rate of 0% (2013: 0%) – –Income tax on foreign earnings 121,655 56,765Current year losses not recognised for deferred tax asset 29,762 39,828Brought forward losses utilised (16,847) (3,295)Tax charge on equity-accounted investees 28,693 18,577Deferred tax in respect of fair value adjustments (6,965) (46,818)Others 6,090 20,979

Tax expense before prior year adjustments 162,388 86,036Tax (over)/under provided in prior periods:– current tax (6,066) (7,487)– deferred tax (211) (414)

Total tax expense from operations before separately disclosed items (A) 156,111 78,135Adjustment for separately disclosed items (40,000) 4,900

Total tax expense 116,111 83,035

Net profit before tax 869,548 786,246Adjustment for separately disclosed items 14,541 (52,450)Adjustment for share of income tax of equity-accounted investees 28,693 18,577

Adjusted profit before tax and before separately disclosed items (B) 912,782 752,373

Effective tax rate before separately disclosed items (A/B) 17.10% 10.39%

Unrecognised deferred tax assetsDeferred tax assets are not recognised on trading losses of USD 693,469 thousand (2013: USD 617,982 thousand) where utilisation is uncertain, either because they have not been agreed with tax authorities, or because the likelihood of future taxable profits is not sufficiently certain, or because of the impact of tax holidays on infrastructure projects. Under current legislation, USD 474,982 thousand (2013: USD 418,901 thousand) of these trading losses can be carried forward indefinitely.

Deferred tax assets are also not recognised on capital and other losses of USD 286,425 thousand (2013: USD 338,378 thousand) due to the fact that their utilisation is uncertain.

Movement in temporary differences during the year:

1 January2014

USD’000

Recognised in consolidated statement of profit or loss

USD’000

Translation and other

movementsUSD’000

31 December2014

USD’000

Deferred tax liabilitiesProperty, plant and equipment 125,726 (9,157) 3,942 120,511Investment in equity-accounted investees 38,746 5,372 (1,048) 43,070Fair value of acquired intangibles 401,704 (5,335) (18,781) 377,588Others 431,608 6,194 (4,861) 432,941

Total before set off 997,784 (2,926) (20,748) 974,110

Set off of tax (62,198) (76,732)Net deferred tax liabilities 935,586 897,378

Deferred tax assetsProperty, plant and equipment 4,561 1,231 (827) 4,965Pension and post-employment benefits 6,431 324 2,495 9,250Financial instruments 4,914 (208) 14,569 19,275Provisions 4,077 412 (154) 4,335Tax value of losses carried forward recognised 32,169 (71) (4,405) 27,693Others 14,439 (4,828) 1,772 11,383

Total before set off 66,591 (3,140) 13,450 76,901

Set off of tax (62,198) (76,732)Net deferred tax assets 4,393 169

Deferred tax assets and liabilities have been offset if certain criteria are met.



Strategic Report


12 Separately disclosed items

2014USD’000

2013USD’000

Revenue:Construction contract revenue relating to service concessions 52,337 –Cost of sales:Construction contract costs relating to service concessions (52,337) –General and administrative expenses:Acquisition related costs (19,400) –Restructuring costs – (2,280)Impairment of assets – (99,153)Other income 9,153 –Profit on sale and termination of businesses – 158,188Share of loss from equity-accounted investees (1,754) (4,305)Finance income:Ineffective interest rate swap gain 1,582 –Finance costs:Ineffective interest rate swap loss (4,122) –Income tax credit/(expense) 40,000 (4,900)

25,459 47,550

Construction contract revenue and costs: In accordance with IFRIC 12 ‘Service Concession Arrangements’, the Group has recorded a revenue of USD 52,337 thousand (2013: Nil) on the construction of a port in the ‘Asia Pacific and Indian subcontinent’ region. The construction revenue represents the fair value of the construction services provided in developing the port. No margin has been recognised, as in management’s opinion the fair value of the construction services provided approximates the construction cost.

Acquisition related costs represent advisory, legal, accounting, valuation, professional consulting, general and administrative costs directly related to various business acquisitions in the ‘Middle East, Europe and Africa’ region (2013: Nil).

Restructuring costs 2014: Nil (2013: related to the restructuring of subsidiaries in the ‘Middle East, Europe and Africa’ region and in the ‘Asia Pacific and Indian subcontinent’ region).

Impairment of assets 2014: Nil (2013: related to impairment of assets in the ‘Middle East, Europe and Africa’ region and in the ‘Asia Pacific and Indian subcontinent’ region).

Other income represents the gain on final settlement of contingent consideration relating to an acquisition of additional interest in a subsidiary during 2012 in the ‘Middle East, Europe and Africa’ region (2013: Nil).

Profit on sale and termination of businesses in 2013 represents:• USD 152,224 thousand profit on monetisation of investments in the ‘Asia Pacific and Indian subcontinent’ region.• USD 5,964 thousand profit on monetisation of investments in an equity-accounted investee in the ‘Australia and

Americas’ region.

Share of loss from equity-accounted investees: USD 655 thousand relates to the share of ineffective hedge in a joint venture in the ‘Middle East, Europe and Africa’ region and USD 1,099 thousand relates to the share of restructuring costs in a joint venture in the ‘Australia and Americas’ region. (2013: USD 1,241 thousand related to the share of ineffective hedge in an associate in the ‘Middle East, Europe and Africa’ region and USD 3,064 thousand related to the share of restructuring costs in the ‘Australia and Americas’ region).

Ineffective interest rate swap gain relates to an ineffective hedge in a subsidiary in the ‘Asia Pacific and Indian subcontinent’ region (2013: Nil).

Ineffective interest rate swap loss relates to an ineffective hedge in a subsidiary in the ‘Middle East, Europe and Africa’ region (2013: Nil).

Income tax credit relates to the release of a tax provision in connection with the restructuring and sale of subsidiaries in the ‘Australia and Americas’ region. The provision has been released following closure of a review by the tax authorities (2013: Income tax expense related to the restructuring of subsidiaries in the ‘Asia Pacific and Indian subcontinent’ region).



13 Property, plant and equipment

Land andbuildingsUSD’000

Plant andequipment

USD’000Ships

USD’000

Capital work-in-progress

USD’000Total

USD’000

CostAs at 1 January 2014 3,308,139 2,928,954 244,802 1,405,545 7,887,440Acquired through business combination – 3,876 65,580 2,054 71,510Additions during the year 13,410 25,297 48,154 628,451 715,312Transfers from capital work-in-progress 181,932 904,299 605 (1,086,836) –Translation adjustment (73,679) (64,771) (37,589) (37,497) (213,536)Disposals (5,020) (58,348) (46,785) – (110,153)Transferred to equity-accounted investees as capital contribution – – – (21,875) (21,875)

As at 31 December 2014 3,424,782 3,739,307 274,767 889,842 8,328,698

Depreciation and impairmentAs at 1 January 2014 694,229 1,017,552 105,874 – 1,817,655Charge for the year 107,137 189,282 15,811 – 312,230Translation adjustment (16,524) (20,413) (14,524) – (51,461)On disposals (2,702) (56,399) (46,785) – (105,886)

As at 31 December 2014 782,140 1,130,022 60,376 – 1,972,538

Net book valueAs at 31 December 2014 2,642,642 2,609,285 214,391 889,842 6,356,160

In the prior years, the Group had entered into agreements with third parties pursuant to which the Group participated in a series of linked transactions including leasing and sub-leasing of certain cranes of the Group (“the Crane French Lease Arrangements”). At 31 December 2014, cranes with aggregate net book value amounting to USD 257,233 thousand (2013: USD 272,972 thousand) were covered by these Crane French Lease Arrangements. These cranes are accounted for as property, plant and equipment as the Group retains all the risks and rewards incidental to the ownership of the underlying assets.

At 31 December 2014, property, plant and equipment with a carrying amount of USD 2,342,980 thousand (2013: USD 2,451,173 thousand) are pledged to secure bank loans (refer to note 27). At 31 December 2014, the net carrying value of the leased plant and equipment and other assets was USD 150,999 thousand (2013: USD 50,065 thousand).

Borrowing costs capitalised to property, plant and equipment amounted to USD 31,390 thousand (2013: USD 36,691 thousand) with a capitalisation rate in the range of 2.94% to 5.13%per annum (2013: 4.68% to 5.13% per annum).

Land and buildingsUSD’000

Plant andequipment

USD’000Ships

USD’000

Capital work-in-progress

USD’000Total

USD’000

CostAs at 1 January 2013 3,073,584 2,462,280 240,361 1,316,806 7,093,031Additions during the year 5,227 52,225 26,340 941,738 1,025,530Transfers from capital work-in-progress 353,024 511,749 – (864,773) –Translation adjustment (63,202) 10,088 (13,999) 20,850 (46,263)Disposals (1,264) (40,088) (7,900) – (49,252)Disposal of subsidiaries (59,230) (67,300) – (8,982) (135,512)

As at 31 December 2013 3,308,139 2,928,954 244,802 1,405,639 7,887,534

Depreciation and impairmentAs at 1 January 2013 614,767 961,150 103,852 – 1,679,769Charge for the year 103,978 152,247 20,622 – 276,847Impairment losses (refer to note 12) 7,197 36,525 – 94 43,816Translation adjustment 7,038 (37,175) (10,700) – (40,837)On disposals (711) (37,289) (7,900) – (45,900)On disposal of subsidiaries (38,040) (57,906) – – (95,946)

As at 31 December 2013 694,229 1,017,552 105,874 94 1,817,749

Net book valueAs at 31 December 2013 2,613,910 1,911,402 138,928 1,405,545 6,069,785



Strategic Report


14 Goodwill and port concession rights

GoodwillUSD’000

Portconcession

rightsUSD’000

TotalIntangible

AssetsUSD’000

CostAs at 1 January 2014 1,532,238 3,799,653 5,331,891Additions – 91,717 91,717Disposals – (9,742) (9,742)Acquired through business combinations 4,297 31,541 35,838Translation adjustment (88,341) (158,981) (247,322)

As at 31 December 2014 1,448,194 3,754,188 5,202,382

Amortisation and impairmentAs at 1 January 2014 – 895,172 895,172Charge for the year – 108,755 108,755On disposals – (4,362) (4,362)Translation adjustment – (24,645) (24,645)

As at 31 December 2014 – 974,920 974,920

Net book valueAs at 31 December 2014 1,448,194 2,779,268 4,227,462

Port concession rights include concession agreements which are mainly accounted for as part of business combinations and acquisitions. These concessions were determined to have finite and indefinite useful lives based on the terms of the respective concession agreements and the income approach model was used for the purpose of determining their fair values.

At 31 December 2014, port concession rights with a carrying amount of USD 175,131 thousand (2013: USD 357,785 thousand) are pledged to secure bank loans (refer to note 27).

GoodwillUSD’000

Portconcession

rightsUSD’000

TotalIntangible

AssetsUSD’000

CostAs at 1 January 2013 1,588,918 3,934,648 5,523,566Additions – 37,892 37,892Disposals – (790) (790)Disposal of subsidiaries (34,880) (27,981) (62,861)Impairment losses (refer to note 12) (3,268) – (3,268)Translation adjustment (18,532) (144,116) (162,648)

As at 31 December 2013 1,532,238 3,799,653 5,331,891

Amortisation and impairmentAs at 1 January 2013 – 819,564 819,564Charge for the year – 118,652 118,652Impairment loss (refer note 12) – 23,871 23,871On disposals – (610) (610)On disposal of subsidiaries – (5,462) (5,462)Translation adjustment – (60,843) (60,843)

As at 31 December 2013 – 895,172 895,172

Net book valueAs at 31 December 2013 1,532,238 2,904,481 4,436,719



15 Impairment testing Goodwill acquired through business combinations and port concession rights with indefinite useful lives have been allocated to various cash-generating units (“CGU”), which are reportable business units, for the purposes of impairment testing.

Impairment testing is done at operating port (or group of ports) level that represents an individual CGU. Details of the CGUs by operating segment are shown below:

Carrying amount of goodwill

Carrying amount of port concession rights with

indefinite useful life Discount ratesPerpetuity

growth rate

2014USD’000

2013USD’000

2014USD’000

2013USD’000

Cash-generating units aggregated by operating segment

Asia Pacific and Indian subcontinent 169,124 169,905 – – 6.50%–12.50% 2.50% Australia and Americas 235,170 252,245 – – 5.75%–13.75% 2.50%Middle East, Europe and Africa 1,043,900 1,110,088 979,201 1,043,125 5.47%–13.50% 2.50%–2.60%

Total 1,448,194 1,532,238 979,201 1,043,125

The recoverable amount of the CGU has been determined based on their value in use calculated using cash flow projections based on the financial budgets approved by management covering a three year period and a further outlook for five years, which is considered appropriate in view of the outlook for the industry and the long-term nature of the concession agreements held i.e. generally for a period of 25–50 years.

Key assumptions used in value in use calculationsThe following describes each key assumption on which management has based its cash flow projections to undertake impairment testing of goodwill and port concession rights with indefinite useful lives.

Budgeted margins – The basis used to determine the value assigned to the budgeted margin is the average gross margin achieved in the year immediately before the budgeted year, adjusted for expected efficiency improvements, price fluctuations and manpower costs.

Discount rates – These represent the cost of capital adjusted for the respective location risk factors. The Group uses the post-tax industry average Weighted Average Cost of Capital which reflects the country specific risk adjusted discount rate.

Cost inflation – The forecast general price index is used to determine the cost inflation during the budget year for the relevant countries where the Group is operating.

Perpetuity growth rate – In management’s view, the perpetuity growth rate is the minimum growth rate expected to be achieved beyond the eight year period. This is based on the overall regional economic growth forecasted and the Group’s existing internal capacity changes for a given region. The Group also takes into account competition and regional capacity growth to provide a comprehensive growth assumption for the entire portfolio.

The values assigned to key assumptions are consistent with the past experience of management.

Sensitivity to changes in assumptionsThe calculation of value in use for the CGU is sensitive to future earnings and therefore a sensitivity analysis was performed. The analysis demonstrated that a 10% decrease in earnings for a future period of three years from the reporting date would not result in impairment.



Strategic Report


16 Investment in equity-accounted investeesThe following table summarises the segment wise financial information for equity-accounted investees, adjusted for fair value adjustments at acquisition and reconciled to the carrying amount of Group’s interest in equity-accounted investees as included in consolidated statement of financial position:

Asia Pacific and Indian subcontinent Australia and Americas

Middle East, Europe and Africa Total

2014USD’000

2013USD’000

2014USD’000

2013USD’000

2014USD’000

2013USD’000

2014USD’000

2013USD’000

Cash and cash equivalents 352,234 350,997 136,146 105,483 165,784 204,675 654,164 661,155Other current assets 167,963 185,851 111,017 137,905 163,159 176,657 442,139 500,413Non-current assets 7,952,900 8,462,128 2,565,924 2,802,062 2,574,955 2,651,225 13,093,779 13,915,415

Total assets 8,473,097 8,998,976 2,813,087 3,045,450 2,903,898 3,032,557 14,190,082 15,076,983

Current financial liabilities 20,746 89,567 89,106 31,599 48,376 38,253 158,228 159,419Other current liabilities 582,136 627,011 205,465 184,462 208,253 197,706 995,854 1,009,179Non-current financial

liabilities 1,250,111 1,432,290 1,643,284 1,710,022 479,931 677,990 3,373,326 3,820,302Other non-current liabilities 651,141 625,330 102,391 111,826 552,012 422,176 1,305,544 1,159,332

Total liabilities 2,504,134 2,774,198 2,040,246 2,037,909 1,288,572 1,336,125 5,832,952 6,148,232

Net assets (100%) 5,968,963 6,224,778 772,841 1,007,541 1,615,326 1,696,432 8,357,130 8,928,751

Group’s share of net assets in equity-accounted investees 2,534,320 2,700,703

Revenue 1,527,146 1,317,725 688,368 716,099 576,798 519,766 2,792,312 2,553,590Depreciation and

amortisation (312,266) (335,663) (155,764) (126,871) (69,103) (68,973) (537,133) (531,507)Other expenses (620,175) (582,941) (513,948) (529,522) (435,961) (396,628) (1,570,084) (1,509,091)Interest expense (107,316) (139,974) (239,853) (205,241) (28,213) (27,183) (375,382) (372,398)Other finance income 44,191 48,731 10,334 34,334 1,141 1,752 55,666 84,817Income tax expense (124,275) (111,840) 54,565 32,280 (3,620) (6,435) (73,330) (85,995)

Net profit/ (loss) 407,305 196,038 (156,298) (78,921) 41,042 22,299 292,049 139,416

Group’s share of profit/ (loss) (before separately disclosed items) 97,433 90,107 (37,517) (14,105) 18,045 8,364 77,961 84,366

Group’s share of other comprehensive income (10,906) 17,772

17 Other investments

2014USD’000

2013USD’000

Debt securities held to maturity (refer to note a) 9,204 10,207Available-for-sale financial assets (refer to note b) 60,811 52,716

70,015 62,923

(a) The movement in debt securities held to maturity mainly relates to redemption of USD 1,003 thousand (2013: USD 1,055 thousand) during the year.

(b) Available-for-sale financial assets consist of an unquoted investment in an Infrastructure Fund in UAE and a listed equity instrument in Hong Kong.



17 Other investments continuedThe movement schedule for these investments is as follows:

2014USD’000

2013USD’000

As at 1 January 52,716 49,556Addition during the year 10,000 –Change in fair value recognised in consolidated statement of other comprehensive income (1,895) 3,160Foreign exchange movement (10) –

As at 31 December 60,811 52,716

Currency wise split of other investments are as follows:

Currencies2014

USD’0002013

USD’000

HKD 8,927 –USD 61,051 62,883AUD 37 40

70,015 62,923

18 Accounts receivable and prepayments

2014Non-current

USD’000

2014Current

USD’000

2014Total

USD’000

Trade receivables (net) – 301,673 301,673Advances paid to suppliers – 30,373 30,373Other receivables and prepayments 73,034 305,291 378,325Employee benefit assets (refer to note 26) 262 – 262Due from related parties (refer to note 29) 121,026 103,606 224,632

194,322 740,943 935,265

2013Non-current

USD’000

2013Current

USD’000

2013Total

USD’000

Trade receivables (net) – 270,074 270,074Advances paid to suppliers – 36,483 36,483Other receivables and prepayments 65,253 263,067 328,320Employee benefit assets (refer to note 26) 372 – 372Due from related parties (refer to note 29) 115,485 111,070 226,555

181,110 680,694 861,804

The Group’s exposure to credit and currency risks is disclosed in note 30.

19 Bank balances and cash

2014USD’000

2013USD’000

Cash at banks and in hand 381,173 368,830Short-term deposits 3,281,606 2,151,205Deposits under lien 60,294 52,435

Bank balances and cash 3,723,073 2,572,470Bank overdrafts – (1,407)

Cash and cash equivalents for consolidated statement of cash flows 3,723,073 2,571,063

Short-term deposits are made for varying periods between one day and three months depending on the immediate cash requirements of the Group and earn interest at the respective short-term deposit market rates. Bank overdrafts are repayable on demand.

The deposits under lien are placed to collateralise some of the borrowings of the Company’s subsidiaries.



Strategic Report


20 Share capitalThe share capital of the Company as at 31 December was as follows:

2014USD’000

2013USD’000

Authorised 1,250,000,000 of USD 2.00 each 2,500,000 2,500,000

Issued and fully paid 830,000,000 of USD 2.00 each 1,660,000 1,660,000

21 ReservesShare premiumShare premium represents surplus received over and above the nominal cost of the shares issued to the shareholders and forms part of the shareholder equity. The reserve is not available for distribution except in circumstances as stipulated by the law.

Shareholders’ reserveShareholders’ reserve forms part of the distributable reserves of the Group.

Hedging reserveThe hedging reserve comprises the effective portion of the cumulative net change in the fair value of the cash flow hedging instruments related to hedge transactions that have not yet occurred.

Other reservesThe other reserves mainly include statutory reserves of subsidiaries as required by applicable local legislations. This reserve also includes the unrealised fair value changes on available-for-sale investments.

Actuarial reserveThe actuarial reserve comprises the cumulative actuarial losses recognised in consolidated statement of other comprehensive income.

Translation reserveThe translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign operations whose functional currencies are different from that of the Group’s presentation currency. It also includes foreign exchange translation differences arising from translation of goodwill and purchase price adjustments which are denominated in foreign currencies at the Group level.

22 Non-controlling interests (‘NCI’)The following table summarises the financial information for the material NCI of the Group:

Middle East, Europe and

Africa region

Other individually immaterial

subsidiaries*


Africa region


subsidiaries*

2014 USD’000

2014 USD’000

2014 USD’000

Total2013

USD’0002013

USD’000

2013 USD’000

Total

Balance sheet information:Non-current assets 465,648 497,259Current assets 247,567 167,675Non-current liabilities (138,487) (171,342)Current liabilities (119,770) (124,341)

Net assets (100%) 454,958 369,251

Carrying amount of fair value adjustments 284,550 304,490

Total 739,508 673,741

Carrying amount of NCI as at 31 December 419,004 110,258 529,262 372,018 103,723 475,741

* There are no material subsidiaries in the other operating segments of the Group with NCI.


22 Non-controlling interests (‘NCI’) continued


Africa region


subsidiaries*


Africa region


subsidiaries*

2014 USD’000

2014 USD’000

2014 USD’000

Total2013

USD’0002013

USD’000

2013 USD’000

Total

Statement of profit or loss information:Revenue 386,297 316,073Profit after tax 97,075 80,600Other comprehensive income, net of tax (5,705) 12,204

Total comprehensive income (100%), net of tax 91,370 92,804Profit allocated to NCI 61,169 20,387 81,556 51,418 30,734 82,152Other comprehensive income allocated to NCI (1,646) (11,376) (13,022) 7,566 2,169 9,735

Total comprehensive income attributable to NCI 59,523 9,011 68,534 58,984 32,903 91,887

Cash flow statement information:Cash flows from operating activities 147,214 129,849Cash flows from investing activities (11,953) 42,663Cash flows from financing activities (54,022) 113,695

Dividends paid to NCI – 38,604

* There are no material subsidiaries in the other operating segments of the Group with NCI.

23 Dividends

2014USD’000

2013USD’000

Declared and paid during the year:Final dividend: 23 US cents per share/24 US cents per share 190,900 199,200

Proposed for approval at the annual general meeting(not recognised as a liability as at 31 December):Final dividend: 23.5 US cents per share/23 US cents per share 195,050 190,900

24 Earnings per share

The calculation of basic and diluted earnings per share is based on the profit attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding.

2014 Before

separately disclosed

items USD’000

2014 Adjusted for


items USD’000

2013 Before


items USD’000

2013 Adjusted for


items USD’000

Profit attributable to the ordinary shareholders of the Company (a) 675,430 700,573 604,421 639,636Add: Interest expense on convertible bonds saved as a result of the conversion 9,397 9,397 – –Add: Transaction cost on convertible bonds saved as a result of the conversion 503 503 – –

Profit attributable to the ordinary shareholders of the Company after conversion (b) 685,330 710,473 604,421 639,636

Weighted average number of basic shares outstanding as at 31 December (c) 830,000 830,000 830,000 830,000Weighted average number of shares due to conversion of convertible bond 19,786 19,786 – –

Total weighted average number of ordinary shares (diluted) outstanding as at – (d) 849,786 849,786 830,000 830,000

Basic earnings per share US cents – (a/c) 81.38 84.41 72.82 77.06Diluted earnings per share USD cents – (b/d) 80.65 83.61 72.82 77.06




Strategic Report


25 Employees’ end of service benefits Movements in the provision recognised in the consolidated statement of financial position are as follows:

2014USD’000

2013USD’000

As at 1 January 61,740 55,747Acquired through business combinations 3,721 –Provision made during the year* 13,895 11,961Amounts paid during the year (5,229) (5,968)

As at 31 December 74,127 61,740

* The provision for expatriate staff gratuities, included in Employees’ end of service benefits, is calculated in accordance with the regulations of the Jebel Ali Free Zone Authority. This is based on the liability that would arise if employment of all staff were terminated at the reporting date.

The UAE government had introduced Federal Labour Law No.7 of 1999 for pension and social security. Under this Law, employers are required to contribute 15% of the ‘contribution calculation salary’ of those employees who are UAE nationals. These employees are also required to contribute 5% of the ‘contribution calculation salary’ to the scheme. The Group’s contribution is recognised as an expense in the consolidated statement of profit or loss as incurred.

26 Pension and post-employment benefitsThe Group participates in a number of pension schemes throughout the world. The principal scheme is located in the UK (the “P&O UK Scheme”). The P&O UK Scheme is a funded defined benefit scheme and was closed to routine new members on 1 January 2002. The pension fund is legally separated from the Group and managed by a Trustee board. The assets of the scheme are managed on behalf of the Trustee by independent fund managers.

The Group also operates a number of smaller defined benefit and defined contribution schemes. In addition, the Group participates in various industry multi-employer schemes, the most significant of which is the Merchant Navy Officers’ Pension Fund (the “MNOPF Scheme”) and is in the UK. These generally have assets held in separate trustee administered funds which are legally separated from the Group.

The board of a pension fund in the UK is required by law to act in the best interests of the fund participants and is responsible for setting certain policies (e.g. investment, contributions and indexation policies) and determining recovery plans if appropriate.

These defined benefit funds expose the Group to actuarial risks, such as longevity risk, currency risk, interest rate risk and market (investment) risk. In addition, by participating in certain multi-employer industry schemes, the Group can be exposed to a pro-rata share of the credit risk of other participating employers.

Reconciliation of assets and liabilities recognised in the consolidated statement of financial position

2014USD’000

2013USD’000

Non-currentDefined benefit schemes net liabilities 208,166 168,000Liabilities from defined contribution schemes – 706Liability in respect of long service leave 588 700Liability for other non-current deferred compensation 1,667 –

210,421 169,406CurrentLiability for current deferred compensation 10,175 10,068

Net liabilities 220,596 179,474

Net liabilitiesReflected in the consolidated statement of financial position as follows:Employee benefits assets (included within non-current receivables (refer to note 18)) (262) (372)Employee benefits liabilities: Non-current 210,683 169,778Employee benefits liabilities: Current 10,175 10,068

220,596 179,474


26 Pension and post-employment benefits continuedThe defined benefit pension schemes net liabilities of USD 208,166 thousand (2013: USD 168,000 thousand) is in respect of the total Group schemes shown on page 102.

The current portion of employee benefits liabilities includes a liability of USD 7,877 thousand (2013: USD 8,400 thousand) in respect of annual leave, USD 829 thousand (2013: USD 1,200 thousand) in respect of long service leave, and USD 1,469 thousand (2013: USD 468 thousand) in respect of sick leave and other miscellaneous employee benefit items.

An expense of USD 31,952 thousand (2013: USD 30,354 thousand) has been recognised in the consolidated statement of profit or loss for the long term employee benefit schemes. USD 7,600 thousand (2013: USD 7,200 thousand) in respect of defined benefit schemes, USD 12,300 thousand (2013: USD 9,700 thousand) in respect of defined contribution schemes and USD 12,052 thousand (2013: USD 13,454 thousand) in respect of other employee benefits.

A net finance cost of USD 6,756 thousand (2013: USD 8,100 thousand) in respect of defined benefit funds has been recognised in the consolidated statement of profit or loss.

The re-measurements of the net defined benefit liability gross of tax recognised in the consolidated statement of other comprehensive income is as follows:

2014USD’000

2013USD’000

Actuarial (gain)/loss recognised in the year 202,472 (39,280)Return on plan assets (lesser)/greater than the discount rate (171,000) (4,800)Change in share in multi-employer scheme 29,745 –Movement in minimum funding liability 8,600 5,200

69,817 (38,880)

Actuarial valuations and assumptionsThe latest valuations of the defined benefit schemes have been updated to 31 December 2014 by qualified independent actuaries. The principal assumptions are included in the table below.

The assumptions used by the actuaries are the best estimates chosen from a range of possible actuarial assumptions, which, due to the timescale covered, may not necessarily be borne out in practice.

P&O UK scheme

2014

MNOPF scheme

2014

Other schemes

2014

Discount rates 3.60% 3.60% 3.70%Discount rates bulk annuity asset 3.35% – –Expected rates of salary increases 2.50% – 3.20%Pension increases: deferment 2.80% 2.15% 3.00%

payment 2.80% 3.05% 3.00%Inflation 3.15% 3.15% 3.20%

P&O UK scheme

2013

MNOPF scheme

2013

Other schemes

2013

Discount rates 4.35% 4.35% 4.50%Discount rates bulk annuity asset 4.20% – –Expected rates of salary increases 2.50% – 1.90%Pension increases: deferment 3.00% 2.60% 3.24%

payment 3.00% 3.45% 3.24%Inflation 3.60% 3.60% 3.60%

From 1 December 2011, changes have been made to the benefits provided by the P&O UK scheme. These include a restriction to pay increases equal to the lower of Retail Price Index and 2.5% in a Scheme Year. This restriction is reflected in the pay increase assumption above and there is no allowance for promotional increases.

The assumptions for pensioner longevity under both the P&O UK scheme and the MNOPF scheme are based on an analysis of pensioner death trends under the respective schemes over many years.




Strategic Report


26 Pension and post-employment benefits continuedFor illustration, the life expectancies for the two schemes at age 65 now and in the future are detailed in the table below.

Male Female

Age 65 now

Age 65 in20 years’

timeAge 65

now

Age 65 in20 years’

time

2014P&O UK scheme 23.3 26.3 25.6 28.7MNOPF scheme 22.6 25.4 26.2 29.2

2013P&O UK scheme 23.1 26.1 25.5 28.6MNOPF scheme 22.5 25.3 26.1 29.0

At 31 December 2014 the weighted average duration of the defined benefit obligation was 16 years (2013: 16.2 years).

Reasonably possible changes to one of the actuarial assumptions, holding other assumptions constant (in practice, this is unlikely to occur, and changes in some of the assumptions may be correlated), would have increased the net defined benefit liability as at 31 December 2014 by the amounts shown below:

USD’000

0.1% reduction in discount rate 21,8000.1% increase in inflation assumption and related assumptions 9,2000.25% p.a. increase in the long-term rate of mortality improvement 14,800

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous period. The schemes’ strategic asset allocations across the sectors of the main asset classes are:

P&O UK scheme

USD’000

MNOPF scheme

USD’000Other schemes

USD’000

Groupschemes fair

valueUSD’000

2014Equities 500,311 75,904 87,600 663,815Bonds 183,136 139,996 120,200 443,332Other 30,549 – 38,700 69,249Value of insured pensioner liability 1,273,496 – – 1,273,496

1,987,492 215,900 246,500 2,449,892

2013Equities 403,400 58,200 84,200 545,800Bonds 216,800 102,500 90,300 409,600Other 61,200 13,900 33,900 109,000Value of insured pensioner liability 1,313,900 – – 1,313,900

1,995,300 174,600 208,400 2,378,300

With the exception of the insured pensioner liability all material investments have quoted prices in active markets.


26 Pension and post-employment benefits continuedReconciliation of the opening and closing present value of defined benefit obligations and fair value of scheme assets for the period ended 31 December 2014:

P&O UKscheme

USD’000

MNOPFscheme

USD’000

OtherschemesUSD’000

Total groupschemesUSD’000

Present value of obligation at 1 January 2014 (2,068,600) (216,300) (255,900) (2,540,800)Employer’s interest cost (87,300) (9,200) (11,400) (107,900)Employer’s current service cost (600) – (3,700) (4,300)Contributions by scheme participants – – (1,200) (1,200)Effect of movement in exchange rates 125,500 14,800 18,659 158,959Benefits paid 109,800 9,400 11,400 130,600Experience gains/(loss) on scheme liabilities 13,900 300 (24,017) (9,817)Change in share in multi-employer scheme – (24,037) (53,508) (77,545)Actuarial gain/(loss) on scheme liabilities due to change in

demographic assumptions (2,900) – – (2,900)Actuarial (loss)/gains on scheme liabilities due to change in

financial assumptions (160,400) (21,263) (8,092) (189,755)

Present value of obligation at 31 December 2014 (2,070,600) (246,300) (327,758) (2,644,658)

P&O UKscheme

USD’000

MNOPFScheme

USD’000



Fair value of scheme assets at 1 January 2014 1,995,300 174,600 208,400 2,378,300Interest income on assets 84,300 7,600 9,400 101,300Return on plan assets (lesser)/greater than the discount rate 125,500 29,700 15,800 171,000Contributions by employer 14,200 8,500 8,900 31,600Contributions by scheme participants – – 1,200 1,200Effect of movement in exchange rates (120,008) (12,900) (14,500) (147,408)Benefits paid (109,800) (9,400) (11,400) (130,600)Change in share in multi-employer scheme – 18,300 29,500 47,800Administration costs incurred during the year (2,000) (500) (800) (3,300)

Fair value of scheme assets at 31 December 2014 1,987,492 215,900 246,500 2,449,892

Defined benefit schemes net liabilities (83,108) (30,400) (81,258) (194,766)Minimum funding liability – (13,400) – (13,400)

Net liability recognised in the consolidated statement of financial position at 31 December 2014 (83,108) (43,800) (81,258) (208,166)




Strategic Report


26 Pension and post-employment benefits continuedReconciliation of the opening and closing present value of defined benefit obligations and fair value of scheme assets for the period ended 31 December 2013:

P&O UKscheme

USD’000

MNOPFscheme

USD’000



Present value of obligation at 1 January 2013 (2,084,534) (217,000) (243,000) (2,544,534)Employer’s interest cost (81,300) (8,400) (10,300) (100,000)Employer’s current service cost (500) – (4,200) (4,700)Contributions by scheme participants – – (1,100) (1,100)Effect of movement in exchange rates (39,046) (4,300) (4,800) (48,146)Benefits paid 100,700 8,600 9,100 118,400Experience gains/(loss) on scheme liabilities 2,800 6,700 (3,300) 6,200Actuarial gain/(loss) on scheme liabilities due to change in

demographic assumptions 44,880 (3,900) – 40,980Actuarial (loss)/gains on scheme liabilities due to change in

financial assumptions (11,600) 2,000 1,700 (7,900)

Present value of obligation at 31 December 2013 (2,068,600) (216,300) (255,900) (2,540,800)

P&O UKscheme

USD’000

MNOPFscheme

USD’000



Fair value of scheme assets at 1 January 2013 1,967,400 167,500 188,000 2,322,900Interest income on assets 76,900 6,700 8,300 91,900Return on plan assets (lesser)/greater than the discount rate (300) (2,500) 7,600 4,800Contributions by employer 13,400 8,000 8,600 30,000Contributions by scheme participants – – 1,100 1,100Effect of movement in exchange rates 40,600 3,700 4,200 48,500Benefits paid (100,700) (8,600) (9,100) (118,400)Administration costs incurred during the year (2,000) (200) (300) (2,500)

Fair value of scheme assets at 31 December 2013 1,995,300 174,600 208,400 2,378,300

Defined benefit schemes net liabilities (73,300) (41,700) (47,500) (162,500)Minimum funding liability – (5,500) – (5,500)

Net liability recognised in the consolidated statement of financial position at 31 December 2013 (73,300) (47,200) (47,500) (168,000)

Where a surplus arises on a scheme in accordance with IAS19 and IFRIC14, the surplus is recognised as an asset only if it represents an unconditional economic benefit available to the Group in the future. Any surplus in excess of this benefit is not recognised in the statement of financial position. A minimum funding liability arises where the statutory funding requirements are such that future contributions in respect of past service will result in a future unrecognisable surplus.

The below table shows the movement in minimum funding liability on the MNOPF Scheme:

2014USD’000

2013USD’000

Minimum funding liability as on 1 January (5,500) –Employer’s interest cost (156) –Actuarial (loss)/gain during the year (8,600) (5,200)Effect of movement in exchange rates 856 (300)

Minimum funding liability as on 31 December (13,400) (5,500)

It is anticipated that the Group will make the following contributions to the pension schemes in 2015:

P&O UKscheme

USD’000

MNOPFscheme

USD’000



Pension scheme contributions 13,478 8,064 8,494 30,036


26 Pension and post-employment benefits continuedP&O UK SchemeFormal actuarial valuations of the P&O UK scheme are normally carried out triennially by qualified independent actuaries, the latest completed regular valuation report for the scheme being at 31 March 2013, using the projected unit credit method.

As a result of the valuation P&O committed to regular monthly deficit payments from April 2013 of USD 1,087 thousand until November 2021.

In December 2007, as part of a process developed with the Group to de-risk the pension scheme, the Trustee transferred USD 1,600,000 thousand of P&O UK Scheme assets to Paternoster (UK) Ltd, in exchange for a bulk annuity insurance policy to ensure that the assets (in the Company’s statement of financial position and in the Scheme) will always be equal to the current value of the liability of the pensions in payment at 30 June 2007, thus removing the funding risks for these liabilities.

Merchant Navy Officers’ Pension Fund (“MNOPF”)The MNOPF Scheme is an industry wide multi-employer defined benefit scheme in which officers employed by companies within the Group have participated.

The scheme was divided into two sections, the Old Section and the New Section, both of which are closed to new members.

The Old Section has been closed to benefit accrual since 1978. The Old Scheme completed a buy-out of all its members benefit obligations in July 2014, following which the Old Section was wound up. Therefore, no further liabilities were assigned to the Group in respect of the Old Scheme. The Group could not identify its share of the underlying assets and liabilities of the Old Section on a consistent and reasonable basis and therefore accounted for contributions and payments to the Old Section under IAS19 as if it were a defined contribution scheme until the scheme was wound up during the year.

The most recent formal actuarial valuation of the New Section was carried out as at 31 March 2012.

Following the valuation the Trustee and Employers have agreed contributions, in addition to those arising from the 31 March 2003, 31 March 2006 and 31 March 2009 valuations, which will be paid to the Section by participating employers over the period to 30 September 2023. These contributions include an allowance for the impact of irrecoverable contributions in respect of companies no longer in existence or not able to pay their share. The Group’s aggregated outstanding contributions from these valuations are payable as follows: 2015 USD 7,925 thousand, 2016 to 2020 USD 7,059 thousand per annum and 2021 to 2023 USD 1,917 thousand per annum.

The Trustee set the payment terms for each participating employer in accordance with the Trustee’s Contribution Collection Policy which includes credit vetting.

The Group’s share of the net deficit of the New Section at 31 December 2014 is estimated at 5.70%.

Merchant Navy Ratings’ Pension Fund (“MNRPF”)The Merchant Navy Ratings’ Pension Fund (the “MNRPF Scheme”) is an industry wide multi-employer defined benefit pension scheme in which sea staff employed by companies within the Group have participated. The scheme has a significant funding deficit and has been closed to further benefit accrual.

The most recent formal actuarial valuation was carried out as at 31 March 2011.

Certain Group companies, which are no longer current employers in the MNRPF had settled their statutory debt obligation and were not considered to have any legal obligation with respect to the on-going deficit in the fund. However, following a legal challenge, by Stena Line Limited, the High Court decided that the Trustees could require all employers that had ever participated in the scheme to make contributions to fund the deficit. Although the Group appealed the decision, it was not overturned.

The Trustees notified these Group companies of their estimated share of the current deficit during December 2012 equating to 3.0%.The method of deficit allocation and the associated recovery plan has still to be approved by the court however based on this initial indication the Group has provided for this liability after an allowance for the impact of irrecoverable contributions in respect of companies no longer in existence or not able to pay their share. The net impact of USD 17,300 thousand was reflected as an actuarial movement in the consolidated statement of other comprehensive income in 2012.




Strategic Report


27 Interest bearing loans and borrowingsThis note provides information about the terms of the Group’s interest-bearing loans and borrowings, which are measured at amortised cost. Information about the Group’s exposure to interest rate, foreign currency and liquidity risk are described in note 30.

2014USD’000

2013USD’000

Non-current liabilitiesSecured bank loans 982,245 1,056,613Mortgage debenture stock 2,220 2,355Unsecured loan stock – 5,399Unsecured bank loans 589,695 455,544Unsecured bond issues 3,241,454 3,239,277Convertible bond* 752,271 –Unsecured loans 9,870 –Finance lease liabilities 25,903 17,502

5,603,658 4,776,690

Current liabilitiesSecured bank loans 227,697 202,209Unsecured bank loans 14,984 42,886Unsecured loans 1,200 3,867Finance lease liabilities 7,449 9,365

251,330 258,327

Total 5,854,988 5,035,017

* Refer note 27(b)


27 Interest bearing loans and borrowings continuedTerms and debt repayment scheduleTerms and conditions of outstanding loans were as follows:

Currency NotesNominal

interest rateYear of

maturityFace value

USD’000

2014Carryingamount

USD’000

Secured bank loansUSD Variable 2015–2020 360,563 360,563USD 3% 2019 3,046 3,046USD 5.65%–8% 2022 37,000 37,000EUR Variable 2023 2,726 2,726EUR Variable 2015–2031 80,347 80,347EUR 6.32% 2015 327 327PKR Variable 2019 65,002 65,002ZAR 9.5% 2017 292 292GBP Variable 2031 658,805 658,805GBP 7.5% 2017 1,834 1,834Unsecured bank loansSAR Variable 2017 11,151 11,151CAD Variable 2018 115,692 115,692INR Variable 2017–2019 46,800 46,800USD 4.14% 2024 8,166 8,166USD Variable 2018–2021 422,870 422,870Mortgage debenture stockGBP 3.5% Undated 2,220 2,220Unsecured loans EUR 2.5%–4% Indefinite

duration9,870 9,870

USD 7.5% Payable ondemand

1,200 1,200

Unsecured bondUSD 7.875% 2027 8,000 7,943Unsecured sukuk bondsUSD (a) * 2017 1,500,000 1,494,487Unsecured MTNsUSD (a) 6.85% 2037 1,750,000 1,739,024Unsecured convertible bondUSD (b) 1.75% 2024 1,000,000 752,271Finance lease liabilities in various currencies 2.62%–13.58% 2015–2054 33,352 33,352

6,119,263 5,854,988

* The profit rate on this Islamic Bond is 6.25%.




Strategic Report


27 Interest bearing loans and borrowings continuedTerms and debt repayment schedule Terms and conditions of outstanding loans were as follows:

Currency NotesNominal

interest rateYear of

maturityFace valueUSD’000

2013Carryingamount

USD’000

Secured bank loansUSD Variable 2014–2020 476,012 476,012USD 3% to 8% 2019–2022 42,786 42,786EUR Variable 2017–2023 88,117 88,117PKR Variable 2019 68,976 68,976ZAR 9.5% 2017 496 496GBP Variable 2031 578,793 578,793GBP 8.5% 2017 3,642 3,642

Unsecured bank loansSAR Variable 2017 15,178 15,178CAD Variable 2018 135,224 135,224INR Variable 2014–2019 64,136 64,136USD Variable 2018 257,209 257,209USD 4.14% 2024 26,683 26,683EUR Variable Payable on

demand2,667 2,667

USD 8% Payable ondemand

1,200 1,200

Mortgage debenture stockGBP 3.5% Undated 2,355 2,355Unsecured loan stockGBP 7.5% Undated 5,399 5,399Unsecured bondUSD 7.88% 2027 8,000 7,940Unsecured sukuk bondsUSD (a) * 2017 1,500,000 1,492,513Unsecured MTNsUSD (a) 6.85% 2037 1,750,000 1,738,824Finance lease liabilities in various currencies 1.13%–10.43% 2014–2054 26,867 26,867

5,053,740 5,035,017

* The profit rate on this Islamic Bond is 6.25%.

(a) The Group has issued conventional bond of USD 1,750,000 thousand as Medium Term Note and a Sukuk (Islamic Bond) of USD 1,500,000 thousand. The Medium Term Note and Sukuk are currently listed on Nasdaq Dubai and the London Stock Exchange (LSE).

(b) On 19 June 2014, the Group issued 10 year USD 1 billion unsecured convertible bonds convertible into 36.85 million ordinary shares of DP World Limited. These bonds are currently listed on the Frankfurt Stock Exchange with a coupon rate of 1.75% per annum. These bonds include investor put option which can be exercised at par in June 2018 (Year 4) and in June 2021 (Year 7). There is also an issuer call option which can be exercised on or July 2017 onwards (Year 3), subject to a 130% trigger on the conversion price of USD 27.14.

Certain property, plant and equipment and port concession rights are pledged against the facilities obtained from the banks (refer to note 13 and note 14). The deposits under lien amounting to USD 60,294 thousand (2013: USD 52,435 thousand) are placed to collateralise some of the borrowings of the Company’s subsidiaries (refer to note 19).

At 31 December 2014, the undrawn committed borrowing facilities of USD 3,627,235 thousand (2013: USD 1,506,129 thousand) were available to the Group, in respect of which all conditions precedent had been met.


27 Interest bearing loans and borrowings continuedFinance lease liabilities

The Group classifies certain property, plant and equipment as finance leases where it retains all risks and rewards incidental to the ownership. The net carrying values of these assets are disclosed in note 13.

Future minimum lease payments under finance leases together with the present value of the net minimum lease payments are as follows:

Future minimum

lease payments

USD’000Interest

USD’000

2014Present value of

minimum lease

paymentsUSD’000

Less than one year 9,087 (2,064) 7,023Between one and five years 26,793 (3,955) 22,838More than five years 8,836 (5,345) 3,491

At 31 December 44,716 (11,364) 33,352

Future minimum

lease paymentsUSD’000

InterestUSD’000

2013Presentvalue of

minimum lease

paymentsUSD’000

Less than one year 11,258 (1,894) 9,364Between one and five years 17,929 (4,120) 13,809More than five years 9,770 (6,076) 3,694

At 31 December 38,957 (12,090) 26,867

The finance leases do not contain any escalation clauses and do not provide for contingent rents.

28 Accounts payable and accruals

Non-currentUSD’000

CurrentUSD’000

2014Total

USD’000

Trade payables – 126,848 126,848Other payables and accruals 205,108 890,879 1,095,987Provisions* 1,028 92,653 93,681Fair value of derivative financial instruments 332,078 11,844 343,922Amounts due to related parties (refer to note 29) – 7,797 7,797

As at 31 December 538,214 1,130,021 1,668,235

Non-currentUSD’000

CurrentUSD’000

2013Total

USD’000

Trade payables – 146,359 146,359Other payables and accruals 256,027 796,671 1,052,698Provisions* 1,018 54,411 55,429Fair value of derivative financial instruments 24,201 28,170 52,371Amounts due to related parties (refer to note 29) – 8,173 8,173

As at 31 December 281,246 1,033,784 1,315,030

* During the current year, additional provision of USD 57,817 thousand was made (2013: USD 41,940 thousand) and an amount of USD 19,565 thousand was utilised (2013: USD 28,010 thousand).




Strategic Report


29 Related party transactionsFor the purpose of these consolidated financial statements, parties are considered to be related to the Group, if the Group has the ability, directly or indirectly, to control the party or exercise significant influence over it in making financial and operating decisions, or vice versa, or where the Group and the party are subject to common control or significant influence i.e. part of the same Parent Group.

Related parties represent associated companies, shareholders, directors and key management personnel of the Group, the Parent Company, Ultimate Parent Company (Dubai World Corporation) and entities jointly controlled or significantly influenced by such parties. Pricing policies and terms of these transactions are approved by the Group’s management. The terms and conditions of the related party transactions were made on an arm’s length basis.

The Ultimate Parent Company operates a Shared Services Unit (“SSU”) which recharges the proportionate costs of services provided to the Group. SSU also processes the payroll for the Company and certain subsidiaries and recharges the respective payroll costs.

Transactions with related parties included in the consolidated financial statements are as follows:

Equity-accounted investeesUSD’000

Other related parties

USD’000

2014Total

USD’000

Expenses charged:Concession fee – 48,169 48,169Shared services – 212 212Other services – 24,838 24,838Revenue earned:Management fee income 21,437 – 21,437Interest Income 18,463 – 18,463Liabilities settled and recharged: – 5,179 5,179

Equity- accounted

investees

Other related parties

USD’000

2013Total

USD’000

Expenses charged:Concession fee – 48,169 48,169Shared services – – –Other services – 30,574 30,574Revenue earned:Management fee income 19,946 – 19,946Interest Income 19,076 – 19,076Liabilities settled and recharged: – 2,877 2,877

Balances with related parties included in the consolidated statement of financial position are as follows:

Due from related parties Due to related parties

2014USD’000

2013USD’000

2014USD’000

2013USD’000

Ultimate Parent Company 2,188 2,114 188 377Parent Company 54,426 54,304 – –Equity-accounted investees 148,797 145,755 303 57Other related parties 19,221 24,382 7,306 7,739

224,632 226,555 7,797 8,173

Guarantees issued on behalf of equity-accounted investees amount to USD 27,668 thousand (2013: USD 81,401 thousand).

Compensation of key management personnelThe remuneration of directors and other key members of the management during the year were as follows:

2014USD’000

2013USD’000

Short-term benefits and bonus 10,318 9,543Post-retirement benefits 677 702

10,995 10,245


29 Related party transactions continuedBusiness combinations under common controlIn the current year, the Group has acquired Dubai Trade FZE and World Security FZE. These business combinations were accounted under common control acquisitions (also refer to note 34).

30 Financial instrumentsThe Group has exposure to the following risks arising from financial instruments:

(a) Credit risk(i) Exposure to credit riskThe carrying amount of financial assets represents the maximum credit exposure which was as follows at 31 December:

2014USD’000

2013USD’000

Available-for-sale financial assets 60,811 52,716Held-to-maturity investments 9,204 10,207Derivative assets 129 1,685Loans and receivables 791,617 669,405Bank balances and cash 3,723,073 2,572,470

4,584,834 3,306,483

The maximum exposure to credit risk for trade receivables (net) at the reporting date by operating segments are as follows:

2014USD’000

2013USD’000

Asia Pacific and Indian subcontinent 13,895 21,288Australia and Americas 40,903 41,323Middle East, Europe and Africa 246,875 207,463

301,673 270,074

The ageing of trade receivables (net) at the reporting date was:

2014USD’000

2013USD’000

Neither past due nor impaired on the reporting date: 187,700 168,120Past due on the reporting datePast due 0–30 days 90,580 81,384Past due 31–60 days 19,775 16,911Past due 61–90 days 2,519 2,456Past due > 90 days 1,099 1,203

301,673 270,074

The Group believes that the unimpaired amounts that are past due by more than 30 days are still collectible, based on the historic collection trends.

Movement in the allowance for impairment in respect of trade receivables during the year was:

2014USD’000

2013USD’000

As at 1 January 47,299 38,920Provision recognised during the year (6,175) 8,379Provision reversed during the year 3,246 –

As at 31 December 44,370 47,299

Based on historic default rates, the Group believes that, apart from the above, no impairment allowance is necessary in respect of trade receivables not past due or past due.

Trade receivables with the top ten customers represent 58% (2013: 47%) of the trade receivables.

Notes to consolidated financial statements continued



Strategic Report


30 Financial instruments continued(b) Liquidity risk2014The following are the undiscounted contractual maturities of financial liabilities, including estimated interest payments and the impact of netting agreements.

Carryingamount

USD’000

Contractualcash flows

USD’000

Less than1 year

USD’000

1 – 2years

USD’000

2 – 5years

USD’000

More than5 years

USD’000

Non derivative financial liabilitiesSecured bank loans 1,209,942 (1,513,949) (186,328) (179,947) (448,348) (699,326)Unsecured bond issues 3,241,454 (6,198,631) (214,255) (214,255) (1,908,911) (3,861,210)Convertible Bond 752,271 (1,166,979) (17,500) (17,500) (52,500) (1,079,479)Mortgage debenture stocks 2,220 (4,162) (78) (78) (233) (3,773)Unsecured loans and loan stock 11,070 (11,537) (11,537) – – –Finance lease liabilities 33,352 (44,716) (9,087) (16,927) (9,866) (8,836)Unsecured other bank loans 604,679 (733,867) (61,523) (85,216) (454,663) (132,465)Trade and other payables 1,194,827 (1,197,812) (1,003,342) (124,900) (49,777) (19,793)Financial guarantees and letters of credit* – (278,044) – – – –

Derivative financial liabilitiesInterest rate swaps used for hedging 109,912 (150,268) (37,201) (28,635) (61,630) (22,802)Embedded derivative option 233,232 – – – – –Forward exchange contracts used for hedging 778 (3,129) (2,116) (1,013) – –

Total 7,393,737 (11,303,094) (1,542,967) (668,471) (2,985,928) (5,827,684)

* Refer to note 33 for further details.

2014The following table indicates the periods in which the undiscounted cash flows associated with derivatives that are expected to occur. The timing of these cash flows are not materially different from the impact on the consolidated statement of profit or loss.

Carryingamount

USD’000

Contractual cash flows

USD’000

Less than 1year

USD’000

1 – 2years

USD’000

2 – 5 years

USD’000

More than 5years

USD’000

Interest rate swapsAssets 129 129 129 – – –Liabilities (109,912) (150,268) (37,201) (28,635) (61,630) (22,802)Forward exchange contracts used for hedgeLiabilities (778) (3,129) (2,116) (1,013) – –Embeddded derivative optionLiabilities (233,232) – – – – –

Total (343,793) (153,268) (39,188) (29,648) (61,630) (22,802)



30 Financial instruments continued2013The following are the undiscounted contractual maturities of financial liabilities, including estimated interest payments and includes the impact of netting agreements.

Carryingamount

USD’000

Contractualcash flows

USD’000

Less than1 year

USD’000

1 – 2years

USD’000

2 – 5years

USD’000

More than5 years

USD’000

Non derivative financial liabilitiesSecured bank loans 1,258,822 (1,679,351) (197,180) (207,770) (490,221) (784,180)Unsecured bond issues 3,239,277 (6,412,886) (214,255) (214,255) (2,002,661) (3,981,715)Mortgage debenture stocks 2,355 (4,496) (82) (82) (247) (4,085)Unsecured loans and loan stock 9,266 (19,795) (4,272) (405) (1,215) (13,903)Finance lease liabilities 26,867 (38,957) (11,258) (9,580) (8,349) (9,770)Unsecured other bank loans 498,430 (556,793) (80,985) (56,606) (395,097) (24,105)Trade and other payables 1,200,037 (1,223,934) (944,011) (110,067) (112,038) (57,818)Bank overdraft 1,407 (1,407) (1,407) – – –Financial guarantees and letters of credit* – (316,834) – – – –Derivative financial liabilitiesInterest rate swaps 51,953 (140,288) (36,730) (33,322) (59,567) (10,669)Forward exchange contracts 418 (534) (381) (131) (22) –

Total 6,288,832 (10,395,275) (1,490,561) (632,218) (3,069,417) (4,886,245)

* Refer to note 33 for further details.

2013The following table indicates the periods in which the undiscounted cash flows associated with derivatives that are expected to occur. The timing of these cash flows are not materially different from the impact on the consolidated statement of profit or loss.

Carryingamount

USD’000

Expectedcash flows

USD’000

Less than 1year

USD’000

1 – 2years

USD’000

2 – 5 years

USD’000

More than 5years

USD’000

Interest rate swapsAssets 1,685 (349) (129) (95) (125) –Liabilities (51,953) (140,288) (36,730) (33,322) (59,567) (10,669)Forward exchange contracts Liabilities (418) (534) (381) (131) (22) –

Total (50,686) (141,171) (37,240) (33,548) (59,714) (10,669)

Market risk(i) Currency riskExposure to currency riskThe Group’s financial instruments in different currencies were as follows:

USD*USD’000

GBPUSD’000

EURUSD’000

AUDUSD’000

INRUSD’000

CADUSD’000

OthersUSD’000

2014Total

USD’000

Cash and cash equivalents 3,190,374 93,729 86,415 63,249 94,962 30,206 164,138 3,723,073Trade receivables 182,570 34,099 37,721 6,810 8,503 16,991 14,979 301,673Secured bank loans and

debenture stock (400,609) (662,858) (83,400) – – – (65,295) (1,212,162)Unsecured bank loans and

loan stock (432,237) – (9,870) – (46,799) (115,692) (11,151) (615,749)Bank overdraft – – – – – – – –Trade payables (33,640) (18,104) (24,016) (2,987) (25,363) (1,705) (21,033) (126,848)

Net consolidated statement of financial position exposures 2,506,458 (553,134) 6,850 67,072 31,303 (70,200) 81,638 2,069,987

* The functional currency of the Company is UAE Dirham. UAE Dirham is currently pegged to USD and therefore the Group has no foreign currency risk on these balances.



Strategic Report


30 Financial instruments continuedThe Group’s financial instruments in different currencies were as follows:

USD*USD’000

GBPUSD’000

EURUSD’000

AUDUSD’000

INRUSD’000

CADUSD’000

OthersUSD’000

2013 Total

USD’000

Cash and cash equivalents 2,260,973 79,415 111,145 21,262 1,856 26,600 71,219 2,572,470Trade receivables 160,500 26,027 31,167 8,400 15,730 13,100 15,150 270,074Secured bank loans and

mortgage debenture stock (518,797) (584,789) (88,117) – – – (69,474) (1,261,177)Unsecured bank loans and

loan stock (285,092) (5,399) (2,667) – (64,136) (135,224) (15,178) (507,696)Bank overdraft – (1,407) – – – – – (1,407)Trade payables (51,151) (44,160) (22,377) (2,300) (19,601) (1,700) (5,070) (146,359)

Net consolidated statement of financial position exposures 1,566,433 (530,313) 29,151 27,362 (66,151) (97,224) (3,353) 925,905

* The functional currency of the Company is UAE Dirham. UAE Dirham is currently pegged to USD and therefore the Group has no foreign currency risk on these balances.

The following exchange rates were applied during the year:

Average rate during

Reporting date spot rate

Significant foreign currencies 2014 2013 2014 2013

GBP 0.607 0.640 0.642 0.605EUR 0.754 0.753 0.824 0.726AUD 1.110 1.036 1.222 1.119INR 61.021 58.510 63.035 61.922CAD 1.104 1.030 1.160 1.064

(ii) Sensitivity analysisA 10 percent strengthening of the USD against the following currencies at 31 December would have increased/(decreased) the consolidated statement of profit or loss and the consolidated statement of other comprehensive income by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant. Furthermore, as each entity in the Group determines its own functional currency, the effect of translating financial assets and liabilities of the respective entity would mainly impact the consolidated statement of other comprehensive income.

Consolidated statement of profit or loss

Consolidated statement of other comprehensive

income

USD’0002014

USD’0002013

USD’0002014

USD’0002013

GBP 3,276 449 (61,459) (58,924)EUR 466 431 761 3,239AUD (3) (7) 7,452 3,040INR 291 967 3,478 (7,350)CAD 549 598 (7,800) (10,803)

A 10 percent weakening of the USD against the above currencies at 31 December would have had the equal but opposite effect on the above currencies to the amounts shown above, on the basis that all other variables remain constant.



30 Financial instruments continued(ii) Interest rate risk(i) ProfileAt the reporting date the interest rate profile of the Group’s interest bearing financial instruments was:

Carrying amount

2014USD’000

2013USD’000

Fixed rate instrumentsFinancial assets 9,204 10,207Financial liabilities (loans and borrowings) (4,091,032) (3,348,705)Interest rate swaps hedging floating rate debt (1,336,405) (1,170,471)

(5,418,233) (4,508,969)

Variable rate instrumentsFinancial assets (short term deposits) 3,281,606 2,151,205Financial liabilities (loans and borrowings) (1,763,956) (1,687,719)Interest rate swaps 1,336,405 1,170,471

2,854,055 1,633,957

(ii) Cash flow sensitivity analysis for variable rate instrumentsA change of 100 basis points (“bp”) in interest rates at the reporting date would have increased/(decreased) consolidated statement of profit or loss and the consolidated statement of other comprehensive income by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency rates, remain constant.

Consolidated statement of profit or loss

Consolidated statement of other comprehensive

income

100 bpincreaseUSD’000

100 bpdecreaseUSD’000

100 bpincreaseUSD’000

100 bpdecreaseUSD’000

2014Variable rate instruments 28,541 (28,541) – –Interest rate swaps 1,670 (1,670) 13,364 (13,364)

Cash flow sensitivity (net) 30,211 (30,211) 13,364 (13,364)

2013Variable rate instruments 16,340 (16,340) – –Interest rate swaps 1,745 (1,745) 13,449 (13,449)

Cash flow sensitivity (net) 18,085 (18,085) 13,449 (13,449)



Strategic Report


30 Financial instruments continued(iii) Equity price riskThe Group is not subject to significant exposure for equity price risk.

Fair valueFair value versus carrying amountThe fair values of financial assets and liabilities, together with the carrying amounts shown in the consolidated statement of financial position are as follows:

2014 2013

Carryingamount

USD’000

Fairvalue

USD’000

Carryingamount

USD’000

Fairvalue

USD’000

Assets carried at fair valueAvailable-for-sale financial assets 60,811 60,811 52,716 52,716Derivative assets 129 129 1,685 1,685

60,940 60,940 54,401 54,401

Assets carried at amortised costHeld to maturity investments 9,204 9,126 10,207 10,110Loans and receivables 791,617 791,617 669,405 669,405Cash and cash equivalents 3,723,073 3,723,073 2,572,470 2,572,470

4,523,894 4,523,816 3,252,082 3,251,985

Liabilities carried at fair valueInterest rate swaps used for hedging (109,912) (109,912) (51,953) (51,953)Forward foreign currency contracts (778) (778) (418) (418)Embedded derivative option (233,232) (262,168) – –

(343,922) (372,858) (52,371) (52,371)

Liabilities carried at amortised costSecured bank loans* (1,209,942) (1,209,942) (1,258,822) (1,258,822)Mortgage debenture stocks (2,220) (1,295) (2,355) (2,458)Unsecured bond issues (3,241,454) (3,600,996) (3,239,277) (3,378,952)Convertible bond (752,271) (799,749) – –Unsecured loan stock and other loans (11,070) (11,070) (9,266) (9,266)Finance lease liabilities (33,352) (33,352) (26,867) (26,867)Unsecured bank and other loans* (604,679) (604,679) (498,430) (498,430)Trade and other payables (1,194,827) (1,194,827) (1,200,037) (1,200,037)Bank overdraft – – (1,407) (1,407)

(7,049,815) (7,455,910) (6,236,461) (6,376,239)

* A significant portion of these loans carry a variable rate of interest and hence, the fair values reported approximate carrying values.

Fair value hierarchyThe table below analyses assets and liabilities that require or permits fair value measurements or disclosure about fair value measurements. It doesn’t include fair value information for financial assets and liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value:

• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities• Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either

directly (i.e. as prices) or indirectly (i.e. derived from prices)• Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs)



30 Financial instruments continued

Level 1USD’000

Level 2USD’000

Level 3USD’000

31 December 2014Available-for-sale financial assets 8,927 51,884 –Debt securities held to maturity – 9,126 –Derivative financial assets – 129 –Derivative financial liabilities – (110,690) –Embedded derivative in convertible bond* – (262,168) –Mortgage debenture stocks – (1,295) –Unsecured bond issues (3,600,996) – –Convertible bond – (799,749) –

(3,592,069) (1,112,763) –

31 December 2013Available-for-sale financial assets – 52,716 –Debt securities held to maturity – 10,110 –Derivative financial assets – 1,685 –Derivative financial liabilities – (52,371) –Mortgage debenture stocks – (2,458) –Unsecured bond issues (3,378,952) – –

(3,378,952) 9,682 –

The fair values disclosed above is computed in line with the fair valuation accounting policy (also refer to note 5).

* The fair value of the embedded derivative liability of convertible bond has been calculated using a valuation model with market assumptions.

31 Operating leasesOperating lease commitments – Group as a lesseeFuture minimum rentals payable under non-cancellable operating leases as at 31 December are as follows:

2014 USD’000

2013 USD’000

Within one year 334,730 290,998Between one to five years 1,192,415 1,115,598Between five to ten years 1,351,756 1,254,322Between ten to twenty years 1,730,306 1,499,439Between twenty to thirty years 1,028,329 981,565Between thirty to fifty years 1,162,777 1,198,978Between fifty to seventy years 914,908 923,174More than seventy years 937,781 983,526

8,653,002 8,247,600

The above operating leases (Group as a lessee) mainly consist of terminal operating leases arising out of concession arrangements which are long term in nature. In addition, this also includes leases of plant, equipment and vehicles. In respect of terminal operating leases, contingent rent is payable based on revenues/ profits earned in the future period. The majority of leases contain renewable options for additional lease periods at rental rates based on negotiations or prevailing market rates.

Operating lease commitments – Group as a lessorFuture minimum rentals receivable under non-cancellable operating leases as at 31 December are as follows:

2014 USD’000

2013 USD’000

Within one year 23,075 25,567Between one to five years 49,081 68,817More than five years 19,596 23,536

91,752 117,920

The above operating leases (Group as a lessor) mainly consist of rental of property, plant and equipment leased out by the Group. The leases contain renewal options for additional lease periods and at rental rates based on negotiations or prevailing market rates.



Strategic Report


32 Capital commitments

2014 USD’000

2013 USD’000

Estimated capital expenditure contracted for as at 31 December 698,258 788,972

33 Contingencies(a) The Group has the following contingent liabilities at 31 December:

2014 USD’000

2013 USD’000

Payment guarantees 46,067 21,651Performance guarantees 194,234 212,192Letters of credit 10,075 1,590Guarantees issued on behalf of equity-accounted investees (refer to note 29) 27,668 81,401

The bank guarantees and letters of credit are arising in the ordinary course of business from which it is anticipated that no material liabilities will arise.

(b) The Group through its 100% owned subsidiary Mundra International Container Terminal Private Limited (“MICT”) has developed and is operating the container terminal at the Mundra port in Gujarat.

In 2006, MICT received a show cause notice from Gujarat Maritime Board (“GMB”) requiring MICT to demonstrate that

the undertaking given by its parent company, P&O Ports (Mundra) Private Limited, with regard to its shareholding in MICT has not been breached in view of P&O Ports being taken over by the Group (DP World).

Based on the strong merits of the case and on the advice received from legal counsel, management believes that the above litigation is unsubstantiated, and in management’s view, it will have no impact on the Group’s ability to continue to operate the port.

(c) Chennai Port Trust (“CPT”) had raised a demand for an amount of USD 18,962 thousand (2013: USD 19,303 thousand) from Chennai Container Terminal Limited (“CCTL”), a subsidiary of the Company, on the basis that CCTL had failed to fulfil its obligations in respect of non-transhipment containers for a period of four consecutive years from 1 December 2003. CCTL had subsequently paid USD 10,131 thousand (2013: USD 10,313 thousand) under dispute in 2008. CCTL had initiated arbitration proceedings against CPT in this regard. The arbitral tribunal passed its award on November 26, 2012 ruling in favour of CCTL. However, CPT appealed against this order, which was upheld by Madras High Court on 8 January 2014 and accordingly a provision has been recognised against the above receivable. CCTL lodged an appeal before the Division Bench of Madras High Court along with a stay petition on 31 January 2014. The Appeal was taken up for hearing and admitted on 3 February 2014. CPT also made a statement before the Court that no further action would be taken by CPT against CCTL. The Court has admitted the matter and is pending for final hearing and disposal before the Division Bench of Madras High Court. The Group is confident that the case will be in favour of CCTL.

(d) On 8 July 2014, the Group was notified that the Office of the Inspector General of the Republic of Djibouti is investigating the awarding of the Doraleh Container Terminal (DCT) concession and had filed for arbitration before the London Court of International Arbitration. The Group rejects all the allegations made and will vigorously defend its position during the arbitration procedure. In order to maintain the operational status quo and to mitigate disruption at the terminal, the Group will continue to manage DCT in accordance with the terms of its concession agreement pending the determination of the arbitral tribunal.

34 Business combinations(a) In June 2014, the Group acquired 100% interest in Dubai Trade FZE for a total consideration of USD 9,500 thousand

(cash acquired on acquisition USD 7,498 thousand) from its Parent Company Port & Free Zone World FZE (also refer to note 29).

(b) In September 2014, DPW Group acquired 57% stake in Remolcadores de Puerto y Altura, S.A., a Spanish operator of offshore support vessels for the energy industry for USD 12,000 thousand (cash acquired on acquisition USD 445 thousand).

(c) In October 2014, DPW Group acquired 100% stake in World Security FZE, a provider of security services for a total consideration of USD 24,045 thousand (cash acquired on acquisition USD 5,571 thousand) from Istithmar World Ventures LLC (an entity owned by the ultimate Parent Company) (also refer to note 29).


35 Significant group entitiesThe extent of the Group’s ownership in its various subsidiaries, associates and joint ventures and their principal activities are as follows:

(a) Significant holding companies

Legal NameOwnership

interest Country of incorporationPrincipal activities

DP World FZE 100% United Arab Emirates Management and operation of seaports,airports and leasing of port equipment

Thunder FZE 100% United Arab Emirates Holding companyPeninsular and Oriental Steam Navigation

Company Limited100% United Kingdom Management and operation of seaports

DP World Australia (POSN) Pty Ltd 100% Australia Holding companyDPI Terminals Asia Holding Limited 100% British Virgin Islands Holding companyDPI Terminals (BVI) Limited 100% British Virgin Islands Holding companyDP World Ports Cooperatieve U.A. 100% Netherlands Holding companyDP World Maritime Cooperatieve U.A. 100% Netherlands Holding companyDPI Terminals Holdings C.V. 100% Netherlands Holding company

(b) Significant subsidiaries – Ports

Legal NameOwnership

interest Country of incorporation Principal activities

Terminales Rio de la Plata SA 55.62% Argentina Container terminal operationsDP World Antwerp N.V. 100% Belgium Multi-purpose terminal operations and

ancillary container servicesDP World (Canada) Inc. 100% Canada Container terminal operations

and stevedoringEgyptian Container Handling Company (ECHCO)

–S.A.E.100% Egypt Container terminal operations

DP World Germersheim, GmbH and Co. KG 100% Germany Container terminal operationsChennai Container Terminal Private Limited 100% India Container terminal operationsIndia Gateway Terminal Pvt. Ltd 81.63% India Container terminal operationsMundra International Container Terminal

Private Limited100% India Container terminal operations

Nhava Sheva International Container Terminal Private Limited

100% India Container terminal operations

DP World Middle East Limited 100% Kingdom of Saudi Arabia Container terminal operationsDP World Maputo SA 60% Mozambique Container terminal operationsQasim International Container Terminal

Pakistan Ltd75% Pakistan Container terminal operations

DP World Callao S.R.L. 100% Peru Container terminal operationsDoraleh Container Terminal SARL 33.33%* Republic of Djibouti Container terminal operationsIntegra Port Services N.V. 60% Republic of Suriname Container terminal operationsSuriname Port Services N.V. 60% Republic of Suriname General cargo terminal operationsConstanta South Container Terminal SRL 75% Romania Container terminal operationsDP World Dakar S.A. 90% Senegal Container terminal operationsDP World Tarragona S.A. 60% Spain Container terminal operationsDP World UAE Region FZE 100% United Arab Emirates Container terminal operationsDP World Fujairah FZE 100% United Arab Emirates Container terminal operationsSouthampton Container Terminals Limited 51% United Kingdom Container terminal operationsLondon Gateway Port Limited 100% United Kingdom Container terminal operationsSaigon Premier Container Terminal 80% Vietnam Container terminal operations




Strategic Report


35 Significant group entities continued(c) Associates and joint ventures – Ports

Legal NameOwnership


Djazair Port World Spa 50% Algeria Container terminal operationsDP World Djen Djen Spa 50% Algeria Container terminal operationsDP World Australia (Holding) Pty Ltd 25% Australia Container terminal operationsAntwerp Gateway N.V 42.50% Belgium Container terminal operationsEmpresa Brasileira de Terminais Portuarious S.A. 33.33% Brazil Container terminal operationsCaucedo Investment Inc. 50% British Virgin Islands Container terminal operationsEurofos S.A.R.L 50% France Container terminal operationsGenerale de Manutention Portuaire S.A 50% France Container terminal operationsGoodman DP World Hong Kong Limited 25% Hong Kong Container terminal operations and

warehouse operationsVishaka Container Terminals Private Limited 26% India Container terminal operationsPT Terminal Petikemas Surabaya 49% Indonesia Container terminal operationsPusan Newport Co. Ltd 42.10% Korea Container terminal operationsQingdao Qianwan Container Terminal Co. Ltd 29% People’s Republic of China Container terminal operationsTianjin Orient Container Terminals Co Ltd 24.50% People’s Republic of China Container terminal operationsYantai International Container Terminals Ltd 12.50% People’s Republic of China Container terminal operationsAsian Terminals Inc 50.54%** Philippines Container terminal operationsLaem Chabang International Terminal Co. Ltd 34.50% Thailand Container terminal operations

(d) Other non-port business

Legal NameOwnership


P&O Maritime Services Pty Ltd 100% Australia Maritime servicesContainer Rail Road Services Private Limited 100% India Container rail freight operationsEmpresa de Dragagem do Porto de Maputo, SA 25.50% Mozambique Dredging services Port Secure Djibouti 40% Republic of Djibouti Port security servicesDP World Cargo Services (Pty) Limited 70% South Africa Cargo servicesRemolcadores de Puerto y Altura, S.A. 57.01% Spain Maritime servicesDubai International Djibouti FZE 100% United Arab Emirates Port management and operationDubai Trade FZE 100% United Arab Emirates Trade facilitation through

integrated electronic servicesP&O Maritime FZE 100% United Arab Emirates Maritime servicesWorld Security FZE 100% United Arab Emirates Security services

(e) Ports under development

Legal NameOwnership

interest Country of incorporation Principal

Nhava Sheva (India) Gateway Terminal Private Limited

100% India Container terminal operations

Rotterdam World Gateway B.V. 30% Netherlands Container terminal operationsDP World Yarımca Liman Is letmeleri Anonim S irketi 100% Turkey Container terminal operations

* Although the Group only has a 33.33% effective ownership interest in Doraleh Container Terminal SARL, this entity is treated as a subsidiary, as the Group is able to govern the financial and operating policies of the company by virtue of an agreement with the other investor.

** Although the Group has more than 50% effective ownership interest in this entity, it is not treated as a subsidiary, but instead treated as a joint arrangement. The underlying joint venture agreement with the other shareholder does not provide significant control to the Group.

36 Subsequent eventOn 16 March 2015, the Group completed the acquisition of Economic Zones World FZE (“EZW”) (an entity owned by the ultimate Parent Company) for a total cash consideration of USD 2.6 billion (subject to certain adjustments).


Notes



Strategic Report


Notes


Notes

5th Floor, JAFZA 17 Jebel Ali Free Zone PO Box 17000 Dubai – U.A.E.

Tel: +971 4881 1110 Fax: +971 4881 1331

www.dpworld.com

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