PSA_AR2010

T he Orchestra Orchestra An ensemble of instrumentalists comprising string, brass, woodwind and percussion sections is a fitting metaphor for PSA; an organisation global and expanding, having diverse talents, bridging different nations and cultures, incorporating the best experience and expertise; all in all, whose whole is far greater than the sum of of its parts! parts! Every member member of PSA plays an important role, brings u nique value, and contributes to PSA’s success; much as each musician in an orchestra comes together to deliver deliver a beautiful musical performance.

T he Orchestra Orchestra An ensemble of instrumentalists comprising string, brass, woodwind and percussion sections is a fitting metaphor for PSA; an organisation global and expanding, having diverse talents, bridging different nations and cultures, incorporating the best experience and expertise; all in all, whose whole is far greater than the sum of of its parts! parts! Every member member of PSA plays an important role, brings u nique value, and contributes to PSA’s success; much as each musician in an orchestra comes together to deliver deliver a beautiful musical performance.

O ur M isisssion To be the port operator of choice in the world’ss gateway hubs, renowned for world’ best-in-class services and successful partnerships.

O ur Values Committed to Excellence We set new standards by continuously improving results and innovating in every aspect of our business. Dedicated to Customers We help our customers, external and internal, succeed by anticipating and meeting their needs.

Program Our Mission & Values

1

Focused on People We win as a team by respecting, nurturing and supporting one another.

Setting the Tempo Group Chairman’s Message Group CEO’s Message

4 6

Integrated Globally We build our strength globally by embracing diversity and optimising operations locally.

Keeping Our Rhythm Board of Directors Senior Management Council

10 12

Raising the Bar Global Footprint Group Financial Highlights

16 18

World Class Performances The Rhythm of Business

22

Round of Applause In Harmony Touching the Heartstrings The Ascending Fish! Fish! Motif

26 27 28

Financial Review

31

Corporate Directory

100

Setting the Tempo Using his baton, a conductor shapes the melodic direction of the musical piece. He unites his musicians to create harmonious melodies. Likewise, our Group Chairman’s vision and Group CEO’s business acumen guide PSA onwards towards greater crescendos of success.

4

Every Note Counts

Group Chairman’s

Message

“ PSA must therefore continue to remain very vigilant and focused so that we can be prepared for any challenges and seize any opportunities that come.” 2010 would surely be remembered as a year that saw exuberance and dark clouds in equal measure. The world economies were greeted with caution and uncertainty a s they entered year 2010, prayerfully hoping that the na scent recovery which started in the second half of 2009 would be sustainable. In the past year, economic recovery g athered pace leading to improved economic activities worldwide and stronger than expected recovery of global trade flows. According to the IMF, world trade was projected to expand by 4.8% from 2009 to 2010, which represents a remarkable surge, given the low base in 2009. However, the global economic recovery has been patchy. Economists now predict a two-speed recovery, slow in advanced countries and fast in emerging market countries. Indeed, significant economic woes continue to besiege the advanced Western economies. The United States, still beleaguered by its stubbornly high unemployment rate, has committed to a second stimulus package; however, the world monitors, with bated breath, whether this stimulus will indeed strengthen United States’ nascent economic recovery or just plunge it into bigger national debt. In Europe, the sovereign debt default in Greece and the continuing worry over the solvency of the PIIGS countries have forced many European governments to initiate austerity measures to contain national spending, in the process setting off social protests and unrest, and depressing consumption. There is no easy solution and Eurozone countries are expected to be bogged down by these problems for months or even years ahead. In Japan, the strong yen is crippling its exports and faltering its economic recovery. In 2010, China has supported the global economic initiatives by the implementation of its own stimulus package to encourage consumption by its citizenry. Whilst its stimulus package has resulted in the maintenance of a relatively high GDP growth, it has not as yet been able to meaningfully right the imbalance of global trade flows and to have a strong, positive knock-on effect on the rest of the world. For these to happen, it will take some time. Whilst we continue to witness better growth rates in Asian economies, a gradual slowdown may be inevitable given rapidly mounting inflationary pressures, especially in China.

PSA International Pte Ltd Annual Report 2010

The mixed world economic performance, however, belied the

opportunities for deserving students entering Inst itutes of

unexpectedly strong recovery in the shipping industry, not only in

Technical Education, Polytechnics and Universities.

volumes but also in freight rates. This is due in no small measure to the skilful management of shipping capacity by lines through

Besides other worthwhile projects, PSA’s Corporate Social

the postponement of new builds, the lay-up of excess capacity, the

Responsibility (CSR) work was extended to include the adoption

scrapping of old ships, and the slow steaming of deployed ships.

of NorthLight School, which aims to help students from

In all, Clarkson Research Services estimated that 2010 saw 140

underprivileged or troubled family backgrounds by preparing them

million TEUs shipped, a record volume surpassing the previous

for lifelong learning and employability. Besides cash donation, PSA

high of 137 million TEUs in 2008.

will provide industrial attachment opportunities to NorthLight students.

We are very pleased that our customers have performed exceedingly well and t heir stellar output helped PSA achieve

Around the world, our terminals have also contributed

a record volume of 65.1 million TEUs on a group-wide basis,

significantly towards charities throughout the year. Through staff

representing a 14.4% increase over 2009. At PSA Singapore

events and the CSR fund, PSA Singapore Terminals has donated

Terminals, the 2010 throughput of 27.7 million TEUs was 10.1%

some S$500,000 to its adopted charities. Other efforts include

higher than the year before. The Group’s revenue and net profit

PSA Antwerp’s contributions and staff volunteerism to the Belgian

reached S$4.08 billion and S$1.18 billion respectively last year.

Paralympic Committee, the SolidarBus refugee and education support program in Italy and the Wheelchair Campaign of Türkiye

At this point, I would like to express my sincere thanks to

Disabled Federation.

our valued customers, for placing their continued trust in us and allowing us the privilege of sharing in their success. Our

Within the Group, a corporate culture change process is

promise of providing “uncompromising and constant care” has

infectiously spreading to make PSA a more caring and fun work

gratifyingly been recognised by the industry, and the PSA Group

place. Based on four simple principles of “ Being There ”, “ Making

was conferred the Seatrade A sia ‘Container Terminal Operator

Their Day ”, “Choosing Your Attitude ” and “ Pla y ”, this change

Award’ for the third consecutive year, Lloyd’s List Asia Award

management initiative motivates our staff and harnesses their

for ‘Container Terminal Operator of the Year’ for the 10th year,

collective energies, strengths and passions.

and the Asian Freight & Supply Chain Award (AFSCA) for ‘Best Global Container Terminal Operating Company’ for the fifth

Some analysts and economists have high expectations for

year. Regionally, Fuzhou International Container Terminal also

2011, believing that global economic recovery is now on a solid

garnered the China Freight Industry Award for ‘Top 10 Best

foundation. I hope they are right. As for me, I continue to be

Container Terminals in China’, while PSA Singapore Terminals

bothered by the lingering and troubling economic problems

was the recipient of AFSCA for ‘Best Container Terminal (Asia)’

in the developed countries and the severity of credit market

for the 21st time.

pressures and unbalances in global trade flows, all of which require considerable time to cure. PSA must therefore continue

Apart from the vote of support by our customers, these awards

to remain very vigilant and focused so that we can be prepared

would not have been possible without the dedication and fortitude

for any challenges and seize any opportunities that come. Most

of our staff, unions and management. Their sustained efforts

importantly, PSA will continue to work closely with our customers

ensured that PSA maintained the world class service quality to

to serve them with alacrity and dedication. I have every confidence

which our customers have become accustomed.

that we will remain f leet and versatile in our responses to change, while leveraging on our core strength in the pursuit of excellence.

Steering the colossal PSA Group through such challenging times is a mammoth responsibility and I am much indebted to the dedicated members of the PSA Board whose staunch support, astute counsel and vast experience have greatly lightened the burden; for which I am deeply thankful. Here, I would also like to extend a warm welcome to Ms Chan Lai Fung, who joined our Board of Directors in March 2010 and quickly immersed herself in the Board Committees and deliberations. Alongside our ongoing business operations, PSA has also been actively involved in contributing back to society. The Howe Yoon

Chong PSA scholarships, open to Singaporean students from low-income families, are uniquely aimed at providing education

FOCK SIEW WAH Group Chairman

5

6

Every Note Counts

Group CEO’s

Message

2010, the year of the Tiger in the Chinese zodiac, certa inly lived up to its characterisation, “….. I seek the unattainable, and try the untried.” A c on ve rg en ce of a l l t he mea su res m acro a nd m icro – governments putting the balance sheet of the State at the disposal of the financial systems, continued quantitative easing to support demand, slow steaming by container shipping lines to soak up surplus capacity – all collectively had the desired effect of calming the global markets.

In 2010, two new terminal projects were completed: • Zeebrugge International Port, in the deep-sea harbour of Zeebrugge in Flanders, Belgium, and • Panama International Terminals in Panama City, on the Pacific coast of Panama. Both terminals w ill commence full commercial operations this year.

PSA and the port and shipping sector in tandem with all other Also in 2010 ca pital expendit ure d eferred duri ng t he globa l industries benefited from the resulting outcome. Container economic crisis to upgrade and expand the Group’s deep-sea volumes recovered strongly in 2010 from t he previous year and, capabilities to service the expanding fleet of mega-size container wi th the con tr ibut ion of volumes fr om new ly com mi ssi one d vessels was revived; and I am pleased to report that additional terminals in Busan in South Korea, Chennai in India and Vung capacity to berth and ha ndle these mega vessels has been added Tau in Vietnam, PSA Group ended the year with a new peak of in Singapore, Tianjin in China, Sines in Portugal, and Zeebrugge 65.1 million TEUs (14.4% increase year on year) handled across during 2010, and barring any further major economic shocks, this its network of terminals worldwide, surpassing the previous high capability upgrading will continue through 2011 and beyond. The of 63.2 million TEUs achieved during the heady and tumultuous Group is also continually reviewing its network and portfolio of times in 2008. port investments to match the changing landscape of global trade.


“We have also continued to align our internal organisation to manage effectively our growing network of terminals worldwide and to meet the challenges posed by an ever-evolving competition landscape in a fast changing world of new emerging economies and geo-politics.” The expansion of the Group’s portfolio into overseas markets to

consultations with the Group Chairman, Fock Siew Wah, I shall

diversify the earnings base started in earnest post corporatisation in 1997, and at the end of last year, the volumes handled at our overseas terminals made up 37.4 million TEUs or 57.5% of the Group’s total volumes. This diversification into overseas markets mitigates exposure to any single market, and has stood us well through the economic turbulence of the recent two years.

be stepping down later this year as Group CEO. An internal and

Singapore, Antwerp, Zeebrugge and Sines has also provided some measure of support when global trade went into a tailspin in 2009; today, a sizeable portion of global volumes is handled with these strategic partnerships, the first of which was entered into in 2003 with MSC.

I also wish to express my gratitude to the past and present Chairmen and Board Directors for their strong support and expert advice given to me. I am equally appreciative of the wholehearted support from my colleagues in the management team as they rallied a round me to face and surmount all the challenges that came our way.

external global search process for my replacement was started earlier this year and I will continue to serve as Special Advisor to the Group Chairman after my retirement.

I wish to thank all partners and customers for their continued patronage all these years; PSA is grateful for the privilege of Building strategic joint venture partnerships with key shipping working with and serving them. lines including MSC, PIL, CMA, Cosco, NYK and K-Line in

The Group has also been working to enhance its human capital leadership and bench strength commensurate with an expanding Multinational Corporation (MNC). The Group’s Fish! teambuilding and leadership program, which was first rolled out in 2006 by Group HR, has now evolved into a global corporate culture change platform encompassing the whole organisation worldwide, and Fish! is now prevalent as a unifying language, within the PSA family.

My heartfelt thanks also go out to the PSA staff and unions for their selfless effort in helping the Group grow to what it is today. Their determined and relentless drive to go the extra m ile for our

customers, unparalleled commitment to getting the job done, and willingness to change and adapt have enabled PSA to grow from strength to strength. I feel a sense of humility and fulfilment in helming this excellent

As part of the ongoing transformation of PSA into a global MNC,

we have continued to g room you ng and capable t alents from

organisation, which is also “The World’s Port of Call”, knowing that I am a part of its success story !

within the organisation, supplemented by good potential talent from without, to build a strong, competent and committed global leadership team. We have also continued to align our internal organisation to manage effectively our growing network of terminals worldwide and to meet the challenges posed by an ever-evolving competition landscape in a fast changing world of new emerging economies and geo-politics. The seeds of human capital development we have planted over the years have taken root and dovetailed well with my pers onal pl an of retir ing by 62. Thi s yea r in Augus t, I shall have attained this “milestone” age, and after close

EDDIE TEH Group CEO

7

Keeping our Rhythm Our Board of Directors and Senior Management Team keep PSA moving forward together amid the challenging and swiftly-evolving business environment, akin to an orchestra having to negotiate changing keys and complex rhythms! It requires the rapport of every member to hold the ranging tempo.

10

Every Note Counts

FOCK SIEW WAH Group Chairman

EDDIE TEH Deputy Group Chairman

Main Committee Committees: s: Chairman, EXCO Chairman, LDCC

Main Committee: Member, EXCO Member, Supervisory Committees: Southeast Asia, Northeast Asia, Middle East South Asia, Europe & Mediterranean, Marine Services

B oa oard rd of

Directors

TAN CHIN NAM FRANK WON WONG G Main Committe Committee: e: Member,, LD CC Member CHAN LAI FUNG Member, Supervisory Committees: Europe & Mediterranean Marine Services

Chairman, Supervisory Committee: Northeast Asia

Main Committee: Member, Audit Member, Supervisory Committee: Middle East South Asia


KUA HONG PAK Main Committe Committees: es: Chairman, Audit Member, EXCO KOH POH TIONG

Chairman, Supervisory Committee: Southeast Asia

Main Committee: Member, EXCO Member, Supervisory Committee: Northeast Asia

MICHAEL LIM Main Committees: Member, EXCO Member,, LD CC Member

NG CHEE KEONG Main Committee: Member, Audit

DAVINDER SINGH Main Committee: Member, LDCC Member, Supervisory Committee: Southeast Asia

Chairman, Supervisory Committee: Europe & Mediterranean

Chairman, Supervisory Committee: Middle East South Asia

11

12

Every Note Counts

EDDIE TEH Group CEO CAROLINE LIM Global Head of HR & Corporate Affairs

Senior M anagement

Council

LEE CHEN YONG Regional CEO Middle East South Asia ONG KIM PONG Regional CEO Northeast Asia

KENNY ONG Regional CEO Americas Head of Group Business D evelopment


LIM PEK SUAT Group CFO

GOH MIA HOCK Head of Group Risk Management / Technology & Operations Development

TERENCE TAN Head of Group Legal & Company Secretary

TAN PUAY HIN Regional CEO Southeast Asia

DAVID YANG Regional CEO Europe & Mediterranean

13

Raising the Bar Music is created when musical notes are played; more musicians playing notes together give rise to an enriching experience of harmony, texture and emotions. At PSA, the different port projects support and build on each other, strengthening the PSA Group and enriching its f inancial performance.

16

Every Note Counts

Global

Footprint

25

SOUTHEAST ASIA SINGAPORE PSA SINGAPORE TERMINALS THAILAND EASTERN SEA LAEM CHABANG TERMINAL VIETNAM SP-PSA INTERNATIONAL PORT MIDDLE EAST SOUTH ASIA INDIA TUTICORIN CONTAINER TERMINA L CHENNAI INTERNATIONAL TERMINALS PSA ABG KOLKATA CONTAINER TERMINA L PSA ABG KANDLA CONTAINER TERMINAL PAKISTAN PSA GWADAR INTERNATIONAL TERMINA LS NORTHEAST ASIA CHINA DALIAN TERMINALS FUZHOU TERMINA LS GUANGZHOU CONTAINER TERMINA L TIANJIN TERMINALS DONGGUAN CONTAINER TERMINAL HONG KONG TERMINA LS SOUTH KOREA INCHEON CONTAINER TERMINA L PUSAN NEWPORT INTERNATIONAL TERMINAL JAPAN HIBIKI CONTAINER TERMINAL

1 2 3

4 5 6 7 8

9 10 11 12 13 14 15 16 17

26

EUROPE & MEDITERRANEAN BELGIUM & THE NETHERLANDS PSA ANTWERP PSA ZEEBRUGGE ITALY VOLTRI TER MINAL EUROPA VENICE CONTAINER TER MINAL PORTUGAL SINES CONTAINER TERMINA L TURKEY MERSIN INTERNATIONAL PORT UNITED KINGDOM PSA GREAT YARMOUTH CONTAINER TERMINAL AMER ICAS PANAMA PSA PANAMA INTERNATIONAL TERMINA L ARGENTINA EXOLGAN CONTAINER TERMINA L

18 19 20 21 22 23

24

25 26


24 19 18

20

21 9

12 22

15

23

16 17

8

10

11

7

13

6

14

2 5

3

4

1

17

18

Every Note Counts

Group Financial

Highlights

TEUs - Twenty-foot Equivalent Units All a mounts in Singapore dollars

2010

2009

2008

2007

2006

Volume Throughput (million TEUs) Singapore Overseas

27.7 37.4

25.1 31.8

29.0 34.2

27.1 31.8

24.0 27.3

Global

65.1

56.9

63.2

58.9

51.3

Consolidated Income Statement ($ million) Revenue Operating Expenses Operating Profit Other Income/(Expenses) Profit from Operations Finance Costs Share of Profit of Associates Profit before Income Tax Income Tax Expense

4,076

3,835

4,392

4,151

3,736

(2,622)

(2,631)

(2,922)

(2,573)

(2,400)

1,454

1,204

1,470

1,578

1,336

14

3

875

348

1,468

1,207

2,453

1,684

(342)

(393)

(504)

(405)

261

244

260

239

202

1,389

1,109

1,309

2,188

1,481

1,198

Non-Controlling Interests

(19)

Profit attributable to Owner of the Company Consolidated Financial Position ($ million) Total Assets Total Liabilities Total Equity Financial Ratios Operating Margin 1 Return on Average Total Assets 2 Return on Average Total Equity3 Total Debt/Equity (times)4 Value-added per Employment Cost ($) Economic Value Added ($ million) Earnings per Share ($)

1,442

(340)

(191)

Profit for the year

(28)

(145)

(265)

964

1,043

12

(248)

(256)

1,940

(4)

1,225

(15)

(16)

1,179

976

1,039

1,925

1,209

18,950

19,611

19,090

18,198

17,206

10,101 8,849

11,318 8,293

11,369 7,721

11,029 7,169

11,635 5,571

35.7% 8.0% 14.0% 0.93

31.4% 6.8% 12.0% 1.13

33.5% 7.7% 14.0% 1.19

38.0% 13.8% 30.5% 1.20

35.8% 11.9% 23.3% 1.73

4.0

3.6

3.6

4.0

3.8

220

173

503

507

573

1.94

1.61

1.71

3.17

1.99

1

Operating profit expressed as a percentage of revenue Profit for the year, add back finance costs, expressed as a percentage of average total assets Profit for the year, expressed as a percentage of average total equity 4 Total debt divided by total equity 2 3

Volume (million TEUs)

Revenue ($ million) 4,500

70

4,000

60

3,500 50 3,000 40

2,500

30

2,000 2006

2007

2008

2009

2010

2006

2007

2008

2009

2010


GeoGraphical contribution

SEGMENT REVENUE 2009 South East Asia Europe North East Asia Others

2010 South East Asia Europe North East Asia Others

58% 30% 7% 5%

59% 28% 7% 6%

SEGMENT NON-CURRENT ASSETS 2009 South East Asia Europe North East Asia Others

43% 27% 23% 7%

2010 South East Asia Europe North East Asia Others

44% 25% 23% 8%

19

World Class Performances The world is our stage, and PSA is an award-winning performer, thanks to the support and patronage of its customers. Just as each inspired performance comes about only through diligent practice and sensitive appreciation of the composer’s intentions, PSA pledges to relentlessly improve its service offering to customers through diligence and an innate understanding of their needs.

22

Every Note Counts

The Rhythm of Business PSA operations worldwide improved in 2010 in tandem with the global economic recovery from the doldrums a year and a half before. Besides catering to organic growth, PSA started new terminal operations and invested in infrastructure and equipment to meet the growing needs and rigorous service requirements of customers. SOUTHEAST ASIA PSA Singapore Terminals (ST) recorded a 10.1% growth in throughput over 2009 and handled an annual throughput of 27.7 million TEUs in 2010. That represented an incremental volume of more than 2 ½ mi llion TEUs, an exceptional increase in demand which ST effectively met by ramping up resources through the close co-operation of management, unions a nd staff. In 2010, 44 new container shipping services were added with about 60% of the services focusing on the key growth markets of Intra-Asia and North-South trade. More than 200 large ships of 10,000 TEU or bigger capacity called at ST, a testimony to its hub status which allowed customers to capitalise on its connectivity network, and superior infrastructure designed to handle mega vessels efficiently. Meanwhile, the Pasir Panjang Automobile Terminal (PPAT) handled more than a million vehicles in 2010. The year also marked the physical completion of Pasir Panjang Terminal (PPT) Phases 1 and 2, comprising 23 container berths and three Ro-Ro berths. Presently, ST is working closely with the Ministry of Transport and Maritime and Port Authority of Singapore to develop Phases 3 and 4 of PPT in order to meet customers’ growth requirements in the new decade. Throughout the year, PSA ST received numerous accolades. Among them were the titles of “Best Container Terminal Asia (over 4 million TEUs)” at the 24th Asian Freight & Supply Chain Awards 2010, “Container Terminal of the Year” at the Supply Chain Asia Logi stics Awards 2010, and the “Cheaper Better Faster Model Partnership Award (Institutional Category)”, a Special May Day Award 2010 for enhancing labour productivity. Additionally, Brani Terminal received

the Safety & Health Award Recognition for Projects (SHARP) at the Workplace Safety and Health Performance Awards 2010 for implementing sound safety and health management systems at the workplace. PSA’s investment in Laem Chabang, Thailand, registered strong growth keeping pace with the favourable exports-driven economic recovery. Two new shipping services plying ChinaThailand and Thailand-Vietnam-China also called at PSA’s terminal facility. In Vietnam, SP-PSA saw a landmark year with more than 200% growth over 2009 to almost 294,000 TEUs in 2010, and by setting four successive vessel productivity records for Vietnamese contai ner ports in the course of the year. NORTHEAST ASIA In China, Fuzhou saw an increase in container throughput, reflecting the improvement in global economy and world trade. PSA’s Fuzhou Qingzhou Container Terminal and Fuzhou International Container Terminal had a combined throughput of 1.17 million TEUs, notching up a growth of 17% over 2009. PSA’s Tianjin Port Pacific International Container Terminal saw its volumes surge by 60% to reach 1.27 million TEUs and is shaping up to be the largest PSA port project in mainland China. Guangzhou Container Terminal handled a throughput of 0.96 million TEUs in 2010, thanks to the strong growth of China domestic boxes. In South Korea, our Incheon Container Terminal ha ndled in excess of ½ million TEUs, showing a 19.2% growth, despite strong regional competition. The Pusan Newport International Terminal (PNIT) is PSA’s other investment in South Korea. Commencing operations in March 2010, PNIT ended the year with more than 548,000 TEUs. With 1.2 kilometres of deepwater berths, PNIT is operationally tailored to efficiently handle hub and spoke as well as relay transhipment volumes for the Transpacific and North East Asian trade routes.


MIDDLE EAST SOUTH ASIA The India economy weathered the global financial crisis well and, by 2010, it had bounced back strongly with a GDP growth of 8%. PSA’s Chennai International Terminals, seizing the robust growth momentum, increased their container throughput to cross the 300,000-TEU mark in 2010, up from 26,000 TEUs handled in the three months of operations since start up in 2009. PSA ABG Ka ndla Container Terminal experienced a 19.1% growth in volume at 155,717 TEUs for 2010 while ABG Kolkata Container Terminal ’s throughput of over 249,000 TEUs represented almost its full capacity. The multipurpose-built PSA Gwadar International Terminals handled 815,000 metric tonnes of urea in 2010. EUROPE & MEDITERRANEAN PSA Antwerp in Belgium is the other PSA flagship terminal outside of Singapore. It handled 14.7% more containers in 2010 over 2009. Even more spectacularly, its joint venture with Mediterranean Shipping Company achieved a 16.2% increase in throughput at 5.3 million TEUs, which is a record. Meanwhile, PSA Zeebrugge pulled out all the stops to get Zeebrugge International Port (ZIP) operational in November 2010. ZIP is fully equipped with four double hoist twin lif t cranes and 16.5 metres of water depth alongside to handle mainhaul mega vessels. It also has on dock rail intermodal capacity of over 120 block trains weekly and an 80,000 square metres on dock Distripark facility. In close proximity, Container Handling Zeebrugge (CHZ), a PSA joint venture with Terminal Link SA, achieved over 1 million TEUs for the first time. Upgrading works are planned in 2011 to deepen alongside water depth to 17 metres, enabling CHZ to handle mega vessels without restrictions. Elsewhere in Italy, Voltri Terminal Europa (VTE) achieved a 10.8% increase in volume, resulting in an a nnual throughput exceeding 980,000 TEUs in 2010. In May 2010, VTE obtained

the concession to “Module 6”, which added 233 metres of quay and 10 hectares of yard. Despite Portugal facing severe pressure on sovereign debts, PSA’s investment in Sines turned in a respectable 50.7% volume increase. MSC’s Eastbound Far East Lion Service – which was launched in May 2010 – contributed to the strong transhipment traffic in Sines. Mersin International Port in Turkey did very well in 2010, recording volume highs in three areas: highest annual container volume, highest monthly container volume and the highest monthly volume of container freight station boxes ha ndled. The terminal also reached 1 million TEUs for the first time in its history. AMERICA S Exolgan Container Terminal rode on the positive economic sentiments in Argentina to handle more than 600,000 TEUs in 2010. It is currently expanding its quay to provide for three container berths and the capability to serve Post-Panamax vessels. Construction is expected to be completed by March 2011. PSA Panama International Terminal handled its first vessel on 23 December 2010. This vessel carried a shipment of steel for the Panama Canal expansion project. MARINE PSA Marine deployed 32 tugs to support towage operations in Singapore and 20 tugs for its overseas towage business. To meet the demands of the pilotage service, PSA Ma rine continued to recruit and train pilots. At year end, there were 219 pilots, an increase of 16 over the previous year. PSA Marine continued to exploit technology to enha nce customer service. Since April 2010, customers of PSA Marine have enjoyed a more convenient way to order, amend and enquire marine services orders with the launch of the Internet Marine Ordering System via Smartphones, which is available on a 24/7 basis.

23

Round of Applause The audience affirms their appreciation for good music by applauding the orchestra at the end of a performance. PSA appreciates its staff for their contribution and support by empowering them through culture change, continual learning, and involving them in corporate social responsibility activities – it is our way of applauding our people and thanking them for their unwavering commitment.

26

Every Note Counts

In H armony PSA International’s Board of Directors plays a pivotal role in overseeing its business affairs and providing guidance on strategic planning, particularly in growth and fi nancial performance. The Board holds quarterly meetings to steer business directions, review investment opportunities, and approve budgets and audited accounts. Decisions are made based on a majority vote; in the event of equal votes, the Chairman holds the deciding vote. The Board is supported by the following Committees: • Executive Committee (EXCO) The EXCO reviews and develops strategies for the long term role and position of the Group. It is responsible for approving major acquisitions and disposal of investments, capital expenditures, the taking of loans a nd provision of guarantees, investment policies for financial projects, customer contracts, tenders and purchase contracts. • Audit Committee The Audit Committee identifies significant ri sk areas and reviews the effectiveness of control procedures and processes to mitigate risks. It assesses the reliability of management reporting and compliance with applicable laws and regulations, and reviews the statutory accounts.

• Leadership Development & Compensation Committee (LDCC) The LDCC oversees leadership development, talent management and remuneration. It ensures that companies within the Group have in place appropriate programs and consistent policies for grooming leaders, developing global talent and preparing potential successors to key leadership positions. It also reviews the performance and approves the remuneration of PSA’s senior management. • Supervisory Committees (SCs) The SCs align ma nagement resources to better manage PSA’s portfolio of terminals worldwide. There are five SCs, namely: Southeast Asia SC, Northeast Asia SC, Middle East South Asia SC, Europe & Mediterranean SC and Marine Services SC. Each SC reviews and plans growth strategies, and approves major capital expenditures, c ustomer contracts, tenders and purchase contracts for all PSA entities within its respective business purview. The commercial practices within the PSA Group are further guided by the Code of Business Conduct to ensure utmost business integrity.


Touching the H eartstrings Embracing the responsibility of an organisation to the communities and the environment in which it operates, PSA has sustained its support of charitable causes and green initiatives through the course of 2010. Underscoring its commitment to the community and the less privileged, PSA Group HQ oversaw the second batch of bondfree scholarships awarded to 13 students in Singapore, under the Howe Yoon Chong PSA Endowment Fund . The Fund, which consists of contributions from PSA, Temasek Holdings and NSL, is endowed to perpetuity to provide deserving students from low income families the opportunity to pursue a formal education. Our Group Chairman, Fock Siew Wah, also led t he way towards PSA adopting NorthLight School as one of its social causes. A pioneering school which helps students who are unable to cope with mainstream education, NorthLight prepares them for lifelong learning and employability through a values-focused and career-oriented education. In addition to a cash donation, PSA Group in collaboration with Singapore Terminals led educational visits (Learning Journeys) for its teachers and affi liates to gain a better understanding of potential job opportunities in the port. We will also be providing places for selected NorthLight students for industrial attachment within the company. PSA Group’s charitable efforts continued with the sponsorship of various notable causes, including the Assisi Hospice, St Luke’s Hospital and the Community Chest. On the cultural and education front, we also contributed to the National Heritage Board and Nanyang Technological University, among others. In tandem with PSA’s growing global footprint, we are taking active steps to reduce our carbon footprint on the planet. Spearheading these efforts in terms of corporate sponsorship, the PSA Group made a significant donation to Singapore’s National Parks Board. PSA Singapore Terminals (ST) continued its Go Green campaign for the second year in 2010, during which its Operations Division organised an inaugural Go Green road show to highlight PSA ST’s green initiatives and raise awareness among staff. Across PSA ST, eco-friendly practices were carried out. These included the planting of trees inside the terminals, testing of new equipment with lower carbon emissions, adapting existing engineering products and practices to reduce emissions, continued efforts to reduce fuel usage through more efficient deployment of equipment and achievement of Green Mark (a benchmark scheme administered by Singapore’s Building and Construction Authority to recognise environmentally friendly buildings) for PSA ST’s office buildings. Reaffirming our support to the community, PSA terminals around the world were also actively engaged in a wide var iety of charitable causes. The Beyond Social Ser vices, Lions Home

for the Elders and Muscular Dystrophy Association Singapore benefited from corporate donation by PSA ST and funds collected by its management, staff and their family members. Our creative fund raising initiatives included the annual PSA Charity Cook-out which raised some $24,000 for the Lions Home for the Elders. In all, PSA ST contributed close to $500,000 to its adopted charities. In October, the Community Chest of Singapore conferred PSA ST the SHARE Platinum Award in recognition of its sustained high staff par ticipation rate in the SHARE monthly donation program. In other parts of the world, PSA Gwadar in Pakistan donated to a local charity organization ‘Khidmat-e-Khalq’ in Karachi, which freely distributes food and clothes to the local community during the month of Ramadan. In Thaila nd, Eastern Sea Laem Chabang (ESCO) aided in the renovation of the Bang Wang Ree School in Prachinburi Province as part of its community outreach efforts. ESCO was also involved in the collection of flood relief aid for the province of Ayutthaya, under the auspices of the Ruamkatanya Foundation. In Vietnam, SP-PSA contributed to the Gratitude Fund of Tan Thanh Commune, the Saigon Children’s Charity, as well as the Consular Club Charity Ba zaar which aids homeless children. The terminal also donated to flood victims in Central Vi et na m. Ove r in Europ e, Volt ri Termi na l Europa in Ita ly continues to champion the SolidarBus project – a mobile vehicle that collects relief items for Africa’s refugees and educates the community on their plight. Turning to Turkey, employee volunteers from Mersin International Port were involved in a project organised by the Turkish Human Resources Association to raise the awareness in youths from rural villages on the importance of healthcare and f irst-aid. PSA terminals also strongly backed causes for children beneficiaries in India and Argentina; for the former, organising sailing programs and a dinner for impoverished children in Chennai and Kandla, and for the latter, making provisions for school clothing, toys, education and first-aid campaigns, as well as food donations for over 2000 children. In its continuing patronage of the arts a nd sports, the PSA Group supported the Singapore Symphony Orchestra, Arts Sentral Asia activities and PSA ST was the official Maritime & Shipping Sponsor for the inaugural Singapore Youth Olympic Games 2010 in August, while PSA Antwerp sustained its sixyear partnership with the Belgian Paralympics Committee to prepare for the 2012 London Meet. At PSA, we remain resolute in the belief that a company is measured not only by its bottom-line but by how it upholds the ethics of good corporate citizenship through philanthropy, and giving back to the communities from which it has prospered – actions which are integral to our mission of being “The World’s Port of Call”.

27

28

Every Note Counts

The Ascending Fish! Motif Teamwork, synergy and professionalism continue to be the hallmarks of the partnership among PSA management, staff and unions, a partnership which has been further enhanced since the launch of the Fish! Philosophy, our common language of corporate culture change. All across the organisation, efforts are made to cascade the simple yet powerful Fish! Philosophy for camaraderie, teamwork, a positive attitude and outstanding customer service, with the aim of creating engagement and fulfilment at work. While Fish! continues to be espoused to all employees, the Leader Fish! program, launched in 2009 a s a workshop for culture change at the highest corporate level, continued to make an impact in 2010. Facilitated by Group Human Resource and graced by Group Chairman as a guest speaker of leadership values, the Leader Fish! program challenged our leaders first in Singapore and then overseas to be change champions for a great workplace culture. In the latter part of the year, Leader Fish ! was cascaded to senior leaders as well as young high-potentials in the Europe & Mediterranean region. The playing of handbells was chosen as one of the teambuilding activities to reinforce the learning on Leader Fi sh ! . The simple act of a group of participants ringing bells musically becomes a challenge of coordination, precision and teamwork. Individuals soon discover that a single bell can produce a note but when a song is called for, all the bells must ring in synergy. Just as successful teamwork produces stunningly

beautiful musical experiences in the handbells exercise; we believe the same truly positive experience can be multiplied powerfully in our teams when every participant, at their own workplaces, puts into practice what was imbibed from Leader Fish !. The ultimate goal is for every individual to live the Fish! Philosophy as naturally as breathing. It was the passion for Fish! that led Caroline Lim, Global Head of HR & Corporate Affairs, to accept an invitation from the International Tra nsport Workers’ Federation (ITF) – a global affiliation of labour unions in the transport sector including ports – to share her diverse and refreshing experiences in corporate culture change, and in so doing, inspired the union representatives with the power of Fish! at the ITF annual conference held in Long Beach, USA, in October 2010. Currently, PSA has 9,000 employees learning a nd living the Fish! Philosophy. The employees of PSA International, PSA Mari ne and Singapore Terminals completed their first “Have Fish! Will Travel” contest in July 2010, after 18 months of nominating one another for demonstrating good Fish! behaviour. The winners with the highest nominations were sponsored to a vacation in Seattle, USA, where the Fish! Philosophy had originated. With the success of the first contest in creating enthusiasm for Fish!, the second 18-month contest is already underway. Over time, jus t a s mu sic tra nsc ends boundarie s, we fi rmly believe tha t Fish! will be a unifying language for the global PSA family.

Financial Review Directors’ Report Statement by Directors Independent Auditors’ Report Group Financial Statements

32 35 36 37

32

Every Note Counts

Directors’ Report Year ended 31 December 2010 We are pleased to submit this annual report to the member of the Company together with the audited financial statements for the financial year ended 31 December 2010.

Directors The directors in office at the date of this report are as follows: Mr Fock Siew Wah (Group Chairman) Mr Eddie Teh Ewe Guan (Deputy Group Chairman and Group Chief Executive Officer) Ms Chan Lai Fung (Appointed on 22 March 2010) Mr Davinder Singh s/o Amar Singh Mr Fran k Kwong Shing Wong Mr Koh Poh Tiong Mr Kua Hong Pak Mr Michael Lim Choo San Mr Ng Chee Keong Dr Tan Chin Nam

Directors’ interests According to the register kept by the Company for the purposes of Section 164 of the Singapore Companies Act, Chapter 50 (the Act), particulars of interests of directors who held office at the end of the financial year (including those held by their spouses and infant children) in shares, debentures, warrants and share options in related corporations are as follows: Name of director and corporation in which interests are held

Holdings at beginning of the year/date of appointment

Holdings at end of the year

Fock Siew Wah Singapore Telecommunications Limited - Ordinary shares

3,240

3,240

Chan Lai Fung Singapore Telecommunications Limited - Ordinary shares

1,550

1,550

Nil

S$500,000

2,547

8,192

Davinder Singh s/o Amar Singh Singapore Airlines Limited - S$300 million 2.15% Bonds due 2015 Singapore Technologies Engineering Ltd - Ordinary shares - Unvested restricted shares (performance period from 01/01/2008 to 31/1 2/2008) - Conditional award of 14,500 restricted shares to be delivered after 2009 - Unvested restricted shares (performance period from 01/01/2009 to 31/1 2/2009) - Time-based restricted shares to be delivered after 2010 Singapore Telecommunications Limited - Ordinary shares Vertex Investment (II) Ltd - Ordinary shares Vertex Technology Fund (II) - Ordinary shares - Redeemable preference shares

5,095

#1

2,548

up to 21,750

#2

Nil

Nil Nil

6,197 11,300

3,170

1,810

50

Nil

500 486

500 486

#1

#1 #3


Directors’ Report Year ended 31 December 2010 Name of director and corporation in which interests are held

Holdings at beginning of the year/date of appointment

Holdings at end of the year

Koh Poh Tiong Singapore Telecommunications Limited - Ordinary shares

1,490

1,490

Kua Hong Pak Singapore Telecommunications Limited - Ordinary shares

3,027

3,027

Ng Chee Keong Singapore Telecommunications Limited - Ordinary shares

49,850

42,570

1,870

1,870

367

367

Tan Chin Nam Singapore Airlines Limited - Ordinary shares Singapore Telecommunications Limited - Ordinary shares

#1

Balance of unvested restricted shares to be released according to the stipulated vesting periods.

#2

A minimum threshold performance over a one year period is required for a ny restricted shares to b e released. A specified number of restricted shares to be released will depend on the extent of achievement of all performance conditions and will be delivered in phases according to the stipulated vesting periods.

#3

The shares under the time-based restricted award will be vested in 2011.

Except as disclosed in this report, no director who held office at the end of the financial year had interests in shares, debentures, warrants or share options of the Company, or of related corporations, either at the beginning of the fina ncial year, or date of appointment if later, or at the end of the financial year. Except as disclosed under the “Share Options” section of this report, neither at the end of, nor at any time during the financial year, was the Company a party to any arrangement whose objects are, or one of whose objects is, to enable the directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate. Except for salaries, bonuses and fees that are disclosed in note 33 to the financial statements, since the end of the last financial year, no director has received or become entitled to receive, a benefit by reason of a contract made by the Company or a related corporation with the director, or with a f irm of which he is a member, or with a company in which he ha s a substantial financial interest.

33

34

Every Note Counts

Directors’ Report Year ended 31 December 2010 Share options The Company has not granted any share option. The PSA Employee Share Option Plan (the Plan) granted by a subsidiary was approved and adopted by its then members at an Extraordinary General Meeting held on 22 March 2001. In the event of an initial public offering of the shares of the subsidiary, certain employees may be allotted a number of share options based on the monetary value of the underlying shares at the initia l public offering price. The options shall vest one year after any initia l public offering of the shares. No options have been granted since the commencement of the Plan. Since the end of the last financial year, none of the Company’s subsidiaries have granted any options.

Auditors The auditors, KPMG LLP, have expressed their willingness to accept re-appointment.

On behalf of the Board of Directors

Fock Siew Wah Director

25 February 2011

Eddie Teh Ewe Guan Director


Statement by Directors Year ended 31 December 2010 In our opinion: (a)

the financial statements set out on pages 37 to 98 are drawn up so as to give a true and fair view of the state of affairs of the Group and of the Company as at 31 December 2010 and of the results, changes in equity and cash flows of the Group for the year ended on that date in accordance with the provisions of the Singapore Companies Act, Chapter 50 and Singapore Financial Reporting Standards; and

(b)

at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they fall due.

The Board of Directors has, on the date of this statement, authorised these financial statements for issue.

On behalf of the Board of Directors

Fock Siew Wah Director

25 February 2011

Eddie Teh Ewe Guan Director

35

36

Every Note Counts

Independent A uditors’ Report Year ended 31 December 2010 MEMBER OF THE COMPANY PSA INTERNATIONAL PTE LTD Report on the financial statements We have audited the accompanying financial statements of PSA International Pte Ltd (the Company) and its subsidiaries (the Group), which comprise the statement of financial position of the Group and the Company as at 31 December 2010, the income statement, statement of comprehensive income, statement of changes i n equity a nd statement of cash f lows of the Group for the year then ended, and a summary of significant accounting policies and other explanatory notes, as set out on pages 37 to 98.

Management’s responsibility for the financial statements Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the provisions of the Singapore Companies Act, Chapter 50 (the Act) and Singapore Financial Reporting Standards. Management has acknowledged that its responsibility includes devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and that t hey are recorded as necessary to permit the preparation of true and fair profit and loss accounts and balance sheets and to maintain accountability of assets.

Auditors’ responsibility Our responsibility is to express a n opinion on these financial s tatements based on our audit. We conducted our audit in accordance with Singapore Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the 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 reas onableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion In our opinion, the consolidated financial statements of the Group and the statement of financial position of the Company are properly drawn up in accordance with the provisions of the Act and Singapore Financial Reporting Standards to give a true and fair view of the state of affairs of the Group and of the Company as at 31 December 2010 and the results, changes in equity and cash flows of the Group for the year ended on that date.

Report on other legal and regulatory requirements In our opinion, the accounting and other records required by the Act to be kept by the Company and by those subsidiaries incorporated in Singapore of which we are the auditors have been properly kept in accordance with the provisions of the Act.

KPMG LLP Public Accountants and Certified P ublic Accountants Singapore 25 February 2011


Statement Of F inancial P osition Year ended 31 December 2010 Group

Non-current assets Property, plant and equipment Intangible assets: - Port use rights - Other intangible assets

2010 $’000

2009 $’000

4

6,680,208

6,942,194

386

156

966,055 609,370 1,575,425 7,622,888 334,432 32,156 16,245,109

1,094,893 678,593 1,773,486 8,139,748 183,959 35,254 17,074,641

138 138 9,739,673 9,740,197

415 415 8,284,148 8,284,719

68,908 583,446 2,052,092 2,704,446 18,949,555

65,034 628,785 1,842,438 2,536,257 19,610,898

224,387 1,095,101 1,319,488 11,059,685

219,445 1,001,668 1,221,113 9,505,832

15 16

1,135,372 7,399,074 8,534,446 314,373 8,848,819

1,135,372 6,849,367 7,984,739 308,599 8,293,338

1,135,372 6,472,153 7,607,525 7,607,525

1,135,372 5,695,715 6,831,087 6,831,087

17 18 19 21

7,292,818 62,114 54,028 300,441 7,709,401

8,510,414 66,234 42,918 301,587 8,921,153

2,377,790 642 2,378,432

2,266,987 669 2,267,656

22 17

1,186,372 940,825 247,744 16,394 2,391,335 10,100,736 18,949,555

1,198,010 859,742 293,168 45,487 2,396,407 11,317,560 19,610,898

403,632 644,096 26,000 1,073,728 3,452,160 11,059,685

380,046 27,043 407,089 2,674,745 9,505,832

Subsidiaries Associates Financial assets Other non-current assets

5 6 7 9 10

Current assets Inventories Trade and other receivables Cash and bank balances

11 14

Total assets

Share capital Reserves Equity attributable to owner of the Company Non-controlling interests Total equity Non-current liabilities Borrowings Provisions Other non-current obligations Deferred tax liabilities Current liabilities Trade and other payables Borrowings Current tax payable Bank overdrafts

Company 2010 2009 $’000 $’000

Note

14

Total liabilities Total equity and liabilities

The accompanying notes form an integral part of these financial statements.

37

38

Every Note Counts

Consolidated Income Statement Year ended 31 December 2010 Note

2010 $’000

2009 $’000

Revenue

24

4,076,480

3,835,432

Other income

25

80,744

83,006

Staff and related costs

26

(678,906)

(681,857)

Contract services

(596,885)

(589,721)

Running, repair and maintenance costs

(358,559)

(315,862)

Other operating expenses

(460,963)

(528,234)

(20,073)

(22,920)

(573,535)

(572,630)

Property taxes Depreciation and amortisation Profit from operations

27

Finance costs

28

Share of profit of associates, net of tax Profit before income tax Income tax expense Profit for the year

29

1,468,303

1,207,214

(340,462)

(342,383)

261,343

243,728

1,389,184

1,108,559

(190,699)

(144,648)

1,198,485

963,911

1,179,002

975,875

Attributable to: Owner of the Company Non-controlling interests Profit for the year


19,483 1,198,485

(11,964) 963,911


Consolidated Statement Of Comprehensive Income Year ended 31 December 2010 Note

Profit for the year

2010 $’000 1,198,485

2009 $’000 963,911

Other comprehensive income Translation differences of foreign operations

(722,025)

(301,909)

Exchange differences on monetary items forming part of net investment in foreign operations

(121,232)

17,982

Exchange differences on hedge of net investment in a foreign operation

335,141

73,431

Effective portion of changes in fair value of cash flow hedges

(30,496)

20,922

16,877

25,476

164,355

75,288

440

170

Net change in fair value of cash flow hedges transferred to income statement Net change in fair value of available-for-sale financial assets Share of capital reserve in associates Share of fair value reserve in associates

3,673

Share of hedging reserve in associates Share of foreign currency translation reserve in associates Income tax on other comprehensive income Other comprehensive loss for the year, net of income tax Total comprehensive income for the year

21

(1,011)

(356)

604

(3,199)

10,199

1,239

(6,541)

(355,583)

(85,389)

842,902

878,522

841,100

894,324

Attributable to: Owner of the Company Non-controlling interests Total comprehensive income for the year


1,802 842,902

(15,802) 878,522

39

40

Every Note Counts

Consolidated Statement Of Changes In Equity Year ended 31 December 2010

Share capital $’000

Capital reserve $’000

Insurance reserve $’000

1,135,372

51,390

97,357

-

-

-

-

-

-

-

170 170

-

-

170

-

Contributions by and distributions to owner of the Company Capital contribution by non-controlling shareholders of subsidiaries Dividend paid to non-controlling shareholders of subsidiaries Final tax exempt dividend declared and paid of $0.49 per share Total contributions by and distributions to owner of the Company

-

-

-

Changes in ownership interests in subsidiaries Acquisition of non-controlling interests without a change in control Total changes in ownership interests in subsidiaries

-

-

-

1,135,372

51,560

97,357

Group At 1 January 2009 Total comprehensive income

Profit for the year Other comprehensive income Translation differences of foreign operations Exchange differences on monetary items forming part of net investment in foreign operations Exchange differences on hedge of net investment in a foreign operation Effective portion of changes in fair value of cash flow hedges Net change in fair value of cash flow hedges transferred to income statement Net change in fair value of available-for-sale financial assets Share of reserves in associates Income tax on other comprehensive income Total other comprehensive income Total comprehensive income for the year Transactions with owner, recorded directly in equity

At 31 December 2009



Foreign currency translation reserve $’000

Hedging reserve $’000

Fair value reserve $’000

(251,421)

(71,220)

-

(298,805)

Accumulated profits $’000

Total attributable to owner of the Company $’000

Non controlling interests $’000

12,295

6,416,642

7,390,415

330,944

-

-

975,875

975,875

(11,964)

963,911

-

-

-

(298,805)

(3,104)

(301,909)

-

17,982 73,431 21,656 25,476 75,288 9,962 (6,541) (81,551)

(734) (3,838)

17,982 73,431 20,922 25,476 75,288 9,962 (6,541) (85,389)

17,982 73,431 10,199 (197,193)

21,656 25,476 604 (6,541) 41,195

75,288 (1,011) 74,277

(197,193)

41,195

74,277

-

-

-

-

-

86,572

(448,614)

(30,025)

(15,802)

Total equity $’000

7,721,359

975,875

894,324

(300,000) (300,000)

(300,000) (300,000)

7,608 (9,402) (1,794)

7,608 (9,402) (300,000) (301,794)

-

-

(4,749) (4,749)

(4,749) (4,749)

7,092,517

7,984,739

308,599

878,522

8,293,338

41

42

Every Note Counts

Consolidated Statement Of Changes In Equity Year ended 31 December 2010

Share capital $’000

Capital reserve $’000

Insurance reserve $’000

1,135,372

51,560

97,357

-

-

-

-

-

-

-

440 440

-

-

440

-

Contributions by and distributions to owner of the Company Capital contribution by non-controlling shareholders of subsidiaries Dividend paid to non-controlling shareholders of subsidiaries Final tax exempt dividend declared and paid of $0.49 per share Total contributions by and distributions to owner of the Company

-

-

-

Changes in ownership interests in subsidiaries Disposal of non-controlling interests without a change in control Acquisition of non-controlling interests without a change in control Total changes in ownership interests in subsidiaries

-

-

-

Changes in ownership interests in subsidiaries of an associate

-

-

-

1,135,372

52,000

97,357

Group At 1 January 2010 Total comprehensive income

Profit for the year Other comprehensive income Translation differences of foreign operations Exchange differences on monetary items forming part of net investment in foreign operations Exchange differences on hedge of net investment in a foreign operation Effective portion of changes in fair value of cash flow hedges Net change in fair value of cash flow hedges transferred to income statement Net change in fair value of available-for-sale financial assets Share of reserves in associates Income tax on other comprehensive income Total other comprehensive income Total comprehensive income for the year Transactions with owner, recorded directly in equity

At 31 December 2010



Foreign currency translation reserve $’000

Hedging reserve $’000

Fair value reserve $’000

(448,614)

(30,025)

-

(704,386)

Accumulated profits $’000

Total attributable to owner of the Company $’000

Non controlling interests $’000

86,572

7,092,517

7,984,739

308,599

8,293,338

-

-

1,179,002

1,179,002

19,483

1,198,485

-

-

-

(704,386)

(17,639)

(722,025)

(121,232) 335,141 (29,447) 15,870 164,355 558 1,239 (337,902)

(1,049) 1,007 (17,681)

(121,232) 335,141 (30,496) 16,877 164,355 558 1,239 (355,583)

841,100

1,802

842,902

(121,232) 335,141 (3,199) (493,676)

(29,447) 15,870 (356) 1,239 (12,694)

164,355 3,673 168,028

-

(493,676)

(12,694)

168,028

1,179,002

-

(169) (169) (942,459)

Total equity $’000

-

-

(300,000) (300,000)

(300,000) (300,000)

20,708 (10,704) 10,004

20,708 (10,704) (300,000) (289,996)

545 545

-

(1,268) (4,305) (5,573)

(892) (4,305) (5,197)

7,199 (13,231) (6,032)

6,307 (17,536) (11,229)

-

-

13,804

13,804

-

13,804

254,600

7,979,750

8,534,446

314,373

8,848,819

(42,174)

43

44

Every Note Counts

Consolidated Statement Of Cash F lows Year ended 31 December 2010 Note

2010 $’000

2009 $’000

1,198,485

963,911

573,535

572,630

Operating activities Profit for the year Adjustments for: Depreciation and amortisation Impairment made for: Financial assets

27

309

492

Intangible assets

27

61,017

61,172

Property, plant and equipment

27

5,275

12,740

25

(3,857)

(4,135)

Dividend income from financial assets Gain on disposal of: Associates

25


25

-

(565)

(11,027)

(8,366)

(261,343)

(243,728)

340,462

342,383

Interest income

(50,550)

(59,472)

Income tax expense

190,699

144,648

Share of profit of associates, net of tax Finance costs

Net fair value (gain)/loss on fair value hedge

28

(4,123) 2,038,882

3,187 1,784,897

Changes in working capital: Inventories Trade and other receivables Trade and other payables Cash generated from operations Income taxes paid Cash flows from operating activities

(3,874)

(3,324)

(10,438)

10,232

22,720

(10,594)

2,047,290 (219,099) 1,828,191

1,781,211 (200,301) 1,580,910

Investing activities Purchase of property, plant and equipment and intangible assets

(489,688)

(986,570)

Proceeds from disposal of: Associates

-

15,719

Financial assets

-

4,483

47,125

81,457

-

575

115,855

110,290

52,542

54,866

(274,166)

(719,180)

Property, plant and equipment and intangible assets Proceeds from capital distribution from equity securities Dividends received from associates and financial assets Interest received Cash flows used in investing activities



Consolidated Statement Of Cash F lows Year ended 31 December 2010 Note

2010 $’000

2009 $’000

Proceeds from bank loans and notes

1,908,327

3,292,367

Repayment of bank loans and notes

(2,568,278)

(2,957,613)

(331,710)

(356,617)

(4,813)

(3,933)

(300,000)

(300,000)

(10,704)

(9,402)

Capital contribution by non-controlling shareholders of subsidiaries

20,708

7,608

Repayment of loans from non-controlling shareholders of subsidiaries

(5,488)

(19,140)

Financing activities

Interest paid Payment of finance lease liabilities Dividends paid to owner of the Company Dividends paid to non-controlling shareholders of subsidiaries

Proceeds from loans from non-controlling shareholders of subsidiaries

-

Acquisition of partial interest in a subsidiary Disposal of partial interest in a subsidiary Cash flows used in fin ancing activities

Cash and cash equivalents at beginning of the year Effect of exchange rate fluctuations on cash held Cash and cash equivalents at end of the year

(17,536)

-

6,307

-

(1,303,187)

Net increase in cash and cash equivalents

(338,525)

250,838

523,205

1,796,951

1,277,381

(12,091) 14

8,205

(3,635)

2,035,698

1,796,951

2,052,092

1,842,438

Cash and cash equivalents at end of the year comprises: Cash and bank balances Bank overdrafts

(16,394) 14


2,035,698

(45,487) 1,796,951

45

46

Every Note Counts

N otes to the Financial Statements Year ended 31 December 2010 These notes form an integral part of the financial statements. The financial statements were authorised for issue by the Board of Directors on 25 February 2011.

1

Domicile and activities PSA International Pte Ltd (the Company) is incorporated in the Republic of Singapore and has its registered office at 460 Alexandra Road, PSA Building, #38-00, Singapore 119963. The principal activities of the Company are investment holding and the provision of consultancy services on port management, port operations and information technology. The principal activities of the subsidiaries are mainly those of a provider of port and marine services. The immediate and ultimate holding company during the f inancia l year is Temasek Holdings (Private) Limited, a company incorporated in the Republic of Singapore. The consolidated financial statements relate to the Company and its subsidiaries (together referred to as the Group) and the Group’s interests in associates and jointly-controlled entities.

2

Summary of significant accounting policies

2.1

Basis of preparation The financial statements have been prepared in accordance with Singapore Financial Reporting Standards (FRS). The financial statements have been prepared on the historical cost basis except for certain financial assets and liabilities that are carried at fair value and/or amortised cost as disclosed in the accounting policies set out below. The financial statements are presented in Singapore dollars which is the Company’s functional currency. All fi nancial information presented in Singapore dollars have been rounded to the nearest thousand, unless otherwise presented. The preparation of fina ncial statements in conformity with FR Ss requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the 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 estimates are revised and in any future periods affected. Information about significant areas of estimation, uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements is set out in note 3. In 2010, the Group adopted the following revised FRSs which are relevant to its operations: FRS 103 Business combinations (2009) Business combination s are now accounted for using the acquisition method as at the acquisition date (see note 2.2). The change in accounting policy has been applied prospectively to new business combinations occurring on or after 1 January 2010 and has no material impact on the Group’s profit after tax.


N otes to the Financial Statements Year ended 31 December 2010 FRS 27 Consolidated and separate financial statements (2009) Acquisitions of non-controlling interests are now accounted for as described in note 2.2. The change in accounting policy has been applied prospectively and has no material impact on the Group’s profit after tax. 2.2

Consolidation

Business combinations In 2003, the Group effected a Scheme of Arrangement (Scheme) under Section 210 of the Companies Act, Chapter 50, as sanctioned by the High Court of Singapore. The Scheme resulted in an amalga mation of subsidiaries held by the Company with those held by PSA Corporation Limited. Such interests acquired from part ies under common control are consolidated on the historical cost method in a manner similar to the pooling of interest method. All other business combinations are accounted for under the acquisition method as at the acquisition date, which is t he date on which control is transferred to the Group. Control is the power to govern the fina ncial and operating policies of an entity so as to obtain benefits from its activ ities. In assessing control, the Group takes into consideration potential voting rights that are currently exercisable. The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognised in income statement. Costs related to the acquisition, 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 recognised at fair va lue at the acquisition date. If the contingent consideration is classif ied as equity, it is not remeasured and settlement is accounted for within equity. Otherwi se, subsequent changes to the fair value of the contingent consideration are recognised in income statement.

Subsidiaries Subsidiaries are entities controlled by the Group. The financial st atements of subsidiaries a re 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 adjusted where necessary to a lign them with the policies adopted by the Group. 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 deficit balance.

Associates Associates are those entities in which the Group has significant influence, but not control, over their financial and operating policies. Associates are accounted for in the consolidated financial statements under the equity method. The consolidated financial statements include the Group’s share of the post-acquisition results and reserves of associates, after adjustments to align the accounting policies with those of the Group, from the date that significant i nfluence commences until the date that signif icant inf luence ceases. The latest audited financia l statements of the associates are used and where these are not available, unaudited financial statements are used. Any differences between the unaudited financial statements and the audited financial statements obtained subsequently are adjusted for in t he subsequent financial year.

47

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Every Note Counts

N otes to the Financial Statements Year ended 31 December 2010 The Group’s investments in associates include goodwill on acquisition and other intangible assets acquired from business combinations. Where the Group’s share of losses exceeds its interest in an associate, the carry ing amount of that interest is reduced to zero and the recognition of further losses is discontinued except to the extent that the Group has incurred an obligation or has made payments on behalf of the associate.

Jointly-controlled entities Jointly-controlled entities are those entities over whose activities the Group has contractual agreements to jointly share the control over the strategic financial and operating decisions of the jointly-controlled entities. The Group’s interests in jointly-controlled entities are recognised in the consolidated fina ncial statements by including its proportionate share of the income and expenses, assets and liabilities and cash flows with items of a similar nature on a line-by-line basis, after adjustments to align the accounting policies with those of the Group, from the date that joint control commences until the date that joint control ceases.

Loss of control Upon the loss of control, the Group derecognises the assets and liabilities of the subsidiary, any non-controlling interests and the other components of equity relate d to the subsidiary. Any surplus or deficit ar ising on the loss of control is recognised in the income statement. If the Group retains any interest in the previous subsidiary, then such interest is measured at fair va lue at the date that control is lost. Subsequently it is accounted for as an equity-accounted investee or as an available-for-sale financial asset depending on the level of influence retained.

Acquisitions of non-controlling interests Acquisitions of non-controlling interests are accounted for as transactions w ith owners in their capacity as owners and therefore no goodwill is recogni sed as a result of such transactions. The adjustments to non-controlling interests are based on a proportionate amount of the net assets of the subsidiary.

Transactions eliminated on consolidation Intra-group balances and transactions, and any unrealised income or expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. Unrealised gains arising from transactions with associates are eliminated agai nst the investment to the extent of the Group’s interest in the associate. Unrealis ed losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

Accounting for subsidiaries, associates and jointly-controlled entities Investments in subsidiaries, associates and jointly-controlled entities are stated in the Company’s statement of financial position at cost less accumulated impairment losses.


N otes to the Financial Statements Year ended 31 December 2010 2.3

Foreign currencies

Foreign currency transactions Transactions in foreign currencies are translated to the respective functional currencies of Group entities at the exchange rate at the date of the transaction. Monetary assets and lia bilities denominated in foreign currencies at the reporting date are retranslated to the functional cur rency at the exchange rate at the reporting date. Non-monetary as sets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date on which the fair va lue was determined. Non-monetary items in a foreign currency that are measured in terms of historical cost are translated using the exchange rate at the date of the transaction. Foreign currency differences arising on retranslation are recognised in the income statement, except for differences arising on the retranslation of available-for-sale equity instruments, a fina ncial liability designated as a hedge of the net investment in a foreign operation that is effective (see 2.13 below), which are recognised in other comprehensive income.

Foreign operations The assets and liabilities of foreign operations, excluding goodwill and fair value adjustments arising on acquisition, are translated to Singapore dollar at exchange rates prevailing at the reporting date. The income and expenses of foreign operations are translated to Singapore dollar at the average exchange rates for the year. Goodwill and fair value adjustments arising on the acquisition of a foreign operation on or after 1 January 2005 are treated as assets a nd liabilities of the foreign operation and translated at the closing rate. For acquisitions prior to 1 January 2005, the exchange rates at the date of acquisition were used. Foreign currency differences are recognised in other comprehensive income and presented within equity in foreign currency tra nslation reserve. However, if the operation is a non-wholly-owned subsidiary, then the relevant proportionate share of the translation difference is allocated to the non-controlling interests. When a foreign operation is disposed such that control, signif icant inf luence or joint control is lost, the relevant proportion of the cumulative amount in the foreign currency translation reserve is transferred to the income statement 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 transferred to the income statement.

Net investment in a foreign operation Foreign cur rency differences arising from monetary items that in substance form part of the Group’s net investment in a foreign operation are recognised in other comprehensive income and presented within equity in the foreign currency translat ion reserve. When the net investment is disposed of, the relevant amount in the foreign currency tra nslation reserve is transferred to the income statement as an adjustment to the gain or loss arising on disposal.

49

50

Every Note Counts


Property, plant and equipment Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses. Cost includes expenditure that is directly att ributable to the acquisition of the asset. The cost of self-constructed assets 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, the cost of dismantling a nd removing the items and restoring t he site on which they are located, and capitalised borrowing costs. Cost may also include transfers from equity of any gain or loss on qualify ing cash flow hedges of foreign currency purchases of property, plant and equipment. Purchased soft ware 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 accounted for as separate items (major components) of propert y, plant and equipment. The gain or loss on disposal of property, plant and equipment is determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment, and is recognised net in the income statement. Subsequent expenditure relating to property, plant and equipment that has already been recognised is added to the carrying amount of the asset only when it is probable that future economic benefits associated with the item will flow to the Group and its cost can be measured reliably. Other subsequent expenditure such as repairs and ma intenance is recognised in the income statement as incurred. Depreciation is recognised in the income statement on a straight-line basis over the estimated useful life (or lease term, if shorter) of each part of an item of property, plant and equipment. Estimated useful lives are as follows: Leasehold land Buildings Wharves, hardsta nding and roads Plant, equipment and machinery Floating crafts Motor vehicles Computers

20 to 80 years 5 to 50 years 3 to 50 years 3 to 25 years 2 to 20 years 2 to 10 years 3 to 5 years

No depreciation is provided on capital work-in-progress until the related property, plant and equipment is ready for use. Depreciation methods, useful lives and residual values are reviewed, and adjusted as appropriate, at each reporting date. 2.5

Intangible assets Intang ible assets with finite useful lives are stated at cost less accumulated amortisation and impairment losses. Intang ible assets with infinite useful lives or not ready for use are stated at cost less accumulated impairment losses.

Port use rights The expenditure incurred in relation to the right to operate a port are capitalised as port use rights. Port use rights are amortised in the income statement on a straight-line basis over the period of the operating rights being available.


N otes to the Financial Statements Year ended 31 December 2010 Goodwill Goodwill arising on the acquisition of subsidiaries and jointly-controlled entities is presented in intangible assets. Goodwill arising on the acquisition of associates is presented together with investments in associates. Goodwill represents the excess of: • • •

the fair value of the consideration transfer red; 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 existing equity interest in the acquiree,

over the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities as sumed. When the excess is negative, a bargain purchase gain is recognised immediately in income statement. Goodwill is measured at cost less accumulated impairment losses and is subject to testing for impairment, as described in note 2.6.

Software development costs Development expenditure attributable to projects where the technical feasibility and commercial v iability of which are reasonably assured, is capitalised and amortised over the time period for which the tang ible benefits of the projects are expected to be realised. Softwa re development costs are not amortised until the completion date and when the software is ready for use. Amortisation is cha rged to the income statement on a straight-line basis over its estimated useful life of 3 years.

Computer software Computer software, which is acquired by the Group, where it is not an integral part of the related hardware, is treated as an intangi ble asset. Computer software is a mortised in the income statement on a straight-line basis over its estimated useful life of 3 years, from the date on which it is ready for use. 2.6

Impairment of non-financial assets The carrying amounts of the Group’s non-financial assets with finite useful lives, are reviewed at each reporting date to determine whether there is any indication of impair ment. If any such indication exists , the assets ’ recoverable amounts are estimated. Non-financial as sets with infi nite useful lives or not available for use are tested for impairment on an annual basis. An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. 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 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 f lows that are largely independent from other assets and groups. Subject to an operating segment ceiling test, for the purposes of goodwil l impairment testing, cash-generating units to which goodwill has been allocated are aggregated so that the level at which impairment testing is performed reflects the lowest level at which goodwill is monitored for internal reporting purposes. Goodwill acqui red in a business combination is allocated to groups of cash-generating units that are expected to benefit from the synergies of the combination.

51

52

Every Note Counts

N otes to the Financial Statements Year ended 31 December 2010 Impairment losses are recognised in the income statement unless it reverses a previous revaluation, credited to equity, in which case it is charged to equity. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying a mount of any goodwill allocated to the units a nd then to reduce the carrying a mount of the other assets in the unit (group of units) on a pro rata basis. An impairment loss in respect of goodwill is not reversed. In respect of other assets, 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 esti mates 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 that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. Goodwill that forms part of the carrying amount of an investment in an associate is not recognised separately, and therefore is not tested for impairment separately. Instead, the entire amount of the investment in an associate is tested for impairment as a single asset when there is objective evidence that the investment in an associate may be impaired. 2.7

Financial assets A financia l asset is recognised if the Group becomes a party to the contractual provisions of the asset. Financia l assets are derecognised if the Group’s contractual rights to the cash flows from the financial assets expire or if the Group transfers the financial asset to another party without retaining control or transfers substantially all the risks and rewards of the asset. Regular way purchases a nd sales of financial a ssets are accounted for at trade date, i.e., the date that the Group commits itself to purchase or sell the asset. Financial assets and liabilities are offset and t he net amount presented in the statement of financial position when, and only when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously. Financial assets a re recognised initially at fair value plus, for financial assets not at fair value through profit or loss, any directly attributable transaction costs. Subsequent to initial recognition, financial assets are measured according to the following categories:

Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Loans and receivables are subsequently measured at amortised cost using the effective interest method, less any impairment losses. Loans and receivables comprise cash and cash equivalents and trade and other receivables. Cash and cash equivalents comprise cash bala nces, bank deposits and bank overdraft. For the purpose of the consolidated statement of cash flows, cash and cash equivalents are presented net of bank overdrafts which are repayable on demand and which form an integral part of the Group’s cash management.

Held-to-maturity investments Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturities that the Group has the positive intention and ability to hold to maturity. Held-to-maturity investments are subsequently measured at amortised cost using the effective interest method, less any impairment losses.


N otes to the Financial Statements Year ended 31 December 2010 Available-for-sale financial assets The Group’s investments in equity securities and debt securities are classified as ava ilable-for-sale fina ncial assets. Subsequent to initial recognition, they are measured at fair value and changes therein, other than for impairment losses (see note 2.8) and foreign exchange gai ns and losses on available-for-sale debt instruments, are recognised in other comprehensive income and presented within equity in the fair value reserve. When the financial asset is derecognised, the cumulative gain or loss in fair value reserve is transferred to the income statement. 2.8

Impairment of financial assets A financial asset is assessed at each reporting date to determine whether there is any objective evidence that it is impaired. A financial asset is impaired if objective evidence indicates that one or more events have had a negative effect on the estimated futu re cash flows of that asset. In addition, for an investment in an equity secur ity, a significant or prolonged decline in its fair value below its cost is objective evidence of impairment. An impairment loss in respect of loans and receivables and held-to-maturity investments 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. An impairment loss in respect of an available-for-sale financia l asset is calculated by reference to its current fair value. Individually significant financial assets a re tested for impairment on an individual basis. The remaining fina ncial assets are assessed collectively in groups that share similar credit risk characteristics. All impairment losses are recognised in the income statement. Any cumulative loss in respect of an available-for-sale financial asset recognised previously in fair value reserve is transferred to the income statement. Impairment losses for loans and receivables, held-to-maturity investments and available-for-sale financial assets that are debt securities are reversed if the subsequent increase in fair value can be related objectively to an event occurring after the impairment loss was recognised. Impairment losses once recognised in the income statement in respect of availablefor-sale financial a ssets that are equity secur ities are not reversed through the income statement. Any subsequent increase in fair value of such assets is recognised directly in fair value reserve.

2.9

Intra-group financial guarantees Financia l guarantee contracts are accounted for as insurance contracts. A provision is recognised based on the Company’s estimate of the ultimate cost of settling all cla ims incurred but unpaid at the reporting date. The provision is assessed by reviewing individual claims and tested for adequacy by comparing the amount recognised and the amount that would be required to settle the guarantee contract.

2.10

Leases

When entities within the Group are lessees of a finance lease Leased assets in which the Group assumes substantially all the risks and rewards of ownership are classified as finance leases. Upon initial recognition, the leased asset is measured at the lower of its fair value and the present value of the minimum lease payments. Subsequent to initia l recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset. Leased assets a re depreciated over the shorter of the lease term and their useful lives. Lease payments are apportioned between finance expense and reduction of the lease 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. Contingent lease payments are accounted for by revising the minimum lease payments over the remaining term of the lease when the lease adjustment is confirmed.

53

54

Every Note Counts

N otes to the Financial Statements Year ended 31 December 2010 At inception, an arrangement that contains a lease is accounted for as such based on the terms and conditions even though the arrangement is not in the legal form of a lease.

When entities within the Group are lessees of an operating lease Where the Group has the use of assets under operating leases, payments made under the leases are recognised in the income statement on a straight-line basis over the term of the lease. Lease incentives received are recognised in the income statement as an integra l part of the total lease expenses. Contingent rentals are charged to the income statement in the financial year in which they are incurred. 2.11

Inventories Inventories mainly comprise stores and consumables which are valued at cost of purchase (including cost incurred in bringing the inventories to their present location and condition) on a weighted average cost method less any applicable allowa nce for obsolescence. When inventories are consumed, the carr ying amount of these inventories is recogni sed as an expense in the year in which the consumption occurs.

2.12

Financial liabilities A financia l liability is recognised if the Group becomes a party to the contractual provisions of the liability. Financial liabilities are derecognised if the Group’s obligations specified in the contract expire or are discharged or cancelled. Financial liabilities are recognised initial ly at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, these financial liabilities are measured at amortised cost using the effective interest method.

2.13

Derivative financial instruments and hedging activities The Group holds derivative fina ncial in struments to hedge its foreign exchange, f uel price and interest rate risk exposures. The use of hedging inst ruments is governed by the Group’s policies which provide written principles on the use of f inancia l instruments consistent with the Group’s risk management strategy. Embedded derivatives are separated from the host contract and accounted for separately if the economic characteristics and risks of t he host contract and the embedded derivative are not closely related; a separate instrument with the sa me terms as the embedded derivative would meet the definition of a derivative; and the combined instrument is not measured at fair value through profit or loss. Derivatives are recognised initially at fair value; attributable transaction costs are recognised in the income statement when incurred. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are accounted for as described below.

Cash flow hedges The effective portion of changes in the fair value of the derivative designated as a hedging instrument of a cash flow hedge is recognised in other comprehensive income and presented within equity in the hedging reserve. The ineffective portion of changes in the fair value is recognised in the income statement.


N otes to the Financial Statements Year ended 31 December 2010 If the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold, terminated or exercised, hedge accounting is discontinued prospectively. The cumulative gain or loss previously recogn ised in other comprehensive income and presented within equity in the hedging reserve remains there until the forecast transact ion occurs. When the hedged item is a non-financial asset, the amount recognised in other comprehensive income is transferred to the carrying amount of the asset when it is recogni sed. In other cases, the amount recognise d in other comprehensive income is transferred to the income statement in the same period that the hedged item affects the income statement.

Fair value hedges Changes in the fai r value of a derivative designated as a hedging instr ument of a fair value hedge are recognised in the income statement. The hedged item is also stated at fair va lue in respect of the risk being hedged; the gain or loss attributable to the hedged risk is recognised in the income statement and the carrying amount of the hedged item is adjusted.

Hedge of net investment in a foreign operation Foreign 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 Company’s income statement. On consolidation, such differences are recognised as other comprehensive income and presented within equity in the foreign currency translation reserve, to the extent that the hedge is effective. The ineffective foreign currency differences are recognised in the income statement. If the hedging instrument no longer meets the criteria for hedge accounting, hedge accounting is discontinued prospectively. The cumulative gain or loss previously recognised in foreign currency translation reserve is transferred to the income statement as an adjustment to the gain or loss on disposal when the investment in the foreign operation is disposed.

Economic hedges Hedge accounting is not applied to derivative instruments that economically hedge monetary assets and liabilities denominated in foreign currencies. Changes in the fair va lue of such derivatives are recognised in the income statement as part of foreign currency gains and losses.

Separable embedded derivatives Changes in the fair value of separable embedded derivatives are recognised immediately in the income statement. 2.14

Employee benefits

Defined contribution plans Obligations for contributions to post-employment benefits a nd employees’ retirement gratuit ies under defined contribution plans are recognised as an expense in the income statement as incurred.

Defined benefit obligations The Group’s net obligations in respect of defined benefit pension and healthcare plans and unfunded defined benefit employees’ leaving entitlements are calculated separately for each defined benefit 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 va lue of any plan assets is deducted. The calculation is performed by a qualified actuary every year using the projected unit credit method.

55

56

Every Note Counts

N otes to the Financial Statements Year ended 31 December 2010 When the benefits of a plan change, the portion of the increased benefit relating to past service by employees is recognised as an expense in the income statement on a straight-line basis over the average period until the benefits become vested. To the extent that the benefits vest immediately, the expense is recognised immediately in the income statement. In calculating the Group’s obligation in respect of a plan, any actuarial gain or loss is recognised as income or expense when the net cumulative unrecognised actuarial gains a nd losses for each individual plan at the end of the previous reporting year exceed 10% of the higher of the defined benefit obligation and the fair value of plan assets at that date. These gains or losses are recognised over the expected average remaining working lives of the employees participating in the plans. When the calculation results in a benefit to the Group, the recognised asset is limited to the net total of any unrecognised past service cost and t he present value of any future refunds from the plan or reductions in future contributions to the plan.

Short-term benefits Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the Group has a present legal or constructive obligat ion to pay this amount as a result of past s ervice provided by the employee, and the obligation can be estimated reliably.

Equity compensation benefits The Employee Share Option Plan (the Plan) allows the employees of a subsidiary participating in the Plan to acquire shares of the said subsidiary. The fair value of options, when granted, wi ll be recognised as an employee expense with a corresponding increase in equit y. The fair value will be measured at gr ant date and spread over the period during which the employees of the subsidiary become unconditionally entitled to the options. At each reporting date, the subsidiary will rev ise its estimates of the number of options that are expected to be exercisable. It will recognis e the impact of the revision of original estimates in employee expense and in a corresponding adjustment to equity over the remaining vesting period. The proceeds received net of any directly attributable transaction costs will be credited to share capital when the options are exercised. 2.15

Share capital Ordinar y shares are classified as equity. Incremental costs directly attributable to the issue of ordinar y shares and share options are recognised as a deduction from equity, net of any tax effects.

2.16

Provisions A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outf low of economic benefits will be require d to settle the obligation. If the effect is material, provisions are determined by discounting the expected future cash flows at a rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.



Revenue recognition

Income from services Income from services rendered is recognised as and when such services are rendered, provided it is probable that the economic benefits will flow to the Group and the revenue and costs, if applicable, can be reliably measured.

Dividend income Dividend income is recognised when the right to receive payment is established.

Interest income Interest income is recognised as it accrues, using the effective interest method, except where the collection is contingent upon certain conditions being met, then such income is recognised when received. 2.18

Finance costs Finance costs comprise interest expense on borrowings and the unwinding of the discount on provisions. All borrowing costs are recognised i n the income statement using the effective interest method, except to the extent that they are capitalised as being directly attributable to the acquisition, construction or production of an asset which necessarily takes a substantial period of time to be prepared for its intended use or sale.

2.19

Income tax expense Income tax expense comprises current and deferred tax. Income tax expense is recognised in the income statement except to the extent that it relates to items recognised directly in other comprehensive income. Current tax is the expected ta x payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financia l reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences: the initial recognition of goodwill, the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit, and differences relating to investments in subsidiaries and jointly-controlled entities to the extent that they probably will not reverse in the foreseeable future. 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. Deferred tax assets and liabil ities are offset if there is a legally enforceable right to offset current tax liabilities and assets and they relate to income taxes levied by the same tax authority on the same taxable entity. A deferred tax asset is recognised for deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be utilised. 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 realised.

57

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Every Note Counts


Interest-free inter-company loans In the Company’s financial statements, interest-free inter-company loans to subsidiaries are stated at fair value at inception. Subsequently, these loans are measured at amortised cost using the effective interest method. The unwinding of the difference is recognised as interest income in the income statement over the expected repayment period. Such balances are eliminated in full in the Group’s consolidated financial statements.

2.21

Assets held for sale Assets (or disposal groups comprising assets and liabilities) that 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 g roup) are remeasured in accordance with t he Group’s accounting policies. Thereafter generally the assets (or disposal groups) are measured at the lower of their carrying amount and fair value less cost 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 and deferred tax assets, which continue to be measured under different rules in accordance with the Group’s accounting policies. Impairment losses on initial classification as held for sale and subsequent gains or losses on remeasurement are recognised in the income statement. Gains are not recognised in excess of any cumulative impairment loss.


N otes to the Financial Statements Year ended 31 December 2010 3

Critical accounting estimates and judgements The accounting policies that are deemed critical to the amounts recognised in the financial statements, in terms of materiality, or which involve a significant degree of judgement and estimation, are discussed below.

Impairment of property, plant and equipment and intangible assets The Group has made substantia l investments in tangible and intangi ble non-current assets in its port business. Changes in technology or changes in the intended use of these assets may cause the estimated period of use or value of these assets to change. Assets that have an infin ite useful life are tested for impairment annually. Assets that are subject to depreciation and amortisation are reviewed to determine whether there is any i ndication that the carrying va lue of these assets may not be recoverable and have suffered an impair ment loss. If any such indication exists, the recoverable amounts of the assets are estimated in order to determine the extent of the impairment loss, if any. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. Such impairment loss is recognised in the income statement. Management judgement is required in the a rea of asset impairment, part icularly in as sessing: (1) whether an event has occurred that may indicate that the related asset values may not be recoverable; (2) whether the carrying value of an asset can be supported by the net present value of future cash flows which are estimated based upon the continued use of the asset in the business; (3) the appropriate key assumptions to be applied in preparing cash flow projections including whether these cash flow projections are discounted using an appropriate rate. Changing the assumptions selected by management to determine the level, if any, of impairment, including the discount rates or the growth rate assumptions in the cash flow projections could materially affect the net present value used in the impairment test and as a result affect the Group’s results of operations.

Depreciation and amortisation Depreciation and amortisation of non-financial assets constit ute substantial operating costs for the Group. The costs of these non-financial assets are charged as depreciation/amortisation expense over the estimated useful lives of the respective assets using the straight-line method. The Group periodically reviews changes in technology and industry conditions, asset retirement activity and residual values to determine adjustments to estimated remaining useful lives and depreciation rates. Actual economic lives may differ from estimated useful l ives. Periodic reviews could result in a change in depreciable lives and therefore depreciation expense in future periods. Residual values of the port assets are estimated af ter considering the price that could be recovered from the sale of the port assets and the expected age and condition at the end of their useful lives, after deducting the estimated costs of disposal.

59

60

Every Note Counts



Note

Leasehold land $’000

Buildings $’000

Group Cost At 1 January 2009 Reclassifications Additions Disposals Transferred to intangible assets Translation differences on consolidation At 31 December 2009 Reclassifications Additions Disposals Transferred to intangible assets Translation differences on consolidation At 31 December 2010 Accumulated depreciat ion and impairment loss es At 1 January 2009 Reclassifications Depreciation charge for the year Disposals Impairment losses Translation differences on consolidation At 31 December 2009 Reclassifications Depreciation charge for the year Disposals Impairment losses Translation differences on consolidation At 31 December 2010 Carrying amount At 1 January 2009 At 31 December 2009 At 31 December 2010

5

5

27

27

1,627,662 46,048 3,835 (59,604) (10,030) 1,607,911 10,902 286 (15,043) 1,604,056

887,469 93,341 43,875 (34,347) (13,168) 977,170 22,773 9,161 (2,235) (83,976) 922,893

475,225 50,770 (37,450) 12,310 (808) 500,047 50,185 3,927 (984) 553,175

358,446 (18) 34,446 (24,109) 323 (2,518) 366,570 33,682 (1,357) (37,515) 361,380

1,152,437 1,107,864 1,050,881

529,023 610,600 561,513


N otes to the Financial Statements Year ended 31 December 2010

Wharves, hardstanding and roads $’000

Plant, equipment and machinery $’000

Floating crafts $’000

Motor vehicles $’000

2,476,132 404,743 54,292 (43,743) (30,227) 2,861,197 67,870 5,698 (8,002) (94,064) 2,832,699

4,196,598 248,676 177,010 (57,075) (31,452) 4,533,757 250,393 150,217 (94,233) (272,662) 4,567,472

437,049 23,492 20,194 (9,356) (5,485) 465,894 2,065 17,779 (25,837) (6,129) 453,772

683,004 276 107,625 (24,461) (4,403) 762,041 753 118,898 (3,780) (20,772) 857,140

2,034,656 (617) 262,127 (47,750) 70 (16,147) 2,232,339 (753) 260,581 (72,760) 1,348 (144,273) 2,276,482

134,605 209 30,299 (9,229) (1,519) 154,365 31,147 (19,725) (2,174) 163,613

2,161,942 2,301,418 2,290,990

302,444 311,529 290,159

1,793,128 2,099,156 1,975,559

Computers $’000

Capital workin-progress $’000

Total $’000

21,363 569 577 (552) (459) 21,498 948 736 (806) (837) 21,539

140,817 20,498 6,047 (4,795) (706) 161,861 5,387 4,901 (11,936) (5,912) 154,301

815,373 (837,367) 506,106 (11,710) (2,643) (2,749) 467,010 (360,338) 389,254 (1,794) (1,137) (13,457) 479,538

10,602,463 811,936 (221,182) (2,643) (94,276) 11,096,298 578,032 (144,843) (1,137) (492,080) 11,036,270

6,430 (95) 2,551 (513) (548) 7,825 2,511 (655) (501) 9,180

113,516 245 23,304 (4,579) 37 (1,606) 130,917 20,718 (11,385) (5,158) 135,092

14,933 13,673 12,359

27,301 30,944 19,209

-

815,373 467,010 479,538

3,805,882 511,122 (148,091) 12,740 (27,549) 4,154,104 517,722 (109,662) 5,275 (211,377) 4,356,062

6,796,581 6,942,194 6,680,208

61

62

Every Note Counts

N otes to the Financial Statements Year ended 31 December 2010 Plant, equipment and machinery $’000

Motor vehicles $’000

Computers $’000

Total $’000

Cost At 1 January 2009 Additions Disposals At 31 December 2009 Additions Disposals At 31 December 2010

42 (4) 38 7 45

303 303 347 650

1,021 23 (11) 1,033 15 (15) 1,033

1,366 23 (15) 1,374 369 (15) 1,728

Accumulated depreciation At 1 January 2009 Depreciation charge for the year Disposals At 31 December 2009 Depreciation charge for the year Disposals At 31 December 2010

36 4 (4) 36 2 38

183 60 243 60 303

855 92 (8) 939 76 (14) 1,001

1,074 156 (12) 1,218 138 (14) 1,342

6 2 7

120 60 347

166 94 32

292 156 386

Company

Carrying amount At 1 January 2009 At 31 December 2009 At 31 December 2010

The carrying amount of property, plant and equipment of the Group includes an amount of approximately $117.7 million (2009: $11.2 million) held under finance leases (note 17).

Impairment loss At 31 December 2010, a shortfall in the carrying amount of property, plant and equipment of certain subsidiaries was identified. The shortfall was determined when the value in use of the asset fell below the carryi ng value. Based on the assessment, an impairment loss of $5.3 mi llion (2009: $12.7 million) was recognised in other operating expenses in t he income statement.



Intangible assets

Note

Goodwill on consolidation $’000

714,181 -

Computer software $’000

Software development costs $’000

Capital work-inprogress $’000

25,670 2,044 4,741 (4)

84,871 7,945 206 -

10,203 (10,295) 8,882 -

Total other intangible Port assets use rights $’000 $’000

Total intangible assets $’000

Group Cost At 1 January 2009 Reclassifications Additions Disposals Transferred from property, plant and equipment Translation differences on consolidation At 31 December 2009 Reclassifications Additions Disposals Transferred from property, plant and equipment Translation differences on consolidation At 31 December 2010

4

-

(1,349) 712,832 -

4

-

(20,805) 692,027

2,425

(223) 34,653 5 5,342 (1,183)

1,053

(5,341) 34,529

-

(203) 92,819 7,931 177 (1,567)

84

(3,418) 96,026

218

(47) 8,961 (7,936) 5,634 -

-

2 6,661

834,925 (306) 13,829 (4)

2,643

(1,822) 849,265 11,153 (2,750)

1,137

(29,562) 829,243

1,267,205 306 20,576 -

-

(29,186) 1,258,901 4,712 (1,367)

-

(99,154) 1,163,092

2,102,130 34,405 (4)

2,643

(31,008) 2,108,166 15,865 (4,117)

1,137

(128,716) 1,992,335

63

64

Every Note Counts


Note

Goodwill on consolidation $’000



Total Capital other work-in- intangible Port progress assets use rights $’000 $’000 $’000

52,906

16,092

74,909

-


Group Accumulated amortisation and impairment losses At 1 January 2009 Amortisation charge for the year Disposals Impairment losses Translation differences on consolidation At 31 December 2009 Amortisation charge for the year Disposals Impairment losses Translation differences on consolidation At 31 December 2010 Carrying amount At 1 January 2009 At 31 December 2009 At 31 December 2010

27

27

143,907

70,638

214,545

12,147

7,145 (2) -

7,931 -

-

15,076 (2) 12,147

46,432 49,025

61,508 (2) 61,172

(89) 64,964

(208) 23,027

(159) 82,681

-

(456) 170,672

(2,087) 164,008

(2,543) 334,680

47,500

6,771 (551) -

6,011 (1,539) -

-

12,782 (2,090) 47,500

43,031 (1,110) 13,517

55,813 (3,200) 61,017

(1,805) 110,659

(3,953) 25,294

(3,233) 83,920

-

(8,991) 219,873

(22,409) 197,037

(31,400) 416,910

661,275 647,868 581,368

9,578 11,626 9,235

9,962 10,138 12,106

10,203 8,961 6,661

691,018 678,593 609,370

1,196,567 1,094,893 966,055

1,887,585 1,773,486 1,575,425






Company Cost At 1 January 2009/ 31 December 2009/ 31 December 2010

832

411

1,243

Accumulated amortisation At 1 January 2009 Amortisation charge for the year At 31 December 2009 Amortisation charge for the year At 31 December 2010

140 277 417 277 694

411 411 411

551 277 828 277 1,105

Carrying amount At 1 January 2009 At 31 December 2009 At 31 December 2010

692 415 138

-

692 415 138

Impairment testing for cash-generating units (CGUs) containing goodwill For the purpose of impairment testing, goodwill is allocated to the Group’s port business in the country of operation, which represents the lowest level within the Group at which the goodwil l is monitored for internal mana gement purposes. The carry ing value of goodwill primarily relates to the Group’s port business CGUs in Europe of $469.5 million (2009: $477.8 million). The remaining goodwil l relates to the Group’s port business CGUs in Asia. The recoverable amounts of these port business CGUs were based on the “value-in-use” approach. They were determined by discounting the future cash f lows generated from the continuing use of these units. The cash flow projections were done as part of the financia l budgets approved by management. Key assumptions include the expected growth in revenues and gross margin, ti ming of future capital expenditures, growth rates and market development expectations in the port business based on both external sources and internal sources (h istorical data). The discount rates for the test were based on country specific risk adjusted discount rates and ranged from 6.00% to 15.50% (2009: 6.50% to 14.00%). Judgement is required to determine key assumptions adopted in the cash flow projections and changes to the key assumptions can significantly affect these cash flow projections and therefore the results of the impairment tests. At 31 December 2010, the recoverable amount of a CGU in Asia was determined to be lower than the carrying amount and an impairment loss of $47.5 million (2009: impairment loss of $12.1 million in a CGU in Europe) was recognised in other operating expenses in the income statement.

Impairment loss on port use rights At 31 December 2010, a shortfal l in the carry ing amount of port use rights of a foreign subsidiary was identified. The shortfall was determined when the value in use of the asset fell below the carry ing value. Based on the assessment, an impairment loss of $13.5 million (2009: impairment loss of $49.0 million in the port use rights of a foreign jointlycontrolled entity) was recognised in other operating expenses in the income statement.

65

66

Every Note Counts


Subsidiaries Company

Equity investments, at cost Loans to subsidiaries Impairment losses

2010 $’000

2009 $’000

1,120,481 8,950,224 10,070,705 (331,032) 9,739,673

1,056,366 7,558,814 8,615,180 (331,032) 8,284,148

The loans to subsidiaries form part of the Company’s net investments in these subsidiaries. The loans are unsecured and settlement is neither planned nor likely to occur in the foreseeable future. Accordingly, these loans are stated at cost less impairment losses. The loans are principally denominated in Singapore dollars, US dollars and Hong Kong dollars, and comprise: (i)

$1,686.7 million (2009: $947.8 million) loans bearing fixed interest rates ranging from 2.50% to 4.63% (2009: 2.50% to 4.63%) per annum; and

(ii)

$174.0 million (2009: $43.1 million) loans bearing floating interest rates ranging from 0.97% to 2.08% (2009: 1.14% to 4.43%) per annum and the interest rates are repriceable at intervals of one to six months.

The remaining loans to subsidiaries are interest-free. Details of significant subsidiaries are as follows:

Name of subsidiary

PSA Corporation Limited PSA Marine (Pte) Ltd PSA Antwerp N.V.

Country of incorporation

Singapore Singapore Belgium

Effective percentage held by the Group 2010 2009 % % 100 100 100

100 100 100



Associates Group 2010 $’000 Investments in associates Loans to associates

2009 $’000

5,701,744 1,933,760 7,635,504 (12,616) 7,622,888

Impairment losses

6,046,942 2,105,422 8,152,364 (12,616) 8,139,748

The loans to associates form part of the Group’s net investments in these associates. The loans are unsecured and settlement is neither planned nor likely to occur in the foreseeable future. Accordingly, these loans are stated at cost less impairment losses. The loans are principally denominated in US dollars and Hong Kong dollars, and comprise: (i)

$1.56 billion (2009: $1.70 billion) loans bearing float ing interest rates of 1.21% to 3.25% (2009: 1.21% to 5.00%) per annum and the interest rates are repriceable at intervals of three to six months; and

(ii)

$368.9 million (2009: $401.2 million) loan bearing fixed interest rate of 1.00% (2009: 1.00%) per annum.

The Group’s net investments in a ssociates include port concession rights of $1.03 billion (2009: $1.16 billion). The amortisation of port concession rights totalling $35.3 million (2009: $35.3 million) is included in the Group’s share of profit of associates in the income statement. The summarised aggregated financial information relating to associates set out below is not adjusted for the percentage of ownership held by the Group.

Group

Assets a nd liabil ities Total assets Total liabilities Results Revenue Profit for the year

2010 $’000

2009 $’000

49,219,328 9,982,527

52,453,740 10,758,879

6,615,197 1,226,620

6,519,276 1,111,873

The Group’s share of contingent liabilities of the associates is $84.9 million (2009: $85.3 million).

67

68

Every Note Counts

N otes to the Financial Statements Year ended 31 December 2010 Details of significant associates are as follows:

Name of associate

HIT Investments Limited Hutchison Port Holdings Limited Hutchison Ports Investments S.à r.l. Vopak Termina ls Singapore Pte Ltd

8

Place of incorporation and business

British Virgin Islands British Virgin Islands Luxembourg Singapore

Effective percentage held by the Group 2010 2009 % % 33.3 20.0 20.0 30.5

33.3 20.0 20.0 30.5

Jointly-controlled entities The following amounts represent the Group’s share of the assets and liabilities and revenue and expenses of jointlycontrolled entities which have been included in the consolidated statement of financial position and income statement:

Group

Statement of financial position Non-current assets Current assets Current liabilities Non-current liabilities Net assets Income statement Revenue Expenses Profit before income tax Income tax expense Profit for the year

2010 $’000

2009 $’000

2,558,852 350,589 (330,074) (1,133,835) 1,445,532

2,876,908 307,169 (235,365) (1,356,179) 1,592,533

875,096 (739,673) 135,423 (55,224) 80,199

786,497 (723,958) 62,539 (41,154) 21,385

The Group’s share of commitments of jointly-controlled entities is as follows:

Group 2010 $’000 Operating lease commitments payable Within 1 year After 1 year but within 5 years After 5 years Capital commitments

2009 $’000

7,440 15,949 31,766

7,547 16,370 37,955

7,428

14,188


N otes to the Financial Statements Year ended 31 December 2010 Details of significant jointly-controlled entities are as follows:

Name of jointly-controlled entity

Dalian Container Terminal Co., Ltd. International Trade Logistics S.A. Mersin Uluslararasi Liman Isletmeciligi A.S. Tianjin Port Pacific International Container Terminal Co., Ltd.

9

Place of incorporation and business

Effective percentage held by the Group 2010 2009 % %

People’s Republic of China Argentina Turkey

34.6 40.0 50.0

34.6 40.0 50.0

People’s Republic of China

49.0

49.0

Financial assets Group

Quoted equity securities, available-for-sale Unquoted equity securities, at cost Impairment losses

10

2010 $’000

2009 $’000

330,049 201,882 (197,499) 4,383 334,432

179,133 202,016 (197,190) 4,826 183,959

Other non-current assets Group

Loan to a joint venture partner Other receivables Non-current portion of loans and receivables Transferable corporate club memberships

2010 $’000

2009 $’000

21,699 8,461 30,160 1,996 32,156

21,132 11,516 32,648 2,606 35,254

The loan to a joint venture partner is unsecured, bears floating interest at LIBOR plus a margin and is repayable in 2020. The effective interest rates range from 1.26% to 2.18% (2009: 1.26% to 4.55%) per annum. Interest rates are repriceable at intervals of one to six months.

69

70

Every Note Counts


Trade and other receivables Group

Trade and accrued receivables Deposits and other receivables Amounts due from: Subsidiaries Associates Related corporations Current portion of loans and receivables Tax recoverable Prepayments Swap hedging instruments

Note

2010 $’000

2009 $’000

2010 $’000

Company 2009 $’000

12 13

411,412 97,931

435,832 100,814

52 440

260 504

19,105 17,137 545,585 35 29,863 7,963 583,446

20,939 18,410 575,995 180 32,148 20,462 628,785

220,231 1,018 28 221,769 1,830 788 224,387

214,452 3,616 22 218,854 174 417 219,445

The amounts due from subsidiaries, associates and related corporations are unsecured, interest-free and repayable on demand. Transac tions with these related entities are priced on terms agreed between the parties.

12

Trade and accrued receivables Group

Trade and accrued receivables Allowance for doubtful receivables

2010 $’000

2009 $’000

478,312 (66,900) 411,412

519,312 (83,480) 435,832

Company 2010 2009 $’000 $’000 52 52

260 260

The Group’s primary exposure to credit risk arises through its trade receivables. Concentration of credit risk relating to trade receivables is limited due to the Group’s internationa lly dispersed customers . Due to the nature of the Group’s business, credit risk is not concentrated in any specific geographical region but concentrated in companies exposed to business cyclical f luctuations that are commonly found in the shipping industry. The Group’s historical experience in the collection of accounts receivable falls w ithin the recorded allowances. Due to these factors, management believes that no additional credit risk beyond amounts provided for collection losses is inherent in the Group’s trade receivables.


N otes to the Financial Statements Year ended 31 December 2010 The ageing of trade and accrued receivables, net of allowance for doubtful receivables at the reporting date is:

Group

Not past due Past due less than 30 days Past due 30 - 120 days More than 120 days

2010 $’000

2009 $’000

337,996 66,428 4,821 2,167 411,412

340,684 55,276 39,072 800 435,832

The change in allowance for doubtful receivables in respect of trade and accrued receivables during the year is as follows:

Group 2010 $’000 At 1 January (Reversal)/allowance recognised Allowance utilised Translation differences on consolidation At 31 December

13

2009 $’000

83,480 (13,815) (1,463) (1,302) 66,900

29,827 59,594 (5,979) 38 83,480

Deposits and other receivables Group

Deposits Other receivables Allowance for doubtful receivables

Company

2010 $’000

2009 $’000

7,118 91,127 (314) 90,813 97,931

6,938 94,263 (387) 93,876 100,814

2010 $’000

2009 $’000

440 440 440

504 504 504

The Group’s other receivables include an amount recoverable from a third party of $13.0 million (2009: $17.7 million) arising from an existing customer’s termination of contract in a foreign subsidiary. The remaining balance relates mainly to miscellaneous recoverables.

71

72

Every Note Counts


Cash and cash equivalents Group

Cash at bank and in hand Fixed deposits Bank overdrafts Cash and cash equivalents in the statement of cash flows

Company 2010 2009 $’000 $’000

2010 $’000

2009 $’000

372,058 1,680,034 2,052,092 (16,394)

334,741 1,507,697 1,842,438 (45,487)

2,035,698

1,796,951

31,352 1,063,749 1,095,101

85,088 916,580 1,001,668

The range of effective interest rates per annum at the reporting dates is as follows:

Group

Cash and cash equivalents, excluding bank overdrafts Bank overdrafts

Company 2009 %

2010 %

2009 %

2010 %

0.01 - 8.39 2.15 - 4.98

0.01 - 9.75 2.31 - 7.00

0.09 - 0.55 -



0.01 - 0.56 -

Interest rates are repriceable at intervals of one to twelve months.

15

Share capital Group and Company

Issued and fully-paid: At 1 January and 31 December

2010 No. of shares (’000)

2009 No. of shares (’000)

607,372

607,372

The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company. All shares rank equal ly with regard to the Company’s residual assets.


N otes to the Financial Statements Year ended 31 December 2010 Capital management The Group defines capital as sha re capital and all components of equity. The Group’s primary objectives when manag ing capital are to safeguard the Group’s ability to continue to provide returns for shareholders and to support the Group’s stability and growth. The Group regularly reviews and manages its capital structure 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, and makes adjustments to the capital structure in light of changes in economic conditions. There were no changes to the Group’s approach to capital management during the year. Certain subsidiaries within the Group are subject to externally imposed capital requirements as required by law. These subsidiaries have complied with the requirements during the fina ncial year. The Company and rest of its subsidiaries are not subject to any externally imposed capital requirements.

16

Reserves Group

Capital reserve Insurance reserve Foreign currency translation reserve Hedging reserve Fair value reserve Accumulated profits

(a)

Note

2010 $’000

2009 $’000

(a) (b) (c) (d) (e)

52,000 97,357 (942,459) (42,174) 254,600 7,979,750 7,399,074

51,560 97,357 (448,614) (30,025) 86,572 7,092,517 6,849,367

Company 2010 2009 $’000 $’000 6,472,153 6,472,153

5,695,715 5,695,715

Capital reserve The capital reserve comprises:

(b)

(i)

statutory reserve of foreign jointly-controlled entities set aside as required under local laws; and

(ii)

the Group’s share of capital reserve of associates.

Insuran ce reserve The insurance reserve relates to a sum transferred f rom the former Port of Singapore Authority to PSA Corporation Limited in 1997 as part of the vesting of property, rights and liabilities. This reserve is to cover potential past liabilities and for funding future potential liabilities in relation to the port related activities undertaken by PSA Corporation Limited.

73

74

Every Note Counts

N otes to the Financial Statements Year ended 31 December 2010 (c)

Foreign currency translat ion reserve The foreign currency translation reserve comprises:

(d)

(i)

all foreign exchange differences arising from the translat ion of the fina ncial statements of foreign operations whose functional currencies are different from the functional currency of the Company;

(ii)

the effective portion of the cumulative net change in fair value of foreign currency loans used to hedge the Group’s net investment in foreign operations;

(iii)

foreign exchange differences on monetary items which form part of the Group’s net investment in foreign operations; and

(iv)

the Group’s share of foreign currency translation reserve of associates.

Hedging reserve The hedging reserve comprises:

(e)

(i)

the effective portion of the cumulative net change in fair value of cash flow hedging instruments related to hedged transactions that have not yet occurred; and

(ii)

the Group’s share of hedging reserve of associates.

Fair value reserve The fair value reserve comprises: (i)

the cumulative net changes in the fair values of available-for-sale financial assets until the investment is derecognised; and

(ii)

the Group’s share of fair value reserve of associates.


N ot es to ththe e F in inan ancial cial State S tateme ments nts Year ended ended 31 Decemb D ecemberer 2010 201 0 17

Borrowings Group Note

Non-current Unsecured fixed and floating rate notes Secured bank loans Unsecured bank loans Finance lease liabilities Loans from non-controlling shareholders of subsidiaries Current Unsecured fixed and floating rate notes Secured bank loans Unsecured bank loans Finance lease liabilities Loans from non-controlling shareholders of subsidiaries Total borrowings Total borrowings comprise: Total unsecured fixed and floating rate notes Total secured bank loans Total unsecured bank loans Total finance lease liabilities Total loans from non-controlling shareholders of subsidiaries

(a)

(a) (b) (c)

Compa ny 2010 2009 $’000 $’000

2 010 $’000

2009 $’000

3,376,465 1,100,402 2,644,174 119,070

2,869,203 1 ,266,371 1, 4 ,307,583 4, 7,429

2,377,790 -

2,266,987 -

52,707 7,292,818

59,828 8,510,414

2,377,790

2,266,987

644,096 188,417 103,804 3,080

600,643 105,350 147,267 4,907

644,096 -

-

1,428 940,825 8,233,643

1,575 859,742 9,370,156

644,096 3,021,886

2,266,987

4,020,561 1,288,819 2,747,978 122,150

3,469,846 1,371,721 4 ,454,850 4, 12,336

3,021,886 -

2,266,987 -

54,135 8,233,643

61,403 9,370,156

3,021,886

2,266,987

Secured bank loans The loans are secured by mortgages on the borrowing subsidiaries’ property, plant and equipment of $863.5 million (2009: $872.2 million), and pledges of shares of subsidiaries which have net assets value as at 31 December 2010 amounting to $252.7 million (2009: $212.9 million).

75

76

Every Note Counts

N ot es to ththe e F in inanc ancial ial State S tateme ments nts Year ended ended 31 Decemb D ecemberer 2010 201 0 (b)

Finance lease liabilities The Group has finance lease liabilities that are repayable as follows:

Principal 2010 $’000 Payable within 1 year Payable after 1 year but within 5 years Payable after 5 years Total

Interest 2010 $’000

Total 2010 $’000

Principal 2009 $’000

Interest 2009 $’000

Total 2009 $’000

3,080

10,133

13,213

4,907

763

5,670

9,265 109,805 122,150

38,479 84,074 132,686

47,744 193,879 254,836

7,429 12,336

887 1,650

8,316 13,986

The effective interest rates of finance lease liabilities range from 0.70% to 20.28% (2009: 1.58% to 14.50%) per annum.

(c)

Loans from non-controlling shareholders of subsidiaries The loans from non-controlling shareholders are unsecured and bear floating interest rates plus plus a margin. Interest rates are repriceable at intervals of six to twelve months.

(d)

Terms and debt repayment schedule The terms and conditions of outstanding loans and borrowings are as follows:

Nominal interest rate %

Year of maturity

Face value $’000

2010 Carrying amount $’000

Face value $’000

2 009

0.97 - 5.90 0.55 - 13.50 0.29 - 6.16

2011 - 2025 2011 - 2024 2011 - 2020

4,038,930 1,288,819 2,747,978

4,020,561 1,288,819 2,747,978

3,483,735 1,371,721 4,454,850

3,469,846 1,371,721 4,454,850

0.66 - 2.50

2011 - 2018

54,135 8,129,862

54,135 8,111,493

61,403 9,371,709

61,403 9,357,820

0.97 - 5.90

2011 - 2025

3,038,930

3,021,886

2,283,735

2,266,987

Carrying amount $’000

Group Unsecured fixed and floating rate notes Secured bank loans Unsecured bank loans Loans from noncontrolling shareholders of subsidiaries Company Unsecured fixed and floating rate notes


N ot es to ththe e F in inan ancial cial State S tateme ments nts Year ended ended 31 Decemb D ecemberer 2010 201 0 18

Provisions Compensation sum $’000

Site restoration costs $’000

Total $’000

50,389 (7,521) 42,868

15,845 3,401 19,246

66,234 3,401 (7,521) 62,114

Group At 1 January 2010 Provisions made Translation differences on consolidation At 31 December 2010

The compensation sum relates to a provision made by a foreign subsidiary arising from an existing customer’s termination of contract with a third party. The estimated amount provided is based on actual clai m made against the foreign subsidiary. A corresponding recoverable amount of $13.0 million (2009: $17.7 million) from another third party is included in other receivables (see note 13). An ag reemen reementt to lease a nd grant the usage of pipeline wayleave wayleave between a subsidiary a nd a local authority requires the subsidiary to remove the pipeline at the end of the wayleave term. The provision provision for site restoration is based on an independent quotation received from a consultant. These costs are included as part of the carr ying value of the pipeline capitalised in property, plant and equipment.

19

Other non-current obligations Group Note

Loans from non-controlling shareholders of subsidiaries Defined benefit obligations Other non-current obligations

20

2 01 0 $’000

2009 $’000

25,945 12,187 15,896 54,028

26,106 15,220 1,592 42,918

The loans from non-controlling shareholders of subsidiaries form part of the shareholder’s investment in the subsidiaries. The loans are unsecured, interest-free and settlement is neither planned nor likely to occur in the foreseeable future. Accordingly, they are stated at cost.

77

78

Every Note Counts


Employee benefits Defined benef it obligations Certain subsidiaries of the Group operate defined benefit plans that provide pension and healthcare benefits, as required under the labour laws of the respective countries. These pension plans are unf unded. Details of defined benefit obligations in respect of the subsidiaries are as follows:

Group

Present value of unfunded obligations Unrecognised net actuarial losses Recognised liability for defined benefit obligations

2010 $’000

2009 $’000

13,481 (144) 13,337

17,185 (223) 16,962

Recognised liability comprises:

Group

Current Non-current

Note

2010 $’000

2009 $’000

23 19

1,150 12,187 13,337

1,742 15,220 16,962

Note

2010 $’000

2009 $’000

16,962 (1,847) 554 462 (221) (2,573) 13,337

15,996 (1,845) 2,355 579 (123) 16,962

Movements in the liability for defined benefit obligations are as follows:

Group

At 1 January Benefits paid by the plan Current service costs recognised in the income statement Interest costs recognised in the income statement Provision written off Translation differences on consolidation At 31 December

26 26


N otes to the Financial Statements Year ended 31 December 2010 Principal actuarial assumptions at the reporting dates (expressed as weighted averages):

Group

Discount rate at 31 December Future salary i ncreases Future pension increases Inflation

2010 % p.a.

2009 % p.a.

2.50-4.90 0 - 2.00 2.00 2.00

5.10-6.00 0 - 2.00 2.00 2.00

Assumptions regarding future mortality are based on published statistics and mortality tables. The average life expectancy of an individual retiring between age 60 to 65 is 23 for males and 27 for females. Past service costs and net actuarial results are amortised over the estimated service life of the employees under plan benefits.

Historical information

Present value of recognised defined benefit obligations Experience adjustments arising on plan liabilities

2010 $’000

2009 $’000

Group 2008 $’000

2007 $’000

2006 $’000

13,337

16,962

15,966

20,952

18,384

329

365

(130)

(330)

(222)

The Group expects to pay $1.7 million in contributions to defined benefits plans in 2011.

Equity compensation benef its The PSA Employee Share Option Plan (the Plan) in relation to shares of a subsidiary was approved and adopted by its then members at an Extraordinary General Meeting in March 2001. In the event of an initial public offering of the shares of the subsidiary, certain employees may be allotted a number of share options based on the monetary value of the underlying shares at the initial public offering price. The options shall vest one year after any such initial public offering of the shares of the subsidiary. No options have been granted since the commencement of the Plan.

79

80

Every Note Counts


Deferred tax Movements in deferred tax assets and liabilities of the Group (prior to offsetting of balances) during the year are as follows: At 1 January 2009 $’000

Recognised in income statement (note 29) $’000

270,927 17,196 288,123

55,271 6,166 61,437

8,623 14,884 1,973 25,480

19,129 10,888 30,017

Recognised in equity $’000

Group Deferred tax liabilities Property, plant and equipment Other items Total Deferred tax assets Provisions Hedging reserves Other items Total

-

(6,541) (6,541)

Deferred tax liabilities of the Company are attributable to the following: Company

Deferred tax liabilities Property, plant and equipment

2010 $’000

2009 $’000

642

669

Deferred tax liabilities and assets are offset when there is legally enforceable right to set off current tax assets against current tax liabilities and when the deferred taxes relate to the same tax authority. The amounts determined after appropriate offsetting are included in the statements of financial position as follows: Group

Deferred tax liabilities, net

2010 $’000

2009 $’000

2010 $’000

300,441

301,587

642

Company 2009 $’000 669



Translation differences on consolidation $’000

At 31 December 2009 $’000

Recognised in income statement (note 29) $’000

(1,437) 2,382 945

324,761 25,744 350,505

15,297 (2,237) 13,060

(144) 106 (38)

27,608 8,449 12,861 48,918

(3,554) 1,969 (2,379) (3,964)

Translation differences on consolidation $’000

At 31 December 2010 $’000

-

(15,327) (4,444) (19,771)

324,731 19,063 343,794

1,239 1,239

(1,472) (1,359) (9) (2,840)

22,582 10,298 10,473 43,353

Recognised in equity $’000

81

82

Every Note Counts

N otes to the Financial Statements Year ended 31 December 2010 Deferred tax assets have not been recognised in respect of the following items: Group

Tax losses Other items

2010 $’000

2009 $’000

3,747 3,747

57,565 15,508 73,073

The tax losses are subject to agreement by the tax authorities and compliance with tax regulations in the respective countries in which certain subsidiaries operate. Deferred tax assets have not been recognised in respect of these items because there is no indication that future taxable profit will be available against which certain subsidiaries of the Group can utilise the benefits.

22

Trade and other payables Group Note

Trade payables and accrued operating expenses Other payables Advances and deposits Amounts due to: Subsidiaries Related corporations

23

2010 $’000

2009 $’000

2010 $’000

Company 2009 $’000

829,373 322,333 33,412

827,952 340,335 28,794

45,933 30,278 666

51,156 10,723 913

1,254 1,186,372

929 1,198,010

326,755 403,632

317,246 8 380,046

The amounts due to subsidiaries and related corporations are unsecured, interest-free and repayable on demand.

23

Other payables Group Note

Other payables Accrued capital expenditure Swap hedging instruments Defined benefit obligations

20

2010 $’000

2009 $’000

2010 $’000

Company 2009 $’000

187,746 79,843 53,594 1,150 322,333

192,960 92,054 53,579 1,742 340,335

29,490 788 30,278

10,723 10,723

The Group’s other payables include interest payable of $41.4 million (2009: $32.6 million) and other sundry creditors.



Revenue This comprises revenue from container handling, marine serv ices, operation of multi-purpose terminals , warehousing and logistics related services, consultancy fees but excludes intra-group transactions.

25

Other income Group

Dividend income from financial assets Interest income from: Associates Financial institutions Trade and other receivables Joint venture partner Non-controlling shareholder of a subsidiary Gain on disposal of associates Gain on disposal of property, plant and equipment, net Net fair value gain on fair value hedge Others

26

2010 $’000

2009 $’000

3,857

4,135

40,232 8,660 834 466 358 11,027 4,123 11,187 80,744

50,288 8,128 778 278 565 8,366 10,468 83,006

Staff and related costs Group Note

Wages and salaries Contributions to defined contribution plans Defined benefit obligations

20

2010 $’000

2009 $’000

608,709 69,181 1,016 678,906

599,955 78,968 2,934 681,857

83

84

Every Note Counts


Profit from operations The following items have been included in arriving at profit from operations:

Group

Impairment made for: Financial assets Intangible assets Property, plant and equipment Operating lease expense Net fair value loss on fair value hedge Exchange loss, net

28

2010 $’000

2009 $’000

309 61,017 5,275 58,734 518

492 61,172 12,740 50,632 3,187 3,043

Finance costs Group

Interest paid and payable to: Banks and other financial institutions Fixed and floating rate notes holders Non-controlling shareholders of subsidiaries

29

2010 $’000

2009 $’000

158,511 180,783 1,168 340,462

201,549 139,100 1,734 342,383

Income tax expense Group Note

Current tax expense Current year Over provided in prior years

2010 $’000

2009 $’000

256,996 (83,321) 173,675

177,156 (63,928) 113,228

15,863 1,161 17,024 190,699

24,511 6,909 31,420 144,648

Deferred tax expense Movements in temporary differences Underprovided in prior years 21 Income tax expense


N otes to the Financial Statements Year ended 31 December 2010 Tax reconciliation

Group

Profit before income tax Share of profit of associates, net of tax Profit before income tax excluding share of profit of associates, net of tax Tax calculated using Singapore tax rate of 17% (2009: 17%) Effect of reduction in tax rate Effect of different tax rates in other countries Tax rebates and incentives Income not subject to tax Effect of unrecognised tax benefits Expenses not deductible for tax purposes Over provided in prior years Income tax expense

30

2010 $’000

2009 $’000

1,389,184 (261,343) 1,127,841

1,108,559 (243,728) 864,831

191,733 (322) 30,342 (13,105) (12,574) (12,814) 89,599 (82,160) 190,699

147,021 (9,852) 15,142 (16,451) (20,548) 3,689 82,666 (57,019) 144,648

Operating segments The Group is organised into business units based on their services and has two reportable operating segments as follows: • Port business: The provision of container handling, operation of multi-purpose terminal s and other port related services. • Marine business: The provision of marine services. The Executive Committee and Senior Management Council of the Company monitor the operating results of the business units separately for the purpose of making strateg ic decisions. Performance is measured based on segment operating profit. Inter-segment pricing is determined on an arm’s length basis.

85

86

Every Note Counts

N otes to the Financial Statements Year ended 31 December 2010 Information about reportable segments

Port business $’000

Marine business $’000

Total $’000

Group 2010 Revenue Total revenue Inter-segment revenue External revenue

3,843,445 (27,049) 3,816,396

263,117 (3,033) 260,084

4,106,562 (30,082) 4,076,480

Operating profit

1,376,670

105,325

1,481,995

540,607

32,513

573,120

66,292 260,388

955

66,292 261,343

16,254,509

300,559

16,555,068

7,617,996 572,451

4,892 21,077

7,622,888 593,528

Segment liabilities

1,089,781

56,058

1,145,839

2009 Revenue Total revenue Inter-segment revenue External revenue

3,609,945 (38,079) 3,571,866

265,848 (2,282) 263,566

3,875,793 (40,361) 3,835,432

Operating profit

1,110,159

124,317

1,234,476

541,625

30,572

572,197

73,912 242,950

778

73,912 243,728

17,238,534

325,505

17,564,039

8,135,046 779,412

4,702 66,906

8,139,748 846,318

1,123,923

46,892

1,170,815

Material items Depreciation and amortisation Impairment made for property, plant and equipment and intangible assets Share of profit of associates, net of tax Segment assets Segment assets include: - Associates - Capital expenditure

Material items Depreciation and amortisation Impairment made for property, plant and equipment and intangible assets Share of profit of associates, net of tax Segment assets Segment assets include: - Associates - Capital expenditure Segment liabilities


N otes to the Financial Statements Year ended 31 December 2010 Reconciliations of reportable segment operating profit, asse ts and liabilities

Group 2010 $’000 Operating profit Operating profit for reportable segments Other income Impairment made for property, plant and equipment and intangible assets Impairment made for financial assets Corporate and unallocated expenses Share of profit of associates, net of tax Finance costs Profit before income tax Segment assets Segment assets for reportable segments Cash and bank balances Financial assets Swap hedging instruments

Segment liabilities Segment liabilities for reportable segments Corporate liabilities Borrowings Loans from non-controlling shareholders of subsidiaries Bank overdrafts Current tax payable Deferred tax liabilities Swap hedging instruments

1,481,995 80,744 (66,292) (309) (27,835) 261,343 (340,462) 1,389,184

2009 $’000

1,234,476 83,006 (73,912) (492) (35,864) 243,728 (342,383) 1,108,559

16,555,068 2,052,092 334,432 7,963 18,949,555

17,564,039 1,842,438 183,959 20,462 19,610,898

1,145,839 77,136 8,233,643 25,945 16,394 247,744 300,441 53,594 10,100,736

1,170,815 56,662 9,370,156 26,106 45,487 293,168 301,587 53,579 11,317,560

87

88

Every Note Counts

N otes to the Financial Statements Year ended 31 December 2010 Geographical information The Group operates principally in South East Asia, Europe and North East Asia. Contributions from the other individual overseas operations are not significa nt and are therefore presented in aggregate as “others”. Segment revenue is based on geographical location of the operations. Segment assets are based on the geographical location of the assets.

Group

Revenue South East Asia Europe North East Asia Others

Non-current assets South East Asia Europe North East Asia Others

31

2010 $’000

2009 $’000

2,419,203 1,128,242 293,549 235,486 4,076,480

2,240,385 1,161,404 248,651 184,992 3,835,432

3,655,213 2,072,571 1,908,331 651,674 8,287,789

3,813,302 2,327,666 1,981,454 628,512 8,750,934

Financial risk management Overview Risk mana gement is integral to the whole business of the Group. Exposure to credit, liquidity and market risks (including interest rate, currency and price risks) arises in the normal course of the Group’s business. The Group has writ ten risk management policies and guidelines. In addition, the Group has established processes to monitor and manage major exposures. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group’s activities.

Credit risk The Group has a credit policy in place which establishes credit limits for customers and monitors their balances on an ongoing basis. Credit evaluations are performed on all customers requiring credit over a certain amount. Cash and fixed deposits are placed with banks and financial inst itutions which are regulated. Investments and transactions involving swap hedging instruments are allowed only with counter parties that are of certain credit standing. At 31 December 2010, there is no significant concentration of credit risk. The maximum exposure to credit risk is represented by the carrying amount of each financial asset, including swap hedging instruments, in the statement of financial position. The principal risk to which the Company is exposed is credit risk in connection with the guarantee contracts it has issued. The credit risk represents the loss that would be recognised upon a default by the parties to which the guarantees were given on behalf of. To mitigate these risks, management continually monitors the risks and has established processes including performing credit evaluations of the parties it is providing the guarantee on behalf of. The Company only issues guarantees on behalf of its subsidiaries and jointly-controlled entities, which amounted to $1.84 billion (2009: $3.53 billion) as at 31 December 2010.


N otes to the Financial Statements Year ended 31 December 2010 Liquidity risk The Group monitors its liquidity risk and maintains a level of cash and cash equivalents deemed adequate by management to finance the Group’s operations and to mitigate the effects of fluctuations in cash f lows. The following are the expected contractual undiscounted cash (inf lows)/outflows of f inancial liabilities, including interest payments and excluding the impact of netting agreements:

Cash flows Carrying amount

Contractual cash flows

Within 1 year

Within 1 to 5 years

More than 5 years

$’000

$’000

$’000

$’000

$’000

8,179,508

10,018,904

1,137,616

3,761,029

5,120,259

54,135 16,394 1,132,778

58,704 16,394 1,132,778

1,570 16,394 1,132,778

31,269 -

25,865 -

(7,963) 53,594 9,428,446

(7,963) 76,539 11,295,356

(7,963) 17,806 2,298,201

19,023 3,811,321

39,710 5,185,834

9,308,753

10,657,369

1,093,733

5,839,814

3,723,822

61,403 45,487 1,144,431

64,035 45,487 1,144,431

1,918 45,487 1,144,431

17,570 -

44,547 -

Group 2010 Non-derivative financial liabilities Interest-bearing liabilities Loans from non-controlling shareholders of subsidiaries Bank overdrafts Trade and other payables Interest rate swaps - Assets - Liabilities

2009 Non-derivative financial liabilities Interest-bearing liabilities Loans from non-controlling shareholders of subsidiaries Bank overdrafts Trade and other payables Cross currency interest rate swaps - Assets - Liabilities

(9,529) 3,618

(9,721) 4,185

2,634 (482)

(12,355) 4,667

Interest rate swaps - Assets - Liabilities

(9,998) 49,961

(9,998) 50,454

(9,998) 27,602

23,372

(520)

(935) 10,593,191

(935) 11,945,307

(935) 2,304,390

5,873,068

3,767,849

Forward contracts on fuel hedging - Assets

-

89

90

Every Note Counts

N otes to the Financial Statements Year ended 31 December 2010 Cash flows Carrying amount

Contractual cash flows

Within 1 year

Within 1 to 5 years

More than 5 years

$’000

$’000

$’000

$’000

$’000

2010 Interest-bearing liabilities Trade and other payables

3,021,886 403,632

3,938,129 403,632

741,175 403,632

429,925 -

2,767,029 -

2009 Interest-bearing liabilities Trade and other payables

2,266,987 380,046

2,996,727 380,046

120,954 380,046

1,043,722 -

1,832,051 -

Company

The table above indicates the periods in which the swap hedging instruments that are cash flow hedges are expected to impact the income statement.

Market risk Market risk is the risk that changes in market prices, such as interest rates, foreign exchange rates, equity prices and fuel prices will affect the Group’s income or the value of its holdings of financia l instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return on risk.

(i)

Interest rate risk The Group’s exposure to changes in interest rates relates primarily to the Group’s interest-earning financial assets and interest-bearing financial liabilities. The Group’s objective is to maintain a balance of fixed and f loating rate exposures as well as a balanced maturity period. At the reporting date, the interest rate profile of the interest-bearing financial assets and liabilities was:

Group

Fixed rate Cash and cash equivalents Borrowings Floating rate Other non-current assets Cash and cash equivalents Borrowings

Company 2010 2009 $’000 $’000

2010 $’000

2009 $’000

1,680,034 (4,098,838) (2,418,804)

1,507,697 (3,559,546) (2,051,849)

1,063,749 (2,893,092) (1,829,343)

21,699 355,664 (4,134,805) (3,757,442)

21,132 289,254 (5,810,610) (5,500,224)

31,352 (128,794) (97,442)

916,580 (2,266,987) (1,350,407) 85,088 85,088


N otes to the Financial Statements Year ended 31 December 2010 Hedging The Group has raised funding with issuance of debt capital market instruments and bank loans to diversify funding sources. Interest rate swaps, which are denominated in Singapore dollars, US dollars and Euro, have been entered to achieve an appropriate mix of fixed and floating rate exposures within the Group’s policy.

Fair value hedge A portion of the fixed rate Singapore dollar notes with a notional amount of $150.0 million (2009: $300.0 million) has been hedged agains t the exposure to changes in the fair value of the notes. In connection with this, the Group entered into interest rate swap contracts to receive fixed rate interest and pay variable rate on t he $150.0 million notes. The Group is therefore exposed to market fluctuations in interest rates on the $150.0 million notes and the corresponding interest rate swap contracts. The net fair value of the swaps as at 31 December 2010 comprises assets of $2.2 million (2009: assets of $3.5 million and liabilities of $0.4 million).

Cash flow hedge A portion of the f loating rate bank loans a mounting to $0.52 billion (2009: $0.81 billion) has been hedged against the exposure to market fluctuations in interest rate payments. In connection with these loans, the Group entered into interest rate swap contracts to receive variable rate interest and pay fixed rate on the notional amounts. Both the floati ng rate bank loans and interest rate swaps have the same terms and conditions. The net fair value of the swaps as at 31 December 2010 comprises assets of $8.0 million and liabilities of $53.6 million (2009: assets of $10.0 million and liabilities of $50.0 million).

Sensitivity analysis At 31 December 2010, it is estimated that a general increase of 100bps in interest rates would decrease the Group’s profit before tax by approximately $33.3 mill ion (2009: $49.9 million). A general decrease of 100bps in interest rates would have the equal but opposite effect on the Group’s profit before tax. The general increase of 100bps in interest rates is not expected to have significa nt impact on the Group’s equity. This analy sis assumes that al l other variables, in part icular foreign currency rates, remain constant a nd does not take into account the associated tax effects and share of non-controlling interest.

(ii)

Foreign currency risk The Group is exposed to foreign currency risk on sales, purchases, bank deposits, bank loans and fixed and floating rate notes that are denominated in a currency other than the functiona l currencies of the Group entities. The functional currencies of the Group entities are primarily Singapore dollars, Euro and Renminbi. In respect of other monetary assets and liabilities held in currencies other than the functional currencies of the Group entities, the Group monitors the net exposure.

91

92

Every Note Counts

N otes to the Financial Statements Year ended 31 December 2010 The Group’s and Company’s significant exposures to foreign currencies are as follows:

31 December 2010

31 December 2009

HK Dollar $’000

US Dollar $’000

HK Dollar $’000

US Dollar $’000

22,553 1,018 (330,686) (10,072) (317,187)

5,765 21,699 91,368 27,255 (3,910,365) (33,823) (3,798,101)

63,581 3,616 (180,414) (3,268) (116,485)

4,570 21,132 228,540 22,514 (4,328,752) (26,252) (4,078,248)

331,400 22,512 1,018 (330,686) (10,072) 14,172

1,418,230 43,115 (2,691,200) (19,417) (1,249,272)

180,810 63,148 3,616 (180,414) (1,321) 65,839

700,975 172,732 150 (2,086,573) (10,068) (1,222,784)

Group Financial assets Other non-current assets Cash and cash equivalents Trade and other receivables Interest-bearing liabilities Trade and other payables

Company Loans to subsidiaries Cash and cash equivalents Trade and other receivables Interest-bearing liabilities Trade and other payables

Cash flow hedge At 31 December 2009, a portion of the Singapore dollar and Euro denominated bank loans amounting to $0.40 billion has been hedged again st the exposure to market fluctuations in foreign exchange rates. In connection with these loans, the Group entered into cross currency interest rate swap contracts to receive variable rate interest in Singapore dollars and Euro and pay variable rate interest in Hong Kong dollars. Both the bank loans and cross currency interest rate swaps have the same terms and conditions. The net fair value of swaps as at 31 December 2009 comprised assets of $9.5 million and liabilities of $3.6 million.

Hedge of net investment in foreign operation The Group’s US dollar and Hong Kong dollar denominated unsecured bank loans, fixed and floating rate notes amounting to $4.13 billion (2009: $4.53 billion) are designated as hedging instruments for the Group’s investment in its associated companies.


N otes to the Financial Statements Year ended 31 December 2010 Sensitivity analysis At 31 December 2010, it is estimated that a 10% strengthening in Singapore dollar against Hong Kong dollar and US dollar would decrease the Group’s profit before tax by approximately $1.4 million (2009: $6.4 million) and increase the Group’s profit before tax by approximately $2.4 million (2009: decreas e by $10.9 million) respectively. A 10% strengthening in Singapore dollar against Hong Kong dollar and US dollar is not expected to have a significant impact on the Group’s equity as the bank loans, fixed and f loating rate notes are designated as a hedge of the Group’s investment in its associated companies. At 31 December 2010, it is estimated that a 10% strengt hening in Singapore dollar aga inst Hong Kong dollar and US dollar would decrease the Company’s profit before tax by approximately $1.4 million (2009: $6.6 million) and increase the Company’s profit before tax by approximately $124.9 million (2009: $122.3 million) respectively. This analysis assumes that all other variables, in particular i nterest rates, remain constant and does not take into account the associated tax effects and share of non-controlling interest.

(iii)

Equity price risk Equity security price risk is the risk of changes in fai r value of the Group’s investments due to changes in the underlying equity securities prices. The risk is concentrated in the Group’s investments in equity securities.

Sensitivity analysis At 31 December 2010, it is estimated that a 10% increase in the underlying equity securities prices would increase equity by $33.0 million (2009: $17.9 million). A 10% decrease in the underlying equity se curities prices would have the equal but opposite effect on the Group’s equity. This analysis as sumes that all other variables, in particular foreign currency rates, remain constant and does not take into account the associated tax effects and share of noncontrolling interest.

Fair value hierarchy The table below analyses fi nancial in struments carr ied at fair value, by valuation method. The different levels have been defined as follows: • 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 observa ble 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 liabilit y that are not based on observable market data (unobservable inputs).

93

94

Every Note Counts

N otes to the Financial Statements Year ended 31 December 2010 Level 1 $’000

Level 2 $’000

Total $’000

330,049 330,049

7,963 7,963

330,049 7,963 338,012

Group 31 December 2010 Available-for-sale financial assets Swap hedging instruments assets

Non-derivative financial liabilities Swap hedging instruments liabilities

31 December 2009 Available-for-sale financial assets Swap hedging instruments assets

Non-derivative financial liabilities Swap hedging instruments liabilities

-

179,133 179,133 -

(150,922) (53,594) (204,516)

(150,922) (53,594) (204,516)

20,462 20,462

179,133 20,462 199,595

(305,975) (53,579) (359,554)

(305,975) (53,579) (359,554)

Estimation of fair values The following summarises the significant methods and assumptions used in estimating the fair values of financial instruments of the Group and Company.

Quoted equity securities Fair value is based on quoted bid prices at the reporting date, without any deduction for transaction costs.

Hedging instruments The fair value of cross currency/interest rate swaps and fuel forward contracts is bas ed on broker quotes. These quotes are tested for reasonableness by discounting estimated future cash flows based on the terms and maturity of each contract and using market interest rates for a similar instrument at the measurement date.

Fixed rate interest-bearing loans Fair value is calculated based on quoted offer price or discounted expected future principal and interest cash flows using market interest rates.

Floating rate interest-bearing loans The Group believes that the carrying amounts of floating rate interest-bearing loans, which are repriced at least semiannually, reflect the corresponding fair values.


N otes to the Financial Statements Year ended 31 December 2010 Finance lease liabilities The fair value of finance lease liabilities is estimated as the present value of future cash flows, discounted at market interest rates for homogeneous lease agreements. The estimated fair values reflec t changes in interest rates.

Non-derivative financial assets and liabilities Fair value, which is determined for disclosure purposes, is calculated based on the present value of future principal and interest cash flows, discounted at the market rate of interest at the reporting date.

Other financial assets and liabilities The notional amounts of financial assets and liabilities with a maturity of less than one year (including cash and cash equivalents, trade and other receivables, bank overdrafts, trade and other payables, short-term borrowings) are assumed to approximate their fair values. The fair values of the financial a ssets and liabilities, together with the carryi ng amounts shown in the statement of financial position, are as follows:

Loans

Swap

Other

Total

and

Available-

hedging

financial

carrying

Fair

receivables

for-sale

instruments

liabilities

amount

value

$’000

$’000

$’000

$’000

$’000

$’000

9 10 11 11 14

30,160 545,585 2,052,092 2,627,837

330,049 330,049

7,963 7,963

330,049 30,160 545,585 7,963 2,052,092 2,965,849

330,049 30,160 545,585 7,963 2,052,092 2,965,849

14

-

-

-

17 17 17 17

-

-

-

17

-

-

Note

Group 31 December 2010 Financial assets Other non-current assets Trade and other receivables Swap hedging instruments Cash and cash equivalents

Bank overdrafts Unsecured fixed and floating rate notes Secured bank loans Unsecured bank loans Finance lease liabilities Loans from non-controlling shareholders of subsidiaries Trade and other payables Swap hedging instruments

23

(53,594) (53,594)

(16,394)

(16,394)

(16,394)

(4,020,561) (4,020,561) (1,288,819) (1,288,819) (2,747,978) (2,747,978) (122,150) (122,150)

(4,137,235) (1,287,830) (2,746,420) (116,551)

(54,135) (54,135) (1,132,778) (1,132,778) (53,594) (9,382,815) (9,436,409)

(54,135) (1,132,778) (53,594) ( 9,544,937)

95

96

Every Note Counts

N otes to the Financial Statements Year ended 31 December 2010 Loans

Other

and Note

Total

Available- Swap hedging financial

carrying

Fair

receivables

for-sale

instruments

liabilities

amount

value

$’000

$’000

$’000

$’000

$’000

$’000

9 10 11 11 14

32,648 575,995 1,842,438 2,451,081

179,133 179,133

20,462 20,462

179,133 32,648 575,995 20,462 1,842,438 2,650,676

179,133 32,648 575,995 20,462 1,842,438 2,650,676

14

-

-

-

17 17 17 17

-

-

-

17

-

-

11 11 14

221,769 1,095,101 1,316,870

-

788 788

17

-

-

(788) (788)

11 14

218,854 1,001,668 1,220,522

-

-

17

-

-

-

Group

31 December 2009 Financial assets Other non-current assets Trade and other receivables Swap hedging instruments Cash and cash equivalents

Bank overdrafts Unsecured fixed and floating rate notes Secured bank loans Unsecured bank loans Finance lease liabilities Loans from non-controlling shareholders of subsidiaries Trade and other payables Swap hedging instruments

23

(53,579) (53,579)

(45,487)

(45,487)

(45,487)

(3,469,846) (3,469,846) (1,371,721) (1,371,721) (4,454,850) (4,454,850) (12,336) (12,336)

(3,589,503) (1,371,687) (4,453,792) (11,557)

(61,403) (61,403) (61,403) (1,144,431) (1,144,431) (1,144,431) (53,579) (53,579) (10,560,074) (10,613,653) (10,731,439)

Company 31 December 2010 Trade and other receivables Swap hedging instruments Cash and cash equivalents

Unsecured fixed and floating rate notes Trade and other payables Swap hedging instruments

31 December 2009 Trade and other receivables Cash and cash equivalents

Unsecured fixed and floating rate notes Trade and other payables

23

-

221,769 788 1,095,101 1,317,658

(3,021,886) (3,021,886) (402,844) (402,844) (788) (3,424,730) (3,425,518)

-

218,854 1,001,668 1,220,522

(2,266,987) (2,266,987) (380,046) (380,046) (2,647,033) (2,647,033)

221,769 788 1,095,101 1,317,658

(3,140,227) (402,844) (788) (3,543,859)

218,854 1,001,668 1,220,522

(2,377,066) (380,046) (2,757,112)



Commitments As at the reporting dates, the Group has the following commitments:

Group

(i)

(ii)

2010 $’000

2009 $’000

Capital commitments which have been authorised and contracted but not provided for in the financial statements

250,424

446,466

Non-cancellable operating lease commitments payable: Within 1 year After 1 year but within 5 years After 5 years

19,917 66,458 209,661

18,322 63,593 226,829

The Group leases a number of office premises under operating leases. The leases run over various periods with some leases containi ng an option to renew the lease after that date. Lease terms are reviewed at renewal of leases.

33

Related parties Key management personnel compensation Key management personnel of the Group are those persons having authority a nd responsibility for planning, direct ing and controlling the activities of the Group. The Board of Directors and Senior Management Council of the Company are considered as key management personnel of the Group. Key management personnel compensation comprises:

Group

Directors’ fees Senior management council remuneration *

*

Comprises short-term employment benefits

2010 $’000

2009 $’000

1,378 11,517 12,895

1,463 12,185 13,648

97

98

Every Note Counts

N otes to the Financial Statements Year ended 31 December 2010 Other related party transactions Other than disclosed elsewhere in the financial statements, transactions with related parties are as follows:

Group

Provision of services to related corporations Purchase of services from related corporations

34

2010 $’000

2009 $’000

237,598 (27,095)

209,960 (27,803)

New accounting standard not yet adopted The Group has not applied the following accounting standard (including its consequential amendments) that ha s been issued as of 31 December 2010 but is not yet effective: •

FRS 24 (revised) Related Party Disclosures

The revised FRS 24 clarifies the definition of a related party to simplify the identification of such relationships and to eliminate inconsistencies in its application. The revised FRS 24 expands the definition of a related party and would treat two entities as related to each other whenever a person (or a close member of that person’s family) or a third par ty has control or joint control over the entity, or has significant influence over the entity. The initial application of the sta ndard (and its consequential amendments) is not expected to have any material impact on the Group’s fina ncial statements. The Group has not considered the impact of accounting standards i ssued after 31 December 2010.

35

Subsequent event Subsequent to year end, the directors proposed a net final dividend of $0.66 per share amounting to $400 million. The dividend has not been provided for in the financial statements.


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99

100

Every Note Counts

PSA HEADUARTERS PSA INTERNATIONAL PTE LTD

GUANGZHOU CONTAINER TERMINAL

INDIA PSA INDIA LIA ISON OFFICE

VENICE CONTA INER TER MINAL

1 Huangpu Xingang Road, Guang zhou

38th Floor PSA Building, 460 Alexandra Road,

Economic and Technological Development Zone, Guangzhou 510730

5th Floor, Bhupati Chambers, 13 Mathew Road, Charni Road (E),

Marghera (VE) Tel +39 041 2582796

Singapore 119963

Tel +86 20 82256328

Mumbai 400 004

Fax +39 041 5380944

Tel +65 62794010

Fax +86 20 82256233

Tel +91 22 30404730

www.vecon.it

Fax +65 62794213 www.internationalpsa.com

www.gct.com.cn

Fax +91 22 23683653

TIANJIN TERMINALS

TUTICORIN CONTAINER TERMINA L

PORTUGAL SINES CONTAINER TERMINAL

SOUTHEAST ASIA PSA SOUTH EAST ASIA 36th Floor PSA Building,

Tianjin Port Alliance International

Tuticorin Container Terminal Building,

Terminal de Contentores de Sines,

Container Terminal Co. Ltd No. 1068, Lin Hai Road, Tanggu District,

Berth No.7, Harbour Estate, Tuticorin 628004

Apartado 195, 7520-903 Sines Tel +351 26 9870600

460 Alexandra Road,

Tianjin 300461

Tel +91 461 6451001 / 2354001

Fax +351 26 9870614

Singapore 119963

Tel + 86 22 25702990

Fax +91 461 2352260

www.psasines.pt

Tel +65 62795190 Fax +65 62795463

Fax + 86 22 25702990 www.tact.com.cn

CHENNAI INTERNATIONAL

Tianjin Port Pacific International

TERMINALS

TURKEY MERSIN INTERNATIONAL PORT

SINGAPORE SINGAPORE TERMINALS

Container Terminal Co. Ltd No. 3889, Meizhou Road, Tianjin East Port

2nd Floor, North Wing, Jawahar Building (Opp. Customs House), 17 Rajaji Salai,

Yeni Mahalle 101 Cad. 5307 Sk. No:5, 33100 Mersin

36th Floor PSA Building,

Free Trade Zone, Tianjin 300463

Chennai 600001

Tel +90 324 2390939

460 Alexandra Road,

Tel + 86 22 25603502

Tel +91 44 25613000

Fax +90 324 2390849

Singapore 119963 Tel +65 62747111

Fax + 86 22 25603502 www.tpct.cc

Fax +91 44 25613111 www.citpl.co.in

www.mersinport.com.tr

PSA DONGGUAN CONTAINER

KOLKATA CONTAINER T ERMINAL

TERMINAL Humen Port Avenue,

5th Floor, Bhupati Chambers, 13 Mathew Road, Charni Road (E),

PANAMA PSA PANAMA INTER NATIONAL TERMINAL, S.A.

Shatian Xidatan Section,

Mumbai 400 004

Suite 11188, APDO 0832-1236,

Dongguan, Guangdong 523990 Tel +86 769 88666181

Tel +91 22 66563000

World Trade Center, Panama City

Fax +91 22 23649236

Tel +507 3783800 Fax +507 3783801

Fax +65 62744261 www.singaporepsa.com THAILAND EASTERN SEA LAEM CHABANG TERMINAL Laem Chabang Port, B3, Toong Sukhla, Sriracha, Chonburi 20230

Porto Commerciale – Molo B 30175,

AMER ICAS

Fax +86 769 88666180

Tel +66 (0) 38 490094

www.psa-dgct.com

Fax +66 (0) 38 490095 www.esco.co.th

HONG KONG TERMINALS

KANDLA CONTAINER TERMINAL 5th Floor, Bhupati Chambers,

ARGENTI NA EXOLGAN CONTAINER TERMINAL Alberti 1780,

4/F Main Office Building,

13 Mathew Road, Charni Road (E), Mumbai 400 004

VIETNAM SP-PSA INTERNATIONAL PORT CO., LTD

Container Terminal 8 West,

Tel +91 22 66563000

(1871) Dock Sud,

Kwai Chung Container Terminal, New Territories, Hong Kong

Fax +91 22 23649236

Buenos Aires, Argentina Tel +54 11 42290000 / 58119100

Road #3, Phu My Industrial Zone,

Tel +852 22768241 Fax +852 21484023

PAKISTAN PSA GWADAR INTERNATIONAL

(switchboard)

Phu My Town, Tan Thanh District,

TERMINALS Office: 37A, Harbour House,

www.exolgan.com

Ba Ria - Vung Tau Province Tel + 84 64 3924567

Fax +54 11 42290031

Fax +84 64 3924555

SOUTH KOREA PSA KOREA

2nd Floor, Lalazar Area,

MARINE

www.sp-psa.com.vn

126-1, 7-ga, Hang-dong, Jung-gu,

Off Moulvi Tamizuddin Khan Road,

NORTHEAST ASIA

Incheon 400-037 Tel +82 32 8908900

Karachi 74000. Terminal: Control Tower Building,

SINGAPORE PSA MARINE (PTE) LTD 70 West Coast Ferry Road,

CHINA PSA CHINA OFFICE 4/F Main Office Building,

Fax +82 32 8908996

Pak China Friendship Road,

Singapore 126800

INCHEON CONTAINER TERMINAL

Gwadar Port, Gwadar, Balochistan Tel +92 21 35636400

Tel +65 67772288 Fax +65 63799800

Container Terminal 8 West,

126-1, 7-ga, Hang-dong, Jung-gu,

Fax +92 21 35611962

www.psamarine.com

Kwai Chung Container Terminal,

Incheon 400-037

www.psagwadar.com

New Territories, Hong Kong Tel +852 22768241

Tel +82 32 8908880 Fax +82 32 8908990

Fax +852 21484023

www.psa-ict.co.kr

DALIAN TERMINALS Dayaowan Port Area, Dalian 116601

PUSAN NEWPORT INTER NATIONAL TERMINAL

Tel +86 411 87597547

1488 Seongbuk-dong, Gangseo-gu Busan,

Fax +86 411 87598307

Korea 618-821

www.dpcmterminal.com www.dct.com.cn

Tel +82 51 290 8001 Fax +82 51 290 8002

BELGIUM & THE NETHERLANDS PSA ANTWERP Napelsstraat 79, 2000 Antwerp, Belgium

www.pnitl.com

Tel +32 3 260 6126

EUROPE & MEDITERRANEAN PSA EUROPE Napelsstraat 79, 2000 Antwerp, Belgium

FUZHOU TERMINALS

Tel +32 3 2606111 Fax +32 3 2606271

Fax +32 3 2606200

Xin Jiang Road, Jiangyin, Fuqing, Fujian 350309

JAPAN HIBIKI CONTAINER TERMINAL

www.psa-antwerp.be

Tel +86 591 85966888

Chisaki, 3-chome, Hibiki-machi,

PSA ZEEBRUGGE

Fax +86 591 85966666 www.fict-fuzhou.com.cn

Wakamatsu-ku, Kitakyushu City Tel +86 13672128266

Caxtonweg Q140-143, 8380 Zeebrugge, Belgium

113 Luoxing Road Mawei, Fuzhou, Fujian 350015

Tel +32 50 543612 Fax +32 50 547520

Tel +86 591 83682473 Fax +86 591 83986897

MIDDLE EAST SOUTH ASIA PSA MIDDLE EAST SOUTH ASIA #34-01 PSA Building,

www.fqct-fuzhou.com.cn

460 Alexandra Road, Singapore 119963

ITALY VOLTRI TERMIN AL EUROPA

Tel +65 62794010 Fax +65 62794213

Porto di Pra-Voltri, 16158 Genoa Tel +39 010 6164403

www.internationalpsa.com

Fax +39 010 6132308

www.psa-zeebrugge.be

www.vte.it

PSA_AR2010

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