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ANNUALREPORT

2013

MALDIVES TRANSPORT AND CONTRACTING COMPANY PLC

4 MTCC ANNUAL REPORT 2013

Acknowledgment

a

This report (Annual Report) comprises the Annual

Report of the Maldives Transport and Contracting

Company PLC for 2013, completed in accordance

with the Companies Act of the Republic Maldives,

the Listing Rules of the Maldives Stock Exchange,

The Securities Act of the Republic of Maldives, the

Cooperate Governance Code of capital Market

Development Authority Requirements, Securities

(Continuing Disclosure Obligations of Issuers)

Regulation and Regulation for Companies.

Unless otherwise stated in this Annual Report, the terms

‘MTCC’ and ‘Company’ refer to Maldives Transport

and Contracting Company PLC and/or its subsidiaries.

Unless otherwise stated figures in Financial Statement

is presented in Maldivian Rufiyaa (1 US Dollar = MVR

15.42).

MTCC prepares its financial statements in accordance

with International Financial Reporting Standards

(IFRS). Reference to a ‘year’ in this report, unless

otherwise indicated, refer to the Company’s financial

year ending 31st December 2013.

In this report, financial and statistical information

is, unless otherwise indicated, stated on the basis of

the Company’s financial year. Information has been

updated to the most practical date.

This Annual Report contains forward looking statements

that are based on current expectations or forcasts, as

well as assumptions about future events. These forward

looking statements can be identified by the fact that

they do not relate to historical or current facts.

Undue reliance should not be placed on any such

statements because, by their very nature, they are

subject to known and unknown risks and uncertainties

and can be affected by other factors that could cause

actual results, and MTCC plans and objectives, to

differ materially from those expressed or implied in the

forward looking statements. There are several factors

which could cause actual results to differ materially

from those expressed or implied in forward looking

statements. MTCC cannot guarantee future results and

thus cannot be legally held responsible for variations

with performance or achievements.

5MTCC ANNUAL REPORT 2013

Corporate profile 7finanCial HigHligHts 14annual review 17

Chairman’s Statement 18CEO’s Statement 20Board of Directors 24Top Management 28

Business review 33Contracting 33Sales 39Transport 45

team mtCC 51Csr 57tHe sHare struCture 61Corporate governanCe 65

Director’s Report 66Nomination Committee Report 73Audit Committee Report 74Remuneration Committee Report 76Remuneration Report 77

suBsidiary 81finanCial review 85finanCial statements 91Corporate information 129

Contents

Corporate Profile


MTCC is ...

Maldives Transport and Contracting Company Plc (MTCC) was

incorporated on 18 December 1980 as the first public company in

the Maldives. Throughout its existence MTCC has positioned itself as

the leading marine and land transport provider and civil and marine

contractor.

Today the company offers diverse services such as logistical operations,

modern transport services, construction and project management

services and a plethora of reputed product brands such as Yanmar

and Suzuki marine engines, Caterpillar heavy machinery, Hamilton

propulsion system, Castrol lubricants and Sigma protective coatings.

MTCC strives to maintain its market position through sustainable

business development and strategic growth. MTCC’s success is

signified by the trust placed on it by its stakeholders and committed

employees.


Vision

To be the country’s most dynamic company,

delivering sustainable business solutions.


Mission - Build shareholder value by delivering innovative,

cost-effective, reliable and safe contracting,

transportation and logistics services at the highest

quality

- Achieve profitable growth through superior customer

service and supply of outstanding products through

dedication, commitment and excellence.


Values - Creativity - We seek innovative ways to reach our goals. We see

creativity as key to dynamic problem solving and quality improvements.

- Employee Development – We are committed to effective employee

training and development strategies to assure staff expertise and

excellence.

- Integrity – We believe that our actions should be honest, ethical and

transparent, respecting the diversity of our clients and each other.

- Social Responsibility – We recognize our social responsibility and

contribute to the greater development of the society and the country.

- Dedication – We work diligently and conscientiously and maximize

efforts towards our goals.


2009 2010 2011 2012 2013

473

-14 -49 -8 24 27

381

505

579 564

27473

2009 2010 2011 2012 2013

724

352

450

382

619

342

381

600

675636

619

772009 2010 2011 2012 2013

108

381

31

579

77

564

473505

78 82

Financial Highlights

Revenue & Net Profit (MVR Millions)

Total Debt & Total Assets (MVR Millions)

Revenue & Gross Profit (MVR Millions)

Revenue

Net Profit

Total Debt

Total Assets

Revenue

Gross Profit

Gross Profit

Total Assets

Net Profit


Financial Highlights of 5 Years

Group Group Group Group Group

MVR (Millions) 2013 2013 2012 2012 2011 2011 2010 2010 2009 2009

Sales 564.02 564.02 579.20 579.21 505.08 505.08 381.10 381.10 473.43 474.34

Cost of Sales 486.81 486.81 497.17 497.17 427.46 427.46 350.01 349.99 365.64 365.35

Gross Profit 77.22 77.22 82.03 82.03 77.62 77.62 31.09 31.11 107.79 108.99

Expenses and Other Income (net) 24.77 24.75 45.32 45.30 58.90 58.88 59.81 59.59 99.30 98.59

Operating Profit 52.45 52.47 36.71 36.73 18.71 18.73 (28.72) (28.48) 8.49 10.40

Financing Cost 17.51 17.51 10.19 10.19 24.37 24.37 19.48 19.48 22.75 22.75

Net Profit 34.94 34.96 26.52 26.54 (5.66) (5.64) (48.20) (47.96) (14.26) (12.35)

Extraordinary Items - - - - 2.52 2.52 0.40 0.40 - -

Business Profit Tax 8.19 8.19 2.51 2.51 0.14 0.14 - - - -

Net Profit 26.75 26.77 24.01 24.03 (8.32) (8.29) (48.60) (48.36) (14.26) (12.35)

Non- Current Assets 199.68 206.79 210.43 217.54 204.74 210.59 263.57 269.42 384.84 322.86

Current Assets 419.44 420.36 425.91 426.81 470.14 472.27 336.87 339.00 339.36 338.91

Total Assets 619.12 627.14 636.34 644.35 674.88 682.86 600.44 608.42 724.20 661.77

Borrowings 20.17 20.17 22.17 22.17 11.47 11.47 28.77 28.77 45.66 45.66

Non- Current Liabilities 16.86 16.86 69.24 69.24 - - 34.12 34.12 81.11 4.43

Current Liabilities 304.58 304.56 290.42 290.41 438.83 438.81 289.31 289.31 303.95 307.56

Total Liabilities 341.61 341.60 381.84 381.82 450.30 450.28 352.20 352.20 430.71 357.65

Working Capital 114.86 115.79 135.49 136.40 31.32 33.46 47.56 49.68 35.40 31.35

Net Assets 277.51 285.54 254.51 262.53 224.58 232.58 248.24 256.21 293.48 304.12

Gross Profit Ratio 13.69% 13.69% 14.16% 14.16% 15.37% 15.37% 8.16% 8.16% 22.77% 22.98%

Net Profit Ratio 4.74% 4.75% 4.15% 4.15% -1.65% -1.64% -12.75% -12.69% -3.01% -2.60%

Earnings Per Share (MVR) 106.99 107.07 96.04 96.13 (33.26) (33.18) (194.40)

(193.44) (57.04) (49.40)

Dividend Per Share (MVR) 15.00 15.00 - - - - - - 10.00 10.00

Share Capital (Millions) 12.50 12.50 12.50 12.50 12.50 12.50 12.50 12.50 12.50 12.50

Net Assets Value per Share (MVR) 1,110.02 1,142.18 1,018.03 1,050.11 898.33 930.31 992.94 1,024.85 1,173.93 1,216.48

Return on Equity (ROE) 9.64% 9.37% 9.43% 9.15% -3.70% -3.57% -19.58% -18.87% -4.86% -4.06%

Gearing Ratio (Long Term Debt to Equity) 7.27% 7.07% 8.71% 8.44% 5.11% 4.93% 11.59% 11.23% 15.56% 15.01%

Annual Review


Chairman’s Statement

to all tHe stakeHolders of tHe Company

I am pleased to present the Annual Report and Audited

Financial Statements of Maldives Transport and

Contracting Company Plc for the year ended 2013.

It gives me great pleasure to note that the unqualified

audit opinion by the auditors for 2013 towards the

positive operating performance demonstrates a bright

future for the company.

Harbour construction and coastal protection work

which are the major areas of business for the company

suffered a setback as importing construction material

such as rock boulders and aggregate from India was

banned from April 2013 until the end of the year

significantly delaying several projects. The impediment

adversely affected the company’s cash flow and overall

business. In addition, the company’s transportation

sector continued to make a loss as previous years.

Despite some business segments making losses,

trading and contracting segment generated MVR83

million as operating profit for the company.

I believe that a successful year for the company was

achieved by the foresight of the then Chairperson

and the members of the board of directors, the hard

work of the management and the staff, hence I take

this opportunity to convey my sincere gratitude for

their efforts. Furthermore, I extend my gratitude to our

loyal customers, suppliers and the confidence and

cooperation extended by all the interlocutors of the

company who also contributed to this success.


I am confident that we will continue to receive such

commitment and cooperation from all the stakeholders

to further strengthen and expand the business of

the company in future. I assure you that we remain

steadfast to work with you in achieving these goals.

investments during tHe year

So far this year, 19 projects have been signed and by

the grace of God, the management will continue its

efforts to secure additional projects.

In order to maintain the company’s position in today’s

competitive markets, efforts are being put in to develop

and strengthen the business through contemporary

techniques. The company remains confident that

this objective will be achieved through the activities

planned by the company for human capacity building

and promote unity amongst the staff.

As the continued losses made by the company in the

transportation sector can only be overcome if the land

plots granted by the government as a subsidy can

be developed, efforts are being made to make swift

decisions.

future of tHe Company

As the first and the oldest public company of the

Maldives, the primary objective of the board of

directors, management and staff is to make Maldives

Transport and Contracting Company Plc the most

successful and the most profitable company for its

shareholders.

In that regard, the company is doing its utmost to

develop its human resources capacity, increase

its productivity and establish a conducive work

environment in the bid to achieve this objective.

As the future success of the company hinges on its ability

to invest in new business ventures and explore new

avenues to resolve existing challenges, the company

is exploring new business opportunities including port

services, docking services, tourism and real estate.

The company would like to assure its shareholders that

it will put in every effort to maintain the success of the

company, to overcome all possible challenges, adopt

new business strategies and implement its plans to

further strengthen the company. The company would

also like to assure its continued commitment to making

it a strong and reliable business hub.

I pray almighty Allah to grant brighter days ahead for

the company.

Igbal Adam

Chairman


CEO’s Statement

overview

As we grow past 1000 employees and as the CEO

at MTCC I see great potential thus, am faced with

much challenges and opportunities alike. Getting a

team behind the much-needed change is not going

to be easy and so the way forward has to be about

building and leading teams and hiring dedicated

people who would deliver. Empowering those taking

the initiative to lead and grow, coordinating everyone

around common goals, and ensuring those goals

and values are adhered. Moreover the focuses of our

management will have to be in developing a culture

that respects and fosters corporate thinking.

Experiences in leading fast-growing teams has led me

to believe that with proper guidance and clear direction

we can create invaluable and dynamic employees

who are equally dedicated to the company, with full

commitment to customers and employer. Furthermore,

to increase efficiency in all aspects of work, we need

to introduce new innovation and derive set KPI’s to

measure productivity to complete the process and

reward the achievers desirably.

outlook at 2013

Glancing at the Financial out look of the company for

the year 2013, the company may boast as heading

in the right direction showing positive figures for 2

consecutive years. However, the distressing cash flow

situation needs serious thought and a turn around.

Formulating a sustainable business model for the

Public Transport Services is the most challenging task

for the management. This however, requires much

thought on operational statistical data and changes


to existing design. Also require a clear strategic focus

that encompasses statutory legal framework and

internal policies with clear mandates. The company

also needs to find ways to minimize the bureaucracies

that hinders conducting its businesses, that invariably

makes it difficult to keep up with competitors in the

ever growing, fast pace business environment that we

operate in.

leap to 2014

For the present year, we highly anticipate an inflow of

Capital to support our planned projects. A move from

the traditional focus on sustaining existing businesses is

considered, whilst the Brand “MTCC” being marketed

to the extent of reaching to every corner of the country.

Without a doubt MTCC can live up to its expectations

and take advantage of its full government support and

continue to be a leading market player in the socio

infrastructure development and take a foot hold in the

booming construction industry too. MTCC also wishes

to embark into Tourism sector for its much-needed

foreign currency requirement to support its other

businesses. Being a one stop ‘total solution provider’

the company can establish itself as the trusted local

partner as well as a reliable partner to international

investors/contractors wishing to set up FDI’s in the

Maldives. MTCC while contributing to social well

being of the general public through its Corporate

Social Responsibility policies brings social harmony

through its set standards in quality and delivery, which

the others in the industry are coerced to follow.

CollaBoration

Our management will strive to reach the expectations

of its Shareholders and reap share value through

desired dividend payments and customer satisfaction.

With confidence nurtured over the years through

complex infrastructure development projects carried

out in harsh marine environments, which many would

dare to undertake, MTCC has supported the local

communities and played a major role in the country’s

urbanization. Building on this confidence, MTCC will

continue to accomplish even more achievements and

success. The management hopes and appeals to its

Board members to extend their extensive support and

guidance during the much needed change process to

ascertain the business expansion and growth through

integration and nurturing team spirit. Taking pride

in being the first public company in the Maldives,

our management will place a high level of respect

to its loyal shareholders who have stood behind the

company through thick and thin.

Ally in essence we wish to exceed the expectations

of our shareholders and our valued clients with our

sincere commitment, dedication and willingness to

face any challenge. We are strongly committed to act

with integrity and show our meaningful contribution

towards the well being of all stakeholders and the

society, making a positive difference in their everyday

lives. I pray that with the blessing of all mighty Allah,

together we will be able to grow this company even

further.

Thank you

Ahmed Shiham Ali

Chief Executive Officer


Mr Iqbal AdamChairman

Mr Ahmed Shiham AliChief Executive Officer

Board of Directors

Mr. Iqbal Adam was appointed as the Chairman of the

Board of Directors of MTCC on 5th January 2014. Mr.

Iqbal Adam has acquired valuable experience in various

fields. In that regard, he has served as the Assistant Director

at Hulhumale Development Corporation and as the Atoll

Chief of Thaa Atoll. Mr. Iqbal Adam was a board director

at Maldives Broadcasting Corporation and is also presently

the vice president of the Ukraine-Maldives Business Council.

Mr. Iqbal Adam has undergone training in Management and

Finance both in Maldives and abroad and gained valuable

experience in these fields.

Mr. Iqbal Adam also serves at the board of directors of

the company’s subsidiary, Maldives Real Estate Investment

Corporation Ltd.

Mr. Ahmed Shiham Ali was appointed as the Chief Executive

Officer on 24th December 2013. With a Master’s Degree

in Business Administration from the James Cook University

in Australia, Mr. Ahmed Shiham Ali also graduated with an

Honours Degree in Administration Management in 1996

from University of Lincolnshire and Humberside, UK.

In addition to completing extensive training programs in

business and administration, Mr. Ahmed Shiham Ali has

vast career experience in such fields. In this regard, he has

served as the Managing Director, General Manager and

Board Director at Fuel Supplies Maldives Pvt Ltd. He also

worked as the head of Fuel and Lubricants Department and

Electronics and Government Import Department of State

Trading Organization Pvt Ltd. He played a pivotal role in

the establishment of Maldives Structural Products Pvt Ltd,

a subsidiary of STO and also served at the board of the

company. In a private business venture, he worked as the

Managing Director at Land Builders Pvt Ltd and as the

Marketing Director in Asix Maldives Pvt Ltd.

Since January 14, 2014 Mr. Ahmed Shiham Ali has been

representing the company in the board of directors at the

Airport Investment Maldives Pvt Ltd. He is also a member

of the Board of the Directors at the Maldives Real Estate

Investment Corporation, a subsidiary of the company.


Mr Ahmed AzmeelDirector (Government)

Mr Hussain SaalimDirector (Government)

Mr. Ahmed Azmeel was appointed to the Board of Directors

on 24th December 24, 2013. He has a Diploma in

Computer Sciences from the Informatics Computer School in

Cambridge and a NCC International Diploma in Computer

Sciences. He also participated in several workshops and

seminars in the field of management. Mr. Ahmed Azmeel

who is the Director of Marine Equipments Pvt Ltd also served

and gained valuable experience in National Security Services

and State Trading Organization.

Mr. Ahmed Azmeel is also a member of the Board of

Directors in the subsidiary company, Maldives Real Estate

Investment Corporation Ltd.

Mr. Hussain Salim who was appointed by the government

to the Company’s Board on 24th December 2014. He is

the Director of Operations at Sun Hotels and Resorts. He

has headed several major construction projects under Sun

Group and has amassed vast experience in both construction

and tourism sectors.


Mr Ali ShafeeuDirector (Public)

Mr Hussain HaalyDirector (Public)

Mr. Ali Shafeeu was first elected to MTCC’s Board of

Directors by the public shareholders on 19th August before

being elected again on 30th July 2012.

An affiliate of the Association of Chartered Certified

Accountants (ACCA), UK, Mr. Ali Shafeeu holds a Masters

Degree in Business Administration. Mr. Ali Shafeeu, who is

presently the Director of Administration and Finance at the

Maldives Civil Aviation Authority, also served as the Financial

Controller in Maldives Post Limited and has more than 12

years service in finance at Maldives Airports Company Ltd.

The public shareholders elected Mr. Hussain Halee to the

MTCC’s Board of Directors on 30th July 2012. He has

also served at the Board of Directors from 27th August

2005 to 30th October 2011 after being elected by the

public shareholders. Mr. Hussain Halee has a diploma in

Information Technology from the University of Wollongong

Institute of Management and Administration. A shareholder

and director of Quarthran Maldives Pvt Ltd, Mr. Hussain

Halee has over 19 years of experience in the business sector.


Mr Nasrath MohamedDirector (Public)

Mr Ahmed AboobakuruDirector (Public)

Mr. Nasrath Mohamed was elected by the public shareholders

to the Board of Directors on 29th May 2013. He holds a

Masters Degree in Business Administration from Victoria

University in Australia and a Bachelor’s Degree in Marketing

and Management from the Australian College of Business

and Technology. With over decade of experience in sales,

Mr. Nasrath Mohamed is currently the Head of Sales and

Client Services at Allied Insurance.

Mr. Nasrath Mohamed is also a member of Board of

Directors in the subsidiary company, Maldives Real Estate

Investment Corporation Ltd.

Mr. Ahmed Aboobakru was elected by the public shareholders

to the MTCC’s Board of Directors on May 29, 2013. Mr.

Ahmed Aboobakru who has gained vast experience during

his stints in the government and State Trading Organization

is currently serving as the Administrative Director at Danican

Construction and Trading, and the Managing Director of

Dynamic Construction and Trading Pvt Ltd. In this regard, he

has headed numerous construction projects and amassed

vast experience during the process.

Mr. Ahmed Aboobakru has been representing the company

in the Board of Directors at Airports Investment Maldives Pvt

Ltd since June 2, 2013.


1 2 3Mr Ahmed Shiham Ali

CEO

Mr Mohamed HilmyCFO

Mr Shifau AliFinancial Controller

Board of Directors


4 5 6 7Mr Ahmed Saeed

General Manager

Mr Ibrahim LatheefGeneral Manager

Mr Ismail AdhuhamGeneral Manager

Ms Aishath Suzan HaneefGeneral Manager


2 3

4

Mr Mohamed HilmyChief Financial Officer

Mr Shifau AliFinancial Controller

Ms Aishath Suzan HaneefGeneral Manager

Mr. Mohamed Hilmy joined the company in 2011 and

was appointed to the post of Chief Financial Officer on

April 24, 2013. Mr. Mohamed Hilmy who also served

as MTCC’s Financial Controller and has worked in

Maldives Ports Limited and Price Waterhouse Coopers.

In addition to being a member of the Association for

Chartered Certified Accountants (ACCA, UK), Mr.

Mohamed Hilmy is also a member of the Certified

Accounting Technicians (CAT).

As a member of the directors’ board of Maldives

Finance Leasing Company, Mr. Mohamed Hilmy is

currently representing MTCC in the directors’ board of

MFLC.

Mr. Shifau Ali, who is the company’s Financial

Controller, joined the Company in 2007.

Mr. Shifau Ai, who also served as the head of both

finance and procurement departments, has an Honours

Degree in Accounting and Finance from University of

East London, UK. Before joining MTCC, Mr. Shifau Ali

worked in Mologs and Horseburg Public Accountants

Pvt Ltd and provided consultancy service in Audit

and Assurance and finance to private companies in

Maldives.

General Manager Ms. Aishath Suzan Haneef joined

MTCC in the year 2000. She is the division Head of

the Human Resources and Administration Department,

Legal Department and the Information Communication

Technology Department.

With a Masters Degree in Business Administration

(Marketing) from the Queensland University, Australia,

Ms. Aishath Suzan Haneef also has a Bachelor’s

Degree in Business Administration (International

Business) from the University of East London, UK. She

has also served as the Head of Building Services and

Security Department, Marketing Department, Rentals

Department, Corporate Department, Corporate

Bureau and the Human Resources Department.


5 7

6

Mr Ahmed SaeedGeneral Manager

Mr Ismail AdhuhamGeneral Manager

Mr Ibrahim LatheefGeneral Manager

General Manager Mr. Ismail Adhuham joined the

company in 2014. He is the division Head of the

Procurement Department, Sales and Marketing

Department and the Transport for Maldives Department.

Mr. Ismail Adhuham holds a Master’s Degree in

Business Administration from Weymbro College in

Business Administration, Ireland. In addition, he also

has an Associate Degree from the Australian Institute

of Business and Technology and a Bachelor of Business

Degree from the Edith Cowen University, Australia.

Mr. Ismail Adhuham has a rich work experience during

his service as the General Manager and Human

Resources Manager at Three A Trading Company,

Marketing Representative of the Code Marketing UK

Ltd and the Human Resources and Marketing Manager

at the Allied Insurance Company of the Maldives. In

addition, Mr. Ismail Adhuham has attended various

conferences and completed training programs in the

field of insurance and quality assurance.

General Manager Mr. Ahmed Saeed joined the

company in the year 1999. Mr. Ahmed Saeed has a

Bachelor’s Degree in Civil and Structural Engineering

from the University of Bradford, UK. Mr. Ahmed Saeed

is the division Head of Construction and Projects

Department. Mr. Ahmed Saeed who had also served as

the Head of Constructions and Projects Management

Department, Senior Engineer, Engineer and Surveying

Officer has vast experience and training in the

construction and projects management field.

In addition, Mr. Ahmed Saeed is a board member of

Maldives Civil Aviation Authority.

General Manager Mr. Ibrahim Latheef who joined

the company in 1999 is overseeing the Repairs and

Maintenance Department and the Thilafushi Dockyard.

Between 2012 and 2014, Mr. Ibrahim Latheef served as

an Executive of the Business Development Department.

Mr. Ibrahim Latheef who has a honours degree in

Marketing from the University of Hertfordshire, UK

also served as the head of Administrative Department,

Marketing Department, Procurement Department and

the Building Services and Security Department.

Mr. Ibrahim Latheef is an affiliate member of the

Chartered Institute of Marketing (CIM).

CONTRACTING

Business Review


MTCC in Infrastructure Development

Maldives is a small nation made up of over a thousand

islands scattered across the Indian Ocean, making

transportation and logistics the biggest challenge faced

by the country. Henceforth, the dreams of so many were

realized after the construction of contemporary harbours

that paved the way for easier unloading of goods and

travel between islands which in turn hastened the pace

of development.

By 2013, MTCC has played a pivotal role in the

construction of harbors in over 90 percent of the

islands.

The services being provided by MTCC in the field

of infrastructure development include, harbor

construction, land reclamation, breakwaters and

revetments. From surveys to the completion of a

respective project, MTCC has the expertise, human

resources and specialized equipment required from the

initial planning to completion.

It is an irrefutable fact that MTCC is a Maldivian

company with immense experience and currently is

at the pinnacle of handling mega projects including

harbor construction, infrastructure, road construction

and airport development.

MTCC has the necessary

resources, manpower and

knowhow needed from

surveying till completion

of projects. ”

“

Seawall construction


The initial method of stacking sandbags as revetment

was revolutionized in 2007, when MTCC began

using “Pre-cast L blocks” which prolonged the life of

revetments in the islands manifold. As a result, the

harbors being constructed at present will outlast half

a century.

In the past decade, 5,172,465.93 cubic meters of

harbor has been constructed throughout the Maldives

through various projects undertaken by MTCC.

MTCC has also reclaimed 235.11 hectares of land

during the same period. In a bid to expand its role

in infrastructure development, the company’s venture

into road construction and airport development was a

resounding success where thousands are reaping the

benefits of the airport completed in 2012.

Although the company secured several harbor projects

in 2013, construction work on harbors and shore

protection suffered a prolonged delay after Government

of India stymied the export of rock boulders, aggregate

and other construction materials to the Maldives. The

resulting consequence on the company’s cash flow

adversely affected the overall business operation.

In a bid to recommence the delayed projects, MTCC

purchased rock boulders imported by a local company

before the Indian export ban and also explored

alternative foreign markets for rock boulders and

aggregate.

Despite the daunting challenges in 2013, the company

continued work on 31 projects and engineered

the successful completion of eight. These included

27 harbours and dredging projects, two airport

development projects, one sheet piling and a land

reclamation project.

In 2013, MTCC was awarded 17 new projects with

a total value of MVR404 million. Given the fact that

harbors in most islands already constructed, MTCC

has already realigned its focus into other areas of

infrastructure development.

Contribution to total revenue from Contracting, the

most prominent business segment of the company

declined from 60 percent in 2012 to 49 percent

this year. This was down to a 20 percent decline in

segmental revenue compared with 2012 which

resulted in a 17 percent decrease in operating profit.

In comparison with 2012, the company recorded a

drop of business by MVR71 million, mainly due to the

ceasing of export of construction material from India

from March 2013 until the end of the year which

significantly delayed several projects.

In spite of this decline, the company still managed to

maintain a 19 percent operating profit margin.

Seawall construction


260

30

155

8

224

43

347

61

276

51

2009 2010 2011 2012 2013

ContraCting (MVr in Millions)

Sales Operating Profit

Contracting is the largest segment of the company in

terms of revenue generation and its contribution to

the total revenue of the Company for 2013 stood at

49% (2012: 60%). The revenue generated from this

segment has come down by 20% in 2013 compared

to 2012, and consequently the operating profit also

decreased by 17% during the year compared to 2012.

The significant drop in the revenue of the construction

department by MVR 71 million (20%) compared to

2012 is basically due to the restrictions placed by

the Indian Government on the export of rock boulders

and construction materials to the Maldives starting

from March 2013 and unconfined in the beginning of

the year 2014. Despite the significant drop in revenue

the contracting business has mnaintained a net profit

margin of 19% during the year.

Dredger

Terminal Construction

Land Reclaimation

Harbour Construction


Dredger

Terminal Construction

Land Reclaimation

Harbour Construction

TRADING

Business Review


MTCC in marine transport revolution

The mode of travel for Maldivians in sail boats

was revolutionized during the 1970s with the first

mechanized boats. Since then, MTCC – the oldest

public company in the Maldives – has played a pivotal

role in the progress made by the fishing industry, cargo

transportation and the ferry service.

The then accepted 12 horsepower Yanmar engine, has

been notched up to 900 horsepower by MTCC with the

ever growing aspirations of the people. Yanmar is the

most popular engine brand amongst Maldivian boat

owners and engineers. Yanmar engines continuing to

maintain the confidence of customers in a competitive

market is undoubtedly due to the excellent customer

service being provided by MTCC.

Our engineers provide much needed expertise for

clients in selecting the most suited engine for a

respective vessel during its initial phase. It is notable

that this service is highly accepted and appreciated by

customers.

MTCC also provides customer friendly after sales service

which includes sending engineers to any location within

the Maldives.

Yanmar engine is the

most popular engine

among the local

sailors and engineers.

”

“


To further enhance its customer service, MTCC staff

undergoes regular training to be kept up to date on

the technological developments of its products.

MTCC provides world renowned engines, spare parts

and engine oil to match the advancement of modern

marine vessels.

The products sold by MTCC include Castrol engine oil,

Yanmar engine, Genset, spare parts, Suzuki outboard

engine, Hamilton water jet, Sigma protective coating,

Himoinsa Genset and industrial gas. Out of these,

Castrol is the most preferred engine oil in the Maldives.

In addition, the Suzuki outboard engine is also widely

accepted by customers.

marketing aCtivities

In order to market the wide variety of products sold by

the company and gain valuable customer feedback,

MTCC travelled to Baa, Meemu, Faafu, Dhaalu, Gaafu

Dhaalu and Gnaviyyani Atoll in 2013. In addition, in

a bid to expand the market for Yanmar and Suzuki

engines, several activities were also conducted in

Addu City.

During marketing activities in Alifu Alifu Atoll, in

addition to providing information on Suzuki engines

and Castrol products, efforts were made to gain

an insight into the difficulties faced by customers in

seeking services provided by the company.

A special event dubbed as “Castrol Week” was held in

Male to promote Castrol engine oil.


106

17

118

25

145

31

131

29

162

33

2009 2010 2011 2012 2013

trading (MVr in Millions)


In 2013, a grand event was held to introduce brand

new products of Sigma Protective Coating.

To help achieve the sales target for Suzuki engines a

special ‘Suzuki promotion’ was conducted during the

month of Ramadan.

MTCC has also sponsored several events held to

celebrate the 33rd annual Fishermen’s Day.

The segment’s primary focus has been providing a

wide range of products for marine vessels. The main

aim of this segment has been to maintain the leading

position In comparison with 2012, the year 2013 saw

a 24 percent increase in trading segment (9.5 percent

increase in 2012) whilst at the end of December 31,

2013 operating profit rose from MVR29 million to

MVR33 million. This is a 14 percent increase from

2012. In 2013, operating profit in relation to revenue

was at 21 percent whilst the rate was at 22 percent in

the previous year.

The main reason for the decline in 2013 was the rise in

expenditure on sales and marketing and the provisions

made for inventory.

TRANSPORT

Business Review


0

5

10

15

20

20132012

201120102009200820072001

MTCC Pioneering Transportation Services

oil PriCe Vs Ferry tiCket (MVr)

Oil Price per Litre

Hulhumale’ Ferry Ticket Price

Vilingili Ferry Ticket Price

People have been resorting to sea travel for education,

health and holidays in the Maldives since the beginning

of time. Henceforth, in an island nation surrounded

by the ocean, sea transportation is a basic need. The

primary objective for the inception of the company

whihc is partially owned by the government and the

public is to cater to the people’s basic necessity of

transportation.

The expansion of MTCC’s transportation service saw

the company taking over the ferry service between Male

and Vilingili in 2001. MTCC further expanded its ferry

service to include Hulhumale following its development

as an inhabited island in 2003. Today, MTCC also

provides ferry service to the largely industrial island

of Thilafushi. Following the government’s vision to

connect the whole country under one transportation

network, MTCC commenced ferry service in the north

central province in 2010.

The company has maintained its original ticket prices

despite hikes in materials and oil prices since MTCC

commenced providing ferry service..


76

-8

67

-20

80

-26

78

-31

88

1

2009 2010 2011 2012 2013

transPort (MVr in Millions)


In 2013, the services provided by the transport services

department was re-branded where ferry service was

changed to Ferry Link, Male and Hulhumale express

speedboat service was re-named as Express Link

and the entire transportation service was re-named

as Transport for Maldives. In the bid to improve the

bus service provided by the company in Hulhumale,

modern buses were introduced, branded as the ‘metro

bus’. The newly introduced buses in Hulhumale are

safe, spacious, reliable, environmental friendly vehicles

with greater mileage. Though the bus service started in

Neighborhood-1 in Hulhumale, with the habitation of

Neighborhood-2 the company added the area to its

routes in 2013.

As part of its ongoing efforts to modernize the ferry

service, MTCC introduced travel cards to passengers

using Male-Hulhumale route under the Ferry Link. The

travel card made travelling easier for passengers as it

enabled them to avoid queues to purchase tickets. .

Due to the continuing losses incurred by the transport

segment, the government in 2013 granted a monthly

subsidy of MVR3.5 million. However, it is noteworthy

that the subsidy has not undermined the company’s

efforts to provide high quality transportation service.

With the ever growing population in Hulhumale,

ferries have been added throughout the year to

cater to the increase in passengers. In addition, the

services provided in ferry terminals have also been

upgraded. The company’s land transportation service

in Hulhumale and the Ibrahim Nasir International

Airport was enhanced during the year with the

introduction of a 50-seat metro bus. By the end of

December 31, 2013, a total of MVR14.8 million had

been invested to improve the quality of transportation

service (2012: MVR 1.5 million). To cut down the time

spent by passengers at ticket counters, an Automatic

Fare Collection System was introduced during the year.

Before the end of 2014, a similar system is scheduled

to be established in Villingili and the north central

province.

Team MTCC


56%

44%

Company Staff

staFF distribution

Expatriate

Maldivian

The real contributors to the success and progress made

by MTCC are the dedicated and diligent staff of the

company across the Maldives. By the end of 2013,

a total of 995 staff was employed by the company,

including 436 expatriates and 559 Maldivians. The

staff comprise of 95 female and 900 male employees.

reCruiting and retaining CapaBle staff

The company always strives to recruit, retain and

develop competant employees. MTCC strongly believes

that the company cannot survive without its employees,

and its objectives cannot be attained without them.

During 2013, a total of 195 new staff were hired.

The company looks to promote internally when job

opportunities become available within the company.

The company believes that such opportunities provide

the staff a chance for career advancement.

The employee turnover rate was at 1.76 percent in

2013 and the company succeeded in retaining 98.2

percent of its staff during the year.


developing Human resourCes

In order to maintain the company’s status of a skilled

and highly trained labor force, the company puts great

emphasis on providing necessary training to its staff.

In that regard, a total of 549 employees underwent

short term training programs both abroad and in

Maldives during 2013. The training areas covered

in Maldives include Fraud and Forensic Accounting,

Cash Management, Legal, Islamic Capital Market,

and awareness programs on Occupational Health and

Safety, Land and Sea Transportation Regulations and

Safety, Communications and Human Trafficking.

The training areas covered abroad include

Compensation and Benefit Management, Commercial

Engineering, Forensic Auditing and Contract

Administration Management.

MTCC has always provided industrial training for

students of mechanical engineering. In that regard,

four students were given the opportunity of on the job

training by MTCC in 2013. In addition, two students

were given the opportunity to gain work experience in

the Human Resources Department, and Accounts and

Finance Department respectively.

serviCe reCognition

The company places great emphasis on recognizing,

appreciating and lauding diligent and productive

employees. In this regard, 85 employees with 15

years or more service were presented with plaques

and commemorative certificates during the company’s

33rd anniversary gala in order to appreciate and

recognize their valued service to the company.


Club MTCC

The MTCC recreation club, “Club MTCC” is primarily

responsible for promoting unity amongst the members

of “Team MTCC”. In that regard, Club MTCC had

conducted various activities ranging from social, sports,

religious and entertainment during 2013 – designed

to further motivate the staff. In addition, Club MTCC

launched its own website complete with its logo, in a

bid to strengthen the functioning of the club.


CSR

As one of the largest companies in the Maldives and the

oldest public limited company, a reliable and affable

relationship between the company and the community

is of utmost importance to the company. The ever

improving ties between the community and the company

are primarily down to the company taking the initiative

to partake in activities that contribute to the betterment

of society. It is the company’s objective to constantly

be involved in such activities to further strengthen and

maintain its relations with the community.

MTCC has taken the initiative to engage in various

social activities and heeded requests made by local

organizations for assistance whilst completing projects

in islands across the Maldives. The company has

also provided assistance in various social programs

conducted by local schools and organizations.

One of the most noteworthy social responsibility

programs conducted by the company since 2007 is

the sponsoring of two teachers of the local orphanage

(Kuda Kudhinge Hiyaa).

The government awarded MTCC with the cleanup of

the Male city dump after a fire broke out at the site

creating a hazardous environment for the schools,

students and people residing in the vicinity. Though

the project duration was four months, given the dire

situation of the people in the area MTCC took upon

itself to expedite the completion of the project and after

working round the clock, managed to finish the clean-

up in two months.

The Share


The ShareThe shareholding structure of the company remained

unchanged during 2013. As at 31st December 2013,

Government of Maldives owned 47.8% of the shares,

Maldives National Shipping Limited owned 7.5% and

the public owned 44.7%.

No single party other than the Government and MNSL

directly or indirectly owned more than 5% of the shares

of the Company.

At the end of 2013, shareholding structure stood as

shown below.

Name No. of Shares % Owned

Government 119,661 47.8%

Public 111,643 44.7%

MNSL 18,696 7.5%

The shares of the company was sold in 1980 with a

face value of MVR 50.00 per share.

sHare market performanCe

During 2013 a total of 90 shares of MTCC were traded

in the stock market, which is an 83.3% increase in the

share movement compared to the 15 share which was

traded during the year 2012. The highest price quoted

for the reporting period was MVR 200, the lowest MVR

150.

The Company’s market capitalization, calculated

using the closing price for the reporting period was

MVR 45 million, whilst the market capitalization at the

end of 2012 stood at MVR 50 million.

Table of Share performance of 2012 and 2013

2013 2012

Lowest Traded 150.00 200.00

Highest Traded 200.00 200.00

Last Trading Price 180.00 200.00

Weighted Average 170.78 200.00

No. of Shares Traded 90 85

Market Capitalization (Millions) 45,000,000 50,000,000

Dividend Yield (%) 8.3 7.5

Earning per Share 106.99 96.04

Price Earning Ratio (P/E) 1.68 1.87

Share Price Movement (MVR)

Average Market Price and Net Assets Value per Share (MVR)

100

200

300

400

500

2013201220112010200920082007200620052004

180

2009 2010 2011 2012 2013

180

1,174

156

993

265

898

230

1,018

178

1,110

Average Market Price

Net Assets Value per Share


dividend

The Company’s net profit for the year after tax reached

MVR 26,767,798, which is an increase of 11% from

year 2012.

Safeguarding the interest of the shareholder and

maximizing the return on their investment is a priority

for the board of directors and the Company has

continuously tried to achieve this by diversification and

operational developments. Dividend per share at the

end of the reporting year stood at MVR 106.99 an

increase of 11% compared to 2012.

The board of directors has proposed a dividend of

MVR 16 per share at the forthcoming Annual General

Meeting, while MVR 15 was declared as dividend at

the Annual General Meeting of 2012.

2013 2013

Earnings per Share (MVR) 106.99 96.04

Dividend per Share (MVR) 15.00 16.00

Earnings per Share and Dividend per Share (MVR)

sHareHolders return

The Group has accumulated a gross value to the

equity holders amounting to MVR 26.7 million with a

Return on Equity of 10% during the year ended 31

December 2013, consequently net asset value per

share also increased to MVR 1,110 per share from

MVR 1,018 per share compared 2012. Earnings per

share also increased to MVR 107 per share from MVR

96 per share in 2012. In the meantime a dividend of

MVR 15 per share was declared and paid during the

year 2013 from the net profits of 2012 after making

continuous losses for the past 3 years.

Dividend Yield and Return on Equity (%)

Net Assets and Market Capitalization (MVR in Millions)

Dividend per Share

Dividend Yield

Net Assets

Earnings per Share

Return on Equity

Market Capitalization (Average Price)

2009 2010 2011 2012 2013

-5710 15-194 -33

96 107

16

2009 2010 2011 2012 2013

-5%

6%

-20% -4%

9% 10%8%

2009 2010 2011 2012 2013

45

293

31

248

73

225

50

255

45

278

Corporate Governance


Corporate Governance Report

The Company is run in accordance with the Companies

Act 10/96, the Company’s Articles of Association and

Memorandum of Association, Corporate Governance

Code of Capital Market Development Authority

(CMDA), Listing Rules of Maldives Security Depository

and Maldives Financial Security Act.

The Board of Directors (the Board) ensures that all the

activities and obligations of the Company are carried

out in a transparent and fair manner.

Board of direCtors

The Company is led by and controlled by the Board,

which has overall responsibilities for the conduct of

the business of the company. The Board is responsible

for setting the strategic direction of the Company and

ensure that if has resources and appropriate controls,

values and standards in place to deliver its strategies.

overall responsiBility of tHe Board

The Board is responsible to ensure that the Company is

being run in a way which is sustainable in the long term

development and strategy. Other than the statutory

tasks resolved in Annual General Meeting (AGM) of

the Company under section 10/96 of the Companies

Act, the Company’s Articles of Association and

Memorandum of Association, Corporate Governance

Code of CMDA , Listing Rules of Maldives Security

Depository and Maldives Financial Security Act, all

other duties and responsibilities directly or indirectly

related in achieving the organizational goal and

objectives of the Company lies with the Board.

� Main responsibilities of the directors board are:

� Setting the Company’s Vision and Mision.

� Protect and safeguard the interest of the

Shareholders.

� Study and approve company policies. Ensure all

regulations and procedures are being followed.

� Determine the operational and financial policies

of the Company

� Obtain basic investment need to achieve the

objectives of the Company

� Maximize the wealth of the Shareholders

� Study and approve Annual Reports and Financial

Statements

� Identify the risks to the Company and ensure

strong internal controls are in place to overcome

these risks

role of tHe CHairman and CHief exeCutive offiCer

As per the Corporate Governance Code and section

80 of the Articles of Association of the Company,

the Chairman and the Chief Executive Officer of the

Company are two separate individuals and do not

have any family or business relation between them.

role of tHe CHairman

The overall responsibility of the Chairman is to provide

the Board and the Shareholders with regard to the

operation of the Company.

Responsibilities of the Chairman include;

� Lead the Board to ensure its effectiveness on all

aspects of its role and set its agenda

� Ensure that the directors receive accurate, timely

and clear information

� Encourage constructive relations between the

Board and Management

� Facilitate the effective contribution of non-


executive directors in particular during and outside

of Board meetings

� Encourage constructive relations between

executive directors and non-executive directors

� Not to unilaterally issue policies without consulting

with the Board as a whole with full frank and

discussions being completed

� Ensure effective communication with shareholders,

and

� Promote high standards of corporate governance.

role of CHief exeCutive offiCer

Chief Executive Officer is responsible to manage the

day-to-day management of the operational activities

of the Company in accordance with the overall strategy

and policy as determined by the Board.

Board Composition

As per section 63 of Articles of Association of the

Company, the Board of Directors of the company

consists of 10 directors. With respect to the

shareholdings of the Company, 6 directors are

appointed by the government and 4 elected by the

public shareholders. Should there be a change in the

shareholding; the composition stated above will also

change accordingly to reflect the change.

Among the 10 directors include 2 executive directors

and 8 non-executive directors. However current board

is missing one executive director seat according to the

Articles of Association of the Company and Corporate

Governance Code. Board also has one non-executive

director seat vacant, whom should be appointed by

the Government of Maldives.

2013 Board of Directors

Name Type of Director Appointed / Elected Resigned / till Attendance

Ms. Aminath Athifa (Government / Independent) Appointed on 6th May 2012 Till 24th December 2013 30/30

Dr. Ahmed Adhuham Abdullah (Government / Executive) Appointed on 4th April 2012 Resigned on 17th September 2013 22/23

Mr. Mohamed Ali Government / Non- Executive Appointed on 6th May 2012 Till 24th December 2013 28/30

Mr. Imran Wajdi Government / Independent Appointed on 6th May 2012 Till 24th December 2013 29/30

Mr. Ihusan Shareef Government / Executive Appointed on 26th August 2012 Till 24th December 2013 26/29

Mr. Mohamed Nabeel Government / Independent Appointed on 9th January 2013 Till 24th December 2013 10/30

Mr. Mansoor Zubair Public / Independent Elected on 29th April 2009 Resigned on 29th May 2013 13/17

Mr. Mujuthaba Jaleel Public / Independent Elected on 30th October 2011 Resigned on 29th May 2013 9/17

* Past Board of Directors

Mr. Ahmed Shiham Ali Government / Executive Appointed on 24th December 2013 1/1

Mr. Azumeel Ahmed Government / Non- Executive Appointed on 24th December 2013 1/1

Mr. Moosa Naseem Government / Independent Appointed on 24th December 2013 Till 5th Jan 2014 1/1

Mr. Hussain Salim Mohamed Government / Independent Appointed on 24th December 2013 1/1

Mr.Ali Shafeeu Public / Independent Elected on 19th August 2009 28/31

Mr.Hussain Haaly Public / Independent Elected on 30th July 2012 28/31

Mr. Ahmed Abubakuru Public / Independent Elected on 29th May 2013 12/12

Mr.Nasrath Mohamed Public / Independent Elected on 29th May 2013 9/12

*Current Board of Directors


Dr Adhuham Abdullah,Ma Maaveyoge, the Company’s

Chief Executive Officer from 4th April 2014 resigned

on 18th September 2014. Then the Board member

Mr Ihusan Shareef was appointed as Acting Chief

Executive Officer from 18th September 2014.

tHe Board’s work 2012

The Board held 31 meeting in 2013.The Subject of

the topics discussed in those meeting are consulting

the Management on how to operate the Company,

obtain investment and finance to the Company, review

the Company’s plan to expand and develop, review

the Company policies and discussion on the reports

submitted by the Committees of the Board

The Board gave a special attention on the decreasing

the loss caused by transport sector and reviewed

necessary action that could be taken to make the

sector profitable.

Additionally, the board gave consultation on securing

finance for the Government awarded Contractor

financed 22 harbours.

The Board recognizes the staff as invaluable asset and

passed resolution to increase staff increments for extra

motivating the staff.

The Board held one non-executive director meeting

excluding executive directors in accordance with

Corporate Governance Code in 2013.

tHe Board’s Committees

In accordance with the provisions of the Articles of

Association and Corporate Governance Code, the

Board has established the following three standing

committees.

1. Nomination Committee

2. Audit Committee

3. Remuneration Committee

The board declared the responsibilities of the

Committees. Each Committee’s responsibility and

works are detailed in page 73 to 76.

disClosure of direCtor’s independenCe and ConfliCt of interest

According to section 76 of the Articles of Association,

the Directors have a duty to avoid a situation in which

they have, or may have a direct or indirect conflict

of interest or possible conflict of interest with the

Company. Also if a director has a conflict of interest,

the Directors agree to excuse themselves from the

discussion on the matter. The Company has no conflict

of interest with neither Directors nor the Management.

There was no direct or indirect conflict of interest of

a director noted with the subsidiary of the Company

in 2013. Also no director has made significant cash

transaction with the Company.

The Company signed several agreements with

various government agencies, the Company’s main

shareholder, to take on several projects.

The Company including the Subsidiary company has

not signed business agreements with any Shareholders

in 2013.

There are no service agreements with the candidates

for public directorship in the upcoming Annual General

Meeting of the Company.

direCtor’s evaluation

The policy for evaluating directors was not finished,

hence the Board was not evaluated.

direCtor’s training

An awareness session on Corporate Governance was

conducted the new directors elected to the Board


during the year in the “Corporate Directors Training”

program conducted by the Institute of Corporate

Directors and Secretaries.

relationsHip witH sHareHolders

The Company places a high priority on communications

with and accountability to shareholders. The Board

recognizes that shareholders, as the ultimate owners

of the Company, are entitled to receive timely

and relevant high quality information about their

investment. Similarly, prospective investors should be

able to make an informed decision when considering

the purchase of shares in MTCC.

Information about the Company and its businesses,

the Board of Directors, Financial and Investor Related

information of the Company and announcements for

the shareholders can be found on the Company’s

website.

Additionally, shareholders are encouraged to attend

Annual General Meetings and question the Board of

Directors and the Management and share their views

with regard to the business and management of the

Company.

The Company fully supports the principles of the

Continuing Disclosure Obligations of the Issuers of

Capital Market Development Authority.

internal audit

During the year internal audits were conducted by the

Company’s Internal Audit Department and by KPMG.

The scope of agreement with KPMG only covers

internal audit.

Internal Audit Department reports functionally to the

Audit Committee and administratively to the Chief

Executive Officer.

external audit

With the approval of shareholders In the Annual

General Meeting of 2012, PriceWaterhouse Coopers

was appointed as the External Auditor for 2013. The

Auditors extended no other service to the Company

during the year apart from the auditing service.

internal Controls

Perceiving the importance of strengthening the future

developments and expansion of the Company, the

current businesses were reviewed and modifications

were made where necessary. Under performing

segments of the company were identified and

monitored while corrective actions were made to

improve the operations. Similarly, the Board monitored

that the Company maintained sound internal controls.

During the year, internal controls were strengthened to

make them more robust in view to safeguard the assets

of the company.

Furthermore, Standard Operating procedure for each

departments of the Company was developed during

the year.

deClaration of tHe Board of direCtors

The Boards responsibility and declaration with the

operation of the Company and financial as follows.

The information in this declaration are true and fair.

Like the past years, The Board of Directors,

Management and employees of the company have

worked to manage the Company in accordance

with the Corporate Governance Code, Listing Rules,

Securities Act and the Company Act, ensuring that the

activities and obligations of the company are carried

out in a transparent and fair manner.

It is the responsibility of Directors to ensure that the

Annual Report and the Financial Statement of the

Company are prepared in accordance with the

International Reporting Standards, Company Act,

Corporate Governance Code and other reporting

regulations.


Annual Report - The information in this annual report

reflects the true and fair picture of the performance of

the Company during the past year.

Financial Statement- The Chief Executive Officer and

Chief Financial Officer has signed the declaration that

the Consolidated Income Statement, Consolidated

Balance Sheet, Consolidated Statement of Changes in

Equity, Consolidated Cash Flow Statement and Notes

to the Consolidated Financial Statements are prepared

in accordance with the International Financial

Reporting Standards.

The financial statements of the Company are prepared

with the assumption that the company has the potential

to continue its business as a going concern.

It is witnessed that there is no major post balance sheet

activity and disclosure will be made for any activity that

is not in line with the reporting standards.

Safeguarding Assets - the Company makes significant

efforts to safeguard the company assets and to increase

internal controls of the Company.

Future - It is the determination of Team MTCC to

build trust between our shareholders, customers and

suppliers and understand the challenges faced by the

company and overcome these obstacles to sustain

firmly in a competitive business environment and

maximize the wealth of our shareholders.

Dividend - It is calculated from the profit of the company

and with reference to the financial performance of the

company. The Board has decided dividend for the year

is need of approval from the shareholders at Annual

General Meeting

aCknowledgment

MTCC is ready to tackle the challenges it faces in

the ever growing competitive market to increase

and maximize the shareholders return, to make our

customers happy, to expands MTCC’s market further.

MTCC will venture in to new markets with the

company’s best interest. Also the company will invest

in making the staffs more productive and happy. The

company will continue its contribution in socially

responsible company.

Heartfelt gratitude and thanks to the former

Chairperson Ms Aminath Athifa for her contribution

as the Chairperson and for numerous contribution

and guidance. Also include the former Chief Executive

Officer, Mr Adhuham Abdullah, outstanding leadership

in bringing the company to profitability.

We thank the outgoing Directors for their guidance

and directorship.

The Directors Report of Maldives Transport and

Contracting Company Plc and the Financial Statement

of the Company as at 31st December 2013 and the

Audit Report was endorsed by the board on 22nd April

2014.

22 April 2014

Igbal Adam Ahmed Shiham Ali

Chairman Chief Executive Officer


Nomination Committee ReportThe Nominating Committee met on four occasions during 2012. The attendance of Board members at Committee

meetings is presented below.

Name Designation Assigned Resigned / till Attendance

Mr. Hussain Haaly Chairman 8th August 2012 3/3

Mr. Ahmed Abubakuru Member 2nd June 2013 1/1

Mr.Mohamed Nabeel member 16th January 2013 Till 24th December 2013 2/3

Mr. Imran Wajdi Member 14th May 2012 Till 24th December 2013 3/3

Mr.Mansoor Zubair Member 14th May 2012 Till 29th May 2013 0/2

As per the Articles of Association, the Nominating

Committee comprises of four directors exclusive of

the Executive Directors. Out of these, 3 directors are

independent/ non-executive directors

Nomination Committee member Mansoor Zubair

did not take part in 2 meetings of the nomination

committee due to a conflict of interest issue.

responsiBilities of tHe nominations Committee

Regularly reviewing the structure, size and composition

of the Board of Directors having regard to their balance

of skills.

Reviewing and making recommendations to the Board

on the conflict of Interest of any of the Directors of

the Board with another Company or personal business

interest of the Director.

Identifying and nominating candidates to the Board

vacancies and evaluating the role and capabilities

required for the particular appointment.

Reviewing and making recommendations to the Board

on the policies of the Corporate Governance Code

complied by the Company and any amendments to

them.

Evaluating Board and Board committees to ensure

that the responsibilities of the board are adequately

performed.

nominations Committee aCtivities

The works carried out by the nomination committee

include evaluating of the candidates for the public

directorship and the directors appointed by the

government based on the Company and Corporate

Governance Code.

In addition to this, recommendations were made to the

Board on possible conflict of interest of Directors with

the businesses of the Company.

Hussain Haaly

Chairman, Nominating Committee


Audit Committee Report

The Audit Committee met on nineteen occasions during 2012.The attendance of Board members at Committee

meetings is presented below;


Mr.Ali Shafeeu Chairman 28th September 2010 27/27

Mr.Mohamed Ali Member 4th May 2012 Till 24th December 2013 26/27

Mr.Hussain Haaly Member 2nd June 2013 21/21

Mr.Nasrath Mohamed Member 2nd June 2013 19/21


Mr.Mujuthaba Jaleel Chairman 1st November 2011 Till 29th May 2013 5/6

Mr.Mansoor Zubair Member 28 September 2010 Till 29th May 2013 4/6

As per the Articles of Association, the Audit Committee

comprises of four non-executive directors and these

members’ have immense experience and knowledge

in analyzing financial statements and situations.

duties and responsiBilities of tHe audit Committee

� Reviewing and monitoring the Internal Risk

Controls and Risk Management Systems

� Monitoring the integrity of the information in the

Annual reports and financial statements of the

Company.

� Reviewing the Accounting policies of the company

and changes made to these policies and ensure

that that these policies are as per the applicable

reporting standards.

� Monitoring the effectiveness, independence and

objectivity of the internal and external Auditor of

the Company.

� Reviewing the audit plans and reports issued by

the internal auditors, follow up actions on the

recommendations made and ensure that adequate

resources are available to the internal auditors to

perform their responsibilities.

� Ensuring that proper mechanisms are in place to

maintain the financial records of the Company.

Committee aCtivities

In 2013, the committee’s activities were focused

in identifying the risks faced by the company due to

business decisions and identifying control issues. The

Committee also reviewed proposals to finance the

investment needed to construct harbours in 22 islands

under contractor finance principles and submitted its

recommendations to the Board.

The main work done by the Committee in 2013 are:

Reviewing financial Reports – the committee reviewed all

the quarterly reports and submitted recommendations

to the board


Risk management and internal controls – risk areas

were identified in audit issues and committee held

discussions on how to minimize the risks

External audit – reviewing the external auditors report

and submitting recommendations to the board

Internal audit – the audit department of MTCC reports

directly to the audit committee. The audit department

submitted control issues based on their findings to the

committee. The committee also reviewed the work of

internal audit executive and submitted findings to the

board

The Chief Executive Officer, Financial Controller,

External Auditor and Internal Auditor participated in

relevant audit committee meetings.

Ali Shafeeu

Chairman, Audit Committee


Remuneration Committee Report

In 2013, the Remuneration Committee held 7 meetings. Attendance of these meetings is presented below.


Mr. Hussain Haaly Chairman 8th August 2012 7/7

Mr. Ahmed Abubakuru Member 2nd June 2013 3/3

Mr. Imran Wajdi Member 14th May 2012 Till 24th December 2013 7/7

Mr. Mohamed Nabeel Member 16th January 2013 24th December 2013 4/7

Mr. Mansoor Zubair Member 14th May 2012 29th May 2013 4/4

As per the Articles of Association, the Remuneration

Committee comprises of 4 independent non-executive

directors of the directors board.

Committee responsiBilities

Reviewing overall remuneration policy of the Board of

Directors and Senior Management.

Reviewing and advising the Board on the remuneration

and benefits provided by the Company

Determining and advising the Board on the bonus

structure of the Company, Employment Contracts, and

Provisions for termination of employees.

Determining and reviewing the overall remuneration

and benefits of the Board of Directors and key

employees with regard to attracting, retaining and

motivating directors and key management of the

experience and caliber required by the Company.

Committee aCtivities

The activities carried out by the Committee in 2013

include:

Reviewing and consulting recommendation on the

amendments to the Salary and Benefit Policy by the

Human Resources Department.


inclusion of “Remuneration of Board Directors and Top

Management” to the Company’s Salary and Benefit

Policy


changes to the Employee Performance Evaluation and

Rewarding Policy.

Amending the Terms of Reference of the Chief Executive

Officer and gave recommendation to the Board.

Reviewing the Company’s Retirement Policy and made

recommendations to the Board

Hussain Haaly

Chairman, Remuneration Committee


Remuneration Report

The salary and allowances for the directors were set

according to The salary and benefits of the Directors

are set in accordance with section 73 of Articles of

Association of the Company and Salary and Benefit

Policy of Remuneration for Board Directors and Top

Management.

Directors are paid a monthly remuneration of MVR

8,000.00 and sitting fee of MVR 500.00 for every

Board and Committee meeting attended. Salary

and benefits are allocated with a fixed ceiling MVR

10,000.00 per month.

Each Director of MTCC receives medical insurance

as per the Company Employees Medical Insurance

Scheme. Also, each Director is subjected to the

Regional Travel Benefit of the Salary and Benefit Policy.

During the year 2013, MVR 1,091,187.09 was paid

to Directors as salary and allowances. Following are

the details of salary and benefits given to the Board

Directors in 2013.

The Executive Directors receive additional pay and

benefits for the position they hold within the Senior

Management.

There was no right given to any Director or the Chief

Executive Officer of the Company to buy shares or

debt security from the Company or its subsidiary.

Name Type of Director Appointed / Elected Resigned / till Attendance

Ms. Aminath Athifa (Government / Independent) Appointed on 6th May 2012 Till 24th December 2013 30/30

Dr. Ahmed Adhuham Abdullah (Government / Executive) Appointed on 4th April 2012 Resigned on 17th September 2013 22/23

Mr. Mohamed Ali Government / Non- Executive Appointed on 6th May 2012 Till 24th December 2013 28/30

Mr. Imran Wajdi Government / Independent Appointed on 6th May 2012 Till 24th December 2013 29/30

Mr. Ihusan Shareef Government / Executive Appointed on 26th August 2012 Till 24th December 2013 26/29

Mr. Mohamed Nabeel Government / Independent Appointed on 9th January 2013 Till 24th December 2013 10/30

Mr. Mansoor Zubair Public / Independent Elected on 29th April 2009 Resigned on 29th May 2013 13/17

Mr. Mujuthaba Jaleel Public / Independent Elected on 30th October 2011 Resigned on 29th May 2013 9/17

* Past Board of Directors

Mr. Ahmed Shiham Ali Government / Executive Appointed on 24th December 2013 1/1

Mr. Azumeel Ahmed Government / Non- Executive Appointed on 24th December 2013 1/1

Mr. Moosa Naseem Government / Independent Appointed on 24th December 2013 Till 5th Jan 2014 1/1

Mr. Hussain Salim Mohamed Government / Independent Appointed on 24th December 2013 1/1

Mr. Ali Shafeeu Public / Independent Elected on 19th August 2009 28/31

Mr. Hussain Haaly Public / Independent Elected on 30th July 2012 28/31

Mr. Ahmed Abubakuru Public / Independent Elected on 29th May 2013 12/12

Mr. Nasrath Mohamed Public / Independent Elected on 29th May 2013 9/12

*Current Board of Directors


sHares of tHe direCtors wHo left tHe Company in 2013

Name Type of Directorship

No. Of Shares

Ms. Aminath Athifa(Appointed by the Government/ independent)

13 shares

Dr. Ahmed Adham Abdulla(Appointed by the Government/ Executive)

No share

Mr. Mohamed Ali(Appointed by the Government/ Non-Executive)

1 share

Mr. Imran Wajdi(Appointed by the Government/ independent)

No shares

Mr. Ihusaan Shareef(Appointed by the Government/ Executive)

No shares

Mr. Mohamed Nabeel (Appointed by the Government/ independent)

No Shares

Mr. Mansoor Zubair(Elected by shareholders/ independent)

2 shares

Mr. Mujthaba Jaleel(Elected by shareholders/ independent)

17 shares

sHares of tHe Current Board of direCtors

Name Type of Directorship

No. Of Shares

Ms. Aminath Athifa(Appointed by the Government/ independent)

13 shares

Dr. Ahmed Adham Abdulla(Appointed by the Government/ Executive)

No share

Mr. Mohamed Ali(Appointed by the Government/ Non-Executive)

1 share

Mr. Imran Wajdi(Appointed by the Government/ independent)

No shares

Mr. Ihusaan Shareef(Appointed by the Government/ Executive)

No shares

Mr. Mohamed Nabeel (Appointed by the Government/ independent)

No Shares

Mr. Mansoor Zubair(Elected by shareholders/ independent)

2 shares

Mr. Mujthaba Jaleel(Elected by shareholders/ independent)

17 shares

The Company Directors can buy Shares or Debt

Security of the Company, but no right given to any

Director or the Chief Executive Officer of the Company

to buy shares or debt security from the Subsidiary.

Shares held by the Directors are acquired by on their

personal capacity.

No Service Contract was made with any Director or

Top Management official. in 2013. No Director or

Top Management official was given the severance

pay or the right to purchase company stock as part of

severance pay.

The Management comprises of the Chief Executive

Officer in charge, and Chief Operating Officer to run

the day-day activities of the Company along with the

Chief Financial Officer.

The salary and allowances for the Top Management

is decided in accordance with the Salary and Benefit

Policy’s Remuneration for Board Directors and

Top Management. During 2013, a total of MVR

4,907,352 was paid as salary and allowances to the

Top Management.

Even though the Corporate Governance Code 2.4,

says that the salary and benefit of the Top Management

should be disclosed, it has been decided by the Board

not to disclose this information as it is sensitive to the

business and the job market.


Maldives Real Estate Investment Corporation Private Limited

MTCC founded the Maldives Real Estate Investment

Corporation as a subsidiary to enter the ever expanding

real estate market in the Maldives in 2007.

sales

During the past year the main activity of the company

was to amend a contract with the Housing Development

Corporation(HDC) to purchase land from Hulhumale’

to develop an apartment building.

The Company also conducted successful negotiations

with the Housing Development Finance Corporation

(HDFC) to secure the necessary finance for this

project. Conceptual planning and design works was

awarded and completed by MTCC. Construction of

this apartment building was contracted to MTCC and

is expected to be started and completed before the

end of 2014.

foreCast

The objective of the Company is to develop and

supply quality housing products and related services

to cater a large variety of customers. Additionally, the

company plans to introduce fully-serviced apartments

and expand into maintenance services. The vision

of the company is to become the leading real estate

company of Maldives. The estimated company’s sales

will be around MVR 18 million this year, with a profit

of MVR 5 million.

Company auditors

The auditor of Maldives Real Estate Investment

Corporation is KPMG. The Annual Report of the

company will be calculated at 31 December along

with the parent company.

Financial Review


Financial Performance

During the year ended 31 December 2013, the

group has generated a profit before tax of MVR 34.9

million from a total revenue of MVR 564 million.

The profit before tax has increased by 32% in 2013

compared to 2012 (MVR 26.5 million), and revenue

for the year ended 31 December 2013 has a drop

of 3% compared to 2012 (MVR 579.2 million). The

main reason for the marginal drop in total revenue

for the year was basically owing to a 20% decrease in

construction revenue, due to the restrictions placed by

the Indian Government on the export of rock boulders

and construction materials to the Maldives.

Cost of Sales in 2013 (MVR 486.8 million) has come

down by 2% compared to 2012 (MVR 497.2 million),

and the increase in cost of sales compared to the

percentage decrease in revenue is basically the direct

fixed overhead cost along with the price inflations

in the market. Administrative, marketing and other

expenses also increased by 17% compared to 2012

owing to the increase in staff costs and utilities. Other

income has significantly increased due to the subsidy

income received from Government of Maldives (MVR

42 million) during the year as compensation towards

the losses incurred from transport services operated by

the Company with controlled tariffs in Greater Male’

area.

Finance Costs (MVR 17.5 million) has increased by

72% in 2013 compared to 2012 (MVR 10.1 million)

due to the increase in interest cost by MVR 1.3 million

and net exchange loss of MVR 3.3 Million from

depreciation of MVR against Japanese YEN and US

Dollars compared to the net exchange gain of MVR

3.0 million in 2012.

Business Profit Tax of MVR 8.2 million has been

provided as expense in the income statement based on

the BPT Act and Regulation 2011/R-35, the Company

is liable to pay tax on business profits from 18 July

2011.

564579

505

381

473

2009 2010 2011 2012 2013

52

37

19

-298

2009 2010 2011 2012 2013

2724

-8-49-14

2009 2010 2011 2012 2013

10796

-33-194-57

2009 2010 2011 2012 2013

reVenue

(MVr in Millions)oPerating ProFit

(MVr in Millions)net ProFit

(MVr in Millions)basiC earning/loss Per

share

(MVr in Millions)


CaPital inVestMent

(MVr in Millions)net debt to equity

(MVr in Millions)gearing ratio

Capital investments and finanCial position

During the year we have made a total investment of MVR 46.3 million in capital assets through finance leases, term loans and operating cash flows, compared to the total capital asset investments in 2012 (MVR 52.1 million). Investments in capital assets during the year has come down mainly due to significant decreases in revenue from construction sector. The fall in revenue from the construction sector had depleted our operating cash flow and subsequently increased our bank overdraft exposure.

Value of the investments in shares of Bank of Maldives had an average market price of MVR 120 per share, but towards the end of the year the market price stood at MVR 100 per share. There was no change in the market share of the investment in the shares of Bank of Maldives during the year. Investment in shares of Airport Investment Maldives Private Limited (associate) had already been impaired and provision has been made in the 2011 for the full investment of MVR 2.5 million and no indications was noticed in the operation of the company to re-evaluate the value of the investment. Investment in shares Maldives Real Estate Investment Corporation (subsidiary) is consolidated and results are

reflected in the group column of the financial statements. Furthermore, investments made in the shares of Maldives Finance and Leasing Company was written-off in 2011 due to discontinuation of the company operations and have no movement in the value of the investment during the year ended 31 December 2013.

Bank overdrafts at the end of the year 2013 has increased to MVR 67.7 million compared to 2012 (MVR 14.8 million), the due course for the significant overdraft is due to delays in settlement of contracting invoices and decreases in contracting revenues during the year. However, cash generated from operating activities of MVR 17.6 million has been utilized on repayment of long term borrowings and acquisition of capital assets. Company has purchased MVR 21 million worth of machineries, vehicles and equipment from long term loans including finance leases during the year. In the meantime company has paid MVR 34.5 million towards loan repayment, MVR 8.2 Million as interest on loans, and MVR 2.9 million as business profit tax during the year. Consequently the total borrowings has increased to MVR 124.8 million in 2013 and Gearing Ratio also moved to 30% in 2013 compared to 26% in 2012.

42

6

32

5246

2009 2010 2011 2012 2013

41%

18%

31%26%

30%

2009 2010 2011 2012 2013

206

293

55

248

101

225255

89117

278

2009 2010 2011 2012 2013


working Capital management

The working capital cycle of the company has increase to 135 days in 2013 compared to 2012 (91 days), this significant increase is due to decrease in credit settlement period by 30 days from 170 days in 2012 to 140 days in 2013. The significant drop in credit settlement period is basically due to re-arrangement of advance received from Ministry of Finance & Treasury to a long term loan during the year 2012. Inventory residency period and debt collection period remains at 96 days and 177 days respectively for the year 2013 compared to 2012 (91 days and 170 days respectively).

Current Assets Ratio has slightly decreased to 1.38 x in 2013 compared to 1.47 x in 2012, further Quick Assets Ratio also has come down in 2013 to 0.94 x from 1.04 x in 2012.

200

300

400

500

20132012201120102009

Liquid Assets

Current Assets

Current Liabilities

134117

61

144

91

2009 2010 2011 2012 2013

Working CaPital CyCle

(days)

Working CaPital (Millions)


CoMPosition oF segMent reVenue

2013

segMent reVenue (MVr in Million) segMent ProFit/(loss) (MVr in Million)

CoMPosition oF segMent reVenue

2012

Business segment performanCe

Geographically the core business units of MTCC are based in Male’ and Thilafushi, operationally divided into four strategic business units (SBU, namely Trading, Contracting, Transport (Male region & north Central Province) and Logistical Services.

The bulk of the revenue to the Group is primarily generated from Contracting, Trading and Transport segment, while the bulk of the profit of the company is generated mainly from Contracting and Trading segments. During the year ended 31 December 2013, losses from Transport segment is compensated by a subsidy from Government of Maldives and while the losses of preceding years were compensated by the profits of Trading & Contracting department.

Total revenue of the group mounting to MVR 564 million is contributed by Trading MVR 162 million (2012: MVR 131 million), Contracting MVR 276 million (2012: MVR 347 million), Transport MVR 88 million (2012: MVR 78 million) and Logistical Services MVR 38 million (2012 MVR 23 million).

The segmental operating profit of the group for the year ended 31 December 2013 are; Trading MVR 33 million (2012: MVR 29 million), Contracting MVR 51 million (2012: MVR 61 million), Transport MVR 1 million [2012: MVR (31) million], and Logistical Services MVR (2) million [2012: MVR (7) million].

Trading

Contracting

Transport

Others

29%

16%7%

49%

Trading

Contracting

Transport

Others

23%

14% 4%

60%

Trading Contracting Transport Others

162131

276

347

88 7838 23

20122012 20132013Trading Contracting Transport Others

33 29

5161

1 -31-2 -7

Financial Statement


Independent Auditor’s Report

to tHe sHareHolders and Board of direCtors of maldives transport and ContraCting Company plC

1 We have audited the accompanying consolidated financial statements of Maldives Transport and contracting Company Plc and its subsidiary (the ‘Group’) which comprise the consolidated balance sheet as of 31 December 2013, and the consolidated statement of comprehensive income, changes in equity and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory notes.

management’s responsiBility for tHe Consolidated finanCial statements

2 Management is responsible for the preparation and fair presentation of these financial statement in accordance with International Financial Reporting Standards, requirements of the Companies Act, No. 10/96, of the Republic of Maldives and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements are free from material misstatement, whether due to fraud or error.

auditor’s responsiBility

3 Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with International Standards on

Auditing. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the consolidate financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risk of material misstatement of the consolidated 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 consolidate financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidate financial statements.

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


opinion

4 In our Opinion, the accompanying financial statements of the Company give a true and fair view of the financial position of the Company as of 31 December 2013 and of its financial performance and its cash flows for the year then ended in accordance with international Financial Reporting Standards and with the requirements of the Companies Act No. 10/96, of the Republic of Maldives.

5 In our opinion, the accompanying consolidated financial statements of the Group give a true and fair view of the financial position of the Group as of 31 December 2013 and of its financial performance and its cash flows for the year then ended in accordance with international Financial Reporting Standards and with the requirements of the Companies Act No. 10/96, of the Republic of Maldives.

MALE’ CHARTERED ACCOUNTANTS

Registration Number: A0001


Consolidated Balance Sheet Group Company

Note 2013 2012 2013 2012

ASSETSNon-current assetsProperty, plant and equipment 6 173,692,532 187,869,238 173,692,532 187,869,238 Intangible assets 7 1,228,096 219,561 1,228,096 219,561 Capital work-in-progress 8 2,853,452 270,475 2,853,452 270,475 Assets held for sale 9 - 164,346 - 164,346 Investment in associate 10 - - - - Investment in subsidiary 10 - - 7,102,500 7,102,500 Available-for-sale financial assets 11 21,909,601 21,909,601 21,909,601 21,909,601

199,683,681 210,433,221 206,786,181 217,535,721 Current assetsInventories 13 134,217,515 123,023,027 132,967,778 121,773,289 Trade and other receivables 12 277,793,042 269,359,290 280,467,958 272,014,361 Cash and cash equivalents 14 7,424,103 33,528,118 6,920,213 33,022,528

419,434,660 425,910,435 420,355,949 426,810,178 Total assets 619,118,341 636,343,656 627,142,130 644,345,899

EQUITY AND LIABILITIESEquityCapital and reserves attributable to equity holders of the CompanyShare capital 15 12,500,000 12,500,000 12,500,000 12,500,000 General reserve 149,539,082 149,539,082 149,539,082 149,539,082 Fair value reserves 19,520,299 19,520,299 19,520,299 19,520,299 Retained earnings 95,945,905 72,948,727 103,985,115 80,967,317 Total equity 277,505,286 254,508,108 285,544,496 262,526,698

LiabilitiesNon-current liabilitiesBorrowings 16 20,173,933 22,167,683 20,173,933 22,167,683 Loan from a shareholder 17 16,860,689 69,244,747 16,860,689 69,244,747

37,034,622 91,412,430 37,034,622 91,412,430 Current liabilitiesCurrent business profit tax payable 23 7,094,427 1,832,480 7,094,427 1,832,480 Loan from a shareholder 17 24,583,266 8,051,715 24,583,266 8,051,715 Trade and other payables 18 168,239,551 180,109,600 168,224,130 180,093,253 Borrowings 16 104,661,189 100,429,323 104,661,189 100,429,323

304,578,433 290,423,118 304,563,012 290,406,771 Total liabilities 341,613,055 381,835,548 341,597,634 381,819,201 Total equity and liabilities 619,118,341 636,343,656 627,142,130 644,345,899

The notes on pages 99 to 126 are an integral part of these financial statements.

These financial statements were approved by the Board of Directors on 22 April 2014

Iqbal Adam Chairman

Ahmed Shiham AliChief Executive Officer

Mohamed HilmyChief Financial Officer


Consolidated Income Statement Group Company

Note 2013 2012 2013 2012

Revenue 5 564,022,694 579,204,606 564,022,694 579,204,606

Cost of sales 20 (486,804,509) (497,171,219) (486,804,509) (497,171,219)

Gross profit 77,218,185 82,033,387 77,218,185 82,033,387

Selling and marketing costs 20 (7,548,912) (2,403,938) (7,548,912) (2,403,938)

Administrative expenses 20 (63,096,466) (54,319,320) (63,075,846) (54,296,888)

Other income 19 49,304,484 18,071,865 49,304,484 18,071,865

Other operating expenses 20 (3,426,933) (6,673,364) (3,426,933) (6,673,364)

Operating profit 52,450,358 36,708,630 52,470,978 36,731,062

Finance income 22 384,627 81,653 384,627 81,653

Finance costs 22 (17,896,203) (10,271,933) (17,896,203) (10,271,933)

Finance costs - net 22 (17,511,576) (10,190,280) (17,511,576) (10,190,280)

Profit before tax 34,938,782 26,518,350 34,959,402 26,540,782

Business profit tax 23 (8,191,604) (2,508,741) (8,191,604) (2,508,741)

Profit after tax 26,747,178 24,009,609 26,767,798 24,032,041

Earnings per share attributable to the equity holders of the Company during the year (expressed in MVR per share) - basic 24 106.99 96.04 107.07 96.13



Consolidated Statement of Comprehensive Income

Group Company

Note 2013 2012 2013 2012

Profit after tax 26,747,178 24,009,609 26,767,798 24,032,041

Other comprehensive income:

Net fair value gain on available-for-sale financial assets - 5,915,593 - 5,915,593

Other comprehensive income for the year - 5,915,593 - 5,915,593

Total comprehensive income after tax 26,747,178 29,925,202 26,767,798 29,947,634



Consolidated Statement of Changes in Equity group

Note Share capitalGeneral and other

reserves Fair value reserves Retained earnings Total

Balance at 1 January 2012 12,500,000 149,539,082 13,604,706 48,939,118 224,582,906

Net profit for the year - - - 24,009,609 24,009,609

Other comprehensive income for the year - - 5,915,593 - 5,915,593

Balance at 31 December 2012 12,500,000 149,539,082 19,520,299 72,948,727 254,508,108



Other comprehensive income for the year - - - - -

Dividend declared 26 - - - (3,750,000) (3,750,000)


Company

Note Share capitalGeneral and other

reserves Fair value reserves Retained earnings Total



Other comprehensive income for the year - - 5,915,593 - 5,915,593




Other comprehensive income for the year - - - - -

Dividend declared 26 - - - (3,750,000) (3,750,000)




Consolidated Cash Flow Statement

Group Company

Note 2013 2012 2013 2012

Cash flows from operating activities

Cash generated from operations 25 17,691,784 72,165,653 17,693,484 72,165,653

Interest paid (8,245,454) (9,064,433) (8,245,454) (9,064,433)

Business profit tax paid 23 (2,929,657) (812,845) (2,929,657) (812,845)

Net cash generated from operating activities 6,516,673 62,288,375 6,518,373 62,288,375

Cash flows from investing activities

Purchase of property, plant and equipment 6 (18,582,010) (17,041,536) (18,582,010) (17,041,536)

Purchase of intangible assets 7 (592,335) (2,750) (592,335) (2,750)

Expenditure on capital work-in-progress 8 (5,961,887) (1,134,678) (5,961,887) (1,134,678)

Proceeds from sale of property, plant and equipment 25 640,106 1,323,996 640,106 1,323,996

Net cash used in investing activities (24,496,126) (16,854,968) (24,496,126) (16,854,968)

Cash flows from financing activities

Interest received 384,627 81,653 384,627 81,653

Repayments of borrowings (34,495,694) (54,505,872) (34,495,694) (54,505,872)

Dividends paid to Company's shareholders (811,533) (296,492) (811,533) (296,492)

Net cash used in financing activities (34,922,600) (54,720,711) (34,922,600) (54,720,711)

Net decrease in cash, cash equivalents and bank overdraft (52,902,053) (9,287,304) (52,900,353) (9,287,304)

Cash, cash equivalents and bank overdrafts at beginning of the year 14 (14,300,212) (5,012,908) (14,805,802) (5,518,498)

Cash, cash equivalents and bank overdrafts at end of the year 14 (67,202,265) (14,300,212) (67,706,155) (14,805,802)



Notes to the Consolidated Financial Statements1. general information

These consolidated financial statements relate to the

operations of Maldives Transport and Contracting

Company Plc (‘the Company’) and its subsidiary and

associate (together ‘the Group’). It is a public limited

liability company incorporated in the Republic of

Maldives under the Act 4/81 on 18 December 1980.

The Company was re-registered with the Ministry

of Trade and Industries on 12 February 1990. The

principal activities undertaken by the Company include

trading, contracting, marine transportation, renting

of buildings, construction equipment and machinery,

and auctioning. The address of its registered office is

MTCC Tower, Boduthakurufaanu Magu, Male’ 20057,

Republic of Maldives.

The Company’s shares are listed on the Maldives stock

exchange.

2. summary of signifiCant aCCounting poliCies

The principal accounting policies applied in the

preparation of these financial statements are set out

below. These policies have been consistently applied

over the years, unless otherwise stated.

2.1 Basis of Preparation

The consolidated financial statements of Maldives

Transport and Contracting Company Plc have been

prepared in accordance with International Financial

Reporting Standards (IFRS) and IFRS Interpretations

Committee (IFRS IC) applicable to companies reporting

under IFRS. The consolidated financial statements have

been prepared under the historical cost convention,

as modified by the revaluation of available-for-sale

financial assets.

2.2 New Accounting Standards Issued But Not Effective As At The Balance Sheet Date

(a) New and amended standards adopted by the group

The following standards have been adopted by the

group for the first time for the financial year beginning

on or after 1 January 2013 and have a material impact

on the group:

� Amendment to IAS 1, ‘Financial statement

presentation’ regarding other comprehensive

income. The main change resulting from these

amendments is a requirement for entities to group

items presented in ‘other comprehensive income’

(OCI) on the basis of whether they are potentially

reclassifiable to profit or loss subsequently

(reclassification adjustments).

� Amendment to IFRS 7, ‘Financial instruments:

Disclosures’, on asset and liability offsetting. This

amendment includes new disclosures to facilitate

comparison between those entities that prepare

IFRS financial statements to those that prepare

financial statements in accordance with US GAAP.

� IFRS 10, ‘Consolidated financial statements’ builds

on existing principles by identifying the concept of

control as the determining factor in whether an

entity should be included within the consolidated

financial statements of the parent company. The

standard provides additional guidance to assist in

the determination of control where this is difficult

to assess.

� IFRS 11, ‘Joint arrangements’ focuses on the rights

and obligations of the parties to the arrangement

rather than its legal form. There are two types

of joint arrangements: joint operations and joint

ventures. Joint operations arise where the investors


have rights to the assets and obligations for the

liabilities of an arrangement. A joint operator

accounts for its share of the assets, liabilities,

revenue and expenses. Joint ventures arise where

the investors have rights to the net assets of

the arrangement; joint ventures are accounted

for under the equity method. Proportional

consolidation of joint arrangements is no longer

permitted.

� IFRS 12, ‘Disclosures of interests in other entities’

includes the disclosure requirements for all

forms of interests in other entities, including joint

arrangements, associates, structured entities and

other off balance sheet vehicles.

� IFRS 13, ‘Fair value measurement’, aims to

improve consistency and reduce complexity by

providing a precise definition of fair value and

a single source of fair value measurement and

disclosure requirements for use across IFRSs. The

requirements, which are largely aligned between

IFRSs and US GAAP, do not extend the use of fair

value accounting but provide guidance on how it

should be applied where its use is already required

or permitted by other standards within IFRSs.

(b) New standard and amendments issued but not yet

adopted

Certain new standards and amendments are effective

for annual periods beginning after 1 January 2013,

and have not been applied in preparing these financial

statements. The following amended standard is not

expected to have a material impact on the financial

statements of the Group:

� IAS 19,‘ Employee benefits’ ( amendment ),

(effective from 1 January 2013);

(c) New standards, amendments and interpretation

issued but not effective for the financial year beginning

1 January 2013 and not early adopted by the

Group:

� IAS 27,‘ Separate Financial Statements’

(amendment), (effective from 1 January 2014);

� IAS 32,‘Financial instruments: Presentation’

(amendment), ( effective from 1 January 2014 );

� IAS 36,‘ Impairment of assets’ (amendment),

(effective from 1 January 2014);

� IAS 39,‘ Financial Instruments: Recognition and

Measurement’ (amendment), (effective from

1 January 2014);

� IFRS 9,‘Financial instruments,‘ (effective from 1

January 2015 ): and

� IFRIC 21,‘ Levies,‘ (effective from 1 January 2014).

2.3 Consolidation

(a) Subsidiaries

Subsidiaries are all entities (including structured

entities) over which the group has control. The group

controls an entity when the group is exposed to, or

has rights to, variable returns from its involvement with

the entity and has the ability to affect those returns

through its power over the entity. Subsidiaries are

fully consolidated from the date on which control is

transferred to the group. They are deconsolidated

from the date that control ceases. Acquisition-related

costs are expensed as incurred.

The business combination is achieved in stages,

the acquisition date carrying value of the acquirer’s

previously held equity interest in the acquiree is re-

measured to fair value at the acquisition date; any

gains or losses arising from such re-measurement are

recognised in profit or loss.

The excess of the consideration transferred, the

amount of any non-controlling interest in the acquiree

and the acquisition-date fair value of any previous

equity interest in the acquiree over the fair value of

the identifiable net assets acquired is recorded as

goodwill. If the total of consideration transferred, non-

controlling interest recognised and previously held

interest measured is less than the fair value of the

net assets of the subsidiary acquired in the case of a

bargain purchase, the difference is recognised directly


in the income statement Inter-company transactions,

balances and unrealised gains on transactions between

group companies are eliminated. Unrealised losses are

also eliminated. When necessary amounts reported by

subsidiaries have been adjusted to conform with the

group’s accounting policies.

(b) Transactions and non-controlling interests

Non-controlling interest is that portion of the profit

or loss and net asset of a subsidiary attributable to

equity interests that are not owned, directly or indirectly

through subsidiaries, by the parent.

The Group applies a policy of treating transactions with

non-controlling interests as transactions with parties

external to the Group. Disposals of non-controlling

interests result in gains and losses for the Group that

are recorded in the income statement. Purchases from

non-controlling interests result in goodwill, being the

difference between any consideration paid and the

relevant share acquired of the carrying value of net

assets of the subsidiary.

(c) Associates

Associates are all entities over which the group

has significant influence but not control, generally

accompanying a shareholding of between 20% and

50% of the voting rights. Investments in associates are

accounted for using the equity method of accounting.

Under the equity method, the investment is initially

recognised at cost, and the carrying amount is

increased or decreased to recognise the investor’s

share of the profit or loss of the investee after the date

of acquisition. The group’s investment in associates

includes goodwill identified on acquisition.

The group’s share of post-acquisition profit or loss is

recognised in the income statement, and its share of

post-acquisition movements in other comprehensive

income is recognised in other comprehensive income

with a corresponding adjustment to the carrying amount

of the investment. When the group’s share of losses

in an associate equals or exceeds its interest in the

associate, including any other unsecured receivables,

the group does not recognise further losses, unless it

has incurred legal or constructive obligations or made

payments on behalf of the associate.

The group determines at each reporting date whether

there is any objective evidence that the investment in

the associate is impaired. If this is the case, the group

calculates the amount of impairment as the difference

between the recoverable amount of the associate and

its carrying value and recognises the amount adjacent

to ‘share of profit/(loss) of associates in the income

statement.

Profits and losses resulting from upstream and

downstream transactions between the group and

its associate are recognised in the group’s financial

statements only to the extent of unrelated investor’s

interests in the associates. Unrealised losses are

eliminated unless the transaction provides evidence

of an impairment of the asset transferred. Accounting

policies of associates have been changed where

necessary to ensure consistency with the policies

adopted by the group.

Dilution gains and losses arising in investments in

associates are recognised in the income statement.

2.4 Segment Reporting

Operating segments are reported in a manner

consistent with the internal reporting provided to the

chief operating decision-maker. The chief operating

decision-maker, who is responsible for allocating

resources and assessing performance of the operating

segments, has been identified as the Board of Directors

that makes strategic decisions. The Board of Directors

consider a business segment is a group of assets and

operations engaged in providing products or services

that are subject to risks and returns that are different

from those of other business segments. Thus the

primary segments of the Group are as follows:

i) Trading ii) Contracting iii)

Transport iv) Logistical services

v) Others (Unallocated)


2.5 Foreign Currency Translation

(a) Functional and presentation currency

Items included in the financial statements of the

Company are measured using the currency of the

primary economic environment in which the entity

operates (“the functional currency”). The financial

statements are presented in Maldivian Rufiyaa,

which is the Company’s functional and presentation

currency.

(b) Transactions and balances

Foreign currency transactions are translated into the

functional currency using the exchange rates prevailing

at the dates of the transactions. Foreign exchange

gains and losses resulting from the settlement of

such transactions and from the translation at year-

end exchange rates of monetary assets and liabilities

denominated in foreign currencies are recognised in

the income statement.

2.6 Property, Plant and Equipment

All property, plant and equipment, which are

initially recorded at historical cost, is stated at cost

less depreciation. Cost includes the transfer value

of the assets, or their purchase cost, or the cost of

construction, together with any incidental expenses of

acquisition.

Subsequent costs are included in the asset’s

carrying amount or recognised as a separate asset,

as appropriate, only when it is probable that future

economic benefits associated with the item will flow to

the Group and the cost of the item can be measured

reliably. All other repairs and maintenance costs are

charged to the income statement during the financial

period in which they are incurred.

Depreciation is calculated using the straight-line

method to allocate their cost or revalued amounts to

their residual values over their estimated useful lives,

commencing from the date in which the assets were

purchased up to the date of disposal, as follows:

2013

(Years)2012

(Years)

Buildings (other than MTCC tower) 10 10

MTCC tower 25 25

Plant and machinery 5 5

Motor vehicles other than dredging vehicles 5 5

Dredging vehicles 10 5

Excavators 5-7 5-7

Dump trucks 5 3

Wheel loaders 5 3

Cranes 5 3

Furniture and fittings 4 6.67

Office equipment 3 5

Vessels 10 10

Tugs 10 10

Tools 3 3

Sundry assets 3 5

When values of acquisitions are less than MVR 5,000

those assets are depreciated fully in the year of

acquisition irrespective of their useful lifetime.

The assets’ residual values and useful lives are

reviewed, and adjusted if appropriate, at each balance

sheet date.

Buildings constructed on leasehold land and

improvements made to leasehold premises are

amortised over the unexpired period of the lease.

An asset’s carrying amount is written down immediately

to its recoverable amount if the asset’s carrying amount

is greater than its estimated recoverable amount.

Gains and losses on disposals are determined by

comparing proceeds with carrying amount. These are

included in the income statement.

2.7 Intangible Assets

Computer software development costs recognised as

assets are amortised using the straight-line method

over their estimated useful lives (not exceeding five

years). The carrying amount of each intangible asset

is reviewed annually and adjusted for permanent

impairment where it is considered necessary.


2.8 Impairment of Non-Financial Assets

Assets that have an indefinite useful life are not

subject to amortisation and are tested annually for

impairment. Assets that are subject to amortisation are

reviewed for impairment whenever events or changes

in circumstances indicate that the carrying amount may

not be recoverable. An impairment loss is recognised

for the amount by which the asset’s carrying amount

exceeds its recoverable amount.

The recoverable amount is the higher of an asset’s

fair value less costs to sell and value in use. For the

purposes of assessing impairment, assets are grouped

at the lowest levels for which there are separately

identifiable cash flows (cash-generating units). Non-

financial assets that suffered an impairment are

reviewed for possible reversal of the impairment at

each reporting date.

2.9 Non-current Assets Held for Sale

Non-current assets are classified as assets held for

sale when their carrying amount is to be recovered

principally through a sale transaction and a sale is

considered highly probable. They are stated at the

lower of carrying amount and fair value less costs to

sell.

2.10 Financial Assets

The Company classifies its financial assets in the

following categories. The classification depends on the

purpose of which the financial assets were acquired.

The management determines the classification of its

financial assets at initial recognition and re-evaluates

this designation at every reporting date.

a) Loans and receivables

Loans and receivables are non-derivative financial

assets with fixed or determinable payments that are

not quoted in an active market. They are included

in current assets, except for maturities greater than

12 months after the balance sheet date. These are

classified as non-current assets. Loans and receivables

are classified as “trade and other receivables” in the

statement of financial position.

The Company assesses at each balance sheet date

whether there is objective evidence that a financial

asset is impaired.

b) Available-for-sale financial assets

Available-for-sale financial assets are non-derivatives

that are either designated in this category or not

classified in any other categories. They are included

in non-current assets, unless management intend to

dispose of the investment within 12 months of the

balance sheet date.

When securities classified as available-for-sale

are sold or impaired, the accumulated fair value

adjustments recognised in equity are included in the

income statement as ‘gains and losses from investment

securities’. Dividends on available-for-sale equity

instruments are recognised in the income statements,

when the Company’s right to receive payments is

established.

The fair values of quoted investments are based

on current bid prices. If the market for the financial

asset is not active (and for unlisted securities), the

Company establishes fair value by using valuation

techniques. These include the use of recent arm’s

length transactions, reference to other instruments

that are substantially the same, discounted cash flow

analysis and option pricing models, making maximum

use of market inputs and relying as little as possible

on entity-specific inputs. Wherever these techniques

cannot give reliable fair price, the price of unlisted

securities is established at cost.

The Company assesses at each balance sheet date

whether there is objective evidence that a financial

asset or a group of financial assets is impaired. In

the case of equity securities classified as available-

for-sale, a significant or prolonged decline in the fair

value of the security below its cost is considered an

indicator that the securities are impaired. If any such

evidence exists for available-for-sale financial assets,


the cumulative loss – measured as the difference

between the acquisition cost and the current fair

value, less any impairment loss on that financial asset

previously recognised in profit or loss – is removed

from equity and recognised in the income statement.

Impairment losses recognised in the income statement

on equity instruments are not reversed through the

income statement.

2.11 Inventories

Inventories are stated at the lower of cost and net

realisable value. Cost is determined using the first-

in, first-out (FIFO) method and includes import duty,

insurance, freight, port charges and bank charges. The

cost does not include borrowing cost. Net realisable

value is the estimated selling price in the ordinary

course of business less applicable variable selling

expenses.

2.12 Construction Contracts

A construction contract is defined by IAS 11,

‘Construction contracts’, as a contract specifically

negotiated for the construction of an asset.

When the outcome of a construction contract can be

estimated reliably and it is probable that the contract

will be profitable, contract revenue is recognised over

the period of the contract by reference to the stage of

completion. Contract costs are recognised as expenses

by reference to the stage of completion of the contract

activity at the end of the reporting period. When it

is probable that total contract costs will exceed total

contract revenue, the expected loss is recognised as an

expense immediately.

When the outcome of a construction contract cannot

be estimated reliably, contract revenue is recognised

only to the extent of contract costs incurred that are

likely to be recoverable.

Variations in contract work, claims and incentive

payments are included in contract revenue to the

extent that may have been agreed with the customer

and are capable of being reliably measured.

The Group uses the ‘percentage-of-completion

method’ to determine the appropriate amount to

recognise in a given period. The stage of completion

is measured by reference to the contract costs incurred

up to the end of the reporting period as a percentage

of total estimated costs for each contract. Costs

incurred in the year in connection with future activity

on a contract are excluded from contract costs in

determining the stage of completion.

On the balance sheet, the Company reports the net

contract position for each contract as either an asset

or a liability. A contract represents an asset where

costs incurred plus recognised profits (less recognised

losses) exceed progress billings; a contract represents

a liability where the opposite is the case.

In determining cost incurred up to year end, any costs

relating to future activity on a contract are excluded

and shown as contract work in progress. The aggregate

of the cost incurred and the profit/loss recognised on

each contract is compared against the progress billings

up to the year end. Where the sum of the costs incurred

and recognised profit or loss exceeds the progress

billings, the balance is shown under receivables and

prepayments as due from customers on contracts.

2.13 Trade Receivables

Trade receivables are recognised initially at fair

value and subsequently measured at fair value less

provision for impairment. A provision for impairment

of trade receivables is established when there is

objective evidence that the Company will not be able

to collect all amounts due according to the original

terms of receivables. The amount of the provision

is the difference between the asset’s carrying amount

and the present value of estimated future cash flows,

discounted at the effective interest rate. The amount

of the provision is recognised in the income statement

within ‘selling and marketing costs’.

2.14 Cash and Cash Equivalents

Cash and cash equivalents include cash in hand,

deposits held at call with banks, other short-term highly


liquid investments with original maturities of three

months or less, and bank overdrafts. Bank overdrafts

are shown within borrowings in current liabilities on the

balance sheet.

2.15 Employee Benefits

Company is liable to enroll the employees in the

Retirement Pension Scheme with effect from 1 May

2011 based on the Regulation on Maldives Retirement

Pension Scheme published by Government of Maldives

and shall make contributions at a rate of 7% from

the employee’s pensionable wages on behalf of the

employees of age between 16 and 65 years to the

pension office. Company contribution to retirement

pension scheme is at the rate of 7% on pensionable

wages. Obligations for contributions to retirement

pension scheme is recognized as an employee benefit

expense in the income statement.

2.16 Share Capital

Ordinary shares are classified as equity.

2.17 Borrowings

Borrowings are recognised initially at fair value,

net of transaction costs incurred. Borrowings are

subsequently stated at amortised cost; any difference

between the proceeds (net of transaction costs) and

the redemption value is recognised in the income

statement over the period of the borrowings using the

effective interest method.

Borrowings are classified as current liabilities unless

the Company has an unconditional right to defer

settlement of the liability for at least 12 months after

the balance sheet date.

2.18 Provisions

Provisions are recognised when: the Company has a

present legal or constructive obligation as a result of

past events; it is more likely than not that an outflow of

resources will be required to settle the obligation; and

the amount has been reliably estimated. Provisions are

not recognised for future operating losses.

Where there are a number of similar obligations,

the likelihood that an outflow will be required in

settlement is determined by considering the class of

obligations as a whole. A provision is recognised even

if the likelihood of an outflow with respect to any one

item included in the same class of obligations may be

small.

2.19 Current And Deferred Business Profit Tax

Provisions are measured at the present value of the

expenditures expected to be required to settle the

obligation using a rate that reflects current market

assessments of the time value of money and the risks

specific to the obligations.

The tax expenses for the period comprises current and

deferred business profit tax. Tax is recognised in the

income statement, except to the extent that it relates to

items recognised directly in equity.

The current business profit tax charge is calculated on

the basis of the tax laws enacted or substantively enacted

at the balance sheet date. Management periodically

evaluates positions taken in tax computation with

respect to situations in which applicable tax regulation

is subject to interpretation. It establishes provisions

where appropriate on the basis of amounts expected

to be paid to the tax authorities.

The provisions for business profit tax is based on the

elements of income and expenditure as reported in

the Financial Statements and computed in accordance

with the provisions of the Business Profit Tax Act.

The company is liable to business profit tax at rate

of 15%, if the taxable profit of the year exceeds MVR

500,000, with effect from 18 July 2011.

Deferred business profit tax is recognised, using the

liability method, on temporary differences arising

between the tax bases of assets and liabilities and their

carrying amounts in the financial statements. However

deferred business profit tax is not accounted for if it

arises from initial recognition of an asset or liability in


a transaction other than a business combination that

at the time of the transaction affects neither accounting

nor taxable profit or loss. Deferred business profit tax

is determined using tax rates that have been enacted

or substantially enacted by the balance sheet date

and are expected to apply when the related deferred

business profit tax asset is realised or the deferred

business profit tax liability is settled.

Deferred business profit tax assets are recognised

only to the extent that it is probable that future taxable

profit will be available against which the temporary

difference can be utilised.

However during the current year, a deferred tax

asset amounting MVR 30,170,081 arose due to the

difference between tax base of fixed assets and the

carrying amounts in the financial statements, which was

not recognised as an asset and also was not adjusted

against current tax liability. The Board of Directors of

the Company are of the opinion that the Company

has made continues losses in past years and adequate

amount of future taxable profit may not be available

against which the temporary difference can be utilised.

Deferred business profit tax assets and liabilities are

offset when there is a legally enforceable right to

offset current tax assets against current tax liabilities

and when the deferred business profit taxes assets and

liabilities relate to business profit taxes levied by the

same taxation authority on either the same taxable

entity or different taxable entities where there is an

intention to settle the balances on a net basis.

2.20 Revenue Recognition

Revenue comprises the fair value of the sale of goods

and services, net of discounts. Revenue is recognised

as follows:

(a) Sales of goods - retail

Sales of goods are recognised when the Company has

delivered products to the customer; the customer has

accepted the products; and collectability of the related

receivables is reasonably assured.

(b) Sales of services

Sales of services are recognised in the accounting

period in which the services are rendered, by reference

to completion of the specific transaction, assessed on

the basis of the actual service provided as a proportion

of the total services to be provided.

(c) Interest income

Interest income is recognised on a time-proportion

basis using the effective interest method.

(d) Dividend income

Dividend income is recognised when the right to

receive payment is established.

(e) Rental income

Rental income is recognised on an accrual basis

in accordance with the substance of the relevant

agreement.

(f) Subsidy income

Subsidy income is recognized as other income over

the period necessary to match them with the related

costs, for which they are intended to compensate, on

a systematic basis.

2.21 Leases

(a) The Company is the lessee

Leases where the lessor retains substantially all the risks

and rewards of ownership are classified as operating

leases. Payments made under operating leases (net of

any incentives received from the lessor) are charged to

the income statement on a straight-line basis over the

period of the lease.

(b) The Company is the lessor

Assets leased to third parties under operating leases

are included in property, plant and equipment in

the balance sheet. They are depreciated over their

expected useful lives on a basis consistent with similar

owned property, plant and equipment. Rental income

(net of any incentives given to lessees) is recognised on

a straight-line basis over the lease term.


2.22 Dividend Distribution

Dividend distribution to the Company’s shareholders

is recognised as a liability in the Company’s financial

statements in the period in which the dividends are

approved by the Company’s shareholders.

3 finanCial Risk Management

3.1 Financial Risk Factors

The Company’s activities expose it to a variety of

financial risks: market risk (including foreign exchange

risk), credit risk and liquidity risk. The Company’s

overall risk management programme focuses on the

unpredictability of financial markets and seeks to

minimise potential adverse effects on the Company’s

financial performance.

Risk management is carried out by the Board of

Directors on specific areas, such as foreign exchange

risk, credit risk and the liquidity risk.

(a) Market risk

(i) Foreign exchange risk

The Company operates internationally and is exposed

to foreign exchange risk arising from various currency

exposures. Foreign exchange risk arises from future

commercial transactions, recognised assets and

liabilities.

(ii) Price risk

The Company is exposed to equity securities price

risk because of the investment held by the Company

and classified on the balance sheet as available-for-

sale.

(b) Credit risk

The Company has no significant concentrations of

credit risk. It has policies in place to ensure that sales

of goods and services are made to customers with an

appropriate credit history.

(c) Interest rate risk

The Company’s exposure to interest rate risk relates to

its bank and other borrowings which are on fixed and

floating rate terms, and this risk is reviewed on an on

going basis. At the balance sheet the Company did not

have in place any instruments to hedge its exposure to

interest rate risk.

(d) Liquidity risk

Prudent liquidity risk management implies maintaining

sufficient cash and marketable securities, the

availability of funding through an adequate amount

of committed credit facilities and the ability to close

out market positions. The Company did not have

committed credit facilities at the end of the year.

3.2 Capital Risk Management

The Company’s objectives when managing capital

are to safeguard the Company’s ability to continue

as a going concern in order to provide returns for

shareholders and benefits for other stakeholders and

to maintain an optimal capital structure to reduce the

cost of capital.

In order to maintain or adjust the capital structure, the

Company may adjust the amount of dividends payable

to shareholders, issue new shares or sell assets to

reduce debt.

The Company monitors capital on the basis of the

gearing ratio. This ratio is calculated as net debt

divided by total capital. Net debt is calculated as

total borrowings excluding trade and other payables,

as shown in the balance sheet less cash and cash

equivalents. Total capital is calculated as equity, as

shown in the balance sheet, plus net debt.


The gearing ratios as at 31 December 2013 and 2012 were as follows:

Group Company

2013 2012 2013 2012

Total borrowings (Note 16) 124,835,122 122,597,006 124,835,122 122,597,006

Less: Cash and cash equivalents (Note 14) (7,424,103) (33,528,118) (6,920,213) (33,022,528)

Net debt 117,411,019 89,068,888 117,914,909 89,574,478

Total equity 277,505,286 254,508,108 285,544,496 262,526,698

Total capital 394,916,305 343,576,996 403,459,405 352,101,176

Gearing ratio 30% 26% 29% 25%

The increase in gearing ratio as at 31 December 2013

compared with 31 December 2012 is primarily due to

increase in bank overdraft during the year.

3.3 Fair Value Estimation

The nominal value less impairment provision of trade

receivables and payables are assumed to approximate

their fair values. The fair value of financial liabilities

for disclosure purposes is estimated by discounting

the future contractual cash flows at the current market

interest rate that is available to the Company for similar

financial instruments.

4 Comparatives

Where necessary, comparative figures have been

adjusted to conform with changes in presentation in

the current period.


5. segment Information - group

At 31 December 2013, the Group is organised into four main business segments.

(1) Trading : Trading of engines, generators, spare parts, lubricants, paints and industrial gas.

(2) Contracting: Construction of harbour development projects, dredging projects, land reclamation projects, shore

protection projects, sheet piling projects and civil construction projects.

(3) Transport : Ferry service in Greater Male’ Region and North Central Province.

(4) Logistical services : Anchoring and docking services, logistic and cargo transport services, ship agent, auctions of

various products, repair and maintenance services.

The segment results of the Group for the year ended 31 December 2013 are as follows:

Trading Contracting Transport Logistical services

Unallocated Total

Revenue 162,271,557 276,092,839 87,817,724 37,840,574 - 564,022,694

Operating profit / (loss) 33,447,500 51,207,934 1,483,412 (2,332,911) (31,355,576) 52,450,358

Finance income / (costs) (Note 22) 325,037 (2,087,471) (3,281,301) - (12,467,841) (17,511,576)

Profit / (loss) before tax 33,772,537 49,120,462 (1,797,890) (2,332,911) (43,823,417) 34,938,782

Business profit tax (8,191,604)

Profit after tax 26,747,178

The segment results of the Group for the year ended 31 December 2012 are as follows:

Revenue 131,065,598 347,091,179 78,471,709 22,522,730 53,390 579,204,606

Operating profit / (loss) 29,278,139 61,426,054 (31,252,249) (6,977,801) (15,765,513) 36,708,630

Finance income / (costs) (Note 22) - (1,795,768) 14,526 - (8,409,038) (10,190,280)




Other segment items included in the Group income statement are as follows:

Year ended 31 December 2013

Depreciation (Note 6) 444,119 31,093,754 8,552,042 15,268,876 1,174,576 56,533,367

Amortisation (Note 7) 4,714 1,462 - - 375,929 382,105




The segment assets and liabilities of the Group at 31 December 2013 and capital expenditure for the year then ended are as follows:

Assets 69,654,660 338,774,389 29,166,220 93,719,078 87,803,994 619,118,341

Liabilities 25,277,211 51,702,009 437,123 - 264,196,712 341,613,055

Capital expenditure (Note 6 and 7) 118,577 19,326,249 14,868,709 9,642,099 2,374,644 46,330,278

The segment assets and liabilities of the Group at 31 December 2012 and capital expenditure for the year then ended are as follows:

Assets 62,596,584 359,151,476 22,829,437 91,639,181 100,126,978 636,343,656

Liabilities 10,539,929 146,753,537 41,397 - 224,500,685 381,835,548

Capital expenditure (Note 6 and 7) - 46,706,258 1,514,256 2,219,235 1,592,093 52,031,842


5. segment Information - Company

At 31 December 2013, the Company is organised into four main business segments.

(1) Trading : Trading of engines, generators, spare parts, lubricants, paints and industrial gas.

(2) Contracting: Construction of harbour development projects, dredging projects, land reclamation projects, shore

protection projects, sheet piling projects and civil construction projects.

(3) Transport : Ferry service in Greater Male’ Region and North Central Province.

(4) Logistical services : Anchoring and docking services, logistic and cargo transport services, ship agent, auctions of

various products, repair and maintenance services.

The segment results of the Company for the year ended 31 December 2013 are as follows:

Trading Contracting Transport Logistical services

Unallocated Total

Revenue 162,271,557 276,092,839 87,817,724 37,840,574 - 564,022,694

Operating profit / (loss) 33,447,500 51,207,934 1,483,412 (2,332,911) (31,334,956) 52,470,978

Finance income / (costs) (Note 22) 325,037 (2,087,471) (3,281,301) - (12,467,841) (17,511,576)




The segment results of the Company for the year ended 31 December 2012 are as follows: Revenue 131,065,598 347,091,179 78,471,709 22,522,730 53,390 579,204,606

Operating profit / (loss) 29,278,139 61,426,054 (31,252,249) (6,977,801) (15,743,081) 36,731,062

Finance income / (costs) (Note 22) - (1,795,768) 14,526 - (8,409,038) (10,190,280)




Other segment items included in the Company income statement are as follows:







The segment assets and liabilities of the Company at 31 December 2013 and capital expenditure for the year then ended are as follows:

Assets 69,654,660 338,774,389 29,166,220 93,719,078 95,827,783 627,142,130

Liabilities 25,277,211 51,702,009 437,123 - 264,181,291 341,597,634

Capital expenditure (Note 6 and 7) 118,577 19,326,249 14,868,709 9,642,099 2,374,644 46,330,278

The segment assets and liabilities of the Company at 31 December 2012 and capital expenditure for the year then ended are as follows:

Assets 62,596,584 359,151,476 22,829,437 91,639,181 108,129,221 644,345,899

Liabilities 10,539,929 146,753,537 41,397 - 224,484,338 381,819,201

Capital expenditure (Note 6 and 7) - 46,706,258 1,514,256 2,219,235 1,592,093 52,031,842


6 property, Plant and Equipment - group

Land Buildings Plant and Machinery

Motor Vehicles

Furniture and Office /

Communication Equipment Vessels

Sundry Assets Total

At 31 December 2011

Cost 7,370,831 115,689,079 371,441,887 6,559,190 30,204,429 122,043,436 22,432,534 675,741,386

Accumulated depreciation - (62,681,951) (315,811,786) (4,773,908) (26,656,237) (62,672,795) (19,457,897) (492,054,574)

Net book amount 7,370,831 53,007,128 55,630,101 1,785,282 3,548,192 59,370,641 2,974,637 183,686,812


Opening net book amount 7,370,831 53,007,128 55,630,101 1,785,282 3,548,192 59,370,641 2,974,637 183,686,812

Additions - - 48,153,570 95,000 1,099,767 557,726 988,351 50,894,414

Transferred from capital work in progress (Note 8) - - - - 1,904,239 193,168 - 2,097,407

Disposals - Cost - - (14,339,753) - (785,589) - (159,849) (15,285,191)

Disposals - Accumulated depreciation - - 13,754,090 - 785,589 - 150,266 14,689,945

Depreciation charge (Note 20) - (6,546,195) (26,529,595) (630,193) (1,684,391) (11,347,266) (1,476,509) (48,214,149)

Closing net book amount 7,370,831 46,460,933 76,668,413 1,250,089 4,867,807 48,774,269 2,476,896 187,869,238

At 31 December 2012

Cost 7,370,831 115,689,079 405,255,704 6,654,190 32,422,846 122,794,330 23,261,036 713,448,016


Net book amount 7,370,831 46,460,933 76,668,413 1,250,089 4,867,807 48,774,269 2,476,896 187,869,238



Additions - - 18,013,198 9,729,197 2,780,403 7,940,942 1,312,316 39,776,056

Transferred from capital work in progress (Note 8) - 1,928,968 - - - 366,520 285,117 2,580,605

Disposals - Cost - - (1,333,950) - (298,133) - (64,477) (1,696,560)


Depreciation charge (Note 20) - (6,460,834) (29,662,260) (3,262,017) (2,610,569) (13,145,186) (1,392,501) (56,533,367)


At 31 December 2013

Cost 7,370,831 117,618,047 421,934,952 16,383,387 34,905,116 131,101,792 24,793,992 754,108,117


Net book amount 7,370,831 41,929,067 65,019,351 7,717,269 5,037,641 43,936,545 2,681,828 173,692,532


6 property, Plant and Equipment - group

Land Buildings Plant and Machinery

Motor Vehicles

Furniture and Office /

Communication Equipment Vessels

Sundry Assets Total

At 31 December 2011

Cost 7,370,831 115,689,079 371,441,887 6,559,190 30,204,429 122,043,436 22,432,534 675,741,386


Net book amount 7,370,831 53,007,128 55,630,101 1,785,282 3,548,192 59,370,641 2,974,637 183,686,812



Additions - - 48,153,570 95,000 1,099,767 557,726 988,351 50,894,414

Transferred from capital work in progress (Note 8) - - - - 1,904,239 193,168 - 2,097,407

Disposals - Cost - - (14,339,753) - (785,589) - (159,849) (15,285,191)


Depreciation charge (Note 20) - (6,546,195) (26,529,595) (630,193) (1,684,391) (11,347,266) (1,476,509) (48,214,149)


At 31 December 2012

Cost 7,370,831 115,689,079 405,255,704 6,654,190 32,422,846 122,794,330 23,261,036 713,448,016


Net book amount 7,370,831 46,460,933 76,668,413 1,250,089 4,867,807 48,774,269 2,476,896 187,869,238



Additions - - 18,013,198 9,729,197 2,780,403 7,940,942 1,312,316 39,776,056

Transferred from capital work in progress (Note 8) - 1,928,968 - - - 366,520 285,117 2,580,605

Disposals - Cost - - (1,333,950) - (298,133) - (64,477) (1,696,560)


Depreciation charge (Note 20) - (6,460,834) (29,662,260) (3,262,017) (2,610,569) (13,145,186) (1,392,501) (56,533,367)


At 31 December 2013

Cost 7,370,831 117,618,047 421,934,952 16,383,387 34,905,116 131,101,792 24,793,992 754,108,117


Net book amount 7,370,831 41,929,067 65,019,351 7,717,269 5,037,641 43,936,545 2,681,828 173,692,532


(a) The buildings have been constructed on the lands belongs to the Government of Maldives, for which a rental

of MVR 6,446,154 (2012: MVR 6,710,547) is paid per annum.

(b) The value of the fully depreciated property, plant and equipment at the balance sheet date amounted to MVR

403,162,746 (2012: MVR 329,130,097).

(c) Demand loans, bank overdraft, LC facilities and bank guarantees from the banks and other financial institutes

are secured over MTCC building, MTCC Tower, Rentals Plaza, barges (Kurimagu 7,8 & 10), tug boats (Tango 6 &

575), steel landing craft (Leema 1), dredger (Jarrafa 3) and machineries (excavators & wheel loaders) (Note 16).

7. intangiBle Assets

Group Company

2013 2012 2013 2012

At 1st January

Opening net book amount 219,561 735,614 219,561 735,614

Additions 592,335 2,750 592,335 2,750

Transferred from capital work in progress (Note 8) 798,305 - 798,305 -

Amortisation charge (Note 20) (382,105) (518,803) (382,105) (518,803)

Closing net book amount 1,228,096 219,561 1,228,096 219,561

At 31 December

Cost 6,410,458 5,019,818 6,410,458 5,019,818

Amortisation charge (5,182,362) (4,800,257) (5,182,362) (4,800,257)

Net book amount 1,228,096 219,561 1,228,096 219,561

8. Capital Work-In-Progress (Cwip)Group Company

2013 2012 2013 2012

Opening net book amount 270,475 1,233,204 270,475 1,233,204

Expenditure incurred during the year 5,961,887 1,134,678 5,961,887 1,134,678

Transferred to property, plant and equipment (Note 6) and intangible assets (Note 7) (3,378,910) (2,097,407) (3,378,910) (2,097,407)

Closing net book amount 2,853,452 270,475 2,853,452 270,475


9. assets Held For Sale

Group Company

2013 2012 2013 2012

Cost

Opening balance 657,384 8,117,396 657,384 8,117,396

Less: Disposals / Transfers (556,101) (7,460,012) (556,101) (7,460,012)

Closing balance 101,283 657,384 101,283 657,384

Provisions for impairment

Opening balance 493,038 6,281,387 493,038 6,281,387

Provision for impairment 25,321 - 25,321 -

Reversal of provision for impairment (417,076) - (417,076)

Impairment loss on disposed assets - (5,788,349) - (5,788,349)

Closing balance 101,283 493,038 101,283 493,038

Net value - 164,346 - 164,346

10. investment In AssoCiate/SuBsidiary

a) Associate

Group Company

2013 2012 2013 2012

At 1 January - - - -

Share of loss / impairment of investment - - - -

At 31 December - - - -

The Group had made an investment of MVR 2,521,727 in the associate company, which has been fully impaired

during the year 2011. The Group’s share of the results of its associate, which is unlisted, and its aggregated assets

and liabilities are as follows:

Name Assets Liabilities Revenues Loss Percentage of interest held


Airport Investments Maldives Private Limited 274,957,734 275,923,228 30,498 (332,809) 33 1/3%


Airport Investments Maldives Private Limited 274,745,089 276,201,492 - (768,181) 33 1/3%

The Group has not recognised accumulated losses amounting to MVR 110,936 (2012: MVR 256,060). The

accumulated losses not recognised were MVR 589,337 ( 2012: MVR 478,401).

The audit reports of the associate Company have been disclaimed in past. Therefore the amounts of assets, liabilities

and loss shown above will get affected if the adjustments are carried out to the financial statements of the associate

Company.


b) Subsidiary:

Group Company

2013 2012 2013 2012

Investment in Maldives Real Estate Investment Corporation Private Limited - - 7,102,500 7,102,500

11. availaBle-For-Sale FinanCial assets

Group Company

2013 2012 2013 2012

Shares in Bank of Maldives Plc 21,909,600 21,909,600 21,909,600 21,909,600

Shares in Maldives Finance and Leasing Company 1 1 1 1

At the end of the year 21,909,601 21,909,601 21,909,601 21,909,601

Opening balance 01.01.2013

Increase/(decrease) in value of Investment

Closing balance 31.12.2013

Shares in Bank of Maldives Plc 21,909,600 - 21,909,600

Shares in Maldives Finance and Leasing Company 1 - 1

21,909,601 - 21,909,601

Available-for-sale investments, comprising principally marketable equity securities, are measured at fair value

annually at the close of business on 31 December. For investments traded in active markets, fair value is determined

by reference to Stock Exchange quoted bid prices. There were no disposal on available-for-sale investments in 2013

and 2012. Other investments (unlisted securities) are stated at cost since the fair value of those shares cannot be

measured reliably.

Available-for-sale investments are classified as non-current assets, unless they are expected to be realised within

twelve months of the balance sheet date or unless they need to be sold to raise operating capital.

Available-for-sale financial assets, consist of marketable securities of Bank of Maldives plc, having a market value

of MVR 21,909,600 (2012: MVR 21,909,600) and, investment in equity shares of MFLC are stated at cost less

impairment since the fair value of these unlisted shares cannot be measured reliably.


12. trade And OtHer ReCeivaBles

Group Company

2013 2012 2013 2012

Trade receivables 121,706,363 114,967,654 121,706,363 114,967,654

Less: provision for impairment of receivables (36,105,962) (34,727,117) (36,105,962) (34,727,117)

Trade receivables (net) 85,600,401 80,240,537 85,600,401 80,240,537

Prepayments 56,799,955 44,666,939 56,799,955 44,666,939

Receivables from related parties (Note 29) 148,445,801 150,628,525 151,120,717 153,283,596

Other receivables 3,504,941 9,406,353 3,504,941 9,406,353

Less : Provision for impairment (16,558,056) (15,583,064) (16,558,056) (15,583,064)

277,793,042 269,359,290 280,467,958 272,014,361

The carrying amount of the trade and other receivables approximates its fair value.

Other receivables mainly consist of LC margin of MVR 2,556,893 (2012: MVR 5,661,329), input tax of MVR 386,913

(2012: MVR 1,365,370) and cash advance of MVR 479,978 (2012: MVR 147,480).

There is no concentration of credit risk with respect to trade receivables, as the Company has a large number of

customers.

13. inventories

Group Company

2013 2012 2013 2012

Materials - Contracting department 28,296,413 20,103,890 27,046,676 18,854,152

Lubricants, paints, construction materials etc 27,090,875 27,978,728 27,090,875 27,978,728

Yanmar engines, generators and spare parts 84,803,249 78,195,959 84,803,249 78,195,959

Consumables 9,159,246 6,651,340 9,159,246 6,651,340

Provision for slow moving items (15,132,268) (9,906,890) (15,132,268) (9,906,890)

134,217,515 123,023,027 132,967,778 121,773,289

14. CasH And CasH Equivalents

Group Company

2013 2012 2013 2012

Cash at bank and in hand 7,424,103 33,528,118 6,920,213 33,022,528

Cash, cash equivalents and bank overdrafts include the following for the purposes of cash flow statement:

Cash and cash equivalents 7,424,103 33,528,118 6,920,213 33,022,528

Bank overdrafts (Note 16) (74,626,368) (47,828,330) (74,626,368) (47,828,330)

(67,202,265) (14,300,212) (67,706,155) (14,805,802)


15. sHare Capital

Number of shares Amount MVR

At 1 January 2012 250,000 12,500,000

At 31 December 2012 250,000 12,500,000

At 31 December 2013 250,000 12,500,000

The total authorised number of ordinary shares is 250,000 shares with a par value of MVR 50 per share (2012: MVR

50 per share). All issued shares are fully paid.

16. Borrowings

Group Company

2013 2012 2013 2012

Non-current

Bank & other borrowings 20,173,933 22,167,683 20,173,933 22,167,683

Current

Bank overdrafts (Note 14) 74,626,368 47,828,330 74,626,368 47,828,330

Bank & other borrowings 30,034,821 52,600,993 30,034,821 52,600,993

104,661,189 100,429,323 104,661,189 100,429,323

Total borrowings 124,835,122 122,597,006 124,835,122 122,597,006

Demand loans, bank overdraft, LC facilities and bank guarantees from the banks and other financial institutes are

secured over MTCC building, MTCC Tower, Rentals Plaza, barges (kurimagu 7,8 & 10), tug boats (Tango 6 & 575),

steel landing craft (Leema 1), dredger (Jarrafa 3) and machineries (excavators & wheel loaders) (Note 16).

Maturity of non-current borrowings:

Group Company

2013 2012 2013 2012

Between 1 to 2 years 16,150,125 13,461,300 16,150,125 13,461,300

Between 3 to 5 years 4,023,808 8,706,383 4,023,808 8,706,383

20,173,933 22,167,683 20,173,933 22,167,683

The interest rate exposure of the borrowings of the Company was as follows:

Group Company

2013 2012 2013 2012

- at floating rate 5,843,152 - 5,843,152 -

- at fixed rates 118,991,970 122,597,006 118,991,970 122,597,006

124,835,122 122,597,006 124,835,122 122,597,006


17. loan From a SHareHolder

Group Company

2013 2012 2013 2012

Loan from a shareholder 41,443,955 77,296,462 41,443,955 77,296,462

Non-current portion 16,860,689 69,244,747 16,860,689 69,244,747

Current portion 24,583,266 8,051,715 24,583,266 8,051,715

41,443,955 77,296,462 41,443,955 77,296,462

Advance received from Ministry of Finance & Treasury in 2011 has been converted as a long term loan after signing

an agreement on 03 September 2012, which carries an interest of 7.5% per annum, unsecured and repayable

within 96 monthly installments starting from 03 September 2012. During the year 2013 the loan repayment was

rescheduled to be paid in 48 monthly installments commencing from 01 January 2013. During the year subsidy from

the Government amounting MVR 42 million was set off against the principal repayment and interest payment due to

the Government of Maldives on a loan.

18. trade And OtHer PayaBles

Group Company

2013 2012 2013 2012

Trade payables 48,548,294 44,309,490 48,548,294 44,309,490

Accrued expenses 5,158,150 5,015,122 5,142,729 4,998,775

Payables to related parties (Note 29) 66,675,360 70,634,469 66,675,360 70,634,469

Other payables 47,857,747 60,150,519 47,857,747 60,150,519

168,239,551 180,109,600 168,224,130 180,093,253

Other payables mainly consist of unpaid dividend amounting to MVR 20,807,193 (2012: MVR 17,768,726), GST

payable amounting to MVR 7,573,043 (2012: MVR 5,015,884) and advance received from customers amounting

to MVR 18,479,188 (2012: MVR 36,960,476).

19. otHer inCome

Group Company

2013 2012 2013 2012

Commission income and others 4,628,976 5,350,826 4,628,976 5,350,826

Government subsidy income 42,000,000 - 42,000,000 -

Dividend income 2,035,402 - 2,035,402 -

Reversal of provisions for impairment of receivables - 12,401,872 - 12,401,872

Profit on sale of property, plant and equipment 640,106 319,167 640,106 319,167

49,304,484 18,071,865 49,304,484 18,071,865


The Government of Maldives granted a subsidy during the year to compensate the losses incurred from transport

services operated by the Company with controlled tariffs in Greater Male’ area amounting to MVR 3,500,000 per

month for 18 months commencing from January 2013 till June 2014. Accordingly, the subsidy amount of MVR 42

million was set off against the loan repayment and interest payment due to the Ministry of Finance and Treasury during

the year.

20. expenses By Nature

Group Company

2013 2012 2013 2012

Depreciation (Note 6) 56,533,367 48,214,149 56,533,367 48,214,149

Amortisation (Note 7) 382,105 518,803 382,105 518,803

Employee benefit expense (Note 21) 117,597,306 101,960,144 117,597,306 101,960,144

Materials and consumables 235,201,631 265,420,834 235,201,631 265,420,834

Director fees 1,091,187 742,067 1,091,187 742,067

Lease rent, hiring and sub contract expenses 66,222,980 81,668,318 66,222,980 81,668,318

Repairs and maintenance 23,265,668 19,086,361 23,265,668 19,086,361

Transportation, travel and inspection 14,597,969 6,904,895 14,597,969 6,904,895

Electricity, water, insurance and communication 16,151,522 13,794,376 16,151,522 13,794,376

Accounting and professional charges 1,427,124 600,594 1,406,504 578,162

Consultation, legal fees and service charges 474,765 1,236,686 474,765 1,236,686

Bank charges 3,079,884 2,058,192 3,079,884 2,058,192

Zakath 543,941 588,510 543,941 588,510

Advertising, sales promotion and marketing 5,195,075 2,403,938 5,195,075 2,403,938

Training expenses 1,021,294 1,079,048 1,021,294 1,079,048

Security charges 1,089,360 1,302,591 1,089,360 1,302,591

License and registration fees 1,598,832 2,207,508 1,598,832 2,207,508

Printing and stationery 2,202,663 2,428,198 2,202,663 2,428,198

Loss on sale of assets - 1,262,080 - 1,262,080

Provision for impairment of asset held for sale 25,321 - 25,321 -

Provision for slow moving and non moving inventory 5,225,378 2,004,444 5,225,378 2,004,444

Provision for impairment of receivables 2,353,837 - 2,353,837 -

Other expenses 5,595,611 5,086,105 5,595,611 5,086,105

Total 560,876,820 560,567,841 560,856,200 560,545,409

Classified as:

- cost of sales 486,804,509 497,171,219 486,804,509 497,171,219

- selling and marketing costs 7,548,912 2,403,938 7,548,912 2,403,938

- administrative expenses 63,096,466 54,319,320 63,075,846 54,296,888

- other operating expenses 3,426,933 6,673,364 3,426,933 6,673,364

560,876,820 560,567,841 560,856,200 560,545,409


21. employee Benefit Expense

Group Company

2013 2012 2013 2012

Wages, salaries and bonus 75,353,058 72,779,529 75,353,058 72,779,529

Other allowance 28,346,701 15,866,494 28,346,701 15,866,494

Pension contribution 2,697,058 2,422,212 2,697,058 2,422,212

Staff food allowance 9,098,531 9,077,267 9,098,531 9,077,267

Staff medical expenses 193,216 168,973 193,216 168,973

Retirement benefit payments 386,470 - 386,470 -

Foreign staff expenses 1,446,610 1,356,299 1,446,610 1,356,299

Staff welfare 75,662 289,370 75,662 289,370

117,597,306 101,960,144 117,597,306 101,960,144

22. finanCe Costs (net)Group Company

2013 2012 2013 2012

Finance expense

- Interest expense on borrowings 8,887,941 6,097,900 8,887,941 6,097,900

- Interest expense on bank overdraft 5,732,028 7,261,164 5,732,028 7,261,164

- Net foreign exchange loss / (gain) 3,276,234 (3,087,131) 3,276,234 (3,087,131)

17,896,203 10,271,933 17,896,203 10,271,933

Finance income

- Interest income (384,627) (81,653) (384,627) (81,653)

(384,627) (81,653) (384,627) (81,653)

17,511,576 10,190,280 17,511,576 10,190,280

23. Business profit tax

Group Company

2013 2012 2013 2012

Current business profit tax 8,191,604 2,508,741 8,191,604 2,508,741

Reconciliations between business profit tax expenses and the accounting profit :

Profit before tax 34,938,782 26,518,350 34,959,402 26,540,782

Add: Non-deductible expenses 83,671,696 69,505,724 83,671,696 69,505,724

118,610,478 96,024,074 118,631,098 96,046,506

Less: Deductible expenses (63,749,786) (80,919,337) (63,770,406) (80,941,769)

Taxable profit 54,860,692 15,104,737 54,860,692 15,104,737

Less: Basic exemption limit applicable to the group/company as per tax laws (250,000) (250,000) (250,000) (250,000)

Profit liable for business profit tax after the basic exemption limit 54,610,692 14,854,737 54,610,692 14,854,737

Tax calculated at the effective tax rate of 15% 8,191,604 2,228,211 8,191,604 2,228,211

Adjustments in respect of previous year - 280,530 - 280,530

Business profit tax charge 8,191,604 2,508,741 8,191,604 2,508,741


Group Company

2013 2012 2013 2012

Current tax liabilities:

As at 1 January 1,832,480 136,584 1,832,480 136,584

Tax charged during the year 8,191,604 2,508,741 8,191,604 2,508,741

Tax paid during the year (2,929,657) (812,845) (2,929,657) (812,845)

As at 31 December 7,094,427 1,832,480 7,094,427 1,832,480

24. earnings Per SHare

Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company by the

weighted average number of ordinary shares in issue during the year.

Group Company

2013 2012 2013 2012

Profit attributable to equity holders 26,747,178 24,009,609 26,767,798 24,032,041

Weighted average number of ordinary shares 250,000 250,000 250,000 250,000

Basic earnings per share (MVR per share) 106.99 96.04 107.07 96.13

25. CasH generated from operations

Reconciliation of profit for the year to cash generated from operations:

Group Company

2013 2012 2013 2012

Profit before tax for the year 34,938,782 26,518,350 34,959,402 26,540,782

Adjustments for:

-Depreciation and amortisation (Note 6 and 7) 56,915,472 48,732,952 56,915,472 48,732,952

-Loss on sale of property, plant and equipment - 1,262,080 - 1,262,080

-Profit on sale of property, plant and equipment (640,106) (319,167) (640,106) (319,167)

-Reversal of provision for doubtful debts - (12,401,872) - (12,401,872)

-Provision for slow/non moving inventories 5,225,378 2,004,444 5,225,378 2,004,444

-Interest expenses ( Note 22) 14,619,969 13,359,064 14,619,969 13,359,064

-Interest income (384,627) (81,653) (384,627) (81,653)

-Impairment of receivables 2,353,837 - 2,353,837 -

-Impairment on asset held for sale 25,321 - 25,321 -

-Subsidy received (42,000,000) - (42,000,000) -

Changes in working capital:

- trade and other receivables (10,807,434) 18,312,071 (10,807,434) 18,312,071

- inventories (16,419,867) 597,765 (16,419,867) 597,765

- trade and other payables (26,134,941) (25,818,381) (26,153,861) (25,840,813)

Cash generated from operations 17,691,784 72,165,653 17,693,484 72,165,653


Non cash transaction :

During the year the subsidy granted by the Government of Maldives amounting to MVR 42 million were set off against

the principal repayment and interest payment of a loan received from the Government.

In the cash flow statement, proceeds from the sale of property, plant and equipment comprise:

Group Company

2013 2012 2013 2012

Net book amount (Note 6 & 9) - 2,266,909 - 2,266,909

Profit / (loss) on sale of property, plant and equipment and assets held for sale 640,106 (942,913) 640,106 (942,913)

Proceeds from sale of property, plant and equipment and assets held for sale 640,106 1,323,996 640,106 1,323,996

26. dividends Per SHare

Dividends payable are not accounted for until they have been ratified at the Annual General Meeting. Dividend of

MVR 15 per share amounting to MVR 3,750,000 has been declared in the annual general meeting held on 30 May

2013 and paid during the year ended 31 December 2013 (2012 : Nil).

27. ContingenCies

Contingent liabilities

The Company had a contingent liability in respect of letters of credit, amounting to MVR 17,045,951 (2012: MVR

18,488,568) at the balance sheet date.

The Company enjoyed a bank guarantee facility of MVR 55,521,000 (2012 : MVR 30,840,000) at the balance sheet

date with commercial banks for which the Company has given a counter guarantee for the equal amount.

Contingent assets

There were no material contingent assets recognised at the balance sheet date.

28. Commitments

Capital commitments

There were no material capital commitments outstanding at the balance sheet date.

Financial commitments

There were no material financial commitments outstanding at the balance sheet date.

29. related Party TransaCtions

The Government of Maldives along with a State owned enterprise Maldives National Shipping Limited owns 55.3%

equity shares of the Company, has substantial interest in the voting power of Housing Development Corporation

Limited, State Trading Organization Plc, Bank of Maldives Plc, Maldives Airport Company Limited, Maldives Tourism

Development Corporation PLC and Maldives Industrial Fisheries Company Limited. Maldives Real Estate Investment


Corporation Pvt Ltd is fully owned subsidiary of Maldives Transport and Contracting Company Plc. The Company

holds one-third of the share capital of Airport Investment Maldives Private Limited.

The following transactions were carried out, on commercial terms and conditions, with related parties:

(i) Sales of goods and services

Group Company

2013 2012 2013 2012

Maldives Industrial Fisheries Company Limited 347,018 313,357 347,018 313,357

State Trading Organization Plc 2,303,045 1,464,972 2,303,045 1,464,972

Maldives Airport Company Limited 3,074,287 1,537,651 3,074,287 1,537,651

Southern Utilities Limited 1,120,587 3,901,899 1,120,587 3,901,899

Maldives Police Services 349,465 347,210 349,465 347,210

Housing Development Corporation Limited 2,652,794 8,266,427 2,652,794 8,266,427

Airport Investments Maldives Private Limited - 122,400 - 122,400

Ministry of Housing and Infrastructure 264,943,854 328,327,442 264,943,854 328,327,442

Ministry of Home Affairs - 13,612 - 13,612

Other related parties 32,630,574 32,630,574 38,867,055 32,630,574

307,421,623 376,925,544 313,658,105 376,925,544

(ii) Purchases of goods and services

Group Company

2013 2012 2013 2012


Maldives Airport Company Limited 87,238 16,307 87,238 16,307

Fuel Supplies Maldives Private Limited 38,336,107 52,691,851 38,336,107 52,691,851

Maldives National Defence Force 486,464 323,067 486,464 323,067

Other Government related entities 69,200,539 55,928,620 69,200,539 55,928,620

118,151,158 123,259,838 118,151,158 123,259,838

(iii) Government subsidy

During the year subsidy from the Government amounting MVR 42 million was set off against the principal repayment

and interest payment due to the Government of Maldives on a loan.


(iv) Year-end balances arising from sale / purchase of goods and services

Group Company

2013 2012 2013 2012

Receivables from related parties (Note 12):

Maldives Industrial Fisheries Company Limited 381,311 334,629 381,311 334,629

State Trading Organisation Plc 175,119 149,013 175,119 149,013

Maldives Airport Company Limited 132,956 200,162 132,956 200,162

Maldives National Shipping Limited 14,000 14,000 14,000 14,000

Maldives Real Estate Investment Corporation Private Limited - - 2,674,916 2,655,071

Housing Development Corporation Limited 1,917,627 2,323,183 1,917,627 2,323,183

Ministry of Housing and Infrastructure 120,743,629 116,251,966 120,743,629 116,251,966

Ministry of Finance and Treasury 3,786,272 9,395,680 3,786,272 9,395,680

Ministry of Environment and Energy 6,850,000 25,655 6,850,000 25,655

Ministry of Home Affairs 5,661,730 11,337,072 5,661,730 11,337,072

Southern Utilities Limited 589,457 1,521,307 589,457 1,521,307

Maldives Police Services 1,035,096 1,032,201 1,035,096 1,032,201

Other related parties 7,158,604 8,043,657 7,158,604 8,043,657

148,445,801 150,628,525 151,120,717 153,283,596

Group Company

2013 2012 2013 2012

Payables to related parties (Note 18):


Ministry of Finance and Treasury 46,600,788 46,600,788 46,600,788 46,600,788

Maldives National Shipping Limited 37,500 37,500 37,500 37,500

Maldives Industrial Fisheries Company Limited 306 306 306 306

Fuel Supplies Maldives Private Limited 5,252,700 10,162,948 5,252,700 10,162,948

Maldives National Defence Force 2,041,471 1,559,819 2,041,471 1,559,819

Airport Investments Maldives Private Limited 5,102,970 5,102,970 5,102,970 5,102,970

Other Government related entities 4,684,012 5,613,773 4,684,012 5,613,773

66,675,360 70,634,469 66,675,360 70,634,469

(v) Loan from related parties

Group Company

2013 2012 2013 2012

Bank of Maldives Plc - 3,606,884 - 3,606,884

Ministry of Finance & Treasury 18,524,767 34,852,896 18,524,767 34,852,896

18,524,767 38,459,780 18,524,767 38,459,780

The movement in the year can be analysed as follows:

Beginning of the year 38,459,780 82,868,667 38,459,780 82,868,667

Loans repaid during the year (19,935,013) (44,408,887) (19,935,013) (44,408,887)

End of the year 18,524,767 38,459,780 18,524,767 38,459,780


Loan received from Ministry of Finance & Treasury carries an interest rate of 8% per annum, unsecured and have no

fixed repayment period. Accordingly, the amount have been shown as falling due within one year.

(vi) Key management remuneration

Group Company

2013 2012 2013 2012

Directors' remuneration 1,091,187 742,067 1,091,187 742,067

Key management remuneration 4,907,352 3,645,882 4,907,352 3,645,882

5,998,539 4,387,949 5,998,539 4,387,949

30. events After THe BalanCe SHeet Date

No significant events have occurred since the balance sheet date, which would require adjustments to, or disclosure

in, the financial statements.

Corporate Information


Corporate Information

Company name

Maldives Transport And Contracting Company Plc

Company status

Registered as a public limited company with ministry of economic

development under company law no. 10/96

registered offiCe

Mtcc tower, Boduthakurufaanu Magu

Male’ 20057, Maldives

registration no. and date

Registration no: C - 680

Registration date: 18th December 1980

Company seCretary

Ms. Fathimath Liusha

+960 332 6822

+960 332 3221

[email protected]

www.mtcc.com.mv

MNSL18,696 no. of Shares934,800 MVR of Shares

Goverment 119,661 no. of Shares5,893,050 MVR of Shares

Public111,643 no. of Shares5,582,150 MVR of Shares

TOTAL250,000 no. of Shares12,500,000 MVR of Shares 47.8% 44.7%

100%

7.5%


Bankers, Auditors & LawyersBankers

Bank Of Maldives Plc.Boduthakurufaanu Magu, Male’ 20094, Maldives

State Bank Of IndiaH. Sunleet, Boduthakurufaanu Magu, Male’, Maldives

HSBC LimitedMTCC Tower, 1St Floor, Boduthakurufaanu Magu,


Bank Of CeylonAage, Boduthakurufaanu Magu, Male’ 20094,

Maldives

Habib Bank LimitedH. Thuniya, Ground Floor, Boduthakurufaanu Magu,


Maldives Islamic BankAmeer Ahmed Magu, Male’ 20030, Maldives

auditors

Internal:

Kpmg Ford, Rhodes, Thornton & Co. MaldivesH. Miyalani, 2Nd Floor, Sosun Magu, Male’, 20069,

Maldives

External:

Pricewaterhouse CoopersH. Thandiraimaage, 3Rd Floor, Roashanee Magu,

20124, Male’, Maldives

lawyers

Shah, Hussain & Co. Barristers And AttorneysH. Aage (East Wing), 2Nd Floor, 20094

Boduthakurufaanu Magu, Male, Maldives

+960 333 0102+960 332 [email protected]

+960 333 0770+960 331 [email protected]

+960 332 2051+960 332 [email protected]

+960 331 0420+960 332 [email protected]

+960 333 3644+960 331 [email protected]

+960 331 2111+960 332 [email protected]

+960 331 4764+960 332 0575 [email protected]

+960 332 5555+960 300 [email protected]

+960 331 8342+960 [email protected]


Departments Information

Finance Department Human Resources and Administration

Department

MTCC Tower , 3Rd Floor, Boduthakurufaanu Magu ,

Male’

MTCC Tower , 7Th Floor, Boduthakurufaanu Magu ,

Male’

Information Communication Technology

Department

Repair and Maintenance Department

MTCC Tower , 5Th Floor, Boduthakurufaanu Magu ,

Male’

MTCC Tower , 2Nd Floor, Boduthakurufaanu Magu ,

Male’

Procurement Department Logistical Operations Department

H. Sawmill, Boduthakurufaanu Magu, Male’ H. Sawmill, Boduthakurufaanu Magu, Male’

20057

+960 332 6822

+960 331 5500

[email protected]

20057

+960 332 6822

+960 332 3221

[email protected]

20002

+960 332 6822

+960 331 5005

[email protected]

20057

+960 332 6822

+960 332 3221

[email protected] / [email protected]

20002

+960 332 6822 / 300 1484 / 300 1477

+960 332 2828

[email protected]

20057

+960 332 6822

+960 333 2835

[email protected]


Construction And Projects Management

Department

Sales And Marketing Department

MTCC Tower , 6Th Floor,

Boduthakurufaanu Magu , Male’

MTCC Tower , 3Rd Floor,

Boduthakurufaanu Magu , Male’

Internal Audit Department Thilafushi Dock Department

H. Sawmill, Boduthakurufaanu Magu, Male’ H. Sawmill, Boduthakurufaanu Magu, Male’

Transport Services Department Corporate Bureau

Dhathuruvehi 3, Boduthakurufaanu Magu , Male’ MTCC Tower , 7Th Floor, Boduthakurufaanu Magu,

Male’

20057

+960 332 6822

+960 333 2835

[email protected]

20002

+960 332 6822

+960 334 6806

[email protected]

-

+960 332 6822

+960 332 3221

[email protected]

20057

+960 331 5050 / 332 9076 / 333 8585

+960 334 5826

[email protected]

20057

+960 332 6822

+960 332 3221

[email protected]

20002

+960 332 6822 / 331 8080

+960 331 4050

[email protected]

MALDIVES TRANSPORT AND CONTRACTING COMPANY PLC

Boduthakurufaanu Magu, MTCC Tower

+960 332 6822

+960 332 3221

[email protected]

www.mtcc.com.mv

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