ANNUAL REPORT | 2020
CONTENTS
Brief Profile of Steamships Group . . . . . . . . . . . . . 2
Financial Highlights . . . . . . . . . . . . . . . . . . . . 4
Chairman’s Report . . . . . . . . . . . . . . . . . . . . . 6
Directors’ Review . . . . . . . . . . . . . . . . . . . . 10
Review of Operations - LOGISTICS . . . . . . . . . . . 12
Consort Express Lines . . . . . . . . . . . . . . . 12
Pacific Towing . . . . . . . . . . . . . . . . . . . 13
Joint Venture Port Services . . . . . . . . . . . . . 14
East West Transport . . . . . . . . . . . . . . . . 15
Review of Operations - PROPERTY . . . . . . . . . . . 16
Coral Sea Hotels . . . . . . . . . . . . . . . . . . 16
Pacific Palms Property . . . . . . . . . . . . . . . 17
Sustainability . . . . . . . . . . . . . . . . . . . . . . . 18
Corporate Governance . . . . . . . . . . . . . . . . . . 19
Financial Section . . . . . . . . . . . . . . . . . . . . . 20
Statements of Comprehensive Income . . . . . . . 20
Statements of Changes in Equity . . . . . . . . . . 21
Statements of Financial Position . . . . . . . . . . 22
Statements of Cash Flows . . . . . . . . . . . . . 23
Notes to the Financial Statements . . . . . . . . . 24
Independent Auditor’s Report . . . . . . . . . . . 60
Directors’ Report . . . . . . . . . . . . . . . . . . 66
Stock Exchange Information . . . . . . . . . . . . 71
Company Directory . . . . . . . . . . . . . . . . . . .
IBC
Steamships Annual Report 2020 1
BRIEF PROFILE OF THE STEAMSHIPS GROUP
Steamships Trading Company (Steamships or Group) is a committed investor in Papua
New Guinea with over a century of experience. The Group is a well-established business
conglomerate with diverse commercial interests and listings on both the Australian and Port
Moresby Stock Exchanges.
Steamships has a vision to build a valuable and profitable business that is widely respected as
being the best group to work for and with which to do business .
Steamships has a vision to build a valuable and profitable
business that is widely respected as being the best group to
work for and with which to do business .
•
Customer Focus – Our customers are the final judges
of our success or failure . We understand and respond
to the needs of our customers .
Integral to this vision are the following business strategies:
•
People Development – We value a working
environment that fosters innovation and encourages
personal development and learning .
•
•
Humility – We believe in the need to respect and to
learn from others. To do this we must be aware of
our own limitations and to seek to understand other
perspectives .
Continuity – We take a long term view. We grow
our business sustainably and create enduring value
that earns the respect of our customers, our staff, our
communities and our shareholders .
Steamships is aware of its prominent position in the
community and its responsibility to serve that community.
The Group continues to be one of PNG’s largest private
sector employers and one of the largest supporters of
community initiatives in education, health and social
welfare. Steamships ensures
that core sustainability
concepts are embedded in its business models and systems.
The Group is wholly aware that its business goals cannot
be achieved unless this is the case . Steamships cannot
succeed without the engagement and support of the people
it employs, the loyalty and satisfaction of its customers, the
local communities and the environment in which it operates .
Steamships is still showing it has the resources and capacity,
vision and capability to meet the dynamic needs of a
growing country.
•
•
•
•
•
The long-term development of a diversified range of
businesses in which shareholder value can be created,
Employment of staff who we believe will further our
strategic objectives and will be committed to the group
for the long term and providing them with rewarding
careers,
Operational excellence in the way we conduct our
business,
Doing business in a sustainable manner, and
Commitment to the highest standards of corporate
governance .
The Group employs over 2,400 PNG citizens and non-
citizens in diverse divisions grouped under the operating
categories of Logistics, Property and Commercial &
Investments . Steamships core values include the following:
•
•
•
Safety – We prioritise safety awareness and compliance
to ensure our business operations are conducted safely.
Integrity – Taking the more ethical and honest path;
honouring our commitments and delivering on
our promises; creating a bond of trust that sustains
relationships with our staff, customers, shareholders,
business partners and the communities in which we do
business .
Excellence – Our customers and colleagues expect us
to deliver high quality goods and services. If something
is to be done, we believe it should be done in the best
possible way.
2 Steamships Annual Report 2020
BRIEF PROFILE OF STEAMSHIPS GROUP
STEAMSHIPS’ ORGANISATIONAL STRUCTURE
STEAMSHIPS TRADING COMPANY
LOGISTICS
PROPERTY
COMMERCIAL &
INVESTMENTS
Consort Express
Lines
Pacific
Towing
EastWest
Transport
Port
Services
Pacific Palms
Property
Coral Sea
Hotels
Colgate
Palmolive JV
JV Port Services
(x15 JV LO Entities)
Harbourside
Development JV
Croesus
(x3 entities)
Pacific
Rumana JV
Wonye JV
Viva No 31 JV
Steamships Annual Report 2020 3
FINANCIAL HIGHLIGHTS
2020 FINANCIAL HIGHLIGHTS (including discontinued operations)
2020
K’000
2019
K’000
Change
%
Revenue (including discontinued operations)
Profit attributable to shareholders
Cash generated from operations
Net cash inflow before financing
Shareholders’ funds
External Borrowings
Earnings per share (toea)
Dividends per share (toea)
Shareholders’ funds per share
Underlying profit attributable to shareholders
Underlying earnings per share
Gearing ratio
Interest cover
Dividend cover
540,406
78,855
149,477
75,347
946,843
309,530
585,168
49,995
111,855
42,656
885,043
319,565
254
80
30.54
36,927
119
161
80
28.54
31,505
102
-8%
58%
34%
77%
7%
0%
58%
0%
7%
17%
17%
13.7%
19.5%
11.5 7.7
4.6 1.1
-30%
49%
316%
Turnover K’000
Earnings and Dividends Toea
0
0
0
’
K
1,200,000
1,000,000
800,000
600,000
400,000
200,000
0
0
0
0
’
K
1,000,000
900,000
800,000
700,000
600,000
500,000
400,000
300,000
200,000
100,000
0
700
600
500
400
300
200
100
-
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Logistics Property and Hotels Commercial
EPS (toea) Underlying EPS (toea) Dividends per share (toea)
Net Assets Employed K’000
Return to Shareholders
30%
25%
20%
15%
10%
5%
0%
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Logistics Property and Hotels Commercial
Net profit to shareholders’ funds %
Underlying profit to shareholders’ funds %
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
4 Steamships Annual Report 2020
FINANCIAL HIGHLIGHTS
SUMMARY OF PAST PEFORMANCE
2011
K’000
2012
K’000
2013
K’000
2014
K’000
2015
K’000
2016
K’000
2017
K’000
2018
K’000
2019
K’000
2020
K’000
INCOME STATEMENT (including discontinued operations)
Revenue
920,357 986,310 930,934
941,708 773,535 732,701 705,687 648,106
585,168 540,406
Profit before tax
Share of associates profit
Income tax (expense)/credit
Minority interests
Net profit attributable to shareholders
Depreciation transfer
Equity adjustment
Dividends paid or provided for the year
Earnings retained this year
79,747
233,967 265,574
9,697
14,188
13,859
(14,042)
(81,414)
(67,727)
38,609
(20,648)
(21,838)
158,261 177,700 114,011
3,843
134,789 136,042 118,686
5,865
3,062
(35,677)
(38,487) (37,710)
(4,664)
(2,415)
(11,490)
84,210
98,979
88,655
62,686 112,493
5,628
7,525
(32,621) (54,420)
5,828
69,529
3,926
41,516
61,284
5,010
63,813
4,026
(18,928) 11,198
(182)
78,855
2,629
49,995
(1,061)
-
(58,916)
98,284
-
-
(88,373)
89,327
-
(8,994)
(57,365)
47,652
-
-
- 2,206
(43,411) (48,062)
53,123
45,244
-
-
(40,291)
43,919
-
-
-
-
(32,559) (26,357)
43,172
8,957
-
-
-
-
(44,962) (17,055)
61,800
5,033
Underlying profit attributable to shareholders
(adjusted for significant items)
153,566 156,213 128,367 108,808
80,651
71,721
61,775
43,304
31,505
36,927
BALANCE SHEET
SHARE CAPITAL & RESERVES
Issued Capital
Retained Earnings
Shareholders’ funds
Non-controlling interests
EQUITY
Fixed Assets / Investment Properties
Investments in Associated Companies
Future Income Tax Benefit
Goodwill
Other assets
TOTAL ASSETS
24,200
24,200
24,200
24,200
24,200
860,843 922,643
554,349 652,978 689,777
578,549 677,178 713,977 735,964 789,087 833,006 841,964 920,305 885,043 946,843
24,200
24,200
24,200
711,764 764,887 808,806 817,764 896,105
24,200
24,200
75,365
16,983
653,914 761,500 736,884 766,737 836,602 881,837 878,154 940,028 902,790 963,826
84,322
22,907
30,773
47,515
48,831
36,190
19,723
17,747
38,687
31,471
- - 21,081
93,617
17,183
17,183
299,634 411,920 352,549
938,709 1,023,861 1,066,393 1,115,123 1,072,955 1,068,892 997,125 890,576
28,445
970,928 945,075
65,276 41,586 36,992
33,193
1,010
2,311
1,683
33,521
76,433
76,433
76,433
80,491
360,385 428,703
366,479 400,480 284,200 294,800 470,810
1,283,971 1,491,651 1,565,111 1,628,807 1,627,298 1,536,708 1,469,373 1,504,778 1,451,643 1,488,213
66,445 67,196
36,680 30,250
80,491 80,002
36,458
36,914
80,491
Current Liabilities
Non-Current Liabilities
TOTAL LIABILITIES
148,286 229,779
283,445 370,396 230,390
346,612 359,755 597,837
400,567 294,608
630,057 730,151 828,227 862,070 790,696 654,871 591,219 564,750 548,853 524,387
190,621 541,292 184,646 221,560 352,541
671,449 249,404 470,225 369,659 212,209
NET ASSETS
653,914 761,500 736,884 766,737 836,602 881,837 878,154 940,028 902,790 963,826
RATIOS
Current assets to current liabilities
Borrowings to shareholders funds
Gearing
Tangible net asset backing per share (Kina)
Net profit to revenue %
Net profit to shareholders’ funds %
Underlying profit to shareholders’ funds %
Dividends per share (toea)
EPS (toea)
Underlying EPS (toea)
Earnings retained %
1.06
70.1%
38.3%
20.53
17.2%
27.4%
26.5%
190
510
495
62.1%
1.11
72.6%
39.2%
24.00
18.0%
26.2%
23.1%
285
573
504
50.3%
1.53
89.7%
46.5%
20.75
12.2%
16.0%
18.0%
185
368
414
41.8%
1.92
95.2%
47.8%
22.13
9.4%
12.0%
14.8%
140
286
351
51.0%
0.74
81.7%
43.1%
24.38
12.8%
12.5%
10.2%
155
319
260
53.7%
1.16
57.0%
34.6%
25.84
11.5%
10.1%
8.6%
130
272
231
52.2%
1.00
50.2%
33.1%
25.74
5.9%
4.9%
7.3%
110
134
199
21.6%
1.15
39.7%
28.2%
27.85
11.1%
7.6%
4.7%
165
224
140
62.1%
1.83
35.4%
19.5%
26.65
8.5%
5.6%
3.6%
80
161
102
10.1%
1.40
32.1%
13.7%
28.62
14.6%
8.3%
3.9%
80
254
119
78.4%
Notes
Earnings per share = profit attributable to shareholders / average shares in issue
Gearing = debt / debt plus equity
Interest cover = earnings before interest and tax / net finance charge
Dividend cover = profit attributable to shareholders / total dividend paid and provided
Steamships Annual Report 2020 5
CHAIRMAN’S REPORT
It has been a year since the Office of the Prime Minister declared a State of Emergency in
Papua New Guinea because of the global COVID-19 virus pandemic. PNG is still experiencing
the ravages of the virus. There has inevitably been an impact on businesses with increased
regulatory restrictions and a reduction in demand for goods and services. Steamships is well
positioned to overcome the challenges arising from the pandemic .
The impact of the pandemic was mostly experienced by the
hospitality sector, where Steamships hotel group, Coral Sea
Hotels, was immediately and deeply impacted by border
closures and restrictions on domestic travel. Our logistics
businesses quickly adjusted to the new operating constraints
caused by the pandemic, and whilst all were impacted, the
feared worst-case scenarios have not transpired. Property
occupancy and rates have suffered as expatriates have left
the country as business and aid agencies scaled back their
operations. The impact of reduced occupancy and rental
rates may impact the property market for several years.
Further commentary on the impact of COVID-19 on each
of our divisions is set out in the Review of Operations on
page 12 to 17.
After a disappointing 2019 when the expected benefits
from the APEC Leaders’ Summit did not materialise,
resource project developments were stalled and a change
in government increased uncertainty, 2020 saw a modest
improvement in the group’s performance, notwithstanding
the negative impacts of COVID-19.
After taking office in 2019, the government of James Marape
announced an intention to broaden the base of the economy
and redress the allocation of benefits from resource projects.
While being a necessary long-term goal that should drive
employment opportunities for a rapidly growing young
population, the lack of progress in new resource projects
is constraining economic activity. Wafi-Golpu, PNG-LNG,
P’nyang and Pasca-A remain mired in complex negotiations
6 Steamships Annual Report 2020
CHAIRMAN’S REPORT
with little immediate prospect for progress. The lack of
progress compounded by the impact of COVID-19 led to a
very subdued business climate in 2020. The closure of the
Porgera mine in March, added further stress to the economy,
put downward pressure on the Kina and further impacted
availability of foreign currency. Progress on projects and
the associated generation of trickle-down benefits, while no
panacea to PNG’s underlying economic challenges, would
create a much-needed boost to the economy.
An increasing budget deficit that constrains capacity for
economic stimulus combined with an absence of new
resource projects will likely undermine business investment
confidence for 2021. Progress in combatting COVID-19
may generate some upside potential.
With the twin challenges of a weak underlying economy
and the global implications of COVID-19 as the backdrop,
Steamships’ businesses managed to adjust quickly in 2020.
Consort’s improved performance and modest contributions
from the other logistics businesses were sufficient to offset
the loss in Coral Sea Hotels and a weaker result for Pacific
Palms Property. Underlying performance (before significant
items) saw a 17.2% improvement over 2019. Profit
attributable to shareholders increased 57.7% to PGK 78.9
million .
Coastal shipping continues to be a highly competitive
market with growth in domestic volumes constrained by
the lacklustre economy and small domestic manufacturing
base. After a reasonable start to the year, Consort’s cargo
volumes in the second quarter were impacted by the onset
of domestic COVID-19 restrictions and a contraction of the
global supply chain. The turnaround programme initiated in
late 2019 made good progress . Liner volumes recovered
on the back of improved schedule reliability and enhanced
customer service. Project and charter activity was subdued,
consistent with recent years. Prospects for 2021 are reliant
on a recovery in the general economy and progress on the
major resource projects .
Pacific Towing had a disappointing year on the back of
reduced harbour towage and the absence of salvage or
emergency towage work. Limited deep-sea towage was
another drag on results. East West Transport suffered from
reduced activity, particularly for its aviation fuel business.
Business in Lae was negatively impacted as competitors
redeployed assets from the Highlands Highway following
Steamships Annual Report 2020 7
CHAIRMAN’S REPORT
the closure of Porgera. The company remains committed
to the logistics sector and its customers, winning several
significant contracts during the year.
accommodation, which helped minimise
losses. The
division made a loss in 2020 and is forecast to do so again
in 2021 .
Pacific Palms Property was challenged by oversupply
conditions in all sectors as demand continued to weaken
and additional supply entered the market. Residential rent
and occupancy levels were under significant pressure with
the departure of expatriates due to COVID-19 . A measured
response to requests for Covid relief ensured that tenancy
defaults were less impactful than feared at the onset of
the pandemic. The reduction in rental rates may impact
the market into the medium term . Despite operational
challenges caused by COVID-19, work on Pacific Palms
Property’s mixed use Harbourside South project continued
throughout the year with the project only marginally behind
schedule. During the year, the company completed the
purchase of a commercial property in Port Moresby and
disposed of non-core assets in Oro Province. The company
anticipates fresh investment opportunities may arise for
consideration due to the challenging market .
Coral Sea Hotel’s performance reflected the profound impact
of COVID-19 restrictions and the reduction in international
air travel, which resulted in the temporary closure of two
of the group’s hotels . Management rationalised capital
and operational expenditure that unfortunately included
a redundancy programme being implemented. Coral Sea
Hotels responded rapidly to the demand for quarantine
8 Steamships Annual Report 2020
The Colgate Palmolive joint venture weathered the Covid
storm relatively well, with strong demand for cleaning
products partially offsetting declines
in discretionary
expenditure on personal care products .
Steamships remains confident in the medium-term prospects
for the PNG economy and projects an improved result
for 2021 subject to caveats on the impact of COVID-19 .
Management will remain vigilant in managing costs while
being responsive to opportunities created by a challenging
market conditions .
As ever, and with PNG being both our home and only
substantive place of business, Steamships will continue to
contribute and participate in PNG’s economic and social
development .
We are well-positioned for a recovery and our team will
continue to grow Steamships and its contribution to PNG. I
thank all our staff for their commitment and in many cases
their personal sacrifices during what has been one of the
more challenging years in recent times. The team have been
and will remain critical to the success of Steamships we will
continue to invest in the future generation of Steamships
leaders .
CHAIRMAN’S REPORT
Steamships Annual Report 2020 9
DIRECTORS’ REVIEW
2020 was a difficult year as the global economy was ravaged by the impact of the COVID-19
virus. PNG was no exception. The economy remained weak due to restrictions imposed to
limit the spread of the virus and the uncertainty for businesses that this created. Failure of the
various parties to progress investment in any of the major resource projects weighed heavily
on the economy. The situation worsened with the sudden closure of the Porgera gold mine
mid-year as a result of the Government not granting an extension to the mine lease. Investment
sentiment and demand remains poor. The National Budget presented in November 2020
projects a K6.6Bn budget deficit. Government spending will therefore remain tight into 2021.
The ongoing shortage of foreign currency in PNG also continues to suppress economic activity.
Continued budget support from multilateral agencies will be
essential and could entail economic reforms that will impair
economic activity in the short term.
2020 was therefore a difficult year for the PNG private sector
as a whole and Steamships diverse business activities, being
closely integrated to the domestic economy, were impacted
by the negative impacts of the COVID-19 virus and
economic slowdown . However, prudent cost management,
a dedication to customer service and cautious investment
have delivered improved results in 2020 .
Steamships’ sales revenue on a continuing basis declined
7.6% to K540.4 million against last year’s K585.2 million,
with improved revenue for Consort shipping only partially
offsetting declines for East West Transport, Pacific Towing
and Coral Sea Hotels. Leasing revenue from property
investments was flat.
Depreciation in 2020 was K88 .3 million against K82 .3
million in 2019, and interest on net borrowings (excluding
capitalised interest) was K8.9 million against K9.8 million
in 2019. Capital expenditure for the year was K66.7 million
against K94 .2 million in 2019 .
The group’s net operating cash flow generation increased
33.6% to K149.5 million against K111.8 million in 2019.
The cash balance at year end is K142.4 million.
A dividend of 80 toea per share has been proposed and will
be paid after the Annual General Meeting on 18th June 2021,
subject to Steamships’ ability to secure foreign exchange for
non-PNG shareholders. As there was no interim dividend
paid during the year the total dividend for the year is
80 toea per share (2019: 80 toea per share). The dividend is
unfranked and there is no conduit foreign income .
2020
K000’s
2019
K000’s
Change
Net Profit attributable to shareholders
78,855
49,995
57.7%
Add back/(less) impact of significant items (post tax and minority interests)
Impairment of Fixed Assets, Goodwill (incl Vessels)
Recognition of tax losses previously not recognised
Fixed Assets Write Off
Refund of SWT Assessment
(Gain)/Loss on Disposal of Vessels
Gain on Sale of Properties
Salvage Profit
Total impact of significant items
919
(25,197)
613
(8,467)
(1,362)
(7,333)
(1,101)
(41,928)
-
-
-
-
789
(16,910)
(2,369)
(18,490)
Underlying profit attributable to shareholders
36,927
31,505
17.2%
10 Steamships Annual Report 2020
DIRECTORS’ REVIEW
Significant items
Following the amalgamation of wholly-owned subsidiary,
Consort Express Lines Ltd (“CEL’) with Steamships Ltd in
2019, previously unutilised tax losses from prior periods
were made available .
The Company reached a settlement with the IRC on a default
assessment for salaries and wages tax that was paid in 2017 .
The amount represents the net credit to the Company.
Coral Sea Hotels
Coral Sea Hotels (CSH) was impacted by COVID-19.
International and domestic travel restrictions significantly
reduced demand for hotel rooms from the end of the first
quarter onwards. There was some upside from quarantine
business, largely from the resource sector, and this gained
strength in the fourth quarter albeit at low margins . CSH
expanded its food and beverage offering with the opening
of new outlets and a restaurant at Ela Beach Hotel, an
Enzo’s at the Port Moresby Nature Park and has taken over
management of the Bonjour Café at Deloitte Tower.
Pacific Palms Property
Pacific Palms Property’s (PPP) financial performance was
broadly in line with last year. The impact of COVID-19
primarily affected the premium residential portfolio in Port
Moresby due to a decline of expatriates in country. Industrial
and retail in Port Moresby was resilient and commercial fell
behind expectation, though improved slightly towards the
end of the year. Outside of Port Moresby, occupancy and
yields were generally stable with the main exception being
weak industrial demand in Lae . Construction of Harbourside
South continues to progress and is expected to complete in
the second half of 2022 .
Logistics
After a generally strong first quarter for the logistics
businesses, April was a particularly challenging month with
the State of Emergency severely restricting the movement
of freight . Initiatives such as contactless port calls between
Consort Express Lines (CEL) and Joint Venture Port Services
(JVPS) were put in place to ensure the safety of operations.
Volumes gradually recovered from the April lows though
generally remained soft for the remainder of the year.
Liner volumes strengthened in the fourth quarter and the
project and charters side of the business performed in line
with expectation . A focus on maintenance and operational
efficiencies continues to deliver improved fleet and schedule
reliability.
JVPS performed well largely due to stronger-than-expected
vessel revenue and improved results at Joint Venture Hire
Company (JVHC), which hires out heavy machinery. JVPS
took over management of United Stevedoring Limited thus
consolidating all of Steamships’ stevedoring activities under
JVPS management .
EastWest Transport’s (EWT) business remained soft. Fuel
transport was negatively impacted by reduced air traffic,
particularly on EWT’s high volume contract for aviation fuel
in Port Moresby. Freight movements in general were also
below expectations .
Pacific Towing experienced a similar volume of harbour
towage jobs in 2020 compared to 2019 . However, non-
harbour towing operations fared poorly on lower jobs
available. It was a particularly quiet year for salvage
opportunities .
Commercial
Colgate-Palmolive (PNG) Limited a PNG incorporated joint
venture, overcame distribution problems associated with
COVID-19 travel restrictions in 2020, although Home Care
category sales suffered as a result. However, overall revenue
was only slightly behind prior year with both Oral Care
and Personal Care categories showing growth in volume,
with Oral care also exhibiting growth in sales revenue. The
overall margin for the business was slightly lower as a result
of promotional activity and sales mix.
Trading Outlook
The new year has started on a more positive note with the
signing of a the Fiscal Stability Agreement for the Papua LNG
gas project and approval of the environmental permit for
the Wafi-Golpu copper and gold mine in Morobe province.
There is even hope of re-opening the Porgera mine mid-
year. The investment and job creation from these projects
is essential to the recovery and future development of PNG.
Whether the key resource projects proceed or not, 2021
is expected to be another challenging year for PNG and
Steamships .
We remain firmly focused on the future and our commitment
to the development of the country and people of PNG and
the exciting opportunities that lie ahead .
Steamships Annual Report 2020 11
REVIEW OF OPERATIONS - LOGISTICS
CONSORT EXPRESS LINES
Consort’s liner performance in 2020 was broadly in line
with the expectations laid out at the start of the year, though
the shape of that performance was impacted by COVID-19.
The first quarter was strong, April 2020 was well below
expectation due to the COVID-19 lockdown, volumes
then gradually returned to normal levels month-on-month
from May 2020 and the fourth quarter of 2020 finished off
strongly.
Consort’s project and charter business performed in line
with expectations as it had already become apparent by the
start of the year that significant new resource investments
were unlikely to progress in 2020. There is slightly more
optimism around infrastructure projects in 2021 .
Overall, the outlook in 2021 remains clouded by the
uncertain impact of COVID-19 . However, at the time
of writing, business fundamentals are solid and Consort
remains committed to its customers and the Papua New
Guinean market. Consort intends to further differentiate
itself through improved systems, its schedule, and customer
service .
Consort operates a fleet of 10 coastal vessels, all of
which are PNG flagged.
LINER SERVICES
Consort consistently connects 14 ports around
PNG. The Company has scheduled services to the
North Coast, South Coast, New Guinea Islands,
Bougainville and Western Province. Consort proudly
serves the people of PNG by providing an important
supply link to many of the communities on its routes.
The Company carries a range of cargoes including
containerised, break-bulk, reefer, LCL and project
cargo . Consort transports cargo for a diverse customer
base from domestic manufacturers and wholesalers
to international liner carriers transhipping cargo . In
addition to owning and operating ships, Consort
manages PNG’s largest fleet of containers offering
customers easy access to a wide range of container
types.
PROJECT CHARTERS
Consort provides short and long-term vessel charters
specialising in shallow water river shipping, and
develops,
intermodal
implements and supports
logistics solutions linked to land-based services such
as road transport, cargo handling, storage, customs
clearance, lay down areas and warehousing.
12 Steamships Annual Report 2020
REVIEW OF OPERATIONS - LOGISTICS
PACIFIC TOWING
Pacific Towing is PNG’s market leader in the
provision of a diverse range of marine services,
enjoying a reputation for excellence and reliability
across the region. The company is a full member of
the International Salvage Union and the International
Spill Control Organisation .
Core services include towage, moorage, salvage,
commercial diving, and life rafts (sales and servicing).
The company operates a fleet of 25 vessels (15 tugs
and 10 associated support vessels) and has fast
responder salvage capability. Vessels are located
in five ports across PNG (being Port Moresby, Lae,
Rabaul, Kimbe and Madang). An additional tug
dedicated to harbour towage services continues to
be based in Honiara at the company’s operations
in the Solomon Islands. The company expanded its
fleet in 2020 with the purchase of tug ‘Waiowa’,
which increased towage and salvage capabilities .
Although primarily operating in PNG waters, Pacific Towing
services broader Oceania and South East Asia . 2020 also
saw a company vessel and crew enter American waters for
the first time with a tandem open ocean tow from Guam to
Port Moresby.
Pacific Towing experienced a similar volume of harbour
towage jobs in 2020 compared to 2019 . However, non-
harbour operations fared poorly and it was a particularly
quiet year for salvage opportunities.
Despite a particularly challenging year for the maritime
industry, Pacific Towing maintained its strategy of localisation
and people development. The company invested heavily in
domestic training and, despite COVID-19 challenges, the
first batch of Pacific Towing cadets completed their final
year of training at the Maritime Academy of Fiji and will
enter the workforce in the first quarter of 2021. The Women
in Maritime cadetship program took on another six female
deck and engine cadets at the beginning of 2020. The total
number of cadets in this program is now 26 . A further intake
is planned for 2021 .
Despite COVID-19’s continued negative impact on the
maritime industry and PNG economy, Pacific Towing
remains well positioned throughout the Pacific Islands
region. Pacific Towing’s strategy is focused on pursuing
greater international expansion and claiming a larger share
of opportunities in PNG’s growing oil and gas sector. A new
International Operations Manager has been recruited to join
in 2021 and will add considerable towage, salvage and oil
and gas experience .
Steamships Annual Report 2020 13
REVIEW OF OPERATIONS - LOGISTICS
JOINT VENTURE PORT SERVICES
Joint Venture Port Services
(JVPS) operate 11
businesses throughout the country including in the
principal ports of Port Moresby and Lae as well as
elsewhere on the mainland and on Bougainville,
New Ireland and New Britain .
The core port businesses offer a full range of
stevedoring and handling facilities. With a fleet of
specialist equipment, the businesses handle all types
of containers, as well as project cargo, break-bulk,
RO-RO, LO-LO, grains and cement. The stevedoring
companies are joint ventures between Steamships
and local landowner groups at the respective ports
around the country. Each joint venture employs a
local workforce and is structured in a manner so
that a significant share of earnings is returned to the
community in which the joint ventures operate.
JVPS is the only group of stevedoring and handling
companies in PNG to be ISO accredited for Quality,
Safety and Environment. The business continues to
work hard to provide a seamless logistics solution for
customers in PNG.
During 2020, JVPS took over United Stevedoring Limited
(USL) from Consort thus consolidating all 11 of Steamships’
stevedoring activities under the JVPS banner . As the
country’s largest professional stevedore, JVPS brings to these
operations a renewed focus on safety, professionalism,
standardisation, and financial discipline.
The focus in 2020 has been to improve customer service
standards whilst reducing costs . In response to the threat
of COVID-19, JVPS worked closely with Swire Shipping,
Consort and local authorities to develop ‘contactless
stevedoring’ across all 11 operations. There has been a
strong focus on deploying digital technology including the
introduction of live cargo updates, electronic payroll and
increased levels of surveillance. A strong focus on safety and
governance, coupled with high levels of productivity and
professionalisms, continues to provide a point of difference
between JVPS and its competitors .
Most of JVPS’ businesses performed in line with expectation
except for Oro Bay and Palm Stevedoring in Alotau, mainly
due to increased competition in those ports . Operations in
the ports of Buka and Kieta in Bougainville saw a welcome
recovery of volumes after a poor 2019.
Joint Venture Hire Company (JVHC), which hires out heavy
machinery on wet leases, completed its second year of
operating with full year results much improved from 2019.
The company has been successful in securing several long-
term service contracts .
The focus for 2021 will be on improving customer
service, driving safety and professionalism, and the further
deployment of new technology.
14 Steamships Annual Report 2020
REVIEW OF OPERATIONS - LOGISTICS
EAST WEST TRANSPORT
2020 proved a tough year for EWT. The first COVID-19
lockdown caused significant challenges in April and, despite
recovering from May, the business environment remained
soft for the rest of the year. Fuel transport was negatively
impacted by reduced air traffic, particularly on EWT’s high
volume contract for aviation fuel in Port Moresby. Freight
movements in general were also below expectation,
impacting general transport, depot services, and customs
clearance .
In a competitive market, EWT made necessary cost savings
during the year and have maintained safety, customer service
and reliability as points of differentiation. The operational
and commercial functions of EWT Lae was strengthened
with a new National Operations Manager who joined in
August 2020 .
Pressure on rates is expected to remain intense. EWT
is focused on defending its market share and achieving
modest business growth through improved productivity and
continuing to justify its points of differentiation.
EastWest Transport (EWT) is one of Papua New
Guinea’s largest multifaceted transport and logistics
companies . It is ISO accredited for Environmental
Management, Occupational Health & Safety and
Quality. Based in Port Moresby, EWT has operations
in Lae, Kimbe, Rabaul, Madang, Wewak, Alotau and
Kavieng. The company has a sizable fleet of prime
movers, heavy and light trucks, forklifts and reach
stackers ranging from 2.5 to 80 tons in capacity.
All equipment is supported by localised workshop
facilities, safety teams and emergency response
teams and vehicles .
EWT operates across a wide spectrum of transport
related activities including bulk fuel, containerised
cargo and break-bulk cargo, and provides depot
services such as equipment hire, warehousing and
bonded or unbonded yard storage. EWT also offers
a licensed customs cargo clearance service in Lae
and Port Moresby with the ability to clear cargo
in any location where EWT has a presence. The
division capitalises on its close relationships with
sister companies in shipping and stevedoring by
offering specialised end-to-end logistics and project
solutions for the mining, oil and gas sectors and new
or existing commercial sectors .
Steamships Annual Report 2020 15
REVIEW OF OPERATIONS - PROPERTY
CORAL SEA HOTELS
Coral Sea Hotels (CSH) is the largest hotel group
in PNG, managing eight hotels and one serviced
apartment block. The group comprises the Grand
Papua Hotel, the Gateway Hotel and Apartments,
the Ela Beach Hotel and Apartments, Whittaker
Apartments and the Air Niugini Residence (under
a management agreement) in Port Moresby; the
Huon Gulf Hotel in Lae; the Highlander Hotel and
Apartments in Mount Hagen; the Bird of Paradise
Hotel in Goroka and the Cassowary Hotel in
Kiunga. The group also operates a number of food
and beverage (F&B) outlets including the fast-food
chain Enzo’s, Ela Beach Bakery and Bonjour Café in
Deloitte Tower.
COVID-19 presented unprecedented challenges in 2020
for the hotel industry. International and domestic travel
restrictions significantly impacted demand for hotel rooms.
However, there was some upside from quarantine business,
particularly in the fourth quarter, though at depressed rates.
There was a strong focus on ensuring the safety and security
of our customers in the context of COVID-19. The business
carried out extensive cost savings in 2020 and will continue
to push business improvement initiatives to ensure it remains
competitive in a challenging market. The Grand Papua Hotel
was once again the recipient of the ‘World Luxury Hotel
Award’ in the Australasia and Oceania category.
Despite the challenging environment, CSH has made
targeted investments to add to CSH’s food and beverage
offering as part of a new F&B strategy. An exciting new
precinct at Ela Beach Hotel completed in December 2020,
offering a bakery, Enzo’s, SALT Restaurant and Beachside
Bar. A stand-alone Enzo’s opened in Port Moresby Nature
Park and CSH took over the operations of Café Bonjour in
Deloitte Tower.
Demand is expected to remain soft in 2021 and the Port
Moresby market remains significantly oversupplied in
hotel rooms. The focus will be on delivering a consistent,
high quality and affordable service across all hotels and
improving the CSH’s food and beverage offering .
16 Steamships Annual Report 2020
REVIEW OF OPERATIONS - PROPERTY
PACIFIC PALMS PROPERTY
Pacific Palms Property (PPP) is one of the largest and
most dynamic property developers and managers in
PNG. The division continues to develop and hold
property in the Residential, Commercial, Retail
and Industrial sectors with building and land assets
located in Port Moresby, Lae, Madang, Wewak,
Goroka, Mt. Hagen and Rabaul. PPP’s strategy of
making investments of scale and quality in good
locations continues to support stable revenues .
PPP’s financial performance was broadly in line with last
year. The impact of COVID-19 primarily affected the
upmarket residential portfolio in Port Moresby due to a
decline of expatriates in country. Industrial and retail in
Port Moresby was resilient and commercial fell behind
expectation, though improved slightly towards the end of
the year. Outside of Port Moresby, occupancy and yields
were generally stable with the main exception being weak
industrial demand in Lae .
PPP’s joint-venture projects in Mount Hagen, Madang and
Port Moresby are performing to expectation. Occupancy
in Hagen Central has improved and is approaching full
occupancy as is the Pacific Rumana building in Port
Moresby.
PPP’s flagship development, the Harbourside East and
West precinct in Port Moresby, finished the year at 100%
commercial occupancy and the construction of Harbourside
South continues to progress. Upon completion, the fully
integrated Harbourside precinct will offer a range of premium
commercial, retail and residential services. PPP’s property
development team have expanded their capabilities to offer
end-to-end project management of large-scale projects from
feasibility studies to handover. This will be increasingly
important as PPP looks to develop and manage projects of
scale in the coming years.
Burns Haus on Stanley Esplanade, Port Moresby, was
acquired and will be refurbished for commercial and retail .
This project was funded through the sale of non-core plots
in Popondetta .
The focus for 2021 is to continue to improve customer
service, maintain high maintenance standards and maximise
occupancy. The outlook for 2021 is for a relatively flat year,
emulating 2020 . Longer term, PPP remains well positioned
to benefit from the next cycle with high quality properties
across all categories and is confident of its future prospects.
Steamships Annual Report 2020 17
SUSTAINABILITY
A genuine commitment to the principles of Sustainable Development has always underpinned
the way that Steamships operates and is key to delivering lasting value to its customers and
shareholders. This commitment, articulated by a focus on Our People, Our Community, and
Our Environment, will ensure that the Company remains relevant, and continues to make a
valuable and lasting economic and social contribution to Papua New Guinea.
the challenges of 2020, Steamships steadily
Amidst
maintained its focus on its greatest asset, people. The STC
Frontline Leader Development Program was successfully
launched with 22 managers, in parallel with re-runs of the
Team Leader Development and Graduate Development
Programs . Despite local and international restrictions on
movement of staff and trainers, opportunities through virtual
sharing platforms strengthened business communications
and staff morale . Additional initiatives were executed
including a series of robust 60 minute leadership trainings
called ‘Reunite & Refresh’ to inspire Senior Managers
through crisis, and a Special Voluntary Leave Scheme for
staff retention. In the area of safety, the company achieved
the impressive milestone of celebrating 12 months LTI (lost
time injury) free, and two of our businesses, JVPS and EWT,
achieved ISO certification in 2020.
Community engagement continues to be a priority for
Steamships . Having a positive impact on the various
communities in which the company operates is important,
and this is done by identifying projects and partnerships
that bring measurable, meaningful, and positive impact to
those in most need. Activity in 2020 was challenged by
the onset of the COVID-19 pandemic, however several
key partnerships and some new projects received funding
throughout the year. Support for Buk bilong Pikinini, The
Salvation Army House of Hope, and the Bel Isi Project,
continued, as did scholarship funding for nursing students
and female maritime cadets . New projects included an aid
post for the Mortlock Islands and a hygiene and sanitation
project in the Central Province .
Responsible and sustainable energy consumption continues
to be encouraged through the regular monitoring and
reporting of energy use, water use and environmental
emissions at operational level. The company again partnered
with the Conservation and Environment Protection Authority
to sponsor World Environment Day, delivering awareness
lectures to selected school children, and coordinating a
number of educational activities to highlight the importance
of environmental sustainability. Steamships also funded
activity around turtle conservation in the Conflict Islands.
Steamships’ sustainability performance aligns with the
requirements of the Global Reporting Initiative (GRI), a
worldwide corporate transparency initiative that Steamships
has followed since 2013. The full GRI report and a
comprehensive Sustainability Report are available on the
Steamships website at www.steamships.com.pg.
18 Steamships Annual Report 2020
CORPORATE GOVERNANCE
Steamships and its Board are committed to achieving and demonstrating the highest standards
of corporate governance and ethical behaviour, and they expect these standards from all
employees. The Group believes that the maximisation of long term returns to shareholders
is best achieved by acting in a socially responsible manner that recognises the interests of
community stakeholders.
Steamships is committed to:
•
•
•
Providing high-quality products and services to meet
customers’ needs;
Maintaining high standards of business ethics and
corporate governance;
Ensuring the safety and wellbeing of employees and
others with whom the Group has contact; and
in the order it is listed in the ASX guidelines. Each section
addressing a key principle includes references to relevant
information that appears elsewhere in the 2020 Annual
Report or on the Steamships’ website .
Steamships believes it complied with the Australian Stock
Exchange Corporate Governance Principles (the fourth
edition) during the twelve months ended 31 December
2020, except where noted in the Corporate Governance
Report .
•
Promoting sustainable business practice .
Steamships reports against the Australian Stock Exchange
(ASX) recommendations by addressing each key principle
Steamships’ Corporate Governance Report can be
found at http://www .steamships .com .pg/aboutus/
corporategoverance
Steamships Annual Report 2020 19
STATEMENTS OF COMPREHENSIVE INCOME
Steamships Trading Company Limited Year Ended 31 December 2020 (Amounts in Kina 000’s)
Continuing Operations
Revenue
Other income
Operating expenses
OPERATING PROFIT
Finance income
Finance costs
Share of profit of associates and joint ventures
PROFIT BEFORE INCOME TAX
Income tax credit / (expense)
PROFIT FROM CONTINUING OPERATIONS
PROFIT FOR THE YEAR
Attributable to:
Non-controlling interests
Shareholders
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
attributable to owners arises from:
Continuing operations
Discontinued operations
Consolidated
Parent Entity
Note
2020
2019
2020
2019
3(a)
3(a)
3(b)
3(e)
3(e)
4(b)
5(a)
540,406
585,168
-
-
(467,603)
(514,038)
72,803
7,416
71,130
7,938
(16,406)
(17,784)
4,026
67,839
11,198
79,037
5,010
66,294
(18,928)
47,366
9,443
2,925
(2,137)
10,231
72
-
-
10,303
(187)
10,116
48,000
3,021
(1,870)
49,151
72
-
-
49,223
(307)
48,916
79,037
47,366
10,116
48,916
182
78,855
79,037
(2,629)
49,995
47,366
-
10,116
10,116
-
48,916
48,916
78,855
-
78,855
49,995
10,116
48,916
-
-
-
49,995
10,116
48,916
Basic and Diluted Earnings per share
Continuing & discontinued (toea)
Continuing (toea)
3(f)
3(f)
254t
254t
161t
161t
These Statements of Comprehensive Income are to be read in conjunction with the accompanying notes.
20 Steamships Annual Report 2020
STATEMENTS OF CHANGES IN EQUITY
Steamships Trading Company Limited Year Ended 31 December 2020 (Amounts in Kina 000’s)
Consolidated
Share
Capital
Retained
Earnings
Other
Total Capital Controlling
Reserves & Reserves
Interest
Total
Equity
Non-
BALANCE AT 1 JANUARY 2018
24,200
896,105
49,995
-
-
920,305
19,723
940,028
49,995
(2,629)
47,366
Profit for the year
Adjustment on acquisition of minority interest
in subsidiary (Note 24)
Dividends paid 2019
-
-
-
-
(40,295)
(40,295)
10,738
(29,557)
(44,962)
-
(44,962)
(10,085)
(55,047)
BALANCE AT 31 DECEMBER 2019
24,200
901,138
(40,295)
885,043
17,747
902,790
Profit for the year
Dividends paid 2020
-
-
78,855
(17,055)
-
-
78,855
182
79,037
(17,055)
(946)
(18,001)
BALANCE AT 31 DECEMBER 2020
24,200
962,938
(40,295)
946,843
16,983
963,826
Parent Entity
Share
Capital
Retained
Earnings
BALANCE AT 1 JANUARY 2019
24,200
Profit for the year
Dividends paid 2019
-
-
65,245
48,916
(44,962)
(44,962)
Total
Equity
89,445
48,916
BALANCE AT 31 DECEMBER 2019
24,200
69,199
93,399
Profit for the year
Dividends paid 2020
-
-
10,116
10,116
(17,055)
(17,055)
BALANCE AT 31 DECEMBER 2020
24,200
62,260
86,460
These Statements of Changes in Equity is to be read in conjunction with the accompanying notes.
There is no other comprehensive income.
Steamships Annual Report 2020 21
STATEMENTS OF FINANCIAL POSITION
Steamships Trading Company Limited As At 31 December 2020 (Amounts in Kina 000’s)
Current assets
Cash and cash equivalents
Term Deposit
Trade and other receivables
Inventories
Income tax receivable
Asset held for sale
Non-current assets
Property, plant and equipment
Investment properties
Investments in related companies
Loans to related companies
Intangible assets
Deferred tax assets
TOTAL ASSETS
Current liabilities
Trade and other payables
Lease liabilities
Provisions for other liabilities and charges
Loans from related companies
Loan from minority shareholder
Borrowings
Income tax payable
Non-current liabilities
Lease liabilities
Deferred tax liabilities
Provisions for other liabilities and charges
Borrowings
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Capital and reserves attributable to the
Company’s shareholders
Non-controlling interests
TOTAL EQUITY
Consolidated
Parent Entity
Note
2020
2019
2020
2019
6
7
8
5(e)
10
10
11
4(a)
9
12
5(c)
13
14
15
9
16
16
5(e)
14
5(c)
15
16
17
142,424
8,063
125,568
17,282
23,923
4,987
322,247
550,737
394,338
36,992
106,456
76,433
1,010
1,165,966
1,488,213
61,689
2,662
55,398
4,864
160
105,006
-
229,779
70,428
14,743
9,937
199,500
294,608
524,387
963,826
24,200
922,643
946,843
16,983
963,826
100,832
-
148,118
13,351
9,507
-
271,808
610,646
360,282
41,586
88,577
76,433
2,311
1,179,835
1,451,643
75,407
3,772
51,542
15,662
160
1,743
-
148,286
68,464
18,866
11,237
302,000
400,567
548,853
902,790
24,200
860,843
885,043
17,747
902,790
-
-
2,473
-
325
-
2,798
25,102
-
101,838
500
-
512
127,952
130,750
-
-
-
44,290
-
-
-
44,290
-
-
-
-
-
44,290
86,460
24,200
62,260
86,460
-
86,460
-
-
471
-
-
-
471
23,396
-
195,887
5,635
-
485
225,403
225,874
-
-
-
132,415
-
-
60
132,475
-
-
-
-
-
132,475
93,399
24,200
69,199
93,399
-
93,399
These Statements of Financial Position are to be read in conjunction with the accompanying notes.
For and on behalf of the Board:
31 March 2021
G.L. Cundle
Chairman
R.P.N. Bray
Managing Director
22 Steamships Annual Report 2020
STATEMENTS OF CASH FLOWS
Steamships Trading Company Limited Year Ended 31 December 2020 (Amounts in Kina 000’s)
Consolidated
Parent Entity
Note
2020
2019
2020
2019
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Payments to suppliers and employees
Interest received
Interest and other finance costs paid
Income tax paid
562,956
595,374
(405,047)
(451,452)
7,416
(12,460)
(3,388)
7,938
(14,502)
(25,503)
Net cash provided by operating activities
19(a)
149,477
111,855
2,970
(1,815)
72
-
(427)
800
5,022
(1,967)
72
-
(250)
2,877
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment
(66,716)
(94,250)
(3,925)
(783)
Proceeds from sales of property, plant and equipment
Proceeds on sale of investment
Investment in term deposits
Loans issued to associated companies
Dividends received
9,909
-
(8,063)
(17,879)
8,619
24,409
-
-
(22,846)
23,488
-
-
-
-
9,443
Net cash (used in)/provided by investing activities
(74,130)
(69,199)
5,518
-
-
-
-
48,000
47,217
CASH FLOWS FROM FINANCING ACTIVITIES
Repayments of borrowings
Proceeds from borrowings
Loans received from subsidiaries
Loans repaid to associated companies
Purchase of additional shares in subsidiary
Lease repayments
Dividends paid
-
-
-
(10,798)
-
(5,719)
(18,001)
(10,000)
10,000
-
-
-
-
-
10,737
26,717
(31,732)
(40,379)
(5,248)
-
-
-
-
(31,850)
-
(55,047)
(17,055)
(44,961)
Net cash used in by financing activities
(34,518)
(132,406)
(6,318)
(50,094)
NET (DECREASE)/INCREASE IN CASH HELD
NET CASH AT BEGINNING OF THE YEAR
NET CASH AT END OF THE YEAR
40,829
99,089
(89,750)
188,839
139,918
99,089
CASH COMPRISES:
Cash and cash equivalents
Bank overdrafts
6
16
142,424
100,832
(2,506)
139,918
(1,743)
99,089
-
-
-
-
-
-
-
-
-
-
-
-
These Statements of Cash Flows are to be read in conjunction with the accompanying notes.
Steamships Annual Report 2020 23
NOTES TO THE FINANCIAL STATEMENTS
Steamships Trading Company Limited Year Ended 31 December 2020 (Amounts in Kina 000’s unless otherwise stated)
1.
Summary of significant accounting policies
•
The Company is a company limited by shares and is
incorporated and domiciled in Papua New Guinea.
These Group consolidated financial statements were
authorised for issue by the Board of Directors on
31 March 2021 .
The Board of Directors has the power to amend the
financial statements after their issue.
(a) Basis of preparation
The financial statements have been prepared in
accordance with the Papua New Guinea Companies
Act 1997 (as amended) and comply with International
Financial Reporting Standards
IFRS
Interpretations Committee (IFRS IC) interpretations
applicable to companies reporting under IFRS and
other generally accepted accounting practice in Papua
New Guinea. The financial statements have been
prepared under the historical cost convention .
(IFRS) and
The preparation of financial statements in conformity
with IFRS requires the use of certain critical accounting
estimates . It also requires management to exercise its
judgement in the process of applying the Company’s
accounting policies. The areas involving a higher
degree of judgement or complexity, or areas where
assumptions and estimates are significant to the
financial statements are disclosed in Note 1(z).
Going concern
The financial statements for the year ended 31
December 2020 have been prepared on a going
concern basis which contemplates the realisation of
assets and settlement of liabilities in the normal course
of business as they become due.
As at 31 December 2020, the Group had cash reserves
of K139 .9m and net current assets of K92 .5m . During
the year ended 31 December 2020 the Group reported
a profit after tax of K79.0m and a net cash inflow from
operating activities of K149 .5m . At 31 December 2020
the Group had K243.0m in committed, undrawn bank
facilities, with financial institutions. The Group has
bank borrowings of K304 .5m, including K102 .5m that
is due for repayment in 2021.
•
•
•
(i)
Standards,
effective in the year ended 31 December 2020
amendment
interpretations
and
following
standards, amendments and
The
interpretations
to existing standards became
applicable for the first time during the accounting
period beginning 1 January 2020.
24 Steamships Annual Report 2020
Amendments to IFRS 3 – definition of a business.
This amendment revises the definition of a
business. According to feedback received by
the IASB, application of the current guidance
is commonly thought to be too complex, and it
results in too many transactions qualifying as
business combinations .
‘material’. These amendments
Amendments to IAS 1 and IAS 8 on the definition
IAS 1,
of
‘Presentation of financial statements’, and IAS
8, ‘Accounting policies, changes in accounting
estimates
consequential
errors’,
and
amendments to other IFRSs:
and
to
-
-
-
use a consistent definition of materiality
throughout
the Conceptual
Framework for Financial Reporting
IFRSs and
clarify the explanation of the definition of
material;
and incorporate some of the guidance in IAS 1
about immaterial information .
Amendments to IFRS 9, IAS 39 and IFRS 7 –
interest rate benchmark reform. These Phase
1 amendments provide reliefs in relation to
hedge accounting and interest rate benchmark
reform and have the effect that IBOR reform
should not generally cause hedge accounting to
terminate. However, any hedge ineffectiveness
should continue to be recorded in the income
statement. Given the pervasive nature of hedges
involving IBOR based contracts, the reliefs will
affect companies in all industries who do hedge
accounting .
to
pandemic,
(COVID-19)
Amendment to IFRS 16,‘Leases’ – COVID-19
related rent concessions . As a result of the
rent
coronavirus
concessions have been granted
lessees .
Such concessions might take a variety of forms,
including payment holidays and deferral of lease
payments. This amendment provides an optional
practical expedient for lessees from assessing
whether a rent concession related to COVID-19 is
a lease modification. Lessees can elect to account
for such rent concessions in the same way as
they would if they were not lease modifications.
In many cases, this will result in accounting for
the concession as variable lease payments in the
period(s) in which the event or condition that
triggers the reduced payment occurs.
The above changes did not have any material impact
on the Group.
NOTES TO THE FINANCIAL STATEMENTS
Steamships Trading Company Limited Year Ended 31 December 2020 (Amounts in Kina 000’s unless otherwise stated)
(ii) Standards, amendments and
interpretations
issued but not yet effective for the year ended 31
December 2020 or adopted early.
following
The
standards, amendments and
interpretations to existing standards have been
published and are mandatory for the entity’s
accounting periods beginning on or after 1 January
2021 or later periods, but the entity has not early
adopted them:
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and
IFRS 16 Interest Rate Benchmark Reform – Phase
2 (effective 1.1.21) - The Phase 2 amendments
address issues that arise from the implementation
of the reforms, including the replacement of one
benchmark with an alternative one .
Amendments to IAS 1, Presentation of financial
statements’ on classification of liabilities (effective
1.1.22). These narrow-scope amendments to IAS 1
clarify that liabilities are classified as either current
or non-current, depending on the rights that exist
at the end of the reporting period. Classification
is unaffected by the expectations of the entity or
events after the reporting date (for example, the
receipt of a waiver or a breach of covenant). The
amendment also clarifies what IAS 1 means when
it refers to the ‘settlement’ of a liability.
A number of narrow-scope amendments to IFRS
3, IAS 16, IAS 37 and some annual improvements
on IFRS 1, IFRS 9, IAS 41 and IFRS 16 (effective
1.1.22).
Amendments to IFRS 3, ‘Business combinations’
update a reference in IFRS 3 to the Conceptual
Framework
for Financial Reporting without
changing the accounting requirements for business
combinations .
Amendments to IAS 16, ‘Property, plant and
equipment’ prohibit an entity from deducting from
the cost of property, plant and equipment amounts
items produced while
received
the entity is preparing the asset for its intended
use. Instead, an entity will recognise such sales
proceeds and related cost in profit or loss.
from selling
Amendments to IAS 37, ‘Provisions, contingent
liabilities and contingent assets’ specify which
costs an entity includes when assessing whether a
contract will be loss-making .
Annual improvements make minor amendments
to IFRS 1, ‘First-time Adoption of IFRS’, IFRS 9,
‘Financial instruments’, IAS 41, ‘Agriculture’ and
the Illustrative Examples accompanying IFRS 16,
‘Leases’.
•
•
•
•
•
•
•
•
IFRS 17 ‘Insurance contracts” (effective 1 January
23) replaces IFRS 4. IFRS 17 will fundamentally
change the accounting by all entities that issue
insurance contracts and investment contacts with
discretionary participation features. The Group
is in the process of assessing the impact of the
application of IFRS 17 .
Apart from the possible impact of IFRS 17, the Group
conducted investigations and does not consider that there
are any material measurement or recognition issues arising
from the release of these new pronouncements that will
have a significant impact on the reported financial position
or financial performance of the Group.
(iii) Comparative information
Where necessary comparative figures have been
adjusted to conform to changes in presentation in the
current year and comparative purpose.
(b) Foreign currency
The Company’s functional and presentation currency is the
Papua New Guinea Kina. Transactions in foreign currencies
have been translated into the functional currency at rates
ruling at the date of the transaction. Amounts payable to
and by the Group in foreign currencies have been translated
to the functional currency at rates of exchange ruling at
the year end. Gains and losses arising from movements in
foreign exchange rates are recognised in the statement of
comprehensive income when they arise.
(c) Principles of consolidation
(i) Subsidiaries
The consolidated financial statements incorporate the
assets and liabilities of all subsidiaries of Steamships
Trading Company Limited as at 31 December 2020
and the results of all subsidiaries for the year then
ended. Steamships Trading Company Limited and its
subsidiaries together are referred to as the Group or the
consolidated entity.
Subsidiaries are all entities over which the Group has
control, that is 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 de-
consolidated from the date that control ceases .
The acquisition method of accounting is used to
account for business combinations by the Group (refer
to note 1(d)).
Intercompany transactions, balances and unrealised
gains on transactions between group companies are
Steamships Annual Report 2020 25
NOTES TO THE FINANCIAL STATEMENTS
Steamships Trading Company Limited Year Ended 31 December 2020 (Amounts in Kina 000’s unless otherwise stated)
eliminated. Unrealised losses are also eliminated
unless the transaction provides evidence of the
impairment of the asset transferred . Accounting policies
of subsidiaries have been changed where necessary to
ensure consistency with the policies adopted by the
Group.
Non-controlling interests in the results and equity of
subsidiaries are shown separately in the consolidated
statement of comprehensive income, statement of
changes in equity and statement of financial position
respectively.
(ii) 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,
after initially being recognised at cost. The Group’s
investment in associates includes goodwill identified
on acquisition .
The Group’s share of its associates’ post-acquisition
profits or losses is recognised in profit or loss, and its
share of post-acquisition other comprehensive income
is recognised in other comprehensive income. The
cumulative post-acquisition movements are adjusted
against
investment.
Dividends receivable from associates are recognised as
a reduction in the carrying amount of the investment.
the carrying amount of
the
When the Group’s share of losses in an associate equal
or exceeds its interest in the associate, including any
other unsecured long-term receivables, the Group
does not recognise further losses, unless it has incurred
obligations or made payments on behalf of the
associate .
Unrealised gains on transactions between the Group
and its associates are eliminated to the extent of the
Group’s interest in the associates. Unrealised losses
are also 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.
(iii) Joint ventures
Joint venture entities
Interests in joint ventures are accounted for using the
equity method after initially being recognised at cost as
for associates .
(iv) Changes in ownership interests
The Group treats transactions with non-controlling
interests that do not result in a loss of control as
26 Steamships Annual Report 2020
transactions with equity owners of the Group. A
change in ownership interest results in an adjustment
between the carrying amounts of the controlling
and non-controlling interests to reflect their relative
interests in the subsidiary. Any difference between the
amount of the adjustment to non-controlling interests
and any consideration paid or received is recognised
in a separate reserve within equity attributable to
shareholders .
When the Group ceases to have control or significant
influence, any retained interest in the entity is re-
measured to its fair value with the change in carrying
amount recognised in profit or loss. This fair value
becomes the initial carrying amount for the purposes of
subsequently accounting for the retained interest as an
associate or financial asset. In addition, any amounts
previously recognised in other comprehensive income
in respect of that entity are accounted for as if the Group
had directly disposed of the related assets or liabilities.
This may mean that amounts previously recognised in
other comprehensive income are reclassified to profit
or loss .
If the ownership interest in a jointly controlled entity
or an associate is reduced but significant influence is
retained, only a proportionate share of the amounts
previously recognised in other comprehensive income
are reclassified to profit or loss where appropriate.
(d) Business combinations
The acquisition method of accounting is used to
account for all business combinations, regardless
of whether equity instruments or other assets
are acquired. The consideration transferred for
the acquisition of a subsidiary comprises the
fair values of the assets transferred, the liabilities
incurred and the equity interests issued by the
Group. The consideration transferred also includes
the fair value of any asset or liability resulting
from a contingent consideration arrangement
and the fair value of any pre-existing equity
the subsidiary. Acquisition-related
interest
costs are expensed as incurred. Identifiable assets
acquired and liabilities and contingent liabilities
assumed in a business combination are measured
initially at their fair values at the acquisition
date. On an acquisition-by-acquisition basis, the
Group recognises any non-controlling interest
in the acquiree either at fair value or at the non-
controlling interest’s proportionate share of the
acquiree’s net identifiable assets.
in
The excess of the consideration transferred, the
amount of any non-controlling interest in the
acquiree and the acquisition date fair value of any
NOTES TO THE FINANCIAL STATEMENTS
Steamships Trading Company Limited Year Ended 31 December 2020 (Amounts in Kina 000’s unless otherwise stated)
previous equity interest in the acquiree over the fair
value of the Group’s share of the net identifiable
assets acquired is recorded as goodwill . If those
amounts are less than the fair value of the net
identifiable assets of the subsidiary acquired
and the measurement of all amounts has been
reviewed, the difference is recognised directly in
determining profit or loss as a bargain purchase.
Where settlement of any part of cash consideration
is deferred, the amounts payable in the future are
discounted to their present value as at the date of
exchange. The discount rate used is the entity’s
incremental borrowing rate, being the rate at
which a similar borrowing could be obtained from
an independent financier under comparable terms
and conditions .
Contingent consideration is classified either as
equity or a financial liability. Amounts classified as
a financial liability are subsequently re-measured
to fair value with changes in fair value recognised
in profit or loss.
Predecessor accounting is applied for business
combinations among entities and amalgamations
of entities under common control. Under this
method, the financial statements of the combined
entity are presented as if the businesses had been
combined from the date when the combining
entities were amalgamated . Assets and liabilities
of
the acquired or amalgamated entity are
stated at predecessor carrying values. Fair value
measurement is not required and no new goodwill
arises in predecessor accounting. Any difference
between
the
aggregate book value of the assets and liabilities
of the acquired or amalgamated entity at the date
of the transaction is included in equity in retained
earnings .
the consideration given and
(e) Revenue recognition
Revenue which represents income arising in
the course of the Group’s ordinary activities
is recognised by reference
to each distinct
performance obligation promised in the contract
with the customer when or as the Group transfers
the control of the goods or services promised in
a contract to the customer . Depending on the
substance of the respective contract with the
customer, the control of the promised goods or
services may transfer over time or at a point in
time . A contract with a customer exists when the
contract has commercial substance, the Group
and its customer have approved the contract and
intend to perform their respective obligations, the
Group’s and the customer’s rights regarding the
goods or services to be transferred and the payment
terms can be identified, and it is probable that the
Group will collect the consideration to which it
will be entitled to in exchange of those goods or
services . At the inception of each contract with
a customer, the Group assesses the contract to
identify distinct performance obligations, being
the units of account that determine when and how
revenue from the contract with the customer is
recognised . A performance obligation is a promise
to transfer a distinct good or service (or a series of
distinct goods or services that are substantially the
same and that have the same pattern of transfer)
to the customer that is explicitly stated in the
contract and implied in the Group’s customary
business practices . A good or service is distinct if:
-
-
the customer can either benefit from the good
or service on its own or together with other
readily available resources; and
the good or service is separately identifiable
from other promises in the contract (e.g.
the good or service is not integrated with,
or highly interrelated with, other goods or
services promised in the contract)
If a good or service is not distinct, the Group
combines it with other promised goods or services
until the Group identifies a distinct performance
obligation consisting of a distinct bundle of goods
or services .
As disclosed in Note 25, revenue from external
customers comes from the logistics business,
hotels & property business, and commercial
business .
Revenue from the logistics business includes
revenue from providing the following services:
freight and shipping activities, land transport
activities, towage and salvage activities, and sale
of goods .
Revenue from freight and shipping services, land
transport services and towage services is recognised
over time as the performance obligation (in this
case transport or towage activity) is performed
taking into consideration the days of shipment. In
case of sale of goods (such as containers), revenue
is recognized at a point of time. Payment terms
for freight and shipping services and land transport
services are typically 30 days; payment terms for
towage services are typically within 30 days after
completion of service delivery.
Salvage revenue is recognised over time as the
Steamships Annual Report 2020 27
NOTES TO THE FINANCIAL STATEMENTS
Steamships Trading Company Limited Year Ended 31 December 2020 (Amounts in Kina 000’s unless otherwise stated)
performance obligation (in this case salvaging
activity) is performed, based on the days of
provision of service, or at a point of time (upon
completion of the salvage job), depending on the
nature of the salvage activity and the contractual
terms. The Group recognises salvage revenue over
time if the customer simultaneously receives and
consume the benefits provided by the Group’s
performance as the Group performs. In such cases,
the Group typically has a right to payment based
on work performed until the reporting date. The
Group recognises salvage revenue at a point in
time when the customer does not simultaneously
receive and consume the benefits provided by
the Group’s performance as the Group performs
and has no enforceable right to payment for
performance completed to date .
Payment terms for salvage work vary between
one and three months . Where salvage work
is completed but the amount of proceeds is
not known at the reporting date, revenue is
determined on the basis of expected proceeds
taking
into account estimation uncertainty.
The estimated amount of consideration will be
recognised as revenue only to the extent that it is
highly probable that a significant reversal in the
amount of cumulative revenue recognised will not
occur when the uncertainty associated with the
consideration is subsequently resolved.
to
incurs costs needed
The Company
fulfil
salvage contracts and defers these costs incurred
directly related to salvage work, if their recovery
is considered probable based on management’s
assessment . If management’s assessment suggests
the expenses is not expected to be recovered, the
estimated unrecoverable portion is expensed when
incurred. Probability of recoverability of initially
recognised deferred salvage costs is assessed at
the end of each reporting period . In the reporting
period when management’s assessment suggests
that these expenses will not likely be recovered by
revenues i .e . the related contract asset is deemed
impaired, the estimated unrecoverable portion is
expensed . Deferred salvage costs are amortised
in profit or loss on a systematic basis consistent
with the pattern of recognition of the associated
revenue .
Revenue from the hotels business from provision
of services is recognised over time based on the
days of provision of service; payments for provided
services are made upon service delivery. Revenue
from sale of goods in hotels business is recognized
at a point in time upon delivery of goods under
28 Steamships Annual Report 2020
typical credit term of 30 days or in cash. Lease
income from the property business is recognized
on a straight-line basis over the term of the lease .
Revenue from the commercial business relates to
sale of goods and is recognized when the goods
are accepted by the customers, under typical
payment terms of 30 days after the delivery of
goods .
The following other income is recognized across
the Group as follows:
Interest income - Interest income is recognised
using the effective interest method .
Dividend income - Dividends are recognized
when the right to receive payment is established.
(f) Income tax
The income tax expense or benefit for the period
is the tax payable on the current period’s taxable
income based on the notional income tax rate
adjusted by changes in deferred tax assets and
liabilities attributable to temporary differences
between the tax bases of assets and liabilities and
their carrying amounts in the financial statements,
and to unused tax losses .
Deferred income tax is provided on temporary
differences arising between the tax bases of
assets and liabilities and their carrying amounts
in the financial statements. Deferred tax is not
recognized if it arises from the initial recognition
of goodwill or the initial recognition of an asset or
liability in a transaction which is not a business
combination and at the time of the transaction,
affects neither accounting profit nor taxable profit
(tax loss). Currently enacted tax rates are used in
the determination of deferred income tax .
Deferred tax assets are recognised to the extent
that it is probable that future taxable profit will be
available, against which the temporary differences
can be utilised .
(g) Cash and cash equivalents
For the purpose of the statement of cash flows,
cash and cash equivalents includes cash on hand,
deposits held at call with banks and Treasury Bills
with an original maturity of up to 3 months. Bank
overdrafts are shown in current liabilities in the
statement of financial position.
(h) Receivables
Trade receivables are amounts due from customers
for merchandise sold or services provided in the
NOTES TO THE FINANCIAL STATEMENTS
Steamships Trading Company Limited Year Ended 31 December 2020 (Amounts in Kina 000’s unless otherwise stated)
ordinary course of business. There are classified
as current assets if collection is expected within
one year. Receivables are recognised initially
at fair value and subsequently measured at
amortised cost using the effective interest method,
less provision for impairment .
(i)
Inventories
Inventories are valued at the lower of cost and net
realisable value . In general, cost is determined
on
the weighted average basis and, where
appropriate, includes a proportion of variable
overhead expenditure . Net realisable value is the
estimated selling price in the ordinary course of
business, less applicable variable selling costs .
(j) Non-current assets held for resale
(or disposal groups) are
Non-current assets
classified as held for sale if their carrying amount
will be recovered principally through a sale
transaction rather than through continuing use
and a sale is considered highly probable. They are
measured at the lower of their carrying amount and
fair value less costs to sell, except for assets such
as deferred tax assets, assets arising from employee
benefits, financial assets and contractual rights
under insurance contracts, which are specifically
exempt from this requirement .
An impairment loss is recognised for any initial or
subsequent write down of the asset (or disposal
group) to fair value less costs to sell. A gain is
recognised for any subsequent increases in fair
value less costs to sell of an asset (or disposal
group), but not in excess of any cumulative
impairment loss previously recognised. A gain or
loss not previously recognised by the date of the
sale of the non-current asset (or disposal group) is
recognised at the date of derecognition .
Non-current assets (including those that are part of
a disposal group) are not depreciated or amortised
while they are classified as held for sale. Interest
and other expenses attributable to the liabilities
of a disposal group classified as held for sale
continue to be recognised .
Non-current assets classified as held for sale and
the assets of a disposal group classified as held for
sale are presented separately from the other assets
in the balance sheet. The liabilities of a disposal
group classified as held for sale are presented
separately from other liabilities in the balance
sheet .
A discontinued operation is a component of the
entity that has been disposed of or is classified as
held for sale and that represents a separate major
line of business or geographical area of operations,
is part of a single coordinated plan to dispose of
such a line of business or area of operations, or is
a subsidiary acquired exclusively with a view to
resale. The results of discontinued operations are
presented separately in the income statement.
(k) Financial assets
The Group classifies all of its financial assets in
the measurement category ‘Financial assets at
amortised cost’ .
The Group classifies
its financial assets at
amortised cost when the asset is held within a
business model whose objective is to collect the
contractual cash flows and the contractual terms
give rise to cash flows that are solely payments of
principal and interest (“SPPI”). Financial assets of
the Group that fall under this category are trade
and other receivables, bank balances, deposits
and cash, and loans to related companies .
At initial recognition, the Group measures a
financial asset at its fair value plus transaction costs
that are directly attributable to the acquisition
of the financial asset. Interest income from these
financial assets is included in finance income
using the effective interest rate method. Any gain
or loss arising on derecognition is recognised
directly in profit or loss and presented in other
gains and losses together with foreign exchange
gains and losses .
As of 31 December 2020 and 31 December
2019, the Group had no financial instruments
classified as financial assets at fair value through
other comprehensive income (“FVOCI”) - Equity
instruments (previously classified as available-
for-sale financial assets) or financial assets at fair
value through profit or loss (“FVTPL”).
Regular way purchases and sales of financial
assets are recognised on trade-date, the date on
which the Group commits to purchase or sell the
asset . Financial assets are derecognised when the
rights to receive cash flows from the financial
assets have expired or have been transferred and
the Group has transferred substantially all the risks
and rewards of ownership .
Financial assets are classified as current assets for
those having maturity dates of not more than 12
months after the end of the reporting period, and
the balance is classified as non-current.
Steamships Annual Report 2020 29
NOTES TO THE FINANCIAL STATEMENTS
Steamships Trading Company Limited Year Ended 31 December 2020 (Amounts in Kina 000’s unless otherwise stated)
Impairment of financial assets
Individual assessment
The Group recognises an allowance for expected
credit losses (“ECLs”) for all debt instruments and
financial guarantee contracts issued. ECLs are
Trade receivables, other receivables and amounts
due from related parties which are in default or
credit-impaired are assessed individually.
based on the difference between the contractual
(l) Property, plant and equipment
cash flows due in accordance with the contract
and all the cash flows that the Group expects to
receive, discounted at an approximation of the
original effective interest rate. The expected cash
flows will include cash flows from the sale of
collateral held or other credit enhancements that
are integral to the contractual terms. For financial
guarantee contracts, the ECL is the difference
between expected payments to reimburse the
holder of the guarantee debt instruments less any
amounts the company expects to recover from the
other party.
ECL is measured based on either the general
3-stage approach or the simplified approach.
The general 3-stage approach is applied for loans
to related parties and financial guarantee contracts
issued .
For credit exposures for which there has not been
a significant increase in credit risk since initial
recognition, ECLs are provided for credit losses
that result from default events that are possible
within the next 12-months (a 12-month ECL). For
those credit exposures for which there has been
a significant increase in credit risk since initial
recognition, a loss allowance is required for credit
losses expected over the remaining life of the
exposure, irrespective of the timing of the default
(a lifetime ECL).
All property, plant and equipment are initially
recorded at cost. Borrowing costs directly
attributable to the acquisition or construction of
qualifying assets are added to the cost of those
assets until the assets are ready for their intended
use . Land is not depreciated . Depreciation on
other items of property, plant and equipment is
calculated on the straight-line method to write
off the cost of each asset to their residual values
using the below rates which is reflective of their
estimated useful life as follows:
Buildings
Ships
Plant and fittings
Motor vehicles
2 – 4%
5 - 10%
10 - 33%
20 - 33%
Where the carrying amount of an asset is greater
than its estimated recoverable amount, it is written
down immediately to its recoverable amount.
Gains and losses on disposal of property, plant
and equipment are determined by reference to
their carrying amount and are taken into account
in determining operating profit.
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 are charged to the statements
of comprehensive income during the financial
period in which they are incurred.
For
trade receivables,
the Group applies a
(m) Investment properties
simplified approach in calculating ECLs. The
Group does not track changes in credit risk, but
instead recognises a loss allowance based on
lifetime ECLs at each reporting date. The Group
has established a provision matrix that is based on
its historical credit loss experience, adjusted for
forward-looking factors specific to the debtors and
the economic environment .
Collective assessment
To measure ECL, trade receivables and other
receivables have been grouped based on shared
credit risk characteristics, such as days past due.
30 Steamships Annual Report 2020
Investment properties include land held for long-
term capital appreciation and buildings leased out
under operating leases . Properties that comprise
a portion held to earn rentals and a portion for
own use or occupation will only be classified as
investment property if an insignificant portion
is held for own use of occupation . Investment
properties are recognised when it is probable
that future economic benefits associated with
the property will flow to the Group and the
cost of the investment property can be reliably
measured . Investment properties are stated at cost
less accumulated depreciation and accumulated
impairment losses. Transaction costs are included
NOTES TO THE FINANCIAL STATEMENTS
Steamships Trading Company Limited Year Ended 31 December 2020 (Amounts in Kina 000’s unless otherwise stated)
on initial measurement. Borrowing costs directly
attributable to the acquisition or construction of
qualifying assets are added to the cost of those
assets until the assets are ready for their intended
use. The fair values of investment properties are
disclosed in the Note 11. These are assessed
using internationally accepted valuation methods,
such as taking comparable properties as a guide
to current market prices or by applying the
discounted cash flow method. Like property,
plant and equipment,
investment properties
are normally depreciated using the straight-line
method over similar useful lives .
(n) Goodwill
Goodwill represents the excess of the cost of
an acquisition over the fair value of the Group’s
share of the net identifiable assets of the acquired
business at the date of acquisition .
is capitalised and assessed
Goodwill
for
impairment annually or more frequently if events
or changes in circumstances indicate a potential for
impairment and is carried at cost less impairment
losses. Any impairment is recognised immediately
as an expense and is not subsequently reversed.
Gains and losses on the disposal of an entity
include the carrying amount of goodwill relating
to the entity sold. Goodwill is allocated to cash-
generating units for the purpose of impairment
testing .
(o) Trade and other payables
These amounts represent obligations to pay for
goods and services that have been acquired in the
ordinary course of business from suppliers. They
are classified as current liabilities if payment is
due within one year or less. Trade payables are
recognised initially at fair value and subsequently
measured at amortised cost using the effective
interest method. The amounts are unsecured and
are usually paid within 30 days of recognition.
(p) Provisions
Provisions are recognised when the Group has a
present legal or constructive obligation as a result
of past events; it is probable that an outflow of
resource embodying economic benefits will be
required to settle the obligation; and a reliable
estimate of the amount of the obligation can be
made .
A liability for annual leave is recognised and
measured at the amount of unpaid leave at
amounts expected to be paid to settle the present
entitlements. A liability for long service leave is
recognised taking into consideration expected
future wage and salary levels, experience of
employee departures and periods of service,
discounted to present values .
A provision for estimated ship dry docking costs is
only recognised where the Group has a contractual
obligation under a Bare Boat charter agreement
from a third party. Dry docking costs relating
to ships not under third-party long-term charter
agreements are only recognised as incurred and
are capitalised to the extent that the previously
assessed economic benefits associated with the
asset are restored .
(q) Employee benefits
(i) Short term obligations
Liabilities for wages and salaries, including non-
monetary benefits, annual leave and accumulating
sick leave expected to be settled within 12 months
after the end of the period in which the employees
render the related service are recognised in
respect of employees’ services up to the end of the
reporting period and are measured at the amounts
expected to be paid when the liabilities are settled .
The liability for annual leave and accumulating
sick leave is recognised in the provision for
employee benefits. All other short term employee
benefit obligations are presented as payables.
(ii) Other long-term employee benefit obligations
The liability for long service leave and annual
leave which is not expected to be settled within
12 months after the end of period in which the
employees render the related service is recognised
in the provision for the employee benefits and
measured as the present value of expected future
payments to be made in respect of services
provided by employees up to the end of the
reporting period using the projected unit credit
method . Consideration is given to expected future
wage and salary levels, experience of employee
departures and periods of service . Expected future
payments are discounted using the market yields
at the end of the reporting period on national
government bonds with terms to maturity and
currency that match, as closely as possible, the
estimated future cash outflows.
(iii) Termination benefits
are
benefits
Termination
payable when
employment is terminated by the Group before the
normal retirement date, or whenever an employee
accepts voluntary redundancy in exchange for
Steamships Annual Report 2020 31
NOTES TO THE FINANCIAL STATEMENTS
Steamships Trading Company Limited Year Ended 31 December 2020 (Amounts in Kina 000’s unless otherwise stated)
these benefits. The Group recognises termination
benefits at the earlier of the following dates: (a)
when the Group can no longer withdraw the offer
of those benefits; and (b) when the entity recognises
costs for a restructuring that is within the scope of
IAS 37 and involves the payment of termination
benefits. In the case of an offer made to encourage
voluntary redundancy, the termination benefits
are measured based on the number of employees
expected to accept the offer. Benefits falling due
more than 12 months after the end of the reporting
period are discounted to their present value .
(r) Borrowings
Borrowings are recognised initially at fair value,
net of any transaction costs incurred, and are
subsequently measured at amortised cost using
the effective interest method . Borrowings are
classified as current liabilities unless the Group
has an unconditional right to defer settlement of
the liability for at least 12 months after the end of
the reporting period .
(s) Impairment of assets
Assets that have an indefinite useful life are not
subject to amortisation and are tested annually for
impairment . Assets that are subject to depreciation
or 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
value exceeds its recoverable amount, which
is determined as the higher of an asset’s fair
value less costs to sell and its value in use . For
the purpose of assessing impairment, assets are
grouped at the lowest levels for which there are
separately identifiable cash flows (cash generating
units).
(t) Borrowing costs
Borrowing costs incurred for the construction
of qualifying assets, which are assets that take a
substantial period of time to get ready for their
intended use or sale, are capitalised during the
period of time that is required to complete and
prepare the asset for its intended use or sale .
Other borrowing costs are expensed .
The capitalisation rate used to determine the
amount of borrowing costs to be capitalised is the
weighted average interest rate applicable to the
entity’s outstanding borrowings during the year, in
this case 5.85% (2019 – 4.5%).
32 Steamships Annual Report 2020
(u) 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
Strategic Steering Committee .
(v) Earnings per share
Basic earnings per share is calculated by dividing
the profit attributable to equity holders of the
Group, by the weighted average number of
ordinary shares outstanding during the financial
year. There are no potential ordinary shares on
issue and hence the diluted earnings per share is
equal to the basic earnings per share .
(w) Goods and services tax (GST)
Revenues, expenses and assets are recognised net
of the amount of associated GST. Receivables and
payables are stated inclusive of GST. The amount of
GST recoverable from, or payable to, the Taxation
authority is included with other receivables or
payables in the balance sheet.
(x) Leases
Leases are recognised as a right-of-use asset and
a corresponding liability at the date at which the
leased asset is available for use by the Group.
Each lease payment is allocated between the
liability and finance cost. The finance cost is
charged to profit or loss over the lease period so
as to produce a constant periodic rate of interest
on the remaining balance of the liability for each
period. The right-of-use asset is depreciated over
the shorter of the asset’s useful life and the lease
term on a straight-line basis .
Assets and liabilities arising from a lease are
initially measured on a present value basis. Lease
liabilities include the net present value of the
following lease payments:
•
•
•
•
fixed payments
in-substance
fixed payments), less any lease incentives
receivable;
(including
variable lease payments that are based on an
index or a rate;
amounts expected to be payable by the lessee
under residual value guarantees;
the exercise price of a purchase option if the
lessee is reasonably certain to exercise that
option, and
NOTES TO THE FINANCIAL STATEMENTS
Steamships Trading Company Limited Year Ended 31 December 2020 (Amounts in Kina 000’s unless otherwise stated)
•
payments of penalties for terminating the
lease, if the lease term reflects the lessee
exercising that option .
The lease payments are discounted using the
interest rate implicit in the lease, if that rate can be
determined, or the group’s incremental borrowing
rate .
Right-of-use assets are measured at cost comprising
the following:
•
•
the amount of the initial measurement of lease
liability;
any lease payments made at or before the
commencement date less any lease incentives
received;
• any initial direct costs, and
•
restoration costs .
Payments associated with short-term leases and
leases of low-value assets are recognised on a
straight-line basis as an expense in profit or loss.
Short-term leases are leases with a lease term of
12 months or less. Low-value assets comprise IT-
equipment and small items of office furniture.
Extension and termination options are included
in a number of property and equipment leases
across the Group. These terms are used to
maximise operational flexibility
terms of
managing contracts. The majority of extension and
termination options held are exercisable only by
the Group and not by the respective lessor.
in
In determining the lease term, management
considers all facts and circumstances that create
an economic incentive to exercise an extension
option, or not exercise a termination option .
Extension options (or periods after termination
options) are only included in the lease term if
the lease is reasonably certain to be extended
(or not terminated). The assessment is reviewed
if a significant event or a significant change in
circumstances occurs which affects this assessment
and that is within the control of the lessee .
(y) Rounding of amounts
Amounts in the financial statements have been
rounded off to the nearest thousand Kina .
(z) Critical accounting estimates and judgments
Estimates and judgments are continually evaluated
and are based on historical experience and other
factors, including expectations of future events
that may have a financial impact on the entity
and that are believed to be reasonable under the
circumstances .
The Group makes estimates and assumptions
concerning the future. The resulting accounting
estimates will, by definition, seldom equal
the related actual results. The estimates and
assumptions that have a significant risk of causing
a material adjustment to the carrying amounts of
assets and liabilities within the next financial year
are discussed below:
(i) Estimated impairment of goodwill
The Group
tests annually whether goodwill
has suffered any impairment. The recoverable
amounts of cash-generating units have been
determined based on value-in-use calculations .
These calculations require the use of estimates as
further detailed in Note 12 .
(ii) Estimated impairment of ships and other plant
and equipment
The Group tests the recoverable amount of ships
and other plant and equipment when impairment
indicators are identified. Recoverable amounts
have been determined using the higher of fair value
less cost to sell and its value in use . Fair value has
been determined using market-based information,
while value in use has been determined using a
pre-tax discount rate of 12.5%. Refer to Note 10.
(iii) Deferred tax assets relating to carry forward
tax losses
losses
is complex and
The analysis of the recognition and recoverability
of the deferred tax assets relating to carry forward
tax
judgmental and
estimating future taxable income is based on
assumptions that are affected by expected future
market or economic conditions . For management’s
judgments in relation to recoverability of deferred
tax assets, refer to Note 5 .
(iv) Incremental borrowing rate relating to lease
liabilities
the weighted average
As disclosed in Note 14, management assessed
that
interest rate on
collateralized borrowings obtained from financial
institutions during 2020 and previous years of
4.5% approximates the incremental borrowing
rate at the date of initial adoption of IFRS 16 and at
31 December 2020. Therefore, this rate has been
used for discounting lease payments arising from
state land leases and property leases. In making
this judgment, management considered the period
of leases (including extension and termination
options), the quality of leased assets compared to
assets used as collateral for relevant borrowings
and made an assessment whether any adjustments
Steamships Annual Report 2020 33
NOTES TO THE FINANCIAL STATEMENTS
Steamships Trading Company Limited Year Ended 31 December 2020 (Amounts in Kina 000’s unless otherwise stated)
the
factors affecting
to the weighted average rate on borrowings are
needed to reflect differences in secured assets,
lease periods compared to maturity of borrowings,
and other
incremental
borrowing rate . Based on assessment performed,
management concluded that the average weighted
interest rate on borrowings of approximately 4.5%
p.a. approximates the rate that the Group would
expect to borrow to acquire the right-of-use assets
in relation to land leases and property leases. If
the incremental borrowing rate were 1.0% higher/
(lower), lease liabilities as of 31 December 2020
would be K6 .1M lower and K10 .1M higher,
respectively (1 January 2020: K6.0M lower and
K10.0M higher).
2. Financial risk management
The Group’s activities expose it to a variety of financial
risks including market risk (including currency, and
interest rate risk), credit risk, liquidity risk and capital
risk. The Group’s overall risk management program
focuses on the unpredictability of financial markets
and seeks to minimise potential adverse effects on the
financial performance of the Group. Risk management
is carried out under policies approved by the Board of
Directors .
(a) Market risk
(i) Foreign exchange risk
The Group engages in international purchase
transactions and is exposed to foreign exchange
risk arising from various currency exposures,
primarily with respect to the Australian dollar.
Foreign exchange risk arises from recognised
assets and liabilities .
The Group’s foreign currency purchases do not
represent a significant proportion of the Group’s
costs and as such exposure to foreign currency risk
is minimal. It is not the Group’s policy to hedge
foreign currency risk. As the foreign currency
exposure is minimal no sensitivity analysis is
provided .
(ii) Price risk
The Group is not significantly exposed to equity
securities or commodities price risk .
(iii) Cash flow interest rate risk
The Group’s interest rate risk arises from long-
term borrowings . Borrowings issued at variable
rates expose the Group to cash flow interest rate
risk. Borrowings issued at fixed rates expose the
34 Steamships Annual Report 2020
Group to fair value interest rate risk. Long term
borrowings are a mix of fixed and variable rate
interest. It is not the Group’s policy to hedge cash
flow and interest rate risk.
At 31 December 2020, if interest rates on
PNG Kina-denominated borrowings had been
1% higher/lower with all other variables held
constant, post-tax profit for the year would have
lower/
been K4,394,000
higher, mainly as a result of higher/lower interest
expense on floating rate borrowings.
(2019: K3,058,000)
(b) Credit risk
The Group has no significant concentration
of credit risk and it is not the Group’s policy to
hedge credit risk. The Group has policies in place
to ensure that sales of products and services are
made to customers with an appropriate credit
history and has policies that limit the amount of
credit exposure to any one customer. Where credit
limits were exceeded during the reporting period
management has made provision for amounts
considered uncollectible .
The Group has the following types of financial
assets that are subject to the expected credit
loss model: trade receivables, other receivables
(including inter- company receivables) and loans
to related parties . While cash and cash equivalents
are also subject to the impairment requirements of
IFRS 9, impairment loss is immaterial .
respectively and
The Group applies the IFRS 9 simplified approach
to measuring expected credit losses, for all
financial assets, other than loans to related parties
and other receivables. To measure the expected
credit losses, trade receivables have been grouped
based on shared credit risk characteristics and the
days past due. The expected loss rates are based on
the payment profiles of sales over a period of 36
months before 31 December 2020 or 31 December
2019
the corresponding
historical credit losses experienced within this
period. The historical loss rates are adjusted to
reflect current and forward- looking information
on macroeconomic factors affecting the ability of
the customers to settle the receivables. The Group
has analyzed GDP and employment rate of PNG
to be the most relevant factors, and accordingly
adjusts the historical loss rates based on expected
changes in these factors . Management concluded
that the impairment provision for trade receivables
is not materially affected by changes in GDP and
employment rate.
NOTES TO THE FINANCIAL STATEMENTS
Steamships Trading Company Limited Year Ended 31 December 2020 (Amounts in Kina 000’s unless otherwise stated)
For loans to related parties and other receivables, the
Group applies a ‘three-stage’ model for impairment
based on changes in credit quality since initial
recognition, as summarised below:
•
•
•
•
A financial instrument that is not credit-
impaired on initial recognition is classified in
‘Stage 1’ and has its credit risk continuously
monitored by the Group.
initial recognition
If a significant increase in credit risk (‘SICR’)
since
the
financial instrument is moved to ‘Stage 2’ but is
not yet deemed to be credit impaired.
identified,
is
If the financial instrument is credit-impaired,
the financial instrument is then moved to ‘Stage
3’ .
Financial instrument in Stage 1 has their ECL
measured at an amount equal to the portion
of lifetime expected credit losses that result
from default events possible within the next 12
months . Loans in Stages 2 or 3 have their ECL
measured based on expected credit losses on a
lifetime basis .
Forward-looking information incorporated in the
model includes GDP Growth (%) of Papua New
Guinea economy.
The Group considers a loan or other receivable to
have experienced a significant increase in credit
risk when one or more of the following quantitative
and qualitative criteria have been met: delay in
payment of over 30 days, early signs of cash flow/
liquidity problems, significant adverse changes in
business, financial and/or economic conditions in
which related party operates, actual or expected
forbearance or restructuring, significant change in
collateral value (for collateralised loans).
The Group defines a financial instrument as in
default, which is fully aligned with the definition of
credit- impaired, when it meets one or more of the
following criteria: delay in payment of over 90 days,
significant financial difficulty of related party (such
as long-term forbearance, insolvency, or probability
of bankruptcy). A loan or other receivable is
considered to no longer be in default (i.e. to have
cured) when it no longer meets any of the default
criteria at the reporting date .
The Expected Credit Loss (ECL) is measured on either
a 12-month (12M) or Lifetime basis depending on
whether a significant increase in credit risk has
occurred since initial recognition or whether an
asset is considered to be credit-impaired .
All of the Group’s loans to related parties as at
31 December 2020 and 31 December 2019 are
classified in ‘Stage 1’. Further, management assessed
that no material impairment provision on loans to
related parties is necessary given the following:
•
•
•
•
Loans to related parties are repayable on
demand and the Group expects to be able to
recover the outstanding balance of related
loans, if demanded;
Loans to related parties have not had significant
increase in credit risk since the loans were first
recognized;
There are no historic losses or write offs on
these loans;
As a result, impairment provision is based on
12-month expected credit losses, which results
in immaterial impairment provision .
Similarly, the Group’s other receivables as at 31
December 2020 and 31 December 2019 are
classified in ‘Stage 1’, as they are either current or
overdue up to 30 days, and the Group has not noted
a significant increase in credit risk.
(c) Liquidity risk
liquidity
risk management
Prudent
implies
maintaining sufficient cash and the availability of
funding through an adequate amount of committed
credit facilities. The Group manages liquidity risk
by maintaining sufficient bank balances to fund its
operations and the availability of funding through
committed credit facilities .
Management monitors rolling forecasts of the
Group’s liquidity reserve on the basis of expected
cash flows.
Undrawn finance facilities as of 31 December were
as follows:
2020
K’000
2019
K’000
Undrawn Facilities
243,000
263,000
The table on the following page analyses the Group’s
financial liabilities which will be settled on a net
basis into relevant maturity groupings based on the
remaining period at the balance sheet date to the
contractual maturity date. The amounts disclosed
in the table are the contractual undiscounted cash
flows.
Steamships Annual Report 2020 35
NOTES TO THE FINANCIAL STATEMENTS
Steamships Trading Company Limited Year Ended 31 December 2020 (Amounts in Kina 000’s unless otherwise stated)
Less than
1 year
K’000
Between 1
& 2 years
K’000
Between 2
& 5 years
K’000
Over 5
years
K’000
Total
K’000
Carrying
amount
At 31 December 2020
Borrowings
Borrowings from minority shareholders
Borrowings from related parties
Trade and other payables
Lease liabilities
(108,743)
(160)
(4,961)
(61,689)
(6,088)
(54,500)
-
-
-
(6,088)
(168,337)
-
-
-
(22,834)
-
-
-
-
(122,274)
(331,580)
(160)
(4,961)
(61,689)
(157,284)
(304,506)
(160)
(4,864)
(61,689)
(73,090)
(181,641)
(60,588)
(191,171)
(122,274)
(555,674)
(444,309)
At 31 December 2019
Borrowings
Borrowings from minority shareholders
Borrowings from related parties
Trade and other payables
Lease liabilities
(1,873)
(160)
(15,975)
(75,407)
(5,246)
(294,014)
-
-
-
(5,246)
(98,661)
(299,260)
(23,510)
-
-
-
(15,741)
(39,251)
-
-
-
-
(115,330)
(115,330)
(319,397)
(160)
(15,975)
(75,407)
(141,563)
(303,743)
(160)
(15,662)
(75,407)
(72,236)
(552,502)
(467,208)
The Group does not hold derivative financial instruments.
All loan covenants associated with borrowing arrangements have been met .
(d) Capital risk management
The Group’s objectives when managing capital are to
safeguard the Group’s ability to continue as a going
concern in order to provide returns to 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
Group may adjust the amount of dividends paid to
shareholders, return capital to shareholders, issue new
shares or sell assets to reduce debt .
The Group 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 external borrowings
and unsecured loans less cash and cash equivalents .
Net debt for the purposes of the gearing ratio does not
include lease liabilities, trade and other payables and
provisions for other liabilities and charges. Total capital
is calculated as capital and reserves attributable to the
Company’s shareholders plus net debt. The gearing
ratios at each balance date were as follows:
2020
K’000
2019
K’000
Total external borrowing and
unsecured loans
Less: Cash & Cash
equivalents
Net debt
Total equity
Total capital
Gearing ratio
309,530
142,424
167,106
963,826
1,130,932
15%
319,565
100,832
218,733
902,790
1,121,523
20%
36 Steamships Annual Report 2020
is subject
The Group
to certain covenants
related primarily to its external borrowings. Non-
compliance with such covenants may result in
negative consequences for the Group including
declaration of default. The Group was in compliance
with covenants as at 31 December 2020 and 31
December 2019, as well as during respective years.
(e) Fair value estimation
IFRS 7 ”Financial Instruments: Disclosures” requires
disclosure of fair value measurements by level of
the following fair value measurement hierarchy:
Quoted prices (unadjusted) in active markets for
identical assets or liabilities (level 1).
Inputs other than quoted prices included within
level 1 that are observable for the asset or liability,
either directly (that is, as prices) or indirectly (that
is, derived from prices) (level 2).
Inputs for the asset or liability that are not based
on observable market data (that is, unobservable
inputs) (level 3).
If one or more of the significant inputs is not based
on observable market data, the instrument is
included in level 3 .
The Group does not hold any financial assets at fair
value .
3. Operating results
(a) Revenue and other income comprises:
Revenue from contracts with customers
- Revenue from sale of goods
- Revenue from provision of services
Lease income
Dividend income
Total Revenue
Consolidated
Parent Entity
2020
2019
2020
2019
32,723
399,259
108,424
-
37,684
440,609
106,875
-
540,406
585,168
-
-
-
-
-
-
9,443
9,443
48,000
48,000
* Other income (net)
-
-
2,925
3,021
* Other income includes royalties and management fees.
The Group’s revenue from contracts with customers are recognized at a point in time and over time. Most of the revenue from the
provision of services is recognized over time, while revenue from sale of goods is recognized at a point in time. Further disaggregation
of revenue by segment is provided at Note 25.
The aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied (or partially unsatisfied)
as of 31 December 2020 that relates mostly to towage work which commenced in late 2020 and will be finalised within January
2021 is nil (2019 – K0.3M).
(b) Expenses comprise:
Cost of sales
Staff costs (note 3(c))
Depreciation and amortisation
Impairment of vessels
Fixed Assets write off
Electricity and fuel
Other operating expenses
Total operating expense
(c) Staff costs:
Wages and salaries
Retirement benefit contributions
Accommodation and other benefits
106,288
99,428
88,328
919
613
33,796
138,231
467,603
85,730
3,877
9,821
99,428
111,552
119,712
82,268
-
-
46,314
154,192
514,038
101,683
5,516
12,513
119,712
Number of staff employed by the Group at year end:
Full Time
2,412
2.637
-
-
-
-
2,048
2,029
-
-
-
89
2,137
-
-
-
(159)
1,870
-
-
-
-
-
-
-
-
-
-
Steamships Annual Report 2020 37
NOTES TO THE FINANCIAL STATEMENTSSteamships Trading Company Limited Year Ended 31 December 2020 (Amounts in Kina 000’s)
NOTES TO THE FINANCIAL STATEMENTS
Steamships Trading Company Limited Year Ended 31 December 2020 (Amounts in Kina 000’s unless otherwise stated)
3. Operating results (continued)
Consolidated
Parent Entity
2020
2019
2020
2019
(d) The operating profit before income tax is arrived at after charging and crediting the following specific items:
After charging:
Audit fees
Fees for non-audit services to Auditors
Bad and doubtful debts provided
Donations
Loss on sale of fixed assets
After crediting:
Gain on sale of property, plant and equipment
Bad and doubtful debts released
Net foreign exchange transaction gains
(e) Cost of financing – net:
Interest expense*
Interest income
Net finance costs
1,044
530
5,425
1,258
-
9,278
1,174
1,045
1,406
4,880
1,817
1,127
16,910
150
96
640
16,406
(7,416)
8,990
17,784
(7,938)
9,846
-
-
-
-
-
-
-
-
-
10
-
-
-
-
-
-
-
-
(72)
(72)
(72)
(72)
*The interest expense excludes capitalised interest which is nil in 2020 (2019 - K0.06m).
(f) Earnings per share
Basic earnings per share are calculated by dividing the net profit attributable to shareholders by the average number of ordinary
shares on issue during the year. There is no difference between the basic and diluted earnings per share.
Net profit attributable to shareholders
Average number of ordinary shares on issue (thousands)
Basic earnings per share (continuing and discontinued)
Basic earnings per share (continuing)
78,855
31,008
254 toea
254 toea
49,995
31,008
161 toea
161 toea
4.
Investments in subsidiaries, associates and joint ventures
Consolidated
Parent Entity
2020
2019
2020
2019
(a) Investments are accounted for in accordance with the policy set out in Note 1(c) and relate to:
Investments in subsidiary companies (note 21)
Investments in associates (note 22)
Investments in joint ventures (note 23)
(b) Share of after tax profit in associates and joint ventures
Share of profit in associates
Share of profit in joint ventures
-
5,529
31,463
36,992
276
3,750
4,026
-
101,838
159,261
11,373
30,213
41,586
393
4,617
5,010
-
-
101,838
-
36,626
195,887
-
-
-
-
-
-
38 Steamships Annual Report 2020
NOTES TO THE FINANCIAL STATEMENTS
Steamships Trading Company Limited Year Ended 31 December 2020 (Amounts in Kina 000’s unless otherwise stated)
5.
Income tax
(a) Income tax expense
Current tax
Deferred Tax
Prior period (over)/under provided
Utilisation of losses in 2019 tax return, Note 5(b)
Consolidated
Parent Entity
2020
2019
2020
2019
4,602
(2,822)
(2,460)
(10,518)
(11,198)
20,657
(489)
(1,240)
-
18,928
214
(27)
-
-
187
355
(49)
1
-
307
(b) The income tax in the Statement of Comprehensive Income is determined in accordance with the policy set out in note 1(f).
The effective rate of tax charged differs from the statutory rate of 30% for the following reasons.
Prima facie tax on profit before income tax
20,352
19,888 3,091
14,767
Non-taxable income - dividends
Expenses not deductible for tax
Tax losses utilized in current year
Tax loss not recognised
Income not assessable for tax
Prior year (over)/under provisions
Utilisation of losses in 2019 tax return
Other
-
460
(14,679)
- (2,833)
(14,400)
579
-
-
-
6,659
-
(3,408)
(2,460)
(10,518)
(945)
(6,958)
(71)
(60)
(1,240)
-
-
-
-
-
-
-
(11,198)
18,928
187
307
-
-
-
During 2021 the Registrar of Companies approved the amalgamation of Consort Express Line Limited and its subsidiary Consort
Investments Limited with Steamships Limited (Note 24). As the effective date of amalgamation is 31 December 2019, Steamships
Limited utilised previously unrecognized tax losses of Consort Express Line Limited in the amount of K10.5M in its tax return for
financial year ended 31 December 2019. In addition, the Group estimated that tax losses of Consort Express Line Limited of K14.7
million will be utilised in the tax return of Steamships Limited for financial year ended 31 December 2020.
(c) The deferred tax (liability)/ asset comprises:
Provisions
Tax losses
Lease liabilities
Prepayments and consumables
Property, plant and equipment
Right-of-use assets
Deferred tax asset
Deferred tax liability
9,212
-
21,927
(3,429)
(19,516)
(21,927)
(13,733)
1,010
(14,743)
(13,733)
7,419
182
21,671
(5,452)
(18,704)
(21,671)
(16,555)
2,311
(18,866)
(16,555)
-
-
-
-
512
512
512
-
512
-
-
-
-
485
-
485
485
-
485
As at 31 December 2020, the group has not recognised a deferred tax asset amounting to K33.3M (2019 - K58.4M) related to
carried forward tax losses.
Steamships Annual Report 2020 39
NOTES TO THE FINANCIAL STATEMENTS
Steamships Trading Company Limited Year Ended 31 December 2020 (Amounts in Kina 000’s unless otherwise stated)
5.
Income tax (continued)
(d) The gross movement on the deferred tax account is as follows:
Consolidated
Provisions and accruals
Tax losses
Lease liabilities
Prepayments and consumables
Property, plant and equipment
Right-of-use assets
Total
Parent Company
Property, plant and equipment
Total
Beginning
Balance
Charge to
profit
Ending
Balance
7,419
182
21,671
(5,452)
(18,704)
(21,671)
(16,555)
1,793
(182)
256
2,023
(812)
(256)
2,822
9,212
-
21,927
(3,429)
(19,516)
(21,927)
(13,733)
485
485
27
27
512
512
(e) Income tax (receivable)/ payable is represented as by:
At 1 January
Income tax provision
Prior year (over) / under provisions
Utilisation of losses in 2019 tax return, Note 5(b)
Utilisation of tax credit
Others
Tax payments made
At 31 December
6. Cash and cash equivalents
Cash and short term deposits
Consolidated
Parent Entity
2020
2019
2020
2019
(9,507)
4,602
(2,460)
(10,518)
(2,670)
18
(3,388)
(23,923)
(355)
20,657
(1,240)
-
(2,632)
(434)
(25,503)
(9,507)
60
214
-
-
(172)
(427)
(325)
(45)
355
-
-
-
-
(250)
60
Consolidated
Parent Entity
2020
2019
2020
2019
142,424
142,424
100,832
100,832
-
-
-
-
The maximum exposure to credit risk at the reporting date is the fair value of cash and cash equivalents on the balance sheet. Cash
and short-term deposits are held with the banks resident in Papua New Guinea who have appropriate long term credit ratings.
7. Trade and other receivables
Trade receivables
Trade receivables related parties (Note 18)
Provision for impairment
Other receivables
Prepayments
40 Steamships Annual Report 2020
Consolidated
Parent Entity
2020
2019
2020
2019
66,216
4,039
(11,359)
58,896
58,774
7,898
125,568
75,737
8,635
(7,108)
77,264
60,844
10,010
148,118
-
-
-
-
2,473
-
2,473
-
-
-
-
471
-
471
NOTES TO THE FINANCIAL STATEMENTS
Steamships Trading Company Limited Year Ended 31 December 2020 (Amounts in Kina 000’s unless otherwise stated)
7. Trade and other receivables (continued)
(i) Credit losses
As at 31 December 2020 and 31 December 2019, loss allowance was determined as follows for trade receivables:
31 December 2020
Current
More than 30 More than 60 More than 90
days past due
days past due
days past due
Total
Expected credit loss rate
0.2%-3%
3%-8%
8%-24%
24%-60%
16.2%
Gross carrying amount - trade receivables
Loss allowance
33,901
709
13,692
767
5,619
568
17,043
9,315
70,255
11,359
31 December 2019
Current
More than 30 More than 60 More than 90
days past due
days past due
days past due
Total
Expected credit loss rate
0.2%-2%
2%-5%
5%-8%
8% - 30%
8.4%
Gross carrying amount - trade receivables
Loss allowance
33,619
370
22,327
714
8,235
494
20,191
5,530
84,372
7,108
Movement in the provision for impairment of trade receivables is as follows:
Opening balance
Impairments recognised during the year
Provision released
Total
7,108
5,425
(1,174)
11,359
2,378
4,880
(150)
7,108
-
-
-
-
-
-
-
-
The creation and release of the provision for impaired receivables is included in operating expenses in the statement of comprehensive
income. Amounts charged to the provision account are generally written off when there is no expectation of recovering the balance
outstanding.
The maximum exposure to credit risk at the reporting date is the fair value of each class of receivable mentioned above. The Group
does not hold any collateral as security in relation to these receivables.
(ii) Other receivables and prepayments
Other receivables generally arise from transactions outside the usual operating activities of the Group. These mostly include
receivables for rental bonds, re-insurance receivables and other tax receivables (such as GST receivables) and other non-financial
assets. These receivables are not interest bearing. Collateral is not normally obtained.
As at 31 December 2020 and 31 December 2019, most of the Group’s other receivables are current and classified as Stage 1 for
impairment provisioning purposes. The amount of other receivables overdue more than 30 days is not material, and the impairment
provision based on expected loss model is immaterial.
Prepayments relate to advance payments for expenses not yet incurred.
Steamships Annual Report 2020 41
NOTES TO THE FINANCIAL STATEMENTS
Steamships Trading Company Limited Year Ended 31 December 2020 (Amounts in Kina 000’s unless otherwise stated)
8.
Inventories
Finished goods
Provision for obsolescence
Consolidated
Parent Entity
2020
2019
2020
2019
18,778
(1,496)
17,282
14,781
(1,430)
13,351
-
-
-
-
-
-
Inventories recognised as an expense during the year ended 31 December 2020 and included in cost of sales and cost of
providing services amounted to K13.1M (2019: K11M). The provision for obsolescence of inventories during the year increased
by K0.1M (2019: K1.3M increase).
9. Loans to/(from) related companies
Non-Current
John Swire & Sons Limited
Colgate Palmolive (PNG) Limited
Huhu Rural LLG
Pacific Rumana Limited
Harbourside Development Limited
Viva No.31 Limited
Wonye Limited
Nikana Stevedoring Limited
Loans to subsidiaries
Loans from associates and joint ventures:
Stevedoring associates
Loans from subsidiaries
Consolidated
Parent Entity
2020
2019
2020
2019
2,641
500
1,054
28,930
68,529
2,000
2,802
-
106,456
-
106,456
-
500
1,640
28,930
55,330
2,000
27
150
88,577
-
88,577
-
500
-
-
-
-
-
-
500
-
500
-
500
-
-
-
-
-
-
500
5,135
5,635
(4,864)
(15,662)
-
-
(4,864)
(15,662)
-
(44,290)
(44,290)
-
(132,415)
(132,415)
The loan to Harbourside Development Limited is secured and earns interest at 6.5%. The loan to Pacific Rumana Limited is unsecured
and earns interest at 9%. The loan from Stevedoring associates is unsecured and incurs interest at 2%.
42 Steamships Annual Report 2020
NOTES TO THE FINANCIAL STATEMENTS
Steamships Trading Company Limited Year Ended 31 December 2020 (Amounts in Kina 000’s unless otherwise stated)
Property
Ships
Plant and
Vehicles
Right-of-use
Assets
Total
637,910
246,719
449,013
50,023
1,383,665
(307,983)
329,927
(142,863)
103,856
(376,498)
(5,584)
(832,928)
72,515
44,439
550,737
364,841
112,661
-
15,815
-
(277)
-
(34,144)
-
(16,308)
329,927
-
21,030
-
(354)
(919)
-
(4,987)
(23,575)
103,856
87,828
-
13,793
-
-
-
-
-
45,316
(3,230)
-
5,441
-
-
-
-
(29,106)
72,515
(3,088)
44,439
610,646
(3,230)
50,638
5,441
(631)
(919)
(34,144)
(4,987)
(72,077)
550,737
10. Property, plant and equipment
Consolidated
2020
Cost
Accumulated depreciation
(including impairment losses)
Net book value
Opening value
IFRS 16 adjustment
Additions
Lease agreements made during the year
Disposals
Impairment
Transfer to investment properties
Asset held for sale
Depreciation
Closing value
2019
Cost
Accumulated depreciation
(including impairment losses)
Net book value
656,517
231,030
435,220
47,812
1,370,579
(291,676)
364,841
(118,369)
112,661
(347,392)
(2,496)
(759,933)
87,828
45,316
610,646
Opening value
294,725
100,189
97,488
-
492,402
Impact of IFRS 16 adoption on 1 January 2019
Additions
Lease agreements made during the year
Disposals
Transfer from investment properties
Depreciation
Closing value
-
37,411
-
-
45,142
(12,437)
364,841
-
36,574
-
(4,506)
-
(19,596)
112,661
-
14,945
20,265
-
(837)
-
(29,088)
87,828
-
32,867
-
-
(2,496)
45,316
14,945
94,250
32,867
(5,343)
45,142
(63,617)
610,646
The Group is committed to its plan to sell a cargo vessel within 12 months from the reporting date. As the sale is considered
highly probable, the vessel is available for immediate sale and actions were taken to locate a buyer (including active marketing of
the vessel for sale) prior to 31 December 2020, this vessel is classified within the line ‘Assets held for sale’ as at 31 December
2020. An impairment loss of K0.9M is recognised in 2020 for write down of this asset to its fair value less costs to sell. Refer to
Note 1(j).
Properties of K34.1M, classified within line ‘Property, plant and equipment’ as at 31 December 2019, were transferred to
investment properties during 2020 due to change in primary use of these properties.
Similarly, premises used by the Group of K45.1 million, classified as investment properties as at 31 December 2018, were
transferred to properties within line ‘Property, plant and equipment’ during 2019 due to change in primary use of property. Refer
to the Note 1(m).
Steamships Annual Report 2020 43
NOTES TO THE FINANCIAL STATEMENTS
Steamships Trading Company Limited Year Ended 31 December 2020 (Amounts in Kina 000’s unless otherwise stated)
10. Property, plant and equipment (continued)
Parent Entity
2020
Cost
Accumulated depreciation (including impairment losses)
Net book value
Opening value
Additions
Disposals
Depreciation
Closing value
2019
Cost
Accumulated depreciation (including impairment losses)
Net book value
Opening value
Additions
Disposals
Depreciation
Closing value
Property
Plant and
Vehicles
Total
78,985
(55,110)
23,875
22,484
3,144
(15)
(1,738)
23,875
76,488
(54,004)
22,484
23,811
406
-
(1,733)
22,484
6,159
(4,932)
1,227
912
625
-
(310)
1,227
5,534
(4,622)
912
743
803
(338)
(296)
912
85,144
(60,042)
25,102
23,396
3,769
(15)
(2,048)
25,102
82,022
(58,626)
23,396
24,554
1,209
(338)
(2,029)
23,396
(a) Assets in the course of construction
The carrying amounts of the assets disclosed above include the following expenditure recognised in relation to property, plant and
equipment and investment properties which are in the course of construction:
Consolidated
Parent Entity
2020
2019
2020
2019
Property (classified as investment properties in note 11)
Plant, vehicles and ships
Total assets in the course of construction
7,851
17,948
25,799
12,243
22,377
34,620
-
-
-
-
-
-
The cost of additions in 2020 did not include any capitalised borrowing costs (2019: K0.06M) in relation to qualifying assets. The
Group used a capitalization rate of 5.85% p.a. to determine the amount of borrowing costs eligible for capitalisation.
(b) Impairment losses
During the year the Directors performed an impairment review on certain assets with impairment indicators. As a result of this
assessment, impairment K0.9M was recorded related to ships in the Consort business (2019: Nil).
Recoverable amount of ships is based on market valuations. Ships have been assessed against market value on an annual basis using
a valuation technique of market comparable prices. The valuation as at 31 December 2020 was carried out by two independent
firms of valuers, Australian Independent Shipbrokers and GPA Maritime & Engineering Consultants Pty Ltd, who both hold a
recognized and relevant professional qualification and who have recent experience in valuation of assets of similar location and
category. The assessed average market value of ships is K77.5M (2019: K82.2M). If market price of ships had been 10% lower,
recoverable amount would be K69.8M (2019: K75.3M) resulting in an additional impairment charge of K1.3M (2019: K3.7M).
There are no other further conditions that indicate impairment of property, plant and equipment as at 31 December 2020 in
other businesses of the Group.
44 Steamships Annual Report 2020
NOTES TO THE FINANCIAL STATEMENTS
Steamships Trading Company Limited Year Ended 31 December 2020 (Amounts in Kina 000’s unless otherwise stated)
10. Property, plant and equipment (continued)
(c) Right-of-use assets
The recognised right-of-use assets relate to properties leased by the Group for its use (i.e. leased buildings). The movement of
right-of-use assets classified under property, plant and equipment is provided below:
As at 31 December 2020
Opening net book amount
IFRS 16 adjustment
Lease agreements made during the year
Depreciation
Closing net book amount
At cost
Accumulated depreciation
As at 31 December 2019
Opening net book amount
Effect on adoption of IFRS 16
Balance at 1 January 2019
Lease agreements made during the year
Depreciation
Closing net book amount
At cost
Accumulated depreciation
Properties
Total
PGK’000
PGK’000
45,316
(3,230)
5,441
(3,088)
44,439
50,023
(5,584)
44,439
-
14,945
14,945
32,867
(2,496)
45,316
47,812
(2,496)
45,316
45,316
(3,230)
5,441
(3,088)
44,439
50,023
(5,584)
44,439
-
14,945
14,945
32,867
(2,496)
45,316
47,812
(2,496)
45,316
11. Investment properties
Investment properties represent the Group’s residential and commercial properties that are available for external lease rather than
internal use. Properties used by the Group are shown in ‘Property’ within note 10.
Cost
Accumulated depreciation
Net book value
Opening value
Additions
Transfers (to) / from property, plant & equipment
Right of use of assets movement
Depreciation
Closing value
Consolidated
Parent Entity
2020
2019
2020
2019
593,181
(198,843)
394,338
360,282
16,078
34,144
85
(16,251)
394,338
542,874
(182,592)
360,282
398,173
-
(45,142)
25,902
(18,651)
360,282
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Steamships Annual Report 2020 45
NOTES TO THE FINANCIAL STATEMENTS
Steamships Trading Company Limited Year Ended 31 December 2020 (Amounts in Kina 000’s unless otherwise stated)
11. Investment properties (continued)
(a) Right-of-use assets
The recognised right-of-use assets relate to state land leases related to properties owned by the Group (including investment
properties). The breakdown of right-of-use assets classified within investment properties is provided below:
As at 31 December 2020
Opening net book amount
IFRS 16 adjustment
Lease agreements made during the year
Terminated
Depreciation
Closing net book amount
At cost
Accumulated depreciation
As at 31 December 2019
Opening net book amount
Effect on adoption of IFRS 16
Balance at 1 January 2019
Depreciation
Closing net book amount
At cost
Accumulated depreciation
State Land
Leases
25,902
(669)
1,167
(72)
(341)
25,987
26,816
(829)
25,987
-
26,390
26,390
(488)
25,902
26,390
(488)
25,902
Total
25,902
(669)
1,167
(72)
(341)
25,987
26,816
(829)
25,987
-
26,390
26,390
(488)
25,902
26,390
(488)
25,902
2020
2019
(b) Amounts recognised in profit/loss for investment properties
Rental income
Repairs and maintenance attributable to rental properties under non-cancellable leases
Operating expenses directly attributable to rental properties under non-cancellable leases
108,424
(6,585)
(22,268)
106,875
(6,753)
(21,088)
(c) Valuation basis
Properties include commercial and residential properties occupied by Group businesses together with commercial and residential
investment properties which are available for external lease. An analysis of the carrying amount and estimated range of fair values
for each category of property is shown below. Fair values have been estimated internally, based on market evidence of property
values, supported by independent professional valuations from previous years, adjusted by observable market trends related to PNG
residential and commercial properties, as well as land values, on an annual basis.
Investment properties
Other properties (note 10)
Total
NBV
Lower
Higher
Valuation Range
394,338
329,927
724,265
1,293,592
448,112
1,741,704
1,616,990
560,141
2,117,131
The management has utilised certain historical facts and available relevant market data in reaching their opinion as to the valuation
of the properties up to the date of valuation, including use of comparable sales and capitalisation rates.
(d) Non-current assets pledged as security
Refer to note 16 for information on non-current assets pledged as security by the Group.
46 Steamships Annual Report 2020
NOTES TO THE FINANCIAL STATEMENTS
Steamships Trading Company Limited Year Ended 31 December 2020 (Amounts in Kina 000’s unless otherwise stated)
11. Investment properties (continued)
(e) Contractual receivables
Minimum lease receivables under non-cancellable operating leases of investment properties not recognised in the financial statements
are receivable as follows:
Within one year
Later than one year but not later than five years
Later than five years
12. Intangible assets
Opening balance
Disposal of Subsidiary
Closing balance
Consolidated
Parent Entity
2020
2019
2020
2019
94,118
122,175
53,778
270,071
48,921
113,546
75,817
238,284
-
-
-
-
-
-
-
-
Consolidated
Parent Entity
2020
2019
2020
2019
76,433
-
76,433
76,433
-
76,433
-
-
-
-
-
-
Goodwill is allocated to the Group’s cash-generating units (CGUs) identified according to operating segment. The goodwill balance of
K76.4M (2019: K76.4M) is attributable to various business acquisitions in the logistics segments including Pacific Towing (K67.4M) and
New Britain Shipping (K9M). The recoverable amount of a CGU is determined based on value-in-use calculations. These calculations
use pre-tax cash flow projections based on financial budgets approved by management covering a three-year period. Growth beyond
year three for the purpose of the impairment testing is set at 5% for New Britain Shipping and 8% for Pacific Towing (2019: 5% for
New Britain Shipping and 5% for Pacific Towing). A pre-tax discount rate of 12.5% per annum (2019: 12.5% per annum) has been
used and reflects specific risks relating to the operating segment. The recoverable amount of the Pacific Towing CGU and New Britain
Shipping CGU exceed their carrying amounts by K64.2M (2019: K1.3M) and K13.2M (2019: K10.9M), respectively. Management
believes that growth rate of revenue of 8% p.a. for Pacific Towing is appropriate, as approved three-year financial budgets are based
on conservative assumptions.
Management determined the budgeted gross margin based on past performance and its market expectations. If the revised growth
rate beyond three years had been 3% lower than management’s estimates the Group would need to reduce the carrying value of
goodwill of Pacific Towing by K Nil and the carrying value goodwill of New Britain Shipping by K Nil. The CGUs’ carrying amount
would exceed the value in use at a growth rate lower than 4.9% p.a. for Pacific Towing and 0.3% p.a. for New Britain Shipping.
The discount rates used are pre-tax, and reflect specific risks relating to the relevant CGUs. If the revised estimated pre-tax discount
rate applied to the discounted cash flows of the Pacific Towing CGU and New Britain Shipping CGU had been 2% higher than
management’s estimates, the carrying value of goodwill of Pacific Towing and New Britain Shipping would be reduced by K Nil and
K Nil. The CGUs’ carrying amount would be equal to value in use at a discount rate of approximately 16.1% p.a. and 22% p.a.
respectively.
13. Trade and other payables
Trade payables
Trade payables related parties (Note 18)
Accruals
Other payables
Consolidated
Parent Entity
2020
2019
2020
2019
18,697
468
40,772
1,752
61,689
32,069
515
36,384
6,439
75,407
-
-
-
-
-
-
-
-
-
-
All trade and other payables are due and payable within 12 months and are recorded at their fair value.
14. Lease Liabilities
As disclosed in Note 10 and 11, the right-of-use assets and related lease liabilities are recognized in relation to the following types
of assets: state land leases related to properties owned by the Group (including its investment properties) and properties (i.e.
buildings leased by the Group for its use).
Steamships Annual Report 2020 47
NOTES TO THE FINANCIAL STATEMENTS
Steamships Trading Company Limited Year Ended 31 December 2020 (Amounts in Kina 000’s unless otherwise stated)
14. Lease Liabilities (continued)
State land leases
Properties
Total lease liabilities
2020
26,553
46,537
73,090
2019
26,198
46,038
72,236
Total lease liabilities as of 31 December 2020 include current liabilities of K2,662,000(1 January 2020: K3,772,000) and non-current
liabilities of K70,428,000 (1 January 2020: K68,464,000).
Minimum lease payments:
Not later than 1 year
Later than 1 year and not later than 5 years
Later than 5 years
Total
Less: Unexpired finance charges
Present value of lease liabilities:
Not later than 1 year
Later than 1 year and not later than 5 years
Later than 5 years
Total
Interest on lease liabilities recognized in profit or loss by the Group amounts to PGK 3.9M.
Movement in net lease liabilities as per below:
Opening
Effect on adoption of IFRS 16
Lease agreements made during the year, net
Finance costs
Repayment
6,088
28,922
122,274
157,284
(84,194)
73,090
2,662
21,022
49,406
73,090
72,236
-
2,627
3,946
(5,719)
73,090
5,246
20,987
115,330
141,563
(69,327)
72,236
3,772
17,895
50,569
72,236
-
41,335
32,867
3,282
(5,248)
72,236
The weighted average lessee’s incremental borrowing rate applied to the lease liabilities on 31 December 2019 and 31 December
2020 was 4.5% p.a. Management assessed that weighted average interest rate on borrowings obtained from financial institutions
during 2020 and previous years approximates the incremental borrowing rate at the date of initial adoption of IFRS 16 and at
31 December 2020. For related management’s judgments refer to Note 1(z).
The Group recognized expenses relating to short-term leases and expenses relating to leases of low-value assets that are
not short-term leases of K10.4M and K5.5M for the year ended 31 December 2020 (2019: K15.8M & K1.7M), respectively.
These expenses are included in operating expenses.
The Group’s leases have no variable payments.
15. Provisions for other liabilities and charges
Opening value
Charged to profit and loss
Utilised during year
Closing value
Current
Non-current
Employee
16,522
7,632
(8,134)
16,020
6,083
9,937
16,020
Insurance
Claims
46,257
3,058
2020
Total
62,779
10,690
2019
Total
68,165
7,909
-
(8,134)
(13,295)
49,315
49,315
-
49,315
65,335
55,398
9,937
65,335
62,779
51,542
11,237
62,779
A description of employee provisions is disclosed in note 1(p). Provision for insurance claims mostly relates to provision for
disputed insurance claim, as criteria for recognition of provision were met. Refer to Note 1(p).
48 Steamships Annual Report 2020
NOTES TO THE FINANCIAL STATEMENTS
Steamships Trading Company Limited Year Ended 31 December 2020 (Amounts in Kina 000’s unless otherwise stated)
16. Borrowings
Current:
Bank overdrafts (secured)
Bank loans
Other loans (unsecured)
Non-current:
Bank loans (secured)
Total Borrowings
Consolidated
Parent Entity
2020
2019
2020
2019
2,506
102,500
160
105,166
199,500
199,500
304,666
1,743
-
160
1,903
302,000
302,000
303,903
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Mortgages over certain of the Group’s properties and a registered equitable charge over the remainder of the Group’s assets,
undertakings and uncalled capital are held by the Group’s bankers as security for the bank overdrafts and secured loans.
Interest is paid on all loans at commercial rates at a discount to Indicator Lending Rates. The effective interest rate on bank facilities
at the balance sheet date was 3.9% (2019: 4.5%). Bank overdrafts are interest-only with no agreed repayment schedule. Bank loans
are secured loans with varying 1 to 3 year terms. The effective interest rate on other loans is 2% (2019: 2%).
The fair value of borrowings approximates their carrying amounts. Borrowing terms, margins and credit risk factors approximate
currently obtainable levels for similar facilities.
17. Issued capital
Consolidated
Parent Entity
2020
2019
2020
2019
(a) Issued and paid up capital
Ordinary shares
24,200
24,200
24,200
24,200
(b) Number of shares
Number of shares (000’s)
Ordinary shares
31,008
31,008
31,008
31,008
In accordance with the Papua New Guinea Companies Act 1997 the shares have no par value.
The Company’s securities consist of ordinary shares which have equal participation and voting rights.
(c) Dividend
The Directors advise that a dividend of 80 toea per share will be paid immediately after the Annual General Meeting on 18th June
2021. Dividends payable to shareholders resident outside of Papua New Guinea will be converted to Australian Dollars at the
prevailing rate which the Company is able to secure. During the year the Company paid dividends totaling 55 toea per share which
is the final dividend of 2019 and totaled K 17.1M.
Steamships Annual Report 2020 49
NOTES TO THE FINANCIAL STATEMENTS
Steamships Trading Company Limited Year Ended 31 December 2020 (Amounts in Kina 000’s unless otherwise stated)
18. Related party disclosures
(a) Parent entity
Until 3 September 2019, the Group was controlled by John Swire & Sons (PNG) Limited, which owned 72.12% of the
Company’s shares. John Swire & Sons (PNG) Limited sold its shares in Steamships Trading Company Limited to JS & S (PNG)
Ltd, incorporated in England, on 3 September 2019. The ultimate holding company as at 31 December 2019 is John Swire &
Sons Ltd, incorporated in England.
(b) Interest in subsidiaries, associates and joint ventures:
These are set out in notes 21, 22 and 23 respectively.
(c) Remuneration:
Income received or due and receivable both by Directors and general managers in connection with the management of the
Group companies is shown in the Directors’ Report.
Consolidated
Parent Entity
2020
2019
2020
2019
Key management personnel disclosure
Wages and salaries
Other short term benefits
12,567
1,298
12,118
1,249
186
154
8,171
136
1
(1,384)
-
9,952
-
-
-
-
11
-
454
56
14,037
-
1,717
-
771
-
216
374
(46)
(9,558)
(140)
(d) Material transactions:
Sales of goods and services
- Associates and joint ventures
- Key management
- Associated groups
- Other shareholders
Lease and rental income
- Associates and joint ventures
- Others shareholders
Management fee received
- Associates and joint venture
- Associated groups
Container and charter hire
- Associates and joint venture
- Shareholders and associate companies
Purchase of goods and services
- Associates and joint ventures
- Associated groups
- Key Management
Purchase of assets
- Associated groups
50 Steamships Annual Report 2020
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
NOTES TO THE FINANCIAL STATEMENTS
Steamships Trading Company Limited Year Ended 31 December 2020 (Amounts in Kina 000’s unless otherwise stated)
18. Related party disclosures (continued)
Lease rental expense
- Associates & Joint ventures
- Associated groups
Finance Cost
- Associates & joint ventures
Dividends paid
- Other shareholders (minority interest)
- Controlling shareholder
- Significant shareholder
Loans to/(from) related companies
- Other shareholders
Consolidated
Parent Entity
2020
2019
2020
2019
344
471
-
-
-
(482)
-
-
-
-
-
-
(946)
(12,300)
(4,755)
(10,085)
(32,427)
(12,535)
-
(12,300)
(4,755)
-
(32,427)
(12,535)
(160)
(160)
All transactions with related parties are made on normal commercial terms and conditions.
Balances with related companies:
Associates and joint ventures:
Stevedoring associates (note 9)
Basilok Limited (note 16)
Loans to related companies:
Colgate Palmolive (PNG) Limited (note 9)
Harbourside Development Limited (note 9)
Subsidiary Companies (note 9)
Pacific Rumana Limited (note 9)
Huhu Rural LLG (note 9)
Viva No. 31 Limited (note 9)
Wonye Limited (note 9)
Nikana Stevedoring Limited (note 9)
John Swire & Sons Limited (note 9)
Balances receivable / (payable) from / to related companies:
Receivables
Pacific Rumana Limited
Harbourside Development Limited
Wonye Limited
Makerio Stevedoring Limited
Nikana Stevedoring Limited
Colgate Palmolive (PNG) Limited
Riback Stevedoring Limited
Swire Shipping
Total trade receivables from related companies (note 7)
Payables
Habourside Development Limited
Woyne Limited
Makerio Stevedoring Limited
Nikana Stevedoring Limited
Swire Shipping
Total trade payables to related companies (note 13)
(4,864)
(160)
(15,662)
(160)
500
68,529
-
28,930
1,054
2,000
2,802
-
2,641
514
938
5
14
18
10
-
2,540
4,039
-
-
(141)
(60)
(267)
(468)
500
55,330
-
28,930
1,640
2,000
27
150
-
1,125
1,876
180
96
445
-
5
4,908
8,635
(110)
(2)
(104)
(30)
(269)
(515)
-
-
-
500
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
500
-
5,135
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Steamships Annual Report 2020 51
NOTES TO THE FINANCIAL STATEMENTS
Steamships Trading Company Limited Year Ended 31 December 2020 (Amounts in Kina 000’s unless otherwise stated)
19. Reconciliation of cash flows
(a) Cash generated from operations
Profit for the year after tax
Depreciation and impairment
Dividend and interest income
Net gain on sale of fixed assets
Share of profit of associates and joint ventures
Reduction in SWT Assessment
Change in operating assets and liabilities
Decrease in trade debtors and other receivables
(Increase)/decrease in inventory
(Increase)/decrease in deferred tax asset
(Increase)/decrease in operating assets
Decrease in trade creditors and other payables
(Increase)/decrease in other operating liabilities
Increase in income tax receivable
(Increase)/decrease in deferred tax liability
Consolidated
Parent Entity
2020
2019
2020
2019
79,037
88,328
-
(9,278)
(4,026)
(12,699)
22,550
(3,931)
1,301
(6,187)
(13,718)
1,442
10,781
(4,123)
47,366
82,268
-
(15,783)
(5,010)
-
40,838
2,712
(628)
3,363
(28,870)
(5,386)
(9,152)
137
10,116
2,048
(9,443)
48,916
2,029
(48,000)
-
-
-
-
-
-
(2,002)
-
(23)
104
-
-
-
-
-
-
(49)
(36)
-
(127)
144
-
Net cash inflow from operating activities
149,477
111,855
800
2,877
(b) Net loan reconciliation
Lease
liabilities
Bank
Loans
Other
Loans
Total
Net debt as at 31 December 2018
-
(302,000)
(66,897)
(368,897)
Adoption of IFRS 16
Borrowings
Repayments
Repayment of minority shareholder loan - purchase of
additional shares in subsidiary (Note 24)
Lease liability-2019 agreement and finance costs
Payment of lease liabilities
Net debt as at 31 December 2019
Repayments
Lease agreements made during the year
Finance costs
Payment of lease liabilities
(41,335)
-
-
-
(36,149)
5,248
(72,236)
-
(2,627)
(3,946)
5,719
-
(10,000)
10,000
-
-
-
-
-
31,732
19,343
-
-
(41,335)
(10,000)
41,732
19,343
(36,149)
5,248
(302,000)
(15,822)
(390,058)
-
-
-
-
10,798
-
-
-
10,798
(2,627)
(3,946)
5,719
Net debt as at 31 December 2020
(73,090)
(302,000)
(5,024)
(380,114)
20. Retirement benefit plans
The total cost of retirement benefits of the Group in 2020 was K3.9M (2019: K5.5M). The Group participates in the National
Superannuation Fund of Papua New Guinea, a multi-employer defined contribution fund, on behalf of all citizen employees with
minimum employer and employee contribution rates established by legislation.
The parent entity does not employ staff directly; consequently, there was no charge during the year.
52 Steamships Annual Report 2020
NOTES TO THE FINANCIAL STATEMENTS
Steamships Trading Company Limited Year Ended 31 December 2020 (Amounts in Kina 000’s unless otherwise stated)
21. Subsidiaries and transactions with non-controlling interests
Significant investments in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with
the accounting policy described in Note 1 (c):
Equity Holdings(1) Equity Holdings(1)
Name of Entity
Country of Incorporation
Class of Shares
2020
2019
Consort Express Lines Limited(6)
Croesus Limited
Kavieng Port Services Limited
Kiunga Stevedoring Company Limited
Lae Port Services Limited(5)
Madang Port Services Limited
Morobe Terminals Limited(4)
Motukea United Limited
New Britain Shipping Limited(2)
Oro Port Services Limited
Pacific Towing (PNG) Limited
Palm Stevedoring & Transport Limited
Port Services PNG Limited(5)
Sandaun Agency & Stevedoring Limited
Steamships Limited
United Stevedoring Limited(3)
Windward Apartments Limited
Croesus Holdings Limited
Croesus Re PCC Limited
Pacific Towing SI Limited
Papua New Guinea
Papua New Guinea
Papua New Guinea
Papua New Guinea
Papua New Guinea
Papua New Guinea
Papua New Guinea
Papua New Guinea
Papua New Guinea
Papua New Guinea
Papua New Guinea
Papua New Guinea
Papua New Guinea
Papua New Guinea
Papua New Guinea
Papua New Guinea
Papua New Guinea
Isle of Man
Isle of Man
Solomon Islands
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
-
100
60
100
51
60
50.5
64.1
50
100
100
66.7
54
100
100
100
100
100
100
100
100
100
60
100
51
60
50.5
64.1
50
100
100
66.7
54
100
100
100
100
100
100
100
(1) The portion of ownership is equal to the proportion of voting power held.
(2) Consolidated by virtue of control over the operating decisions and returns. As at 31 December 2020, Steamships Trading Company
Limited still has control over this entity.
(3) United Stevedoring Limited became subsidiary in May 2019.
(4) Morobe Terminals Limited became subsidiary in May 2019 and is in liquidation.
(5) Lae Port Services and Port Services Limited are in liquidation.
(6) As disclosed in Note 24, Steamships Trading Company Limited acquired the minority shareholding (29.76%) of Consort Express
Lines Limited in May 2019 to increase its shareholding to a fully owned subsidiary. In March 2020, Investment Promotion Authority
approved the application to amalgamate Consort Express Lines Limited into Steamships Limited. The amalgamation is effective as
at 31 December 2019.
Shares in subsidiary companies have been stated at cost or fair value on acquisition less dividends received from pre-acquisition
profits.
The summarized financial information of the Group’s largest subsidiaries with non-controlling interest as at 31 December 2020 and
31 December 2019 is as follows:
2020
Madang Port Services Limited
New Britain Shipping Limited
Motukea United Limited
2019
Madang Port Services Limited
New Britain Shipping Limited
Motukea United Limited
Ownerships
Interest %
Assets
Liabilities
60
50
64.1
60
50
64.1
6,047
25,759
3,576
5,711
19,189
3,452
1,295
7,204
1,192
1,149
1,753
1,160
Carrying
Value
4,752
18,555
2,384
4,562
17,436
2,292
Revenue
Profit
5,699
10,855
7,566
5,383
11,134
6,824
190
1,807
146
(28)
1,572
214
Steamships Annual Report 2020 53
NOTES TO THE FINANCIAL STATEMENTS
Steamships Trading Company Limited Year Ended 31 December 2020 (Amounts in Kina 000’s unless otherwise stated)
22. Investment in associates
(a) Movement in carrying amounts
Consolidated
Parent Entity
2020
2019
2020
2019
Opening value
Share of profits before tax
Income tax expense
Change in control of associate companies to subsidiaries
Dividends received
Closing value
11,373
394
(118)
-
(6,120)
5,529
34,359
561
(168)
(1,681)
(21,698)
11,373
-
-
-
-
-
-
-
-
-
-
-
-
The equity method is used to account for all interests in associates on a consolidated basis.
(b) Summarised financial information of equity accounted associates.
The Group’s share of the results of its principal associates and its aggregated assets (including goodwill) and liabilities are as follows:
2020
Ownerships
Interest
%
Assets
Liabilities
Carrying
Value
Revenue
Profit
Makerio Stevedoring Limited
Nikana Stevedoring Limited
Riback Stevedoring Limited
45
45
49
2019
Makerio Stevedoring Limited
Nikana Stevedoring Limited
Riback Stevedoring Limited
Morobe Terminals Limited
Ownerships
Interest
%
45
45
49
43
1,351
1,723
2,514
5,588
(17)
63
13
59
Assets
Liabilities
1,317
1,356
8,830
-
11,503
(57)
(239)
426
-
130
1,368
1,660
2,501
5,529
Carrying
Value
1,374
1,595
8,404
-
791
597
-
1,388
113
185
(22)
276
Revenue
Profit
540
414
378
-
28
11
559
(205)
393
11,373
1,332
The associates provide stevedoring services to various external and Group shipping entities.
All associated companies are incorporated and operate in Papua New Guinea.
There are no contingent liabilities relating to the Group’s interest in the associates.
54 Steamships Annual Report 2020
NOTES TO THE FINANCIAL STATEMENTS
Steamships Trading Company Limited Year Ended 31 December 2020 (Amounts in Kina 000’s unless otherwise stated)
23. Investment in joint ventures
(a) Movement in carrying amounts
Opening value
Share of profits before tax
Income tax expense
Elimination of gain on sale of land to associate company
Dividends received
Closing value
2020
2019
30,213
5,357
(1,607)
-
(2,500)
30,917
6,633
(2,016)
(2,821)
(2,500)
31,463
30,213
The interest in joint ventures is accounted for in the financial statements using the equity method of accounting.
(b) Information relating to the joint ventures is set out below.
2020
Colgate Palmolive (PNG) Limited
Harbourside Development Limited
Pacific Rumana Limited
Viva No. 31 Limited
Wonye Limited
2019
Colgate Palmolive (PNG) Limited
Harbourside Development Limited
Pacific Rumana Limited
Viva No. 31 Limited
Wonye Limited
Ownership
Interest
%
50
50
50
50
50
Ownership
Interest
%
50
50
50
50
50
Assets
Liabilities
Carrying
Value
Revenue
Profit
22,725
10,687
12,038
44,363
3,867
115,969
116,147
3,171
10,756
26,092
(174)
7,198
13,392
178,713
147,250
Assets
Liabilities
(178)
3,345
3,558
12,700
31,463
Carrying
Value
9,884
1,731
881
2,588
(178)
(15)
(171)
247
59,447
3,750
Revenue
Profit
15,173
4,502
10,671
44,714
4,084
105,204
105,204
3,588
13,122
27,279
228
9,390
14,829
164,366
134,153
-
3,360
3,732
12,450
30,213
9,838
1,921
1,744
2,422
210
(1)
385
(61)
60,639
4,617
The Group’s share of the capital commitments of joint ventures at 31 December 2020 is K103.2M (2019: K98.5M).
There are no contingent liabilities arising from the Group’s interests in the joint ventures.
Steamships Annual Report 2020 55
NOTES TO THE FINANCIAL STATEMENTS
Steamships Trading Company Limited Year Ended 31 December 2020 (Amounts in Kina 000’s unless otherwise stated)
24. Business Combinations and Transactions with Non-Controlling Interests
In the 2019 financial year, Steamships Trading Company Limited acquired the minority shareholding (29.76%) of Consort Express
Lines Limited in May 2019 to increase its shareholding to a fully owned subsidiary.
Purchase consideration paid for acquisition of minority
shares in subsidiary
Repayment of minority shareholder loan
Add/(less): acquisition of minority interest
Equity adjustment on gain in control of subsidiaries
2020
K’000
-
-
-
-
-
2019
K’000
51,202
(19,343)
10,738
(2,302)
40,295
During 2020, the Investment Promotion Authority approved the application to amalgamate Consort Express Lines Limited and
Consort Investments Limited into Steamships Limited effective as at 31 December 2019 using the short-form amalgamation
process under section 235 of the Companies Act 1997. The name of the amalgamated company is Steamships Limited. Under
the amalgamation, Steamships Limited took control of all the assets of Consort Express Lines Limited and Consort Investments
Limited and assumed the responsibility for their liabilities. The amalgamation was accounted for based on predecessor accounting
with book value accounting used for the purposes of the transaction. Amalgamation had no impact on the Group’s assets, liabilities,
equity, and profit or loss account, as amalgamated entities have been fully controlled by the Group and consolidated prior to the
amalgamation and after the amalgamation. Further, amalgamation had no impact on the Group’s cash flows.
During 2020 the directors made the decision to amalgamate Pacific Towing (PNG) Limited into Steamships Limited.
As 31 December 2020 the application was subject to approval by the Investment Promotion Authority.
56 Steamships Annual Report 2020
NOTES TO THE FINANCIAL STATEMENTS
Steamships Trading Company Limited Year Ended 31 December 2020 (Amounts in Kina 000’s unless otherwise stated)
25. Segmental reporting
(a) Description of segments
The Board monitors the business from a product perspective and has identified three reportable segments. A brief description of
each segment is outlined below:
•
Hotels and property – consist of the hotels owned and operated by the Group and also its property leasing division. The assets
are stated at historical cost net of accumulated depreciation and include new assets in the course of construction.
•
Logistics – consists of shipping and land-based freight transport and related services divisions.
• Commercial and investment – consists of commercial, head office administration function and insurance activities.
(b) Segment information
The segment information provided to the Board for the reportable segments for the year ended 31 December 2020 is as follows:
Hotels and
Property
Logistics
Commercial and
Investments
(and eliminations)
Total
2020
External revenue
Interest revenue
Interest expense
Segment results
Share of joint ventures and associates profit
Total tax (expense) / benefit
Profit from continuing operations
197,520
339,148
3,738
6,322
540,406
7,416
716
378
(8,636)
53,697
(116)
(15,537)
38,044
(2,718)
(5,052)
(16,406)
14,750
(4,634)
276
(6,233)
8,793
3,866
32,968
32,200
63,813
4,026
11,198
79,037
Segment assets
Segment liabilities
Net assets
740,382
324,848
422,983
1,488,213
(242,585)
(148,902)
(132,900)
(524,387)
497,797
175,946
290,083
963,826
Total assets includes investment in joint ventures
and associates
Capital expenditure
Depreciation
19,425
30,325
45,217
5,529
35,842
40,023
12,038
549
3,088
36,992
66,716
88,328
Steamships Annual Report 2020 57
NOTES TO THE FINANCIAL STATEMENTS
Steamships Trading Company Limited Year Ended 31 December 2020 (Amounts in Kina 000’s unless otherwise stated)
25. Segmental reporting (continued)
2019
External revenue
Interest revenue
Interest expense
Segment results
Share of joint ventures and associates profit
Total tax (expense) / benefit
Profit from continuing operations
Segment assets
Segment liabilities
Net assets
Hotels and
Property
Logistics
Commercial and
Investments
(and eliminations)
Total
222,621
358,507
995
(14,422)
68,701
532
(18,310)
50,923
1,506
(3,644)
5,592
393
(2,994)
2,991
4,040
5,437
282
(13,009)
4,085
2,376
585,168
7,938
(17,784)
61,284
5,010
(18,928)
(6,548)
47,366
741,088
401,809
308,746
1,451,643
(259,406)
(282,185)
(7,262)
(548,853)
481,682
119,624
301,484
902,790
Total assets includes investment in joint ventures
and associates
Capital expenditure
Depreciation
19,542
25,190
44,756
11,373
66,220
34,552
10,671
1,637
2,960
41,586
93,047
82,268
These figures include non-controlling interests share of operating profits and assets.
Revenue from the hotels and property business mostly relates to the provision of services and is recognized over time. A minor
portion represents revenue from the sale of goods and is recognized at a point in time. Similarly, revenue from the logistics
business mostly relates to the provision of services and is recognised over time. Revenue from the commercial segment relates to
sale of goods and is recognized at a point in time.
(c) Geography
The Group operates almost wholly in Papua New Guinea. It is not practical to provide a segment analysis by geographical region
within Papua New Guinea. The Group has two insignificant business operations in the Solomon Islands and Isle of Man.
58 Steamships Annual Report 2020
NOTES TO THE FINANCIAL STATEMENTS
Steamships Trading Company Limited Year Ended 31 December 2020 (Amounts in Kina 000’s unless otherwise stated)
26. Contingent assets and liabilities
(a) Contingent Assets
During 2017 the Company received a salaries and wages tax default assessment of K15.2M, including penalties and interest, from the
Internal Revenue Commission of PNG (“IRC”) for the periods from 2006 to 2016. The Company recognised related expenses in the
2017 financial statements. During 2017, the Company paid the assessment, and lodged the appropriate objections as required by the
IRC. The company successfully pursued recovery of K12.6M during the year which is recognised in the statement of comprehensive
income as a salaries and wages tax recoverable.
(b) Contingent Liabilities
There were contingent liabilities at the Balance Sheet date as follows:
(a) The parent entity has given a secured guarantee in respect of the bank overdrafts and loans of certain subsidiaries.
(b) The parent entity has given letters of continuing financial support in respect of certain subsidiaries, associates and joint
ventures
No losses are anticipated in respect of these guarantees.
27. Commitments
(a) Capital commitments
Contracts outstanding for capital expenditure:
- less than 12 months
- 1-5 years
Consolidated
Parent Entity
2020
2019
2020
2019
6,079
-
6,079
8,883
-
8,883
-
-
-
-
-
-
28. Subsequent events
The Directors advise that a dividend of 80 toea per share will be paid immediately after the Annual General Meeting on 18th June
2021. Dividends payable to shareholders resident outside of Papua New Guinea will be converted to Australian Dollars at the
prevailing rate which the Company is able to secure.
Steamships Annual Report 2020 59
INDEPENDENT AUDITOR’S REPORT
to the Shareholders of Steamships Trading Company Limited
Report on the audit of the financial statements of the Company and the Group
Our opinion
We have audited the financial statements of Steamships Trading Company Limited (the Company), which comprise the
statements of financial position as at 31 December 2020, and the statements of comprehensive income, statements of changes
in equity and statements of cash flows for the year then ended, and the notes to the financial statements which include a
summary of significant accounting policies and other explanatory information for both the Company and the Group. The
Group comprises the Company and the entities it controlled at 31 December 2020 or from time to time during the financial
year.
In our opinion, the accompanying financial statements:
•
•
comply with International Financial Reporting Standards and other generally accepted accounting practice in Papua New
Guinea; and
give a true and fair view of the financial position of the Company and the Group as at 31 December 2020, and their
financial performance and cash flows for the year then ended.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those
standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report .
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We are independent of the Group in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics
for Professional Accountants (IESBA Code), and we have fulfilled our other ethical responsibilities in accordance with these
requirements .
Our firm carries out other services for the Group in the areas of taxation and other non-audit services. The provision of these
other services has not impaired our independence as auditor of the Company and the Group.
Our audit approach
An audit is designed to provide reasonable assurance about whether the financial statements are free from material
misstatement. Misstatements may arise due to fraud or error. They are considered material if individually or in aggregate, they
could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial
statements as a whole, taking into account the management structure of the Company and the Group, their accounting
processes and controls and the industries in which they operate.
PricewaterhouseCoopers, PwC Haus, Level 6, Harbour City, Konedobu, PO Box 484
Port Moresby, Papua New Guinea
T: +675 321 1500 / +675 305 3100, www.pwc.com/pg
60 Steamships Annual Report 2020
INDEPENDENT AUDITOR’S REPORT
to the Shareholders of Steamships Trading Company Limited
Materiality
Audit scope
Key audit matters
•
Amongst other relevant topics, we
communicated the following key
audit matters to the Audit and Risk
Committee:
- Non-current asset impairment
assessment
- Goodwill impairment
assessment
•
These matters are further described
in the Key audit matters section of
our report .
•
•
•
•
For the purpose of our audit of
the Group we used overall group
materiality of 5% of the Group’s
average annual profit before tax
for the three year period ended
31 December after adding back
certain non-recurring items .
We applied this threshold,
together with qualitative
considerations, to determine the
scope of our audit and the nature,
timing and extent of our audit
procedures and to evaluate the
effect of misstatements on the
financial statements as a whole.
We chose Group profit before
tax because, in our view, it is
the metric against which the
performance of the Group is most
commonly measured and is a
generally accepted benchmark.
We selected 5% based on our
professional judgement noting
that it is also within the range of
commonly acceptable related
thresholds .
•
•
•
•
We (PwC Papua New Guinea)
conducted audit work over the
Group’s significant operations
including the significant
subsidiaries included in the Group
consolidation sufficient to express
an opinion on the financial
statements as a whole .
All subsidiaries of the Group
are incorporated and operating
in Papua New Guinea with the
exception of one subsidiary which
has operations in the Solomon
Islands and two subsidiaries
incorporated in the Isle of Man .
All significant associates of the
Group are incorporated and
operating in Papua New Guinea
and audited by PwC Papua New
Guinea.
Our audit focused on where
the directors made subjective
judgements; for example,
significant accounting estimates
involving assumptions and
inherently uncertain future events.
Steamships Annual Report 2020 61
INDEPENDENT AUDITOR’S REPORT
to the Shareholders of Steamships Trading Company Limited
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
statements for the current period. The key audit matters were addressed in the context of our audit of the financial statements
as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters .
We have determined the matters described below to be key matters to be communicated in our report. Further, commentary
on the outcomes of the particular audit procedures is made in that context .
Key audit matter
How our audit addressed the key matter
Non-current asset impairment assessment -
Ships
(Refer to note 10 of the financial statements)
Included within property, plant and equipment are Ships
with an aggregate net book value of K103 .8 million as at
31 December 2020 .
The Group’s financial performance has been impacted by
a prolonged weakness in economic conditions in Papua
New Guinea. These conditions adversely impacted levels of
shipping throughout the country.
We considered this a key audit matter because economic
conditions are a potential indicator of impairment in the
value of the ships. The Group has assessed impairment
by reference to estimated sales values of the ships. The
impairment assessment is sensitive to changes in key
assumptions about the estimated sales values of the ships .
The sales values have been determined by reference to
external valuations by independent experts of the fleet
which contain assumptions about the global supply and
demand for specific ship types and dry docking schedules.
In applying the external valuations, the directors have used
their professional judgement to consider the impact of the
specific dry docking schedule of the individual ships.
As there was an indicator of potential impairment we
have considered and tested the Group’s assessment of the
estimated sales values of the ships .
We evaluated the competency, qualifications and
objectivity of the independent experts engaged by the
Group to provide the valuations of the ships.
We discussed the valuation methodologies and assumptions
with the independent experts. This included understanding
and evaluating the impact of the dry docking schedules on
the determined values .
We tested, on a sample basis, the accuracy, completeness
and relevance of the input data provided by the Group to
the experts .
We compared the valuations of the individual ships with
the valuations in the previous year. We also compared the
selling prices of ships sold during 2020 with the most recent
valuations for each respective ship .
We compared the Group’s assertions and estimates
regarding estimated useful lives and residual values with the
previous year.
We also considered whether the Group’s assessment of the
condition of the ships and their future operating plans were
consistent with historical experience and our knowledge of
the business .
62 Steamships Annual Report 2020
INDEPENDENT AUDITOR’S REPORT
to the Shareholders of Steamships Trading Company Limited
Goodwill impairment assessment
(Refer to note 12 of the financial statements)
The Group has goodwill totalling K76.4 million at 31
December 2020 . In accordance with the accounting
policy in note 1(n) of the financial statements, the Group
has assessed the goodwill balance for impairment at 31
December 2020 .
The prolonged weakness in economic conditions in a
number of the markets in which the Group operates in
Papua New Guinea has increased the risk that the carrying
values of the components of goodwill may be impaired.
We have considered and tested the financial models used
by the Group to determine the value of the cash generating
units. We compared the models with the previous year’s
models and found them to be consistently structured
and consistent with the basis of preparation required by
accounting standards .
We compared the forecast revenues and expenditures to
approved budgets and obtained an understanding and
evaluated the Group’s budgeting procedures upon which
forecasts are based. We also evaluated the reliability of
estimates made by comparing forecasts made in prior years
to actual outcomes .
The Group has calculated the value of the respective cash
generating units containing goodwill balances based on
financial models comprising cash flow projections. The
cash flow projections use a number of forward looking
assumptions, including revenue and cost growth, and the
value calculation is sensitive to these .
We benchmarked the assumptions used around revenue
and cost inflation with external forecasts, and the discount
rates with our expectation based on the overall Weighted
Average Cost of Capital (WACC) of the Group. Together
with our valuation expert we reviewed the methodology
used in determining the discount rate applied .
The value in use calculations incorporates judgements
regarding the impact of COVID 19 on forward looking
information .
We considered this a key audit matter because of the
significant judgements around future revenues and costs,
and the discount rate to be applied in determining the value
of the cash generating units .
We performed sensitivity analysis on assumptions to
ascertain the extent of change that would be required in
key assumptions for the respective goodwill balances to be
impaired . We determined that the calculations were more
sensitive to growth and inflation assumptions and discount
rates and focused our testing on these assumptions .
Information other than the financial statements and auditor’s report
The directors are responsible for the annual report which includes other information. Our opinion on the financial statements
does not cover the other information included in the annual report and we do not express any form of assurance conclusion
on the other information .
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in
the audit, or otherwise appears to be materially misstated. If, based on the work we have performed on the other information
that we obtained prior to the date of this auditor’s report, we conclude that there is a material misstatement of this other
information, we are required to report that fact . We have nothing to report in this regard .
Steamships Annual Report 2020 63
INDEPENDENT AUDITOR’S REPORT
to the Shareholders of Steamships Trading Company Limited
Responsibilities of the directors for the financial statements
The directors are responsible, on behalf of the company for the preparation of financial statements that give a true and fair view
in accordance with International Financial Reporting Standards and other generally accepted accounting practice in Papua
New Guinea and the Companies Act 1997 and for such internal control as the directors determine is necessary to enable the
preparation of financial statements that give a true and fair view and are free from material misstatement, whether due to fraud
or error .
In preparing the financial statements, the directors are responsible for assessing the ability of the Group to continue as a going
concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless
the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements, as a whole, are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion .
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the
ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of the financial statements.
As part of an audit in accordance with International Standards on Auditing, we exercise professional judgement and maintain
professional scepticism throughout the audit . We also:
•
•
•
•
•
•
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and
perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide
a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control .
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt
on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required
to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditor’s report. However future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether
the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
within the Group to express an opinion on the financial statements. We are responsible for the direction, supervision and
performance of the Group audit. We remain solely responsible for our audit opinion.
64 Steamships Annual Report 2020
INDEPENDENT AUDITOR’S REPORT
to the Shareholders of Steamships Trading Company Limited
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements
regarding independence, and communicate with them all relationships and other matters that may reasonably be thought to
bear on our independence, and where applicable, related safeguards .
From the matters communicated with those charged with governance, we determine those matters that were of most
significance in the audit of the financial statements for the current period and are therefore the key audit matters.
We describe these matters in our auditor’s report unless law or regulations preclude public disclosure about the matter or when,
in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on other legal and regulatory requirements
The Companies Act 1997 requires that in carrying out our audit we consider and report on the following matters. We confirm
in relation to our audit of the financial statements for the year ended 31 December 2020:
• We have obtained all the information and explanations that we have required;
•
In our opinion, proper accounting records have been kept by the Company as far as appears from an examination of those
records .
Who we report to
This report is made solely to the Company’s shareholders, as a body, in accordance with the Companies Act 1997. Our audit
work has been undertaken so that we might state to the Company’s shareholders those matters which we are required to state
to them in an auditor’s report and for no other purpose. We do not accept or assume responsibility to anyone other than the
Company and the Company’s shareholders, as a body, for our audit work, for this report or for the opinions we have formed.
PricewaterhouseCoopers
Jonathan Grasso
Partner
Registered under the Accountants Act 1996
Port Moresby
31 March 2021
Steamships Annual Report 2020 65
DIRECTORS’ REPORT
Steamships Trading Company Limited Year ended 31 December 2020
Steamships Trading Company Limited and Subsidiary Companies
The Directors submit their Annual Report for the year ended 31 December 2020 for the Company and its subsidiaries.
Principal Activities and Review of Operations
Full details of the Group’s activities are given in the Directors’ Review on page 10. The Group continues to operate in the
segments of Hotels and Property, Logistics and Commercial & Investments.
The Directors believe that there will be no significant changes in the Group’s activities for the foreseeable future.
Changes in Accounting Policies
There are no changes in Accounting Policies in the year.
Result
The Group operating profit for the year attributable to shareholders was K78,855,000 (2019: K49,995,000).
Dividend
The Directors advise that a dividend of 80 toea per share will be paid after the Annual General Meeting on 18th June 2021.
Dividends payable to shareholders resident outside of Papua New Guinea will be converted to Australian Dollars at the
prevailing rate which the Company is able to secure.
Rounding Off
Amounts in the Directors’ Report and accounts have been rounded off to the nearest thousand Kina .
66 Steamships Annual Report 2020
DIRECTORS’ REPORT
Steamships Trading Company Limited Year ended 31 December 2020
Experience & Interests Register
Directors serving at the date of this report have disclosed the following experience and interests in shares in the Company
and provided general disclosure of companies in which the Director is to be regarded as interested as set out below:
G.L. Cundle
Chairman since 2015
Managing Director 2013 to 2015
Member of the Remuneration Committee
Member of the Strategic Planning Committee Director since 2013
Mr Cundle joined the Swire Group in 1979 and has extensive corporate experience having worked with the Group in
various divisions in Hong Kong, Australia, Korea, Japan and Papua New Guinea. He was a Non-Executive Director of
Steamships in 2006-2007 and General Manager of Steamships Shipping from 1989-1992. He is a Director of John Swire
& Sons (PNG) Ltd. He was the Managing Director of Steamships Trading Company Limited from 1st January 2013 to 12th
January 2015. He is Chairman and Chief Executive Officer of John Swire and Sons (Australia) Pty Limited.
G. Aopi CBE
Director since 1997
Mr Aopi has achieved several tertiary degrees in Papua New Guinea, and a Masters of Business Administration from the
University of Queensland. Mr Aopi has substantial public service and business experience in PNG, including Secretary
of Finance and Planning and Managing Director of Telikom PNG Limited. He recently held the position of PNG Country
Chairman at Oil Search Limited and is currently President of Chamber of Mines and Petroleum. He was previously the
Chairman of Telikom PNG Limited and Independent Public Business Corporation (IPBC). Mr Aopi is a Director of Marsh
Limited and is involved in a number of other private sector and charitable organizations in Papua New Guinea.
R.P.N. Bray
Managing Director from 20th September 2020
Director since 2018
Appointed Chief Operating Officer on 27th August 2018, Mr Bray was previously Marine Services Director of Singapore
based Swire Pacific Offshore Pte Ltd. He was responsible for Swire Pacific Offshore’s subsea, renewables, logistics, seismic,
salvage and oil spill divisions. He was formally Chief Operating Officer of Swire Oilfield Services and held various senior
operational and commercial positions in Cathay Pacific Airways Ltd in his earlier career. He is a Director of John Swire &
Sons (PNG) Ltd and various Steamships Trading Company subsidiaries, joint ventures and associated companies. He sits
on a number of charitable advisory boards and chairs a number of PNG business groupings, including the PNG Property
Developers Association. He graduated with a Bachelor of Science from Bristol University (UK) and holds a Master of Marine
Sciences from Nanyang Technical University (Singapore).
Steamships Annual Report 2020 67
DIRECTORS’ REPORT
Steamships Trading Company Limited Year ended 31 December 2020
L.M. Bromley
Director since 2019
Ms Bromley has been a Senior Executive of the Bromley Group of Companies for over 12 years.
She is currently a Director of the Bromley Group’s various commerical operating Companies some of which include Heli
Niugini Ltd, Maps Tuna Ltd, Hoia Investments Ltd and Western Drilling Ltd in Papua New Guinea, PT Sayap Garuda Indah
and PT Air Bali in Indonesia, Allway Logistics Limited and Merit Logistic Services Limited in Hong Kong and Aerolfit
(Singapore) Pte Ltd in Singapore and is responsbile for the aviation operation, logistic support and group investment
functions .
She is the Managing Director of Merit Finance Limited which serves as the Bromley Group’s treasury arm. Louise also
consults on the Bromley Group’s property development and property management Companies through advisory roles in
Papua New Guinea, Australia and Russia.
She is a Director of Viva No 31 Ltd, a Steamships Trading Company joint venture Company, and has previously held
positions on the Divisional Boards of East West Transport and Steamships shipping.
She graduated from Bond University in Australia and holds a Bachelor of Commerce and a Bachelor of Laws.
Sir M.R. Bromley KBE
Member of the Audit Committee
Member of the Remuneration Committee
Member of the Strategic Planning Committee Director, 1986 to 1996 Director since 2000
Sir Michael Bromley has extensive international business experience from over 40 years of operating and advising
companies in countries including Singapore, Indonesia, Australia, Russia, China and Papua New Guinea, principally in retail
and logistics operations. He is Chairman of Heli Niugini Ltd and a Director of Baht Fung Limited, Allway Logistics Limited,
Pegasus Print Group Pty Ltd, Fasteners & More Pty Ltd, Sonway Asia Ltd, Chemica Ltd, Sig No.1 Ltd, Glock No. 1 Ltd, Maps
Tuna Ltd, Sek No. 35 Ltd, Hoia Investment Ltd, Venture Ltd and Viva No. 31 Limited. Relevant Interest in Steamships shares:
19.99%.
D.H. Cox OL, OBE
Managing Director 2004 to 2012
Member of the Audit Committee
Member of the Strategic Planning Committee
Director since 2003
Mr Cox joined Steamships as a Manager in 1992, rising to become Managing Director from 2004-2012 . He has extensive
experience in the Asia-Pacific business environment. He is also a Director of Charles Parsons (Holdings) Pty Ltd, and holds a
MBA in International Hospitality and BSc (Hons) in Accounting & Business Management.
G.J. Dunlop
Chairman of the Audit Committee
Member of the Strategic Planning Committee
Managing Director 2000 to 2003
Director since 1995
Mr Dunlop is a chartered accountant with extensive experience in the Pacific region. He is a Director of City Pharmacy
Group Ltd and Croesus Re PCC Limited.
68 Steamships Annual Report 2020
DIRECTORS’ REPORT
Steamships Trading Company Limited Year ended 31 December 2020
Lady W.T. Kamit CBE
Member of the Audit Committee
Director since 2005
Lady Winifred Kamit is a former Senior Partner, and currently a consultant at Dentons (formerly Gadens Lawyers) in Port
Moresby. Lady Kamit is a Director of Bunowen Services Ltd, Kamchild Limited, Dentons Administration Services Ltd, Post
Courier Limited and its subsidiaries, Brian Bell Group and Chairman of ANZ Banking Group (PNG) Ltd.
Lady Kamit also serves on a number of non-government and charitable organisations, including Anglicare PNG Inc and as
Patron of the Business Coalition for Women Inc .
J.B. Rae-Smith
Director since 2019
Mr Rae-Smith joined the Board of United States Cold Storage, Inc in June 2008 and has been its Chairman since January
2017 .
He joined the Swire Group in 1985 and has worked with the Group in Australia, Papua New Guinea, Japan, Taiwan, Hong
Kong, the United States, Singapore and the United Kingdom.
He was a Director of Swire Pacific Limited, a company listed in Hong Kong, from January 2013 to August 2016 and was
the Executive Director of the Marine Services Division from 2005 to 2016, the Trading & Industrial Division between 2008
and 2016 and Chairman of the Swire Group Charitable Trust. He has led or has been involved with many Swire Group
businesses over the years and was most recently the Chief Executive Officer of Swire Oilfield Services. He also a Director
and Chairman of the Audit Committee of The China Navigation Co Ltd Pte and Swire Bulk Ltd Pte and a Director of
Steamships Trading Co. Ltd. He is also a member of the Supervisory Board of the UK Chamber of Shipping.
In addition, he has also been a Director of the Standard P&I Club, Deputy Chairman of the Hong Kong Ship Owners
Association, Chairman of the Lloyds Asian Ship Owners Committee, and a Director of the Singapore Environmental Council.
M.R. Scantlebury
Managing Director 2018 to 20th September 2020
Finance Director & Company Secretary since June 2016
Mr Scantlebury is a chartered accountant and was previously Director of the Office for Financial Planning at Swire Pacific
Ltd in Hong Kong and he has held various senior finance and commercial positions in the Swire group in his career. He
is a Director of John Swire & Sons (PNG) Ltd and various Steamships Trading Company subsidiaries, joint ventures and
associated companies .
J.H. Woodrow
Director since 2015
Mr Woodrow is Managing Director of the China Navigation Company Pte Ltd (Swire Shipping). He was formerly Director
Cargo for Cathay Pacific (2013-2015) and General Manager Cargo Sales & Marketing for Cathay Pacific (2010-2013). He
joined John Swire and Sons Ltd in September 1990 and spent 15 years in the sea freight industries in Japan and Australia.
He was also a Director of various companies across Asia including Air Hong Kong Ltd, Air China Cargo Ltd, Cathay Pacific
China Cargo Holdings Ltd, Cathay Pacific Services Limited.
Steamships Annual Report 2020 69
DIRECTORS’ REPORT
Steamships Trading Company Limited Year ended 31 December 2020
Remuneration of Directors
Directors remuneration received or receivable from the Company as directors during the year, is as follows:
G.L Cundle (Chairman)
G. Aopi
Lady W.T. Kamit
Sir M.R. Bromley
D.H Cox
G.J. Dunlop
J.H Woodrow
J.B Rae Smith
L.M. Bromley
2020
K’000
218
121
169
217
217
241
121
185
121
1,610
2019
K’000
218
121
170
218
218
243
121
61
61
1,431
The directors fees vary in accordance with the required duties on various sub-committees of the board.
* Executive Directors receive no fees for their service as Directors during the year.
Remuneration of Employees
The number of employees whose remuneration and other benefits was within the specified bands are as follows:
Remuneration
K’000
2020
No.
2019
No.
Remuneration
K’000
2020
No.
2019
No.
Remuneration
K’000
2020
No.
2019
No.
100-110
110-120
120-130
130-140
140-150
150-160
160-170
170-180
180-190
190-200
200-210
210-220
220-230
230-240
240-250
260-270
270-280
280-290
290-300
300-310
330-340
4
7
7
14
6
5
4
1
2
1
3
1
-
4
5
1
3
2
2
-
2
5
4
7
3
7
2
2
1
3
-
3
-
2
-
1
-
3
1
2
1
2
350-360
360-370
380-390
390-400
420-430
430-440
460-470
470-480
480-490
500-510
520-530
530-540
540-550
550-560
560-570
570-580
620-630
630-640
640-650
650-660
660-670
1
-
-
2
-
-
1
-
3
1
-
1
2
-
1
-
1
-
-
3
1
5
1
1
-
1
1
1
1
-
1
2
1
-
1
-
1
1
1
1
1
1
680-690
710-720
720-730
730-740
770-780
790-800
800-810
810-820
820-830
830-840
840-850
850-860
890-900
910-1000
1,000-1,010
1,300-1,400
1,800-1,900
2,000-2,800
3,000-3,200
-
1
1
-
1
-
-
2
1
-
1
1
-
2
1
-
-
1
1
1
-
1
1
2
1
1
-
-
1
-
-
1
1
1
1
1
1
1
For and on behalf of the Board:
Port Moresby
31 March 2021
G.L. Cundle
Chairman
R.P.N. Bray
Managing Director
70 Steamships Annual Report 2020
STOCK EXCHANGE INFORMATION
Steamships Trading Company Limited Year ended 31 December 2020
Shares are listed on the Australian Securities Exchange and the Port Moresby Stock Exchange.
All shares carry equal voting rights.
Shareholdings
At 28 February 2021, there were 361 shareholders.
262 Holding
Holding
69
Holding
16
Holding
14
1
1,001
5,001
10,001
-
-
-
-
1,000 units
5,000 units
10,000 units
and over
The number of shareholders holding less than a marketable parcel was 20.
The 20 largest shareholders were:
Number of shares
JS&S (PNG) LIMITED
BERNE NO 132 NOMINEES PTY LTD
NATIONAL SUPERANNUATION FUND LIMITED
BERNE NO 132 NOMINEES PTY LTD
JOHN E GILL OPERATIONS PTY LIMITED
HYLEC INVESTMENTS PTY LIMITED
KELVINSIDE PROPRIETARY LIMITED
BOND STREET CUSTODIANS LIMITED
MR RAMESH MAHTANI
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
CITICORP NOMINEES PTY LIMITED
INTERCONTINENTAL ASSETS PTY LIMITED
BNP PARIBAS NOMINEES PTY LTD
MRS LUCY ANN KING
MS JENNIFER MAY FORBES
CUSTODIAL SERVICES LIMITED
MRS JUDITH SCOTTHOLLAND
MRS MARY PATRICIA HAUGHTON
MRS ROBYN ANNE GOSTELOW
BNP PARIBAS NOMINEES PTY LTD HUB24 CUSTODIAL SERV LTD
22,362,651
5,760,000
1,859,446
446,494
54,727
32,500
25,000
23,067
21,700
21,382
17,507
15,000
10,970
10,348
10,000
8,768
8,161
8,161
7,393
6,850
30,710,125
%
72.12
18.58
6.00
1.44
0.18
0.10
0.08
0.07
0.07
0.07
0.06
0.05
0.04
0.03
0.03
0.03
0.03
0.03
0.02
0.02
99.04
Applicable Legislation
The Company is incorporated in Papua New Guinea and is not generally subject to Australian Corporations Law including,
in particular, Chapter 6 of the Australian Corporations Law dealing with the acquisition of shares (including substantial
shareholdings and takeovers). The Company is subject to the requirements of the Papua New Guinea Companies Act 1997,
Securities Act 1997 and the Takeovers Code. The Companies Act and the Securities Act regulate the issue and buy-back of
shares and contain provisions as to the trading in securities, provisions as to financial benefits to related parties, substantial
shareholders provisions, remedies in cases of oppression or injustice and actions by, and access to, records by shareholders.
The Takeovers Code regulates offers where a person already holds more than 20% of the voting rights in a company or
where a person becomes the holder of more than 20% of the voting rights in a manner permitted by the Code.
A code offer, which can either be a full offer or a partial offer, must be extended to all holders of voting securities in the
Company. The Code also contains compulsory purchase and sale provisions if more than 90% of the shares are acquired
under an offer .
Steamships Annual Report 2020 71
72 Steamships Annual Report 2019
Steamships Annual Report
COMPANY DIRECTORY
CHAIRMAN
G. L. Cundle §&
MANAGING DIRECTOR
R.P.N. Bray
FINANCE DIRECTOR
M. R. Scantlebury
NON-EXECUTIVE DIRECTORS
G. Aopi CBE
L.M. Bromley
Sir M.R. Bromley KBE §+&
D. Cox OL, OBE +&
G.J. Dunlop +&
Lady W.T. Kamit, CBE +
J .B . Rae Smith
J . H Woodrow
+ Member of the Audit and Risk Committee
§ Member of the Remuneration Committee
& Member of the Strategic Planning Committee
SECRETARY
M.R. Scantlebury
REGISTERED OFFICE
Level 5, Harbourside West, Stanley Esplanade
Telephone: +675 313 7400 / 79987000
P .O . Box 1
Port Moresby, NCD
Papua New Guinea
AUDITORS
PricewaterhouseCoopers
P .O . Box 484
Port Moresby, NCD
Papua New Guinea
SHARE REGISTRARS
Computershare Investor Services Pty Limited
GPO Box 2975
Melbourne VIC 3001
AUSTRALIA
Telephone: (Aus) 1300 85 05 05
(Overseas)
Fax:
+61 (0)3 9415 4000
+61 3 9473 2500
STOCK EXCHANGE
Shares are listed on both the Port Moresby Stock Exchange
Limited and the Australian Securities Exchange Limited .
A. R. B. N.
055 836 952
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Level 5 Harbourside West | Stanley Esplanade |
P.O. Box 1 | Port Moresby | NCD 121 | Papua New Guinea
P: +675 313 7400 / 79987000
steamships.com.pg