ANNUAL REPORT 2012

Report of the Directors

The Directors present their report and accounts for the year ended 31 December 2012.

Principal activities

The Business Overview describes the principal activities, operations, performance and financial position of the Group. The results of the Group are set out in detail in the Financial Statements on pages 49 to 54 and in the accompanying notes. The principal subsidiaries, joint ventures and associates are listed in the Notes to Consolidated Financial Statements on pages 103 and 104.

Principal changes in the Group

On 25 January 2012, the Company sold all of its 34% shareholding in Tilbury Container Services Limited to a subsidiary of Otter Ports Holdings Ltd, owner of Forth Ports Limited.

On 4 July 2012, DP World Australia Limited, in which the Company has a 25% shareholding, sold all of its 60% shareholding in Adelaide Container Terminal Pty Ltd to Flinders Ports Adelaide Container Terminal Pty Ltd for A$134 million (approx $138 million).

On 20 September 2012, DP World Yemen LLC, in which the Company has a 66.6% indirect shareholding, divested its 50% shareholding in Dubai and Aden Port Development Company to its joint venture partner Yemen Gulf of Aden Ports Corporation. The value of the net assets divested by DP World Limited was $27 million.

On 20 September 2012, the Company announced the divestment of all of its 60% shareholding in DP World Breakbulk NV and A Projects NV to Oriental. The transaction completed on 30 December 2012 for a consideration to the Company of $23 million.

On 22 October 2012, the Company divested its 25% shareholding in Vostochnaya Stevedoring Company (Russia) for a total consideration of $230 million. The purchaser was the existing 75% majority shareholder, Global Ports Investments PLC.

On 1 November 2012, the Company announced the receipt of the Letter of Award from Jawaharlal Nehru Port Trust, Government of India, to build and operate a single berth facility of 330m quay length alongside its existing terminal operation at Nhava Sheva, Mumbai. DP World will be investing approximately $200 million to build the new facility which is expected to be operational in 2015.

Directors

During the year, Deepak Parekh was appointed as a member of the Nominations and Governance Committee.

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

Biographical details of the current Directors of the Company are given here together with details of Board Committee memberships.

Details of the Directors’ remuneration and their interests in shares are given in the Corporate Governance Section of this Report.

Financial instruments

Details regarding the use of financial instruments and financial risk management are included in the Notes to Consolidated Financial Statements.

Results

The Group’s Consolidated Financial Statements for the year ended 31 December 2012 are shown on pages 49 to 54.

Dividends

The Directors recommend a final dividend in respect of the year ended 31 December 2012 of 24 US cents per share. This comprises of an increase of 10% in the ordinary dividend to 21 US cents per share, supplemented by a special dividend of 3 US cents per share. Subject to approval by shareholders, the final dividend will be paid on 30 April 2013 to shareholders on the Register at close of business on 2 April 2013.

Post-balance sheet events

These events are disclosed in the Notes to Consolidated Financial Statements on page 104.

Employees

DP World is a global team in excess of 28,000 people which continues to be as diverse as the communities and countries in which it operates. DP World adheres to local labour regulations and statutes, yet emphasises that it is one company seeking common goals. To reinforce this, common approaches are implemented, where possible, for reward, performance management and succession planning. These frameworks are used to facilitate the delivery of business objectives and DP World’s values. For example, where appropriate at a local level, at least one of the objectives that earns bonus must be linked to a safety measure. DP World’s performance management process is applied in a way that cascades the annual corporate business goals throughout the organisation.

DP World’s strategy for learning and development is delivered through the DP World Institute, with a focus on blended learning which suits a global company and enables employees to learn via eLearning as well as traditional methods. The emphasis is on developing people to excel in their current role, while identifying opportunities for future roles via succession planning.

More information is included here in the Our People section.

Corporate responsibility

The corporate responsibility (“CR”) section is found here. This section focuses on DP World’s CR strategy, integrating responsible business practices into process and procedures across the Group.

Substantial shareholdings

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

 

Class

Shares

Percentage
of class

Port and Free Zone World FZE

Ordinary

667,735,000

80.45%

Going concern

The Directors, having made enquiries, consider that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future and therefore they consider it appropriate to adopt the going concern basis in preparing the accounts. Further details can be found under Note 2(c) to the consolidated financial statements.

Audit information

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

Creditor payment policy

The policy is to pay suppliers in accordance with terms and conditions agreed when the orders are placed. The international nature of the Group means that the Group adopts policies applicable to the jurisdictions of its operations.

Articles of Association

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

Indemnity

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

Authority to purchase shares

At the Company’s Annual General Meeting (“AGM”) on 30 April 2012, the Company was authorised to make market purchases of up to 29,050,000 ordinary shares (representing approximately 3.5% of the Company’s issued share capital). No such purchases were made during 2012. Shareholders will be asked to approve the renewal of a similar authority at the Company’s AGM to be held on 25 April 2013.

Auditors

The auditors, KPMG LLP, have indicated their willingness to continue in office. A resolution to re-appoint them as auditors will be proposed at the AGM to be held on 25 April 2013.

Share capital

As at 31 December 2012, the Company’s issued share capital was US$1,660,000,000 comprising 830,000,000 ordinary shares of US$2.00 each.

Annual General Meeting

The Company’s AGM will be held on 25 April 2013 at The Wheelhouse, Jebel Ali Port, Dubai, United Arab Emirates. Full details are set out in the Notice of AGM.

By order of the Board

B Allinson

Board Legal Adviser and Company Secretary

26 March 2013