i

MARINE ENVIRONMENT PROTECTION AUTHORITY

ANNUAL REPORT 2010

ii

Vision

“A pollution free marine environment around Sri Lanka for the sustainable national

development and the well being of its people and the economy”

Mission

“Be an agency with required skills, competence, organizational structure and infrastructure

framework to prevent, control and manage marine pollution in Sri Lankan waters through

effective enforcement of regulations, implementation of concerned International

conventions, coordination and mobilization of stakeholder and other resources, for

sustainable management of marine environment for present and future generations.”

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Corporate Information

Board of Directors

Chairman Mr. M A R Kularatne(Resigned w. e .f. 01.07.2010)

Mr.R.S Ariypperuma(Appointed w. e .f. 09.07.2010)

Directors

Mr. W M V Narampanawa - (Representative -Secretary to the Ministry of Environment)

Commodore N. Roziro - (Representative- Commander of Sri Lanka Navy)

Mrs S.N Mayadunne Bandara - (Representative - Secretary to the Ministry of External Affairs)

Mr. S.D.J.N Nilukkshan - (Representative - Secretary to the Ministry of Finance & Planning)

Mr. S Bandara - (Representative - Secretary Ministry of Fisheries & A.R.D)

Mr. A W H S R Weerakoon - (Director General Merchant shipping)

Rear Adm. S R Samaratunge - (General Manager –MEPA)

Auditors

The Auditor General

Registered Office

Marine Environment Protection Authority 758,2nd Floor, Baseline Road, Colombo 09.

TP: 2687520 /2690604/2690605 Fax: 2687451/4615960

E-Mail:info@mppa.gov.lk Web:mppa.gov.lk

Bankers Bank of Ceylon

Peoples Bank

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Senior Management Staff

Chairman

Mr. M A R Kularatne(Resigned w. e .f. 01.07.2010)

Mr.R.S Ariypperuma(Appointed w. e .f. 09.07.2010)

General Manager

Rear Adm. S R Samaratunga RSP, VSV, USP

Legal Officer

Ms. A Kariyawasam (LLB, M Sc.)

Accountant

Mr. D R C Jayawaradana (B. Com. SP/ LICA)

Assistant Manager (Operation)

Mr. A J M Gunasekara (B Sc., M Sc. )

Assistant Manager (Province)

Mrs. T S Ranasinghe (B Sc.)

Mrs.Ranuka Ranweera(B Sc.)

Administrative Officer

Ms.G P Nilanjani (BA.Sp)

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Marine Environment Protection Authority Contact Details

Head Office

Marine Environment Protection Authority 758,2nd Floor, Baseline Road, Colombo 09.

TP: 2687520 /2690604/2690605 Fax: 2687451/4615960

E-Mail:info@mppa.gov.lk

Web: mppa.gov.lk

Southern Provincial Office &Regional Office- Galle District Marine Environment Protection Authority 04, Closenburg Road, Magalle. Galle TP: 091-2233547/0718-214184 Fax: 091-2233547 Regional office -Hambanthota District Marine Environment Protection Authority 1/2, Sinhagiri, Beddawala Road. Hambanthota. Tp: 047-2222372/0718181430 Fax: 047-2222372 Regional office -Putllam District Marine Environment Protection Authority No. 23, Ebert Silva Watta, Colombo Rd. Chilaw. TP:032-2222865/071-3351000 Fax: 032-2222865

Regional office- Matara District Marine Environment Protection Authority No.18 Wilmot Balasuriya Mw, Nupe, Matara. Tp: 041-2234250/ 0718-100817 Fax: 041-2234250 Regional office -Kaluthara District Marine Environment Protection Authority No 187, Colombo Rd, Beruwala. TP: 034-2298407/0718-576401 Fax: 034-2298407 Regional office -Gampaha District Marine Environment Protection Authority No. 704/9A, 2nd Kurana, Colombo Rd, Negombo. Tp: 031-2228606/718-100821 Fax: 031-2228606

Chairman's Message Marine Pollution Prevention Act No 59 of 1981 was repealed and a new act of Parliament was enacted in August 2008. It is titled as Marine Pollution Prevention Act; No 35 of 2008 and came into operation on 01.01.2009 by order published in the Gazette by the Minister in Charge. That was a land mark in the history of Marine Environment Protection Authority [MEPA] making the year 2009 unique. Marine Pollution Prevention Act; No 35 of 2008 which came into operation on 01.01.2009 expose lot of areas under the authority of MEPA to protect marine environment. According to the act the authority finalized drafting of 18 regulations which are more important legal provision for the protecting of marine environment. The authority started the project with Sri Jayawardana Pura University to measure the Ballast water impact on Colombo port during the year. This was an initial step to implement the Ballas water convention. Sri Lanka experienced for the first time, a chemical spill when MT GRANBA, a Turkish chemical tanker sank with 6,250 metric tons of concentrated sulphuric acid in April 2009 in the eastern waters of Sri Lanka. Though it was handled reasonably within the new legal framework, which was an eye opener reminding us the absolute need for emergency preparedness, which Sri Lanka is seriously falling behind. This was an offence punishable under Section 26 of Marine Pollution Prevention Act No.35 of 2008. As per Section 50 of the Act, Attorney General, (instructed by the Legal Division/MEPA) appeared for MEPA and the judgment was delivered in May, 2010 ordering the Accused to pay a fine of LKR10 M under section 26 of the Act. Further a sum of $ 50,000 (LKR 5.6 M) was received by MEPA from the Accused in Civil Liability (Section 34 of the Act) as an out of Court settlement. This was a major achievement in the year 2010. As for the performance, achievements are 99% as against the funds provided. MEPA is proud of the performance of the year under review. It is proud that the authority income is rapidly increased during the year in compared with last few years. We are planning to continue this trend in the year to come.

Mr.R.S Ariypperuma

Chairman

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Content Page No.

1. Background

1.1 Background and Scope of the MEPA 1

1.2 Functions, Powers and Duties in Act No 35 of 2008. 1 - 2

2. Review of Operations 3 - 10

3. Duties and Responsibilities Finance, Administration & Legal Divisions

3.1 Administration Division 11 - 13

3.2 Legal division 14

3.3 Finance Division 14 - 17

4. Final Statements of the Authority 4.1 Accounting Policies 18 - 19

4.2 Balance Sheet as at 31.12.2010 20

4.3 Income & Expenditure for the year ended 31.12.2010 21

4.4 Changes in Equity Statement for the year 2010 22

4.5 Cash Flow Statement for the year 2010 23

4.6 Notes to the Financial Statements 2010 24 - 28

5. Independent Auditor’s Report 29 - 36

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1. BACKGROUND

1.1 INTRODUCTION Strategic location of Sri Lanka in the Indian Ocean close to the east west shipping route and

the increased shipping activity projected within next decade has given vision to enhance capacity in

Sri Lankan commercial ports at Colombo, Hambantota, and Trincomalee. In the light of these

developments Sri Lanka faces a greater risk of marine pollution due to Oil/Chemical Spill or due to

dumping of Ship generated waste. Therefore it is imperative to enhance awareness, preparedness

and capacity to counter possible threat paused to marine environment.

Marine Pollution Prevention Authority was established under the Marine Pollution

Prevention Act No. 59 of 1981. With a view to strengthen the legal authority vested with this

authority to deal with marine pollution incidents and to implement international conventions

relating to marine pollution prevention as applicable to GOSL, in order to strong then the legislative

authority, the act was repealed and Marine Pollution Prevention act No. 35 of 2008 was enacted and

came into operation with effect from 01st January 2009. Accordingly the Authority was re-named as

Marine Environment Protection Authority.

1.2 The Responsibilities and functions of the Authority

(a) To effectively and efficiently administer and implement the provisions of Marine

Environment protection act and the regulations made there under

(b) To formulate and execute a scheme of work for the prevention, reduction, control and

management of pollution arising out of ship based activity and shore based maritime related

activity in the territorial waters of Sri Lanka or any other maritime zone declared at a future

date under such law, its fore shore and the coastal zone of Sri Lanka.

(c) To conduct research in collaboration with other departments, agencies and institutions for

both the government and private sector for the purpose of prevention, reduction, control

and management of pollution arising out of any ship based activity or any other maritime

zone declared at a future date under such law, its fore share and the coastal zone of Sri

Lanka.

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(d) To take measures to manage safeguard and preserve the territorial water of Sri Lanka or any

other maritime zone declared at a future date under such law, its fore share and the coastal

zone of Sri Lanka

(e) To provide adequate and effective reception facilities for oil, harmful substances or any

other pollutant

(f) To recommend adherence to all international conventions and relevant protocols dealing

with marine pollution which the government of Sri Lanka has or may ratify, accept, accede

to or approve.

(g) To formulate and implement the national oil pollution contingency plan

(h) To oversee, regulate and supervise the conduct of the contractors and persons conducting

or engaged in exploration of natural resources, service , sub contractors and person

conducting or engaged in exploration of natural resources including petroleum or related

activities

(i) To create awareness amongst groups of community of the need to preserve the marine

environment.

(j) To do all such other acts or things as may be necessary for the discharge of all or any of the

above functions.

(k) To effectively safeguard and preserve the territorial waters of Sri Lanka or any other

maritime zone declared under the Maritime Zones Law or which may be declared at a

future date under such law from any pollution arising out of any ship based or shore based

maritime related activity.

(l) To conduct investigations and inquiries and to institute legal action in relation to any

pollution, arising out of any ship based activity or shore based maritime related activity,

(m) To oversee all sea transport of oil and bunkering operations that are carried out in the

territorial waters of Sri Lanka or any other maritime zone declared under the maritime zones

law or which may be declared at a future date under such law, for the purpose of prevention

of pollution.

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2 .Review of Operations

The Marine Environment Protection Authority is responsible for implementing provision which are

laid down in the Marine Pollution Prevention Act No 35 of 2008.Accordingly following pollution

prevention incentives and pollution control activities performed to reduce, control and manage

marine pollution due to land based, Ship based and sea based activity.

The technical division of Marine Environment Protection authority is responsible for the planning

and operation of all technical activities including formulation of policies to reduce, control and

manage marine pollution due to land based, Ship based and sea based activity and issuing relevant

permits for those who comply with relevant legal and technical requirements.

Project No 01 - National Oil Spill Contingency Plan (NOSCOP)

1.1 A three day workshop was held for the purpose of creating awareness on National Oil

Spill Contingency Plan for the benefit of the first respondents. At this workshop the

knowledge of the participants was enhanced on National Oil spill Contingency Plan

(NOSCOP), The responsibility of each institution in relation to the NOSCOP plan, the

nature of oil spills and the type of response expected from the Agency with regard to

the availability of equipment and the usage of equipment available at SLPA was

demonstrated, equipment used for this purpose and the ways of handling some of the

equipment available at present with Sri Lanka Ports Authority. (December 2010 at

Foundation Institute)

1.2 21 programs were held on District basis with the participation one of Divisional Secretariats,

Grama Niladaris and officers of non-governmental organizations in the coastal zone from

Hambantota to Puttlam, in order to create an awareness on the implementation of the

National Oil Spill Contingency Plan and the to identify the resources available for

mobilization, The total participation exceeded 1300. This awareness programs included

lectures and practical training etc…..

1.3 Four sets of equipment used to identify harmful gases in responding to accidents involving

vessels carrying chemical substance were purchased. (November 2010)

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Project No 02 - International Conventions and Draft Regulations

2.1 10 out of 18 regulations have been drafted under section 51(2) of the Marine Pollution

Prevention Act No. 35 of 2008.

2.2 Final drafts of regulations pertaining to Bunkering and Oil Spill Contingency Plan have been forwarded to legal draftsman and with his concurrence these regulation will be published in the gazette

Project No 03 - School Marine Groups Related activities ( Haritha Lanka Progremme)

3.1 Awareness programme & Field excursions

The intention of forming the school marine group is to convey the importance of marine

environment and the need to conserve marine eco systems to the community through school

children. The awareness programmes have helped in achieving this objective. Under this

program the number of School Active Marine Groups was increased to 300 by the end of

2010. During the period year 2010 awareness programmes and field excursions have been

organized for the benefit of School Marine Groups and Over 5000 school children

participated.

Pmbala Mangrove Conservation center -Field excursions (Puttalum District)

3.2 Marine Information Centers

During the year 2010, 70 Information Centers were established, based on 10 schools selected

from each of the seven districts from Hambantota to Puttlam. Maps, Magazines and Posters

were given to Marine Information Centers. Information Centers were established for the

purpose of creating awareness on importance of marine environment and the need to

conserve marine eco systems.

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(SMG members visiting information center)

Project No 04 - Awareness Program

The national ceremony for the commemoration of World Ocean Day on the 08 June 2010

was held on Auditorium of Central Environment Authority with the participation of Hon

Deputy Minister of Environment, as the chief guest. During this ceremony, the heads of

institutions associated with marine environment, government officials and about 200 school

children participated. In these programs the audience was made aware of the ways in which

the Marine environment is being polluted and the nature of ocean related accidents.

Project No - 05 Development of Mini Laboratory

The need for qualitative assessment of sea water was felt in connection with the marine

environment protection programms. A Mini lab was established for this purpose in 2009,

this lab was further improved and necessary equipment for same was purchased.

Project No 06 - “Sonduru Sauara” Programme

6.1 International Coastal Clean-up Day

In commemoration of the International Coastal Clean-up Day, 18 programs on cleaning the

coastal area and data collection were conducted at district level. The National program was

held at Mt. Lavinia Beach with the participation of the Additional Secretary of Environment,

as the Chief Guest

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District Location

Puttalam – 04

Kandakuliya, Chillaw Coastal Garden, Ranveli

Hotel , Dolpin Hotel beach area

Gampaha - 02 Negambo beach, Wattala Preethipura

Colombo – 01 Mt Lavania beach

Kalutara - 02 Moragolla beach, Panadura

Galle - 03 Boossa, Deveta, Habaraduwa

Matara - 02 Pelana, Nilwella

Hambantota - 02 Tengalle, Rekawa

Ampara - 01 Arugambay beach

Trincomalee - 01 Pallethottam

Galle District ICC Programme at Deveta Beach (Chief gust Honorable Chief Minister Southern

Province)

6.2 Research activities conducted in collaboration with Sri Jayawardanapura University on the

dispersal of alien invasive organisms through ballast water released by vessels calling at

commercial harbors in Sri Lanka is being continued.

6.3 In order to prevent the improper disposal of waste in to the sea and the coastal line, 80

billboards were fixed covering the coastal belt frequented by tourists and fisheries

communities in the Eastern, Southern, Western and the North Western Provinces.

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( Opening Chilaw Beach Boards )

6.4 National Tree Planting Progame 2010

Under this program, 17,000 plants comprising of mangrove and other species were planted

in locations identified as suitable by the Pradeshiya Sabas in Puttlam, Gampaha, Kalutara,

Galle, Matara and Hambantota districts. The selected plants included Watakkeiya,

Kottamba, Mudilla, Kumbuk, Mango, Weralu, Naran, Teak, Avacados, Mahakadol and

Beriya. MEPA directly involoved in planting of 10,000 Mangrove plants in Ammathottam

area bordering Puttlam lagoon, 1000 Beriya plants in Anawasala, 1000 Mangrove plants in

Koggala and 2690 plants which included all above varieties in Hambantota district.

(Mangrove planting programme in Ammathottam Area - Puttlam District)

Opening Galle Beach Boards by the Chief guest

Honorable Chief Minister Southern Province)

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6.5 “Uthuru Vasanthaya” Program

1500 liter capacity Tanks with oil carts were established to store or transport used engine

oil generated by fishing vessels in order to prevent Marine pollution and also to enable

the use of this oil for productive purpose. Notice boards were installed with messages in

Sinhala and Tamil prohibiting improper disposal of used engine oil, solid waste and

waste water generated by fisheries harbors and fishing vessels.

“Uthuru Vasanthaya” Programe The districts / Divisional Secretariats

where project is implemented

Providing oil tanks with 1500 liter capacity and oil carts for

the reception of used engine oil generated by fishing vessels

Jaffna – Gurunagar, Pt. Pedro,

Velvetithurai, Mannar - Pesale

Installation of notice boards with messages on protection of

marine environment at fisheries harbors and terminals of

fishing vessels

Jaffna – Gurunagar, Pt. Pedro,

Velvetithurai, Mannar - Pesale

Project No 07 - Water Quality Monitoring Programme

Investigations were carried out to check the quality of sea water on the Beruwala – Moragalla coastal

belt for suitability for bathing. For this purpose water samples from 08 locations in a 01 km stretch

in the Moragalla beach were tested. These tests have shown that, the maximum permissible level of

fecal coliform bacteria in water is exceeded very rapidly. The cause for this could be the improper

release of waste water/sewage with human excreta in an illegal manner from land based sources

directly or through the Benthota River

Providing oil tanks with 1500 liter capacity

Mannar - Pesale Fishery Habour Providing oil tanks with 1500 liter capacity

to Jaffna – Gurunagar Fishery Habour

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Project No 08 – Promotional and

Program

Project No 08 – Promotional

Project No 08- Promotional and Communication Program

8.1 “Samudura Puwath” Quarterly journals

The third and fourth released of “Samudura Puwath ” a quarterly journal published for the

enhancement of knowledge on marine environment among the school children and

members of the community were published in 2010. The journal publisher reviews of

national and international issues pertaining to marine environment.

8.2 “Sath Samudura” Magazine Special Issue

A special edition of “Sath Samudura” vol. 2- 2010 was issued in connection with the World

Ocean Day2010 . Eminent Authors of science publications, lecturers and professors of

universities and reputed journalists contributed articles to the “Sath Samudura” journal.

8.3 Radio Program

A radio program designed to enhance contemporary knowledge on marine environment at local

and international level with reviews of prevailing issues and challenges of the future and the legal

background is broadcast by the Commercial Service of the Sri Lanka Broadcasting Corporation,

every Sunday for 20 minutes from 9.00 a.m. This program in which eminent scientists are

participating is titled “Samudura Asiriya”. It promotes free exchange of ideas. 52 No

programmes of “Samudura Asiriya” conducted during the year 2010.

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Project No 9 - Marine Research Activities Spread of invasive plants and organisms via

ballast water.

Action was taken to hold a programme to investigate whether invasive plants and organisms

are spreading via commercial harbours of Sri Lanka due to exchange of ballast water by

ships. Action was also initiated to collect data on waters realisms and plants found at present

in the marine lagoons near the harbours of Sri Lanka. A project proposed by Dr. Kamal

Ranathunga, Senior Lecturer of the Department of the Marine Biology in the University of

Sri Jayawardanapura on this subject was consitered and approved by the Board of

Management. Accordingly, the MEPA entered into an agreement with the Biology

Department of the University of Sri Jayawardanapura to conduct a joint research program

during 2011 and 2012.

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3. Administration, Finance & Legal Division

3.1 Administration Division The Administration Division is responsible for Human Resource Development, Management and Administration of the MEPA staff which functions under directives of the General Manager who is the Chief Executive Officer of the Authority

Manpower Position of MEPA as at 31.12.2010

Designations

Approved

No.

of Posts

Filled

Positions

Vacancies

Chief Executive Officer 01 01 00

Senior Manager 04 00 04

Middle Manager 11 05 06

Junior Manager 12 08 04

Enforcement/Associate officer 12 04 08

Management Assistant(Technical) 02 02 00

Management Assistant(Non technical) 08 08 00

Primary level (Skilled) 06 05 01

Primary level (Semi skilled) 64 47 17

Primary level (Un skilled) 09 08 01

Total 129 88 41

MEPA comprised of 88 employees on at end 2011.Out of which 17 degree holders including recently recruited graduates.

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3.1.1 Tanning and Development Following trainings provide during the period for staff to improve their Technical and subject knowledge. This tanning provide locally and abroad . Foreign Tanning details during the year 2010

Name Designation Period Course name Country 01 R.N. Priyadarshana

Marine Environment Officer

2010-October IAEA/RCA Training Course Vietnam

02 J.M. Amali Shanika

Marine Environment Officer

2010-July Environment Management Pollution control Training Course

Malayasia

03 H.R.D. Subashini

Marine Environment Officer

2010-April 30th Symposium for Sea Turtle Biology Convention and management

India

04 L.P. Titus

Marine Environment Officer

2010-October The legal implementation of the Ballast Water management Workshop

Singapore

05 A.J.M Gunasekara

Assistant Manager Operation

2010-April

Nature Radioisotopes in studies of land based pollution Training Course

Philippines

06 A.J.M. Gunasekara

Assistant Manager Operation

September 2010 to December 2011

MSC Marine Environment

Sweden

07 R.N. Priyadarshana

Marine Environment Officer

July 2010

Regional HNS Operational Level Work shop

Maldives

08 R P Ranweera

Assistant Manager Province

June 2010

Technical Work shop on coastal pollution

Maldives

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3.1.2 Local Tanning details during the year 2010

Name

Period

Course name

Institution

D R C Jayawaradana 15th May 2010 Financial Reporting in Compliance with Accounting Standards

Skill Development Fund Limited

D N Panditharana 15th May 2010 Financial Reporting in Compliance with Accounting Standards

Skill Development Fund Limited

A Kariyawasam 10th February 2010

Shipping Law ICLP arbitration Center

P S Samarajeewa 10th August to 11th August 2010

Tax applicable to Government institution

Institute of government account and finance

D M I P Karunarathna

1 day-18 August 2010

Payment of Overtime and Traveling claims

Institute of government account and finance

D M I P Karunarathna

30 august to 03rd September 2010

Windows based Application Package

Institute of Government Account and Finance

All staff Tamil class

All staff English Class

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3.3 Legal Division The legal division is responsible for attending to all the legal matters of the authority including formulation of regulations under the provisions of the MPPA Act No 35 of 2008 and drafting agreements and attending other general legal matters.

Legal action Taken during the year

MT GRANBA Incident at Trincomalle – April 2009

Legal action was instituted against a Turkish vessel, MT Granba for spilling app. 6250 MT Sulphuric Acid into our waters off 50 nautical miles off the coast of Trincomalee, in April, 2009, which was an offence punishable under Section 26 of Marine Pollution Prevention Act No.35 of 2008. As per Section 50 of the Act, Attorney General, (instructed by the Legal Division/MEPA) appeared for MEPA and the judgment was delivered in May, 2010 ordering the Accused to pay a fine of LKR10 M under section 26 of the Act. Further a sum of $ 50,000 (LKR 5.6 M) was received by MEPA from the Accused in Civil Liability (Section 34 of the Act) as an out of Court settlement.

3.3 Finance Division The Finance division is responsible for salary related activities, All financial reporting activities, Handling Audit Mater, Handling correspondence with the Banks, Managing funds, and Budgeting activities. 3.3 .1 Income Analysis from 2005 to 2010

Income Source

2005

2006

2007

2008

2009

2010

Waste Reception

Service Income

1,054,000

1,248,000

1,968,000

1,792,000

3,998,000

4,438,000

Other

Income

250,000

253,000

157,000

9,000

380,000

381,000

-

500,000.00

1,000,000.00

1,500,000.00

2,000,000.00

2,500,000.00

3,000,000.00

3,500,000.00

4,000,000.00

4,500,000.00

5,000,000.00

2005 2006 2007 2008 2009 2010

Waste Reception Service Income

Other Income

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According to the MARPOL Convention the arrangement have been made to provide waste reception services to the ships calling at commercial harbors in Sri Lanka by registering 21 service providers with required qualifications for the year 2010. Necessary action has been taken to ensure the satisfactory continuation of this service. This is the main income source for the authority and during the year 2009 and 2010 the authority introduced some additional guidelines to formalize procedures and also increased permit fees and registration fees. Due to the above reasons income generated from Waste Reception Service rapidly increased. The authority has being taken all necessary action to continue this trend in the future as well. 3.3.2 MT GRANBA Incident at Trincomalle – April 2009

During the year 2010 the authority received Rs 10 million as a result of judgments made against the

owner of MT GRANBA Ship , in addition to the above fine the authority received another USD $ 50000

equaling of Rs 5.6 Million rupees as a out of court settlement. Due the MT GRANBA Incident at

Trincomalle the Authority received Rs 15.6 million out of above a sum of Rs 10 Million was invested in

treasury Bills with the approvals of the Board of Directors and Rs 4 Million transferred to the Staff loan

account to provide the distress loan to the Staff.

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3.3.3 Financial progress Report

Recurrent Expenditure Object code

Category/Object Title Allocation 2010

Expenditure Up to

31.12.10(Rs)

Balance as at 31.12.10 (Rs)

1 2 3 5 7

Recurrent Expenditure

Personal Emoluments

1001 Salaries and wages 30,000,000 25,382,272.33 4,617,727.67

1002 Over Time / Holiday pay 600,000 438,233.57 161,766.43

1003 Other Allowances 400,000 68,850.00 331,150.00

Sub Total 31,000,000 25,889,355.90 5,110,644.10

Travelling Expenses - -

1101 Domestic 850,000 885,122.99 (35,122.99)

1102 Foreign 800,000 350,524.88 449,475.12

Sub Total 1,650,000 1,235,647.87 414,352.13

Supplies

1201 Stationery and Office requisites 400,000 348,135.99 51,864.01

1202 Fuel and Lubricants 800,000 644,411.85 155,588.15

1205 Other 100,000 44,440 55,560.00

Sub Total 1,300,000.00 1,036,987.84 263,012.16

Maintenance Expenditure

1301 Vehicles 1,000,000 838,648 161,351.66

1302 Plant, Machinery and Equipment 600,000 358,893 241,107.20

1304 Building & Structures 180,000 139,061 40,939.00

Sub Total 1,780,000 1,336,602.14 443,397.86

Contractual Services

1402 Postal & Telecommunication 700,000 678,348.23 21,651.77

1403 Electricity and Water 1,110,000 1,138,931.98 (28,931.98)

1404 Rent , Rates and taxes 6,200,000 5,807,435.00 392,565.00

1405 Other 750,000 813,607.54 (63,607.54)

Sub Total 8,760,000 8,438,322.75 321,677.25

Total Recurrent Expenditure

44,490,000

37,936,916.50

6,553,083.50

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Capital Expenditure Object code

Category/Object Title Allocation 2010

Expenditure Up to

31.12.10(Rs)

Balance as at 31.12.10 (Rs)

Rehabilitation & Improvement of Capital Assets

2001 Building and Structures 1,475,000 1,466,681.45 8,318.55

2002 Plant Machinery and Equipment 65,000 64,197.84 802.16

2003 Vehicles 1,135,000 1,132,152.00 2,848.00

Sub Total 2,675,000 2,663,031.29 11,968.71

Acquisition of Fixed Assets

2102 Furniture & Equipments 1,260,000 1,249,623.44 10,376.56

2103 Machinery and Equipment 650,000 644,560.00 5,440.00

Sub Total 1,910,000 1,894,183.44 15,816.56

2502 Other

1. Capacity Building - NOSCOP 2,175,000 2,158,015.63 16,984.37

2. Matters related to Regulations & International convention

365,000 282,259.24 82,740.76

3. Awareness Programmes 3,140,000 2,692,604.28 447,395.72

4. Waste Reception Facility 240,000 232,720.57 7,279.43

5. Develop Mini laboratory 3,500,000 3,403,037.25 96,962.75

7. Sonduru Saura Prograamme 4,200,000 4,064,458.70 135,541.30

8. Water Quality Monitoring Programme

125,000 39,097.00 85,903.00

9.Promotional - Publicity /Communication

650,000 578,500.00 71,500.00

10. Marine Research Programme 750,000 740,052.00 9,948.00

11. Contingencies 100,000 - 100,000.00

12. Human Resource Development 170,000 103,175.20 66,824.80

Sub Total 15,415,000 14,293,919.87 1,121,080.13

Total Capital Expenditure 20,000,000 18,851,134.60 1,148,865.40

Total Capital and Recurrent Expenditure

64,490,000 56,788,051.10 7,701,948.90

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4. Final Statements of the Authority

4.1. Accounting Policies 4.1.1 General Accounting Policies

The financial statements for the year 2010 have been prepared based on the historical cost convention with generally accepted accounting principles. No adjustments have been made for inflationary factors affecting the accounts.

Revenue and expenditure have been accounted on accrual basis and provision has been made in the accounts for all known liabilities.

4.1.2 Basis of Preparation

The Financial Statements of Marine Environment Protection Authority comprise Statement of financial position, Statement of financial performance, Statement of Changes in Net Assets/Equity, Cash Flow Statement, Significant Accounting Policies and Notes to the Financial Statement These statements are prepared in accordance with Sri Lanka Accounting Standard and Public Sector Accounting Standards laid down by Institute of Chartered Accountant of Sri Lanka.

Marine Environment Protection Authority use the Sri Lanka Public sector accounting standards with effect from the year 2010 for preparation and the presentation of it financial statements in a though SLPSAS effective from the year 2011.

The Financial Statements are presented in accordance with SLPSAS 01and where the SLPSAS not available in such a case Sri Lanka Accounting Standard are applied Ex. SLAS18/SLAS 16/SLAS24 etc………..

4.1.3 Property, Plant & Equipments

Property, Plant & Equipments has been recorded at their cost. They have been depreciated on straight line basis in order to write of their cost over their useful life. The rates used to depreciate them are as follows.

Motor Vehicles at 20%

Furniture and equipments at 10% Office Equipments 15% Computers at 15% Photocopy Machines & Attendance Time Recorder at 15% Air Conditioners at 15% Telephone System at 15% Others at 10% Technical Equipments at 10%

Depreciation of Assets begins when it is available for it intended use and depreciate on straight line basis over their useful life. The authority adept SLAS 18 in relation to the Property, Plant & Equipments accordingly the depreciation Policy was change to accommodate guide line laid down in the SLAS 18 and the adjustment was made to accumulated surplus/deficit.

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4.1.4 Income

The main income of the authority is grants received from Government of Sri Lanka. In addition, there is a small income generated by the authority by issuing licenses for activities connected with waste reception Service provided to the ships which come to the Sri Lankan Ports. 4.1.4.1 Income generated by the Authority

The income generated by the authority is recognized on accrual basis, In accordance with the Sri Lanka Accounting Standards.

4.1.4.2 Grants received from the Government of Sri Lanka

The authority receives two types of grants namely capital and recurrent. The accounting policy adopted for accounting for these grants based on SLAS 24 is as follows

4.1.4.3Capital Grants

Government grants received for acquisition or construction of property, plant & equipment are recognized as income over the period of useful life of such property plant & equipment.

Capital Grants received for activities connected with prevention of Sri Lankan Marine pollution naturally generate intangible assets. But it does not meet the recognition Criteria laid down in Intangible Assets standards (SLAS 37) therefore the Expenditure relation to the Marine pollution prevention activities are recognized as income in the year in which such activities are performed.

4.1.4.4Recurrent Grants

Recurrent grants are recognized as income in the year in which they are received as they are incurred in the same year.

4.1.5 Expenditure

Expenditure is recognized as expenses on the accrual basis.

4.1.6 Provision for Gratuity

A provision has been made for payment of Gratuity on the retirement of employees as per the requirement of SLAS 16.

4.1.7 Comparative Figures

Comparative figures have been restated to reflect the adjust made on application of SLAS 24 Accounting for Government Grants & SLAS 16 Provision for Gratuity

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4.2 Statement of Financial Position Marine Environment Protection Authority

Statement of Financial Position As at 31st December 2010

2010 2009 Note Rs Rs ASSETS CURRENT ASSETS Cash balance 10 7,069,591.12 3,038,768.03 Debtors 11 98,437.49 22,212.25 Deposits 12 480,800.00 375,800.00 Pre Payments 13 533,538.35 384,732.04 Staff loan 14 3,929,914.76 2,058,852.74 Short Term Investment 9,999,999.75 - NON CURRENT ASSETS Property, Plant & Equipments 9 22,359,481.88 18,051,055.42 TOTAL ASSETS 44,471,763.35 23,931,420.48 LIABILITIES CURRENT LIABILITIES Payables 15 273,840.48 335,569.63 NON CURRENT LIABILITIES Marine Environment Protection Fund 11,600,000.00 Funds for distress Loan 16 6,204,711.22 2,098,143.21 Gratuity Provision 17 2,866,922.50 2,263,975.00 TOTAL LIABILITIES 20,945,474.20 4,697,687.84

NET ASSETS 23,526,289.15 19,233,732.64 Government Grants and Capital 18 22,359,482.03 18,051,055.49 Accumulated Surplus/Deficit 19 1,166,807.12 1,182,677.16 TOTAL EQUITY AND LIABILITIES 23,526,289.15 19,233,732.64

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4.3 Statement of Financial Performance

Marine Environment Protection Authority Statement of Financial Performance for the

Year ended 31st December 2010 NOTES 2010 2009 Rs Rs INCOME Treasury Grants 1 48,164,438.86 44,539,673.69 Waste Reception Service 2 4,438,000.00 3,998,300.00 Other Income 3 380,304.19 158,612.50 52,982,743.05 48,696,586.19 LESS EXPENDITURE Personal emoluments 4 26,341,796.16 25,184,719.98 Supplies and consumables used 5 2,398,219.34 2,044,278.91 Other Recurrent Expenditure 6 9,554,829.06 8,668,721.39 Grant and Other Transfer Payment 7 11,000,148.32 7,751,144.73 Finance cost 8 20,195.00 24,865.00 Depreciation and amortization expense 9 3,713,425.21 3,213,027.26 TOTAL EXPENDITURE 53,028,613.09 46,886,757.27 Deficit/Surplus for the period ( 45,870.04) 1,809,828.92

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4.4 Statement of Changes in Net Assets/Equity Marine Environment Protection Authority

Statement of Changes in Net Assets/Equity for the Year ended 31st December 2010

Capital Grants Accumulated Total

Surplus/Deficit Rs. Cts. Rs. Cts. Rs. Cts. Balance as at 01/01/2010 18,051,055.49 1,182,677.16 19,233,732.65 Being reversal of deposit charge to P&L in 2005 - 30,000.00 30,000.00 Restated Balance as at 01/01/2010 18,051,055.49 1,212,677.16 19,263,732.65 Capital Grants Received 19,022,000.00 19,022,000.00 Capital grant transfer to Income (SLAS 24) (14,713,573.46) (14,713,573.46) Surplus/ (Deficit) for the year (45,870.04) (45,870.04) Balance as at 31/12/2010 22,359,482.03 1,166,807.12 23,526,289.14

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4.5 Cash flow Statement Marine Environment Protection Authority

Cash flow Statement For the year 2010

2010 2009

Cash Flow from Operating Activities Excess of Income Over Expenditure (45,870.04) 1,809,828.92

Adjustments for Depreciation 3,713,425.21 3,213,027.26 Opening Balance 30,000.00 - Provision for Gratuity 602,947.50 596,240.00 Income Recognized as per SLAS 24 (14,713,573.46) (10,964,171.92) (From grants received previous years) Operating Surplus/Deficit Before working (10,413,070.79) (5,345,075.73) Capital changes (Increase)/decrease in Deposit (105,000.00) (7,800.00) (Increase)/decrease in Prepayments (148,806.31) (31,578.20) (Increase)/decrease in Debtors (76,225.24) (21,137.25) Decrease/increase in current liabilities (61,729.15) (763,995.81) Net Cash flow from operating Activities (10,804,831.49) (6,169,587.00) Investing Activities Investment in Treasury Bills (9,999,999.75) - Acquisition of property plant & Equipment (8,021,851.68) (4,464,855.27) Funds from staff loan 106,568.01 83,560.27

(Increase)/decrease in staff loan (1,871,062.02) (204,964.99) Net Cash flow from Investing Activities (19,786,345.44) (4,586,259.99) Financing Activities Government grant for Capital expenditure 19,022,000.00 12,216,000.00 Fund received from MT Granba incident 15,600,000.00 - Net cash from Financing Activities 34,622,000.00 12,216,000.00 Net increase/decrease in cash and cash equivalents 4,030,823.07 1,460,153.02 Cash and cash equivalents at the beginning of the year 3,038,768.03 1,578,615.00 Cash & cash equivalents at the end of the year 7,069,591.10 3,038,768.02

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4.6 Notes to the Financial Statements Marine Environment Protection Authority

Notes to the Financial Statements

Note 2010 2009

1 Treasury Grants Recurrent Grant 33,280,000.00 33,455,000.00

Capital Grant transfer to income-Cash Balance 170,865.40 120,501.77

Capital Grant transfer to income -Current Year 11,000,148.32 7,751,144.73 Capital Grant transfer to income-Differed Grant 3,713,425.14 3,213,027.19

48,164,438.86 44,539,673.69

2 Waste Reception Service Fee Waste Reception Service -Registration Fees 2,195,000.00 2,028,300.00

Waste Reception Service -Permit Fees 2,215,000.00 1,692,500.00

Waste Reception Service - Application Fees 13,000.00 25,000.00

Waste Reception Service -RFP __ 252,500.00 Waste Reception Service - Application Fees 15000.00 -

(Received in 2009) 4,438,000.00 3,998,300.00

3 Other Revenue

Sundry Income 377,150.00 125,000.00 Book advance interest 3,154.19 2,362.50 Chq Cancellation __ 31,250.00

380,304.19 158,612.50

4 Personal Emoluments

Salaries & Wages 25,196,278.83 24,204,435.08 Overtime/Holiday Pay 469,969.83 312,804.90 Other Allowances 72,600.00 71,240.00 Provision for Gratuity 602,947.50 596,240.00

26,341,796.16 25,184,719.98

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5 Supplies and Consumables

5.01 Supplies Stationary & Office Requisites 348,135.99 356,378.11 Fuel & Lubricants 644,411.85 574,419.90 Uniforms 44,440.00 64,445.00 1,036,987.84 995,243.01

5.02 Maintenance Expenditure Vehicles 838,648.34 605,625.64 Plant Machinery & Equipments 383,522.16 367,578.26 Office Maintenance 139,061.00 75,832.00

1,361,231.50 1,049,035.90

6 Other Recurrent Expenditure

6.01 Traveling Domestic 951,853.55 615,328.76 Foreign 350,524.88 667,937.88

1,302,378.48 1,283,266.64

6 .02 Contractual Services Telecommunication/Postal Charges 679,632.53 641,497.82 Electricity & Water 1,080,061.82 1,051,203.99 Office Rent 5,794,435.00 5,136,050.00 Others Contractual Services 847,127.59 588,281.13 Last Year Prepaid Expenses 384,732.04 353,153.85 Prepaid Expenses (533,538.35) (384,732.04)

8,252,450.63 7,385,454.74

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7 Grant and Other Transfer Payments Total capital Grant for the year 19,022,000.00 12,216,000.00

Less: Amount utilizes to purchase of capital Assets (8,021,851.00) (4,464,855.27) Amount transfer to statement of the F/Performance 11,000,148.32 7,751,144.73

8 Finance Expenditure

Others Expenditure __ 1,075.00

Bank Charges 20,195.00 23,790.00

20,195.00 24,865.00

09 Depreciation of Fixed Assets

Property, Plant & Equipments Type of Assets

COST-2010 DEPRECIATION-2010 W D V

01.01.2010 Additions 31.12.2010 01.01.2010 Additions 31.12.2010 31.12.2010

Motor Vehicles

13,750,532.63

864,360.00

14,614,892.63

7,269,426.10

1,651,106.53

8,920,532.63

5,694,360.00

Furniture & Equipments

12,800,359.25

1,882,283.44

14,682,642.69

5,360,542.17

1,542,379.97

6,902,922.14

7,779,720.55

Technical Equipments

5,199,387.17

5,275,208.24

10,474,595.41

1,069,255.36

519,938.72

1,589,194.08

8,885,401.33

Total

31,750,279.05

8,021,851.68

39,772,130.73

13,699,223.63

3,713,425.21

17,412,648.84

22,359,481.89

10 Cash and cash equivalents

Bank of Ceylon –Boralla-194109 4,794,794.66 3,038,768.03 Peoples Bank –Dematagoda 2,274,796.46 - (071100180004783) 7,069,591.12 3,038,768.03

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11 Debtors Shehan Kuranarue 13,500.00 - Festival Advance - 4,375.00 Book Advance - 182.25 Recurrent Advance 84,937.49 17,655.00

98,437.49 22,212.25

12 Deposits

Rental 466,500.00 363,000.00 Refundable Deposit 14,300.00 12,800.00

480,800.00 375,800.00

13 Pre payments Rent 418,288.89 188,970.83 Insurance 84,222.21 123,590.85 Maintenances Agreements 29,349.47 72,170.35

Other Expenses 1,677.78 - 533,538.35 384,732.04

14 Staff loan Recoverable

Opening Loan Balance 01.01.2010 2,058,852.74 1,853,887.75 Add: Loan given during the year 3,400,000.00 1,200,000.00

Total recoverable amount 5,458,852.74 3,053,887.75 Less: Amount recovered during the year 1,528,937.98 995,035.01

Balance as at 31.12.2010 3,929,914.76 2,058,852.74

15 Payables WRS Application & permit fees 31,000.00 15,000.00

Electricity &water bill 16,194.66 75,064.82

Rent payable - 13,000.00

Telephone 47,795.59 46,511.29

Other Payable 178,850.23 185,993.50

273,840.48 335,569.61

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16 Staff loan Fund

Opening Loan Balance 01.01.2010 2,098,143.21 2,014,582.94 ADD: Additional Fund 4,000,000.00 - Interest for the Year 107,608.85 83,560.27 Bank Charges (1,040.84) - Closing Loan Balance 31st December 2010 6,204,711.22 2,098,143.21

17 Provision for Gratuity Opening Balance 2,263,975.00 1,667,735.00 Provision for Year 602,947.50 596,240.00 Closing Balance 2,866,922.50 2,263,975.00

18 Government Grants & Capital Opening Balance 18,051,055.49 16,799,227.40

Capital Grants Received during the year 19,022,000.00 12,216,000.00

37,073,055.49 29,015,227.40 Less: Recognized as income (SLAS 24) 14,713,573.46 10,964,171.92 Closing Balance as at 31.12.2010 22,359,482.03 18,051,055.49

19 Accumulated Deficit/Surplus

Opening Balance 1,182,677.16 (627,151.76) Error Correction 30,000.00 Deficit for the year (45,870.04) 1,809,828.92

Closing Balance as at 31.12.2009 1,166,807.12 1,182,677.16

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5. Auditor’s Report

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