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JA RD I NE
MATHESON
ANNUAL
REPORT
2022
C R E AT I N G
LONG-TERM,
SUSTAINABLE
VALUE
Contents
Strategic Report
Introduction 1
Highlights 2
Creating Value at Jardines 4
Group Structure 10
Our Presence 11
Group Businesses at a Glance 12
Chairman’s Statement 14
Group Managing Director’s Review 18
Financial Review 42
Sustainability 50
TCFD Report 54
Governance Report
Directors’ Profiles 60
Corporate Governance 62
Remuneration Report 74
Audit Committee Report 79
Principal Risks and Uncertainties 84
Shareholder Information 93
Financial Report
Financial Statements 94
Independent Auditors’ Report 195
Five Year Summary 205
Responsibility Statements 206
Group Offices 207
Jardine Matheson Holdings Limited is
incorporated in Bermuda and has a primary
listing in the standard segment of the London
Stock Exchange, with secondary listings in
Bermuda and Singapore. Jardine Matheson
Limited operates from Hong Kong and provides
management services to Group companies.
www.jardines.com
for more information
Jardine Matheson Holdings Limited
Jardine House
Hamilton
Bermuda
1
Jardine Matheson
Annual Report 2022
Jardine Matheson is a diversified Asia-based group founded
in China in 1832, with unsurpassed experience in the region.
Our broad portfolio of market-leading businesses represents
a combination of cash generating activities and long-term
property assets, which are closely aligned to the increasingly
prosperous consumers of the region. The Group’s businesses
aim to produce sustainable returns by providing their
customers with high quality products and services. We are
committed to driving long-term sustainable success in our
businesses and our communities.
Our Presence
We operate principally in China and
Southeast Asia. We maintain a
sustainable balance of both growth
and developed markets. We have
deep roots across the region and
have been partnering with founders
and management for 190 years
tobuild and grow successful
companies. Our subsidiaries and
affiliates benefit from the support
ofthe Group’s extensive knowledge
of the region and long-standing
relationships.
Our Approach
Our values of integrity, steadfastness,
collaboration, and an entrepreneurial
spirit, underpin how our businesses
operate, as they provide products,
services, and experiences that impact
millions of lives every day.
The Group works closely with our
businesses to deliver on four strategic
priorities: Evolving our portfolio,
Enhancing leadership and
entrepreneurialism, Driving innovation
and operational excellence,
andEmbedding sustainability.
These values and priorities guide usin
creating long-term and sustainable
value for our businesses and the
communities inwhich we operate.
Our Operations
Across the Group, our over 425,000
employees work in a wide range
ofbusinesses in major sectors,
including motor vehicles and
relatedoperations, property
investment and development,
foodretailing, health and beauty,
home furnishings, engineering and
construction, transport services,
restaurants, luxury hotels, financial
services, heavy equipment, mining,
and agribusiness.
We support our Group companies by
sharing the Group’s expertise and
experience, as well as providing them
with financial and other resources, to
create value and achieve sustainable
growth over the long term.
2
Jardine Matheson
Annual Report 2022
Highlights
* Based on underlying profit attributable to shareholders before corporate and other interests, which amounted to US$1,740 million.
^ Insignificant contribution from Mandarin Oriental.
Analysis of underlying profit attributable to shareholders of US$1,584 million
• Underlying profit and underlying earnings per share grow by 5% and 14%, respectively
• Strong performance in Southeast Asia, led by Astra
• Continued pressure on China (including Hong Kong) in the second half
• Full year dividend of US$2.15, up 8%
By business* By sector*
By geographical area*
24%
US$417m
Property
32%
US$561m
Motor vehicles
27%
US$475m
Engineering,
heavyequipment,
mining, construction
& energy
9%
US$154m
Financial
services
US$6m
Hotels^
3%
US$51m
Others
5%
US$76m
Retail &
restaurants
11%
Jardine Pacific
US$182m
17%
Jardine Motors
US$299m
23%
Hongkong Land
US$405m
1%
DFI Retail Group
US$22m
8%
Jardine Cycle & Carriage
US$135m
40%
Astra
US$691m
Mandarin Oriental
^
US$6m
Rest of the World
6%
Southeast Asia
55%
China
39%
3
Jardine Matheson
Annual Report 2022
Ω
The Group uses ‘underlying profit’ in its internal financial reporting to distinguish
between ongoing business performance and non-trading items, as more fully described
in note 41 to the financial statements. Management considers this to be a key measure
which provides additional information to enhance understanding of the Group’s
underlying business performance.
Δ
Includes major associates and joint ventures.
#
Excluding net borrowings of financial services companies.
†
Including expenditure on properties for sale and in associates and joint ventures.
US$89,148m
Total assets
US$37,724m
Revenue
425,000
People employed
Δ
US$354m
Profit attributable to
shareholders
US$4,930m
Underlying profit before tax
Ω
US$114,758m
Gross revenue
US$7,515m
Net borrowings
#
US$9,657m
Total capital investment
†
US$1,584m
Underlying profit
attributable to shareholders
Ω
US$28,826m
Shareholders’ funds
Underlying Earnings per Share (US$)
Highlights
2019
2020
2021
2018
4.40
4.23
2.95
4.83
5.49
2022
Net Asset Value per Share (US$)
Highlights
2019
2020
2021
2018
2022
69.19
81.90
81.32
102.87
99.47
Underlying earnings per share (US$)
Net asset value per share (US$)
2022 financial highlights
Results
2022
US$m
2021
US$m
Change
%
Gross revenue including
100% of associates
and joint ventures 114,758 109,370 5
Revenue 37,724 35,862 5
Underlying profit
beforetax
Ω
4,930 4,117 20
Underlying profit
attributable to
shareholders
Ω
1,584 1,513 5
Profit attributable to
shareholders 354 1,881 (81)
Shareholders’ funds 28,826 29,781 (3)
US$ US$ %
Underlying earnings
pershare
Ω
5.49 4.83 14
Earnings per share 1.22 6.01 (80)
Dividends per share 2.15 2.00 8
Highlights
Enhancing
leadership and
entrepreneurialism
Driving innovation
and operational
excellence
Evolving
our
portfolio
Embedding
sustainability
Strategic priorities
The Group works with our businesses to deliver on
our strategic priorities of:
The Group’s
strategic
priorities
4
Jardine Matheson
Annual Report 2022
Creating Value at Jardines
Jardine Matheson (‘Jardines’ or ‘the Group’)
isadiversified group operating across our core
geographies of China and Southeast Asia. Over our
190 years, we have developed a track record,
expertise, networks, and long-standing relationships
in the region that support our Group businesses in
creating value and sustainable growth.
In this section, we hear from John Witt, Group
Managing Director of Jardine Matheson, as he
discusses the strengths of our portfolio across the
regions of North and Southeast Asia, and the
opportunities ahead for the Group.
A Discussion
withour Group
Managing
Director
Our
diversified portfolio
and prospects ahead
5
Jardine Matheson
Annual Report 2022
Creating Value at Jardines
What is the role of Jardines in creating value for the Group’s businesses?
We are active and long-term owners of our Group businesses. We partner with founder entrepreneurs and
leading local companies, sharing our long-standing relationships, localised market knowledge, international
best practices, and capital resources. We also serve as the partner of choice for many international brands
when they want to find a single platform for accessing the region.
With our businesses, we work together to set strategic direction and deliver on four priorities. These are:
1. Evolving our portfolio;
2. Enhancing leadership and entrepreneurialism;
3. Driving innovation and operational excellence; and
4. Embedding sustainability.
We focus on having the right leaders in place across our businesses, and ensuring recruitment, learning and
development, and succession planning all support our strategic objectives. Cross-group people mobility is
also an important characteristic of the way leaders are developed across the Group.
How does Jardines approach investments and grow them for the long-term?
Firstly, we partner with management teams that we trust and who have the drive to develop and execute
strategies to grow their businesses.
We take a disciplined approach towards our capital structure, which ensures the stability of our businesses
across cycles. This approach includes the investment principles that we apply to manage our gearing and the
long-standing relationships we have with a wide range of capital providers.
We are patient, long-term investors, and we often start with small interests in companies and build them up
over time. We also make substantial investments when we see the right opportunity, are confident in our
experience and knowledge of the sector, and have the talent in place to succeed.
For example, we invested in Astra just after the 1997 Asian Financial Crisis, when others were still
apprehensive about Southeast Asia. Over the years, we increased our investment, and alongside capital,
weprovide strategic advice and talent. Today, Astra is one of Indonesia’s leading local companies. Similarly,
in Vietnam, we started our investments in THACO in 2008 and continue to support the group. Today, THACO
operates across multiple sectors, principally in automotive, but also in property and agriculture.
We also continue to invest via our Group businesses. An example is Hongkong Land, where in the early
stages of COVID – together with strategic partners – we invested in a 1.1 million square metre mixed-use
development along the West Bund, which has a development cost of approximately US$8 billion.
TheGroup’s deep knowledge of the property sector and strong balance sheet allowed us to successfully
invest and develop the project against a challenged property market outlook in the Chinese mainland.
Demonstrating the scale of the investments we make via our businesses, in 2022 alone, we deployed
US$2.7billion of organic growth Capex across the Group.
Tell us more about the Group’s geographical focus.
We are and will continue to be focussed on China and Southeast Asia. Our diversified portfolio has
benefitted us through difficult periods such as the pandemic – where our performance in 2020 was largely
carried by China, while over the following two years, Southeast Asia contributed significantly towards our
strongperformance.
On the Chinese mainland, we are selective of the regions in which we invest. For example, Hongkong Land’s
property businesses are in Tier 1 and Tier 2 cities – essentially along the Yangtze River Delta – while our
consumer retail businesses like Yonghui and Zhongsheng are mostly in well-developed and economically
vibrant higher growth areas.
6
Jardine Matheson
Annual Report 2022
Creating Value at Jardines
In Southeast Asia, our highest priority growth markets are in Indonesia – where Astra is a major investment–
and increasingly in Vietnam, where we are building up our portfolio.
Our businesses are well-positioned to capture the themes of urbanisation and the rising middle-income
population in Asia. They support infrastructure development and provide products and services to meet the
growing needs of consumers and businesses.
In Southeast Asia, Astra hasbusinesses in sectors including automotive, financial services, heavy
equipment and mining, agribusiness, and property, all of which support the country’s growth. They also
provide almost 200,000 jobs.
Zhongsheng, China’s largest automotive dealer, is well-placed to capture opportunities of the growing
automotive market by leveraging its operational capability as a leading distributor and its strong
customerbase.
In Hong Kong and Singapore, DFI Retail Group continues its digital transformation to cement its position as a
marketleader.
The exception to our geographical focus is Mandarin Oriental, which is a global luxury hotel investment and
management group.
Overall, we expect both China and Southeast Asia to make balanced contributions to our growth and
earnings over the long-term.
What are the opportunities for Jardines to generate growth and returns, andhow is the Group
organising itself to capture them?
In the near-term, returns will come from the cyclical recovery as we emerge from the pandemic. For example,
ourconsumer businesses like Mannings in Hong Kong and Maxim’s across the region, as well as
MandarinOriental, should benefit significantly from the reopening of Chinese borders.
Looking ahead, we are expecting some of our more recent substantial investments to start generating
sustainable returns. Some examples include Astra’s infrastructure business in Indonesia – principally
investments in toll roads – Hongkong Land’s important West Bund development project, as well as THACO’s
business inagriculture.
We are responding to macro trends and growth sectors where we see opportunities. These include
digitalisation, healthcare services, and sustainability.
In the area of digitalisation, we have expanded our digital banking offerings through investments in
BankJasa Jakarta and livi bank in Hong Kong.
We have made investments in healthcare services – including Halodoc and Medikaloka Hermina in
Indonesia – and these are expected to be a significant growth area as consumers grow older and more
affluent in thefuture.
Finally, we are capturing sustainability and energy transition business opportunities in markets like
Vietnam, where there is strong government support for green energy. REE is now one of the biggest players in
renewables in Vietnam, particularly in solar, wind and hydro. Furthermore, we have begun to make
early-stage investments in renewables in Indonesia.
Over the past two years, our focus has been on the simplification of our Group structure which has required
significant capital, as well as ongoing review and disposal of non-core assets.
At the same time, we are increasingly positioned to capture new opportunities. You will note that we have
made senior appointments to drive business development efforts in both China and Southeast Asia.
I am confident and excited about the opportunities ahead for the Group and our businesses across Asia.
7
Jardine Matheson
Annual Report 2022
Creating Value at Jardines
At Jardines, our disciplined capital allocation
strategy and core investment principles have
allowed us to successfully grow our businesses
overtime. Ourdiverseportfolio of market-leading
businesses generates strong cashflows and delivers
resilient performance across the business cycle.
In this section, Graham Baker, Group Finance
Director of Jardine Matheson, shares more
aboutthe Group’s capital allocation strategy
thatsupports growth for the long-term.
A Discussion
withour Group
Finance Director
Our
capital allocation
strategy
8
Jardine Matheson
Annual Report 2022
Creating Value at Jardines
Can you share about Jardines’ capital allocation strategy?
Our capital allocations start with organic investments in our existing business portfolio in order to
drive sustainable long-term earnings growth and returns. Next, we are committed to continued
payment of our dividend to shareholders, which we aim to grow over time. Finally, we review
M&Aopportunities in new businesses and deepening investments in existing Group companies
sideby side.
Our principal criteria for such investments are value and returns, earnings growth and risk profile,
including sustainability considerations. All of this sits within a commitment to a strong balance sheet
and investment grade credit metrics, which give us the confidence and flexibility to invest when we
see the right opportunities – even at times of financial dislocation.
We have maintained this approach through the recent pandemic with continued support for organic
capital investment across our businesses. These include investments to digitally enable our
businesses across the portfolio, and as a couple of specific examples, investing in the ongoing
transformation programme at DFI Retail Group and the major West Bund project in Shanghai at
Hongkong Land.
The Group has recently been deepening its position in existing businesses through share
buybacks and the Jardine Strategic acquisition. What is the thinking behind this and
what’snext?
There were multiple reasons for the US$5.6 billion acquisition of Jardine Strategic. We wanted to put
inplace a simpler, more conventional ownership structure for the Group, which provides greater
transparency to shareholders. We also saw benefit in enhancing the earnings position of the Group to
support long-term dividend growth and the opportunity to streamline some of our internal processes.
At the time in 2021, we were also able to leverage the financial strength of our balance sheet.
Since then, the focus of the Group has been on getting gearing closer to historical levels and
prioritising reducing debt. To support this – as well as the resilient organic cash generation of the
business – wehave made some strategic decisions to recycle capital where we saw good value and
strategic rationale, notably the sale of Zung Fu China to our associate Zhongsheng.
On buybacks, the Group deployed US$1.3 billion purchasing Jardine Matheson shares over 2020, 2021
and 2022. There have also been buybacks by Hongkong Land and a number of Group companies in
Southeast Asia.
As mentioned earlier, the Group evaluates these side by side with external M&A opportunities.
However, portfolio evolution remains a strategic priority for the Group. Both of these offer potential
fordelivering value to shareholders and, therefore, we look to balance the investments in buybacks
(and the acquisition of Jardine Strategic) with capital allocations on M&A for new businesses.
In 2022, we made several new investments across the Group. These included investments by Astra in
Bank Jasa Jakarta, with plans to transform it into a digital bank; Halodoc, a tele-medical consultant
company; and Medikaloka Hermina hospital group.
In summary, we remain committed to reducing net debt and getting gearing closer to historical
levelsbut will also continue to invest in new business opportunities to drive long-term growth and
value creation.
9
Jardine Matheson
Annual Report 2022
Creating Value at Jardines
How does the Group look at investment opportunities?
We follow a consistent set of investment principles, which have allowed us to successfully grow our
businesses’ value and earnings over time. At the broadest level, we invest in businesses where we see
long-term value and growth potential, principally in markets and sectors we understand, led by people
we know and trust.
We believe that a continued predominant focus on Asia, in particular China, Indonesia and Vietnam,
isconsistent with this and will continue to bring attractive earnings and growth prospects. Beyond
that, what is distinctive is our long-term strategic approach, our ability to create enduring
partnerships, local knowledge and relationships, financial strength, and our active, engaged
ownershipof portfolio companies.
We evolve our portfolio to reflect changes in our operational environment and customer needs,
andinvest in new sectors and businesses, or divest non-core businesses and exit sectors,
whereappropriate. We also evolve our investment approach as the needs of our stakeholders and
thecommunities we serve change.
In 2022, we announced a number of significant developments in our approach to sustainability,
including issuing our first Sustainability Report and our decarbonisation strategy, which aligns the
Group collectively towards the ultimate goal of net-zero.
As we move forward, our sustainability principles will also inform our investment decisions.
Thereiswork that remains to be done, for example plotting the decarbonisation pathways of our
existing portfolio. The Group is committed to developing a sustainability framework on which we will
base our capital allocation decisions, balancing business growth with social well-being and
environmental sustainability.
Within this, we are focussed on the growth opportunities in sustainable businesses, and we are
actively looking into scaling up our investments in renewable energy and related innovations.
10
Jardine Matheson
Annual Report 2022
Group Structure
Percentagesshow effective ownership as at 2nd March 2023.
Other
Southeast
Asian
companies
100%
21%
21%
50%
50.1%
100% 52.9% 79.5%
77.5% 76.6%
100%
11
Jardine Matheson
Annual Report 2022
Our Presence
Chinese mainland
Indonesia
Singapore
Malaysia
The Philippines
Brunei
Vietnam
Thailand
Cambodia
Myanmar
Hong Kong
Macau
Worldwide
Automotive
Engineering, Heavy Equipment,
Mining, Construction & Energy
Financial Services
Hotels
Property
Retail & Restaurants
Other sectors
Sectors
We are focussed in Asia.
Ourmarket-leading businesses
operate in multiple sectors
across key markets of
Chinaand Southeast Asia –
principally Indonesia,
Singapore and Vietnam.
Taiwan
12
Jardine Matheson
Annual Report 2022
Group Businesses at a Glance
*Figures in brackets show effective ownership at 2nd March 2023.
The listed holding company of the Group which oversees a portfolio of market-leading businesses and supports
their long-term sustainable growth.
Jardine Matheson
Hongkong Land is a major listed property investment,
management and development group. The group owns and
manages more than 850,000 sq. m. of prime office and luxury
retail assets in key Asian cities, principally Hong Kong,
Singapore, Beijing and Jakarta. Its properties hold industry
leading green building certifications and attract the world’s
foremost companies and luxury brands. The group also has a
number of high quality residential, commercial and mixed-use
projects under development in cities across China and Southeast
Asia, including a 43% interest in a 1.1 million sq. m. mixed-use
project in West Bund, Shanghai. (52.9%)*
Jardine Pacific’s diverse portfolio comprises industry leaders
in the areas of engineering and construction, aviation and
transport services, and restaurants. Its companies seek to
deliver excellent performance and best in class service to their
customers and to create value for their business partners and
shareholders. (100%)*
DFI Retail Group is a leading listed Pan-Asian retailer.
Itoperates under a number of well-known brands across Food
(including Grocery Retail and Convenience Stores), Health and
Beauty, Home Furnishings, Restaurants and OtherRetailing.
The group aims to provide quality and value toAsian
consumers by offering leading brands, a compelling retail
experience and great service, all delivered through a strong
store network supported by efficient supply chains. (77.5%)*
Jardine Matheson has a wide range of automotive businesses,
with an extensive footprint in China and Southeast Asia,
andastrong presence in the United Kingdom. The Group has a
long-standing strategic partnership with Zhongsheng Group,
aleading automotive distribution group on the Chinese mainland.
The Group’s automotive businesses also compriseZung Fu
Motors Group in Hong Kong and Macau (managed by Jardine
Pacific); Cycle & Carriage in Singapore, Malaysia and Myanmar,
aswell as TunasRidean in Indonesia (managed by JC&C); and
Jardine Motors Group in the United Kingdom.
13
Jardine Matheson
Annual Report 2022
Mandarin Oriental is an international hotel investment and
management group with luxury hotels, resorts and residences
in sought-after destinations around the world. The group
operates 36 hotels and nine residences in 24 countries and
territories, and has a strong pipeline of hotels and residences
under development. As an innovative industry leader, the
group is committed to exceeding its guests’ expectations
through exceptional levels of hospitality. (79.5%)*
*Figures in brackets show effective ownership at 2nd March 2023.
Group Businesses at a Glance
Jardine Cycle & Carriage (‘JC&C’) is the investment holding company
of the Jardine Matheson Group in Southeast Asia, listed in Singapore.
JC&C seeks to grow with Southeast Asia by investing in market-
leading businesses based on the themes of urbanisation and the
emerging consumer class. These include Astra in Indonesia; THACO,
Refrigeration Electrical Engineering Corporation and Vinamilk in
Vietnam; and Thailand-headquartered Siam City Cement.
Otherinvestments include automotive businesses under the
Cycle&Carriage banner (in Singapore, Malaysia and Myanmar)
andTunas Ridean in Indonesia. (76.6%)*
Astra is a diversified business group operating in Indonesia
withseven core businesses: Automotive; Financial Services,
Heavy Equipment, Mining, Construction & Energy; Agribusiness;
Infrastructure and Logistics; Information Technology; and
Property. With 270 subsidiaries, associated companies and
jointly-controlled entities, and 200,000 employees, itis one of
the largest companies in Indonesia by market capitalisation.
Astra is also renowned for its 'Catur Dharma' corporate
philosophy that underpins its extensive community programmes.
In 2022, Astra launched Astra 2030 Sustainability Aspirations
which combines its focus on communities, climate and
theplanet. This will guide Astra's transition journey to
becomeamore sustainable business by 2030 and beyond.
JardineCycle&Carriage has a 50.1% interest in Astra.
14
Jardine Matheson
Annual Report 2022
Jardines delivered a good
performance overall in 2022, with
results recovering to pre-pandemic
levels seen in 2019. There were
strongresults from Southeast Asia,
inparticular Astra and JC&C, but the
performance of our businesses in
HongKong and on the Chinese
mainland continued to be materially
impacted by the continuation of
pandemic restrictions there, which
onlybegan to be relaxed in December.
The Group’s resilience through the
pandemic, however, together with its
diversified portfolio, have established
a solid foundation for future growth.
Iwant to thank our colleagues across
the Group for their unwavering
commitment to our customers and
ourbusinesses during this
challengingperiod.
The Group is well-positioned to take
advantage of opportunities across
Asia, as Southeast Asia continues its
return to growth and as Hong Kong
and the Chinese mainland recover.
Wealso remain confident in our
long-term strategy, focussed on
ourcore Asia markets.
Chairman’s Statement
“
”
Ben Keswick
Executive Chairman
15
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Annual Report 2022
Chairman’s Statement
2022 in Review
2022 was a further year of challenge for our businesses
across the Group, which continued to be impacted by the
pandemic. I want to start by thanking each of the many
colleagues who work for Jardines, as well as the Group’s
partners across our markets, for their unwavering
commitment to our customers and our businesses during
this challenging period.
The last year has seen much of the world moving to live
with COVID, and many of our businesses were able to
benefit from the reopening of markets and the economic
recovery which resulted. Hong Kong and the Chinese
mainland, however, continued to be significantly impacted
by the pandemic and related restrictions, with a relaxation
only starting to be seen in these markets at the very end of
the year.
The Group’s resilience through the pandemic, however,
and its strong performance in 2022, despite challenging
conditions in a number of our sectors and markets,
together with its diversified portfolio, have established a
solid foundation for future growth. We are optimistic that
the reopening of Hong Kong and the Chinese mainland will
enable our businesses there to recover quickly and we are
confident in the strong future growth opportunities in
Southeast Asia, and particularly in Indonesia and Vietnam.
We are focussed on continuing to capitalise on the best
long-term opportunities across Asia, while adapting to the
changing external environment and evolving expectations
of our stakeholders.
425,000 employees by business*
Jardine Pacific 45,000
Jardine Motors 3,500
Hongkong Land 4,500
200,000 Astra
54,000 Jardine
Cycle & Carriage
13,000 Mandarin
Oriental
105,000DFI Retail
Group
Performance
The Group’s underlying net profit of US$1,584 million for
the year was US$71 million (5%) higher than the prior year.
The increase was primarily driven by strong performances
by Astra and our other Southeast Asian businesses held by
Jardine Cycle & Carriage (‘JC&C’). Therewas a return to
underlying profit by Mandarin Oriental and an improved
contribution from the Group’s unlisted Jardine Pacific
businesses. Hongkong Land, however, delivered
significantly reduced underlying profits in 2022 and the
results of DFIRetail Group (‘DFI Retail’) were also materially
lower. There was a slight decline in the performance of the
Group’s Motor interests.
The financial and operational strength of the Group’s
businesses continues to be supported by our investment
strategy and approach to capital allocation.
The Board is recommending an increased final dividend of
US$1.60 per share, which produces a full year dividend of
US$2.15 per share, up 8% from the prior year.
Significant Developments
The Board regularly reviews our portfolio of businesses and
assesses whether actions are necessary to ensure that our
activities align with our strategic priorities. The Group
believes it is essential to continue to invest for the long
term in business opportunities which will drive future
growth for our shareholders. This approach drove the
substantial investment in 2021 in simplifying the Group’s
parent company structure, by acquiring the 15% of the
issued share capital of Jardine Strategic Holdings Limited
(‘Jardine Strategic’) which the Company did not already
own. The final stage in this Group simplification was the
approval by shareholders at the Company’s AGM on
5thMay 2022 of the cancellation of 427 million shares in
the Company, as part of a reduction in capital.
During 2022, and into 2023, we have continued to progress
the simplification of the Group’s portfolio and lay the
foundations for the next stage of its growth. In January
2023, the Group entered into a conditional agreement to
sell its 28.2% stake in the Hong Kong-listed Greatview
Aseptic Packaging Company and, in March 2023, the Group
expectsto complete the sale of its Motors business in the
United Kingdom.
* Includes major associates and joint ventures.
16
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Annual Report 2022
Chairman’s Statement
In September 2022, Mandarin Oriental completed the sale
of its Washington D.C. hotel, as it continued to pursue its
strategy for driving future growth, primarily through the
development of its management business.
The Group also continued to make strategic investments.
InSeptember 2022, Astra continued its focus on providing
compelling financial services to its customers by
completing the acquisition of a 49.6% stake in Bank Jasa
Jakarta, which it jointly controls withWeLab and which it is
planned to transform into an innovative digital bank
inIndonesia.
During the year, Astra also purchased a 7.4% stake in
Medikaloka Hermina, one of the largest hospital groups in
Indonesia, operating as Hermina Hospitals, increasing its
focus on healthcare services and adding to its existing
investment in Halodoc, an online platform in Indonesia
providing access to a range of medical services.
Astra made an important further step in diversifying into
other minerals, by entering the nickel mining and
processing businesses through an agreement to acquire
90% interests in Stargate Pasific Resources and Stargate
Mineral Asia, which is expected to complete in 2023.
Italsomade progress against its commitment to invest in
renewable energy, by acquiring a 31.5% interest in Arkora
Hydro, a hydro-based energy power generation business.
In July 2022, JC&C announced a general offer to acquire
theremaining shares in Cycle & Carriage Bintang which
itdid not already own. It also increased its interest in
Refrigeration Electrical Engineering Corporation (‘REE’)
to33.6% in the period, through on-market purchases.
In 2022, Hongkong Land acquired two new sites, in
Suzhou and Shanghai. The joint venture to develop a
mixed-used commercial site in Suzhou, consisting of a
luxury mall and hotel, reflects the group’s strategy of
developing luxury and premium lifestyle retail properties
on the Chinese mainland. The residential site in
Shanghai is located in Xuhui District, adjacent to our
large mixed-used project in West Bund.
In May 2022, DFI Retail launched its yuu-to-me offering,
providing customers with an integrated one-stop online
shopping experience and home delivery service across
leading Hong Kong brands. Following the success of the
rollout of the yuu Rewards loyalty programme in Hong
Kong, the group launched yuu Rewards in Singapore in
October 2022. The programme in Singapore benefits
from partnerships with a number of leading local brands.
17
Jardine Matheson
Annual Report 2022
Chairman’s Statement
Sustainability
We believe that it is essential that our sustainability
approach is good for business, and that real value can be
realised by integrating sustainability into the strategy and
business models of our Group companies. Each of our
businesses should also consider sustainability issues
inallaspects of their decision-making, and we are
developinga framework for all our businesses to use to
integrate sustainability into the capital allocation
decision-making process.
There is a strong level of engagement between our
businesses on sustainability issues, and this will enable
usto create real scale in what we do.
A significant milestone in the Group’s sustainability
journey was the publication of our inaugural Sustainability
Report at the end of June. The report reflected extensive
work over the previous year to set a range of Group-wide
metrics and gather data from our businesses, to enable
theGroup to measure and report its progress. We also
published Task Force on Climate-related Financial
Disclosures (‘TCFD’)-aligned disclosures for the first time.
Eightother Group businesses also published sustainability
reports last year, three for the first time.
We published a statement in June 2022, clarifying the
Group’s support for a Just Energy Transition to a low carbon
economy in the geographies where we operate. The
statement contains commitments to scale up investments
in renewable energy and related innovations, diversify into
non-coal mineral mining, and make no investments in
newthermal or metallurgical coal mines or new thermal
coal-fired power plants. Astra and JC&C published aligned
statements at the same time.
During 2022, good progress was made on climate action.
Our businesses are setting science-based 2030 targets for
decarbonisation, and several of them have submitted
commitment letters to SBTi. In 2023, our businesses will be
developing decarbonisation pathways towards achieving
those targets. There is also a strong focus on climate risk,
with the development of Group-wide transition climate risk
scenarios, and our businesses are starting to incorporate
physical climate risk into their risk management approach.
Our businesses are exploring opportunities in relation to
responsible consumption, especially in the areas of
wasteand circularity, including ways in which they can
collaborate to achieve shared objectives. A number of
initiatives are being progressed already. The Group is
developing its social inclusion strategy, with a particular
focus on the areas of education and mental health.
Governance
Our approach to governance is based on what is most
appropriate for the Group’s unique shareholding structure,
size and its operations in Asia, and we continue to review
its effectiveness on an ongoing basis. In 2022, we made a
series of changes to strengthen the boards of our listed
subsidiaries, appointing new independent non-executive
directors with sector expertise and experience. The audit
committees of each of these boards now have a majority
ofindependent members. At the Company level,
themembership of the audit committee is now solely
Independent Non-Executive Directors.
People
Jeremy Parr retired from the Board on 31st March 2022.
David Hsu retired from his role as Chairman of Jardine
Matheson China on 1st August 2022. He remains on the
Board of the Company as a Non-Executive Director.
Onbehalf of the Company, I would like to thank them both
for their contribution to the Board and the wider Group.
Conclusion
The Group delivered a strong set of results in 2022,
despitethe fact that, for much of the year, the performance
of many of our businesses in Hong Kong and on the
Chinese mainland was materially impacted by pandemic
restrictions in those markets. This is testament to the value
of the Group’s diversified portfolio, as well as the resilience
which our businesses and our many colleagues across the
region have shown in the past year.
The Group is likely to continue to face challenges in the
coming year from global economic headwinds, but it is
well-positioned to take advantage of opportunities, as our
key markets in Southeast Asia and China return to growth
following their emergence from the pandemic.
18
Jardine Matheson
Annual Report 2022
The pandemic continued to impact many of our businesses
for much of 2022, but the Group performed strongly and
delivered near-record levels of underlying profit.
The performance of the Group’s businesses reflects the
immense effort our many colleagues across the Group have
made to put customers first and to overcome the extensive
professional and personal challenges they have continued
to face as a result of the pandemic. This was especially
thecase in Hong Kong and on the Chinese mainland,
wherethe impact of the pandemic and related restrictions
continued for much longer than in other parts of the world.
I would like to thank each of our colleagues for their
unwavering dedication and hard work, often in very
difficultcircumstances.
We remain focussed on managing the short-term
challenges our businesses are likely to face from global
economic headwinds. We are at the same time building
businesses and teams that will deliver sustainable strong
growth over the medium- to long-term, and over the past
year we have continued to simplify the Group’s portfolio
and set the Group up for its next stage of growth.
Innovation and adaptability have proven to be critical in
the face of the rapidly changing business environment,
andwe have made substantial progress in modernising
ourcore businesses and transforming the way we operate,
to reflect that evolving environment. The pace of change
continues to accelerate, however, and we are focussed on
driving forward our strategic priorities with urgency in the
coming year. These priorities and how we are progressing
them are set out below.
Evolving our Group Portfolio
Evolving the Group’s portfolio is a key element of ensuring
that our business is sustainable and grows earnings over
the long-term. We are focussed on deploying capital,
bothat a Group level and within our Group companies,
towards strategic higher growth initiatives, while taking
asensible approach to divesting non-strategic and
lower-yielding assets.
Group Managing Director’s Review
John Witt
Group Managing Director
19
Jardine Matheson
Annual Report 2022
Group Managing Director’s Review
During the year, we continued to strengthen our position
inthe more promising markets of Asia and in industries
where we can establish market-leading positions,
tocreatelong-term value and ensure sustainable growth.
Ourdiversified presence in China and Southeast Asia, as
well as our balanced portfolio across sectors, has helped
us perform well even in difficult market conditions.
Our primary focus is on expanding our operations in areas
that offer the greatest potential for future growth, such as
the Chinese mainland and several ASEAN markets. We are
seeking strong growth opportunities in emerging ASEAN
markets like Indonesia and Vietnam, as well as developing
our automotive, retail and property development interests
in China.
We want to align ourselves with key trends in these
markets, such as growing urbanisation and the developing
middle class. We also recognise that there are continuing
growth opportunities in our established markets such as
Hong Kong and Singapore, which provide a stable
foundation and strong cash flow.
Our capital allocation strategy prioritises organic
investment in our portfolio to drive long-term growth and
returns, while also aiming to increase dividends over time.
We then focus on investing in new business opportunities,
as well as carrying out share buybacks in our companies
asappropriate. Our strategy is underpinned by a strong
balance sheet. We are also increasingly focussed on
ensuring that the investment opportunities we take
alignwith our sustainability goals, and in this context
weare developing a framework, which will be adopted
Group-wide, to integrate sustainability into the capital
allocation decision-making process.
The Group’s prudent capital allocation approach
underpinned the acquisition by the Company in April 2021
of the 15% minority stake in Jardine Strategic that it did not
already own. This resulted in Jardine Matheson increasing
its interests in Hongkong Land, DFI Retail, Mandarin
Oriental, Jardine Cycle & Carriage and Astra, as well as
simplifying the Group’s ownership structure and
governance framework. The acquisition was funded in
partby debt facilities.
Following the completion of the acquisition, for the
remainder of 2021 we prioritised debt reduction ahead of
further, material new investments. In order to achieve this,
we made two significant strategic disposals in the second
half of 2021: the sale of the Zung Fu China business to our
long-term partner in China, Zhongsheng; and the sale
andleaseback of the Zung Fu Hong Kong properties.
Thesetransactions enabled the Company to reduce its
netdebt to US$1.3 billion by the end of 2021.
During 2022 and, as we enter 2023, we have continued
toprogress the simplification of the Group’s portfolio
andlaythe foundations for the next stage of its growth.
InJanuary 2023, the Group entered into a conditional
agreement to sell its 28.2% stake in the Hong Kong-listed
Greatview Aseptic Packaging Company and, in March 2023,
the Group expects to complete the sale of its Motors
business in the United Kingdom.
The Group also continued to focus on making strategic
investments, with Astra acquiring a 49.6% stake in Bank
Jasa Jakarta in 2022, continuing its focus on providing
compelling financial services to its customers, aswell as
a7.4% stake in Medikaloka Hermina, one of the largest
hospital groups in Indonesia, increasing its focus on
healthcare services and adding to its existing investment in
Halodoc, an online platform in Indonesia providing access
to a range of medical services.
To support its strategy of diversifying into other minerals
and renewable energy, Astra, through United Tractors,
isentering the nickel mining and processing businesses
through an agreement to acquire a 90% interest in
StargatePasific Resources and Stargate Mineral Asia for
US$272 million, which is expected to complete in 2023.
Ithas also acquired a 31.5% interest in Arkora Hydro,
ahydro-based energy power generation business.
In February 2023, Cycle & Carriage Singapore completed a
sale and leaseback arrangement of its properties for
around US$230 million.
These examples illustrate the focus of the Group on
implementing its capital allocation and portfolio strategy
and on seizing opportunities when they arise to optimise
our portfolio and prepare the Group for future growth.
20
Jardine Matheson
Annual Report 2022
Group Managing Director’s Review
Driving Innovation and Operational Excellence
The Group also continues to focus on delivering
operational excellence in our existing and new
businesses, and the past year has seen strong progress
byour businesses in driving greater efficiency and
productivity, despite the challenging market environment.
Business improvement initiatives were progressed in the
year in many of the Group’s businesses, including
Gammon, Jardine Restaurant Group, Zung Fu Hong Kong
and HACTL, with a positive impact on results. DFI Retail’s
multi-year transformation plan continues to deliver real
improvements in operating metrics across its banners.
Mandarin Oriental has successfully unified its property
management system across hotels, delivering
standardisation and enabling efficiency benefits.
Theincreased efficiencies which are being delivered
across our businesses are essential to their ability to
increase their agility and adaptability and address the
challenges they face in order to deliver future growth.
As well as driving operational excellence, a key strategic
priority is a focus on innovation. Our B2B businesses have
continued enthusiastically to embrace digital ways of
working to improve operations. Gammon has been an
early embracer of building information modelling and has
continued to grow its Virtual Design & Construction (‘VDC’)
teams in Hong Kong and Shenzhen, which use digital
prototyping to validate and optimise the design and
construction process. JEC have developed their JEDI
AI-powered digital platform, which utilises data-driven
insights to provide building energy services in areas such
as energy analytics and optimisation, fault detection and
diagnostics and chiller optimisation, and deliver better
experiences for end-users. Gammon’s Digital G subsidiary
provides digital technology to make the building process
and management of the built environment safer, more
efficient and less labour intensive.
We continue to seek new inorganic growth opportunities
which facilitate our wider participation in the digital
economy, emerging industries and new geographies.
JEChas acquired the Hong Kong and Macau business
ofMGI Group Holdings Limited, a leading specialty
healthcare engineering solutions provider, as part of JEC’s
strategic aim of building its skills and capabilities in the
healthcare sector. Astra has continued to invest in digital
businesses in Indonesia during the period. It acquired an
interest in Paxel, a technology-based logistics startup, and
also increased its investments in Sayurbox, an e-commerce
grocery farm-to-table platform and Mapan, a digital
community-based social financing platform.
As the Asian consumer appetite for digital continues to
increase, our B2C businesses are focussed on embedding
digital as a core component of how we anticipate and serve
the needs of customers – developing omnichannel
experiences, building data capabilities and investing in
start-ups to augment our capabilities to react with speed
and agility to the changing marketplace and evolving
consumer behaviours and connect effectively with
ourcustomers.
DFI Retail’s yuu coalition loyalty programme continues to
exceed expectations and is the leading customer loyalty
programme in Hong Kong, with more than four million
members. The group has this year launched yuu Rewards in
Singapore, with encouraging performance so far, and its
yuu-to-me offering, launched in May 2022, provides
customers with an integrated one-stop online shopping
experience and home delivery service across leading
HongKong brands.
Hongkong Land has developed the digital services it
provides to customers in its Hong Kong retail portfolio by
introducing a revamped LANDMARK app, which provides
shoppers and loyalty members with a more personalised
and intuitive user experience, while the group has also
enhanced the functionality of its ‘By The Bay’ mobile app
inSingapore with the addition of exclusive retail offerings,
health and wellness workshops and a series of community
and charitable events.
Mandarin Oriental launched its new website during the
year, redesigned to ensure a mobile-first, personalised
user experience whilst improving site performance and
reliability. Since the new website went live in August, 60%
of visits have come from mobile devices, a considerable
uplift from the previous website, driving more direct
digitalbookings.
Our Southeast Asian businesses are also adopting
innovative approaches to how they run their businesses.
Astra, for example, is using Formula 1 technology in the
mining industry to optimise fuel consumption. It is also
using the Internet of Things (‘IoT’) and control centres to
optimise manufacturing.
21
Jardine Matheson
Annual Report 2022
Group Managing Director’s Review
Our businesses are looking for ways in which they can
innovate (through enhancements to existing businesses or
new inorganic growth) which align with our sustainability
priorities. Astra’s investment through United Tractors in
Arkora Hydro demonstrates its determination to take action
to deliver on the commitments in its Just Energy Transition
Statement published last June, by investing in renewable
energy. This investment builds on Astra’s existing presence
in the hydroelectric power sector, where it already operates
a mini-hydro power plant and is developing another.
Astra is also developing electricity generation facilities
using innovative solar photovoltaic (‘PV’) technology,
through its subsidiary PT Energia Prima Nusantara (‘EPN’).
In 2022, EPN secured commitments to install 16 MWp of
rooftop solar PV, of which 4 MWp has been installed in a
number of Astra group company facilities.
Vietnam’s installed capacity for wind, solar and hydro
power is forecast to double by 2030 and REE, JC&C’s
associate there, continues to make extensive investments
in renewable energy. REE is Vietnam’s largest investor in
roof-top solar power and also has interests in wind
farmsand hydroelectric dams. As of December 2022,
renewable energy sources (hydroelectric, solar and wind)
accounted for 72% of REE’s energy portfolio.
JC&C’s automotive businesses in Southeast Asia are also
focussed on innovative sustainable business solutions.
Asan example, Cycle & Carriage Singapore (‘CCS’) is
growing its new electric van logistics business in
Singapore, offering logistics solutions to retail giants
suchas IKEA, Guardian and Uniqlo. CCS also sells and
leases the vehicles to large logistics businesses,
includingUPS andDHL.
Enhancing Leadership and Entrepreneurialism
We need to evolve and accelerate to stay ahead of the
competition – and we have identified the embedding of
anentrepreneurial culture as a key success factor in
doingthis. Entrepreneurship means being open to
experimentation and having the confidence to put ideas
forward and, importantly, to promote and defend them.
A key element of building an entrepreneurial culture is
attracting, developing and retaining the right leadership
talent, and this is a top priority for the Group and its
companies. In the past year, the Group has made a number
of significant senior appointments to bolster its leadership
and drive future growth. We see it as essential to appoint
the most competent, highly-qualified and experienced
senior executives to drive business growth, and have
appointed two new Jardine Matheson Limited Directors to
lead our business development efforts across China and
Southeast Asia. We have also strengthened theleadership
of our core Group functions, by appointing anew Group
General Counsel and Group Head of HumanResources.
We have continued to invest in developing our leaders and
providing them with opportunities to advance their careers
within different businesses across the Group, with a
number of executive-level senior management moves
taking place during the period.
We are focussed on providing our colleagues with the
appropriate training and support to equip them with the
skills needed to navigate the challenges and opportunities
they face, both in the short- and the long-term. Our
comprehensive Group-wide programme of online learning
and academies has seen high levels of participation in
theyear.
We are also continuing our work to create a diverse and
inclusive culture where everyone can succeed. We are
working with our businesses to increase the diversity of the
boards and senior management of our Group companies.
Akey element of this is the successful nurturing of
colleagues at all levels, in order to develop diverse pools
oftalent from which our future senior leaders can be
selected. We recognise that there is a great deal more to do
in order to build greater diversity at all levels of the Group,
but we made good progress last year in implementing our
diversity and inclusion (‘D&I’) strategy to help progress our
ambitions across the Group. We launched a series of
initiatives, including a learning campaign on inclusive
leadership; a comprehensive review to enhance Human
Resources policies; and new processes which support D&I.
We have also developed targets for increasing female
representation in our workforce and leadership.
We also aim to create an owner mindset among our staff
and are supporting this by enhancing our incentive
structures over time to focus less on current profits and
more on value creation over a longer time horizon.
22
Jardine Matheson
Annual Report 2022
Group Managing Director’s Review
Progressing Sustainability
In 2022, we continued to drive a more aligned, focussed
approach to sustainability across all our Group companies,
leveraging and building on the work many of them are
already doing in this area to maximise the impact we have
in our communities and on the environment. There is
increasingly strong engagement between our businesses
on sustainability issues, which will enable us to create real
scale in what we do.
We continue to focus on actively sharing the positive
actions our diverse businesses are taking in relation
tosustainability, by reporting more effectively on
Environmental, Social and Governance (‘ESG’) issues, and
in 2022 we published our inaugural Sustainability Report.
The report included data on a range of Group-wide metrics
gathered from our businesses. We also published TCFD-
aligned disclosures for the first time in the report.
We took a key step in progressing our climate action
agenda in June 2022 with the publication by the Company,
JC&C and Astra of a Just Energy Transition statement, which
articulated our commitment to a low carbon economy in
the geographies where we operate. Effective steps are
already being taken to implement the key commitments
inthe statement: we saw investments in the year in
renewable energy-focussed businesses in Indonesia and
Vietnam and a diversification into non-coal mineral mining
with the acquisition of interests in a nickel mining and
processing business.
Our focus on climate action also saw our businesses
setting science-based 2030 targets for decarbonisation
and starting to develop decarbonisation pathways towards
achieving those targets.
Our businesses are exploring opportunities to collaborate
in relation to responsible consumption, especially in the
areas of waste and circularity, and the Group is developing
its social inclusion strategy, with a particular focus on the
areas of education and mental health.
Creating emotional engagement among our colleagues
andother stakeholders continues to be a key aspect of
implementing an impactful and effective sustainability
approach, and this was a focus of our sustainability efforts
during the year, as we saw an acceleration in momentum
across our businesses in organising volunteering activity,
with a significant increase in volunteering hours and
number of volunteers.
Summary of Performance
The Group saw improved performances from many of its
businesses in 2022, compared to 2021, with particularly
strong growth in Southeast Asia, led by Astra. The results
delivered by the Group in 2022 once again demonstrate the
continuing value of our diversified portfolio, which has
enabled Jardines to produce a resilient performance,
despite challenging conditions in a number of our sectors
and markets.
The strong performance of the Group’s businesses in
Southeast Asia in the first half of 2022, together with the
challenges faced by our businesses in Hong Kong and on
the Chinese mainland throughout the year, led to 55% of
the Group’s profit for the period coming from Southeast
Asia and 39% from China.
The Group’s underlying net profit for the year increased by
5% to US$1,584 million and underlying earnings per share
were US$5.49, an increase of 14%. The Group’s underlying
earnings per share in 2022 represent an increase of 30%
over those of 2019, while its dividends per share of
US$2.15 in 2022 represent an increase of 25% over the
same period.
The key drivers of the Group’s performance were strong
performances by Astra and our other Southeast Asian
businesses held by JC&C. Astra reported a 51% increase
inunderlying earnings, excluding the unrealised net
fairvalue loss on investments in GoTo and Hermina,
withimprovements across most of its divisions,
supportedby Indonesia’s economic recovery and higher
commodity prices. JC&C’s underlying profits increased
by39%, with strong performances by THACO and its
DirectMotor Interests.
Mandarin Oriental saw a return to underlying profitability in
the year, with a strong performance from its resort hotels
and a good recovery by its owned hotels, although results
were impacted by Hong Kong and Tokyo. There was also an
improved contribution from the Group’s unlisted Jardine
23
Jardine Matheson
Annual Report 2022
Group Managing Director’s Review
Total capital investment of US$9.7 billion
(US$ million)
2,200 Astra
584 Jardine
Cycle & Carriage
61 Mandarin Oriental
Jardine Pacific 106
Hongkong Land 5,252
Corporate 365
Jardine Motors 9
1,080 DFI Retail Group
Pacific businesses, driven by Jardine Schindler and JEC,
although most of the businesses focussed on Hong Kong
were impacted by the continuation of pandemic
restrictions there.
Hongkong Land’s full year underlying profits were 20%
lower than the prior year, as a result of a significantly lower
profit contribution from the Development Properties
business in the second half of the year. The lower profit
contribution was primarily due to a smaller number of
planned sales completions and the impact of pandemic-
related restrictions on construction activities on the
Chinese mainland. DFI Retail Group saw a decline year-on-
year in underlying profit, with the pandemic continuing to
impact the financial performance of the group’s
subsidiaries and associates. There were, however,
encouraging signs of an improvement in performance in
the second half. There was a slight decline in the
performance of the Group’s Motor interests.
Net non-trading items were negative, versus a positive
position last year. The majority of the non-trading losses
in2022 were the Group’s share of fair value losses of
US$604million arising from the revaluation of the Group’s
investment properties portfolio and non-current
investments of US$309 million, together with the
impairment of investment in associates of US$320 million.
The net non-trading gain in 2021 mainly included the
US$791 million gain on disposal of Zung Fu China business
and the US$337 million gain on the sale and leaseback
ofZung Fu Hong Kong’s principal operating properties,
partly offset by the Group’s share of the unrealised loss
ofUS$681 million in respect of the Group’s investment
properties portfolio. After taking account of the net
non-trading losses, the Group recorded a net profit
attributable to shareholders of US$354 million in 2022.
The Group’s balance sheet remains strong with gearing of
13%, up from 11% at the end of 2021.
The Group’s capital investment, including expenditure on
properties for sale, was US$5.3 billion in 2022, and capital
investment at its associates and joint ventures exceeded
US$4.3 billion. The Group continues to invest for the
long-term and ensure that its businesses have the
resources to drive future growth.
Outlook
The encouraging recovery in performance across many of
our businesses continued in 2022 and overall earnings
returned to levels last seen in 2019. This reflected the
broad diversification of the Group, even while many of our
businesses in Hong Kong and the Chinese mainland were
held back by the continued impact of the pandemic.
We are optimistic that the reopening of borders, as well as
opportunities in Southeast Asia, will drive the Group’s
cyclical recovery during 2023 despite softening commodity
prices, and we remain confident in our strategy for
sustainable, long-term profit growth.
24
Jardine Matheson
Annual Report 2022
Group Managing Director’s Review
2022 2021 Change (%)
Gross revenue (including
100% of associates and
joint ventures) (US$ billion) 6.6 5.7 17
Revenue (US$ billion) 2.1 1.5 36
Underlying profit attributable
to shareholders
(US$million) 182 175 4
Jardine Pacific
Gammon
HACTL
Jardine Aviation Services
Jardine Engineering Corporation (‘JEC’)
Jardine Restaurant Group
Jardine Schindler
Zung Fu Hong Kong
Jardine Pacific
• Good performance by most of the
B2Bbusinesses
• Consumer businesses continued to be
impacted by pandemic restrictions
• Jardine Schindler and JEC saw
improved performance
25
Jardine Matheson
Annual Report 2022
Group Managing Director’s Review
Underlying profit by business
(excluding corporate & other interests) (US$ million)
Gross revenue (US$ billion)
Underlying profit attributable to shareholders
(US$million)
Gross Revenue (US$ million)
Jardine Pacific’s
2019
2020
2021
2018
2022
6.8
6.8
6.2
5.7
6.6
Underlying Profit Attributable
to Shareholders (US$ million)
Jardine Pacific’s
2019
2020
2021
2018
2022
160
164
182
175
182
23 Transport Services
19 Jardine Restaurants
12 Zung Fu Hong Kong
Gammon 39
JEC 53
Jardine Schindler 36
Jardine Pacific produced an underlying net profit of
US$182million, 4% higher than 2021. There was a good
performance by most of the B2B businesses, while the
group’s consumer businesses continued to be impacted
bycontinuing pandemic restrictions in Hong Kong.
Thebusiness reported a net loss of US$123 million,
afternet non-trading losses of US$305 million.
Jardine Pacific businesses received total government
subsidies of US$28 million in the current year, compared
with US$9 million in 2021.
There was significant focus in the year across the group’s
businesses in driving operational improvements.
Thebenefits are now starting to be seen in improved
business performance and the group is well set for
futuregrowth.
Within Jardine Pacific’s B2B businesses, Jardine
Schindler’s performance was higher than in 2021, with a
stable contribution from the Existing Installation business.
JEC delivered good profit growth. Its Hong Kong businesses
continued to report solid performances, although its
regional businesses continued to face challenging
conditions. Strong levels of new work were secured,
leading to a record order book at year-end.
Gammon’s performance was in line with last year due to
the timing of projects, and its order book remained strong.
In Transport Services, there was weaker performance in
HACTL, mainly caused by lower volumes as export demand
softened. Jardine Aviation reported a higher loss, due to
lower flight volumes for much of the year. Volumes slowly
recovered, however, as pandemic restrictions in Hong Kong
eased towards the end of the year.
Looking at the group’s consumer-facing businesses,
Jardine Restaurants delivered overall results which were
29% lower than last year, mainly due to the impact of
disruption from pandemic restrictions in Hong Kong,
whichresulted in a weaker performance in both Pizza Hut
and KFC Hong Kong. Despite a lower contribution caused
by increasing operating costs, Pizza Hut Taiwan continued
to perform well. The business continued to benefit from
ongoing ‘process re-engineering’ projects.
Zung Fu Hong Kong reported a lower profit year on year.
After-sales activities were affected by the pandemic, while
supply constraints impacted passenger car deliveries.
Jardine Pacific saw net non-trading losses of
US$305million in the year, compared to a net non-trading
gain of US$389 million in 2021, as a result of the decrease
in the fair value of the investment properties and the
impairment of investments, and the absence of the gain on
disposal of Hong Kong properties by Zung Fu which was
reported in 2021.
26
Jardine Matheson
Annual Report 2022
Group Managing Director’s Review
2022 2021 Change (%)
Revenue* (US$ billion) 2.0 5.0 (59)
Underlying profit attributable
toshareholders*
(US$million) 299 318 (6)
* Excluding results of automotive interests held through Jardine Cycle & Carriage.
The Group’s Motors business produced an underlying net
profit of US$299 million in 2022, 6% lower than the prior
year. The Group no longer had the benefit of contributions
from its Chinese mainland business following its disposal
to Zhongsheng in late 2021, although it benefitted from a
higher contribution from its 21% interest in Zhongsheng in
respect of the second half of 2021 and the first half of
2022, with a strong performance in its used car business.
Jardine Motors
• Underlying net profit 6% lower than the prior year
• Benefitted from its 21% interest inZhongsheng
due to higher contribution in2022
• The Group no longer had the benefit
ofcontributions from its Chinese
mainland business following its
disposal last year
• Despite constrained supply,
the new car business
performed well due
tostrong margins
27
Jardine Matheson
Annual Report 2022
Group Managing Director’s Review
Revenue* (US$ billion)
Underlying profit attributable to shareholders*
(US$million)
Underlying profit by geographical location*
(excluding corporate) (US$million)
Revenue (US$ million)
Jardine Motors
2019
2020
2021
2018
2022
5.9
5.7
5.0
5.0
2.0
Underlying Profit Attributable to
Shareholders (US$ million)
Jardine Motors
2019
2020
2021
2018
2022
175
196
214
318
299
35 United Kingdom
Chinese mainland 263
* Excluding results of automotive interests held through Jardine Cycle & Carriage.
The Group’s United Kingdom motor business delivered a
slightly lower profit in 2022, with the business impacted
byunfavourable exchange rates in the period. Despite
constrained supply, the new car business performed well
due to strong margins. Used cars also remained resilient,
with lower volumes offset by improved margins.
417
Dealerships
Covering
25
provinces and regions
Over
110
cities across Chinese mainland
Zhongsheng
Group’s
presence
28
Jardine Matheson
Annual Report 2022
Group Managing Director’s Review
2022 2021 Change (%)
Underlying profit attributable
to shareholders
(US$million) 776 966 (20)
Gross assets (US$ billion) 39.1 39.7 (1)
Net asset value per share
(US$) 14.95 15.05 (1)
Hongkong Land’s full-year underlying profits were 20%
lower than the prior year, primarily due to a significantly
lower profit contribution from the Development Properties
business on the Chinese mainland in the second half of the
year. The contribution from Investment Properties was
resilient, however, with modest financial impacts in the
retail portfolio from the pandemic measures introduced
across the Chinese mainland in 2022. The impact of lower
average office rents in Hong Kong was partially offset by a
reduction in operating costs.
Profit attributable to shareholders was US$203 million,
after including net non-cash losses of US$573 million
resulting primarily from lower valuations of the group’s
investment properties. This compares to a loss of
US$349million in 2021, which included a US$1,315 million
reduction in property valuations.
Hongkong Land
• Underlying profit down 20% to
US$776million
• Lower residential development
profitson the Chinese mainland
• Slight decline in results from
Investment Properties; asset
valuesstable
• Group financial position
remainsstrong
• Final dividend maintained
at US¢16.00 per share
29
Jardine Matheson
Annual Report 2022
Group Managing Director’s Review
1.2 million sq. m.
Area of operational commercial investment portfolio under
management (including 100% of joint ventures)
Investment Properties
In Hong Kong, office leasing demand remained subdued.
Against this backdrop, the group’s Central office portfolio
remained resilient, outperforming the broader market due
to its prime CBD location and premium offering. Physical
vacancy remained below average Central market vacancy
levels. Modestly negative rental reversions, however,
resulted in a decrease in average office rents.
Retail market sentiment in Hong Kong was severely
affected by the fifth wave of the pandemic in the first half
of 2022. Retail trading benefitted in the second half of the
year, however, as social distancing and travel restrictions
were progressively relaxed. Total retail sales nevertheless
remained well below pre-pandemic levels, as travel
restrictions continued to prevent the return of tourists.
Average retail rents in 2022 in the Central LANDMARK retail
portfolio decreased, but vacancy on both a physical and
committed basis was unchanged from the prior year.
In Singapore, contributions from the group’s office
portfolio increased, due to positive rental reversions
underpinned by a healthy level of occupier demand, with
average office rents increasing and vacancy in the Group’s
office portfolio remaining low.
In Shanghai, development activity continued at the group’s
43%-owned prime 1.1 million sq. m. development on the
West Bund. The multi-phase project remains on schedule,
with modest impacts from the pandemic-related
restrictions in Shanghai during part of the year. The West
Bund development is a complex, predominantly
commercial, mixed-use site of unprecedented scale.
Itislocated in a prime waterside location in Shanghai
withunrivalled access to the riverside. When completed,
the project will comprise five neighbourhoods and
28landparcels. The West Bund has established itself as
aninternational creative industry cluster, supported by
three pillars: culture and creative industries, high-tech
businesses and the innovative finance sector. When
completed, the development will comprise around
660,000 sq. m. of offices, 210,000 sq. m. of retail space,
170,000 sq. m. of luxury residences, 55,000 sq. m. of
five-star hotels, 30,000 sq. m. of convention facilities
and10,000 sq. m. of sports facilities. It will incorporate an
industry-leading approach to sustainability.
Development Properties
As anticipated, the profit contribution from the group’s
Development Properties business on the Chinese mainland
decreased compared to the prior year, as a result of a
significantly lower profit contribution in the second half of
the year, due to fewer planned sales completions and the
impact of pandemic-related restrictions on construction
activities. There was also a decrease in the group’s
attributable interest in contracted sales in 2022, mainly
due to weak market sentiment for residential properties
and pandemic-related movement restrictions that
hampered sales activities.
In Singapore, recognised profits in 2022 were lower than
the prior year, which benefitted from the construction of
the wholly-owned 1,404 unit Parc Esta project. The group’s
attributable interest in contracted sales rose, however,
driven by the healthy pre-sales performance of two new
residential projects launched during the year.
Chinese mainland
Hong Kong
Thailand
Malaysia
Singapore
Indonesia
Philippines
Vietnam
Macau
Cambodia
Investment
Properties –
Office
Investment
Properties –
Retail
Development
Properties
30
Jardine Matheson
Annual Report 2022
Group Managing Director’s Review
The group continues to be disciplined in evaluating and
selecting Development Properties opportunities on the
Chinese mainland, with a focus on Tier 1 and Tier 2 cities.
During the year the group made two acquisitions –
aprimarily residential site in Xuhui District, Shanghai,
adjacent to our mixed-used project in West Bund and an
interest in a predominantly retail commercial site in
Suzhou. This development reflects the group’s strategy of
developing luxury and premium lifestyle retail properties
on the Chinese mainland. The group currently has four such
properties in operation, and the site in Suzhou will be
added to the pipeline of ten further such developments.
The group also increased its investments in two existing
projects, acquiring the remaining 50% interest in the
mixed-use project in WE City, Chengdu from KWG Property
Holdings Limited and acquiring a 15% interest in Yue City,
amixed-use project in Nanjing, from Country Garden in
January 2023.
In Singapore, the group acquired a 49% interest in a
residential site in the Jalan Tembusu area.
Underlying profit attributable to shareholders
(US$million)
Net asset value per share (US$)
Underlying operating profit by activity
(before corporate costs) (US$ million)
Gross assets by activity
Underlying Earnings per Share (US¢)
Hongkong Land
2019
2020
2021
2018
2022
1,036
1,076
963
966
776
Net Asset Value per Share (US$)
Hongkong Land
2019
2020
2021
2018
2022
16.43
16.39
15.30
15.05
14.95
404 Development
Properties
951Investment
Properties
83%Investment
Properties
17% Development
Properties
Gross assets by location
Hong Kong 66%
20% Chinese mainland
& Macau
14% Southeast Asia
Hongkong Land
31
Jardine Matheson
Annual Report 2022
Group Managing Director’s Review
2022 2021 Change (%)
Revenue including 100% of
associates & joint ventures
(US$ billion) 27.6 27.9 (1)
Revenue (US$ billion) 9.2 9.2 –
Underlying profit attributable
toshareholders
(US$million) 29 105 (72)
2022 was another very challenging year for DFI Retail.
Acombination of inflationary pressures and customer
behavioural shifts driven by the pandemic significantly
impacted first-half financial performance, reducing profit
contributions from the Grocery Retail and Convenience
divisions. The group’s share of underlying losses
fromsimilarly affected associates also materially
affectedresults.
DFI Retail Group
• Substantial sequential improvement in
underlyingprofitability in second half
• Lower full year underlying profit due to
continuing impactof pandemic, inflationary
pressure, increased investment in digital
• Ongoing transformation programme
continues to drive improvement
• Final dividend of US¢2.00 per share
32
Jardine Matheson
Annual Report 2022
Group Managing Director’s Review
There was, however, a significant improvement in
profitability in the second half of the year. The group needs
to continue to adapt to changes in consumer preferences
and, despite the external challenges, has increased
investments in digital capacity and capability in the year.
While these investments impacted profitability in the year,
they are necessary to meet customers’ evolving needs and
to drive long-term shareholder value.
The group reported an overall underlying profit of
US$29million for the full year. The group’s subsidiaries
delivered underlying profit of US$64 million, while
associates contributed an underlying loss of US$35 million.
There was an encouraging improvement in second-half
underlying profit to US$80 million, representing a
US$132million increase in profitability relative to the
firsthalf.
The group’s net loss for the year was US$115 million,
reflecting an impairment charge of US$171 million in
respect of its investment in Robinsons Retail.
Food – Grocery Retail
Underlying operating profit for the Grocery Retail division
was US$91 million for the year, lower than the prior year,
primarily due to the absence of the panic buying seen
lastyear, further compounded by rising cost of goods
soldand increases in operating expenses. Despite the
challenges faced throughout 2022, however, the group
hasbeen encouraged by stronger underlying performance,
withGrocery Retail underlying profitability significantly
above 2019 levels, supported by the group’s
transformation initiatives.
Food – Convenience
Convenience underlying operating profit was US$51million
for the year, broadly in line with the prioryear.
Encouragingly, profitability in the second half improved
significantly, with the group reporting US$51million profit
compared to the breakeven result in the first half.
Health and Beauty
Underlying operating profit for the Health and Beauty
division increased by 66% to US$94 million, driven by
solid sales growth.
Home Furnishings
IKEA’s sales for the year were impacted by COVID-19 related
restrictions in the first half and supply chain constraints,
which impacted stock availability. Operating profit was
US$46 million, slightly ahead of the prior year, primarily
due to strong cost control.
DFI Retail Group
33
Jardine Matheson
Annual Report 2022
Group Managing Director’s Review
#
Including share of associates and joint ventures.
Sales mix by format
#
Profit mix by format
†
Retail outlet numbers by format
Ω
Underlying profit attributable to shareholders
(US$million)
Underlying Profit Attributable
to Shareholders (US$ million)
Dairy Farm
2019
2020
2021
2018
2022
358
321
276
105
29
Before effect of adopting IFRS 16
At IFRS 16 basis
Grocery Retail 51%
16% Health and Beauty
6% Home Furnishings
9% Restaurants
1% Other Retailing
17%Convenience
Stores
Grocery Retail 5%
Other Retailing 1%
39% Health and Beauty
19% Home Furnishings
15% Restaurants
21%Convenience
Stores
Grocery Retail 2,024
2,552 Health and
Beauty
23 Home Furnishings
1,908 Restaurants
560 Other Retailing
3,596Convenience
Stores
†
Based on operating profit before effect of adopting IFRS 16 and share of results of
associates and joint ventures, and excluding selling, general and administrative
expenses and non-trading items.
Ω
Including 100% of associates and joint ventures.
13
Asian countries and
territories
Over
10,600
Outlets
11.7 million sq. m.
Gross trading area
Associates
The performance of Maxim’s for the full year was severely
hampered by a very challenging first quarter as result of
thefifth wave of COVID-19 in Hong Kong, which led to a
large number of restrictions on movement and dining.
Thegroup’s share of Maxim’s underlying losses was
US$26million in the first half of the year. Encouragingly,
Maxim’s performance improved as the year progressed,
due to solid mooncake sales performance and the easing
of dining restrictions. The group’s overall share of Maxim’s
underlying profits was US$38 million for the full year.
The group’s share of Yonghui’s underlying losses was
US$80 million for the year, compared to a US$90 million
share of underlying losses in the prior year. While
Yonghui’s like-for-like sales improved in the first half of the
year, performance in the second half was impacted by
government-imposed restrictions on the Chinese mainland,
as well as the slowdown in the overall macroeconomic
environment.
Robinsons Retail reported strong growth in 2022, as it
benefitted from the reopening of the Philippines economy,
together with an improved product mix and strong cost
control. Robinsons Retail’s underlying profit contribution to
the group was US$24 million in 2022, over 60% higher
than in 2021.
34
Jardine Matheson
Annual Report 2022
Group Managing Director’s Review
2022
US$m
2021
US$m
Change (%)
Combined total revenue of
hotels owned and under
management* 1,568 1,054 49
Revenue 454 317 43
Underlying profit/(loss)
attributable to
shareholders 8 (68) n/a
* Combined revenue includes turnover of the group’s subsidiary hotels in addition to
100% of revenue from associate, joint venture and managed hotel.
Mandarin Oriental continued its recovery in 2022 as travel
restrictions lifted in most parts of the world and it ended
the year strongly, with a return to underlying profitability.
Owned hotels achieved improved occupancy at strong
rates, and the management business continued to grow
robustly, exceeding 2019 profitability. The group’s
management business recorded a strong performance,
with robust growth in management fees, particularly from,
resort destinations such as Bodrum, Turkey, Lake Como,
Italy and Dubai, UAE. The group’s management business
reported an underlying profit of US$17 million in 2022,
compared to US$5 million in 2021.
Mandarin Oriental
• Combined revenue exceeds 2019 levels
• Group returns to underlying profit
• Strong performance from management
business, particularly resort hotels
• Good recovery by owned hotels,
although results impacted by
HongKong and Tokyo
• Two new hotels and two new
residences opened and
seven new projects
announced
35
Jardine Matheson
Annual Report 2022
Group Managing Director’s Review
Most of the Group’s owned or partially owned properties
reported better earnings in 2022. The overall performance
from owned hotels, however, continued to be adversely
affected by lower contributions from the Hong Kong and
Tokyo hotels, whose performance was heavily impacted
byCOVID-19 restrictions throughout the year. Results were
notably better in London, Paris, Singapore, and Bangkok,
driven by high rates and improved occupancy from the
previous year.
The group achieved an underlying profit of US$8 million
forthe full year, its first profit since 2019. Although
profitability remained below pre-pandemic levels, this is
asignificant improvement compared with 2021, when
thegroup recorded an underlying loss of US$68 million.
The group opened two new hotels in the year, in Shenzhen,
China and Lucerne, Switzerland, and two standalone
residences in Barcelona, Spain and Beverly Hills, USA.
Fiveprojects are scheduled to open in 2023.
In 2022, the group announced seven new management
contracts, in Greece, Italy, Egypt, Kuwait, the Maldives,
China and Vietnam. The group’s robust development
pipeline includes over 26 projects expected to be
completed in the next five years.
The Causeway Bay site in Hong Kong, which is being
redeveloped as a mixed-use commercial building,
remainson track to complete in 2025.
Underlying profit/(loss) attributable to shareholders
(US$ million)
Net asset value per share* (US$)
* With freehold and leasehold properties at valuation.
Underlying Profit Attributable
to Shareholders (US$ million)
MO
2019
2020
2021
2018
65
41
2022
(68)
(206)
8
Net Asset Value per Share* (US$)
MO
2019
2020
2021
2018
2022
4.62
4.70
4.09
3.93
3.87
Hotel and residences portfolio
#
As of 2nd March 2023.
MO
Number of hotels in operation
Number of hotels and residences projects expected in the
next five years
30
18
33
20
34
23
36
24
26
#
36
#
2018
2019
2020
2021
2022
Combined total revenue of US$1,568 million of hotels
under management by geographical area (US$ million)
The Americas 275
462 Asia
831Europe,
Middle East
& Africa
36
Jardine Matheson
Annual Report 2022
Group Managing Director’s Review
2022 2021 Change (%)
Revenue (US$ billion) 21.8 17.7 23
Underlying profit attributable
toshareholders
(US$million) 1,096 786 39
Jardine Cycle & Carriage
Astra
Truong Hai Group Corporation (‘THACO’)
Direct Motor Interests:
Cycle & Carriage Bintang
Cycle & Carriage Myanmar
Cycle & Carriage Singapore
Tunas Ridean
Other Strategic Interests:
Refrigeration Electrical Engineering Corporation (‘REE’)
Siam City Cement (‘SCCC’)
Vinamilk
Jardine Cycle & Carriage
• Record underlying profit of US$1,096 million,
39% higher than 2021
• Improved performances from both Astra
and non-Astra interests
• Proposed final dividend of
US¢83per share, total dividend of
US¢111 for the year, 39% higher
than 2021
37
Jardine Matheson
Annual Report 2022
Group Managing Director’s Review
Underlying profit of US$234 million (excluding Astra,
DMIcentral overheads and corporate) by business
(US$million)
Revenue (US$ billion)
Underlying profit attributable to shareholders
(US$million)
JC&C’s underlying profit was 39% higher than 2021 at
US$1,096 million. After accounting for non-trading items,
profit attributable to shareholders was US$740 million,
12% higher than the same period last year. Non-trading
items in 2022 of US$356 million comprised unrealised fair
value losses of US$238 million related to non-current
investments, and an impairment loss of US$114 million in
respect of the investment in SCCC, necessary due to a
challenging operating environment.
Astra’s contribution to the group’s underlying profit
increased to a record US$913 million from US$655 million
last year, with improved performances from most of its
businesses, reflecting the recovery in the Indonesian
economy and high commodity prices.
The underlying profit from JC&C’s Direct Motor Interests
increased to US$63 million from US$39 million last year,
mainly due to improved contributions from Cycle & Carriage
Singapore and Malaysia, and Tunas Ridean in Indonesia.
Other Strategic Interests contributed an underlying profit of
US$86 million, down 4% from the previous year.
THACO
THACO contributed a profit of US$83 million, 34% up from
the previous year. The profit from its automotive business
continued to grow, supported by strong production
levelsand a temporary reduction in registration fees for
locally-assembled vehicles that expired in May 2022.
Itsunit sales were higher and its market share increased.
Margins benefitted from strong demand and an improved
sales mix. The group continues to expand its investment
inagriculture and, as a result, saw an increase in losses
from this business as substantial pre-production losses
were incurred.
Revenue (US$ billion)
Jardine C&C
2019
2020
2021
2018
2022
19.0
18.6
13.2
17.7
21.8
Underlying Profit Attributable
to Shareholders (US$ million)
Jardine C&C
2019
2020
2021
2018
2022
856
863
429
786
1,096
7 Cycle & Carriage
Bintang
THACO 83
REE 38
SCCC 12
Vinamilk 36
Other Strategic Interests:
Direct Motor Interests:
33 Cycle & Carriage
Singapore
28 Tunas Ridean
(3) Cycle & Carriage
Myanmar
38
Jardine Matheson
Annual Report 2022
Group Managing Director’s Review
Jardine Cycle & Carriage
Direct Motor Interests
Direct Motor Interests saw an increase of 62% in underlying
profit, with better results in Singapore, Malaysia and
Indonesia. Cycle & Carriage Singapore’s contribution was
13% higher, mainly due to increased profits from its
premium and used car operations. New passenger car
sales fell by 15% as sales volume, particularly in respect of
its mass-market models, was adversely impacted by the
tightened Certificate of Entitlement cycle. Market share,
however, increased from 15% to 19%.
In Indonesia, Tunas Ridean’s contribution was 71% higher
than the previous year, with higher profits across its
automotive, financial services and leasing businesses.
Cycle & Carriage Bintang in Malaysia saw an increased
profit, mainly due to improved sales volumes and margins
backed by a larger order book, arising from a temporary
reduction in government sales tax.
During the year, JC&C further increased its interest in
Cycle& Carriage Bintang from 89.0% to 96.9%, through
on-market purchases, acceptances under its Voluntary
General Offer and direct purchases from the minority
shareholders. Cycle & Carriage Bintang was delisted from
Bursa Malaysia in September 2022.
Other Strategic Interests
The profit from JC&C’s Other Strategic Interests decreased
by 4% compared with the previous year, with a significantly
lower contribution from SCCC, as the business was
adversely impacted by higher energy costs and inflationary
pressure, as well as increased tax rates in SriLanka and the
depreciation of the rupee, which offset improved cement
volumes and prices in most of its markets.
REE’s contribution was, however, 70% higher than the
previous year, mainly due to an improved performance
from its renewable energy investments as a result of
favourable hydrology.
The group’s investment in Vinamilk produced a slightly
lower dividend income of US$37 million compared to
US$39 million last year. Vinamilk reported a decrease in
net profit, mainly due to higher raw material costs.
39
Jardine Matheson
Annual Report 2022
Group Managing Director’s Review
2022 2021 Change* (%)
Net revenue
#
(US$ billion) 20.2 16.3 29
Profit attributable to
shareholders
#
†
(US$million) 2,043 1,408 51
* Based on the change in Indonesian rupiah, being the reporting currency of Astra.
#
Reported under Indonesian GAAP.
†
Before net fair value loss on investments in GoTo and Hermina.
Astra delivered record earnings, with net profit under
Indonesian accounting standards of Rp28.9 trillion,
equivalent to US$1.9 billion, 43% higher than 2021.
Excluding the net fair value loss on the group’s investments
in GoTo and Hermina, Astra’s net profit of Rp30.5 trillion,
orUS$2.0 billion, was 51% higher than 2021.
A strong recovery in the Indonesian economy and higher
commodity prices drove stronger performances from all
ofAstra’s businesses and in particular its infrastructure
and logistics, heavy equipment and mining and
automotivedivisions.
Astra
• Record earnings boosted by economic recovery
andunprecedented high commodityprices
• Strong performance across most businesses
• Car and motorcycle sales grow by 17% and 2%,
respectively
• Net earnings per share up 51% at Rp753
(excluding fair value adjustments on
investments in GoTo and Hermina)
• An enhanced final dividend of Rp552
pershare will be proposed on the
basisof unprecedented high coal
prices in 2022
• Group capex and investment
for2022 doubles to
Rp26.4trillion
40
Jardine Matheson
Annual Report 2022
Group Managing Director’s Review
Automotive
Net income from Astra’s automotive division increased by
33% to US$648 million, reflecting higher sales volume.
The wholesale car market increased by 18% in 2022.
Astra’s car sales for that period were 17% higher,
withmarket share relatively stable at 55%. The wholesale
motorcycle market increased by 3%, while Astra Honda
Motor’s sales increased by 2%, with sales growth limited
by semiconductor supply issues, while market share
remained relatively stable at 77%.
Astra Otoparts saw a 117% increase in profit compared to
the previous year, mainly due to higher revenues from the
original equipment manufacturer and replacement market
segments.
Financial Services
Net income from the group’s financial services division
increased by 22% to US$404 million, due to higher
contributions from its consumer finance businesses,
whichsaw a 21% increase in new amounts financed.
Thenet income contribution from the group’s car-focussed
finance companies increased due to larger loan portfolios,
while the contribution from Astra’s motorcycle-focussed
finance company, Federal International Finance, was higher
due to larger loan portfolios and lower loan loss provisions.
General insurance company Asuransi Astra Buana reported
a 12% increase in net income to US$80 million, mainly
caused by higher investment and underwriting income.
Heavy Equipment, Mining, Construction
andEnergy
Net income from the group’s heavy equipment, mining,
construction and energy division increased by 107% to
US$850 million, mainly due to higher contributions from
heavy equipment sales, mining contracting and coal
mining, all of which benefitted from unprecedented
coalprices.
United Tractors reported a 104% increase in net income to
US$1,408 million. Komatsu heavy equipment sales rose
significantly and revenue from its parts and service
businesses was higher. Mining services contractor
Pamapersada Nusantara recorded a higher overburden
removal volume, while coal production was relatively
stable. Agincourt Resources, 95%-owned by United
Tractors, reported a decrease in gold sales.
General contractor Acset Indonusa, 82.2%-owned by
United Tractors, reported a lower net loss of US$30 million.
Net losses continued to be incurred mainly as a result of
the continued slowdown of several ongoing projects.
Astra
41
Jardine Matheson
Annual Report 2022
Group Managing Director’s Review
Profit attributable to shareholders of US$2,043 million
†
by business (US$ million)
Motorcycle sales including associates and
joint ventures (thousand units)
Motor vehicle sales including associates and
joint ventures (thousand units)
Motor Vehicle Sales including Associates
and Joint Ventures (thousand units
Astra
2019
2020
2021
2018
2022
582
536
270
489
574
Motorcycle Sales including Associates
and Joint Ventures (thousand units)
Astra
2019
2020
2021
2018
2022
4,759
4,911
2,892
3,996
3,929
Automotive 648
Financial Services 404
9 Property
92 Agribusiness
Heavy Equipment,
Mining,
Construction
and Energy
850
5 Information
Technology
35 Infrastructure
& Logistics
US$662m
New heavy equipment
financing
US$6.8bn
New consumer
financing
77%
Market share for
new motorcycles
55%
Market share for
new motor cars
Agribusiness
Net income from Astra’s agribusiness division decreased
by 12% to US$92 million, largely due to lower crude palm
oil sales volumes and production, which offset an increase
in selling prices.
Infrastructure and Logistics
Astra’s infrastructure and logistics division reported a
significant increase in net income to US$35 million,
primarily due to improved performance in its toll road
businesses. The group’s toll road concessions saw higher
toll revenue during the period. Astra has 396 km of
operational toll roads along the Trans-Java network and
inthe Jakarta Outer Ring Road. Serasi Autoraya’s net
income increased by 19%, mainly due to an increase in
vehicles under contract, despite a lower used car
earningscontribution.
Information Technology
Net income from the group’s information technology
division was 12% higher at US$5 million.
Property
The group’s property division saw a 10% increase in
netincome to US$9 million, primarily due to a higher
occupancy rate in Menara Astra and the handover of units
in the Arumaya development starting at the end of 2022.
†
Before net fair value loss on investments in GoTo and Hermina.
42
Jardine Matheson
Annual Report 2022
Financial Review
Graham Baker
Group Finance Director
Results
Underlying Business Performance
2022
US$m
2021
US$m
Revenue 37,724 35,862
Operating profit 4,126 3,328
Net financing charges (428) (389)
Share of results of associates
andjoint ventures 1,232 1,178
Profit before tax 4,930 4,117
Tax (964) (828)
Profit after tax 3,966 3,289
Non-controlling interests (2,382) (1,776)
Underlying profit attributable
toshareholders 1,584 1,513
Non-trading items (1,230) 368
Profit attributable to shareholders 354 1,881
US$ US$
Underlying earnings pershare 5.49 4.83
The Group’s underlying profit and underlying earnings
pershare in 2022 were up by 5% and 14%, respectively
(9% and 18% at constant exchange rates). Reported results
benefitted from the impact of the Company’s acquisition of
the remaining 15% minority interest in Jardine Strategic in
April 2021 to simplify the Group’s ownership structure.
Excluding the impact of this Group simplification, increases
in reported underlying net profit and underlying earnings
per share in 2022 were 1% and 4%, respectively.
Within our businesses, growth in 2022 was driven by
strong contributions across Astra’s businesses,
aturnaround in Mandarin Oriental’s profitability and
animproved contribution fromthe Group’s Southeast
Asian businesses.
However, the Group’s businesses in HongKong and the
Chinese mainland, particularly Hongkong Land and
DFIRetail Group (‘DFI Retail’), were adversely impacted by
pandemic-related restrictions which remained in force in
the region for most of 2022. Nevertheless, the Group’s
earnings returned overall to levels delivered in 2019,
priorto the COVID-19 pandemic.
43
Jardine Matheson
Annual Report 2022
Financial Review
Revenue
The Group’s revenue of US$37.7 billion in 2022 was 5%
above the prior year.
Astra recorded a significant increase in sales of 24% from
2021 with improvement in the majority of its businesses,
particularly Automotive, where higher volumes in its car
sales operations resulting from the improved market
condition, and Heavy Equipment, Mining and Construction
due to higher revenue from heavy equipment sales, mining
contracting and coal mining, all of which benefitted from
higher commodity prices.
Jardine Pacific recorded an overall 36% increase in sales
mainly due to higher sales in the Hong Kong engineering
operation at JEC and full year sales from Zung Fu Hong Kong
which was reported as part of Jardine Pacific group with
effect from 1st October 2021. Zung Fu Hong Kong’s overall
sales in 2022 were in line with 2021.
Jardine Cycle & Carriage’s motor vehicle operations
recorded a 13% increase in sales from 2021 as a result of
higher sales in its premium and used car operations in
Singapore and higher sales in Malaysia due to a reduction
in government sales tax.
Mandarin Oriental’s subsidiary hotels recorded a
significant increase in revenue of 43% from 2021 with
strong demand and increased occupancy at higher rates
following the removal of travel restrictions in most parts of
the world, except for its Hong Kong hotel which was heavily
impacted by COVID restrictions throughout 2022. Higher
revenue from management contracts was recorded with
increased management fees, particularly from hotels in
resort destinations.
DFI Retail reported 2% higher year-on-year sales, with
strong sales growth in the key markets of its Health and
Beauty business offset by a lower sales in its Grocery Retail
business, which were impacted by the absence of panic
buying seen in 2021 and by store interruptions in
Singapore ColdStorage due to essential renovations to
reinvigorate its offering.
Hongkong Land’s revenue decreased by 6% from 2021
mainly due to lower contribution from Investment
Properties, particularly its office and retail portfolio in
Hong Kong as a result of negative rental reversions;
andlower revenue from Development Properties reflecting
lower residential properties sales in the Chinese mainland
due to the expected progression of its portfolio following a
record year in 2021, together with the impact of pandemic
restrictions on construction and pre-sales activities.
Jardine Motors reported an overall 59% decrease in sales
mainly reflecting the absence of contribution from its
Chinese mainland business following the disposal to
Zhongsheng in October 2021. Sales contribution from the
United Kingdom reduced compared to 2021 due to a
weaker Pound Sterling exchange rate but was 3% up in
local currency with higher selling prices and a better
modelmix.
Gross revenue, including 100% of revenue from associates
and joint ventures, which is a measure of the full extent
ofthe Group’s operations, increased by 5% to
US$114.8billion. The increase was mainly from
Zhongsheng, Astra’s associates in the Indonesia
Automotive business and Jardine Cycle & Carriage’s
associate in Vietnam, THACO; partly offset by a
decreasefrom Hongkong Land’s property associates
andjoint ventures.
Operating profit
Operating profit from the Group’s subsidiaries, excluding
non-trading items, was US$4,126 million, an increase of
US$798 million or 24%.
Astra’s underlying operating profit increased by 63% from
2021 to US$2,916 million, with higher contributions from
the Automotive and Heavy Equipment, Mining and
Construction businesses reflecting higher revenues.
Mandarin Oriental recorded an underlying operating profit
of $21 million, compared to the underlying loss of
US$26million in 2021. Results from most of its owned
hotels, notably London and Paris, improved driven
byincreased occupancy and higher rates. Lower
contributions, however, were reported from the Hong Kong
and Tokyo hotels due to the continued impact of COVID
restrictions in 2022. There was a higher contribution from
management business driven by higher hotel management
fees and residences branding fees.
44
Jardine Matheson
Annual Report 2022
Financial Review
Jardine Pacific reported operating profit in 2022 at
US$97million, which was US$12 million (15%) higher than
2021. JEC delivered higher profit in 2022 with good
performance from the Hong Kong engineering operations.
Afull year contribution was recorded from Zung Fu Hong
Kong. This was partly offset by a lower contribution from
the Restaurant businesses due to the impact of pandemic
restrictions in Hong Kong which resulted in a weaker
performance in both Pizza Hut and KFC.
Jardine Cycle & Carriage’s motor operations in Singapore
reported an underlying operating profit in 2022 of
US$72million, which was in line with 2021.
Hongkong Land’s underlying operating profit decreased
byUS$98 million (10%) from 2021 to US$845 million,
primarily due to lower earnings from its commercial
portfolio in Hong Kong and lower contributions from
development properties sales in the Chinese mainland
andSingapore.
DFI Retail’s underlying operating profit was US$104 million
(33%) below 2021 at US$209 million, principally due to
lower contributions from its Grocery Retail business in
Hong Kong and Southeast Asia reflecting absence of panic
buying seen in 2021 and inflationary pressures, particularly
in Singapore. Contributions from the Convenience store
business in 2022 were broadly in line with 2021. Higher
operating profit was recorded in the Health and Beauty
business, mainly driven by strong healthcare sales in
HongKong, and improved sales in Singapore, Malaysia
andIndonesia in tourist stores. The Home Furnishings
business performed slightly ahead of last year primarily
due to strong cost control.
Jardine Motors’ reported an overall underlying operating
profit decreased by US$133 million (73%) to US$50 million
mainly due to the absence of contribution from the Chinese
mainland upon its sale in October 2021. The Group’s
United Kingdom dealerships recorded an operating profit
of US$51million in 2022, 8% down from prior year
reflecting a weaker Pound Sterling which offset improved
underlying performance from better margins in 2022.
Net financing charges
Net financing charges at US$428 million were
US$39million (10%) higher compared to 2021, principally
due to higher average interest rates on US dollar and
HongKong dollar denominated bank borrowings, mitigated
by lower average borrowings in Astra in 2022. Interest
cover, excluding financial services companies, increased
slightly from 14 times to 15 times in 2022. Cover is
calculated as the sum of underlying operating profit –
before the deduction of the amortisation of right-of-use
assets, net of actual lease payments – and the share of
results of associates and joint ventures, divided by net
financing charges excluding interest on lease liabilities.
Share of results of associates and joint ventures
The Group’s US$1,232 million share of underlying results of
associates and joint ventures was US$54 million, or 5%,
higher than the prior year.
The overall contribution from Astra’s associates and
jointventures increased by US$77 million in 2022 to
US$530 million, primarily due to strong performance from
its Automotive business with increased car sales volumes
and increased income from toll road operations.
The Group’s contribution from Zhongsheng was higher
byUS$57 million at US$263 million compared to 2021.
Asin prior years, theGroup has recognised its 21% share
ofZhongsheng’s results based on publicly available
information for the 12 months ended 30th June. Hence,
Zhongsheng’s contribution in the Group’s 2022 accounts
represented our share of its results in the second half of
2021 and the first half of 2022. However, recognising the
growing importance of Zhongsheng to the Group’s
performance, from 2023, we intend to recognise our
shareof Zhongsheng’s results on a contemporaneous
(calendar year) basis using, if necessary, an estimate of
Zhongsheng’s current year results based on recent analyst
estimates. It is considered that, moving forward, this
change will provide the users of the financial statements
with a more meaningful insight into the current year
underlying performance of the Group.
45
Jardine Matheson
Annual Report 2022
Financial Review
In Mandarin Oriental, a profit contribution of US$10 million
was reported by its associates and joint ventures in 2022,
compared to a loss of US$22 million in 2021. The
turnaround performance was mainly attributable to
thehotels in Singapore, Bangkok, Madrid and the
UnitedStates.
The overall contribution from Jardine Cycle & Carriage’s
associates and joint ventures increased by US$31 million to
US$159 million. Their 26.6%-owned associate in Vietnam,
THACO, recorded stronger automotive results with
increased unit sales and better margins benefitting from an
improved sales mix. There was an increased contribution
from Jardine Cycle & Carriage’s 33.6%-owned associate
REEdue to improved performance from its renewable
power investments as a result of favourable hydrology in
Vietnam in 2022. Higher profit in the automotive, financial
services and leasing businesses was reported by its
49.9%-owned Tunas Ridean in Indonesia. 25.5%-owned
SCCC delivered lower contribution in 2022, as the business
was adversely impacted by higher energy costs and
inflationary pressure, as well as increased tax rates in
SriLanka and the depreciation of the rupee, which
offsetimproved cement volumes and prices in most of
itsmarkets.
A marginally lower loss of US$35 million was recorded in
respect of DFI Retail’s associates and joint ventures,
compared to a loss of US$40million in 2021. DFI Retail’s
share of losses in its 21%-owned associate, Yonghui, was
US$80 million in 2022, compared to US$90 million in
2021. Yonghui’s profitability in 2022 was impacted by store
disruption caused by the pandemic, investment costs
associated with digital transformation and margin dilution
from a greater level of e-commerce sales. Contribution from
DFI Retail’s 21%-owned Robinsons Retail was up by 66% to
US$24million, benefitting from the reopening of the
Philippines economy, together with improved product mix
and strong cost-control. This was partly offset by a lower
contribution from its 50%-owned associate, Maxim’s,
which declined by US$14million to US$38 million,
asrestaurant patronage in the first half of 2022 was
significantly impacted by the government-imposed
restrictions on movements and dining in Hong Kong,
mitigated by solid mooncake sales performance and easing
of dining restrictions in the second half of the year.
Jardine Pacific’s associates and joint ventures in 2022
performed slightly behind 2021 with weaker performance
in HACTL caused by lower volumes as export demand
softened, and lower flight volumes in Jardine Aviation.
Thiswas mitigated by higher contribution from Jardine
Schindler in 2022, mainly recurring revenues from the
Existing Installation business.
Contributions from Hongkong Land’s associates and joint
ventures decreased by US$127 million to US$229 million,
primarily due to significantly lower sales completions in
the second half of 2022 in its development property
projects in the Chinese mainland as a result of pandemic-
related restrictions.
Tax
The underlying effective tax rate for the year was 26%,
compared to 28% in 2021. The decrease in effective tax
rate in 2022 reflects changes in the geographical mix of the
Group’s profit.
Non-trading Items
In 2022, the Group had net non-trading losses of
US$1,230million, which included a net decrease of
US$604 million in the fair value of investment properties,
anet decrease of US$309 million in the fair value of other
investments, and impairment of investment in associates
of US$320 million.
In 2021, the Group had net non-trading gains of
US$368million, which included a gain of US$791 million
on the sale of Zung Fu’s business on the Chinese mainland
to Zhongsheng, and a gain of US$337 million on the sale
and leaseback of two of Zung Fu’s properties in Hong Kong;
partly offset by a net decrease of US$681 million in the fair
value of investment properties, primarily in Hongkong
Land, and a net decrease of US$62 million in the fair value
of other investments.
46
Jardine Matheson
Annual Report 2022
Financial Review
Dividends
The Board is recommending a final dividend of US$1.60
per share for 2022, providing a total annual dividend for
2022 of US$2.15 per share, an 8% increase from 2021.
Thefinal dividend will be payable on 10th May 2023,
subject to approval at the Annual General Meeting to be
held on 4th May 2023, to shareholders on the register of
members at the close of business on 17th March 2023.
The dividend will be available in cash, with a scrip
alternative.
Cash Flow
Summarised cash flow
2022
US$m
2021
US$m
Cash generated from operations 5,287 5,383
Net interest and other financing
charges paid (387) (379)
Tax paid (1,006) (728)
Dividends from associates and
joint ventures 931 800
Operating activities 4,825 5,076
Capital expenditure and
investments (3,507) (2,738)
Disposals 914 2,969
Cash flow before financing 2,232 5,307
Acquisition of the remaining
interest in Jardine Strategic (21) (5,490)
Principal elements of lease
payments (875) (894)
Other financing activities (2,379) (797)
Net decrease in cash and cash
equivalents (1,043) (1,874)
Cash inflow from operating activities for the year of
US$4,825 million was US$251 million lower than in 2021.
There were higher operating profits in the year, and higher
dividends received from Astra’s joint ventures inits
Automotive business, Jardine Cycle & Carriage’s associate,
THACO, and from Zhongsheng. These, however, were more
than offset by higher tax paid principally by Astra and
increased in net working capital, principally in Astra’s
Heavy Equipment, Mining and Construction, Automotive
and Financial Services businesses as a result of favourable
trading conditions in2022.
Capital expenditure and investments for the year,
beforedisposals, amounted to US$3,507 million
(2021:US$2,738 million). This included the following:
• US$1,460 million for investments in various associates
and joint ventures, primarily Hongkong Land’s
investments of US$1,012 million in Development
Property projects, most of which were joint venture
projects in the Chinese mainland in Chongqing,
Shanghai, Chengdu and Suzhou; and Astra’s investment
in Bank Jasa Jakarta of US$260 million, investments in
its tollroad concession businesses of US$44 million,
and investments in PT Mobilitas Digital of US$41 million
and PT Arkora Hydropower Plant of US$18 million;
• US$1,014 million for the purchase of tangible assets,
which included US$709 million in Astra (of which
US$565 million was for the acquisition of heavy
equipment and machinery, predominantly by
Pamapersada, US$57 million was for outlet development
and additional operational machinery and equipment in
Astra’s automotive business, and US$53 million was to
improve plantation infrastructure in Astra’s agribusiness)
and US$224 million in DFI Retail for investments in
digital capability and refurbishment of existing stores;
• US$645 million for the purchase of other investments,
which included US$481 million in Astra (of which
US$327 million represented acquisition of securities,
US$99 million of investment in a healthcare services
group, US$31million for an online consumer credit
platform and U$14 million for a technology-based
logistics startup); and US$151 million in Corporate,
themajority of which was for capital calls by Hillhouse
Fund V Feeder, L.P.; and
• US$154 million for the purchase of intangible assets,
which included US$60 million for mining exploration
costs and US$38 million for the acquisition of contracts
by Astra’s general insurance business.
In 2021, the Group’s principal capital expenditure and
investments included:
• US$1,294 million for investments in various associates
and joint ventures, primarily Hongkong Land’s
investments of US$1,208 million in Development
Property projects, most of which were joint venture
projects in the Chinese mainland in Chongqing,
Shanghai, Wuhan, Nanjing and Chengdu; and Astra’s
47
Jardine Matheson
Annual Report 2022
Financial Review
investments in and capital injections into associates and
joint ventures of US$68 million, including US$66 million
related to investments in toll road concession business;
• US$620 million for the purchase of tangible assets by
Group companies;
• US$467 million for the purchase of other investments,
which included US$375 million acquisition of securities
in Astra; and
• US$158 million for the purchase of intangible assets,
which included US$63 million for mining exploration
costs and US$36 million for the acquisition of contracts
by Astra’s general insurance business.
The contribution to the Group’s cash flow from
disposalsfor the year amounted to US$914 million
(2021:US$2,969 million), which principally included:
• US$416 million primarily related to advances and
repayments from associates and joint ventures in
Hongkong Land;
• US$227 million from the sale of securities by Astra’s
general insurance business; and
• US$131 million from the sale of its hotel in Washington
D.C. by Mandarin Oriental.
The Group’s cash flow from disposals in 2021 included
principally:
• US$738 million being proceeds received, net of
transaction costs, relating to sale and leaseback of
ZungFu Hong Kong’s properties in Hung Hom and Chai
Wan; and US$754 million being proceeds received, net of
tax and transaction costs, relating to sale of Zung Fu
China to the Group’s associate, Zhongsheng, for a total
consideration of US$1.3 billion, which comprised
US$886 million in cash and US$428 million worth of
new shares in Zhongsheng, increasing the Group’s
shareholding in Zhongsheng to 20.9%;
• US$850 million related to advances and repayments
from associates and joint ventures mainly in
HongkongLand; and
• US$246 million and US$152 million from the sale of
securities by Astra’s general insurance business and
Corporate, respectively.
During the year, the Company repurchased its own shares
at a total cost of US$173 million (2021: US$584 million).
Additional shares in Group companies were purchased in
2022. Shares in Jardine Cycle & Carriage were acquired at a
total cost of US$130 million. There were share buybacks
inHongkong Land at a total cost of US$352 million
(2021:US$192 million) and in Astra’s subsidiary, United
Tractors, at a total cost of US$214 million (2021: nil).
Thesepurchases are recognised as part of financing
activities in the Consolidated Cash Flow Statement.
In 2021, the Company acquired its remaining 15% interests
in Jardine Strategic to simplify the Group’s parent company
structure. The total acquisition cost was US$5.6 billion,
ofwhich US$5,490 million and US$21 million was settled
in 2021 and 2022, respectively.
The Group’s management also monitors total capital
investment across the Group. The Group’s capital
investment, including expenditure on properties for sale,
was US$5.3 billion in 2022 (2021: US$10.3 billion which
also included the US$5.6 billion investment in the Group’s
simplification of its holding structure), in addition to which
capital investment at its associates and joint ventures
exceeded US$4.3 billion (2021: US$4.7 billion). The Group
continued to focus on making strategic investments and
prioritising organic investments to drive future growth
during 2022. The Group also continued to progress the
simplification of its portfolio by divesting non-core
investments when opportunities arise.
Treasury Policy
The Group manages its exposure to financial risk using a
variety of techniques and instruments. The main objectives
are to limit foreign exchange and interest rate risks to
provide a degree of certainty about costs. Investment of the
Group’s cash resources is managed so as to minimise risk,
while seeking to enhance yield. Appropriate credit
guidelines are in place to manage counterparty risk.
When economically sensible to do so, borrowings are taken
in local currency to hedge foreign exchange exposures on
investments. A portion of borrowings is denominated in
fixed rates. Adequate headroom in committed facilities is
maintained to facilitate the Group’s capacity to pursue new
investment opportunities and to provide some protection
48
Jardine Matheson
Annual Report 2022
Financial Review
Interest rate*
Currency
Maturity
* Excluding Astra’s financial services companies.
Floating 45%
55% Fixed
IDR 27%
19% USD
37% HKD
17% Others
< 1 year 26%
1-2 years 23%
25% > 5 years
26% 2-5 years
Net borrowings* and total equity (US$ billion)
* Excluding net borrowings of Astra’s financial services companies.
JM Financial Review
Net borrowings
Total equity
5.9
58.8
4.8
65.1
3.7
62.8
6.6
7.5
58.4
56.2
2018
2019
2020
2021
2022
against market uncertainties. Overall, the Group’s funding
arrangements are designed to keep an appropriate balance
between equity and debt from banks and capital markets,
both short and long term in tenor, to give flexibility to
develop the business.
The Group’s Treasury operations are managed as cost
centres and are not permitted to undertake speculative
transactions unrelated to underlying financial exposures.
Note 43 of the financial statements summarises the
Group’s financial risk factors.
Funding
The Group is well financed with strong liquidity.
Netgearing, excluding net borrowings relating to Astra’s
financial services companies, was 13% at 31st December
2022, up from 11% at the end of 2021. Net borrowings,
onthe same basis, were US$7.5 billion at 31st December
2022, compared with US$6.6 billion at the end of 2021.
Astra’s financial services companies had net borrowings
ofUS$2.8 billion at the end of the year, compared with
US$2.7 billion at the end of 2021.
At the year end, undrawn committed facilities totalled
US$7.1 billion. In addition, the Group had liquid funds of
US$5.9 billion. During the year, the Group’s total equity
decreased by US$2.2 billion to US$56.2 billion, principally
reflecting exchange translation losses resulting from the
weakening of Indonesian Rupiah and Chinese Renminbi
against US dollar during 2022.
The average tenor of the Group’s borrowings at
31stDecember 2022 was 4.4 years, down from 4.9 years
atthe end of 2021. 81% of borrowings were non-US dollar
denominated as shown below and directly related to the
Group’s businesses in the countries of the currencies
concerned. At 31st December 2022, approximately 45% of
the Group’s borrowings, exclusive of Astra’s financial
services companies, were at floating rates and the
remaining 55% were at fixed rates including those hedged
with derivative financial instruments with major
creditworthy financial institutions. 92% of the borrowings
for Astra’s financial services companies were at fixed rates.
Borrowings profile at 31st December 2022
49
Jardine Matheson
Annual Report 2022
Financial Review
By geographical area
By business
#
Excluding Astra.
2%Jardine
Cycle & Carriage
Astra 16%
Jardine Pacific 5%
DFI Retail Group 3%
Mandarin Oriental 9%
6% Jardine Motors
59% Hongkong Land
#
30% Southeast Asia
China 66%
3% Rest of the World
1% United Kingdom
Shareholders’ Funds
Shareholders’ funds at 31st December 2022 are analysed
below, by business and by geographical area. There were
no significant changes from the prior year.
However, in 2022, DFI Retail engaged Ernst & Young to
perform a full scope audit for the twelve months ended
30th September 2022 with consent from Yonghui’s
management. Accordingly, an unqualified audit opinion
onDFI Retail’s financial statements for the year ended
31stDecember 2022 was issued (with a qualification only
on the comparability of the 2022 financial results with the
unaudited results for the year ended 31stDecember 2021).
Accounting Policies
The Directors continue to review the appropriateness of the
accounting policies adopted by the Group, having regard to
developments in International Financial Reporting
Standards (‘IFRS’). The accounting policies adopted in
2022 are consistent with those of previous year.
Principal Risks and Uncertainties
A review of the principal risks and uncertainties facing the
Group is set out on pages 84 to 92.
Audit Opinion on DFI Retail
In the prior year, a qualified audit opinion for limitation
ofscope was issued by PricewaterhouseCoopers on
DFIRetail’s financial statements for the year ended
31stDecember 2021 because a full scope audit for Yonghui
could not be performed and Yonghui’s losses had grown to
be material to DFI Retail. Yonghui management concluded
that it was impractical to conduct an additional audit on
their results for the twelvemonths ended 30thSeptember
2021 which, as in prior years, were used asthebasis for
incorporating into DFI Retail’s 2021 financial statements.
Yonghui’s own statutory reporting obligation covered the
yearended 31st December 2021. Asimilar limitation did
not arise in Jardine Matheson’s 2021 financial statements
given the significantly higher level ofmateriality in the
Group’s accounts.
50
Jardine Matheson
Annual Report 2022
Sustainability
Sustainability as a Key Enabler
For almost 200 years, we have adopted an entrepreneurial
mindset combined with a long-term and sustainable
approach to how we do business. Today, our approach
ismore relevant than ever, as we face an increasingly
complex and volatile landscape. With this in mind,
wecontinue to believe that seeking opportunities to build
resilience in our businesses, the communities we serve
and future generations is vital for business continuity,
andthis is a fundamental part of our corporate purpose.
Over the past year, the Group continued to progress its
sustainability agenda, with a focus on providing greater
transparency of sustainability activities across our
businesses. The Group reached a key milestone with
thepublication of its inaugural Sustainability Report in
June 2022, disclosing the sustainability practices and
performance of the Group and its businesses. We have
continued to work with our Group businesses to enhance
alignment across Jardines, while our businesses have
actively led sustainability agendas relevant to their
ownoperations.
Building Towards 2030
Jardines strongly believes that creating a shared sense of
purpose in sustainability will encourage closer collaboration
and support between our businesses and the Group. It will
also enable us to move forward together to build resilience
to challenges that lie ahead and ensure long-term value
creation for our stakeholders.
The Group’s sustainability strategy, Building Towards 2030,
is informed by the Group’s response to social and
environmental megatrends shaping the future of our
business and the communities in which we operate. It is
built on nine focus areas under three strategic pillars:
Leading Climate Action, Driving Responsible Consumption
and Shaping Social Inclusion. Demonstrating our
commitment to support the global agenda to end poverty,
protect the planet and ensure that all people enjoy peace
and prosperity by 2030, our sustainability strategy is
aligned with five of the 17 United Nations Sustainable
Development Goals (‘UNSDGs’).
51
Jardine Matheson
Annual Report 2022
Sustainability
Health
Education
LivelihoodNature
Plastic
Food
Carbon
Risk
Leading Climate
Action
Driving Responsible
Consumption
Shaping Social
Inclusion
Resilience
Building Towards 2030 articulates our sustainability
direction at the Group-level and facilitates consistent
implementation of sustainability strategy across our
portfolio. With support and guidance from the Group,
ourbusinesses drive their own sustainability agendas,
taking account of their business nature, operating markets
and the benefits of alignment with the Group’s
sustainability approach.
To ensure we focus our efforts and resources, we have
identified key priorities to enable us to deliver effectively
on the matters which are most important. In 2022,
wemaintained our focus on implementing our
decarbonisation strategy, with a number of our Group
businesses committing to develop, or progressing the
formulation of, science-based medium-term targets.
Wehave also dedicated significant efforts towards
proactively communicating our journey to our stakeholders
and developing our Group sustainability culture.
Sustainability Governance
We have underpinned our sustainability approach with
aneffective governance structure, which enables us to
operate to the highest business standards and deliver
sustainable value creation. Our sustainability governance
structure includes the Sustainability Leadership Council
(‘SLC’), the Jardine Matheson Board and the boards/Risk
Management and Compliance Committees of our Group
companies, supported bythe Group Sustainability Team
and a number of sustainability working groups.
Sustainability Leadership Council
The SLC is led by Jardine Matheson Executive Chairman,
Ben Keswick. It currently comprises more than 20
members, including the Jardine Matheson Group Managing
Director, Executive and non-Executive Directors, Chief
Executives of all the Group's principal businesses and the
Heads of relevant Group functions as core members.
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Annual Report 2022
Sustainability
Meeting twice a year, the SLC serves as a collaboration
platform for the senior management from across the Group
to exchange insights and perspectives on sustainability
strategy, planning and direction for the Group. Material
sustainability issues are communicated and discussed
atthe SLC, and the Group’s sustainability strategy and
policies are further refined with input from the
management teams of our Group businesses. The SLC
provides opportunities for the Group and our businesses
toregularly share best practices and discuss Group-wide
sustainability (including climate) risks and opportunities,
with the aim of improving the Group’s performance and
ensuring consistent integration of sustainability
considerations into corporate policies and business
operations.
Group Sustainability
The Group Sustainability Team is responsible for facilitating
the Group’s development and implementation of the
sustainability strategy and initiatives, as well as the setting
of appropriate and relevant ESG metrics and targets to
track material ESG issues. The team monitors sustainability
trends and provides advice on sustainability-related
issues, as well as progressing the Group's approach to
improving ratings, reporting and disclosure, and driving a
range of Group-led initiatives. The team also coordinates
with representatives from our Group businesses to
facilitate cross-business activities.
In addition, the team works with other Group functions
including Group Finance, Group Audit & Risk Management
(‘GARM’), Group Human Resources, Group Corporate
Secretariat, Group Legal, Group Tax and Group
Communications to offer support on sustainability matters,
including budgets and reporting, sustainability risks and
opportunities, human capital, corporate governance,
business ethics, tax reporting and sustainability
communications.
Sustainability Working Groups
Each pillar of our sustainability strategy is supported by a
working group, which is chaired by representative(s) from
our businesses and consists of individuals from across
theGroup who are responsible for driving the relevant
sustainability agendas within their organisations.
Theprimary objectives of the working groups are to support
the execution of the Group’s sustainability strategy within
businesses, identify, develop and recommend Group-wide
initiatives that will strengthen cohesion between the
Groupbusinesses, and share knowledge and experience
across the Group.
Group Businesses
The boards of our Group businesses are responsible for
overseeing sustainability within their respective
businesses. Each individual business is expected to
develop and implement a sustainability strategy that is
aligned to the Group strategy, and set sustainability
metrics and targets to effectively address material issues.
The leadership of each of the Group’s listed and private
businesses reports twice a year on the progress of their
sustainability agenda to their own boards (in the case of
listed businesses) or their respective Risk Management
and Compliance Committees ('RMCCs')(in the case of
private businesses).
Audit Committee
The Audit Committee supports the Board in overseeing and
reviewing the consolidated Group-wide principal risks and
uncertainties (including climate risks). The Audit
Committee also has oversight responsibility for reviewing
independent assurance obtained by the Group in respect of
the effectiveness of sustainability metrics that measure the
Group’s sustainability strategy, initiatives and goals, as
disclosed in the Company’s annual Sustainability Report.
Insupport of this, external and internal assurance is
conducted on the Group’s sustainability reporting and the
effectiveness of its governance, respectively. Please refer
to the Audit Committee Report and the Principal Risks and
Uncertainties section of ths Report fordetails.
Sustainability, including climate action, is a regular agenda
item at Board and RMCC meetings, both for our individual
businesses and at the Group level. Senior management of
the Group (a number of whom who also sit on the
Company's Board) are members of the boards of our Group
businesses, and have the opportunity to reiterate to our
businesses the strategic importance of sustainability to
Jardines and make sure the commitment to sustainability
(including climate action) is ingrained in major business
decisions. For details of the Board, please refer to the
Corporate Governance section of this Report.
53
Jardine Matheson
Annual Report 2022
Sustainability
The Boards/Committees
Internal/external audit
Operational teams
Report
Oversee
The dotted line indicates
that the SLC does not
directly report to the Board
and boards of the Group
businesses. However, the
management teams of the
Company and our Group
businesses (who are SLC
members) report to their
respective Boards.
Sustainability Leadership Council
Climate Action
Working Group
Responsible
Consumption
Working Group
Social Inclusion
Working Group
Group
Sustainability
Group Businesses Audit Committees/
Risk Management and Compliance Committee
Group Businesses Boards of Directors The Company Audit Committee
Group Businesses
Risk Management/
Compliance Teams
Group Businesses
Internal Audit
The Company Board of Directors
Group Businesses Governance
Group Audit and
Risk Management (‘GARM’)
External
Audit
Remark:
For details of the Risk
Governance Structure, please
refer to the Risk Management
and Internal Control section.
Stakeholder Engagement and Materiality
Assessment
We are committed to conducting an ongoing dialogue with
our stakeholders, to communicate our sustainability
progress and seek their valuable feedback. Through these
engagements, we gather stakeholder feedback on the key
issues they are focussed on, which helps us confirm and
further refine our sustainability strategy and focus areas.
Following the launch of our first standalone Sustainability
Report last June, we conducted a series of meetings with
our investors to share key highlights from the Report, and
our current progress and future plans in our sustainability
journey. We simultaneously collected our investors’ views
and suggestions on the Group’s sustainability strategy,
performance and disclosure. We also actively engaged with
rating agencies in a more systematic manner, to ensure
that the analysis of Jardine’s sustainability performance
accurately reflects our sustainability approach,
commitments, actions and progress. Through the
coordinated efforts made across the Group’s businesses,
wehave achieved a significant improvement in our
ESGratings in 2022.
Engaging our internal stakeholders is a key focus, and we
use a range of channels, from internal surveys to events
and campaigns, to encourage a dialogue among colleagues
on sustainability . We use an internal sustainability
communication channel to provide regular updates to our
colleagues on sustainability accomplishments and events,
share the latest sustainability news and trends, and
provide access to sustainability-related learning courses.
We also reference the latest global reporting standards,
thesustainability reports of our Group businesses and
those of our peers, expert insights and environmental
andsocial megatrends to identify new and emerging
sustainability issues relevant to the Group. Informed by the
results of our stakeholder engagement activities and the
rapidly evolving sustainability landscape, we continuously
review and enhance our sustainability strategy and focus
areas to ensure relevance and materiality to the Group.
Climate Action
We know climate change will increasingly impact our
business and we are actively identifying the physical and
transition risks we face, as well as approaches for
mitigation. At the same time, we view supporting and
contributing to the transition to a low carbon and,
ultimately, a net-zero world as not only a business
imperative but also a source of new opportunities for
impact and growth. As a primarily Asian-based owner and
operator, we fully understand the challenges and the
operating environment in the region. Our network of
partners, the skills of our colleagues and the credibility we
have in the region, give us a unique platform to accelerate
the transition, by creating and leveraging opportunities to
leapfrog to the sustainable economies of the future.
While this Sustainability section provides the Group’s
perspective, weacknowledge that Jardines’ overall climate
change performance is the result of a collaborative effort
with each of our businesses. As our Group businesses
continue to build their climate resilience, the Group will
provide support, guidance, and oversight to ensure that
Jardines asa whole is ready for the future.
54
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Annual Report 2022
Sustainability
TCFD Report
This section provides details on our climate journey based
on the TCFD recommendations. Please refer to the
Consistency with TCFD Requirements section on page 58
for a detailed view on the extent of alignment with the
recommendations.
Governance
Climate action is one of the critical topics reviewed and
assessed by the SLC. The SLC receives updates on global
and regional climate and sustainability trends, policies,
initiatives and activities undertaken by Group businesses
and the Group twice a year. Progress on climate risk
assessments and identified climate risks and opportunities
are also provided to the SLC, to inform their discussion of
sustainability strategy and priorities. A number of
sustainability-related policies, including the Group’s
Climate Change Policy, were reviewed by the SLC and
published in 2022. All sustainability-related policies are
periodically reviewed by executive management and
updated as required.
The Climate Action Working Group comprises
representatives from each of our businesses, who are
responsible for delivering climate-related initiatives within
their companies. The Working Group meets on a quarterly
basis and the chairpersons provide updates on progress to
the SLC.
The Group Sustainability Team, headed by the Group Head
of Corporate Affairs and Sustainability, supports the
SLCand the Climate Action Working Group in developing
the overall sustainability strategy and respective
initiatives. Amonthly meeting is held by the Group
Sustainability Team with the Executive Chairman, to report
progress on our sustainability agenda.
For more information on respective roles and
responsibilities, and management oversight of the
sustainability agenda (including climate risks and
opportunities) across the Group, please refer to the
Sustainability Governance section on page 51.
Strategy
Over the past few years, we have been engaged in an
ongoing exercise to identify and analyse material climate
risks and opportunities across the Group. Climate
scenarios are adopted, to evaluate the resilience of our
businesses to the impacts of climate change on our
strategy and financialplanning. At Jardines, we use three
sets of time horizons to analyse climate-related risks and
opportunities: short-term (within five years), medium-term
(five to ten years) and long-term (beyond ten years).
In 2021, we completed a preliminary study of physical risks
likely to have a material impact on the Group, through
asset damage and business disruption. We analysed
theexposure and impact of acute
1
and chronic
2
hazards
onmore than 800 significant assets across our Group
businesses in22countries and regions, under three
Representative Concentration Pathways (‘RCPs’) developed
by the Intergovernmental Panel on Climate Change
(‘IPCC’)
3
. Ourtop identified climate hazards, their
corresponding impacts and mitigation measures are
summarised in the table below.
In 2022, the Group initiated an assessment of transition
risks that may impact our businesses, with the assistance
of Group Sustainability and GARM. The exercise aimed to
develop a consistent set of scenarios and assumptions for
risk assessment across the Group, setting the foundation
for a robust methodology which would result in comparable
outcomes across our businesses. Two scenarios were
developed based on internationally recognised data sets
4
with the following characteristics:
Low-emissions scenario High-emissions scenario
• Global warming is
limited to well below 2˚C
• Rapid coordinated
global response to
climate change
• Implementation of strict
climate policies
• Active decarbonisation
of businesses
• High consumer
awareness of climate
change
• Global warming is on
track to reach at least
3.3˚C
• No significant
acceleration and climate
action from currently
announced policies
• Slow investment in
climate transition
• Lack of consumer
awareness of climate
change
The scenarios will be periodically refreshed to align with
the climate science updates and significant changes in our
operating environments as a result of shifts in policy,
regulations and other signals.
1
Acute hazards include landslide, rainfall flood, river flood, storm surge, and typhoon.
2
Chronic hazards include extreme heat, snow melt, drought, and sea level rise.
3
RCP 2.6 represents a low-emission scenario, RCP 4.5 represents a medium-emission scenario and RCP 8.5 represents a high-emission scenario.
4
Scenarios are based on the IPCC Representative Concentration Pathways, the Network for Greening the Financial System (‘NGFS’) and the International Energy Agency (‘IEA)’,
supplemented by additional research to reflect the unique regional context.
55
Jardine Matheson
Annual Report 2022
Sustainability
The assessment produced distinct transition risk heat maps for the High-emissions and Low-emissions scenarios, identifying
the critical impact of transition risk drivers across the business activities of our Group business in their most material
geographic regions, based on revenue and/or strategic value. A number of mitigation planning workshops have been
conducted across the businesses tokickstart thinking in relation to building a structured approach to climate resilience and
equipping our businesses with the right knowledge and resources to implement it.
We believe that climate risks are emerging in the short term, but are most likely to materialise in the medium and long-term.
Asummary of the identified physical and transition risks that may have a material impact on our business, and our response
(mitigation measures) , isincluded in the tablebelow:
Physical risks Potential impacts Our response
Typhoon
Severity as measured by wind speed is
increasing in Southeast Asia and is
expected to move north, with more
frequent and destructive typhoons in
the Chinese mainland, Hong Kong,
Vietnam, and the Philippines.
• Disruption of services and
business operations
• Damage to equipment, facilities
and properties
• Decrease in business demand
due to business disruption and
loss of attractions to tourist areas
• Develop business contingency plans
• Incorporate special considerations
during planning and design of
newprojects
• Implement inspection and
preventative maintenance
programmes for critical infrastructure
• Set up emergency response teams
• Engage with government bodies on
flood defences
Rainfall flooding
Severity as measured by flood depth is
expected to increase across Asia. This
will have major implications for our low
lying and flood vulnerable assets
throughout the region.
Extreme heat
Measured by the combined impact of
temperature and humidity on the
human body and is forecasted to
increase in the period to 2030 across
Asia. Higher latitudes are expected to
be most adversely affected.
• Adverse effect on employees’
health and safety
• Damage to equipment, facilities
and properties
• Develop safety work procedures for
employees working in extreme
heatconditions
• Develop business contingency plans
• Incorporate special considerations
during planning and design of
newprojects
• Implement inspection and
preventative maintenance
programmes for critical infrastructure
Transition risks Potential impacts Our response
Carbon price
Direct (e.g. carbon tax) or indirect costs
associated with emissions reduction
regulatory or fiscal policies.
• Increased cost of raw materials
such as steel and cement,
products, and services
• Increased capital expenditures
and cost of operations
• Supply chain disruptions
• High energy efficiency
requirements
• Changing customer preferences
and behaviour
• Increased risk of litigation,
requiring additional efforts for
compliance
• Source alternative low-carbon
materials
• Introduce new low-carbon products
and services
• Invest in energy efficiency
• Invest in R&D/innovation
• Regular study of customer
preferences and behaviour
• Monitor upcoming carbon and
climate-related regulatory
requirements
• Build climate resilience capability
across the Group
Energy price
The rising prices of primary and
secondary energy, i.e., fossil fuels and
electricity.
Polices and regulations
Examples include green building
policies which are applicable to most
of our businesses, and electric vehicle
policies which are applicable to our
motor businesses.
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Annual Report 2022
Sustainability
We are progressively building on our learning every year,
tofurther enhance our methodology and future-proof our
business. We have been proactive in responding to climate
risks, but there is still much to learn and do. The climate
risk assessment will help inform discussions on business
strategy, financial planning and capital allocation, to move
forward in a way that leverages the opportunities
uncovered by the transition, while mitigating climate
change impacts and adapting to the effects that are
already taking place.
Our success as a business is based on our ability to
identify emerging risks and opportunities and make the
right capital investment decisions. The risk management
process described below enables the integration of these
risks and opportunities, including climate-related ones,
into our long-term strategy. This is the first step in putting
climate risk on the agenda in all aspects of how we operate
our businesses, including strategic and financial planning,
investment and divestment decisions, managing our
supply chains, developing products and services, and daily
business operations across all Group businesses.
With guidance from Group Finance and Group
Sustainability, each of our Group businesses allots a
budget to fund sustainability and climate action-related
activities. The budgets are approved by the Chief Finance
Officers of our businesses and the Group Finance Director.
One of the Group's focus areas for 2022 is the development
of a framework for a systematic incorporation of
sustainability considerations, including climate risks,
intocapital allocation decisions.
We are pursuing climate resilient development on the
journey to a low carbon economy. As an Asian-based
conglomerate, we want to be a key partner for the region
incontributing to an orderly and equitable transition,
which helps to reduce energy poverty, create economic
opportunities, and strengthen climate resilience. In this
context, Jardine Matheson and our Group businesses
published a Just Energy Transition statement in June 2022.
We are actively expanding our involvement in the
renewable energy sector, with key investments in this area
by Refrigeration Electrical Engineering Corporation (‘REE’),
a Vietnam-based associate of JC&C, and our Indonesian
subsidiary, Astra. Vietnam is one of the region’s fast-
growing markets for renewables, where installed capacity
of wind, solar and hydro is forecast to double to 150GW by
2030; and REE has been a leading developer of sustainable
infrastructure since 2010. Astra is investing in hydro, wind
and solar projects, as well as exploring new technologies
and innovations in biomass waste-to-energy.
Risk Management
To evaluate and prioritise the climate risks faced by the
Group, risk heat maps have been developed, which classify
all relevant risks into different impact severity groups
ranging from low to high. Understanding the implications
of these risks to the businesses and the Group will
guideour planning of risk mitigation and enable us to
prioritise action.
An important objective of the climate risk assessments we
have conducted in the past two years was building a
culture of climate action across our businesses. Most of
our businesses are actively attuning their business
capabilities to better evaluate and respond to climate risk.
The Group will continue to guide the discussion, to further
improve our businesses’ approach to assessing the
significance and impact of climate risks in relation to
otherrisks.
We have incorporated the best practices of enterprise risk
management into the process of climate risk identification
and assesssment. The teams responsible for risk
management in each of our Group businesses provide a
business-specific risk perspective to the sustainability
team in the business. GARM also collaborates with the
Group Sustainability Team to develop the Group's climate
risk assessment framework and approach. In addition,
different business functions, including Procurement,
Operations and Marketing & Sales are involved in the
process to provide feedback on the identified climate risks.
Physical and transition risk reports have been provided to
the Group businesses to further explore the implications
for, and develop mitigation measures to minimise the
impact to, our businesses, including both property damage
and business disruption. The Group businesses are also
encouraged to assign risk owners to manage risks in a
holistic manner. Guidance and support on climate risk
management and mitigation measures planning are
provided by GARM and Group Sustainability, when needed.
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Sustainability
Climate risks and mitigation measures are reported to
GARM twice a year. GARM and Group Sustainability will
review the information and provide feedback, if any, to the
Group businesses to improve the process and outcome.
In addition, climate risk is a topical area frequently
included in internal risk management training and
conferences, and it is also included in risk newsletters
published by GARM to raise the awareness of climate
change and climate action across the Group, particularly
targeting finance and risk management colleagues.
The Group’s approach to overall risk management
combines a top-down strategic view with a complementary
bottom-up process. As with other principal risks and
uncertainties, those risks identified as material to our
businesses are consolidated at the Group level into the
Group’s risk register and risk heat map, which are reported
to the Audit Committee twice a year. Climate risks have
been already been reported by some businesses who are
advanced in their sustainability journey and featured in the
Group’s Principal Risk and Uncertainties.
Building on the Group-wide climate risk assessments
performed in 2021 and 2022, climate change modelling
and financial impact assessments will be conducted for our
businesses based on a common set of scenarios and
assumptions which have been developed. The financial
impact of existing climate risks reported by some
businesses will be revisited. For the businesses which
havenot yet reported climate risks in their risk registers,
financial impact will be assessed, so that the climate risks
identified can be fully integrated into risk registers and
managed together with other business risks within the
existing enterprise risk management framework.
Please refer to the Risk Management and Internal Control
section of this Report for details of the Group’s risk
management framework, including risk identification,
assessment, treatment, and reporting and monitoring.
TheMonitoring of Risk Management and Internal Control
Systems section provides details on how GARM monitors
the approach taken by the businesses to managing risk.
Metrics and Targets
Building on the climate risk assessment work carried out in
the past couple of years, we are now in the process of
establishing metrics and indicators to help the Group
manage relevant climate risks and opportunities. As we
drive forward the climate action agenda in 2023 and
beyond, we will consider forward-looking metrics to help us
build resilience to climate change.
In 2021, we developed GHG emissions guidance which is
inline with the GHG Protocol methodology on measuring
Scope 1 and 2 emissions, and aggregated data to provide a
Group-wide picture of our collective GHG emissions. At the
time of publication of this Report, the Group’s 2022
performance is still undergoing external assurance, and
further details willtherefore be provided in the forthcoming
Sustainability Report 2022. The Group’s 2021 performance
is extracted in the table below:
Metric Unit of
measure
Group total
in2021
Scope 1 emissions tCO2e 4,112,571
Scope 2 emissions
(location-based)
tCO2e 1,305,804
Scope 2 emissions
(market-based)
tCO2e 1,299,662
Total GHG emissions
(Scope 1 and location-
based Scope 2)
tCO2e 5,418,375*
* The data was subject to independent limited assurance by PricewaterhouseCoopers as
part of our 2021 Sustainability Report which is available on our website.
2021 was the first year for which we collected GHG
emissions data across the Group, starting with direct
emissions (Scope 1 and 2). The Group is aware of the
importance of collecting our indirect emissions (Scope 3)
data, and we are already planning to collect and disclose it
in the near future.
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Sustainability
Decarbonisation has been a key focus area of the Group’s
sustainability strategy. The Group’s ultimate strategic
ambition is to transition towards net-zero, in line with
climate science. The Group has set its sights on developing
a credible medium-term target aligned with a 1.5°C
trajectory. The success of the Group in reducing carbon
emissions is dependent on the decarbonisation progress
by each individual business. Every business is responsible
and held accountable for developing science-based
decarbonisation plans and delivering on theagreed
targets. In 2022, the Group continued to build momentum
on our net-zero strategy, and the following businesses
made significant progress aligning to the Group’s net-zero
approach:
• Hongkong Land had its 1.5°C near-term
5
target validated
by the Science-Based Target initiative (‘SBTi’); and
• Hactl and Gammon submitted commitment letters for
1.5°C near-term
5
targets to SBTi.
A number of our other businesses are also progressing the
development of a science-based approach which will align
with the Group's ambitions in this area.
Consistency with TCFD requirements
Our climate-related disclosures meet the reporting
requirements for UK standard listed companies, and are
consistent with the TCFD recommendations on:
• governance – all recommended disclosures;
• strategy – disclosures (a) and (b);
• risk management – all recommended disclosures;
• metrics and targets – disclosures (b).
As we are still in the early stages of our TCFD journey,
weacknowledge that we are not fully consistent with
TCFDrequirements, including the additional guidance for
all sectors published in October 2021. It will take some
time for us to fully consider and plan the actions necessary
to achieve alignment. We will continue to move forward
and improve our disclosure in the coming years.
For strategy disclosure (c), we are still analysing our
climate risk assessment results and are in the process of
identifying potential climate opportunities, and we have
not yet fully adjusted our business strategy for climate
resilient development under the low emissions scenario.
This is an ongoing area of collaboration between Group
Sustainability, GARM and Group Strategy in the short term.
For metrics and targets disclosure (a), as we are finalising
the results of climate risk assessment, we have not yet
reached the stage of developing metrics. For disclosure (c),
as a conglomerate operating across a variety of sectors,
setting a single Group-wide target is complex. We will start
developing the metrics and explore the feasibility of
settinga Group-wide target in line with climate science in
the short term.
Responsible Consumption
Promoting resource efficiency and seeking opportunities
for circularity are at the heart of our operations. In early
2022, we established the Responsible Consumption
Working Group (‘RCWG’) as a platform for our businesses to
collaborate and drive the Group strategy across three focus
areas: Plastic, Food and Nature. The RCWG met quarterly in
2022 to establish a framework and a coordinated approach
for more efficient use of resources across our operations.
Through closer collaboration, we create more value as a
Group by leveraging our synergies and cross-sectoral
expertise. Ourbusinesses are actively sharing insights and
exploring collaboration opportunities.
In 2022, one of the key priorities of the RCWG was to
identify major waste streams and expand ongoing waste
reduction initiatives. Weprioritised our efforts on the major
types of wastes produced in our operations, namely food
waste, plastic waste and construction waste. Going
forward, the members of the RCWG will continue to
collaborate and seek ways to enhance data collection and
improve data quality, to support target setting in the future.
Group Sustainability keeps up-to-date on the latest market
trends and engages with our businesses to discuss specific
issues that may have a significant impact on our
5
SBTi defined near-term target as five to ten years, which is the medium-term target as defined by Jardines.
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Sustainability
businesses. In 2022, external experts were invited to host
a workshop on the latest legislation and best practices in
circularity in relation to the food and beverages industry in
Hong Kong. Relevant Group businesses also shared their
initiatives and challenges in waste management and
circularity. They actively sought waste reduction
collaboration opportunities, and actions have been
identified to follow up the discussions.
Contributing to the protection of nature is a key element of
our commitment to sustainability. Nature risks include loss
of biodiversity and degradation of ecosystems. As part of a
global effort to protect and restore nature for current and
future generations, governments from around the world
came together in December 2022 for the UN Biodiversity
Conference (‘COP 15’). A series of goals and targets for
2030 and 2050 were established as part of a framework to
halt and reverse biodiversity loss. Jardines is closely
monitoring global developments post-COP15, including the
regulatory requirements of the Task Force for Nature-related
Financial Disclosure (‘TNFD’), and increasing interest on
biodiversity conservation, as well as future opportunities
for the Group. We have engaged closely with our
businesses and relevant stakeholders to address
biodiversity issues, including supporting the long-term
preservation of the Tapanuli orangutan in the areas near
the Martabe mine in Indonesia. More details can be
foundin the statement on the Martabe mine and
Tapanuliorangutan in the Sustainability section of the
Company’s website.
Social Inclusion
Supporting our communities has been a longstanding
commitment at Jardines. Our community investment
strategy focuses on positively contributing to the issues
ofeducation, health (especially mental health) and
livelihoods.
In 2022, the Jardine Foundation celebrated its 40th
anniversary of providing access to higher education.
Overthe past four decades, the Foundation has awarded
over 400 scholarships at the undergraduate and
postgraduate level to help outstanding students from
theGroup's Asian markets study at top UK universities.
Aspart of the anniversary celebrations, we announced the
expansion of the Foundation's focus to support access to
leading Asian universities, with the launch of two new
scholarships, with the University of Hong Kong and the
Universitas Gadjah Mada in Indonesia.
Recognising the prevalence of mental health-related issues
and the need to increase access to quality mental health
care and effective treatments, Jardines established
MINDSET in Hong Kong in 2002, with a vision to create
inclusive communities where everyone is empowered to
improve their mental health. When MINDSET was first
established, the mental health community was
underserved and affected by social stigma. As MINDSET
celebrated its 20th anniversary in 2022, the awareness and
understanding of mental health have improved as more
resources are available to support people tackling mental
health difficulties and help rehabilitated individuals
integrate into the community. Operations expanded into
Singapore in 2011. MINDSET collaborates with several
mental health organisations to raise awareness and
support people with mental ill-health. Since the launch of
MINDSET Hong Kong in 2002, over HK$78 million has been
raised to support 198,000 beneficiaries.
Engaging our employees and developing a sustainability
culture, where everyone is aware they have a role to play in
our sustainability journey, is essential to the success of our
strategy. Sustainability was a key focus of our employee
engagement activities in 2022. We also hosted several
events dedicated to raising the awareness of our
colleagues on sustainability. During LearnFest 2022,
Jardine’s annual learning week, sustainability-related
sessions provided colleagues with the opportunity to
increase their knowledge in this area. The Jardine
Internship Programme and Jardine Executive Trainee
Programme included a Sustainability Challenge to
inspireinnovative ideas amongst our young talents,
withguidance and support from Group Sustainability.
Wewill continue to provide a range of learning
opportunities to build up sustainability capabilities and
further develop a sustainability culture for our employees
across the Group.
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Directors’ Profiles
* Executive Director
Ben Keswick*
Executive Chairman
Ben Keswick has been Executive Chairman of Jardine Matheson since January 2019.
HewasManaging Director from April 2012 to June 2020. He has held a number of executive
positions since joining the Group in 1998, including finance director and then chief
executive officer of Jardine Pacific between 2003 and 2007, and group managing director of
Jardine Cycle & Carriage until March 2012. Mr Keswick is chairman of DFI Retail Group,
Hongkong Land and Mandarin Oriental. He is also chairman of Jardine Cycle & Carriage and
a commissioner of Astra. He is a director of Yonghui Superstores and held the position of
chairman between 2018 and 2020. He has an MBA from INSEAD.
John Witt*
Group Managing Director
John Witt was appointed Group Managing Director in 2020, when he also became
managingdirector of DFI Retail Group, Hongkong Land and Mandarin Oriental. He joined
the Board in 2016 and was Group Finance Director from 2016 to 2020. He has been with the
Jardine Matheson Group since 1993 and has held a number of senior finance positions,
including chief financial officer of Hongkong Land. Mr Witt is chairman of Jardine Matheson
Limited and is also a director of Jardine Pacific and Jardine Motors, as well as a
commissioner and chairman of the Executive Committee of Astra. He is a Chartered
Accountant and has an MBA from INSEAD.
Y.K. Pang*
Deputy Managing Director
and Chairman of Hong Kong
Y.K. Pang joined the Board in 2011 and was appointed Deputy Managing Director in 2016
and Chairman of Hong Kong in 2019. He has held a number of senior executive positions in
the Group, which he joined in 1984, including chief executive of Hongkong Land between
2007 and 2016. He was a director of DFI Retail Group from 2016 to 2021. He is chairman of
Jardine Pacific, Gammon, Hong Kong Air Cargo Terminals and Zung Fu. Mr Pang is also
deputy chairman of Jardine Matheson Limited, and a director of Hongkong Land,
JardineMatheson (China), Mandarin Oriental and Greatview. He is chairman of the
HongKong Tourism Board and the Hong Kong Management Association, a member of the
Council and General Committee of the Hong Kong General Chamber of Commerce and the
Employers’ Federation of Hong Kong.
Graham Baker*
Group Finance Director
Graham Baker joined the Board as Group Finance Director in 2020. He was previously an
executive director and chief financial officer of Smith+Nephew in the United Kingdom from
2017 to 2020. Prior to joining Smith+Nephew, he worked for 20 years for AstraZeneca PLC in
a range of senior roles in the United Kingdom and internationally, including in Japan and
Singapore, and then as chief financial officer of generic pharmaceutical company Alvogen.
He is also a director of Jardine Matheson Limited.
Stuart Gulliver
Stuart Gulliver joined the Board in 2019. He was previously executive director and group
chief executive of HSBC Holdings plc from 2011 until 2018 and chairman of The Hong Kong
and Shanghai Banking Corporation Limited from 2011 to 2018. Mr Gulliver has more than
37years’ international banking experience, having joined HSBC in 1980 and worked for the
group throughout his career. He is a director and member of the audit and finance
committees of Airport Authority Hong Kong, and is also a member of the International
Advisory Council of Hong Kong Exchanges and Clearing Limited. He is a director, chairman
of the risk committee and a member of the audit committee of The Saudi British Bank. He is
also a director and member of the audit committee and the risk and health, safety and
environment committee of Saudi Aramco.
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Annual Report 2022
David Hsu
David Hsu joined the Board in 2016, having first joined the Group in 2011. Prior to his
retirement from executive office in August 2022, he was chairman of Jardine Matheson
(China), with responsibility for supporting the Group’s business developments on the
Chinese mainland, Taiwan and Macau. He was previously chief executive of J.P. Morgan
Asset Management in the Asia Pacific Region.
Julian Hui
Julian Hui joined the Board in 2018, having first joined the Group in 1994. He is an executive
director of Owens Company, and a director of Central Development.
Adam Keswick*
Adam Keswick first joined the Group in 2001 and was appointed to the Board in 2007.
Hewas Deputy Managing Director from 2012 to 2016, and became chairman of
Matheson&Co. in 2016. Mr Keswick is a director of DFI Retail Group, Hongkong Land and
Mandarin Oriental. He is also a director of Ferrari NV, Schindler and Yabuli China
Entrepreneurs Forum and vice chairman of the supervisory board of Rothschild & Co.
Anthony Nightingale
Anthony Nightingale joined the Group in 1969 and was appointed as a Director in 1994.
Hewas Managing Director from 2006 until he retired from executive office in 2012. He is
also a director of DFI Retail Group, Hongkong Land and a commissioner of Astra. He is a
director of Shui On Land and Vitasoy. He is chairperson of The Sailors Home and Missions
to Seafarers in Hong Kong. He is a past chairman of the Hong Kong General Chamber of
Commerce and served on many Hong Kong Government committees from 1992 to 2022,
also representing Hong Kong on the APEC Business Advisory Council from 2005 to 2017.
Percy Weatherall
Percy Weatherall first joined the Company in 1976 and was appointed to the Board in 1999
before being appointed Managing Director in 2000. He retired from executive office in
2006. He is also a director of Matheson & Co. He is chairman of Corney & Barrow and the
Nith District Salmon Fishery Board.
Michael Wei Kuo Wu
Michael Wu joined the Board in 2015. He is chairman and managing director of Maxim’s
Caterers in Hong Kong. He is also a non-executive director of Hang Seng Bank.
* Executive Director
Company Secretary
Jonathan Lloyd
Registered Office
Jardine House, 33-35 Reid Street
Hamilton
Bermuda
Directors’ Profiles
62
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Annual Report 2022
Overview of the Group’s Governance Approach
The Jardine Matheson Group (the ‘Group’) understands the value of good corporate governance in driving the long-term
sustainable success of the business. It is committed to high standards of governance and has evolved, over many years,
anapproach that the Group regards as appropriate taking account of its size, structure and the complexity and breadth of its
business and the long-term strategy it pursues in its markets, primarily China and SoutheastAsia.
An important part of strong governance is corporate stability, and this is provided by the long-term stewardship of the
business by family as well as related and like-minded shareholders, who hold a significant proportion of the shares of the
parent company of the Group, Jardine Matheson Holdings Limited (the ‘Company’). This stability, coupled with an effective
and robust corporate governance framework, supports the Board of the Company in delivering the Group’s strategy and
sustainable growth. It also ensures that the Group retains and promotes those characteristics and values of a family-owned
business that have enabled Jardines to prosper over its 191-year history:
• A long-term perspective – the Group takes a long-term view in its decision-making and investments and draws on the
many years’ experience of our directors, rather than just focussing on short-term profits. This leads to long-term growth for
our shareholders and the communities where we operate.
• Credibility and trust – the credibility and trust that family ownership brings to the business are highly valued by our
partners and other stakeholders, especially in developing markets.
• Deep knowledge of the business and our markets – the involvement of many generations of the family in the running of
the Group has led to a deep understanding of how to drive successful growth by the business across its markets, giving
the Group a competitive advantage.
The Group believes that its stakeholders gain significant value from the historical governance approach the Group has
takenas a family-owned business and that it is therefore important to retain the key elements of this approach. It is also
important, without losing these benefits, to adapt to changing circumstances in our markets and, where appropriate, to the
developing expectations of stakeholders and changes in best practice and the approach taken by our peers.
Accordingly, the Company continues to focus on enhancing the Group’s approach to corporate governance more generally,
focussing on changes which benefit the Group.
Several changes were made to the governance of the Company during the year, including the appointment of Michael Wu
asa member of the Audit Committee, replacing Adam Keswick with effect from 2nd March 2023, which means that the
membership of the Company’s Audit Committee now comprises solely Independent Non-Executive Directors. The proportion
of Independent Non-Executive Directors on the Board also increased as a result of the retirement of Jeremy Parr in
March2022.
Independent Non-Executive Directors with a broad and diverse range of backgrounds are a valuable source of external
perspectives and are a key element of good governance and decision-making. The Company and the Group can benefit from
the expertise and experience they bring, and the Company is taking steps to increase the independence and diversity of
itsBoard.
Corporate Governance
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Annual Report 2022
Corporate Governance
Group Structure
The Company’s management is concerned both with the direct management of the Company’s own activities and with the
oversight of the other listed companies within the wider Group. By coordinating objectives, establishing common values and
standards and sharing experience, contacts and business relationships, the Group optimises opportunities across the Asian
countries in which it operates.
This approach has been developed over time and is designed so that individual subsidiaries and affiliates benefit from the
Group’s strategic guidance and professional expertise, while at the same time ensuring that the independence of their
boards is respected and clear operational accountability rests with their executive management teams. We believe this
approach is a key element of the Group’s success.
In April 2021, the Company completed the simplification of the parent company structure of the Group, which included the
acquisition by the Company, for cash, of the approximately 15% of the issued share capital of Jardine Strategic Holdings
Limited that it did not already own. At the Company’s 2022 Annual General Meeting, shareholders approved the cancellation
of Jardine Strategic’s almost 60% shareholding in the Company and the shares were cancelled on 18th May 2022.
Governance of the Company’s Listed Subsidiaries
The Company also continues to lead enhancements to the governance of the Group’s listed subsidiaries. These have
included increasing the diversity of, and bringing greater sector expertise to, the boards of DFI Retail Group Holdings Limited
(‘DFIRGH’), Mandarin Oriental International Limited (‘MOIL’) and Hongkong Land Holdings Limited (‘HKLH’) through the
appointment of new Independent Non-Executive Directors in 2021 and 2022, as well as the appointment of Independent
Non-Executive Directors as chairman of the HKLH and MOIL audit committees.
Governance and Legal Framework
The Company is incorporated in Bermuda. The primary listing of the Company’s equity shares is a standard listing on the
Main Market of the London Stock Exchange (the ‘LSE’). The Company also has secondary listings in Singapore and Bermuda.
As the Company has only secondary listings on these exchanges, many of the listing rules of such exchanges are not
applicable. Instead, the Company must release the same information in Singapore and Bermuda as it is required to release
under the rules which apply to it as a standard listed company on the LSE.
As a company incorporated in Bermuda, the Company is governed by:
• the Bermuda Companies Act 1981 (the ‘Companies Act’);
• the Bermuda Jardine Matheson Holdings Limited Consolidation and Amendment Act 1988 (as amended, the ‘Special Act’),
pursuant to which the Company was incorporated, and the Bermuda Jardine Matheson Holdings Limited Regulations of
1993 (as amended, the ‘Regulations’) were implemented; and
• the Company’s Memorandum of Association and Bye-laws.
The Bermuda Takeover Code for the Company is set out in the Regulations and is based on the UK City Code on Takeovers
and Mergers. It provides an orderly framework within which takeover offers can be conducted and the interests of
shareholders protected.
Other acquisition mechanisms available under the Companies Act include schemes of arrangement and amalgamation and
mergers. The Companies Act provides a framework within which such procedures can be conducted and the interests of
shareholders protected.
The shareholders can amend the Company’s Bye-laws by way of a special resolution at a general meeting of the Company.
64
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Annual Report 2022
Corporate Governance
The Company’s standard listing in London means that it is bound by many of the same rules as premium-listed companies
under the UK Listing Rules, the Disclosure Guidance and Transparency Rules issued by the FCA (the ‘DTRs’), the Market
Abuse Regulation
1
(‘MAR’) and the Prospectus Regulation Rules, including in relation to continuous disclosure, periodic
financial reporting, disclosure of interests in shares, market abuse and the publication and content of prospectuses in
connection with admission to trading or the offering of securities to the public. In addition, the Company is subject to
regulatory oversight from the Financial Conduct Authority of the United Kingdom (the ‘FCA’), as the Company’s principal
securities regulator, and is required to comply with the Admission and Disclosure Standards of the Main Market of the LSE.
The Company and its directors are also subject to legislation and regulations in Singapore relating, among other things,
toinsider dealing.
Some of the rules applicable to premium listed companies do not apply to the Company. When the shareholders approved
the Company’s move to a standard listing from a premium listing in 2014, however, the Company stated that it intended to
maintain certain governance principles which were then applicable to it by virtue of its premium listing.
As a result, the Company adopted a number of governance principles (the ‘Governance Principles’) based on the
then-applicable requirements for a premium listing, which go further than the standard listing requirements.
The key elements of the Governance Principles are as follows:
• When assessing a significant transaction (a larger transaction which would be classified as a class 1 transaction under the
provisions of the UK Listing Rules), the Company will engage an independent financial adviser to provide a fairness
opinion on the terms of the transaction.
• If the Company carries out a related party transaction which would require a sponsor to provide a fair and reasonable
opinion under the provisions of the UK Listing Rules, it will engage an independent financial adviser to confirm that the
terms of the transaction are fair and reasonable as far as the shareholders of the Company are concerned.
• Further, as soon as the terms of a significant transaction or a related party transaction are agreed, an announcement will
be issued by the Company, providing such details of the transaction as are necessary for investors to evaluate the effect of
the transaction on the Company.
• At each annual general meeting, the Company will seek shareholders’ approval to issue new shares on a non-pre-emptive
basis for up to 33% of the Company’s issued share capital, of which up to 5% can be issued for cash consideration.
• The Company adheres to a set of Securities Dealing Rules which follow the provisions of MAR with respect to market abuse
and disclosure of interests in shares.
The Company is not required to comply with the UK Corporate Governance Code (the ‘Code’), which applies to all
premium-listed companies and sets out the governance principles and provisions expected to be followed by companies
subject to the Code. However, the Company does have regard to the Code in developing and implementing its approach to
corporate governance and disclosure.
1
The EU Market Abuse Regulation and, with effect from 1st January 2021, the UK Market Abuse Regulation.
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Annual Report 2022
Corporate Governance
The Management of the Group
Board
The Board is responsible for ensuring that the Group is appropriately managed and achieves the strategic objectives it sets,
in a way that is supported by the right culture, values and behaviours throughout the Group.
The Directors have the full power to manage the Company’s business affairs, except matters reserved to be exercised by the
Company in a general meeting under Bermuda legislation or the Company’s Bye-laws. Key matters that the Directors are
responsible for include:
• responsibility for the overall strategic aims and objectives of the Group;
• establishing the Company’s purpose and values;
• approval of the Group’s strategy and risk appetite to align with the Group’s purpose and values;
• approval and oversight of the Group policy framework and approval of appropriate Group policies;
• approval of the Annual Budget and monitoring of performance against it;
• oversight of the Group’s operations;
• approval of major changes to the Group’s corporate or capital structure;
• approval of major capital expenditure and significant transactions in terms of size or reputational impact;
• approval of interim and final financial statements upon recommendation from the Audit Committee, as well as interim
management statements;
• approval of the Annual Report and Accounts;
• approval of dividend policy and the amount and form of interim and final dividend payments, for approval by shareholders
as required;
• any significant changes to the Company’s accounting policies or practices, upon recommendation from the Audit
Committee;
• appointment, re-appointment or removal of the external auditor, subject to shareholders’ approval, upon recommendation
from the Audit Committee;
• approval of matters relating to AGM resolutions and shareholder documentation;
• approval of all shareholder circulars, prospectuses and listing particulars issued by the Company; and
• approval of material public announcements concerning matters decided by the Board.
Responsibility for certain matters, including the approval of borrowing facilities and capital expenditure (other than major
capital expenditure required to be approved by the Board), has been delegated by the Board to the Group management
company, Jardine Matheson Limited (‘JML’).
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Corporate Governance
Board Composition
The Board’s composition and the way it operates provide stability, allowing the Company to take a long-term view as it seeks
to grow its business and pursue investment opportunities.
As at 2nd March 2023, the Board comprises 11 Directors, three of whom (27%) – Stuart Gulliver, Julian Hui and MichaelWu–
are Independent Non-Executive Directors as defined by the Code. Two further Non-Executive Directors – Anthony Nightingale
and Percy Weatherall – do not have any executive responsibilities, nor have they been an employee of the Company or Group
within the past five years, and they are sufficiently distanced from the day-to-day operations of the Company for the
Company to take the view that they are Independent Directors, even though they have served on the Board for over nine
years. Although there are no female Directors on the Board at present, the Board has plans to increase its gender diversity in
the short- to medium-term. More information on the actions the Group is taking in relation to diversity and inclusion can be
found in the Diversity and Inclusion section of this report on pages 72 to 73.
The names of all the Directors and brief biographies appear on pages 60 to 61 of this Report.
Ben Keswick has been Executive Chairman of the Board since 15th June 2020. John Witt has held the role of Group Managing
Director from the same date. Ben Keswick previously held the roles of Executive Chairman and Managing Director on a
combined basis from 1st January 2019.
The Board considers that there is a clear division of responsibilities between the Chairman and the Group Managing Director,
and this ensures an appropriate balance of power and authority.
Age of Directors
Nationality Tenure of Directors
Directors’ experience
Capacity of Directors (Number of Directors)
5
1
5
50-59 60-69 70-75
6 4 1
British Chinese Canadian
7
9
8
10
8
9
Corporate Governance,
Risk Management and/or Sustainability
Financial Acumen
Stratagy & Business Acumen
Executive Leadership
International Business
Related Industry Knowledge/Experience
5
1
5
Independent
Non-Executive Directors
Non-Executive Directors
Executive Directors
3 3 5
5 years or below 6-10 years Over 10 years
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Corporate Governance
Chairman
The Chairman’s role is to lead the Board, ensuring its effectiveness while taking account of the interests of the Group’s
various stakeholders, and promoting high standards of corporate governance.
The Chairman’s principal responsibilities are in the areas of strategy, external relationships, governance and people.
Heleads the Board in overseeing the long-term strategic direction of the Group and approving its key business priorities.
Hiskey responsibilities also include:
• building an effective Board supported by a strong governance framework;
• supporting the Group Managing Director in the execution of his duties;
• ensuring a culture of openness and transparency at Board meetings;
• chairing Board meetings effectively, ensuring all Directors effectively contribute to discussions;
• ensuring comprehensive committee reporting to the Board;
• ensuring all Directors receive accurate, timely and clear information;
• communicating with Directors on a regular basis between Board meetings and promoting effective communication
between Executive and Non-Executive Directors;
• ensuring that all Non-Executive Directors have a comprehensive induction programme and an ongoing programme to build
their knowledge and understanding of the business;
• providing feedback to Non-Executive Directors on their performance and attendance at meetings;
• leading succession planning for the Group Managing Director;
• leading, with the Group Managing Director, the development of the culture and values of the Group;
• agreeing, together with the Group Managing Director, key business priorities;
• supporting the development and maintenance of relationships with existing and new key business partners, governments
and shareholders; and
• ensuring, with the Group Managing Director, an appropriate focus on attracting and retaining the right people and carrying
out succession planning for senior management positions.
Group Managing Director
The role of the Group Managing Director is to implement the strategy agreed by the Board and manage the Group’s
operations. The Group Managing Director is responsible for developing the Group’s strategy and ensuring its timely
execution, as well as managing all aspects of the performance and management of the Group, with day-to-day
responsibilityfor:
• effective management of the Group’s businesses;
• leading the development of the Group’s strategic direction and implementing the agreed strategy;
• overseeing the Group’s capital allocation, business planning and performance;
• identifying and executing new business opportunities;
• managing the Group’s risk profile and implementing and maintaining an effective framework of internal controls;
• developing targets and goals for his executive team;
• leading, with the Chairman, the development of the culture and values of the Group;
• ensuring effective communication with shareholders and key stakeholders and regularly updating institutional investors
on the business strategy and performance;
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• providing regular operational updates to the Board on all matters of significance relating to the Group’s businesses
orreputation;
• ensuring, together with the Chairman, an appropriate focus on attracting and retaining the right people and carrying out
succession planning for senior management positions;
• deepening collaboration within the Group and with external partners; and
• fostering innovation and entrepreneurialism to drive the Group’s businesses.
The Chairman has appointed the Group Managing Director as Managing Director of the Group’s listed subsidiaries HKLH,
DFIRGH and MOIL, pursuant to their respective Bye-laws. The Group Managing Director’s role in relation to each of these
businesses includes:
• providing oversight of the day to-day management of each business by its CEO and his leadership team;
• carrying out ongoing reviews of the business, financial and operational performance of each business against agreed
objectives;
• providing regular feedback to each CEO on his/her performance and conducting an annual performance review;
• leading CEO succession planning;
• ensuring that there is appropriate discussion of future competencies required of the management team to execute
thestrategy;
• ensuring that the information submitted to the Board is of high quality and provided on a timely basis;
• ensuring the Board conducts reviews on past significant investment decisions; and
• communicating with shareholders as appropriate.
Non-Executive Directors
The Non-Executive Directors bring insight and relevant experience to the Board. They have responsibility for constructively
challenging the strategies proposed by the Executive Directors and scrutinising the performance of management in
achieving agreed goals and objectives. In addition, Non-Executive Directors work on individual initiatives as appropriate.
Board Meetings
The Board usually holds four scheduled meetings each year, as well as ad hoc meetings when appropriate to deal with
urgent matters that arise between scheduled meetings. Board meetings are usually held in different locations around the
Group’s markets.
In March 2022, as border restrictions began to ease, a hybrid meeting was held in Singapore. The May 2022 Board meeting
was held virtually. In-person Board meetings were held in Singapore in July and Bangkok in December.
The Board receives high quality, up-to-date information for each of its meetings, which is provided to Directors via a secure
online board information portal. The Company reviews the information provided to the Board regularly, to ensure that it
remains relevant to the needs of the Board in carrying out its duties.
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Those of the Company’s Directors who are based outside Asia will usually visit the region regularly to review and discuss the
Group’s businesses. They also participate in a series of strategy review meetings that precede each of the regular Board
meetings. These Directors are not directly involved in the operational management of the Group’s business activities,
buttheir knowledge of the Group’s affairs, as well as their experience of the wider Group, provide significant value to the
ongoing review by the Company of the Group’s businesses and reinforce the Board oversight process.
Board Attendance
Directors are expected to attend all Board meetings. The table below shows the attendance at the scheduled 2022 Board
meetings:
Meetings eligible
to attend % attendance
Current Directors
Executive Directors
Ben Keswick 4/4 100%
John Witt 4/4 100%
Y.K. Pang 4/4 100%
Graham Baker 4/4 100%
Adam Keswick 4/4 100%
Non-Executive Directors
Stuart Gulliver 4/4 100%
David Hsu 4/4 100%
Julian Hui 4/4 100%
Anthony Nightingale 4/4 100%
Percy Weatherall 4/4 100%
Michael Wu 4/4 100%
Former Director
Jeremy Parr 1/1 100%
Note: Jeremy Parr retired from the Board of the Company on 31st March 2022.
Appointment and Retirement of Directors
Each new Director is appointed by the Board and, in accordance with the Company’s Bye-laws, is subject to retirement and
re-appointment at the first annual general meeting after the appointment. After that, Directors are subject to retirement by
rotation requirements under the Bye-laws, whereby one-third of the Directors retire at the annual general meeting each year.
These provisions apply to both Executive and Non-Executive Directors, but the requirement to retire by rotation does not
extend to the Chairman or Group Managing Director.
In accordance with Bye-law 84, David Hsu, Adam Keswick and Anthony Nightingale will retire by rotation at the forthcoming
Annual General Meeting and, being eligible, offer themselves for re-election. Neither David Hsu nor Anthony Nightingale
have service contracts with the Company or its subsidiaries.
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Operational Management
Operational management is delegated to the appropriate level, and coordination with the Group’s listed subsidiaries is
undertaken by the board of the Group management company, JML. The JML board meets regularly in Hong Kong and is
chaired by the Group Managing Director. It has six other members, whose names appear on page 207 of this Report.
Company Secretary
All Directors have access to advice and support from the Group Corporate Secretary, who is responsible for advising the
Board on all governance matters.
Insurance and Indemnification
The Company purchases insurance to cover its Directors against their costs in defending themselves in civil proceedings
taken against them in that capacity and in respect of damages resulting from the unsuccessful defence of any proceedings.
To the extent permitted by law, the Company also indemnifies its Directors. Neither insurance nor indemnity arrangements,
however, provide cover where the Director has acted fraudulently or dishonestly.
Delegations of Authority
The Group has an organisational structure with defined lines of responsibility and delegation of authority in place. Across
the Group, there are established policies and procedures for financial planning and budgeting, information and reporting
systems, risk management and monitoring of the Group’s operations and performance. The information systems in place are
designed to ensure that the financial information reported is reliable and up to date.
Directors’ Responsibilities in Respect of the Financial Statements
Under the Companies Act, the Directors are required to prepare financial statements for each financial year and present
them annually to the Company’s shareholders at the annual general meeting. The financial statements are required to
present fairly, in accordance with International Financial Reporting Standards (‘IFRS’), the financial position of the Group at
the end of the year, and the results of its operations and its cash flows for the year then ended. The Directors consider that
applicable accounting policies under IFRS, applied on a consistent basis and supported by prudent and reasonable
judgments and estimates, have been followed in preparing the financial statements. The financial statements have been
prepared on a going concern basis.
Substantial Shareholders
As a non-UK issuer, the Company is subject to the provisions of the DTRs, which require that a person must, in certain
circumstances, notify the Company of the percentage of voting rights attaching to the share capital of the Company that
person holds. The obligation to notify arises if that person acquires or disposes of shares in the Company and that results in
the percentage of voting rights which the person holds reaching, exceeding, or falling below, 5%, 10%, 15%, 20%, 25%,
30%, 50% and 75%.
The Company has been informed of the following holdings of voting rights of 5% or more attaching to the Company’s issued
ordinary share capital: the 1947 Trust (as defined below) is interested in 36,327,391 ordinary shares carrying 12.54% of the
voting rights; Butterfield Trust (Bermuda) Limited is interested in 38,632,892 ordinary shares carrying 13.24% of the voting
rights and First Eagle Investment Management, LLC is interested in 14,714,540 ordinary shares carrying 5.08% of the voting
rights. Apart from these interests and the interests disclosed under ‘Directors’ Share Interests’ below, the Company is not
aware of any holders of voting rights of 5% or more attaching to the issued ordinary share capital of the Company as at 2nd
March 2023.
There were no contracts of significance with corporate substantial shareholders during the year under review.
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Related Party Transactions
Details of transactions with related parties entered into by the Company during the course of the year are included in note 37
to the financial statements on page 167.
Engagement with Shareholders and Stakeholders
The Group regularly engages with its shareholders and other stakeholders. Since the beginning of 2022, we have held two
results briefings and a number of analyst and institutional shareholder meetings to provide an opportunity for questions to
be asked of senior management, discuss concerns and hear feedback on areas where improvements could be made.
The Group also engages with internal and external stakeholders to communicate the progress it is making in respect of its
sustainability approach and seek feedback. More information can be found in the Stakeholder Engagement and Materiality
Assessment section of the Group’s 2022 Sustainability Report, which will be published later this year and can be accessed
via the corporate website https://www.jardines.com.
Securities Purchase Arrangements
The Directors have the power under the Bermuda Companies Act and the Company’s Memorandum of Association to
purchase the Company’s shares. Any shares so purchased are required to be treated as cancelled and, therefore, reduce the
Company’s issued share capital. The Board regularly considers the possibility of share repurchases or the acquisition of
further shares in Group companies. When doing so, it considers the potential for enhancing earnings or asset values per
share. When purchasing such shares, the Company is subject to the provisions of MAR.
During the year ended 31st December 2022, the Company repurchased and cancelled 2,963,600 ordinary shares for an
aggregate total cost of US$171 million. The ordinary shares, which were repurchased in the market, represented
approximately 0.5% of the Company’s issued ordinary share capital.
Annual General Meeting
The 2023 Annual General Meeting will be held on 4th May 2023. The full text of the resolutions and explanatory notes in
respect of the meeting are contained in the Notice of Meeting that is distributed at the same time as this Report and can be
found at https://www.jardines.com/en/investors/shareholder-centre/annual-general-meeting.
Corporate Website
The Company’s corporate website, which contains a wide range of information of interest to investors, can be found at
www.jardines.com.
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Group Policies
Code of Conduct
The Group conducts business in a professional, ethical and even-handed manner. Its standards are clearly set out in its Code
of Conduct, a set of guidelines to which every employee must adhere and which is reinforced and monitored by an annual
compliance certification process. The Code of Conduct requires that all Group companies and employees comply with all
laws of general application, all rules and regulations that are industry-specific and proper standards of business conduct.
Inaddition, the Code of Conduct prohibits the giving or receiving of illicit payments. It requires that all managers be fully
aware of their obligations under the Code and establish procedures to ensure compliance at all levels within their
businesses.
During the year, the Code of Conduct has been updated to make it easier to understand, more impactful, and more relevant
to the modern workplace. All employees are expected to familiarise themselves with the refreshed Code of Conduct and to
be the person of integrity that the Code of Conduct envisages. Annual training on the refreshed Code of Conduct is being
rolled out to staff. Each of the Group companies either applies the Code of Conduct or has implemented its own code of
conduct which is aligned to the Code of Conduct but tailored to its particular industry, business or circumstances.
The Company’s policy on commercial conduct underpins the Group’s internal control process, particularly in the area of
compliance. The policy is set out in the Code of Conduct.
The Code of Conduct can be viewed on the Company’s website at https://www.jardines.com/en/about-us/corporate-
governance.
Whistleblowing
The Company has a whistleblowing policy covering how employees can report matters of serious concern. The Audit
Committee has the responsibility for overseeing the effectiveness of the formal procedures for colleagues to raise such
matters and is required to review any reports made under those procedures referred to it by the internal audit function.
The Company has a confidential whistleblowing service, managed by an independent third party, which supplements
existing whistleblowing channels in the business units to assist employees in raising matters of concern and reporting cases
of suspected illegal or unethical behaviour. The service, which aims to help foster an inclusive, safe and caring workplace,
isavailable 24 hours a day in multiple local languages and is accessible through phone hotline or online. Colleagues may
make anonymous submissions in situations where it is inappropriate or not possible to report a matter of concern to a
manager or supervisor, or a Human Resources (‘HR’) or Group Legal representative.
Reports may be lodged by one of three channels: email, website and telephone hotline. Each report is allocated a unique
case number which enables follow-up with the reporter, if appropriate. Once a report is lodged, it is sent to certain
authorised persons at the relevant business unit. These include senior representatives from legal, compliance and HR teams
who have experience in dealing with such matters. The authorised persons will follow up on the report and investigate where
necessary. The reporter will be notified of the outcome.
All reports are treated confidentially, and no retaliation against a person reporting a matter of concern in good faith will
betolerated.
Diversity and Inclusion (‘D&I’)
Jardines is a diversified Group operating a wide range of market-leading businesses across Asia and other regions.
Ourpeople represent many ideas, experiences, cultures and backgrounds. The Group’s diversity is one of our key strengths,
and our employees all have a part to play in ensuring that our workplace supports and encourages inclusion and
collaboration.
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The Group applies the principle that colleagues should always treat others in a way they would expect others to treat them.
Bullying, intimidation, discrimination, and harassment of others have no place in the Group and will not be tolerated.
Our D&I Policy, which can be viewed at https://www.jardines.com/en/about-us/corporate-governance, encapsulates these
principles and states that all employees, regardless of ethnicity, gender, age, sexual orientation, disability, background or
religion, should be treated fairly and with dignity, should be given equal opportunities, and be valued for the contributions
they make in their role.
We value the physical and mental health, safety and well-being of our employees, and this is key to the success of our
Group. All staff are encouraged and supported to develop their full potential and contribute to the sustainable growth of the
Group. Colleagues’ views and ideas are important, and they are encouraged to express them respectfully at all levels within
the organisation.
To build an inclusive workplace, we incorporate D&I principles across our business and HR practices. This includes:
• ongoing collaboration with our Group companies to ensure a set of inclusive working arrangements and policies to
support D&I;
• keeping our recruitment, promotion and retention systems fair and based on aptitude, merit and ability, including ongoing
reviews of remuneration to ensure appropriateness of pay levels;
• active talent management and career support for our talent pools, to provide equitable opportunities that will enable a
diverse future pipeline of leaders; and
• cultivating the right set of leadership behaviours, through learning campaigns to ensure our people behave in a way
consistent with the principles we have put in place.
The Company keeps the composition of its Board and senior management positions under review, to ensure that it adapts to
the changing business landscape. The Company is actively focussed on increasing gender diversity at all levels of the
organisation and in each of the Group’s businesses.
The Company has a Group Head of D&I, who leads initiatives to develop a Group-wide approach to D&I and ensures that an
open and inclusive culture is integrated into the way each of the Group’s businesses operates.
We are continuing our work to create a diverse and inclusive culture where everyone can succeed. During the year,
welaunched a new D&I strategy to help progress our ambitions across the Group. New initiatives included a learning
campaign on inclusive leadership and a comprehensive review to enhance HR policies and new processes which support
D&I. We have also developed targets for increasing female representation in our workforce and leadership. We recognise,
however, that further progress needs to be made to achieve our objectives.
Data Privacy
The Group is committed to being a responsible custodian of the data entrusted to it by customers, employees, suppliers and
other stakeholders keeping the data secure and processing it in accordance with legal requirements and stakeholder
expectations as they continue to evolve.
The Group’s Code of Conduct and Data Breach Notification Policy underpin this commitment.
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Remuneration Report
Introduction
This Report sets out the Company’s approach to remuneration for its directors and employees. It summarises the link
between the Company’s values, strategy and its remuneration framework, and between performance and reward,
indetermining remuneration outcomes.
Remuneration Philosophy and Reward Framework
The Company aims to ensure that its compensation system is designed in a manner that reflects the Company’s culture
andstrategic priorities. At the heart of the Company’s remuneration framework is a commitment to deliver competitive
remuneration for excellent performance at all levels, to attract the most talented individuals and motivate and retain them,
while aligning the interests of colleagues and shareholders and taking account of stakeholder expectations, as appropriate.
The Company achieves this through performance-based variable compensation, reflecting incentives based on:
• financial measures and strategic objectives which reflect key goals critical to the long-term sustainable success of the
Group and its businesses, including business and operational risk and sustainability-related goals; and
• individual performance objectives which reflect key development areas.
Given the nature of the Group and its diverse geographic base, a number of its senior executives are required to be offered
international terms, and the nature of their remuneration packages is designed to reflect this, while retaining the link
between remuneration to strategic and individual performance objectives.
The structure of remuneration varies from senior executive to more junior level employees and in particular the remuneration
mix for employees varies depending on level. At senior executive levels, more remuneration is ‘at risk’, depending on
performance levels against goals. At more junior levels, more remuneration is directed toward fixed remuneration.
TheCompany strives to provide an appropriate amount of remuneration ‘at risk’ for the achievement of goals –
whetherthose are short- or long-term in nature.
The Board has overall responsibility for setting remuneration for the Company’s employees, ensuring it is appropriate and
supports the Group’s strategy, creating value for stakeholders and having regard to the core principles and integrity standard
set out in the Code of Conduct.
How Remuneration is Linked to Business Strategy
The Company’s approach to remuneration is designed to support and reinforce its strategic priorities, both short- and
long-term. The level of remuneration is determined based on a review of the contribution to the achievement of these
priorities. In particular, the level of contribution to and achievement of:
Priorities Measurement period
Key strategic objectives and evolving the Group’s portfolio Long-term (>3 years)
Driving operational excellence Short-term (<3 years)
Enhancing leadership and entrepreneurialism Short-term
Progressing sustainability Short- and long-term
At the beginning of each year, each senior executive sets out performance objectives that are relevant to their role.
Theseobjectives are required to take account of the role’s expected contribution to the Company and be aligned with the
Company’s strategic direction, as well as Company culture. These objectives are then agreed between the senior executive
and the Group Managing Director in consultation with the Executive Chairman, and the senior executive is held accountable
for the agreed objectives. By assigning goals on an annual basis and reviewing them regularly, we ensure relevance to
andalignment with the Group’s strategic direction, as well as alignment between the interests of senior executives and
shareholders.
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Objectives are determined in a manner that allows the Company to achieve its strategic ambitions, while delivering
competitive remuneration upon their achievement. Further, the objectives aim to motivate senior executives to pursue
stretch performance, which may deliver above-target remuneration levels.
Each year the Company reviews senior executive achievements and approves compensation levels. Communication of
remuneration-linked goals and attainment is designed to be simple in nature, so it is easy to understand for participants,
and it can clearly show direct alignment to the strategic priorities of the Company.
Directors’ Remuneration
Shareholders decide in general meetings the Directors’ fees which are payable to the Chairman and all Non-Executive
Directors, as provided for by the Company’s Bye-laws.
The remuneration of the Company’s Non-Executive Directors is not linked to performance. This is consistent with
Non-Executive Directors being responsible for objective and independent oversight of the Group. The Company’s Bye-laws
provide that Non-Executive Directors may determine their own remuneration, but the total amount provided to all Directors
(not including the Group Managing Director and any other Executive Directors of the Company) must not exceed the sum
agreed by shareholders at a general meeting. The maximum aggregate remuneration of US$1.5 million per annum was
approved by shareholders at the 2022 AGM. Non-Executive Directors do not receive bonuses or any other incentive payments
or retirement benefits. The Non-Executive Directors are reimbursed for expenses properly incurred in performing their duties
as a Director of the Company. The schedule of fees paid to Directors in respect of 2022 is set out in the table below. Fees are
annual fees, unless otherwise stated:
US$
Base Non-Executive Director fee 100,000
Audit Committee Member fee 35,000
Director
Director fee
US$
Audit Committee fee
US$
Total fees
US$
1 Ben Keswick (Chairman) – N/A –
2 John Witt – N/A –
3 Y.K. Pang – N/A –
4 Graham Baker – N/A –
5 David Hsu
†
41,920 N/A 41,920
6 Adam Keswick – – –
7 Percy Weatherall 100,000 N/A 100,000
8 Stuart Gulliver 100,000 35,000 135,000
9 Anthony Nightingale 100,000 35,000 135,000
10 Jeremy Parr
^
– N/A –
11 Julian Hui 100,000 N/A 100,000
12 Michael Wu 100,000 N/A 100,000
Total 541,920 70,000 611,920
†
David Hsu appointed as Non-Executive Director on 1st August 2022.
^ Jeremy Parr retired from the Board on 31st March 2022.
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The Executive Directors
2
are paid a basic fixed salary and receive certain employee benefits from the Group.
The Executive Directors’ performance is assessed by reference to: (i) the overall contribution by each Executive Director to
increasing shareholder value over the long-term, by reference to long-term sustainable growth in earnings per share,
focussing on underlying earnings per share, a progressive dividend policy and the share price as well as the achievement
ofagreed Group objectives; and (ii) performance by reference to agreed individual objectives.
Depending on their performance, the Executive Directors may receive amounts in lieu of discretionary annual incentive
bonuses from the income of a trust created in 1947 (the ‘1947 Trust’), which holds 36,327,391 ordinary shares in the
Company, representing 12.54% of the Company’s issued share capital.
3
The Executive Directors do not otherwise receive any
discretionary annual incentive bonuses from the Group.
This arrangement benefits shareholders by aligning their interests with those of the Executive Directors. This happens in two
principal ways.
First, the 1947 Trust was established and acts completely independently of the Company. Decisions as to the allocation of
the 1947 Trust’s income to the Executive Directors are made by the Executive Chairman, taking into account the interests of
shareholders as a whole. Decisions as to the allocation of the 1947 Trust’s income are made in consultation with the Group
Managing Director and others, including certain Non-Executive Directors of the Company and with the benefit of appropriate
external advice as and when appropriate. The fact that this assessment and these decisions are made by a significant
shareholder, taking into account the interests of shareholders as a whole and not the Company, is a key benefit for
shareholders of this structure and arrangement.
Secondly, a significant part (up to 30%) of the amounts paid to Executive Directors from the 1947 Trust is specified to be for
the purposes of acquiring shares in the Company. Executive Directors are expected to acquire shares in the Company up to
the relevant value within a six-month period after the payment and then retain such shares in accordance with the share
ownership policy, described in the section entitled ‘Share Ownership by Executive Directors’ below.
The 1947 Trust’s income consists solely of ordinary dividends it receives on its shareholding in the Company and therefore
the amounts paid to Executive Directors from the 1947 Trust are neither expenses of, nor borne by, the Group. This also
directly benefits shareholders.
Share Ownership by Executive Directors
The Company believes that it is essential to align the interests of shareholders and Executive Directors. This means creating
an environment where the Executive Directors are incentivised to create long-term shareholder value. The Company has
sought to do this in part by encouraging all Executive Directors to accumulate and hold shares in the Company for the
long-term.
In this regard, in 2020 the Company adopted the Directors’ Shareholding Policy (the ‘Policy’) which was then updated
in2021.
The Policy requires that each of the Executive Directors should build a meaningful and increasing shareholding in the
Company over time.
2
For the purposes of this section entitled ‘Directors’ Remuneration’ and the following section entitled ‘Share Ownership by Executive Directors’, Executive Directors means the Executive
Directors of the Company and JML.
3
Under the terms of the 1947 Trust, income can be distributed to eligible beneficiaries, including to senior executive officers and employees of the Company and its wholly-owned
subsidiaries. The Executive Directors from time to time are discretionary objects or beneficiaries of the 1947 Trust.
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The Policy sets a minimum shareholding requirement. For all Executive Directors (other than the Executive Chairman and the
Group Managing Director) the minimum requirement is to hold shares in the Company with a value of 2.5 times their annual
basic salary. For the Executive Chairman and the Group Managing Director the value is five times their annual basic salary.
New Executive Directors are permitted two years from the commencement of their employment to accumulate the required
level of shareholding.
Notwithstanding these minimum shareholding requirements, the fact that a significant part of the amounts awarded to
Executive Directors by the 1947 Trust (as described above) is specified to be for the purposes of acquiring shares in the
Company means that the minimum levels will generally be exceeded for each Executive Director within a relatively short
period after the commencement of their employment. Current shareholdings of the Executive Directors are set out below.
All shares, once acquired, should be retained by the relevant Executive Director for so long as they are engaged by the Group
and for at least two years thereafter.
As and when any Executive Director ceases to hold any office or be employed by the Company or any member of the Group,
the Executive Chairman will discuss with the relevant individual how the Policy will apply in his or her circumstances.
However, as noted above, it is expected that former Executive Directors will retain all shares held at the cessation of their
engagement with the Group for at least two years thereafter.
Remuneration Outcomes in 2022
For the year ended 31st December 2022, the Company’s Directors received US$66.6 million (2021: US$58.9 million) in
aggregate, being:
• Distributions from the 1947 Trust of US$58.1 million (2021: US$48.8 million); and
• Directors’ fees and employee benefits from the Group of US$8.5 million (2021: US$10.1 million).
Directors’ fees and employee benefits included:
• US$0.5 million (2021: US$0.3 million) in Directors’ fees;
• US$7.8 million (2021: US$9.4 million) in short-term employee benefits including salary, bonuses, accommodation and
deemed benefits in kind; and
• US$0.2 million (2021: US$0.3 million) in post-employment benefits.
Additionally, in 2021, Directors’ fees and employment benefits included US$0.1 million in relation to share-based payments.
The information set out in this section headed ‘Remuneration Outcomes in 2022’ forms part of the audited financial
statements.
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Directors’ Share Interests
The Directors of the Company and JML in office on 2nd March 2023 had interests* in the ordinary share capital of the
Company as set out below. These interests included those notified to the Company in respect of the Directors’ closely
associated persons*.
Jardine Matheson Holdings Limited Interests
Ben Keswick 48,637,169
(a) (b)
John Witt 240,573
Y.K. Pang 445,000
Graham Baker 36,084
Stuart Gulliver 53,378
David Hsu 160,285
Adam Keswick 41,363,905
(a) (b)
Anthony Nightingale 1,203,438
Percy Weatherall 40,226,839
(a) (b)
Notes:
(a) Includes 1,750,004 ordinary shares held by a family trust, the trustees of which are closely associated persons of Ben Keswick, Adam Keswick and Percy Weatherall.
(b) Includes 36,143,701 ordinary shares held by family trusts, the trustee of which is a closely associated person of Ben Keswick, Adam Keswick and Percy Weatherall.
* within the meaning of MAR
Jardine Matheson Limited Interests
Matthew Bland
(a)
11,107
Stephen Gore
(b)
35,000
Anne O’Riordan 18,614
Steve Sun
(c)
–
Notes:
(a) Matthew Bland was appointed on 1st April 2022.
(b) Stephen Gore was appointed on 1st August 2022.
(c) Steve Sun was appointed on 1st August 2022.
In addition to the interests of the Directors of the Company and JML set out above, the interests for each of the Executive
Directors include 36,327,391 ordinary shares in the Company held by the 1947 Trust, in which the Executive Directors are
interested as discretionary objects under the 1947 Trust (as further described in the ‘Directors’ Remuneration’ section above)
and/or as the 1947 Trust is a closely associated person of certain of the Directors. For these purposes, such Executive
Directors are deemed to be interested in the 36,327,391 ordinary shares held by the 1947 Trust.
In addition, as at 2nd March 2023, Ben Keswick, John Witt, Y.K. Pang, David Hsu and Adam Keswick held options in respect
of 120,000, 90,000, 80,000, 30,000 and 50,000 ordinary shares, respectively, issued in the past pursuant to the Company’s
share-based long-term incentive plans.
Share Schemes
In the past, share-based long-term incentive plans provided incentives for Executive Directors and senior managers.
Nooptions were granted in the period from 2020 to 2022, however, and there are no current plans to grant further options.
Share options are not granted to Non-Executive Directors.
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Audit Committee Report
Audit Committee
The Board is supported by the activities of the Audit Committee. Matters considered by the Audit Committee are set out in its
terms of reference, a copy of which can be obtained from the Company’s website at www.jardines.com.
The current members of the Audit Committee are:
• Stuart Gulliver (Chairman);
• Anthony Nightingale; and
• Michael Wu.
Stuart Gulliver was appointed as the chairman of the Audit Committee with effect from 25th January 2021. He has recent
financial experience and expertise, as well as a deep understanding of risk management. Michael Wu was appointed as a
member of the Audit Committee on 2nd March 2023, in place of Adam Keswick who stood down with effect from the
samedate.
With the appointment of Michael Wu to the Audit Committee, the Company considers that the Audit Committee now
comprises only Independent Non-Executive Directors.
The Company’s Chairman, Group Managing Director, Deputy Managing Director, Group Finance Director and Group General
Counsel, together with representatives of the internal and external auditors, also attend Audit Committee meetings by
invitation. Other individuals may attend part of a meeting for specific agenda items as appropriate. The Audit Committee
meets on a scheduled basis twice a year and reports to the Board after each meeting.
The role of the Audit Committee is governed by its terms of reference. The Committee’s remit includes:
• independent oversight and assessment of financial reporting processes, including related internal controls;
• independent oversight of risk management and compliance; cybersecurity, business ethics issues and the risks related to
information systems and procedures;
• monitoring and reviewing the effectiveness of the internal and external audit functions;
• considering the independence and objectivity of the external auditors;
• reviewing and approving the level and nature of non-audit work performed by the external auditors; and
• reviewing independent assurance in respect of the effectiveness of sustainability metrics adopted by the Group.
Before completion and announcement of the half-year and year-end results, a review of the Company’s financial information
and any issues raised in connection with the preparation of the results, including the adoption of any new accounting
policies, is undertaken by the Audit Committee with the executive management and a report is received from the external
auditors. The external auditors also have access, when necessary, to the full Board and other senior executives and the
boards of the Group’s operating companies.
The Audit Committee also keeps under review the nature, scope and results of the audits conducted by the internal audit
function and the findings of the various audit committees across the Group’s companies.
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The matters considered by the Audit Committee during 2022 included:
• reviewing the 2021 annual financial statements and 2022 half-yearly financial statements, with particular focus on the
impact of COVID-19, valuation of investment properties, carrying value of investments in certain associates and joint
ventures, and provisioning for consumer financing debtors;
• reviewing the actions and judgments of management in relation to changes in accounting policies and practices to ensure
clarity of disclosures and compliance with new accounting standards;
• receiving reports from Internal Audit on the status of the control environment of the Group and its business divisions and
progress made in resolving matters identified in the reports;
• reviewing the principal risks, evolving trends and emerging risks that affect the Group and monitoring changes to the risk
profile, as well as the effectiveness of risk management measures and crisis management arrangements;
• receiving updates on the cybersecurity threat landscape and the Group’s cybersecurity environment, risk management
approach, training, priorities and control effectiveness;
• reviewing the annual internal audit plan and status updates;
• reviewing and approving the revised terms of reference of the Group’s Internal Audit and Risk Management function;
• receiving updates on risk management initiatives, including cross-Group sharing on risk topics and best practices,
anexternal review and benchmarking of the Group’s enterprise-wide risk management approach completed in 2022;
• reviewing the biennial assessment of the effectiveness of the Group’s Internal Audit function;
• reviewing the Group’s governance approach to cybersecurity management, data security and privacy management across
its businesses;
• reviewing the independence, audit scope and fees of PwC as External Auditor and recommending their re-appointment as
the External Auditor; and
• conducting a review of the terms of reference of the Audit Committee.
Audit Committee Attendance
The table below shows the attendance at the scheduled 2022 Audit Committee meetings:
Meetings eligible
to attend
% attendance
Current Audit Committee members
Stuart Gulliver (Chairman) 2/2 100%
Adam Keswick* 2/2 100%
Anthony Nightingale 2/2 100%
* Adam Keswick resigned from the Audit Committee on 2nd March 2023. Michael Wu was appointed to the Audit Committee on 2nd March 2023.
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Auditor Independence and Effectiveness
The Group Auditor’s independence and objectivity are safeguarded by control measures, including:
• reviewing the nature of non-audit services (including the adoption by the Company of a non-audit services policy);
• the External Auditor’s own internal processes to approve requests for non-audit work to the external audit work;
• monitoring changes in legislation related to auditor independence and objectivity;
• the rotation of the lead auditor partner after five years;
• independent reporting lines from the external auditor to the Committee and providing an opportunity for the external
auditor to have in-camera sessions with the Committee;
• restrictions on the employment by the Group of certain employees of the external auditor;
• providing a confidential helpline that employees can use to report any concerns; and
• an annual review by the Committee of the policy to ensure the objectivity and independence of the external auditor.
The Board’s annual review in 2022 of the Auditor’s Independence and Effectiveness found that the Auditor performed their
duties effectively. The Board found the level of professional scepticism, the number and regularity of meetings with the Audit
Committee (both informal as well as formal), feedback from Audit Committee members and internal stakeholders, and the
levels of technical skills and experience to be effective.
Risk Management and Internal Control
The Board has overall responsibility for the Group’s systems of risk management and internal control. The Board has
delegated responsibility to the Audit Committee for providing oversight in respect of risk management activities. The Audit
Committee considers the Group’s principal risks and uncertainties and potential changes to the risk profile. It reviews the
operation and effectiveness of the Group’s systems of internal control (financial, operational and compliance) and the
procedures by which these risks are monitored and mitigated.
The Audit Committee considers the systems and procedures regularly and reports to the Board semi-annually. The Group’s
Audit and Risk Management function (Group Audit and Risk Management or ‘GARM’) assists the Audit Committee in fulfilling
its assurance and reporting roles. GARM adheres to international standards for the professional practice of internal audit. To
safeguard its independence and objectivity, GARM reports functionally to the Audit Committee of the Company and has full
and unrestricted access to all business functions, records, properties and personnel.
The internal control systems are designed to manage, rather than eliminate, business risk; to help safeguard the Group’s
assets against fraud and other irregularities; and give reasonable, but not absolute, assurance against material financial
misstatement or loss.
Executive management oversees the implementation of the systems of internal control within the Group’s operating
companies, the responsibility for which rests with each company’s board and its executive management.
The Group has an established risk management process, which covers all business units within theGroup. This includes
themaintenance of risk registers that detail the emerging and existing risks to the future success ofthe business and the
relevant key controls and mitigating factors that address those risks. The Group’s risk management process and risk registers
are reviewed on a regularbasis.
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Risk Governance Structure
Each business unit is responsible for:
• identifying and assessing principal risks and uncertainties to which it is exposed;
• implementing the most appropriate actions to mitigate and control those risks to an acceptable level;
• providing adequate resources to minimise, offset or transfer the effects of any loss that may occur while managing
acceptable risk/benefit relationships;
• monitoring the effectiveness of the systems of risk management and internal control; and
• reporting periodically to its board of directors and GARM on the principal risks and uncertainties.
The Group is a collection of businesses, each of which has a high degree of operational autonomy, for which GARM performs
a Group risk consolidation, reporting, advisory and knowledge-sharing role. Each business determines the structure of
enterprise risk management (‘ERM’) that is appropriate for its nature and size, and is responsible for its own ERM activities
and documentation. GARM facilitates the building of the Group’s ERM knowledge base with records of past events,
newsletters, as well as learnings from matters of serious concern that inform its regular knowledge sharing and advisory to
Group businesses. This Group-level activity supports and supplements the knowledge base that each business holds in
respect of its own ERM.
Information and guidelines for reporting principal risks and uncertainties are regularly communicated to the business units.
Risk management initiatives, such as training and sharing sessions, are undertaken by each business unit.
The Boards/Committees Internal/external audit Operational teams
Report
Oversee
Group Businesses Audit Committees/
Risk Management and
Compliance Committee
Group Businesses Boards of Directors The Company Audit Committee
Group Businesses
Risk Management/
Compliance Teams
Group Businesses
Internal Audit
The Company Board of Directors
Group Businesses Governance
Group Audit and
Risk Management (‘GARM’)
External Audit
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Risk Management Framework
Risk management is integrated into each business unit’s strategic planning, budgeting, decision-making and operations.
Central to this is the continuous and systematic application of:
Risk
Identification
Risk
Treatment
Risk
Reporting &
Monitoring
Risk
Assessment
A Risk Management Framework based on ISO 31000 and COSO principles is embedded within the Group’s processes,
toidentify, assess and define the strategies to be adopted to monitor risks. The risk registers prepared by each business unit
provide the basis for an aggregation process, which summarises the principal risks and uncertainties facing the Group as
awhole.
The key elements of the Risk Management Framework are as follows:
Risk Identification
• Identify and document the Group’s exposure to uncertainty with existing strategic
objectives
• Adopt structured and methodical techniques to identify critical risks
Risk Assessment
• Evaluate risks by estimating likelihood, financial and reputational damage, and the
speed at which the risk materialises, based on its inherent and residual level
• Determine risk rating using the risk heatmap, with four levels of residual risk status
Risk Treatment
• Tolerate – accept if within the Group’s risk appetite
• Terminate – dispose or avoid risks where no appetite
Risks may be accepted if mitigated to an appropriate level via:
• Transfer – take out insurance or share risk through contractual arrangements with
business partners
• Treat – redesign or monitor existing controls or introduce new controls
Risk Reporting & Monitoring
• Periodic review of principal risks and uncertainties
• Setting key risk indicators to enhance monitoring and mitigation of risks
• Regular reporting of principal risks and uncertainties from business units to the Group’s
Board of Directors via Audit Committee and Group Audit and Risk Management
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Principal Risks and Uncertainties
Set out below are the principal risks and uncertainties facing the Company as required to be disclosed pursuant to the DTRs,
as well as a summary of the steps taken to mitigate those risks.
These risks are in addition to matters referred to in the Chairman’s Statement, Group Managing Director’s Review and other
parts of the Annual Report.
Political and economic risk
Description
Changes and uncertainties in the political landscape pose risks for business activity and sentiment in the territories
where the Group operates and, consequently, for the current investments and future growth of the Group’s businesses.
Most of the Group’s businesses are exposed to the risk of adverse developments in global and regional economies and
financial markets, either directly, or through the impact such developments might have on the Group’s joint venture
partners, associates, franchisors, bankers, suppliers or customers. These developments could include recession,
inflation, deflation, currency fluctuations, restrictions in the availability of credit, business failures, or increases in
financing costs, oil prices or the cost of raw materials.
Mitigation
• Maintaining the Group’s financial strength and funding sources under scenarios of economic downturn and
otherstresses.
• Monitoring the volatile macroeconomic environment and considering economic factors in strategic and financial
planning processes.
• Making agile adjustments to existing business plans and exploring new business streams and new markets.
• Reviewing pricing strategies and keeping conservative assumptions on global commodity prices.
• Insurance programme covering business interruption due to civil unrest.
Customers’ changing behaviours and market competition
Description
The Group’s businesses operate in sectors and regions which are highly competitive and evolving rapidly. Failure to
compete effectively, whether in terms of price, product, distribution, service or application of new technologies, can hurt
margins, earnings or market share.
Sustainability considerations has increasingly resulted in customers switching to other companies, brands or providers
that provide sustainable products or services.
Mitigation
• Utilising market intelligence and deploying digital strategies for business-to-consumer businesses.
• Establishing customer relationship management and digital commerce capabilities.
• Diversifying the customer base and reducing dependency on any key customers.
• Re-engineer existing business processes to take advantage of new technological capabilities.
• Invest in and partner with companies that can provide the Group access to different capabilities and technologies.
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Investment, partnerships and franchise rights
Description
Conflicts with joint venture partners or other strategic partners may arise due to (i) different corporate cultures,
management styles and risk appetite; (ii) disagreement over business priorities, strategy, and allocation of capital/
resources; and (iii) conflicts of interests.
The Group’s retail and motor businesses rely on their franchises on relationships with principals, whereby
non-compliance with the agreement or a strained relationship with principals might result in principals terminating,
notrenewing or renegotiating the franchise agreement.
Mitigation
• Conducting sufficient research, due diligence and evaluation of investment opportunities and potential business
partners.
• In-house Legal reviewing shareholder agreements to ensure adequate rights and protections are in place.
• Developing clear frameworks and levels of authority for investment or partnership decisions.
• Established Group Investment and Business Development Committee to review significant investments.
• Maintaining close relationships with senior management of business partners.
• Requesting and influencing joint ventures and associates to operate in a proper manner and in compliance with
policies and procedures.
• Strengthening existing relationships with principals through sustaining strong market shares, achieving high customer
retention and complying with dealer standards and principal’s policies.
IT, facilities and cybersecurity
The Group’s businesses are ever more reliant on technology in their operations and face increasing cyber-attacks from
groups targeting both individuals and businesses. As a result, the privacy and security of customer and corporate
information are at risk of being compromised through a breach of our IT systems or the unauthorised or inadvertent
release of information, resulting in brand damage, impaired customer trust, loss of competitiveness or regulatory action.
Cyber-attacks stemming from inadequate cybersecurity or lack of employee cybersecurity awareness may also adversely
affect the function of important equipment and facilities and our ability to manage daily business operations, resulting in
business interruption, reputational damage, regulatory penalties, lost revenues, repair or other costs.
Mitigation
• Engaging external consultants to perform assessments on the business units with industry benchmarks.
• Defining cybersecurity programme and centralised function to provide oversight, promote cybersecurity hygiene,
strengthen cybersecurity defences and manage cybersecurity incidents.
• Performing regular vulnerability assessment and penetration testing to identify weaknesses.
• Maintaining and testing disaster recovery plans and backup for data restoration.
• Arranging regular security awareness training at least annually and phishing testing to raise users’ cybersecurity
awareness.
• Conducting regular internal audits of IT general controls and cybersecurity.
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Concentration risk
Description
Certain locations in Asia contribute a significant portion of the Group’s underlying profit and are where many of its key
functions and senior management are based. Adverse conditions such as social upheaval, erosion of the rule of law or
travel restrictions could reduce a location’s competitiveness and impact the Group’s businesses concentrated operations
in that jurisdiction.
Mitigation
The diverse nature of the Group’s businesses mitigates concentration risk at a portfolio level. Ongoing strategic initiatives
include:
• Exploring diversification of businesses through organic growth, selective acquisitions and establishing support
services beyond locations where the Group typically operates.
• Maintaining financial strength under challenging scenarios.
• Further strengthening the Group’s brands to sustain competitiveness and resilience.
• Supporting governments with constructive input and activities.
Talent and labour
Description
The competitiveness of the Group’s businesses depends on the quality of the people that it attracts and retains.
Theunavailability of needed HR may impact the ability of the Group’s businesses to operate at capacity, implement
initiatives and pursue opportunities.
Recent and future workforce rationalisation in some businesses may raise the potential for organisational gaps in
capabilities, succession and controls.
Mitigation
• Supporting workforce practices that promote well-being and flexible work arrangements that are competitive with
themarket.
• Ensuring proactive manpower planning and succession planning are in place.
• Enhancing modern employer branding, training for staff members, compensation and benefits, including retention
incentives.
• Establishing employee assistance and counselling programmes.
• Enhancing talent development plans to increase employees’ visibility on future career paths, including identifying
strategic talent pools.
• Delivering new learning academy programmes to equip staff with finance, procurement, HR, digital, IT and innovation
technical capabilities for business transformation.
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Environmental and climate risk
Description
Environmental disasters such as earthquakes, floods and typhoons can damage the Group’s assets and disrupt
operations. The Group is also facing higher insurance premiums or reduced coverage for such natural disasters.
Some of the Group’s businesses operate in areas which are sensitive from a biodiversity point of view have the potential
to impact the local environment and to be negatively perceived by stakeholders.
Mitigation
• Sustainability Leadership Council established to mobilise and coordinate sustainability efforts across the Group.
• A Climate Action Working Group, with representatives from all business units, drives Group-wide initiatives which
strengthen collaboration and share knowledge.
• Each business is building a net zero carbon pathway and climate change plan to build climate resilience.
• Conducting climate risk assessments and adaptation action plans based on recommendations of TCFD, including
implementing measures to address physical risks posed by climate change and identifying opportunities in global
transition to a low carbon economy.
• Company has issued Just Energy Transition commitments to scale up investment in renewable energy and related
innovations, diversify into non-coal mineral mining, and make no investments in new thermal or metallurgical coal
mines or new thermal coal-fired power plants.
Third-party service provider and supply chain management
Description
Supply chain disruption caused by key suppliers or service providers, or failure to deliver by contractors/subcontractors
could cause significant operational disruption, lack of inventory supply, financial loss and reputational damage to the
businesses.
The Group’s operations may be materially affected if third parties on which we depend are compromised by cyber-attacks.
With increased reliance on third-party ecosystems, the Group has greater exposure to third-party risk if there is
insufficient vetting, oversight or visibility over third parties and their subcontractors, particularly on information security,
resilience, regulatory compliance, and their ongoing capability.
Mitigation
• Ensuring protective terms and conditions in third-party service agreements, including vendors being contractually
required to bear higher liability for failures to deliver or if they are responsible for a cyber incident at a Group business.
• Having robust evaluation and selection procedures for vendors and third-party service providers, including an
information security assessment where appropriate.
• Engaging suppliers only if they agree to comply with a supplier code of conduct where businesses require.
• Maintaining a minimum safety stock for key/high risk ingredients at all times.
• Sourcing back-up suppliers, warehouses or other alternative plans.
• Maintaining strong relationships with suppliers that are designated by principals.
• Maintaining supplier insurance to cover logistics interruption.
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• Ensuring early negotiation of new contracts for key service providers.
• Diversifying the product range to reduce the impact of disruptions to single products.
• Including third-party disruption scenarios as part of business continuity planning.
Change management, cultural agility and strategic initiatives
Description
Challenges include managing change, fostering an agile and entrepreneurial culture that supports innovation and
exploring, and ensuring skilful project management of strategic initiatives.
Dependence on legacy systems and processes may also undermine change initiatives due to inability to support new
tools and efficiency improvements.
Inadequate change management, cultural agility or strategic initiatives could lead to erosion of competitive position and
reputation, loss of valued employees, project delays, failure to deliver results on invested resources, and lost
opportunities for cross-business synergies.
Mitigation
• Senior management maintain support and regular communication across the organisation on strategic direction and
cultural values.
• Oversight of material strategic initiatives by Steering Committees or Board.
• Encouraging innovation, including cross-organisation sharing of ideas, incentives and championing of change
initiatives.
• Encouraging cross-departmental input and involvement on projects.
• Appointing experienced personnel to manage projects and change, including external consultants where needed.
• Exploring potentially disruptive business models by partnering with start-ups or allowing business units autonomy to
create new ventures.
Health, safety and product quality
Description
Several of the Group’s businesses engage in construction, production or other physical activities that may lead to serious
injury or fatal incidents if work conditions are unsafe or workers do not take due care to observe safety procedures.
The safety and quality of food products, elevators, vehicles and other items delivered by the Group’s businesses are
fundamental to their reputation with customers. Any actual or perceived deficiency in product safety or quality may
damage consumer confidence and the brand’s reputation, leading to financial loss.
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Mitigation
• Establishing and maintaining safe working environments and regular safety training for all employees and
subcontractors.
• Establishing contractual requirements for contractors to comply with high expected levels of safety standards.
• Incorporating site safety plans in tenders and contracts.
• Conducting occupational health and safety awareness campaigns.
• Disseminating safety materials such as signage, guard rails and pictorial representations of safe work procedures
accessed via mobile phones.
• Purchasing sufficient insurance coverage including employee compensation and motorbike insurance for
deliveryriders.
• Establishing product quality and safety standards, guidelines.
• Reporting and including quality and food safety as KPIs.
• Establishing and maintaining proper supplier selection processes.
• Implementing comprehensive quality control measures in all retail stores.
• Ensuring suppliers follow the Group’s guidelines, principals’ requirements and local regulations.
• Conducting regular audits on suppliers, manufacturers, warehouse services providers and own facilities.
• Conducting periodic drills and crisis management procedures for safety incidents, including media handling.
• Obtaining adequate product liability insurance.
Compliance with and changes to laws and regulations
Description
The Group’s businesses are subject to several regulatory regimes in the territories they operate in. New or changing laws
and regulations in a wide range of areas such as foreign ownership of assets and businesses, exchange controls, building
and environmental standards, competition, tax, employment and data privacy could potentially impact the operations
and profitability of the Group’s businesses.
Non-compliance may lead to reputational damage from media exposure and financial loss due to litigation or penalties by
government authorities.
Mitigation
• Engagement of legal experts at early stage to assess implications of new rules.
• Staying connected and informed of relevant new and draft regulations.
• Annual update on new regulations.
• Lobbying of relevant bodies.
• Undertake early scenario planning assessing the implications of new rules and preparing contingencies.
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Pandemic
Description
COVID-19 has demonstrated the wide-ranging and long-lasting impacts and disruptions for businesses, communities and
employees that may result from the spread of a pandemic.
Significant disruptions and uncertainties would likely result from global or regional pandemics if they raise the prospect
of lockdowns, restrictions on cross-border mobility, interruptions to supply chains, and dampened consumer sentiment
while vaccines are unavailable.
Mitigation
• Increasing flexibility and resilience of work arrangements, including tools that enable all employees to work remotely.
• Testing business continuity plans periodically for various scenarios including loss of premises, systems, people and
extended periods of split teams.
• Increasing resilience of supply chain with sourcing alternative suppliers for key inputs and close coordination with
logistics partners.
Customer exposures and claims on customers
Description
If not carefully managed, receivables from customers could be impaired and lead to financial loss. Customers may also
present financial exposures for businesses that provide product warranties or insurance as part of their offering.
For construction projects, claims on customers are substantial parts of the contract sum. Failure to agree claims with
customers due to disputes on terms such as delivery of contractual scope or cost estimates may impair profitability and
cash flow of the projects.
Mitigation
• Setting credit limits based on comprehensive and regular evaluation of customers’ creditworthiness.
• Monitoring the ageing of accounts receivable.
• Implementing receivables collection to maximise recoverability.
• Reviewing and ensuring terms and conditions of contracts are acceptable, including payment terms, during
tenderstage.
• Maintaining sufficient provision for doubtful debts, based on prudent assessment of recoverability of receivables.
• Allocating sufficient allowances for contingencies for each project.
• Considering sanctions lists when assessing potential customers.
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Financial strength and funding
Description
The Group’s activities expose it to a variety of risks to its financial strength and funding, including market risk, credit risk
and liquidity risk.
The market risk the Group faces includes (i) foreign exchange risk from future commercial transactions, net investments in
foreign operations and net monetary assets and liabilities that are denominated in a currency that is not the entity’s
functional currency; (ii) interest rate risk through the impact of rate changes on interest bearing liabilities and assets;
and(iii) securities price risk as a result of its equity investments and limited partnership investment funds which are
measured at fair value through profit and loss, and debt investments which are measured at fair value through other
comprehensive income.
The Group’s credit risk is primarily attributable to deposits with banks, contractual cash flows of debt investments carried
at amortised cost and those measured at fair value through other comprehensive income, credit exposures to customers
and derivative financial instruments with a positive fair value.
The Group may face liquidity risk if its credit rating deteriorates or if it is unable to meet its financing commitments.
Several of the Group’s businesses and projects may have concessions, franchises or other contracts which contain
financial requirements as part of their obligations which, if breached, may lead to termination or renegotiation.
Mitigation
• Setting clear policies and limits on market, credit and liquidity risks, including in relation to foreign exchange exposure,
interest rate risks, cash management and prohibition on derivatives not used in hedging.
• Regular internal audits of compliance with treasury policies.
• Adopting appropriate credit guidelines to manage counterparty risk.
• When economically feasible, taking borrowings in local currency to hedge foreign exchange exposures on investments.
• Fixing a portion of borrowings in fixed rates.
• Maintaining adequate headroom in committed facilities to facilitate the Group’s capacity to pursue new investment
opportunities and to provide some protection against market uncertainties.
• Keeping an appropriate funding balance between equity and debt from banks and capital markets, both short- and
long-term in tenor, to give flexibility to develop the business.
• Maintaining sufficient cash and marketable securities, and availability of funding from an adequate amount of
committed credit facilities and the ability to close out market positions.
• The Group’s Treasury operations are managed as cost centres and are not permitted to undertake speculative
transactions unrelated to underlying financial exposures.
The detailed steps taken by the Group to manage its exposure to financial risk are set out in the Financial Review on
pages42 to 49 and Note 43 to the financial statements on pages 181 to 190.
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Governance and misconduct
Description
Ethical breaches, management override of controls, employee fraud and misconduct, or other deficiencies in
governanceand three lines of internal controls may result in financial loss and reputational damage for the Group.
Inadequate capability and diversity in management or the Board may also lead to sub-optimal deliberations
anddecisions.
The Group holds minority stakes in various companies. Lack of control or significant influence over these companies may
lead to losses on the Group’s investment if the companies are mismanaged.
Mitigation
• Established Groupwide mandatory Code of Conduct and training that applies to all Group businesses and new joiners.
• Maintaining a robust Corporate Governance Framework which includes whistle-blowing channels.
• Compliance departments of individual businesses reviewing internal controls.
• Maintaining functionally independent internal audit function that reports to the Group Audit Committee on risk
management, the control environment and significant non-compliance matters.
• Maintaining Professional Indemnity, Crime and General Liability insurance policies with adequate coverage.
Monitoring of Risk Management and Internal Control Systems
The effectiveness of the Company’s risk management and internal control systems is monitored by the internal audit
function, which reports functionally to the Audit Committee of the Company, and by a series of audit committees or risk
management and compliance committees that operate in each significant business unit across the Group. The internal audit
function also monitors the approach taken by the business units to managing risk. The findings of the internal audit function
and recommendations for any corrective action required are reported to the relevant audit committee and, if appropriate,
tothe Company’s Audit Committee.
Shareholder Information
Financial Calendar
2022 full-year results announced 2nd March 2023
Shares quoted ex-dividend 16th March 2023
Share registers closed 20th to 24th March 2023
2022 final dividend scrip election period closes 21st April 2023
Annual General Meeting to be held 4th May 2023
2022 final dividend payable 10th May 2023
2023 half-year results to be announced 28th July 2023*
Shares quoted ex-dividend 17th August 2023*
Share registers to be closed 21st to 25th August 2023*
2023 interim dividend scrip election period closes 22nd September 2023*
2023 interim dividend payable 11th October 2023*
*Subject to change
Dividends
The dividends will be available in cash with a scrip alternative. Shareholders will receive their cash dividends in United States Dollars,
except when elections are made for alternate currencies in the following circumstances.
Shareholders on the Jersey Branch Register
Shareholders registered on the Jersey branch register will have the option to elect for their dividends to be paid in Sterling.
Theseshareholders may make new currency elections for the 2022 final dividend by notifying the United Kingdom transfer agent in
writing by 21st April 2023. The Sterling equivalent of dividends declared in United States Dollars will be calculated by reference to a
rate prevailing on 26th April 2023.
Shareholders holding their shares through CREST in the United Kingdom will receive their cash dividends in Sterling only as
calculatedabove.
Shareholders on the Singapore Branch Register who hold their shares through The Central Depository
(Pte) Limited (‘CDP’)
Shareholders who are on CDP’s Direct Crediting Service (‘DCS’)
For those shareholders who are on CDP’s DCS, they will receive their cash dividends in Singapore Dollars unless they opt out of CDP
Currency Conversion Service, through CDP, to receive United States Dollars.
Shareholders who are not on CDP’s DCS
For those shareholders who are not on CDP’s DCS, they will receive their cash dividends in United States Dollars unless they elect,
through CDP, to receive Singapore Dollars.
Registrars and Transfer Agent
Shareholders should address all correspondence with regard to their shareholdings or dividends to the appropriate registrar or
transferagent.
Principal Registrar
Jardine Matheson International Services Limited
P.O. Box HM 1068
Hamilton HM EX
Bermuda
Jersey Branch Registrar
Link Market Services (Jersey) Limited
12 Castle Street
St Helier, Jersey JE2 3RT
Channel Islands
United Kingdom Transfer Agent
Link Group
10th Floor
Central Square
29 Wellington Street
Leeds LS1 4DL, United Kingdom
Singapore Branch Registrar
M & C Services Private Limited
112 Robinson Road #05-01
Singapore 068902
Press releases and other financial information can be accessed through the internet at www.jardines.com.
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Consolidated Profit and Loss Account
for the year ended 31st December 2022
2022
2021
Underlying Underlying
business Non-trading business Non-trading
performance
items
Total
performance
items
Total
US$m
US$m
US$m
US$m
US$m
US$m
Revenue
3
37,724
–
37,724
35,862
–
35,862
Net operating costs
4
(33,598)
(363)
(33,961)
(32,534)
1,114
(31,420)
Change in fair value
ofinvestment
properties
13
–
(930)
(930)
–
(1,410)
(1,410)
Operating profit
4,126
(1,293)
2,833
3,328
(296)
3,032
Net financing charges
5
– financing charges
(625)
–
(625)
(595)
–
(595)
– financing income
197
–
197
206
–
206
(428)
–
(428)
(389)
–
(389)
Share of results of
associates and
jointventures
6
– before change in fair
value of investment
properties
1,232
(411)
821
1,178
10
1,188
– change in fair value
ofinvestment
properties
–
(3)
(3)
–
81
81
1,232
(414)
818
1,178
91
1,269
Profit before tax
4,930
(1,707)
3,223
4,117
(205)
3,912
Tax
7
(964)
4
(960)
(828)
(123)
(951)
Profit after tax
3,966
(1,703)
2,263
3,289
(328)
2,961
Attributable to:
Shareholders of the
Company
8 & 9
1,584
(1,230)
354
1,513
368
1,881
Non-controlling
interests
2,382
(473)
1,909
1,776
(696)
1,080
3,966
(1,703)
2,263
3,289
(328)
2,961
US$
US$
US$
US$
Earnings per share
8
– basic
5.49
1.22
4.83
6.01
– diluted
5.49
1.22
4.83
6.01
94
Jardine Matheson
Annual Report 2022
Consolidated Statement of Comprehensive Income
for the year ended 31st December 2022
2022
2021
Note
US$m
US$m
Profit for the year
2,263
2,961
Other comprehensive expense
Items that will not be reclassified to profit and loss:
Net exchange translation loss arising during the year
(718)
(62)
Remeasurements of defined benefit plans
19
37
86
Net revaluation surplus before transfer to investment properties
– tangible assets
11
–
75
– right-of-use assets
12
39
3
Tax on items that will not be reclassified
(7)
(9)
(649)
93
Share of other comprehensive income of associates and joint ventures
9
9
(640)
102
Items that may be reclassified subsequently to profit and loss:
Net exchange translation differences
– net loss arising during the year
(569)
(165)
– transfer to profit and loss
4
(21)
(565)
(186)
Revaluation of other investments at fair value through other
comprehensiveincome
– net loss arising during the year
16
(20)
(2)
– transfer to profit and loss
(2)
(3)
(22)
(5)
Cash flow hedges
– net gain arising during the year
92
75
– transfer to profit and loss
(7)
12
85
87
Tax relating to items that may be reclassified
(11)
(21)
Share of other comprehensive expense of associates and joint ventures
(963)
(16)
(1,476)
(141)
Other comprehensive expense for the year, net of tax
(2,116)
(39)
Total comprehensive income for the year
147
2,922
Attributable to:
Shareholders of the Company
(660)
1,908
Non-controlling interests
807
1,014
147
2,922
95
Jardine Matheson
Annual Report 2022
Consolidated Balance Sheet
at 31st December 2022
96
Jardine Matheson
Annual Report 2022
At 31st December
2022
2021
Note
US$m
US$m
Assets
Intangible assets
10
2,528
2,635
Tangible assets
11
5,853
6,184
Right-of-use assets
12
4,184
4,274
Investment properties
13
31,813
32,847
Bearer plants
14
465
499
Associates and joint ventures
15
17,856
17,980
Other investments
16
2,801
2,908
Non-current debtors
17
3,222
2,961
Deferred tax assets
18
575
518
Pension assets
19
17
32
Non-current assets
69,314
70,838
Properties for sale
20
3,311
3,345
Stocks and work in progress
21
3,513
2,793
Current debtors
17
6,873
6,928
Current investments
16
18
46
Current tax assets
156
172
Bank balances and other liquid funds
22
– non-financial services companies
5,526
6,904
– financial services companies
372
378
5,898
7,282
19,769
20,566
Asset classified as held for sale
65
85
Current assets
19,834
20,651
Total assets
89,148
91,489
Approved by the Board of Directors
John Witt
Graham Baker
Directors
2nd March 2023
Consolidated Balance Sheet
At 31st December
2022
2021
Note
US$m
US$m
Equity
Share capital
23
73
179
Share premium and capital reserves
25
26
25
Revenue and other reserves
28,727
35,800
Own shares held
27
–
(6,223)
Shareholders’ funds
28,826
29,781
Non-controlling interests
28
27,371
28,587
Total equity
56,197
58,368
Liabilities
Long-term borrowings
29
– non-financial services companies
10,541
11,026
– financial services companies
1,532
1,273
12,073
12,299
Non-current lease liabilities
30
2,951
3,022
Deferred tax liabilities
18
791
743
Pension liabilities
19
368
451
Non-current creditors
31
191
250
Non-current provisions
32
336
309
Non-current liabilities
16,710
17,074
Current creditors
31
10,459
10,074
Current borrowings
29
– non-financial services companies
2,500
2,513
– financial services companies
1,663
1,846
4,163
4,359
Current lease liabilities
30
772
812
Current tax liabilities
672
609
Current provisions
32
175
193
Current liabilities
16,241
16,047
Total liabilities
32,951
33,121
Total equity and liabilities
89,148
91,489
97
Jardine Matheson
Annual Report 2022
ShareShareCapitalRevenue
capitalpremiumreservesreserves
US$m
US$m
US$m
US$m
2022
At 1st January
179
–
25
34,926
Total comprehensive income
–
–
–
374
Dividends paid by the Company
–
–
–
(607)
Dividends paid to non-controlling interests
–
–
–
–
Unclaimed dividends forfeited
–
–
–
2
Issue of shares
–
1
–
–
Employee share option schemes
–
–
4
–
Scrip issued in lieu of dividends
1
(1)
–
184
Repurchase of shares
(1)
(2)
–
(168)
Reduction of capital
(106)
(1)
–
(6,116)
Capital contribution from non-controlling interests
–
–
–
–
Share purchased for a share-based incentive plan
ina subsidiary
–
–
–
(15)
Change in interests in subsidiaries
–
–
–
322
Change in interests in associates and joint ventures
–
–
–
(15)
Transfer
–
3
(3)
–
At 31st December
73
–
26
28,887
2021
At 1st January
181
–
31
33,497
Total comprehensive income
–
–
–
1,966
Dividends paid by the Company
–
–
–
(505)
Dividends paid to non-controlling interests
–
–
–
–
Unclaimed dividends forfeited
–
–
–
1
Issue of shares
–
3
–
–
Employee share option schemes
–
–
1
–
Scrip issued in lieu of dividends
1
(1)
–
152
Repurchase of shares
(3)
(8)
–
(569)
Acquisition of the remaining interest in
JardineStrategic
–
–
–
–
Subsidiaries disposed of
–
–
–
–
Change in interests in subsidiaries
–
–
–
282
Change in interests in associates and joint ventures
–
–
–
73
Transfer
–
6
(7)
29
At 31st December
179
–
25
34,926
Asset
revaluation
reserves
Hedging
reserves
Exchange
reserves
Own
shares
held
Attributable to
shareholders of
the Company
Attributable to
non-controlling
interests
Total
equity
On 8th March 2021, the Company announced a plan to simplify the Group’s parent company structure, including the
acquisitionfor cash of the 15% of Jardine Strategic Holdings Limited’s (‘Jardine Strategic’) issued share capital that the
Company and its wholly-owned subsidiaries did not already own (the ‘Acquisition’). The Acquisition was implemented by way
ofan amalgamation of Jardine Strategic and a wholly-owned subsidiary of the Company, under the Companies Act 1981 of
Bermuda. The total Acquisition value was approximately US$5.6 billion. The Acquisition was financed by the issuance of a total
of US$1.2billion bonds on 9th April 2021 (refer note 29), new revolving credit facilities and existing cash resources.
The Acquisition was completed on 14th April 2021, following shareholders’ approval at Jardine Strategic’s special general
meeting on 12th April 2021. The Acquisition value and the related transaction costs resulted in a reduction of the Group’s total
equity in 2021.
At the Company’s annual general meeting on 5th May 2022, shareholders approved the cancellation of the 59%
shareholding in the Company held directly and indirectly by the above amalgamated subsidiary by way of a reduction of
capital in the Company (refer note 23). The capital reduction, which was effective on 18th May 2022, constituted the final
stage in the Group’s simplification of its parent company structure.
Consolidated Statement of Changes in Equity
for the year ended 31st December 2022
98
Jardine Matheson
Annual Report 2022
Consolidated Statement of Changes in Equity
Share
capital
Share
premium
Capital
reserves
Revenue
reserves
AssetOwnAttributable toAttributable to
revaluationHedgingExchangesharesshareholders ofnon-controllingTotal
reservesreservesreservesheldthe Companyinterestsequity
US$m
US$m
US$m
US$m
US$m
US$m
US$m
US$m
US$m
US$m
US$m
2022
At 1st January
179
–
25
34,926
2,242
(18)
(1,350)
(6,223)
29,781
28,587
58,368
Total comprehensive income
–
–
–
374
30
73
(1,137)
–
(660)
807
147
Dividends paid by the Company
–
–
–
(607)
–
–
–
–
(607)
–
(607)
Dividends paid to non-controlling interests
–
–
–
–
–
–
–
–
–
(994)
(994)
Unclaimed dividends forfeited
–
–
–
2
–
–
–
–
2
–
2
Issue of shares
–
1
–
–
–
–
–
–
1
–
1
Employee share option schemes
–
–
4
–
–
–
–
–
4
2
6
Scrip issued in lieu of dividends
1
(1)
–
184
–
–
–
–
184
–
184
Repurchase of shares
(1)
(2)
–
(168)
–
–
–
–
(171)
–
(171)
Reduction of capital
(106)
(1)
–
(6,116)
–
–
–
6,223
–
–
–
Capital contribution from non-controlling interests
–
–
–
–
–
–
–
–
–
4
4
Share purchased for a share-based incentive plan
ina subsidiary
–
–
–
(15)
–
–
–
–
(15)
(5)
(20)
Change in interests in subsidiaries
–
–
–
322
–
–
–
–
322
(1,030)
(708)
Change in interests in associates and joint ventures
–
–
–
(15)
–
–
–
–
(15)
–
(15)
Transfer
–
3
(3)
–
–
–
–
–
–
–
–
At 31st December
73
–
26
28,887
2,272
55
(2,487)
–
28,826
27,371
56,197
2021
At 1st January
181
–
31
33,497
2,167
(55)
(1,152)
(5,282)
29,387
33,456
62,843
Total comprehensive income
–
–
–
1,966
76
37
(171)
–
1,908
1,014
2,922
Dividends paid by the Company
–
–
–
(505)
–
–
–
–
(505)
–
(505)
Dividends paid to non-controlling interests
–
–
–
–
–
–
–
–
–
(669)
(669)
Unclaimed dividends forfeited
–
–
–
1
–
–
–
–
1
1
2
Issue of shares
–
3
–
–
–
–
–
–
3
–
3
Employee share option schemes
–
–
1
–
–
–
–
–
1
–
1
Scrip issued in lieu of dividends
1
(1)
–
152
–
–
–
–
152
–
152
Repurchase of shares
(3)
(8)
–
(569)
–
–
–
–
(580)
–
(580)
Acquisition of the remaining interest in
JardineStrategic
–
–
–
–
–
–
–
(941)
(941)
(4,627)
(5,568)
Subsidiaries disposed of
–
–
–
–
–
–
–
–
–
(5)
(5)
Change in interests in subsidiaries
–
–
–
282
–
–
–
–
282
(581)
(299)
Change in interests in associates and joint ventures
–
–
–
73
–
–
–
–
73
(2)
71
Transfer
–
6
(7)
29
(1)
–
(27)
–
–
–
–
At 31st December
179
–
25
34,926
2,242
(18)
(1,350)
(6,223)
29,781
28,587
58,368
On 8th March 2021, the Company announced a plan to simplify the Group’s parent company structure, including the
acquisitionfor cash of the 15% of Jardine Strategic Holdings Limited’s (‘Jardine Strategic’) issued share capital that the
Company and its wholly-owned subsidiaries did not already own (the ‘Acquisition’). The Acquisition was implemented by way
ofan amalgamation of Jardine Strategic and a wholly-owned subsidiary of the Company, under the Companies Act 1981 of
Bermuda. The total Acquisition value was approximately US$5.6 billion. The Acquisition was financed by the issuance of a total
of US$1.2billion bonds on 9th April 2021 (refer note 29), new revolving credit facilities and existing cash resources.
The Acquisition was completed on 14th April 2021, following shareholders’ approval at Jardine Strategic’s special general
meeting on 12th April 2021. The Acquisition value and the related transaction costs resulted in a reduction of the Group’s total
equity in 2021.
At the Company’s annual general meeting on 5th May 2022, shareholders approved the cancellation of the 59%
shareholding in the Company held directly and indirectly by the above amalgamated subsidiary by way of a reduction of
capital in the Company (refer note 23). The capital reduction, which was effective on 18th May 2022, constituted the final
stage in the Group’s simplification of its parent company structure.
99
Jardine Matheson
Annual Report 2022
2022
2021
Note
US$m
US$m
Operating activities
Cash generated from operations
33 (a)
5,287
5,383
Interest received
177
194
Interest and other financing charges paid
(564)
(573)
Tax paid
(1,006)
(728)
3,894
4,276
Dividends from associates and joint ventures
931
800
Cash flows from operating activities
4,825
5,076
Investing activities
Purchase of subsidiaries
(19)
(24)
Purchase of associates and joint ventures
33 (c)
(658)
(194)
Purchase of other investments
33 (d)
(645)
(467)
Purchase of intangible assets
(154)
(158)
Purchase of tangible assets
(1,014)
(620)
Additions to right-of-use assets
(53)
(25)
Additions to investment properties
(123)
(118)
Additions to bearer plants
(39)
(32)
Advances to and repayments to associates and joint ventures
33 (e)
(802)
(1,100)
Advances from and repayments from associates and joint ventures
33 (f)
416
850
Sale of subsidiaries
33 (g)
–
1,510
Sale of associates and joint ventures
30
60
Sale of other investments
33 (h)
228
398
Sale of intangible assets
3
–
Sale of tangible assets
33 (i)
230
135
Sale of right-of-use assets
7
13
Sale of investment properties
–
3
Cash flows from investing activities
(2,593)
231
Financing activities
Issue of shares
1
3
Capital contribution from non-controlling interests
4
–
Acquisition of the remaining interest in Jardine Strategic
(21)
(5,490)
Change in interests in other subsidiaries
33 (j)
(708)
(299)
Purchase of own shares
23
(173)
(584)
Purchase of shares for a share-based incentive plan in a subsidiary
(20)
–
Drawdown of borrowings
29
9,047
12,572
Repayment of borrowings
29
(9,113)
(11,467)
Principal elements of lease payments
33 (k)
(875)
(894)
Dividends paid by the Company
(423)
(353)
Dividends paid to non-controlling interests
(994)
(669)
Cash flows from financing activities
(3,275)
(7,181)
Net decrease in cash and cash equivalents
(1,043)
(1,874)
Cash and cash equivalents at 1st January
7,278
9,153
Effect of exchange rate changes
(356)
(1)
Cash and cash equivalents at 31st December
33 (l)
5,879
7,278
Consolidated Cash Flow Statement
for the year ended 31st December 2022
100
Jardine Matheson
Annual Report 2022
Notes to the Financial Statements
101
Jardine Matheson
Annual Report 2022
General Information
Jardine Matheson Holdings Limited (the “Company”) is incorporated in Bermuda and has a primary listing in the standard
segment of the London Stock Exchange, with secondary listings in Bermuda and Singapore.
1 Basis of Preparation
The financial statements have been prepared in accordance with International Financial Reporting Standards (‘IFRS’),
including International Accounting Standards (‘IAS’) and Interpretations adopted by the International Accounting Standards
Board. The financial statements have been prepared on a going concern basis and under the historical cost convention
except as disclosed in the accounting policies.
Details of the Group’s principal accounting policies are included in note 41.
The Group has adopted the following amendments for the annual reporting period commencing 1st January 2022.
Amendments to IAS 37 – Onerous Contracts – Cost of Fulfilling a Contract
(effective from 1st January 2022)
The amendments clarify that for the purpose of assessing whether a contract is onerous, the cost of fulfilling the contract
includes both the incremental costs of fulfilling that contract and an allocation of other costs that relate directly to fulfilling
contracts. The Group applied the amendment from 1st January 2022 and there was no material impact on the Group’s
consolidated financial statements.
There are no other amendments which are effective in 2022 and relevant to the Group’s operations, that have a significant
impact on the Group’s results, financial position and accounting policies.
The Group has not early adopted any standard, interpretation or amendments that have been issued but not yet effective
(refer note 42).
The principal operating subsidiaries, associates and joint ventures have different functional currencies in line with the
economic environments of the locations in which they operate. The functional currency of the Company is United States
dollars. The consolidated financial statements are presented in United States dollars.
The Group’s reportable segments are set out in note 2 and are described on pages 12 to 13 and pages 24 to 41.
Notes to the Financial Statements
2 Segmental Information
Operating segments are identified on the basis of internal reports about components of the Group that are regularly reviewed
by the executive directors of the Company for the purpose of resource allocation and performance assessment. The Group has
seven operating segments (2021: seven) as more fully described on pages 12 to 13. No operating segments have been
Jardine
Pacific
Jardine
Motors
#
Hongkong
Land DFI Retail
Mandarin
Oriental
Jardine
Cycle &
Carriage Astra
Corporate
and other
interests
Intersegment
transactions
Underlying
business
performance
Non-
trading
items Group
US$m US$m US$m US$m US$m US$m US$m US$m US$m US$m US$m US$m
2022
Revenue (refer note 3) 2,079 2,044 2,244 9,174 454 1,589 20,205 – (65) 37,724 – 37,724
Net operating costs (1,982) (1,994) (1,399) (8,965) (433) (1,517) (17,289) (84) 65 (33,598) (363) (33,961)
Change in fair value of investment properties – – – – – – – – – – (930) (930)
Operating profit/(loss) 97 50 845 209 21 72 2,916 (84) – 4,126 (1,293) 2,833
Net financing charges
– financing charges (14) (10) (235) (126) (17) (37) (141) (45) – (625) – (625)
– financing income – 3 67 5 2 1 119 – – 197 – 197
(14) (7) (168) (121) (15) (36) (22) (45) – (428) – (428)
Share of results of associates and joint ventures
– before change in fair value of investment properties 113 263 229 (35) 10 159 529 (36) – 1,232 (411) 821
– change in fair value of investment properties – – – – – – – – – – (3) (3)
113 263 229 (35) 10 159 529 (36) – 1,232 (414) 818
Profit/(loss) before tax 196 306 906 53 16 195 3,423 (165) – 4,930 (1,707) 3,223
Tax (14) (7) (132) (32) (8) (16) (753) (2) – (964) 4 (960)
Profit/(loss) after tax 182 299 774 21 8 179 2,670 (167) – 3,966 (1,703) 2,263
Non-controlling interests – – (369) 1 (2) (44) (1,979) 11 – (2,382) 473 (1,909)
Profit/(loss) attributable to shareholders 182 299 405 22 6 135 691 (156) – 1,584 (1,230) 354
Net (borrowings)/cash (excluding net borrowings of financial
services companies)* 34 (14) (5,817) (866) (376) (1,456) 2,349 (1,369) – (7,515)
Total equity 1,336 1,703 33,264 1,121 3,324 981 15,565 (853) (244) 56,197
2021
Revenue (refer note 3) 1,533 4,988 2,384 9,015 317 1,403 16,285 – (63) 35,862 – 35,862
Net operating costs (1,448) (4,805) (1,441) (8,702) (343) (1,330) (14,496) (32) 63 (32,534) 1,114 (31,420)
Change in fair value of investment properties – – – – – – – – – – (1,410) (1,410)
Operating profit/(loss) 85 183 943 313 (26) 73 1,789 (32) – 3,328 (296) 3,032
Net financing charges
– financing charges (10) (14) (222) (120) (14) (19) (159) (37) – (595) – (595)
– financing income 1 5 67 1 1 – 126 5 – 206 – 206
(9) (9) (155) (119) (13) (19) (33) (32) – (389) – (389)
Share of results of associates and joint ventures
– before change in fair value of investment properties 117 206 356 (40) (22) 128 453 (20) – 1,178 10 1,188
– change in fair value of investment properties – – – – – – – – – – 81 81
117 206 356 (40) (22) 128 453 (20) – 1,178 91 1,269
Profit/(loss) before tax 193 380 1,144 154 (61) 182 2,209 (84) – 4,117 (205) 3,912
Tax (17) (47) (179) (60) (7) (16) (499) (3) – (828) (123) (951)
Profit/(loss) after tax 176 333 965 94 (68) 166 1,710 (87) – 3,289 (328) 2,961
Non-controlling interests (1) (15) (491) (12) 20 (47) (1,236) 6 – (1,776) 696 (1,080)
Profit/(loss) attributable to shareholders 175 318 474 82 (48) 119 474 (81) – 1,513 368 1,881
Net (borrowings)/cash (excluding net borrowings of financial
services companies)* 126 153 (5,104) (844) (517) (1,463) 2,233 (1,219) – (6,635)
Total equity 1,623 1,726 34,618 1,453 3,418 1,235 15,268 (762) (211) 58,368
* Net (borrowings)/cash is total borrowings less bank balances and other liquid funds. Net borrowings of financial services companies amounted to
US$2,823 million at 31st December 2022 (2021: US$2,741 million) and relates to Astra.
#
During 2021, the operations under Jardine Motors were restructured. The motor trading business in the Chinese mainland (‘Zung Fu China’) was sold to
the Group’s associate, Zhongsheng, in October 2021 (refer notes 15 and 33(g)). Subsequent to the sale, the motor trading businesses in Hong Kong and
Macau are managed by Jardine Pacific. Accordingly, the results of these operations are presented under Jardine Pacific from October 2021. Operations in
the United Kingdom and Zhongsheng remain unchanged with results presented under Jardine Motors.
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Notes to the Financial Statements
aggregated to form the reportable segments. Set out below is an analysis of the Group’s underlying profit, net borrowings
and total equity by reportable segment.
Jardine
Pacific
Jardine
Motors
#
Hongkong
Land DFI Retail
Mandarin
Oriental
Jardine
Cycle &
Carriage Astra
Corporate
and other
interests
Intersegment
transactions
Underlying
business
performance
Non-
trading
items Group
US$m US$m US$m US$m US$m US$m US$m US$m US$m US$m US$m US$m
2022
Revenue (refer note 3) 2,079 2,044 2,244 9,174 454 1,589 20,205 – (65) 37,724 – 37,724
Net operating costs (1,982) (1,994) (1,399) (8,965) (433) (1,517) (17,289) (84) 65 (33,598) (363) (33,961)
Change in fair value of investment properties – – – – – – – – – – (930) (930)
Operating profit/(loss) 97 50 845 209 21 72 2,916 (84) – 4,126 (1,293) 2,833
Net financing charges
– financing charges (14) (10) (235) (126) (17) (37) (141) (45) – (625) – (625)
– financing income – 3 67 5 2 1 119 – – 197 – 197
(14) (7) (168) (121) (15) (36) (22) (45) – (428) – (428)
Share of results of associates and joint ventures
– before change in fair value of investment properties 113 263 229 (35) 10 159 529 (36) – 1,232 (411) 821
– change in fair value of investment properties – – – – – – – – – – (3) (3)
113 263 229 (35) 10 159 529 (36) – 1,232 (414) 818
Profit/(loss) before tax 196 306 906 53 16 195 3,423 (165) – 4,930 (1,707) 3,223
Tax (14) (7) (132) (32) (8) (16) (753) (2) – (964) 4 (960)
Profit/(loss) after tax 182 299 774 21 8 179 2,670 (167) – 3,966 (1,703) 2,263
Non-controlling interests – – (369) 1 (2) (44) (1,979) 11 – (2,382) 473 (1,909)
Profit/(loss) attributable to shareholders 182 299 405 22 6 135 691 (156) – 1,584 (1,230) 354
Net (borrowings)/cash (excluding net borrowings of financial
services companies)* 34 (14) (5,817) (866) (376) (1,456) 2,349 (1,369) – (7,515)
Total equity 1,336 1,703 33,264 1,121 3,324 981 15,565 (853) (244) 56,197
2021
Revenue (refer note 3) 1,533 4,988 2,384 9,015 317 1,403 16,285 – (63) 35,862 – 35,862
Net operating costs (1,448) (4,805) (1,441) (8,702) (343) (1,330) (14,496) (32) 63 (32,534) 1,114 (31,420)
Change in fair value of investment properties – – – – – – – – – – (1,410) (1,410)
Operating profit/(loss) 85 183 943 313 (26) 73 1,789 (32) – 3,328 (296) 3,032
Net financing charges
– financing charges (10) (14) (222) (120) (14) (19) (159) (37) – (595) – (595)
– financing income 1 5 67 1 1 – 126 5 – 206 – 206
(9) (9) (155) (119) (13) (19) (33) (32) – (389) – (389)
Share of results of associates and joint ventures
– before change in fair value of investment properties 117 206 356 (40) (22) 128 453 (20) – 1,178 10 1,188
– change in fair value of investment properties – – – – – – – – – – 81 81
117 206 356 (40) (22) 128 453 (20) – 1,178 91 1,269
Profit/(loss) before tax 193 380 1,144 154 (61) 182 2,209 (84) – 4,117 (205) 3,912
Tax (17) (47) (179) (60) (7) (16) (499) (3) – (828) (123) (951)
Profit/(loss) after tax 176 333 965 94 (68) 166 1,710 (87) – 3,289 (328) 2,961
Non-controlling interests (1) (15) (491) (12) 20 (47) (1,236) 6 – (1,776) 696 (1,080)
Profit/(loss) attributable to shareholders 175 318 474 82 (48) 119 474 (81) – 1,513 368 1,881
Net (borrowings)/cash (excluding net borrowings of financial
services companies)* 126 153 (5,104) (844) (517) (1,463) 2,233 (1,219) – (6,635)
Total equity 1,623 1,726 34,618 1,453 3,418 1,235 15,268 (762) (211) 58,368
* Net (borrowings)/cash is total borrowings less bank balances and other liquid funds. Net borrowings of financial services companies amounted to
US$2,823 million at 31st December 2022 (2021: US$2,741 million) and relates to Astra.
#
During 2021, the operations under Jardine Motors were restructured. The motor trading business in the Chinese mainland (‘Zung Fu China’) was sold to
the Group’s associate, Zhongsheng, in October 2021 (refer notes 15 and 33(g)). Subsequent to the sale, the motor trading businesses in Hong Kong and
Macau are managed by Jardine Pacific. Accordingly, the results of these operations are presented under Jardine Pacific from October 2021. Operations in
the United Kingdom and Zhongsheng remain unchanged with results presented under Jardine Motors.
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Notes to the Financial Statements
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2 Segmental Information (continued)
Set out below are analyses of the Group’s underlying profit attributable to shareholders and non-current assets,
by geographical areas:
2022 2021
US$m US$m
Underlying profit attributable to shareholders:
China 682 882
Southeast Asia 957 669
United Kingdom 35 27
Rest of the world 66 16
1,740 1,594
Corporate and other interests (156) (81)
1,584 1,513
Non-current assets*:
China 40,287 40,869
Southeast Asia 17,375 17,724
United Kingdom 590 642
Rest of the world 1,431 1,628
59,683 60,863
* Excluding amounts due from associates and joint ventures, financial instruments, deferred tax assets and pension assets.
Notes to the Financial Statements
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3 Revenue
Jardine
Pacific
Jardine
Motors
Hongkong
Land DFI Retail
Mandarin
Oriental
Jardine
Cycle &
Carriage
Intersegment
Astra transactions Group
US$m US$m US$m US$m US$m US$m US$m US$m US$m
2022
Gross revenue 6,601 28,882 5,684 27,597 834 8,243 37,173 (256) 114,758
Revenue
By product and
service:
Property 4 – 2,244 – – – 65 (8) 2,305
Motor vehicles 504 2,044 – – – 1,589 7,999 – 12,136
Retail and
restaurants 838 – – 9,174 – – – – 10,012
Financial services – – – – – – 1,780 – 1,780
Engineering,
heavy equipment,
mining and
construction 733 – – – – – 8,259 (56) 8,936
Hotels – – – – 454 – – (1) 453
Other – – – – – – 2,102 – 2,102
2,079 2,044 2,244 9,174 454 1,589 20,205 (65) 37,724
By geographical
location of
customers:
China 1,421 – 2,023 5,906 80 – – (64) 9,366
Southeast Asia 223 – 221 2,842 21 1,589 20,205 (1) 25,100
United Kingdom – 2,044 – – 88 – – – 2,132
Rest of the world 435 – – 426 265 – – – 1,126
2,079 2,044 2,244 9,174 454 1,589 20,205 (65) 37,724
From contracts with
customers:
Recognised at a
point in time
1,420 2,044 953 9,161 141 1,519 17,946 – 33,184
Recognised
over time 655 – 173 13 295 66 213 (57) 1,358
2,075 2,044 1,126 9,174 436 1,585 18,159 (57) 34,542
From other sources:
Rental income
from investment
properties 4 – 927 – – – 12 (8) 935
Revenue from
financial services
companies – – – – – – 1,780 – 1,780
Other – – 191 – 18 4 254 – 467
4 – 1,118 – 18 4 2,046 (8) 3,182
2,079 2,044 2,244 9,174 454 1,589 20,205 (65) 37,724
Notes to the Financial Statements
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3 Revenue (continued)
Jardine
Pacific
Jardine
Motors
Hongkong
Land DFI Retail
Mandarin
Oriental
Jardine
Cycle &
Carriage
Intersegment
transactions
Astra and other Group
US$m US$m US$m US$m US$m US$m US$m US$m US$m
2021
Gross revenue 5,665 31,568 6,845 27,684 510 6,434 30,909 (245) 109,370
Revenue
By product and
service:
Property 4 – 2,384 – – – 56 (8) 2,436
Motor vehicles 104 4,988 – – – 1,403 6,642 (13) 13,124
Retail and
restaurants 853 – – 9,015 – – – – 9,868
Financial services – – – – – – 1,735 – 1,735
Engineering,
heavy equipment,
mining and
construction 572 – – – – – 5,524 (41) 6,055
Hotels – – – – 317 – – (1) 316
Other – – – – – – 2,328 – 2,328
1,533 4,988 2,384 9,015 317 1,403 16,285 (63) 35,862
By geographical
location of
customers:
China 905 2,765 1,770 5,714 89 – – (59) 11,184
Southeast Asia 176 2 614 2,885 14 1,403 16,285 (4) 21,375
United Kingdom – 2,221 – – 44 – – – 2,265
Rest of the world 452 – – 416 170 – – – 1,038
1,533 4,988 2,384 9,015 317 1,403 16,285 (63) 35,862
From contracts with
customers:
Recognised at a
point in time 1,038 4,984 688 9,015 111 1,337 14,073 (13) 31,233
Recognised
over time 491 4 567 – 186 64 245 (42) 1,515
1,529 4,988 1,255 9,015 297 1,401 14,318 (55) 32,748
From other sources:
Rental income
from investment
properties 4 – 946 – – – 12 (8) 954
Revenue from
financial services
companies – – – – – – 1,735 – 1,735
Other – – 183 – 20 2 220 – 425
4 – 1,129 – 20 2 1,967 (8) 3,114
1,533 4,988 2,384 9,015 317 1,403 16,285 (63) 35,862
Gross revenue comprises revenue together with 100% of revenue from associates and joint ventures.
No interest income calculated using effective interest method had been included in revenue from contracts with customers
in 2022 and 2021.
Rental income from investment properties included variable rents of US$31 million (2021: US$29 million).
Notes to the Financial Statements
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3 Revenue (continued)
Contract balances
Contract assets primarily relate to the Group’s rights to consideration for work completed but not billed, and are transferred
to receivables when the rights become unconditional which usually occurs when the customers are billed.
Costs to fulfil contracts includes costs recognised to fulfil future performance obligations on existing contracts that have
not yet been satisfied. Costs to obtain contracts include costs such as sales commission and stamp duty paid, as a result
of obtaining contracts. The Group has capitalised these costs and recognised in profit and loss when the related revenue
is recognised.
Contract liabilities primarily relate to the advance consideration received from customers for which revenue is recognised
over time.
Contract assets and contract liabilities are further analysed as follows:
2022 2021
US$m US$m
Contract assets (refer note 17)
– properties for sale 5 448
– engineering, heavy equipment, mining and construction 91 92
– other 17 15
113 555
– provision for impairment (59) (64)
54 491
Contract liabilities (refer note 31)
– properties for sale 538 1,015
– motor vehicles 330 349
– retail and restaurants 239 210
– engineering, heavy equipment, mining and construction 148 122
– other 50 71
1,305 1,767
At 31st December 2022, costs to fulfil contracts and costs to obtain contracts amounted to US$80 million
(2021: US$144 million) and US$7 million (2021: US$6 million) were capitalised, and US$370 million (2021: US$591 million)
and US$5 million (2021: US$19 million) had been recognised in profit and loss during the year, respectively.
Notes to the Financial Statements
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Annual Report 2022
3 Revenue (continued)
Revenue recognised in relation to contract liabilities
Revenue recognised in the current year relating to carried-forward contract liabilities:
2022 2021
US$m US$m
Properties for sale 643 390
Motor vehicles 199 178
Retail and restaurants 175 155
Engineering, heavy equipment, mining and construction 64 48
Other 60 38
1,141 809
Revenue expected to be recognised on unsatisfied contracts with customers
Timing of revenue to be recognised on unsatisfied performance obligations:
Properties
for sale
Motor
vehicles
Engineering,
heavy
equipment,
mining and
construction Other Total
US$m US$m US$m US$m US$m
2022
Within one year 600 117 818 61 1,596
Between one and two years 234 47 331 22 634
Between two and three years 42 20 111 1 174
Between three and four years 2 9 44 – 55
Between four and five years 1 5 32 – 38
Beyond five years – 1 81 – 82
879 199 1,417 84 2,579
2021
Within one year 943 118 546 65 1,672
Between one and two years 430 50 137 19 636
Between two and three years 22 27 58 1 108
Between three and four years – 10 18 – 28
Between four and five years – 4 1 1 6
Beyond five years – – 1 – 1
1,395 209 761 86 2,451
As permitted under IFRS 15 ‘Revenue from Contracts with Customers’, the revenue expected to be recognised in the next
reporting periods arising from unsatisfied performance obligations for contracts that have original expected durations of one
year or less is not disclosed.
Notes to the Financial Statements
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Annual Report 2022
4 Net Operating Costs
2022 2021
US$m US$m
Cost of sales (27,538) (26,755)
Other operating income 493 1,940
Selling and distribution costs (4,017) (4,024)
Administration expenses (2,296) (2,283)
Other operating expenses (603) (298)
(33,961) (31,420)
The following credits/(charges) are included in net operating costs:
Cost of stocks recognised as expense (22,241) (22,368)
Cost of properties for sale recognised as expense (1,004) (1,069)
Amortisation of intangible assets (184) (195)
Depreciation of tangible assets (957) (1,016)
Amortisation/depreciation of right-of-use assets (939) (983)
Depreciation of bearer plants (28) (27)
Impairment of intangible assets (7) (15)
Impairment of tangible assets (47) (43)
Impairment of right-of-use assets (3) (2)
Write down of stocks and work in progress (48) (53)
Reversal of write down of stocks and work in progress 28 52
Impairment of financing debtors (166) (161)
Impairment of trade debtors, contract assets and other debtors (14) (55)
Operating expenses arising from investment properties (169) (192)
Net foreign exchange gain 11 –
Employee benefit expense
– salaries and benefits in kind (3,526) (3,407)
– share options granted (6) (1)
– defined benefit pension plans (refer note 19) (46) (99)
– defined contribution pension plans (87) (90)
(3,665) (3,597)
Expenses relating to low-value leases (3) (4)
Expenses relating to short-term leases (129) (125)
Expenses relating to variable lease payment not included in lease liabilities (30) (21)
Gain on lease modification and termination 7 26
Sublease income 22 20
Auditors’ remuneration
– audit (22) (20)
– non-audit services (4) (4)
(26) (24)
Dividend income from equity investments 61 62
Interest income from debt investments 53 51
Rental income from properties 13 16
In relation to the COVID-19 pandemic, the Group received government grants and rent concessions of US$31 million
(2021: US$58 million) and US$17 million (2021: US$49 million), respectively, for the year ended 31st December 2022.
These subsidies were accounted for as other operating income.
Net operating costs included the following gains/(losses) from non-trading items:
Change in fair value of other investments (390) (103)
Impairment of assets (14) (5)
Sale of Zung Fu China (refer notes 15 and 33(g)) (20) 899
Sale and closure of other businesses 5 –
Sale of a hotel property (refer note 11) 41 –
Sale of Zung Fu properties in Hong Kong – 336
Sale of other property interests 31 25
Restructuring of businesses (7) (31)
Other (9) (7)
(363) 1,114
Notes to the Financial Statements
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Annual Report 2022
5 Net Financing Charges
2022 2021
US$m US$m
Interest expense
– bank loans and advances (269) (235)
– interest on lease liabilities (114) (120)
– other (180) (181)
(563) (536)
Fair value losses on fair value hedges (18) (14)
Fair value adjustment on hedged items attributable to the hedged risk 18 14
– –
(563) (536)
Interest capitalised 11 11
Commitment and other fees (73) (70)
Financing charges (625) (595)
Financing income 197 206
(428) (389)
6 Share of Results of Associates and Joint Ventures
2022 2021
US$m US$m
By business:
Jardine Pacific 12 118
Jardine Motors 263 206
Hongkong Land 193 434
DFI Retail (212) (41)
Mandarin Oriental 10 (22)
Jardine Cycle & Carriage 45 139
Astra 531 452
Corporate and other interests (24) (17)
818 1,269
Share of results of associates and joint ventures included the following gains/(losses)
from non-trading items:
Change in fair value of investment properties (3) 81
Change in fair value of other investments (9) 12
Impairment of assets
– investment in Robinsons Retail (refer note 15) (171) –
– investment in Siam City Cement (refer note 15) (114) –
– other (117) (14)
(402) (14)
Sale and closure of businesses – 3
Other – 9
(414) 91
Results are shown after tax and non-controlling interests in the associates and joint ventures.
In relation to the COVID-19 pandemic, included in share of results of associates and joint ventures were the Group’s
share of the government grants and rent concessions of US$24 million (2021: US$18 million) and US$14 million
(2021: US$19 million), respectively, for the year ended 31st December 2022.
Notes to the Financial Statements
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7 Tax
2022 2021
US$m US$m
Tax charged to profit and loss is analysed as follows:
Current tax (1,022) (974)
Deferred tax 62 23
(960) (951)
China (139) (355)
Southeast Asia (793) (560)
United Kingdom (6) (12)
Rest of the world (22) (24)
(960) (951)
Reconciliation between tax expense and tax at the applicable tax rate*:
Tax at applicable tax rate (543) (575)
Income not subject to tax
– change in fair value of investment properties – 9
– other items 123 380
Expenses not deductible for tax purposes
– change in fair value of investment properties (139) (254)
– other items (266) (225)
Tax losses and temporary differences not recognised (51) (76)
Utilisation of previously unrecognised tax losses and temporary differences 28 24
Recognition of previously unrecognised tax losses and temporary differences 5 2
Deferred tax assets written off – (3)
Deferred tax liabilities written back 12 3
Underprovision in prior years (13) (11)
Withholding tax (100) (175)
Land appreciation tax in Chinese mainland (11) (39)
Change in tax rate (3) (6)
Other (2) (5)
(960) (951)
Tax relating to components of other comprehensive income is analysed as follows:
Remeasurements of defined benefit plans (7) (9)
Cash flow hedges (11) (21)
(18) (30)
Share of tax charge of associates and joint ventures of US$490 million (2021: US$456 million) is included in share of
results of associates and joint ventures. Share of tax charge of US$30 million (2021: US$11 million) is included in other
comprehensive income of associates and joint ventures.
* The applicable tax rate for the year was 22.6% (2021: 21.7%) and represents the weighted average of the rates of taxation prevailing in the territories
in which the Group operates. The increase in applicable tax rate is mainly caused by a change in the geographic mix of the Group’s profits.
Notes to the Financial Statements
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Annual Report 2022
8 Earnings per Share
Basic earnings per share are calculated on profit attributable to shareholders of US$354 million (2021: US$1,881 million) and
on the weighted average number of 289 million (2021: 313 million) shares in issue during the year.
Diluted earnings per share are calculated on profit attributable to shareholders of US$354 million (2021: US$1,881 million),
which is after adjusting for the effects of the conversion of dilutive potential ordinary shares of subsidiaries, associates or
joint ventures, and on the weighted average number of 289 million (2021: 313 million) shares in issue during the year.
The weighted average number of shares is arrived at as follows:
Ordinary shares
in millions
2022 2021
Weighted average number of shares in issue 467 721
Company’s share of shares held by subsidiaries (178) (408)
Weighted average number of shares for basic earnings per share calculation 289 313
Adjustment for shares deemed to be issued for no consideration under the
Senior Executive Share Incentive Schemes – –
Weighted average number of shares for diluted earnings per share calculation 289 313
Additional basic and diluted earnings per share are also calculated based on underlying profit attributable to shareholders.
A reconciliation of earnings is set out below:
2022 2021
Basic
earnings
per share
Diluted
earnings
per share
Basic
earnings
per share
Diluted
earnings
per share
US$m US$ US$ US$m US$ US$
Profit attributable to
shareholders 354 1.22 1.22 1,881 6.01 6.01
Non-trading items (refer note 9) 1,230 (368)
Underlying profit attributable to
shareholders 1,584 5.49 5.49 1,513 4.83 4.83
Notes to the Financial Statements
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9 Non-trading Items
2022 2021
US$m US$m
By business:
Jardine Pacific (305) 382
Jardine Motors (30) 789
Hongkong Land (335) (663)
DFI Retail (112) (4)
Mandarin Oriental (46) (58)
Jardine Cycle & Carriage (234) (85)
Astra (37) (1)
Corporate and other interests (131) 8
(1,230) 368
An analysis of non-trading items after interest, tax and non-controlling
interests is set out below:
Change in fair value of investment properties
– Hongkong Land (335) (664)
– other (269) (17)
(604) (681)
Change in fair value of other investments (309) (62)
Impairment of assets
– investment in Robinsons Retail (refer note 15) (133) –
– investment in Siam City Cement (refer note 15) (87) –
– other (125) (12)
(345) (12)
Sale of Zung Fu China (refer notes 15 and 33(g)) (28) 791
Sale and closure of other businesses 4 2
Sale of a hotel property (refer note 11) 37 –
Sale of Zung Fu properties in Hong Kong – 337
Sale of other property interests 23 18
Restructuring of businesses (5) (23)
Other (3) (2)
(1,230) 368
Notes to the Financial Statements
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Annual Report 2022
10 Intangible Assets
Goodwill
Franchise
rights
Concession
rights
Deferred
exploration
costs Other Total
US$m US$m US$m US$m US$m US$m
2022
Cost 1,297 150 660 1,219 636 3,962
Amortisation and impairment (189) (2) (55) (706) (375) (1,327)
Net book value at 1st January 1,108 148 605 513 261 2,635
Exchange differences (43) (13) (57) 1 (14) (126)
Additions 26 – 26 55 107 214
Disposals – – – – (4) (4)
Amortisation – – (13) (70) (101) (184)
Impairment charge (6) – – (1) – (7)
Net book value at 31st December 1,085 135 561 498 249 2,528
Cost 1,273 136 623 1,270 663 3,965
Amortisation and impairment (188) (1) (62) (772) (414) (1,437)
1,085 135 561 498 249 2,528
2021
Cost 1,331 152 653 1,159 605 3,900
Amortisation and impairment (203) (2) (47) (619) (334) (1,205)
Net book value at 1st January 1,128 150 606 540 271 2,695
Exchange differences (12) (2) (7) – (1) (22)
Additions – – 14 60 106 180
Disposals (2) – – – (6) (8)
Amortisation – – (8) (79) (108) (195)
Impairment charge (6) – – (8) (1) (15)
Net book value at 31st December 1,108 148 605 513 261 2,635
Cost 1,297 150 660 1,219 636 3,962
Amortisation and impairment (189) (2) (55) (706) (375) (1,327)
1,108 148 605 513 261 2,635
2022 2021
US$m US$m
Goodwill allocation by business:
Jardine Pacific 74 61
Jardine Motors 50 56
DFI Retail 457 456
Mandarin Oriental 39 39
Astra 465 496
1,085 1,108
Notes to the Financial Statements
115
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10 Intangible Assets (continued)
Goodwill relating to DFI Retail is allocated to groups of cash-generating units (‘CGU’) identified by banners or group of stores
acquired in each geographical segment. Management has assessed the recoverable amount of each group of CGU based on
value-in-use calculations using cash flow projections in the approved budgets and projections based on the weighted
average number of years of the remaining lease terms of stores ranging from eight to eleven years.
Key assumptions used for value-in-use calculations for the significant balances of DFI Retail goodwill include budgeted gross
margins between 21% and 29% (2021: 22% and 27%) and average sales growth rates are between 2% and 5% (2021: 2%
and 5%) to project cash flows, which vary across the group’s business segments and geographical locations, over the
weighted average number of years of the remaining lease terms, and are based on management expectations for the market
development; and pre-tax discount rates between 8% and 16% (2021: 5% and 9%) applied to the cash flow projections.
The discount rates used reflect business specific risks relating to the relevant industry, business life-cycle and geographical
location. On the basis of this review, management concluded that no impairment charge is required.
Goodwill relating to Astra mainly represents goodwill arising from acquisition of shares in Astra which is regarded as an
operating segment, and those arising from Astra’s acquisition of subsidiaries. For the purpose of impairment review, the
carrying value of Astra is compared with the recoverable amount measured by reference to the quoted market price of the
shares held. On the basis of this review, management concluded that no impairment has occurred.
Franchise rights are rights under franchise agreements with automobile and heavy equipment manufacturers. These
franchise agreements are deemed to have indefinite lives because either they do not have any term of expiry or their renewal
would be probable and would not involve significant costs, taking into account the history of renewal and the relationships
between the franchisee and the contracting parties. The carrying amounts of franchise rights comprise mainly Astra’s
automotive of US$49 million (2021: US$53 million) and heavy equipment of US$86 million (2021: US$95 million), are not
amortised as such rights will contribute cash flows for an indefinite period. Management has performed an impairment
review of the carrying amounts of franchise rights at 31st December 2022 and has concluded that no impairment has
occurred. The impairment review was made by comparing the carrying amounts of the cash-generating units in which the
franchise rights reside with the recoverable amounts of the cash-generating units. The recoverable amounts of the cash-
generating units are determined based on value-in-use calculations. These calculations use pre-tax cash flow projections
based on financial budgets approved by management covering a three-year period. Cash flows beyond the three-year period
are extrapolated using growth rates between 3% and 4% (2021: 3% and 4%). Pre-tax discount rates between 19% and 20%
(2021: 17% and 20%) reflecting specific risks relating to the relevant industries, are applied to the cash flow projections.
Other intangible assets comprise trademarks, computer software, deferred acquisition costs for insurance contracts and
customer contracts.
The amortisation charges are all recognised in arriving at operating profit and are included in cost of sales, selling and
distribution costs and administration expenses.
The remaining amortisation periods for intangible assets are as follows:
Concession rights by traffic volume over 33 to 37 years
Computer software up to 10 years
Deferred exploration costs by unit of production
Other various
Notes to the Financial Statements
116
Jardine Matheson
Annual Report 2022
11 Tangible Assets
Buildings on
Freehold leasehold
properties land
Leasehold
improve-
ments
Mining
properties
Plant &
machinery
Furniture,
equipment
& motor
vehicles Total
US$m US$m US$m US$m US$m US$m US$m
2022
Cost 1,173 2,415 1,569 1,804 5,731 2,254 14,946
Depreciation and impairment (154) (1,048) (1,046) (968) (4,097) (1,449) (8,762)
Net book value at 1st January 1,019 1,367 523 836 1,634 805 6,184
Exchange differences (66) (106) (28) (5) (119) (61) (385)
Additions 5 65 131 – 628 303 1,132
Disposals (85) (12) (4) – (9) (19) (129)
Transfer from investment
properties – 74 – – – – 74
Transfer from/(to) stock and work
in progress – – – – 2 (20) (18)
Classified as held for sale – (1) – – – – (1)
Depreciation charge (13) (97) (113) (74) (436) (224) (957)
(Impairment charge)/reversal of
impairment charge (2) 1 – – (46) – (47)
Net book value at 31st December 858 1,291 509 757 1,654 784 5,853
Cost 975 2,344 1,558 1,746 5,738 2,124 14,485
Depreciation and impairment (117) (1,053) (1,049) (989) (4,084) (1,340) (8,632)
858 1,291 509 757 1,654 784 5,853
2021
Cost 1,231 2,777 1,546 1,811 5,723 2,197 15,285
Depreciation and impairment (148) (1,079) (1,008) (892) (3,902) (1,394) (8,423)
Net book value at 1st January 1,083 1,698 538 919 1,821 803 6,862
Exchange differences (37) (31) (4) 1 (3) (9) (83)
Additions 4 60 126 – 300 283 773
Disposals (8) (177) (19) – (17) (25) (246)
Revaluation surplus before
transfer to investment
properties – 75 – – – – 75
Transfer to investment properties – (77) – – – – (77)
Transfer to stock and work in
progress – – – – – (26) (26)
Classified as held for sale (7) (28) – – – – (35)
Depreciation charge (16) (111) (119) (84) (464) (222) (1,016)
(Impairment charge)/reversal of
impairment charge – (42) 1 – (3) 1 (43)
Net book value at 31st December 1,019 1,367 523 836 1,634 805 6,184
Cost 1,173 2,415 1,569 1,804 5,731 2,254 14,946
Depreciation and impairment (154) (1,048) (1,046) (968) (4,097) (1,449) (8,762)
1,019 1,367 523 836 1,634 805 6,184
Notes to the Financial Statements
117
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Annual Report 2022
11 Tangible Assets (continued)
Freehold properties in 2021 included a hotel property of US$94 million, which was stated net of a grant of US$18 million.
The property was sold in 2022 (refer notes 4, 9 and 33(i)).
Rental income from properties and other tangible assets amounted to US$292 million (2021: US$260 million) with no
contingent rents for both 2022 and 2021.
The maturity analysis of the undiscounted lease payments to be received after the balance sheet date are as follows:
2022 2021
US$m US$m
Within one year 107 125
Between one and two years 55 77
Between two and five years 47 83
Beyond five years 22 29
231 314
At 31st December 2022, the carrying amount of tangible assets pledged as security for borrowings amounted to
US$349 million (2021: US$449 million) (refer note 29).
12 Right-of-use Assets
Leasehold
land Properties
Plant &
machinery
Motor
vehicles Total
US$m US$m US$m US$m US$m
2022
Cost 1,372 7,020 223 183 8,798
Amortisation/depreciation and impairment (452) (3,745) (173) (154) (4,524)
Net book value at 1st January 920 3,275 50 29 4,274
Exchange differences (65) (108) (7) (3) (183)
Additions 49 303 78 39 469
Disposals (1) – – – (1)
Revaluation surplus before transfer to investment
properties 39 – – – 39
Transfer from investment properties 29 – – – 29
Classified as held for sale (4) – – – (4)
Modifications to lease terms – 505 (2) – 503
Amortisation/depreciation charge (53) (819) (43) (24) (939)
Impairment charge (1) (2) – – (3)
Net book value at 31st December 913 3,154 76 41 4,184
Cost 1,378 6,933 274 200 8,785
Amortisation/depreciation and impairment (465) (3,779) (198) (159) (4,601)
913 3,154 76 41 4,184
Notes to the Financial Statements
118
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Annual Report 2022
12 Right-of-use Assets (continued)
Leasehold
land Properties
Plant &
machinery
Motor
vehicles Other Total
US$m US$m US$m US$m US$m US$m
2021
Cost 1,734 7,405 201 162 1 9,503
Amortisation/depreciation and
impairment (435) (4,040) (134) (125) (1) (4,735)
Net book value at 1st January 1,299 3,365 67 37 – 4,768
Exchange differences (12) (34) (1) – – (47)
Additions 25 341 31 32 – 429
Disposals (281) (87) – – – (368)
Revaluation surplus before transfer
to investment properties 3 – – – – 3
Transfer to investment properties (3) – – – – (3)
Classified as held for sale (50) – – – – (50)
Modifications to lease terms – 543 (7) (9) – 527
Amortisation/depreciation charge (59) (853) (40) (31) – (983)
Impairment charge (2) – – – – (2)
Net book value at 31st December 920 3,275 50 29 – 4,274
Cost 1,372 7,020 223 183 – 8,798
Amortisation/depreciation and
impairment (452) (3,745) (173) (154) – (4,524)
920 3,275 50 29 – 4,274
The typical lease term associated with the right-of-use assets are as follows:
Leasehold land 4 to 95 years
Properties 1 to 20 years
Plant & machinery 1 to 5 years
Motor vehicles 1 to 10 years
Leasehold land of a hotel property in Hong Kong with carrying value of US$122 million is amortised over 895 years.
At 31st December 2022, the carrying amount of leasehold land pledged as security for borrowings amounted to
US$122 million (2021: US$122 million) (refer note 29). None of the other right-of-use assets were pledged at 31st December
2022 and 2021.
Notes to the Financial Statements
119
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Annual Report 2022
13 Investment Properties
Completed
commercial
properties
Under
development
commercial
properties
Completed
residential
properties
Under
development
residential
properties Total
US$m US$m US$m US$m US$m
2022
At 1st January 28,887 2,636 903 421 32,847
Exchange differences (124) 1 (1) – (124)
Additions 94 26 3 – 123
Transfer to tangible assets (7) – (59) (8) (74)
Transfer to right-of-use assets (16) – (13) – (29)
Change in fair value
#
(543) (103) (172) (112) (930)
At 31st December 28,291 2,560 661 301 31,813
Freehold properties 140
Leasehold properties 31,673
31,813
2021
At 1st January 30,287 2,717 882 387 34,273
Exchange differences (160) (15) (7) (1) (183)
Additions 58 23 1 16 98
Disposal (8) – (3) – (11)
Transfer 12 (12) – – –
Transfer from tangible assets 77 – – – 77
Transfer from right-of-use assets 3 – – – 3
Change in fair value (1,382) (77) 30 19 (1,410)
At 31st December 28,887 2,636 903 421 32,847
Freehold properties 138
Leasehold properties 32,709
32,847
#
Change in fair value of completed and under development residential properties in 2022 included US$146 million and US$118 million, respectively,
relating to the unwinding of historical fair value gains on certain investment properties that have been reclassified to tangible assets and right-of-
use assets in 2022.
The Group measures its investment properties at fair value. The fair values of the Group’s investment properties at
31st December 2022 and 2021 have been determined on the basis of valuations carried out by independent valuers who
hold a recognised relevant professional qualification and have recent experience in the locations and segments of the
investment properties valued. The completed commercial properties were principally held by Hongkong Land. The under
development commercial properties were principally held by Mandarin Oriental.
Hongkong Land and Mandarin Oriental engaged Jones Lang LaSalle to value their commercial investment properties in
Hong Kong, the Chinese mainland, Singapore, Vietnam and Cambodia which are either freehold or held under leases with
unexpired lease terms of more than 20 years. The valuations, which conform to the International Valuation Standards issued
by the International Valuation Standards Council and the HKIS Valuation Standards issued by the Hong Kong Institute of
Surveyors, were arrived at by reference to the net income, allowing for reversionary potential, of each completed commercial
property, and using direct comparison method and residual method for under development commercial properties. The
valuations are comprehensively reviewed by Hongkong Land and Mandarin Oriental.
Fair value measurements of residential properties using no significant unobservable inputs
Fair values of completed residential properties are generally derived using the direct comparison method. This valuation
method is based on comparing the property to be valued directly with other comparable properties, which have recently
transacted. However, given the heterogeneous nature of real estate properties, appropriate adjustments are usually required
to allow for any qualitative differences that may affect the price likely to be achieved by the property under consideration.
Notes to the Financial Statements
120
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Annual Report 2022
13 Investment Properties (continued)
Fair value measurements of commercial properties using significant unobservable inputs
Fair values of completed commercial properties in Hong Kong, the Chinese mainland and Singapore are generally derived
using the income capitalisation method. This valuation method is based on the capitalisation of the net income and
reversionary income potential by adopting appropriate capitalisation rates, which are derived from analysis of sale
transactions and valuers’ interpretation of prevailing investor requirements or expectations. The prevailing market rents
adopted in the valuation have reference to valuers’ views of recent lettings, within the subject properties and other
comparable properties.
Fair values of completed commercial properties in Vietnam and Cambodia are generally derived using the discounted cash
flow method. The net present value of the income stream is estimated by applying an appropriate discount rate which
reflects the risk profile.
Fair values of under development commercial properties in Hongkong Land are generally derived using the residual method.
This valuation is essentially a means of valuing the land by reference to its development potential by deducting development
costs together with developer’s profit and risk from the estimated capital value of the proposed development assuming
completion as at the date of valuation.
Fair value of Mandarin Oriental’s commercial property under development is derived using the direct comparison method
and the residual method with equal weighting. The direct comparison method is based on comparing the property to be
valued directly with other comparable properties, which have recently transacted. The residual method is essentially a
means of valuing the land by reference to its development potential by deducting development costs together with
developer’s profit and risk from the estimated capital value of the proposed development assuming completion as at the
date of valuation. For the direct comparison method and the estimated capital value of the residual method, given the
heterogeneous nature of real estate properties, appropriate adjustments are usually required to allow for any qualitative
differences that may affect the price likely to be achieved by the property under consideration.
The Group’s policy is to recognise transfers between fair value measurements as of the date of the event or change in
circumstances that caused the transfer.
Information about fair value measurements of Hongkong Land’s and Mandarin Oriental’s commercial properties using
significant unobservable inputs at 31st December 2022 and 2021:
Fair value at
31st December
2022
Range of significant unobservable inputs
Hongkong Land
Completed properties
Valuation method
Prevailing market
rent per month
Capitalisation/
discount rate
US$m US$ %
Hong Kong 26,131 Income capitalisation 5.8 to 28.2 per square foot 2.80 to 5.00
Chinese mainland 936 Income capitalisation 106.1 per square metre 3.75
Singapore 589 Income capitalisation 7.4 to 7.7 per square foot 3.35 to 4.80
Vietnam and Cambodia 104 Discounted cash flow 21.0 to 42.8 per square metre 12.50 to 15.00
Total 27,760
Fair value at
31st December
2022
Range of significant unobservable inputs
Mandarin Oriental
Under development
property
Valuation method Average unit price Capitalisation rate
US$m US$ %
Hong Kong 2,385 Direct comparison 3,951.6 per square foot n/a
Residual* 3,178.2 to 4,071.7 per square foot 2.45 to 3.85
Notes to the Financial Statements
121
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Annual Report 2022
13 Investment Properties (continued)
Fair value at
31st December
2021
Range of significant unobservable inputs
Hongkong Land
Completed properties
Valuation method
Prevailing market
rent per month
Capitalisation/
discount rate
US$m US$ %
Hong Kong 26,552 Income capitalisation 6.0 to 28.2 per square foot 2.75 to 5.00
Chinese mainland 1,040 Income capitalisation 114.0 per square metre 3.75
Singapore 588 Income capitalisation 7.4 to 7.8 per square foot 3.35 to 4.80
Vietnam and Cambodia 103 Discounted cash flow 18.6 to 42.8 per square metre 12.50 to 15.00
Total 28,283
Fair value at
31st December
2021
Range of significant unobservable inputs
Mandarin Oriental
Under development
property
Valuation method Average unit price Capitalisation rate
US$m US$ %
Hong Kong 2,462 Direct comparison 4,066.0 per square foot n/a
Residual* 3,480.2 to 4,156.8 per square foot 2.40 to 3.80
* In using the residual method to make fair value measurements of the under development leasehold commercial property, unobservable inputs
relating to the estimated costs to complete the development and the developer’s estimated profit and margin for risk have been used.
Prevailing market rents are estimated based on independent valuers’ view of recent lettings, within the subject properties
and other comparable properties. Average unit prices are estimated based on independent valuers’ view of recent
transactions of comparable properties. The higher the rents/unit prices, the higher the fair value.
Capitalisation and discount rates are estimated by independent valuers based on the risk profile of the properties being
valued. The lower the rates, the higher the fair value.
The maturity analysis of lease payments, showing the undiscounted lease payments to be received after the balance sheet
date are as follows:
2022 2021
US$m US$m
Within one year 751 800
Between one and two years 562 603
Between two and five years 720 742
Beyond five years 237 209
2,270 2,354
Generally the Group’s operating leases in respect of investment properties are for terms of three or more years.
At 31st December 2022, the carrying amount of investment properties pledged as security for borrowings amounted to
US$936 million (2021: US$1,040 million) (refer note 29).
Notes to the Financial Statements
122
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Annual Report 2022
14 Bearer Plants
2022 2021
US$m US$m
Cost 734 711
Depreciation (235) (214)
Net book value at 1st January 499 497
Exchange differences (47) (6)
Additions 41 35
Depreciation charge (28) (27)
Net book value at 31st December 465 499
Immature bearer plants 104 113
Mature bearer plants 361 386
465 499
Cost 702 734
Depreciation (237) (235)
465 499
The Group’s bearer plants are primarily for the production of palm oil.
At 31st December 2022 and 2021, the Group’s bearer plants had not been pledged as security for borrowings.
Notes to the Financial Statements
123
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Annual Report 2022
15 Associates and Joint Ventures
2022 2021
US$m US$m
Associates
Listed associates
– Yonghui 380 526
– Zhongsheng 1,498 1,379
– Siam City Cement 309 356
– Robinsons Retail 284 301
– other 318 295
2,789 2,857
Unlisted associates 1,683 1,681
Share of attributable net assets 4,472 4,538
Goodwill on acquisition 911 1,329
5,383 5,867
Amounts due from associates 461 461
5,844 6,328
Joint ventures
Listed joint ventures – 136
Unlisted joint ventures 9,345 8,378
Share of attributable net assets 9,345 8,514
Goodwill on acquisition 94 28
9,439 8,542
Amounts due from joint ventures 2,573 3,110
12,012 11,652
17,856 17,980
Amounts due from associates are interest free, unsecured and have no fixed terms of repayment.
Amounts due from joint ventures bear interests at fixed rates up to 10% per annum and are repayable within one to
thirteen years.
Associates Joint ventures
2022 2021 2022 2021
US$m US$m US$m US$m
Movements of associates and joint ventures during the year:
At 1st January 6,328 5,629 11,652 10,916
Share of results after tax and non-controlling interests 146 412 672 857
Share of other comprehensive income after tax and
non-controlling interests (308) (1) (646) (6)
Dividends received (265) (160) (666) (640)
Additional interest in Zhongsheng in exchange for the
Group’s interest in Zung Fu China (refer note 33(g)) – 428 – –
Acquisitions, other increases in attributable interests
and advances 69 307 2,101 1,522
Other disposals, decreases in attributable interests and
repayment of advances (128) (287) (1,098) (1,000)
Other 2 – (3) 3
At 31st December 5,844 6,328 12,012 11,652
Fair value
#
of listed associates and joint ventures 4,907 6,539 – 235
#
Fair values of the listed associates and joint ventures were based on quoted prices in active markets at the respective balance sheet dates.
Notes to the Financial Statements
124
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Annual Report 2022
15 Associates and Joint Ventures (continued)
An impairment review was performed by management on the carrying values of investment in associates and joint ventures
at 31st December 2022. Following the review, partial impairments of DFI Retail’s investment in Robinsons Retail of
US$171 million (Group’s attributable share of US$133 million), and Jardine Cycle & Carriage’s investment in Siam City Cement
of US$114 million (Group’s attributable share of US$87 million) were recognised within non-trading items under the share of
results of associates and joint ventures in the profit and loss in 2022.
The impairment reviews were performed by comparing the carrying amounts of the associates with the recoverable amounts.
The recoverable amounts were determined based on value-in-use calculations using cashflow projections approved by
management covering projection periods considered appropriate. Cashflows beyond the projection periods were
extrapolated using the estimates stated below. The growth rates did not exceed the long-term average industry growth rates
in the countries of operation, and the pre-tax discount rates reflected business specific risks relating to the relevant
industries and the risk related to the countries of operation. The calculation of the value-in-use recoverable amounts under
the impairment review in 2022 was inherently sensitive to changes in assumptions. However, based on the impairment
reviews performed, it was concluded that the carrying values remained supportable.
Summary of assumptions used and sensitivities on recoverable amounts:
Robinsons Retail Siam City Cement
DFI Retail
Group’s
attributable
share
Jardine
Cycle &
Carriage
Group’s
attributable
share
US$m US$m US$m US$m
Principal countries of operation The Philippines Thailand and Vietnam
Assumptions used:
Cashflow projection period 5 years 4 years
Growth rate 3.0% 2.6% – 3.5%
Pre-tax discount rate 15.2% 11.9%
Sensitivities on recoverable amounts:
A lower recoverable amount if
– revenue growth 1.0% lower (62) (48) N/A N/A
– cement selling prices 2.0% lower N/A N/A (63) (48)
– EBITDA margin 1.0% lower N/A N/A (45) (34)
– PBIT growth rate 1.0% lower (15) (12) N/A N/A
– pre-tax discount rate 1.0% higher (31) (24) (52) (40)
– long-term growth rate
– 1.0% lower for Robinsons Retail (30) (23) N/A N/A
– 0.5% lower for Siam City Cement N/A N/A (27) (21)
Impairment reviews were performed by management on the carrying values of investment in associates and joint ventures at
31st December 2021 and concluded that no impairments were required.
Notes to the Financial Statements
125
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Annual Report 2022
15 Associates and Joint Ventures (continued)
(a) Investment in associates
The material associates of the Group are listed below. These associates have share capital consisting solely of ordinary
shares, which are held directly by the Group.
Nature of investments in material associates in 2022 and 2021:
Name of entity Nature of business
Place of incorporation/
principal place of business/
place of listing
% of ownership
interest
2022 2021
Zhongsheng Group Holdings Limited Automotive Cayman Islands/
Chinese mainland/
Hong Kong
21
21
Maxim’s Caterers Limited
(‘Maxim’s’)
Restaurants Hong Kong/Hong Kong/
Unlisted
50
50
Yonghui Superstores Co., Limited
(‘Yonghui’)
Grocery retail China/Chinese mainland/
Shanghai
21
21
Robinsons Retail Holdings, Inc.
(‘Robinsons Retail’)
Grocery retail, convenience,
health and beauty,
department stores,
specialty and DIY stores
The Philippines/
The Philippines/
The Philippines
21
21
Siam City Cement Public Company
Limited (‘Siam City Cement’)
Cement manufacturing Thailand/Thailand/
Thailand
26
26
Truong Hai Group Corporation
(‘THACO’)
Automotive, property
development and agriculture
Vietnam/Vietnam/
Unlisted
27
27
Notes to the Financial Statements
126
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Annual Report 2022
15 Associates and Joint Ventures (continued)
Summarised financial information for material associates
Summarised balance sheets at 31st December (unless otherwise indicated):
Zhongsheng
Ω
Maxim’s Yonghui
†
Robinsons
Retail
†
Siam City
Cement THACO Total
US$m US$m US$m US$m US$m US$m US$m
2022
Non-current assets 6,681 2,506 6,131 1,598 1,893 3,436 22,245
Current assets
Cash and cash equivalents 1,706 219 1,137 227 99 57 3,445
Other current assets 4,672 284 1,954 553 379 3,152 10,994
Total current assets 6,378 503 3,091 780 478 3,209 14,439
Non-current liabilities
Financial liabilities* (2,049) (992) (3,638) (385) (550) (616) (8,230)
Other non-current liabilities* (485) (164) (35) (101) (155) (188) (1,128)
Total non-current liabilities (2,534) (1,156) (3,673) (486) (705) (804) (9,358)
Current liabilities
Financial liabilities* (1,969) (597) (1,243) (180) (85) (1,689) (5,763)
Other current liabilities* (2,293) (113) (2,618) (368) (334) (1,975) (7,701)
Total current liabilities (4,262) (710) (3,861) (548) (419) (3,664) (13,464)
Non-controlling interests (71) (124) (39) (81) (36) (236) (587)
Net assets 6,192 1,019 1,649 1,263 1,211 1,941 13,275
2021
Non-current assets 5,503 2,558 7,520 1,864 2,135 3,169 22,749
Current assets
Cash and cash equivalents
1,623 247 1,942 291 290 97 4,490
Other current assets 3,700 272 2,426 571 296 2,571 9,836
Total current assets 5,323 519 4,368 862 586 2,668 14,326
Non-current liabilities
Financial liabilities* (1,983) (878) (3,801) (447) (521) (896) (8,526)
Other non-current liabilities* (332) (191) (52) (123) (167) (144) (1,009)
Total non-current liabilities (2,315) (1,069) (3,853) (570) (688) (1,040) (9,535)
Current liabilities
Financial liabilities* (2,091) (769) (2,358) (172) (321) (1,105) (6,816)
Other current liabilities* (1,662) (121) (3,261) (431) (275) (1,548) (7,298)
Total current liabilities (3,753) (890) (5,619) (603) (596) (2,653) (14,114)
Non-controlling interests (62) (124) (92) (101) (45) (250) (674)
Net assets 4,696 994 2,324 1,452 1,392 1,894 12,752
* Financial liabilities exclude trade and other payables and provisions, which are presented under other current and non-current liabilities.
Ω
Based on the unaudited summarised balance sheet at 30th June 2022 and 2021.
†
Based on the unaudited summarised balance sheets at 30th September 2022 and 2021.
Notes to the Financial Statements
127
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Annual Report 2022
15 Associates and Joint Ventures (continued)
Summarised financial information on comprehensive income for the year ended 31st December (unless otherwise indicated):
Zhongsheng
Ω
Maxim’s Yonghui
†
Robinsons
Retail
†
Siam City
Cement THACO Total
US$m US$m US$m US$m US$m US$m US$m
2022
Revenue 26,838 2,524 13,054 3,237 1,416 3,702 50,771
Depreciation and amortisation (418) (406) (655) (138) (108) (144) (1,869)
Interest income – 2 36 7 2 122 169
Interest expense (167) (35) (343) (36) (29) (192) (802)
Profit/(loss) from underlying
business performance 1,713 88 (457) 148 87 346 1,925
Tax (460) (10) 12 (21) (32) (34) (545)
Profit/(loss) after tax from
underlying business
performance 1,253 78 (445) 127 55 312 1,380
Profit/(loss) after tax from
non-trading items – 28 (93) (7) – – (72)
Profit/(loss) after tax 1,253 106 (538) 120 55 312 1,308
Other comprehensive expense (42) (23) – (6) 3 – (68)
Total comprehensive income/
(expense) 1,211 83 (538) 114 58 312 1,240
Dividends received from
associates 54 28 6 11 20 55 174
2021
Revenue
26,580 2,455 13,013 3,088 1,286 2,646 49,068
Depreciation and amortisation (318) (426) (602) (145) (121) (127) (1,739)
Interest income – 2 45 11 2 93 153
Interest expense (186) (36) (407) (44) (39) (97) (809)
Profit/(loss) from underlying
business performance 1,440 123 (578) 90 126 302 1,503
Tax (389) (24) 58 (13) – (23) (391)
Profit/(loss) after tax from
underlying business
performance 1,051 99 (520) 77 126 279 1,112
Loss after tax from non-trading
items – – (7) 1 – – (6)
Profit/(loss) after tax 1,051 99 (527) 78 126 279 1,106
Other comprehensive income/
(expense) 125 (15) – (6) (7) – 97
Total comprehensive income/
(expense) 1,176 84 (527) 72 119 279 1,203
Dividends received from
associates 34 28 6 12 21 – 101
Ω
Based on the unaudited summarised statements of comprehensive income for the 12 months ended 30th June 2022 and 2021.
†
Based on the unaudited summarised statements of comprehensive income for the 12 months ended 30th September 2022 and 2021.
The information contained in the summarised balance sheets and financial information on comprehensive income reflect the
amounts presented in the financial statements of the associates adjusted for differences in accounting policies between the
Group and the associates, and fair value of the associates at the time of acquisition.
Notes to the Financial Statements
128
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Annual Report 2022
15 Associates and Joint Ventures (continued)
Reconciliation of the summarised financial information
Reconciliation of the summarised financial information presented to the carrying amount of the Group’s interests in its
material associates for the year ended 31st December:
Zhongsheng
Ω
Maxim’s Yonghui
†
Robinsons
Retail
†
Siam City
Cement THACO Total
US$m US$m US$m US$m US$m US$m US$m
2022
Net assets 6,192 1,019 1,649 1,263 1,211 1,941 13,275
Interest in associates (%) 21 50 21 21 26 27
Group’s share of net assets
in associates 1,070 510 349 269 309 516 3,023
Goodwill – – 476 124 94 163 857
Other 428 – 31 15 – – 474
Carrying value 1,498 510 856 408 403 679 4,354
Fair value
#
2,605 N/A 1,004 305 338 N/A N/A
2021
Net assets 4,696 994 2,324 1,452 1,392 1,894 12,752
Interest in associates (%) 21 50 21 21 26 27
Group’s share of net assets
in associates 951 497 490 301 356 504 3,099
Goodwill – – 518 316 215 169 1,218
Other 428
Δ
– 36 – – – 464
Carrying value 1,379 497 1,044 617 571 673 4,781
Fair value
#
3,943 N/A 1,215 405 357 N/A N/A
#
Fair values of the listed associates were based on quoted prices in active markets at 31st December 2022 and 2021.
Ω
Based on the unaudited summarised balance sheet at 30th June 2022 and 2021.
Δ
Increased shareholdings in Zhongsheng in exchange for the Group’s interest in Zung Fu China in October 2021 (refer note 33(g)).
†
Based on the unaudited summarised balance sheet at 30th September 2022 and 2021.
Notes to the Financial Statements
129
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Annual Report 2022
15 Associates and Joint Ventures (continued)
The Group has interests in a number of individually immaterial associates. The following table analyses, in aggregate,
the share of profit and other comprehensive expense and carrying amount of these associates.
2022 2021
US$m US$m
Share of profit 199 130
Share of other comprehensive income 62 41
Share of total comprehensive income 261 171
Carrying amount of interests in these associates 1,490 1,547
Contingent liabilities relating to the Group’s interest in associates
2022 2021
US$m US$m
Financial guarantee in respect of facilities made available to an associate 20 20
(b) Investment in joint ventures
The material joint ventures of the Group are listed below. These joint ventures have share capital consisting solely of ordinary
shares, which are held directly by the Group.
Nature of investments in material joint ventures in 2022 and 2021:
Nature of business
Place of incorporation and
principal place of business
% of ownership interest
2022 2021
Hongkong Land
– Properties Sub F, Ltd Property investment Macau 49 49
– BFC Development LLP Property investment Singapore 33 33
– Central Boulevard Development Pte Ltd Property investment Singapore 33 33
– One Raffles Quay Pte Ltd Property investment Singapore 33 33
Astra
– PT Astra Honda Motor Automotive Indonesia 50 50
Notes to the Financial Statements
130
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Annual Report 2022
15 Associates and Joint Ventures (continued)
Summarised financial information for material joint ventures
Summarised balance sheets at 31st December:
Properties
Sub F, Ltd
BFC
Development
LLP
Central
Boulevard
Development
Pte Ltd
One
Raffles
Quay
Pte Ltd
PT Astra
Honda
Motor Total
US$m US$m US$m US$m US$m US$m
2022
Non-current assets 1,166 3,752 2,901 2,916 1,182 11,917
Current assets
Cash and cash equivalents 55 19 27 11 820 932
Other current assets 46 4 3 3 512 568
Total current assets 101 23 30 14 1,332 1,500
Non-current liabilities
Financial liabilities* – (1,272) (1,181) (765) – (3,218)
Other non-current liabilities* (127) – (21) (215) (240) (603)
Total non-current liabilities (127) (1,272) (1,202) (980) (240) (3,821)
Current liabilities
Financial liabilities* – (1) (10) (2) – (13)
Other current liabilities* (46) (58) (43) (47) (1,073) (1,267)
Total current liabilities (46) (59) (53) (49) (1,073) (1,280)
Net assets 1,094 2,444 1,676 1,901 1,201 8,316
2021
Non-current assets 1,202 3,733 2,885 2,900 1,362 12,082
Current assets
Cash and cash equivalents 32 11 24 10 779 856
Other current assets 38 3 3 4 428 476
Total current assets 70 14 27 14 1,207 1,332
Non-current liabilities
Financial liabilities* – (1,265) (1,209) (778) – (3,252)
Other non-current liabilities* (131) – (21) (214) (248) (614)
Total non-current liabilities (131) (1,265) (1,230) (992) (248) (3,866)
Current liabilities
Financial liabilities* – (1) (9) (2) – (12)
Other current liabilities* (42) (55) (40) (46) (978) (1,161)
Total current liabilities (42) (56) (49) (48) (978) (1,173)
Net assets 1,099 2,426 1,633 1,874 1,343 8,375
* Financial liabilities exclude trade and other payables and provisions, which are presented under other current and non-current liabilities.
Notes to the Financial Statements
131
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Annual Report 2022
15 Associates and Joint Ventures (continued)
Summarised statements of comprehensive income for the year ended 31st December:
Properties
Sub F, Ltd
BFC
Development
LLP
Central
Boulevard
Development
Pte Ltd
One
Raffles
Quay
Pte Ltd
PT Astra
Honda
Motor Total
US$m US$m US$m US$m US$m US$m
2022
Revenue 66 158 118 119 5,393 5,854
Depreciation and amortisation (5) – – – (131) (136)
Interest income – – – – 18 18
Interest expense – (48) (31) (19) – (98)
Profit from underlying business
performance 27 67 55 67 532 748
Tax (3) (11) (9) (11) (118) (152)
Profit after tax from underlying
business performance 24 56 46 56 414 596
Loss after tax from
non-trading items (29) (1) – (1) – (31)
Profit/(loss) after tax (5) 55 46 55 414 565
Other comprehensive income – 13 43 28 2 86
Total comprehensive income/
(expense) (5) 68 89 83 416 651
Dividends received from joint
ventures – 17 15 19 217 268
2021
Revenue
82 157 123 112 5,114 5,588
Depreciation and amortisation (5) – – – (137) (142)
Interest income – – – – 18 18
Interest expense – (31) (23) (13) – (67)
Profit from underlying business
performance 39 86 69 66 544 804
Tax (4) (14) (11) (11) (119) (159)
Profit after tax from underlying
business performance 35 72 58 55 425 645
Profit/(loss) after tax from
non-trading items (42) 114 74 134 – 280
Profit/(loss) after tax (7) 186 132 189 425 925
Other comprehensive expense (7) (53) (13) (28) (6) (107)
Total comprehensive income/
(expense) (14) 133 119 161 419 818
Dividends received from joint
ventures 38 22 19 18 209 306
The information contained in the summarised balance sheets and statements of comprehensive income reflect the amounts
presented in the financial statements of the joint ventures adjusted for differences in accounting policies between the Group
and the joint ventures, and fair value of the joint ventures at the time of acquisition.
Notes to the Financial Statements
132
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Annual Report 2022
15 Associates and Joint Ventures (continued)
Reconciliation of the summarised financial information
Reconciliation of the summarised financial information presented to the carrying amount of the Group’s interests in its
material joint ventures for the year ended 31st December:
Properties
Sub F, Ltd
BFC
Development
LLP
Central
Boulevard
Development
Pte Ltd
One
Raffles
Quay
Pte Ltd
PT Astra
Honda
Motor Total
US$m US$m US$m US$m US$m US$m
2022
Net assets 1,094 2,444 1,676 1,901 1,201 8,316
Interest in joint ventures (%) 49 33 33 33 50
Group’s share of net assets in joint
ventures 536 815 559 634 600 3,144
Amount due from joint ventures – 424 – 38 – 462
Carrying value 536 1,239 559 672 600 3,606
2021
Net assets 1,099 2,426 1,633 1,874 1,343 8,375
Interest in joint ventures (%) 49 33 33 33 50
Group’s share of net assets in joint
ventures 538 809 544 625 671 3,187
Amount due from joint ventures – 421 – 38 – 459
Carrying value 538 1,230 544 663 671 3,646
The Group has interests in a number of individually immaterial joint ventures. The following table analyses, in aggregate,
the share of profit and other comprehensive income and carrying amount of these joint ventures.
2022 2021
US$m US$m
Share of profit 416 465
Share of other comprehensive (expense)/income (496) 115
Share of total comprehensive (expense)/income (80) 580
Carrying amount of interests in these joint ventures 8,406 8,006
Commitments and contingent liabilities in respect of joint ventures
The Group has the following commitments relating to its joint ventures as at 31st December:
2022 2021
US$m US$m
Commitment to provide funding if called 945 1,067
There were no contingent liabilities relating to the Group’s interest in the joint ventures at 31st December 2022 and 2021.
Notes to the Financial Statements
133
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Annual Report 2022
16 Other Investments
2022 2021
US$m US$m
Equity investments measured at fair value through profit and loss
Listed securities
– Schindler Holdings 229 340
– Toyota Motor Corporation 198 264
– Vietnam Dairy Products Vinamilk 715 841
– Other 342 120
1,484 1,565
Unlisted securities 306 490
1,790 2,055
Debt investments measured at fair value through profit and loss 10 –
Debt investments measured at fair value through other comprehensive income 763 777
Limited partnership investment funds measured at fair value through profit and loss 256 122
2,819 2,954
Non-current 2,801 2,908
Current 18 46
2,819 2,954
Debt investments comprised of listed bonds.
Movements during the year:
At 1st January 2,954 3,001
Exchange differences (119) (40)
Additions 643 466
Disposals and capital repayments (229) (404)
Change in fair value recognised in profit and loss (410) (67)
Change in fair value recognised in other comprehensive income (20) (2)
At 31st December 2,819 2,954
Movements of equity investments and limited partnership investment funds which were valued based on unobservable
inputs during the year are disclosed in note 43.
Management considers debt investments have low credit risk when they have a low risk of default based on credit ratings
from major rating agencies.
Notes to the Financial Statements
134
Jardine Matheson
Annual Report 2022
17 Debtors
2022 2021
US$m US$m
Consumer financing debtors
– gross 4,448 4,597
– provision for impairment (340) (340)
4,108 4,257
Financing lease receivables
– gross investment 569 419
– unearned finance income (64) (48)
– net investment 505 371
– provision for impairment (31) (24)
474 347
Financing debtors 4,582 4,604
Trade debtors
– third parties 2,487 1,952
– associates 49 32
– joint ventures 118 111
2,654 2,095
– provision for impairment (100) (101)
2,554 1,994
Contract assets (refer note 3)
– gross 113 555
– provision for impairment (59) (64)
54 491
Other debtors
– third parties 2,679 2,589
– associates 140 110
– joint ventures 121 139
2,940 2,838
– provision for impairment (35) (38)
2,905 2,800
10,095 9,889
Non-current
– consumer financing debtors 2,013 2,026
– financing lease receivables 227 164
– trade debtors – 4
– other debtors 982 767
3,222 2,961
Current
– consumer financing debtors 2,095 2,231
– financing lease receivables 247 183
– trade debtors 2,554 1,990
– contract assets 54 491
– other debtors 1,923 2,033
6,873 6,928
10,095 9,889
Notes to the Financial Statements
135
Jardine Matheson
Annual Report 2022
17 Debtors (continued)
2022 2021
US$m US$m
Analysis by geographical area of operation:
China 852 872
Southeast Asia 9,051 8,838
United Kingdom 78 73
Rest of the world 114 106
10,095 9,889
Analysis by fair value:
Consumer financing debtors 3,741 4,320
Financing lease receivables 451 351
Financing debtors 4,192 4,671
Trade debtors 2,554 1,994
Other debtors* 1,506 1,443
8,252 8,108
* Excluding prepayments and other non-financial debtors.
The fair values of financing debtors are determined based on a discounted cash flow method using unobservable inputs,
which are mainly rates of 10% to 37% per annum (2021: 10% to 37% per annum). The higher the discount rates, the lower the
fair value.
The fair values of trade debtors and other debtors, other than short-term debtors, are estimated using the expected future
receipts discounted at market rates ranging from 6% to 13% (2021: 4% to 15%) per annum. The fair value of short-term
debtors approximates their carrying amounts. Derivative financial instruments are stated at fair value. The higher the
discount rates, the lower the fair value.
Financing debtors
Financing debtors comprise consumer financing debtors and financing lease receivables. They relate primarily to Astra’s
motor vehicle and motorcycle financing businesses.
Financing debtors are due within five years (2021: five years) from the balance sheet date and the interest rates range from
7% to 45% per annum (2021: 7% to 45% per annum).
An analysis of financing lease receivables is set out below:
2022 2021
US$m US$m
Lease receivables 569 419
Guaranteed residual value 182 165
Security deposits (182) (165)
Gross investment 569 419
Unearned finance income (64) (48)
Net investment 505 371
Notes to the Financial Statements
136
Jardine Matheson
Annual Report 2022
17 Debtors (continued)
The maturity analyses of financing lease receivables at 31st December are as follows:
2022 2021
Gross
investment
Net
investment
Gross
investment
Net
investment
US$m US$m US$m US$m
Within one year 306 263 227 196
Between one and two years 191 174 129 116
Between two and five years 72 68 63 59
569 505 419 371
Impairment of financing debtors
Before accepting any new customer, the Group assesses the potential customer’s credit quality and sets credit limits by
customer using internal scoring systems. These limits and scoring are reviewed periodically. The Group obtains collateral in
the form of motor vehicles and motorcycles from consumer financing debtors.
The loan period ranges from 6 to 60 months for motor vehicles and motorcycles. Significant financial difficulties of the
debtor, probability that the debtor will enter bankruptcy or financial reorganisation and default or delinquency in payment
are factors in determining the credit risk of financing debtors. To measure the expected credit losses, the financing debtors
have been grouped based on shared credit risk characteristics and the days past due. The calculation reflects the probability
weighted outcome, the time value of money, historical loss rate, reasonable and supportable information that is available
at the reporting date about past events, current conditions and forecasts of future economic conditions, and higher credit
risks of financing debtors who restructured their loans during the COVID-19 pandemic, as allowed under the Indonesia
regulations. Changes in certain macroeconomic information, such as GDP and inflation rate, are relevant for determining
expected credit loss rates. Financing debtors are performing when timely repayments are being made. Financing debtors are
underperforming and subject to a significant increase in credit risk when motor vehicle and motorcycle financing debtors are
overdue for 30 days, or for certain motor vehicle and motorcycle financing debtors who had restructured their loans. Lifetime
expected credit losses are provided at this stage. Financing debtors are non-performing if they are overdue for 90 days.
Financing debtors are written off when they are overdue for 150 days and there is no reasonable expectation of recovery.
In case of default, the Group facilitates the customer to sell the collateral vehicles under fiduciary arrangements for the
purpose of recovering the outstanding receivables .
Notes to the Financial Statements
137
Jardine Matheson
Annual Report 2022
17 Debtors (continued)
The Group provides for credit losses against the financing debtors as follows:
2022 2021
Expected
credit loss
rate
Estimated gross
carrying amount
at default
Expected
credit loss
rate
Estimated gross
carrying amount
at default
% US$m % US$m
Performing 2.15 – 13.58 3,666 2.00 – 12.25 3,526
Underperforming 2.15 – 37.60 1,161 2.00 – 31.29 1,386
Non-performing 42.00 – 66.00 126 39.00 – 100.00 56
4,953 4,968
Movements of provisions for impairment of financing debtors are as follows:
Performing Underperforming Non-performing Total
US$m US$m US$m US$m
2022
At 1st January (182) (148) (34) (364)
Exchange differences 16 13 6 35
(Additional provisions)/writeback 46 (177) (35) (166)
Transfer (44) 133 (89) –
Write off/utilisation – 62 62 124
At 31st December (164) (117) (90) (371)
2021
At 1st January (142) (159) (46) (347)
Exchange differences 1 2 – 3
(Additional provisions)/writeback 4 (143) (22) (161)
Transfer (45) 71 (26) –
Write off/utilisation – 81 60 141
At 31st December (182) (148) (34) (364)
At 31st December 2022 and 2021, there are no financing debtors that are written off but still subject to enforcement
activities.
Notes to the Financial Statements
138
Jardine Matheson
Annual Report 2022
17 Debtors (continued)
Trade and other debtors
The average credit period on sale of goods and services varies among Group businesses and is generally not more than
60 days.
Other debtors net of provision for impairment are further analysed as follows:
2022 2021
US$m US$m
Derivative financial instruments (refer note 34) 185 54
Loans to employees 32 34
Other amounts due from associates 140 110
Other amounts due from joint ventures 121 139
Rental and other deposits 182 209
Repossessed collateral of finance companies 16 20
Restricted bank balances and deposits 43 67
Other receivables 793 816
Financial assets 1,512 1,449
Costs to fulfil contracts (refer note 3) 80 144
Costs to obtain contracts (refer note 3) 7 6
Prepayments 943 912
Reinsurers’ share of estimated losses on insurance contracts 83 83
Other 280 206
2,905 2,800
Impairment of trade debtors and contract assets
Before accepting any new customer, the individual Group business assesses the potential customer’s credit quality and sets
credit limits by customer using internal credit scoring systems. These limits and scoring are reviewed periodically.
Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation
and default or delinquency in payment are considered indicators that the debtor is impaired and an allowance for
impairment is made based on the estimated irrecoverable amount determined by reference to past default experience.
The Group applied the simplified approach to measure expected credit loss, that is a lifetime expected loss allowance for
trade debtors and contract assets. To measure the expected credit losses, trade receivables and contract assets have been
grouped based on shared credit risk characteristics and the days past due. Changes in certain macroeconomic information,
such as GDP and inflation rate, are relevant for determining expected credit loss rates. The contract assets relate to unbilled
work in progress and have substantially the same risk characteristics as the trade debtors for the same types of contracts.
The Group has therefore concluded that the expected loss rates for trade debtors are a reasonable approximation of the loss
rates for the contract assets.
The expected loss rates are based on the historical payment profiles of sales and the corresponding historical credit losses.
The historical loss rates are adjusted to reflect current and forward-looking information on macroeconomic factors and
industry trends affecting the ability of the customers to settle the receivables.
Notes to the Financial Statements
139
Jardine Matheson
Annual Report 2022
17 Debtors (continued)
The loss allowance for both trade debtors and contract assets at 31st December 2022 and 2021 were determined as follows:
Below
30 days
Between
31 and 60 days
Between
61 and 120 days
More than
120 days Total
2022
Weighted average expected loss rate 2.7% 1.9% 5.2% 57.5%
Gross carrying amount – trade
debtors (US$m) 2,282 150 69 153 2,654
Gross carrying amount – contract
assets (US$m) 113 – – – 113
Loss allowance (US$m) (65) (3) (3) (88) (159)
2021
Weighted average expected loss rate 2.9% 1.4% 6.0% 58.9%
Gross carrying amount – trade
debtors (US$m) 1,739 139 57 160 2,095
Gross carrying amount – contract
assets (US$m) 555 – – – 555
Loss allowance (US$m) (66) (2) (3) (94) (165)
Movements in the provisions for impairment are as follows:
Trade debtors Contract assets Other debtors
2022 2021 2022 2021 2022 2021
US$m US$m US$m US$m US$m US$m
At 1st January (101) (87) (64) (46) (38) (23)
Exchange differences 7 1 6 1 3 1
Additional provisions (17) (29) (2) (19) (10) (19)
Unused amounts
reversed 5 9 1 – 9 3
Amounts written off 6 5 – – 1 –
At 31st December (100) (101) (59) (64) (35) (38)
Trade debtors, contract assets and other debtors are written off when there is no reasonable expectation of recovery.
Indicators that there is no reasonable expectation of recovery include, amongst others, the failure of a debtor to engage in a
repayment plan with the Group.
At 31st December 2022, the carrying amount of consumer financing debtors, financing lease receivables and other debtors
pledged as security for borrowings amounted to US$17 million, nil and US$16 million (2021: US$84 million, US$1 million and
US$7 million), respectively (refer note 29). Trade debtors and contract assets had not been pledged as security for
borrowings at 31st December 2022 and 2021.
Notes to the Financial Statements
140
Jardine Matheson
Annual Report 2022
18 Deferred Tax Assets/(Liabilities)
Accelerated
tax
depreciation
Fair value
gains/
(losses) Losses
Employee
benefits
Provisions
and other
temporary
differences Total
US$m US$m US$m US$m US$m US$m
2022
At 1st January (133) (367) 38 114 123 (225)
Exchange differences (8) 7 (2) (11) (16) (30)
Disposals – – – – (5) (5)
Credited/(charged) to profit and loss 17 22 41 11 (29) 62
Charged to other comprehensive
income – (11) – (7) – (18)
At 31st December (124) (349) 77 107 73 (216)
Deferred tax assets 133 (48) 74 102 314 575
Deferred tax liabilities (257) (301) 3 5 (241) (791)
(124) (349) 77 107 73 (216)
2021
At 1st January (144) (346) 50 115 111 (214)
Exchange differences – 11 (1) (1) (1) 8
Disposals (2) 1 (1) – (10) (12)
Credited/(charged) to profit and loss 13 (12) (10) 9 23 23
Charged to other comprehensive
income – (21) – (9) – (30)
At 31st December (133) (367) 38 114 123 (225)
Deferred tax assets 146 (41) 37 108 268 518
Deferred tax liabilities (279) (326) 1 6 (145) (743)
(133) (367) 38 114 123 (225)
Deferred tax balances predominantly comprise non-current items. Deferred tax assets and liabilities are netted when the
taxes relate to the same taxation authority and where offsetting is allowed.
Deferred tax assets of US$296 million (2021: US$301 million) arising from unused tax losses of US$1,308 million
(2021: US$1,339 million) have not been recognised in the financial statements. Included in the unused tax losses,
US$361 million have no expiry date and the balance will expire at various dates up to and including 2037.
Deferred tax liabilities of US$627 million (2021: US$644 million) arising on temporary differences associated with
investments in subsidiaries of US$6,445 million (2021: US$6,206 million) have not been recognised as there is no current
intention of remitting the retained earnings of these subsidiaries to the holding companies in the foreseeable future.
Notes to the Financial Statements
141
Jardine Matheson
Annual Report 2022
19 Pension Plans
The Group operates defined benefit pension plans in the main territories in which it operates, with the major plans in
Hong Kong and the United Kingdom. Most of the pension plans are final salary defined benefits, calculated based on
members’ length of service and their salaries in the final years leading up to retirement. In Hong Kong, the pension benefits
are usually paid in one lump sum. With the exception of certain plans in Hong Kong, all the defined benefit plans are closed
to new members. In addition, although all plans are impacted by the discount rate, liabilities in Hong Kong are driven by
salary growth, whilst the United Kingdom plans are driven by inflationary rates and life expectancy.
The Group’s defined benefit plans are either funded or unfunded, with the assets of the funded plans held independently of
the Group’s assets in separate trustee administered funds. Plan assets held in trusts are governed by local regulations and
practices in each country. Responsibility for governance of the plans, including investment decisions and contribution
schedules, lies jointly with the company and the boards of trustees. The Group’s major plans are valued by independent
actuaries annually using the projected unit credit method.
The amounts recognised in the consolidated balance sheet are as follows:
2022 2021
US$m US$m
Fair value of plan assets 742 971
Present value of funded obligations (775) (1,019)
(33) (48)
Present value of unfunded obligations (318) (371)
Net pension liabilities (351) (419)
Analysis of net pension liabilities:
Pension assets 17 32
Pension liabilities (368) (451)
(351) (419)
Notes to the Financial Statements
142
Jardine Matheson
Annual Report 2022
19 Pension Plans (continued)
The movement in the net pension liabilities is as follows:
Fair value
of plan
assets
Present
value of
obligations Total
US$m US$m US$m
2022
At 1st January 971 (1,390) (419)
Current service cost – (29) (29)
Interest income/(expense) 21 (38) (17)
Past services cost and losses on settlements – 3 3
Administration expenses (3) – (3)
18 (64) (46)
989 (1,454) (465)
Exchange differences (44) 83 39
Remeasurements
– return on plan assets, excluding amounts included in interest income (151) – (151)
– change in financial assumptions – 202 202
– experience losses – (14) (14)
(151) 188 37
Contributions from employers 19 – 19
Contributions from plan participants 4 (4) –
Benefit payments (73) 92 19
Settlements (2) 2 –
At 31st December 742 (1,093) (351)
2021
At 1st January 954 (1,450) (496)
Current service cost
– (66) (66)
Interest income/(expense) 17 (45) (28)
Past services cost and losses on settlements – (3) (3)
Administration expenses (2) – (2)
15 (114) (99)
969 (1,564) (595)
Exchange differences (8) 13 5
Remeasurements
– return on plan assets, excluding amounts included in interest income 52 – 52
– change in financial assumptions – 10 10
– experience losses – 24 24
52 34 86
Contributions from employers 29 – 29
Contributions from plan participants 4 (4) –
Benefit payments (75) 103 28
Settlements – 28 28
At 31st December 971 (1,390) (419)
Notes to the Financial Statements
143
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Annual Report 2022
19 Pension Plans (continued)
The weighted average duration of the defined benefit obligations at 31st December 2022 is 11 years (2021: 12 years).
Expected maturity analysis of undiscounted pension benefits at 31st December is as follows:
2022 2021
US$m US$m
Within one year 131 103
Between one and two years 105 110
Between two and five years 309 333
Between five and ten years 512 556
Between ten and fifteen years 620 638
Between fifteen and twenty years 796 844
Beyond twenty years 2,471 2,915
4,944 5,499
The principal actuarial assumptions used for accounting purposes at 31st December are as follows:
Hong Kong United Kingdom Others
2022 2021 2022 2021 2022 2021
% % % % % %
Discount rate 5.2 2.4 5.0 1.8 7.0 6.9
Salary growth rate 4.0 3.8 3.3 – 6.3 6.2
Inflation rate N/A N/A 3.2 3.5 N/A N/A
Life expectancy for pensioners in the United Kingdom plans at the age of 65 for male and female are 22 years and 24 years
(2021: 22 years and 24 years), respectively. As participants of the plans relating to Hong Kong usually take lump sum
amounts upon retirement, mortality rate is not a principal assumption for these plans.
The sensitivity of the defined benefit obligations to changes in the weighted principal assumptions is:
(Increase)/decrease on defined benefit obligations
Change in
assumption
Increase in
assumption
Decrease in
assumption
% US$m US$m
Discount rate 1 87 (100)
Salary growth rate 1 (72) 62
Inflation rate 1 (7) 5
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant.
In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the
sensitivity of the defined benefit obligations to significant actuarial assumptions the same method (present value of the
defined benefit obligations calculated with the projected unit credit method at the end of the reporting period) has been
applied as when calculating the pension liability recognised within the balance sheet.
Notes to the Financial Statements
144
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19 Pension Plans (continued)
The analysis of the fair value of plan assets at 31st December is as follows:
2022 2021
US$m US$m
Equity investments
Asia Pacific 13 30
Europe 4 128
North America 9 21
Global – 1
26 180
Debt investments
Asia Pacific 27 34
Europe 4 158
North America 8 11
Global 3 4
42 207
Investment funds
Asia Pacific 93 114
Europe 305 127
North America 216 250
Global 86 74
700 565
Total investments 768 952
Cash and cash equivalents 38 42
Benefits payable and other (64) (23)
742 971
At 31st December 2022, 93% of equity investments, 98% of debt investments and 52% of investment funds were quoted on
active markets (2021: 99%, 100% and 82%, respectively).
The strategic asset allocation is derived from the asset-liability modelling (‘ALM’) review, done triennially to ensure the plans
can meet future funding and solvency requirements. The lastest ALM review was completed in 2021. The next ALM review is
scheduled for 2024.
At 31st December 2022, the Hong Kong and United Kingdom plans had assets of US$466 million and US$233 million
(2021: US$546 million and US$373 million), respectively.
The Group maintains an active and regular contribution schedule across all the plans. The contributions to all its plans in
2022 were US$19 million and the estimated amount of contributions expected to be paid to all its plans in 2023 is
US$16 million.
Notes to the Financial Statements
145
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Annual Report 2022
20 Properties for Sale
2022 2021
US$m US$m
Properties in the course of development 2,536 2,399
Completed properties 775 946
3,311 3,345
At 31st December 2022, properties in the course of development amounting to US$1,749 million (2021: US$1,890 million)
were not scheduled for completion within the next twelve months.
At 31st December 2022, the carrying amount of properties for sale pledged as security for borrowings amounted to
US$1,329 million (2021: US$724 million) (refer note 29).
21 Stocks and Work in Progress
2022 2021
US$m US$m
Finished goods 3,040 2,418
Work in progress 65 54
Raw materials 149 130
Spare parts 98 73
Other 161 118
3,513 2,793
At 31st December 2022, the carrying amount of stocks and work in progress pledged as security for borrowings amounted to
US$1 million (2021: nil) (refer note 29).
Notes to the Financial Statements
146
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Annual Report 2022
22 Bank Balances and Other Liquid Funds
2022 2021
US$m US$m
Deposits with banks and financial institutions 2,323 3,450
Bank balances 3,412 3,700
Cash balances 163 132
5,898 7,282
Analysis by currency:
Chinese renminbi 455 831
Euro 57 85
Hong Kong dollar 269 300
Indonesian rupiah 2,588 3,437
Japanese yen 14 10
Macau patacas 21 27
Malaysian ringgit 41 41
New Taiwan dollar 67 69
Singapore dollar 545 603
United Kingdom sterling 60 37
United States dollar 1,743 1,791
Other 38 51
5,898 7,282
The weighted average interest rate on deposits with banks and financial institutions at 31st December 2022 was 2.4%
(2021: 1.4%) per annum.
Notes to the Financial Statements
147
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Annual Report 2022
23 Share Capital
2022 2021
US$m US$m
Authorised:
1,000,000,000 shares of US¢25 each 250 250
Ordinary shares
in millions
2022 2021
2022 2021 US$m US$m
Issued and fully paid:
At 1st January 716 724 179 181
Scrip issued in lieu of dividends 3 2 1 1
Repurchased and cancelled (3) (10) (1) (3)
Reduction of capital (427) – (106) –
At 31st December 289 716 73 179
During the year, the Company repurchased 3 million (2021: 10 million) ordinary shares from the stock market at a cost of
US$171 million (2021: US$580 million), which was accounted for by charging US$1 million (2021: US$3 million) to share
capital, US$2 million (2021: US$8 million) to share premium and US$168 million (2021: US$569 million) to revenue reserves.
The Company also reduced its share capital by 427 million or the 59% shareholding held by subsidiaries (refer note 27),
on 18th May 2022 at a cost of US$6,223 million, constituting the final stage in the Group’s simplification of its parent
company structure. The amount was accounted for by charging US$106 million to share capital, US$1 million to share
premium and US$6,116 million to revenue reserves.
Notes to the Financial Statements
148
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Annual Report 2022
24 Share-based Long-term Incentive Plans
Share-based long-term incentive plans (‘LTIP’) have been put in place to provide incentives for selected executives. Awards
take the form of share options to purchase ordinary shares in the Company with exercise prices based on the then prevailing
market prices; however, share awards which will vest free of payment may also be made. Awards normally vest on or after
the third anniversary of the date of grant and may be subject to the achievement of performance conditions.
The Jardine Matheson Holdings Share-based Long-term Incentive Plan (the ‘2015 LTIP’) was adopted by the Company on
5th March 2015. Since the adoption of the 2015 LTIP, awards were granted in the form of options with exercise prices based
on the then prevailing market prices and no free shares were granted. No awards were granted under the 2015 LTIP in 2022
and 2021.
Prior to the adoption of the 2015 LTIP, The Jardine Matheson International Share Option Plan 2005 and The Jardine Matheson
Holdings Limited Tax-Qualified Share Option Plan 2005 (formerly The Jardine Matheson Holdings Limited Approved Share
Option Plan 2005) provided selected executives with options to purchase ordinary shares in the Company.
The exercise prices of the options granted in prior years were based on the average market prices for the five trading days
immediately preceding the dates of grant of the options. Options normally vest in tranches over a period of three to five
years, and are exercisable for up to ten years following the date of grant.
Movements during the year:
2022 2021
Weighted
average
exercise
price
Options
in millions
Weighted
average
exercise
price
Options
in millions
US$ US$
At 1st January 58.9 1.7 58.4 2.2
Exercised 51.3 (0.2) 56.2 (0.5)
Cancelled 61.6 (0.2) 58.9 –
At 31st December 59.9 1.3 58.9 1.7
The average share price during the year was US$53.2 (2021: US$59.0) per share.
Outstanding at 31st December:
Exercise
price
Options
in millions
Expiry date US$ 2022 2021
2022 51.2 – 0.2
2023 64.9 0.1 0.2
2024 59.6 0.1 0.1
2025 52.8 – 63.4 0.1 0.1
2026 53.9 – 56.6 0.5 0.6
2027 65.6 0.2 0.2
2028 63.4 0.3 0.3
Total outstanding 1.3 1.7
of which exercisable 1.2 1.4
Notes to the Financial Statements
149
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Annual Report 2022
25 Share Premium and Capital Reserves
Share
premium
Capital
reserves Total
US$m US$m US$m
2022
At 1st January – 25 25
Capitalisation arising on scrip issued in lieu of dividends (1) – (1)
Repurchase of shares (refer note 23) (2) – (2)
Reduction of capital (refer note 23) (1) – (1)
Employee share option schemes
– exercise of share options 1 – 1
– value of employee services – 4 4
Transfer 3 (3) –
At 31st December – 26 26
2021
At 1st January – 31 31
Capitalisation arising on scrip issued in lieu of dividends (1) – (1)
Repurchase of shares (refer note 23) (8) – (8)
Employee share option schemes
– exercise of share options 3 – 3
– value of employee services – 1 1
Transfer 6 (7) (1)
At 31st December – 25 25
Capital reserves represent the value of employee services under the Group’s employee share option schemes.
At 31st December 2022, US$17 million (2021: US$22 million) related to the Company’s Senior Executive Share Incentive
Schemes.
Notes to the Financial Statements
150
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Annual Report 2022
26 Dividends
2022 2021
US$m US$m
Final dividend in respect of 2021 of US¢156.00 (2020: US¢128.00) per share 1,114 921
Interim dividend in respect of 2022 of US¢55.00 (2021: US¢44.00) per share 159 318
1,273 1,239
Company’s share of dividends paid on the shares held by subsidiaries (666) (734)
607 505
Shareholders elected to receive scrip in respect of the following:
Final dividend in respect of previous year 138 112
Interim dividend in respect of current year 46 40
184 152
A final dividend in respect of 2022 of US¢160.00 (2021: US¢156.00) per share amounting to a total of US$464 million
(2021: US$1,114 million) is proposed by the Board. The dividend proposed will not be accounted for until it has been
approved at the 2023 Annual General Meeting and will be accounted for as an appropriation of revenue reserves in the year
ending 31st December 2023. Final dividend in respect of 2021 of US$448 million, after netting US$666 million paid to the
shares held by the Company’s subsidiaries, was charged to reserves in the year ended 31st December 2022.
27 Own Shares Held
Own shares held of US$6,223 million in 2021 represent the Company’s share of the cost of 427 million ordinary shares in the
Company held by subsidiaries and were deducted in arriving at shareholders’ funds at 31st December 2021. These shares
were cancelled in 2022 (refer note 23).
Notes to the Financial Statements
151
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Annual Report 2022
28 Non-controlling Interests
2022 2021
US$m US$m
By business:
Hongkong Land 15,689 16,897
DFI Retail 224 303
Mandarin Oriental 670 693
Jardine Cycle & Carriage 241 310
Astra 10,547 10,384
27,371 28,587
Summarised financial information on subsidiaries with material non-controlling interests
Set out below are the summarised financial information for each subsidiary that has non-controlling interests that are
material to the Group.
Summarised balance sheets at 31st December:
Hongkong
Land DFI Retail
Mandarin
Oriental
Jardine
Cycle &
Carriage* Astra*
US$m US$m US$m US$m US$m
2022
Current
Assets 4,686 1,440 329 12,131 11,713
Liabilities (2,415) (3,673) (186) (8,572) (7,543)
Total current net assets/(liabilities) 2,271
(2,233) 143
3,559
4,170
Non-current
Assets 37,911 5,886 3,924 17,172 14,463
Liabilities (6,855) (2,712) (769) (4,281) (3,241)
Total non-current net assets 31,056 3,174 3,155 12,891 11,222
Net assets 33,327 941 3,298 16,450 15,392
Non-controlling interests 24 (6) 4 9,310 3,272
2021
Current
Assets 5,508 1,325 289 11,814 11,484
Liabilities (3,263) (3,541) (176) (7,583) (7,251)
Total current net assets/(liabilities) 2,245 (2,216) 113 4,231 4,233
Non-current
Assets 38,355 6,280 4,128 17,240 14,225
Liabilities (5,982) (2,797) (929) (5,076) (3,413)
Total non-current net assets 32,373 3,483 3,199 12,164 10,812
Net assets 34,618 1,267 3,312 16,395 15,045
Non-controlling interests 34 – 4 9,027 3,045
* Jardine Cycle & Carriage has 50.1% interest in Astra.
Notes to the Financial Statements
152
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Annual Report 2022
28 Non-controlling Interests (continued)
Summarised profit and loss for the year ended 31st December:
Hongkong
Land DFI Retail
Mandarin
Oriental
Jardine
Cycle &
Carriage* Astra*
US$m US$m US$m US$m US$m
2022
Revenue 2,244 9,174 454 21,793 20,205
Profit after tax from underlying business
performance 776 21 8 2,855 2,756
Loss after tax from non-trading items (576) (142) (57) (399) (91)
Profit/(loss) after tax 200 (121) (49) 2,456 2,665
Other comprehensive income/(expense) (642) (90) 34 (1,221) 118
Total comprehensive income/(expense) (442) (211) (15) 1,235 2,783
Total comprehensive income/(expense)
allocated to non-controlling interests (10) (6) – 1,078 812
Dividends paid to non-controlling interests (1) – – (642) (261)
2021
Revenue 2,384 9,015 317 17,688 16,285
Profit/(loss) after tax from underlying business
performance 965 94 (68) 1,845 1,742
Loss after tax from non-trading items
(1,309) (3) (73) (127) (3)
Profit/(loss) after tax (344) 91 (141) 1,718 1,739
Other comprehensive income/(expense) (68) 17 (60) (39) 112
Total comprehensive income/(expense) (412) 108 (201) 1,679 1,851
Total comprehensive income/(expense)
allocated to non-controlling interests 8 (12) – 1,066 397
Dividends paid to non-controlling interests (1) (2) – (314) (124)
* Jardine Cycle & Carriage has 50.1% interest in Astra.
Notes to the Financial Statements
153
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Annual Report 2022
28 Non-controlling Interests (continued)
Summarised cash flows at 31st December:
Hongkong
Land DFI Retail
Mandarin
Oriental
Jardine
Cycle &
Carriage* Astra*
US$m US$m US$m US$m US$m
2022
Cash flows from operating activities
Cash generated from operations 943 1,058 78 3,044 3,006
Interest received 46 3 2 122 140
Interest and other financing charges paid (228) (123) (16) (130) (120)
Tax paid (125) (43) (8) (682) (630)
Dividends from associates and joint ventures 222 45 – 496 414
Cash flows from operating activities 858 940 56 2,850 2,810
Cash flows from investing activities (727) (201) 87 (1,524) (1,478)
Cash flows from financing activities (416) (728) (122) (1,590) (1,610)
Net increase/(decrease) in cash and
cash equivalents (285) 11 21 (264) (278)
Cash and cash equivalents at 1st January 1,476 210 213 4,589 4,482
Effect of exchange rate changes (20) (7) (8) (307) (308)
Cash and cash equivalents at 31st December 1,171 214 226 4,018 3,896
2021
Cash flows from operating activities
Cash generated from operations 619 1,122 42 3,096 2,971
Interest received 43 1 – 137 137
Interest and other financing charges paid (216) (117) (14) (174) (156)
Tax paid (157) (110) (2) (375) (343)
Dividends from associates and joint ventures 239 46 – 344 317
Cash flows from operating activities 528 942 26 3,028 2,926
Cash flows from investing activities (432) (125) (32) (688) (660)
Cash flows from financing activities (629) (841) 61 (1,230) (1,140)
Net increase/(decrease) in cash and
cash equivalents (533) (24) 55 1,110 1,126
Cash and cash equivalents at 1st January 1,990 234 165 3,498 3,371
Effect of exchange rate changes 19 – (7) (19) (15)
Cash and cash equivalents at 31st December 1,476 210 213 4,589 4,482
* Jardine Cycle & Carriage has 50.1% interest in Astra.
The information above is before any inter-company eliminations.
Notes to the Financial Statements
154
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Annual Report 2022
29 Borrowings
2022 2021
Carrying
amount
Fair
value
Carrying
amount
Fair
value
US$m US$m US$m US$m
Current
– bank overdrafts 19 19 4 4
– other bank advances 1,260 1,260 1,099 1,099
– other advances 3 3 18 18
1,282 1,282 1,121 1,121
Current portion of long-term borrowings
– bank loans 2,340 2,340 2,040 2,040
– bonds and notes 540 540 1,163 1,163
– other loans 1 1 35 35
2,881 2,881 3,238 3,238
4,163 4,163 4,359 4,359
Long-term borrowings
– bank loans 6,648 6,626 6,745 6,753
– bonds and notes 5,418 4,816 5,551 5,829
– other loans 7 7 3 3
12,073 11,449 12,299 12,585
16,236 15,612 16,658 16,944
The fair values are based on market prices or are estimated using the expected future payments discounted at market
interest rates ranging from 2.1% to 8.5% (2021: 0.3% to 8.9%) per annum. This is in line with the definition of ‘observable
current market transactions’ under the fair value measurement hierarchy. The fair value of current borrowings approximates
their carrying amount, as the impact of discounting is not significant.
2022 2021
US$m US$m
Secured 1,524 1,689
Unsecured 14,712 14,969
16,236 16,658
Secured borrowings at 31st December 2022 included Hongkong Land’s bank borrowings of US$873 million
(2021: US$871 million) which were secured against its investment properties and properties for sale, Mandarin Oriental’s
bank borrowings of US$600 million (2021: US$641 million) which were secured against its tangible assets and right-of-use
assets, and Astra’s bank borrowings of US$51 million (2021: bank borrowings of US$135 million and bonds and notes of
US$42 million) which were secured against its various assets.
Notes to the Financial Statements
155
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Annual Report 2022
29 Borrowings (continued)
Fixed rate borrowings
Weighted
average
interest rates
Weighted
average period
outstanding
Floating
rate
borrowings Total
By currency: % Years US$m US$m US$m
2022
Chinese renminbi 4.3 – – 1,050 1,050
Hong Kong dollar 4.1 5.8 3,825 2,189 6,014
Indonesian rupiah 6.1 1.8 3,965 463 4,428
Malaysian ringgit 4.5 0.3 1 230 231
Singapore dollar 3.5 12.7 287 665 952
Thai baht 2.3 – – 348 348
United Kingdom sterling 3.5 1.3 48 92 140
United States dollar 3.1 6.0 2,000 1,063 3,063
Other 6.8 – – 10 10
10,126 6,110 16,236
2021
Chinese renminbi 4.7 – – 1,001 1,001
Hong Kong dollar 2.9 6.3 4,081 1,544 5,625
Indonesian rupiah 6.9 1.9 4,164 386 4,550
Malaysian ringgit 3.6 – – 222 222
Singapore dollar 1.9 12.5 316 636 952
Thai baht 1.5 – – 336 336
United Kingdom sterling 1.6 2.4 54 167 221
United States dollar 1.7 6.2 2,241 1,499 3,740
Other 2.6 10.0 1 10 11
10,857 5,801 16,658
The weighted average interest rates and period of fixed rate borrowings are stated after taking into account hedging
transactions.
The exposure of the Group’s borrowings to interest rate changes and the contractual repricing dates at 31st December after
taking into account hedging transactions are as follows:
2022 2021
US$m US$m
Floating rate borrowings 6,110 5,801
Fixed rate borrowings
– within one year 2,676 3,039
– between one and two years 2,010 1,830
– between two and three years 1,419 1,232
– between three and four years 144 757
– between four and five years 207 113
– beyond five years 3,670 3,886
10,126 10,857
16,236 16,658
Notes to the Financial Statements
156
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Annual Report 2022
29 Borrowings (continued)
Details of the bonds and notes outstanding at 31st December are as follows:
2022 2021
Maturity
Interest rates
% Nominal values
Current
Non-
current Current
Non-
current
US$m US$m US$m US$m
Hongkong Land
3.86% 10-year notes 2022 3.86 HK$410 million – – 53 –
4.50% 10-year notes 2022 4.50 US$500 million – – 503 –
3.00% 10-year notes 2022 3.00 HK$305 million – – 39 –
2.90% 10-year notes 2022 2.90 HK$200 million – – 25 –
3.95% 10-year notes 2023 3.95 HK$1,100 million 141 – – 141
3.95% 10-year notes 2023 3.95 HK$300 million 38 – – 38
4.625% 10-year notes 2024 4.625 US$400 million – 395 – 407
4.10% 15-year notes 2025 4.10 HK$300 million – 38 – 38
4.50% 15-year notes 2025 4.50 US$600 million – 604 – 606
3.75% 15-year notes 2026 3.75 HK$302 million – 39 – 39
4.00% 15-year notes 2027 4.00 HK$785 million – 100 – 100
4.04% 15-year notes 2027 4.04 HK$473 million – 61 – 61
3.95% 15-year notes 2027 3.95 HK$200 million – 26 – 26
3.15% 15-year notes 2028 3.15 HK$300 million – 38 – 38
4.22% 15-year notes 2028 4.22 HK$325 million – 42 – 42
3.83% 10-year notes 2028 3.83 HK$450 million – 58 – 58
3.75% 10-year notes 2028 3.75 HK$355 million – 45 – 45
4.40% 15-year notes 2029 4.40 HK$400 million – 51 – 51
2.93% 10-year notes 2029 2.93 HK$550 million – 70 – 70
2.875% 10-year notes 2030 2.875 US$600 million – 596 – 595
4.11% 20-year notes 2030 4.11 HK$800 million – 102 – 102
2.25% 10-year notes 2031 2.25 US$500 million – 496 – 495
1.957% 10-year notes 2031 1.957 HK$375 million – 48 – 48
4.125% 20-year notes 2031 4.125 HK$200 million – 25 – 25
4.00% 20-year notes 2032 4.00 HK$240 million – 30 – 30
2.83% 12-year notes 2032 2.83 HK$863 million – 110 – 110
4.12% 15-year notes 2033 4.12 HK$700 million – 89 – 89
3.67% 15-year notes 2034 3.67 HK$604 million – 77 – 77
2.72% 15-year notes 2035 2.72 HK$400 million – 51 – 51
2.90% 15-year notes 2035 2.90 HK$400 million – 51 – 51
2.90% 15-year notes 2035 2.90 HK$400 million – 51 – 51
2.65% 15-year notes 2035 2.65 HK$800 million – 101 – 101
3.95% 20-year notes 2038 3.95 S$150 million – 110 – 109
3.45% 20-year notes 2039 3.45 S$150 million – 111 – 110
5.25% 30-year notes 2040 5.25 HK$250 million – 32 – 32
Astra Sedaya Finance (‘ASF’)
Berkelanjutan III Tahap III bonds 2022 8.75 Rp375 billion – – 26 –
Berkelanjutan III Tahap IV bonds 2022 7.65 Rp200 billion – – 14 –
Berkelanjutan IV Tahap II bonds 2024 9.20 Rp623 billion – 38 42 40
Berkelanjutan IV Tahap III bonds 2024 7.95 Rp236 billion – 15 49 17
Berkelanjutan IV Tahap IV bonds 2023 7.00 Rp1,301 billion 78 – – 86
Berkelanjutan V Tahap I bonds 2023 7.60 Rp473 billion 28 – – 31
Berkelanjutan V Tahap II bonds 2024 6.35 Rp1,608 billion – 99 63 108
Berkelanjutan V Tahap III bonds 2024 5.30 Rp1,459 billion – 85 37 93
Berkelanjutan V Tahap IV bonds 2023 – 2025 3.50 – 5.70 Rp3,000 billion 65 119 – –
Berkelanjutan V Tahap V bonds 2023 – 2027 4.00 – 6.50 Rp900 billion 30 24 – –
Notes to the Financial Statements
157
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Annual Report 2022
29 Borrowings (continued)
Details of the bonds and notes outstanding at 31st December are as follows (continued):
2022 2021
Maturity
Interest rates
% Nominal values
Current
Non-
current Current
Non-
current
US$m US$m US$m US$m
Federal International
Finance (‘FIF’)
Berkelanjutan III Tahap V bonds 2022 8.80 Rp1,370 billion – – 90 –
Berkelanjutan IV Tahap I bonds 2022 8.55 Rp1,042 billion – – 66 –
Berkelanjutan IV Tahap II bonds 2023 7.25 Rp645 billion 41 – – 45
Berkelanjutan V Tahap I bonds 2024 6.25 Rp872 billion – 55 44 58
Berkelanjutan V Tahap II bonds 2024 5.30 Rp775 billion – 43 68 47
Berkelanjutan V Tahap III bonds 2023 – 2025 3.50 – 5.60 Rp2,000 billion 74 42 – –
Berkelanjutan V Tahap IV bonds 2023 – 2025 5.00 – 6.80 Rp1,177 billion 27 40 – –
Medium Term Notes 2022 7.99 Rp372 billion – – 26 –
SAN Finance
Berkelanjutan II Tahap II bonds 2022 9.25 Rp31 billion – – 2 –
Berkelanjutan III Tahap I bonds 2022 8.75 Rp281 billion – – 16 –
Berkelanjutan IV Tahap I bonds 2023 – 2025 4.50 – 7.05 Rp750 billion 7 32 – –
Serasi Autoraya (‘SERA’)
Berkelanjutan I Tahap I bonds 2023 8.35 Rp167 billion 11 – – 12
Jardine Matheson
2031 bonds 2031 2.50 US$800 million – 788 – 787
2036 bonds 2036 2.875 US$400 million – 391 – 391
540 5,418 1,163 5,551
All notes and bonds are unsecured at 31st December 2022.
The ASF bonds, FIF bonds, SAN Finance bonds and SERA bonds were issued by wholly-owned subsidiaries of Astra.
Of the bonds outstanding at 31st December 2021, the ASF Berkelanjutan III Tahap III and IV bonds, and SAN Finance
Berkelanjutan II Tahap II bonds were collateralised by fiduciary guarantee over financing debtors of the subsidiaries issuing
the bonds which amounting to 50% and 60%, respectively, of the total outstanding principal of the bonds.
Notes to the Financial Statements
158
Jardine Matheson
Annual Report 2022
29 Borrowings (continued)
The movements in borrowings are as follows:
Bank
overdrafts
Long-term
borrowings
Short-term
borrowings Total
US$m US$m US$m US$m
2022
At 1st January 4 12,299 4,355 16,658
Exchange differences (1) (236) (203) (440)
New subsidiaries – 66 3 69
Amortisation of borrowing costs – 5 12 17
Transfer – (3,298) 3,298 –
Change in fair value – (18) – (18)
Change in bank overdrafts 16 – – 16
Drawdown of borrowings – 5,852 3,195 9,047
Repayment of borrowings – (2,597) (6,516) (9,113)
At 31st December 19 12,073 4,144 16,236
2021
At 1st January 50 9,822 5,825 15,697
Exchange differences – (76) (29) (105)
Amortisation of borrowing costs – 10 10 20
Transfer – (3,489) 3,489 –
Change in fair value – (13) – (13)
Change in bank overdrafts (46) – – (46)
Drawdown of borrowings – 10,407 2,165 12,572
Repayment of borrowings – (4,362) (7,105) (11,467)
At 31st December 4 12,299 4,355 16,658
30 Lease Liabilities
2022 2021
US$m US$m
At 1st January 3,834 3,890
Exchange differences (131) (42)
Additions 416 514
Disposals – (100)
Modifications to lease terms 479 466
Lease payments (989) (1,014)
Interest expense 114 120
At 31st December 3,723 3,834
Non-current 2,951 3,022
Current 772 812
3,723 3,834
Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease
agreements do not impose any covenants other than the security interests in the leased assets that are held by the lessor.
The Group is not exposed to any residual guarantees in respect of the leases entered into at 31st December 2022 and 2021.
The Group has not entered into any material lease contracts which have not commenced at 31st December 2022 and 2021.
Notes to the Financial Statements
159
Jardine Matheson
Annual Report 2022
31 Creditors
2022 2021
US$m US$m
Trade creditors
– third parties 4,383 3,798
– associates 136 95
– joint ventures 267 231
4,786 4,124
Accruals 2,427 2,164
Other amounts due to joint ventures 141 140
Rental and other refundable deposits 359 363
Deferred consideration payable 1 47
Contingent consideration payable 9 9
Derivative financial instruments (refer note 34) 24 78
Other creditors 525 533
Financial liabilities 8,272 7,458
Contract liabilities (refer note 3) 1,305 1,767
Gross estimated claims on insurance contracts 254 259
Unearned premiums on insurance contracts 282 293
Rental income received in advance 26 31
Other 511 516
10,650 10,324
Non-current 191 250
Current 10,459 10,074
10,650 10,324
Analysis by geographical area of operation:
China 3,782 4,213
Southeast Asia 6,142 5,381
United Kingdom 296 219
Rest of the world 430 511
10,650 10,324
Derivative financial instruments are stated at fair value. Other creditors are stated at amortised cost. The fair values of these
creditors approximate their carrying amounts.
Notes to the Financial Statements
160
Jardine Matheson
Annual Report 2022
32 Provisions
Motor
vehicle
warranties
Closure cost
provisions
Reinstate-
ment and
restoration
costs
Statutory
employee
entitlements Others Total
US$m US$m US$m US$m US$m US$m
2022
At 1st January 70 36 204 163 29 502
Exchange differences – (2) (3) (15) (3) (23)
Additional provisions 6 5 14 25 13 63
Unused amounts reversed (2) (5) (2) – – (9)
Utilised (3) (9) (4) (2) (4) (22)
At 31st December 71 25 209 171 35 511
Non-current – – 172 145 19 336
Current 71 25 37 26 16 175
71 25 209 171 35 511
2021
At 1st January 74 29 207 172 29 511
Exchange differences (2) – (2) (2) – (6)
Additional provisions 4 44 8 1 4 61
Unused amounts reversed (3) (8) (5) (5) – (21)
Utilised (3) (29) (4) (3) (4) (43)
At 31st December 70 36 204 163 29 502
Non-current – 1 164 129 15 309
Current 70 35 40 34 14 193
70 36 204 163 29 502
Motor vehicle warranties are estimated liabilities that fall due under the warranty terms offered on sale of new and used
vehicles beyond that which are reimbursed by the manufacturers.
Closure cost provisions are established when legal or constructive obligations arise on closure or disposal of businesses.
Provisions for reinstatement and restoration costs comprised the estimated costs, to be incurred by the Group as lessees,
in dismantling and removing the underlying assets, restoring the sites on which they are located or restoring the underlying
assets to the condition required by the terms and conditions of the leases.
Other provisions principally comprise provisions in respect of indemnities on disposal of businesses and legal claims.
Notes to the Financial Statements
161
Jardine Matheson
Annual Report 2022
33 Notes to Consolidated Cash Flow Statement
(a) Cash generated from operations
2022 2021
US$m US$m
By nature:
Operating profit 2,833 3,032
Adjustments for:
Depreciation and amortisation (refer note 33(b)) 2,108 2,221
Change in fair value of investment properties 930 1,410
Profit on sale of subsidiaries (42) (1,266)
Loss/(profit) on sale of associates and joint ventures 29 (35)
(Profit)/loss on sale of other investments (2) 4
Loss on sale of right-of-use assets 1 3
Loss on sale of intangible assets 1 1
Profit on sale of tangible assets (37) (44)
Loss on sale of repossessed collateral of finance companies 37 65
Fair value loss on other investments 410 67
Fair value loss/(gain) on agricultural produce 11 (4)
Impairment of intangible assets 7 15
Impairment of tangible assets 47 43
Impairment of right-of-use assets 3 2
Impairment of debtors 180 216
Write down of properties for sale 6 –
Write down of stocks and work in progress 48 53
Reversal of write down of stocks and work in progress (28) (52)
Gain on lease modification and termination (7) (26)
Rent concessions (17) (49)
Change in provisions 44 43
Net foreign exchange loss/(gain) 55 (3)
Negative goodwill on acquisition of a business (37) –
Amortisation of borrowing costs for financial services companies 9 8
Options granted under employee share option schemes 6 1
3,762 2,673
6,595 5,705
Change in working capital:
Increase in concession rights (25) (15)
Decrease/(increase) in properties for sale 28 (981)
Increase in stocks and work in progress (1,074) (244)
Increase in debtors (1,149) (638)
Increase in creditors and provisions 905 1,542
Increase in pension obligations 7 14
(1,308) (322)
5,287 5,383
Notes to the Financial Statements
162
Jardine Matheson
Annual Report 2022
33 Notes to Consolidated Cash Flow Statement (continued)
(b) Depreciation and amortisation
2022 2021
US$m US$m
By business:
Jardine Pacific 145 139
Jardine Motors 20 47
Hongkong Land 18 16
DFI Retail 861 886
Mandarin Oriental 58 69
Jardine Cycle & Carriage 21 21
Astra 985 1,043
2,108 2,221
(c) Purchase of associates and joint ventures in 2022 mainly included US$213 million for Hongkong Land’s investments in
the Chinese mainland; US$34 million for Jardine Cycle & Carriage’s additional interest in Refrigeration Electrical Engineering
Corporation; US$260 million, US$44 million and US$41 million for Astra’s investments in PT Bank Jasa Jakarta, toll road
concession business and PT Mobilitas Digital Indonesia, respectively.
Purchase in 2021 mainly included US$115 million for Hongkong Land’s investments in the Chinese mainland, US$9 million
for Jardine Cycle & Carriage’s additional interest in Refrigeration Electrical Engineering Corporation and US$66 million for
Astra’s investments in toll road concession business.
(d) Purchase of other investments for 2022 mainly included acquisition of securities of US$327 million, investments in
healthcare services of US$99 million, an online consumer credit platform of US$31 million and a technology-based logistics
startup of US$14 million in Astra; and investment in limited partnership investments funds for US$151 million in Corporate.
Purchase in 2021 included US$375 million for acquisition of securities in Astra and US$69 million for investment in limited
partnership investment funds in Corporate.
Notes to the Financial Statements
163
Jardine Matheson
Annual Report 2022
33 Notes to Consolidated Cash Flow Statement (continued)
(e) Advances to and repayments to associates and joint ventures in 2022 and 2021 mainly included Hongkong Land’s
advances to its property joint ventures.
(f) Advances from and repayments from associates and joint ventures in 2022 and 2021 mainly included advances from and
repayments from Hongkong Land’s property joint ventures.
(g) Sale of subsidiaries
2021
US$m
Non-current assets 605
Current assets 423
Non-current liabilities (86)
Current liabilities (250)
Non-controlling interests (5)
Net assets 687
Cumulative exchange translation difference (25)
Profit on disposal 1,266
Deferred gain on sale and leaseback of properties 126
Sales proceeds 2,054
Adjustment for carrying value of an associate (refer note 15) (428)
Cash and cash equivalents of subsidiaries disposed of (116)
Net cash inflow 1,510
Net cash inflow for sale of subsidiaries in 2021 included US$738 million from Jardine Pacific’s sale of property holding
subsidiaries which hold the Zung Fu Hong Kong properties in Hung Hom and Chai Wan with sale and leaseback
arrangements, and US$754 million (net of tax of US$115 million) from Jardine Motors’ sale of Zung Fu China to the Group’s
associate, Zhongsheng, for a total consideration of US$1.3 billion, comprised US$886 million in cash and US$428 million
worth of new shares in Zhongsheng (refer note 15), increasing the Group’s shareholding in Zhongsheng to 20.9% at
31st December 2021.
Notes to the Financial Statements
164
Jardine Matheson
Annual Report 2022
33 Notes to Consolidated Cash Flow Statement (continued)
(h) Sale of other investments in 2022 mainly included Astra’s sale of securities. Sale in 2021 comprised sale of securities of
US$246 million and US$152 million in Astra and Corporate, respectively.
(i) Sale of tangible assets in 2022 included US$131 million for Mandarin Oriental’s sale of a hotel property (refer note 11).
(j) Change in interests in subsidiaries
2022 2021
US$m US$m
Increase in attributable interests
– Hongkong Land (352) (192)
– Jardine Cycle & Carriage (130) –
– Mandarin Oriental (1) –
– other (225) (107)
(708) (299)
Increase in attributable interests in other subsidiaries in 2022 included US$214 million for repurchase of shares in Astra’s
subsidiary, United Tractors, which consequentially increased Astra’s interest from 59.5% to 61.1%.
Increase in 2021 included US$18 million and US$19 million for Jardine Cycle & Carriage’s additional 30% and 25% interests
in Cycle & Carriage Bintang and Republic Auto, respectively, and US$70 million for Astra’s acquisition of the remaining 33%
interest in PT Astra Modern Land.
(k) Cash outflows for leases
2022 2021
US$m US$m
Lease rentals paid (1,151) (1,163)
Additions to right-of-use assets (53) (25)
(1,204) (1,188)
The above cash outflows are included in
– operating activities (276) (269)
– investing activities (53) (25)
– financing activities (875) (894)
(1,204) (1,188)
(l) Analysis of balances of cash and cash equivalents
2022 2021
US$m US$m
Bank balances and other liquid funds (refer note 22) 5,898 7,282
Bank overdrafts (refer note 29) (19) (4)
5,879 7,278
Notes to the Financial Statements
165
Jardine Matheson
Annual Report 2022
34 Derivative Financial Instruments
The fair values of derivative financial instruments at 31st December are as follows:
2022 2021
Positive
fair
value
Negative
fair
value
Positive
fair
value
Negative
fair
value
US$m US$m US$m US$m
Designated as cash flow hedges
– forward foreign exchange contracts 22 5 10 2
– interest rate swaps and caps 40 – 5 9
– cross currency swaps 123 15 26 67
185 20 41 78
Designated as fair value hedges
– forward foreign exchange contracts – 1 – –
– cross currency swaps – 3 12 –
– 4 12 –
Non-qualifying as hedges
– forward foreign exchange contracts – – 1 –
Forward foreign exchange contracts
The contract amounts of the outstanding forward foreign exchange contracts at 31st December 2022 were US$812 million
(2021: US$1,192 million).
Interest rate swaps and caps
The notional principal amounts of the outstanding interest rate swap and cap contracts at 31st December 2022 were
US$850 million (2021: US$1,088 million).
At 31st December 2022, the fixed interest rates relating to interest rate swaps and caps varied from 0.4% to 2.1%
(2021: 0.4% to 2.7%) per annum.
The fair values of interest rate swaps at 31st December 2022 were based on the estimated cash flows discounted at market
rates ranging from 0.9% to 6.0% (2021: 0.2% to 4.7%) per annum.
Cross currency swaps
The contract amounts of the outstanding cross currency swap contracts at 31st December 2022 were US$3,543 million
(2021: US$4,652 million).
Commodity options and commodity zero collars
The contract amounts of the outstanding commodity options and commodity zero collars at 31st December 2022 were
US$38 million (2021: US$82 million) and US$10 million (2021: US$37 million), respectively.
The Group has aggregated notional principal and contract amounts of US$1.2 billion in interest rate swaps and cross
currency swaps referencing to US$ LIBOR that will expire beyond 30th June 2023, the cessation date of US$ LIBOR.
These have carrying values of US$95 million included in debtors at 31st December 2022. Further details in relation to the
transition plan for these contracts are shown on pages 193 and 194.
Notes to the Financial Statements
166
Jardine Matheson
Annual Report 2022
35 Commitments
2022 2021
US$m US$m
Capital commitments:
Authorised not contracted
– joint ventures 26 64
– other 576 954
602 1,018
Contracted not provided
– joint ventures 945 1,067
– other 953 779
1,898 1,846
2,500 2,864
The Group had no material operating lease commitments for short-term and low-value leases outstanding at 31st December
2022 and 2021.
Total future sublease payments receivable amounted to US$19 million at 31st December 2022 (2021: US$16 million).
36 Contingent Liabilities
Following the acquisition of the 15 per cent of Jardine Strategic not previously owned by the Company and its wholly-owned
subsidiaries, which was effected on 14th April 2021, a number of former Jardine Strategic shareholders are seeking an
appraisal of the fair value of their shares in Jardine Strategic by the Bermuda court, relying upon the process referred to in
the shareholder circular issued in connection with the acquisition. These shareholders claim the consideration of US$33 per
share that Jardine Strategic considered to be fair value for its shares, and that all shareholders have already received, did not
represent fair value. Although the proceedings were commenced in April 2021, they are still at an early stage and it is
anticipated that the court appraisal process will not be concluded for at least a further 12 months. The Board believes that
the US$33 per share that was paid represented fair value to Jardine Strategic minority shareholders and is of the opinion that
no provision is required in relation to these claims.
Various Group companies are involved in litigation arising in the ordinary course of their respective businesses.
Having reviewed outstanding claims and taking into account legal advice received, the Directors are of the opinion that
adequate provisions have been made in the financial statements.
Notes to the Financial Statements
167
Jardine Matheson
Annual Report 2022
37 Related Party Transactions
In the normal course of business the Group undertakes a variety of transactions with certain of its associates and
joint ventures.
The most significant of such transactions relate to the purchases of motor vehicles and spare parts from its associates and
joint ventures in Indonesia including PT Toyota-Astra Motor, PT Astra Honda Motor and PT Astra Daihatsu Motor. Total cost of
motor vehicles and spare parts purchased in 2022 amounted to US$6,142 million (2021: US$4,970 million). The Group also
sells motor vehicles and spare parts to its associates and joint ventures in Indonesia including PT Astra Honda Motor,
PT Astra Daihatsu Motor and PT Tunas Ridean. Total revenue from sale of motor vehicles and spare parts in 2022 amounted
to US$763 million (2021: US$604 million).
The Group manages six (2021: six) associate and joint venture hotels. Management fees received by the Group in 2022 from
these managed hotels amounted to US$15 million (2021: US$7 million).
Amounts of outstanding balances with associates and joint ventures are included in debtors and creditors, as appropriate
(refer notes 17 and 31).
Details of Directors’ remuneration (being the key management personnel compensation) are shown on pages 75 to 76 under
the heading of Remuneration Report.
39 Post Balance Sheet Event
The Group has entered into an agreement to sell its entire interest in the automotive dealership business in the United
Kingdom. Completion is expected to take place in the first quarter of 2023. The gain on disposal will be recognised as a
non-trading item in the 2023 financial statements.
The Group, through a subsidiary of Astra, entered into a conditional agreement with third parties to acquire 90% of
PT Stargate Pasific Resources, a company engaged in the business of nickel mining, and 90% of PT Stargate Mineral Asia,
a company engaged in processing of nickel, for a total of approximately US$272 million in December 2022. Completion of
the acquisition is subject to the fulfillment of the conditions set out in the agreement.
38 Summarised Balance Sheet of the Company
Included below is certain summarised balance sheet information of the Company disclosed in accordance with Bermuda law.
2022 2021
US$m US$m
Subsidiaries 1,659 1,659
Current assets 467 1,506
Total assets 2,126 3,165
Share capital (refer note 23) 73 179
Share premium and capital reserves (refer note 25) 17 22
Revenue and other reserves 1,823 2,935
Shareholders’ funds 1,913 3,136
Current liabilities 213 29
Total equity and liabilities 2,126 3,165
Subsidiaries are shown at cost less amounts provided.
Notes to the Financial Statements
168
Jardine Matheson
Annual Report 2022
40 Principal Subsidiaries
The Group’s principal subsidiaries at 31st December 2022 are set out below:
Place of
incorporation/
principal place of
business Nature of business
Attributable
interests
Proportion of ordinary
shares and voting powers at
31st December 2022 held by
2022 2021
the Group
non-controlling
interests
% % % %
DFI Retail Group Holdings Ltd Bermuda/
China and
Southeast Asia
Grocery retail,
convenience stores,
health and beauty,
home furnishings,
restaurants and other
retailing
78
78
78 22
Hongkong Land Holdings Ltd Bermuda/
China and
Southeast Asia
Property development
& investment, leasing
& management
53
51
53 47
Jardine Cycle & Carriage Ltd Singapore/
Southeast Asia
A 50.1% interest in
PT Astra International
Tbk, motor trading and
holding
76
75
76 24
Jardine Matheson Ltd Bermuda/
Hong Kong
Group management
100
100
100 –
Jardine Motors Group
Holdings Ltd*
Bermuda/
China and
United Kingdom
Motor trading
100
100
100 –
Jardine Pacific Holdings Ltd Bermuda/
China and
Southeast Asia
Engineering &
construction, motor
trading, transport
services and
restaurants
100
100
100 –
Jardine Strategic Ltd
†
Bermuda/
China and
Southeast Asia
Holding
100
100
100 –
Mandarin Oriental
International Ltd
Bermuda/
Worldwide
Hotel management &
ownership
79
79
79 21
Matheson & Co., Ltd England/
United Kingdom
Holding and
management
100
100
100 –
PT Astra International Tbk Indonesia/
Indonesia
Automotive, financial
services, heavy
equipment, mining and
construction and
energy, agribusiness,
infrastructure and
logistics, information
technology and property
38
38
50 50
All subsidiaries are included in the consolidation.
Attributable interests represent the proportional holdings of the Company, held directly or through its subsidiaries, in the
issued share capitals of the respective companies, after the deduction of any shares held by the trustees of the employee
share option schemes of any such company and any shares in any such company owned by its wholly-owned subsidiaries.
* Jardine Motors is directly held by the Company. All other subsidiaries are held through subsidiaries.
†
At 31st December 2021, Jardine Strategic held 59% of the share capital of the Company. Following the reduction of capital on 18th May 2022
(refer note 23), Jardine Strategic no longer holds any shares in the Company.
Notes to the Financial Statements
169
Jardine Matheson
Annual Report 2022
41 Principal Accounting Policies
Basis of consolidation
(i) The consolidated financial statements include the financial statements of the Company, its subsidiaries, and the Group’s
interests in associates and joint ventures.
(ii) A subsidiary is an entity over which the Group has control. The Group controls an entity when the Group is exposed to,
or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its
power over the entity.
The purchase method of accounting is used to account for the acquisition of subsidiaries by the Group. The cost of an
acquisition includes the fair value at the acquisition date of any contingent consideration. The Group recognises the
non-controlling interest’s proportionate share of the recognised identifiable net assets of the acquired subsidiary.
In a business combination achieved in stages, the Group remeasures its previously held interest in the acquiree at its
acquisition-date fair value and recognises the resulting gain or loss in profit and loss. Changes in a parent’s ownership
interest in a subsidiary that do not result in the loss of control are accounted for as equity transactions. When control over a
previous subsidiary is lost, any remaining interest in the entity is remeasured at fair value and the resulting gain or loss is
recognised in profit and loss.
All material intercompany transactions, balances and unrealised surpluses and deficits on transactions between Group
companies have been eliminated. The cost of and related income arising from shares held in the Company by subsidiaries
are eliminated from shareholders’ funds and non-controlling interests, and profit, respectively.
(iii) An associate is an entity, not being a subsidiary or joint venture, over which the Group exercises significant influence.
A joint venture is a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to the
net assets of the joint venture. Joint control is the contractually agreed sharing of control of an arrangement, which exists
only when decisions about the relevant activities require unanimous consent of the parties sharing control.
Associates and joint ventures are included on the equity basis of accounting.
Profits and losses resulting from upstream and downstream transactions between the Group and its associates and joint
ventures are recognised in the consolidated financial statements only to the extent of unrelated investor’s interests in the
associates and joint ventures.
(iv) Non-controlling interests represent the proportion of the results and net assets of subsidiaries and their associates and
joint ventures not attributable to the Group.
(v) The results of subsidiaries, associates and joint ventures are included or excluded from their effective dates of
acquisition or disposal, respectively. The results of entities other than subsidiaries, associates and joint ventures are
included to the extent of dividends received when the right to receive such dividend is established.
Foreign currencies
Transactions in foreign currencies are accounted for at the exchange rates ruling at the transaction dates.
Assets and liabilities of subsidiaries, associates and joint ventures, together with all other monetary assets and liabilities
expressed in foreign currencies, are translated into United States dollars at the rates of exchange ruling at the year end.
Results expressed in foreign currencies are translated into United States dollars at the average rates of exchange ruling
during the year, which approximate the exchange rates at the dates of the transactions.
Exchange differences arising from the retranslation of the net investment in foreign subsidiaries, associates and joint
ventures, and of financial instruments which are designated as hedges of such investments, are recognised in other
comprehensive income and accumulated in equity under exchange reserves. On the disposal of these investments, such
exchange differences are recognised in profit and loss. Exchange differences on other investments measured at fair value
through profit and loss are recognised in profit and loss as part of the gains and losses arising from changes in their fair
value. Exchange differences on other investments measured at fair value through other comprehensive income are
recognised in other comprehensive income as part of the gains and losses arising from changes in their fair value. All other
exchange differences are recognised in profit and loss.
Notes to the Financial Statements
170
Jardine Matheson
Annual Report 2022
Goodwill and fair value adjustments arising on acquisition of a foreign entity after 1st January 2003 are treated as assets and
liabilities of the foreign entity and translated into United States dollars at the rate of exchange ruling at the year end.
Impairment of non-financial assets
Assets that have indefinite useful lives are not subject to amortisation and are tested for impairment annually and whenever
there is an indication that the assets may be impaired. Assets that are subject to amortisation are reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. For the purpose
of assessing impairment, assets are grouped at the lowest level for which there is separately identifiable cash flows.
Cash generating units or groups of cash-generating units to which goodwill has been allocated are tested for impairment
annually and whenever there is an indication that the units may be impaired. An impairment loss is recognised for the
amount by which the carrying amount of the asset exceeds its recoverable amount, which is the higher of an asset’s fair
value less costs to sell and value in use. Non-financial assets other than goodwill that suffered an impairment are reviewed
for possible reversal of the impairment annually.
Intangible assets
(i) Goodwill represents the excess of the sum of the consideration transferred, the amount of any non-controlling interests in
the acquiree, and the acquisition-date fair value of any previously held equity interest in the acquiree over the acquisition
date fair value of the Group’s share of the net identifiable assets acquired. Non-controlling interests are measured at their
proportionate share of the net identifiable assets at the acquisition date. If the cost of acquisition is less than the fair value
of the net assets acquired, the difference is recognised directly in profit and loss. Goodwill on acquisitions of subsidiaries is
included in intangible assets. Goodwill on acquisitions of associates and joint ventures is included in investment in
associates and joint ventures. Goodwill is allocated to cash-generating units or groups of cash-generating units for the
purpose of impairment testing and is carried at cost less accumulated impairment loss.
The profit or loss on disposal of subsidiaries, associates and joint ventures is stated after deducting the carrying amount of
goodwill relating to the entity sold.
(ii) Franchise rights, which are rights under franchise agreements, are separately identified intangible assets acquired as
part of a business combination. These franchise agreements are deemed to have indefinite lives because either they do not
have any term of expiry or their renewal by the Group would be probable and would not involve significant costs, taking into
account the history of renewal and the relationships between the franchisee and the contracting parties. The useful lives are
reviewed at each balance sheet date. Franchise rights are carried at cost less accumulated impairment loss.
(iii) Concession rights are operating rights for toll roads under service concession arrangements. The cost of the construction
services is amortised based on traffic volume projections.
(iv) Deferred exploration costs relating to mining resources are capitalised when the rights of tenure of a mining area are
current and is considered probable that the costs will be recouped through successful development and exploitation of the
area. Deferred exploration costs are amortised using the unit of production method, and are assessed for impairment if facts
and circumstances indicate that impairment may exist.
(v) Other intangible assets are stated at cost less accumulated amortisation. Amortisation is calculated on the straight line
basis to allocate the cost of intangible assets over their estimated useful lives.
Tangible fixed assets and depreciation
Freehold properties comprised land and buildings. Freehold land is stated at cost less any impairment. No depreciation is
provided on freehold land as it is deemed to have an indefinite life. Buildings on freehold and leasehold land are stated
at cost less any accumulated depreciation and impairment. Owner-occupied portions of multi-purpose properties are
accounted for as tangible fixed assets unless the portion is considered insignificant, in which case this portion is treated
as part of investment properties. Mining properties, which are contractual rights to mine and own coal and gold reserves
in specified concession areas, and other tangible fixed assets are stated at cost less amounts provided for depreciation.
Cost of mining properties includes expenditure to restore and rehabilitate coal and gold mining areas following the
completion of production.
Notes to the Financial Statements
171
Jardine Matheson
Annual Report 2022
Depreciation of tangible fixed assets other than mining properties is calculated on the straight-line basis to allocate the cost
or valuation of each asset to its residual value over its estimated useful life. The residual values and useful lives are reviewed
at each balance sheet date. The estimated useful lives are as follows:
Buildings
– hotels 21 to 150 years
– others 20 to 50 years
Surface, finishes and services of hotel properties 20 to 30 years
Leasehold improvements shorter of unexpired lease term or useful life
Plant and machinery 2 to 25 years
Furniture, equipment and motor vehicles 2 to 25 years
Mining properties are depreciated using the unit of production method.
Where the carrying amount of a tangible fixed asset is greater than its estimated recoverable amount, it is written down
immediately to its recoverable amount.
The profit or loss on disposal of tangible fixed assets is recognised by reference to their carrying amount.
Leases
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if
the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
Lease contracts may contain lease and non-lease components. The Group allocates the consideration in the contract to
lease and non-lease component based on their relative stand-alone prices. For property leases where the Group is a lessee,
it has elected not to separate lease and immaterial non-lease components and accounts for these items as a single lease
component.
(i) As a lessee
The Group enters into property leases for use as retail stores and offices, as well as leases for plant & machinery and motor
vehicles for use in its operations.
The Group recognises right-of-use assets and lease liabilities at the lease commencement dates, that is the dates the
underlying assets are available for use. Right-of-use assets are measured at cost, less any accumulated depreciation and
impairment, and adjusted for any remeasurement of lease liabilities. The cost of the right-of-use assets includes amounts of
the initial measurement of lease liabilities recognised, lease payments made at or before the commencement dates less any
lease incentives received, initial direct costs incurred and restoration costs. Right-of-use assets are depreciated using the
straight-line method over the shorter of their estimated useful lives and the lease terms.
When right-of-use assets meet the definition of investment properties, they are presented in investment properties, and are
initially measured at cost and subsequently measured at fair value, in accordance with the Group’s accounting policy.
The Group also has interests in leasehold land for use in its operations. Lump sum payments were made upfront to acquire
these land interests from their previous registered owners or governments in the jurisdictions where the land is located.
There are no ongoing payments to be made under the term of the land leases, other than insignificant lease renewal costs or
payments based on rateable value set by the relevant government authorities. These payments are stated at cost and are
amortised over the term of the lease which includes the renewal period if the lease can be renewed by the Group without
significant cost.
Lease liabilities are measured at the present value of lease payments to be made over the lease terms. Lease payments
include fixed payments (including in-substance fixed payments) less any lease incentives receivable, variable lease
payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease
payments also include the exercise price of a purchase option reasonably certain to be exercised and payments of penalties
for terminating a lease, if the lease term reflects the Group exercising that option. The variable lease payments that do not
depend on an index or a rate are recognised as expense in the period on which the event or condition that triggers the
payment occurs.
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In calculating the present value of lease payments, the Group uses the incremental borrowing rate at the lease
commencement date if the interest rate implicit in the lease is not readily determinable. Lease liabilities are measured at
amortised cost using the effective interest method. After the commencement date, the amount of lease liabilities is
increased by the interest costs on the lease liabilities and decreased by lease payments made.
The carrying amount of lease liabilities is remeasured when there is a change in the lease term, or there is a change in
future lease payments arising from a change in an index or rate, or there is a change in the Group’s estimate of the
amount expected to be payable under a residual guarantee, or there is a change arising from the reassessment of whether
the Group will be reasonably certain to exercise an extension or a termination option. When the lease liability is remeasured,
a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the
carrying amount of right-of-use asset has been reduced to zero.
The Group has elected not to recognise right-of-use assets and lease liabilities for leases of low value assets (i.e. US$5,000
or less) and short-term leases. Low value assets comprised IT equipment and small items of office furniture. Short-term
leases are leases with a lease term of 12 months or less. Lease payments associated with these leases are recognised on a
straight-line basis as an expense in profit and loss over the lease term.
Lease liabilities are classified as non-current liabilities unless payments are within 12 months from the balance sheet date.
(ii) As a lessor
The Group enters into contracts with lease components as a lessor primarily on its investment properties. These leases are
operating leases as they do not transfer the risk and rewards incidental to the underlying investment properties. The Group
recognises the lease payments received under these operating leases on a straight line basis over the lease term as part of
revenue in the profit and loss.
Investment properties
Properties including those under operating leases which are held for long-term rental yields or capital gains are classified
and accounted for as investment properties, but the business model does not necessarily envisage that the properties will
be held for their entire useful life. Investment properties are carried at fair value, representing estimated open market value
determined annually by independent qualified valuers who have recent experience in the location and category of the
investment property being valued. The market value of commercial properties are calculated on the discounted net rental
income allowing for reversionary potential. The market value of residential properties are arrived at by reference to market
evidence of transaction prices for similar properties. Changes in fair value are recognised in profit and loss.
Bearer plants
Bearer plants are stated at cost less any accumulated depreciation and impairment loss. The cost of bearer plants includes
costs incurred for field preparation, planting, fertilising and maintenance, capitalisation of borrowing costs incurred on loans
used to finance the development of immature bearer plants and an allocation of other indirect costs based on planted
hectares. Bearer plants are considered mature three to four years after planting and once they are generating fresh fruit
bunches which average four to six tonnes per hectare per year. Depreciation of mature bearer plants commences in the year
when the bearer plants are mature using the straight-line method over the estimated useful life of 20 years. Agricultural
produce growing on bearer plants comprise oil palm fruits which are measured at fair value. Changes in fair value are
recorded in the profit and loss.
Investments
The Group classifies its investments into the following measurement categories:
(i) Those to be measured subsequently at fair value, either through other comprehensive income or through profit and loss;
and
(ii) Those to be measured at amortised cost.
The classification is based on the management’s business model and their contractual cash flows characteristics.
Notes to the Financial Statements
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Equity investments are measured at fair value with fair value gains and losses recognised in profit and loss, unless
management has elected to recognise the fair value gains and losses through other comprehensive income. For equity
investments measured at fair value through other comprehensive income, gains or losses realised upon disposal are not
reclassified to profit and loss. Dividends from equity investments are recognised in profit and loss when the right to receive
payments is established.
Debt investments that are held for collection of contractual cash flows and for sale, where the cash flows represent solely
payments of principal and interest, are measured at fair value through other comprehensive income. On disposal, the
cumulative gain or loss previously recognised in other comprehensive income is reclassified from equity to profit and loss.
Interest income calculated using the effective interest rate method is recognised in profit and loss.
Debt investments that are held for collection of contractual cash flows till maturity, where the cash flows represent solely
payments of principal and interest, are measured at amortised cost. Any gain or loss arising on disposal is recognised in
profit and loss. Interest income calculated using the effective interest rate method is recognised in profit and loss.
Limited partnership investment funds, which are structured in the form of limited partnerships for the purpose of managing
investments for the benefit of its investors, are measured at fair value with fair value gains and losses recognised in profit
and loss. Distributions from these investment funds are recognised in profit and loss when the right to receive payments is
established.
At initial recognition, the Group measures an investment at its fair value plus, in the case of the investment not at fair value
through profit or loss, transaction costs that are directly attributable to the acquisition of the investment. Transaction costs
of investments carried at fair value through profit and loss are expensed in profit and loss.
Investments with embedded derivatives are considered in their entirety when determining whether their cash flows are
solely payment of principal and interest.
The Group assesses on a forward-looking basis the expected credit losses associated with both types of debt investments.
They are considered ‘credit impaired’ when one or more events that have a detrimental impact on the estimated future cash
flows have occurred. Any impairment is recognised in profit and loss.
All purchases and sales of investments are recognised on the trade date, which is the date that the Group commits to
purchase or sell the investments.
Investments are classified as non-current assets, unless in the case of debt investments with maturities less than 12 months
after the balance sheet date, are classified as current assets.
Properties for sale
Properties for sale, which comprise land and buildings held for resale, are stated at the lower of cost and net realizable
value. The cost of properties for sale comprises land costs, construction and other development costs, and borrowing costs.
Stocks and work in progress
Stocks, which principally comprise goods held for resale, are stated at the lower of cost and net realisable value. Cost is
determined by the first-in, first-out method, specific identification method and weighted average method. The cost of
finished goods and work in progress comprises raw materials, labour and an appropriate proportion of overheads.
Debtors
Financing and trade debtors are recognised initially at the amount of consideration that is unconditional and measured
subsequently at amortised cost using the effective interest method. Finance lease receivables are shown as the finance
lease receivables plus the guaranteed residual values at the end of the lease period, net of unearned finance lease income,
security deposits and provision for doubtful receivables. A contract asset arises if the Group has a right to consideration in
exchange for goods or services the Group has transferred to a customer, that is conditional on something other than the
passage of time. Repossessed collateral of finance companies are measured at the lower of the carrying amount of the
debtors in default and fair value less costs to sell. All other debtors, excluding derivative financial instruments, are
measured at amortised cost except where the effect of discounting would be immaterial. The Group assesses on a
forward-looking basis using the three stages expected credit losses model on potential losses associated with its consumer
Notes to the Financial Statements
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financing debtors and financing lease receivables. The impairment measurement is subject to whether there has been a
significant increase in credit risk. For trade debtors and contract assets, the Group applied the simplified approach as
permitted by IFRS 9, which requires expected lifetime losses to be recognised from initial recognition of the debtors.
Provision for impairment is established by considering potential financial difficulties of the debtor, probability that the
debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments. The carrying amount of the
asset is reduced through the use of an allowance account and the amount of the loss is recognised in arriving at operating
profit. When a debtor is uncollectible, it is written off against the allowance account. Subsequent recoveries of amount
previously written off are credited to profit and loss.
Debtors with maturities greater than 12 months after the balance sheet date are classified under non-current assets.
Cash and cash equivalents
For the purposes of the cash flow statement, cash and cash equivalents comprise deposits with banks and financial
institutions, bank and cash balances, and liquid investments, net of bank overdrafts. In the balance sheet, bank overdrafts
are included in current borrowings.
Liquid investments, which are readily convertible to known amounts of cash and which are subject to an insignificant risk of
change in value, are included in bank balances and other liquid funds and are stated at market value. Increases or decreases
in market value are recognised in profit and loss.
Provisions
Provisions are recognised when the Group has present legal or constructive obligations as a result of past events, it is
probable that an outflow of resources embodying economic benefits will be required to settle the obligations, and a reliable
estimate of the amount of the obligations can be made.
Borrowings and borrowing costs
Borrowings are initially recognised at fair value, net of transaction costs incurred. In subsequent periods, borrowings are
stated at amortised cost using the effective interest method.
On the issue of bonds which are convertible into a fixed number of ordinary shares of the issuing entity, the fair value of the
liability portion is determined using a market interest rate for an equivalent non-convertible bond; this amount is included in
long-term borrowings on the amortised cost basis until extinguished on conversion or maturity of the bond. The remainder of
the proceeds is allocated to the conversion option which is recognised and included in shareholders’ funds. On the issue of
convertible bonds which are not convertible into the issuing entity’s own shares or which are not convertible into a fixed
number of ordinary shares of the issuing entity, the fair value of the conversion option component is determined and
included in current liabilities, and the residual amount is allocated to the carrying amount of the bond. Any conversion
option component included in current liabilities is shown at fair value with changes in fair value recognised in profit
and loss.
Borrowing costs relating to major development projects are capitalised until the asset is substantially completed.
Capitalised borrowing costs are included as part of the cost of the asset. All other borrowing costs are expensed as incurred.
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 balance sheet date.
Current and deferred tax
The tax expense for the year comprises current and deferred tax. Tax is recognised in profit and loss, except to the extent that
it relates to items recognised in other comprehensive income or direct in equity. In this case, the tax is also recognised in
other comprehensive income or directly in equity, respectively.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance
sheet date in the countries where the Group operates and generates taxable income.
Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax
regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be
paid to the tax authorities.
Notes to the Financial Statements
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Deferred tax is provided, using the liability method, for all temporary differences arising between the tax bases of assets
and liabilities and their carrying values. Deferred tax is determined using tax rates and laws that have been enacted or
substantially enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realised or
the deferred tax liability is settled.
Provision for deferred tax is made on the revaluation of certain non-current assets and, in relation to acquisitions, on the
difference between the fair value of the net assets acquired and their tax base. Deferred tax is provided on temporary
differences associated with investments in subsidiaries, associates and joint ventures, except where the Group is able to
control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the
foreseeable future. Deferred tax assets relating to the carry forward of unused tax losses are recognised to the extent that it
is probable that future taxable profit will be available against which the unused tax losses can be utilised.
Employee benefits
(i) Pension obligations
The Group operates a number of defined benefit and defined contribution plans, the assets of which are held in trustee
administered funds.
Pension accounting costs for defined benefit plans are assessed using the projected unit credit method. Under this method,
the costs of providing pensions are charged to profit and loss spreading the regular cost over the service period in which
employees accrue benefits, in accordance with the advice of qualified actuaries, who carry out a full valuation of major plans
every year. Plan assets are measured at fair value.
Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in
other comprehensive income in the year in which they occur.
Past service costs are recognised immediately in profit and loss.
The Group’s total contributions relating to the defined contribution plans are charged to profit and loss in the year to which
they relate.
(ii) Share-based compensation
The Company and its subsidiaries and associates operate a number of equity settled employee share option schemes.
The fair value of the employee services received in exchange for the grant of the options in respect of options granted after
7th November 2002 is recognised as an expense. The total amount to be expensed over the vesting period is determined by
reference to the fair value of the options granted as determined on the grant date. At each balance sheet date, the entity
revises its estimates of the number of options that are expected to become exercisable. The impact of the revision of original
estimates, if any, is recognised in profit and loss.
Derivative financial instruments
The Group only enters into derivative financial instruments in order to hedge underlying exposures and not as speculative
investments. Derivative financial instruments are initially recognised at fair value on the date a derivative contract is entered
into and are subsequently remeasured at their fair value. The method of recognising the resulting gain or loss is dependent
on the nature of the item being hedged. The Group designates certain derivatives as a hedge of the fair value of a recognised
asset or liability (‘fair value hedge’), or a hedge of a forecasted transaction or of the foreign currency risk on a firm
commitment (‘cash flow hedge’), or a hedge of a net investment in a foreign entity.
At inception of the hedge relationship, the Group documents the economic relationship between hedging instruments and
hedged items including whether changes in the cash flows of the hedging instruments are expected to offset changes in the
cash flows of hedged items. The Group documents its risk management objective and strategy for undertaking its hedge
transactions.
Notes to the Financial Statements
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Changes in the fair value of derivatives that are designated and qualify as fair value hedges and that are highly effective,
are recognised in profit and loss, along with any changes in the fair value of the hedged asset or liability that is attributable
to the hedged risk. The gain or loss relating to the effective portion of interest rate swaps hedging fixed rate borrowings is
recognised in profit and loss within finance costs, together with changes in the fair value of the hedged fixed rate borrowings
attributable to interest rate risk. The gain or loss relating to the ineffective portion is recognised in profit and loss. When a
hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, the cumulative
adjustment to the carrying amount of a hedged item for which the effective interest method is used is amortised to profit and
loss over the residual period to maturity.
Changes in the fair value of derivatives that are designated and qualify as cash flow hedges and that are highly effective,
are recognised in other comprehensive income and accumulated in equity under hedging reserves. Changes in the fair value
relating to the ineffective portion is recognised immediately in profit and loss. Where the hedged item results in the
recognition of a non-financial asset or of a non-financial liability, the deferred gains and losses are included in the initial
measurement of the cost of the asset or liability. The deferred amounts are ultimately recognised in profit and loss as the
hedged item affects profit and loss. Otherwise, amounts deferred in hedging reserves are transferred to profit and loss in the
same periods during which the hedged firm commitment or forecasted transaction affects profit and loss. The gain or loss
relating to the effective portion of the interest rate swaps hedging variable rate borrowings is recognised in profit and loss
within finance cost at the same time as the interest expense on the hedged borrowings. When a hedging instrument expires
or is sold, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in hedging
reserves at that time remains in the hedging reserves and is recognised when the committed or forecasted transaction
ultimately is recognised in profit and loss. When a committed or forecasted transaction is no longer expected to occur,
the cumulative gain or loss that was reported in hedging reserves is immediately transferred to profit and loss.
Certain derivative transactions, while providing effective economic hedges under the Group’s risk management policies,
do not qualify for hedge accounting under the specific rules in IFRS 9. Changes in the fair value of any derivative instruments
that do not qualify for hedge accounting under IFRS 9 are recognised immediately in profit and loss.
Hedges of net investments in foreign entities are accounted for on a similar basis to that used for cash flow hedges. Any gain
or loss on the hedging instrument relating to the effective portion of the hedge is recognised in other comprehensive income
and accumulated in exchange reserves; the gain or loss relating to the ineffective portion is recognised immediately in profit
and loss.
The fair value of derivatives which are designated and qualify as effective hedges are classified as non-current assets or
liabilities if the remaining maturities of the hedged assets or liabilities are greater than 12 months after the balance
sheet date.
Insurance contracts
Insurance contracts are those contracts that transfer significant insurance risk.
Premiums on insurance contracts are recognised as revenue proportionately over the period of coverage. The portion of
premium received on in-force contracts that relates to unexpired risks at the balance sheet date is reported as the unearned
premium liability. Claims and loss adjustment expenses are charged to profit and loss as incurred based on the estimated
liabilities for compensation owed to contract holders or third parties damaged by the contract holders. They include direct
and indirect claims settlement costs and arise from events that have occurred up to the balance sheet date even if they have
not yet been reported to the Group. The Group does not discount its liabilities for unpaid claims. Liabilities for unpaid claims
are estimated using the input of assessments for individual cases reported to the Group and statistical analyses for the
claims incurred but not reported.
Financial guarantee contracts under which the Group accepts significant risk from a third party by agreeing to compensate
that party on the occurrence of a specified uncertain future event are accounted for in a manner similar to insurance
contracts. Provisions are recognised when it is probable that the Group has obligations under such guarantees and an
outflow of resources embodying economic benefits will be required to settle the obligations.
Notes to the Financial Statements
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Offsetting financial instruments
Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally
enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and
settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be
enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the company or the
counterparty.
Non-trading items
Non-trading items are separately identified to provide greater understanding of the Group’s underlying business
performance. Items classified as non-trading items include fair value gains or losses on revaluation of investment properties
and equity investments which are measured at fair value through profit and loss; gains and losses arising from the sale of
businesses, investments and properties; impairment of non-depreciable intangible assets, associates and joint ventures
and other investments; provisions for the closure of businesses; acquisition-related costs in business combinations; and
other credits and charges of a non-recurring nature that require inclusion in order to provide additional insight into
underlying business performance.
Earnings per share
Basic earnings per share are calculated on profit attributable to shareholders and on the weighted average number of shares
in issue during the year. The weighted average number excludes the Company’s share of the shares held by subsidiaries.
For the purpose of calculating diluted earnings per share, profit attributable to shareholders is adjusted for the effects of the
conversion of dilutive potential ordinary shares of subsidiaries, associates or joint ventures, and the weighted average
number of shares is adjusted for the number of shares which are deemed to be issued for no consideration under the Senior
Executive Share Incentive Schemes based on the average share price during the year.
Dividends
Dividends proposed or declared after the balance sheet date are not recognised as a liability at the balance sheet date.
The nominal amount of the ordinary shares issued as a result of election for scrip is capitalised out of the share premium
account or other reserves, as appropriate.
Revenue recognition
(i) Property
Properties for sale
Revenue from properties for sale is recognised when or as the control of the property is transferred to the customer.
Revenue consists of the fair value of the consideration received and receivable, net of value added tax, rebates and
discounts. Proceeds received in advance for pre-sale are recorded as contract liabilities. Depending on the terms of the
contract and the laws that apply to the contract, control of the property may transfer over time or at a point in time.
If control of the property transfers over time, revenue is recognised over the period of the contract by reference to the
progress towards complete satisfaction of that performance obligation. Otherwise, revenue is recognised at a point in time
when the customer obtains control of the property.
The progress towards complete satisfaction of the performance obligation is measured based on the Group’s efforts or
inputs to the satisfaction of the performance obligation, by reference to the contract costs incurred up to the end of reporting
period as a percentage of total estimated costs for each contract.
For properties for sale under development and sales contract for which the control of the property is transferred at a point in
time, revenue is recognised when the customer obtains the physical possession or the legal title of the completed property
and the Group has present right to payment and the collection of the consideration is probable.
Investment properties
Rental income from investment properties are accounted for on an accrual basis over the lease terms.
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(ii) Motor vehicles
Revenue from the sale of motor vehicles, including motorcycles, and rendering of aftersales services, is recognised through
dealership structures. In instances where the contracts with customers include multiple deliverables, the separate
performance obligations are identified. The transaction price, which is represented by the consideration fixed in the contract
and net of discounts if any, is then allocated to each performance obligation based on their relative stand-alone selling
prices. When a stand-alone selling price is not directly observable, it is estimated. Revenue from the sale of motor vehicles is
recognised when control of the motor vehicles is transferred to the customer, which generally coincides with the point of
delivery. Revenue from the aftersales services is recognised when the services are rendered. In instances where payments
are received in advance from customers but there are unfulfilled aftersales services obligations by the Group, a contract
liability is recognised for which revenue is subsequently recognised over time as the services are rendered.
(iii) Retail and restaurants
Revenue from retail includes sales from the supermarket and hypermarkets, health and beauty stores, and home furnishing
stores. Revenue consists of the fair value of goods sold to customers, net of returns, discounts and sales related taxes.
Sale of goods is recognised at the point of sale, when the control of the asset is transferred to the customers, and is recorded
at the net amount received from customers.
Revenue from restaurants comprises the sale of food and beverages and is recognised at the point when the Group sells the
food and beverages to the customer and payment is due immediately when the customer purchases the food and beverages.
(iv) Financial services
Revenue from consumer financing and finance leases is recognised over the term of the respective contracts based on a
constant rate of return on the net investment, using the effective interest method. Revenue from insurance premiums is
recognised proportionately over the period of coverage. The portion of premium received on in-force contracts that relates to
unexpired risks at the balance sheet date is reported as the unearned premium liability.
(v) Engineering, heavy equipment, mining, construction and energy
Engineering
Revenue from engineering, including supplying, installing and servicing engineering equipment is recognised over time
based on the enforceable right to payment for the performance completed to date and using the output method on the basis
of direct measurements of the value to customer of the Group’s performance to date, as evidenced by the certification by
qualified architects and/or surveyors. When there is more than one single performance obligation under a contract or any
contract modification creates a separate performance obligation, the revenue will be allocated to each performance
obligation based on their relative stand-alone selling prices. Payments received in advance from customers but there are
unfulfilled obligations, are recognised as contract liabilities.
Claims, variations and liquidated damages are accounted for as variable consideration and are included in contract revenue
provided that it is highly probable that a significant reversal will not occur in the future.
Heavy equipment
Revenue from heavy equipment includes sale of heavy equipment and rendering of maintenance services. In instances
where the contracts with customers include multiple deliverables, the separate performance obligations are identified and
generally referred as sale of heavy equipment and rendering of maintenance services. The transaction price, which is
represented by the consideration fixed in the contract and net of discounts if any, is then allocated to each performance
obligation based on their relative stand-alone selling prices. Revenue from the sale of heavy equipment is recognised when
control of the heavy equipment is transferred to the customer, which generally coincides with the point of delivery. Payments
from customers for maintenance services are received in advance and recognised as a contract liability. Revenue from the
maintenance services is recognised when customer has received and consumed benefit from the services.
Notes to the Financial Statements
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Mining
Revenue from mining includes contract mining services and through the Group’s own production. The performance
obligations identified under contract mining services relate to the extraction of mining products and removal of overburden
on behalf of the customers. Revenue is recognised when the services are rendered by reference to the volume of mining
products extracted and overburden removed at contracted rates, and payment is due upon delivery. Revenue from its own
mining production is recognised when control of the output is transferred to the customer, which generally coincides with
the point of delivery.
Construction
Revenue from construction includes contracts to provide construction and foundation services for building, civil and
maritime works. Under the contracts, the Group’s construction activities creates or enhances an asset or work in progress
that the customer controls as the asset is created or enhanced, and hence revenue is recognised over time by reference to
the progress towards completing the construction works. Under this method, the revenue recognised is based on the latest
estimate of the total value of the contract and actual completion rate determined by reference to the physical state of
progress of the works.
Claims, variations and liquidated damages are accounted for as variable consideration and are included in contract revenue
provided that it is highly probable that a significant reversal will not occur in the future.
(vi) Hotels
Revenue from hotel ownership comprises amounts earned in respect of rental of rooms, food and beverage sales, and other
ancillary services and goods supplied by the subsidiary hotels. Revenue is recognised over the period when rooms are
occupied or services are performed. Revenue from the sale of food and beverages and goods is recognised at the point of
sale when the food and beverages and goods are delivered to customers. Payment is due immediately when the hotel guest
occupies the room and receives the services and goods.
Revenue from hotel and residences branding and management comprises gross fees earned from the branding and
management of all the hotels and residences operated by the Group. Branding and management fees are recognised over
time as determined by the relevant contract, taking into account the performance of the hotels, and the sales and operating
expenses of the residences. Fees charged to the subsidiary hotels are eliminated upon consolidation. Hotels and residences
are invoiced in accordance with the terms of contract and fees are payable when invoiced.
Pre-operating costs
Pre-operating costs are expensed as they are incurred.
Government grants
Grants from government are recognised at their fair values where there is reasonable assurance that the grants will be
received, and the Group will comply with the conditions associated with the grants.
Grants that compensate the Group for expenses incurred are recognised in the profit and loss as other income on a
systematic basis in the period in which the expenses are recognised. Unconditional grants are recognised in the profit and
loss as other income when they become receivable.
Grants related to assets are deducted in arriving at the carrying value of the related assets.
Notes to the Financial Statements
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42 Standards and Amendments Issued But Not Yet Effective
A number of new standard and amendments effective for accounting periods beginning after 2022 have been published and
will be adopted by the Group from their effective dates. The Group is currently assessing the potential impact of these
standard and amendments but expects their adoption will not have a significant impact on the Group’s consolidated
financial statements. The more important standard and amendments are set out below.
(i) IFRS 17 ‘Insurance Contracts’ (effective from 1st January 2023) will only apply to the Group’s insurance businesses in
Indonesia. It is a new accounting standard for insurance contracts covering recognition, measurement, presentation and
disclosure. Under IFRS 17, all profits will be recognised in the profit and loss over the life of the contracts as insurance
services are provided. The Group expects that, even though the total profit recognised over the lifetime of the insurance
contracts will not change, it will emerge differently under IFRS 17. For certain insurance contracts, profits are currently
recognised in the profit and loss on initial recognition of the contracts. The different timing of profit recognition will result in
an increase in liabilities on adoption of IFRS 17. A portion of profits, previously recognised and accumulated in equity under
the existing standard, IFRS 4, will now be recorded as a liability under IFRS 17. The Group is in the process of assessing the
estimated impact on its consolidated financial statements in the period of initial application.
(ii) Amendment to IAS 12 – Deferred Tax related to Assets and Liabilities arising from a Single Transaction (effective
1st January 2023) requires companies to recognise deferred tax on transactions that, on initial recognition, give rise to equal
amounts of taxable and deductible temporary differences. They typically apply to transactions such as leases of lessees and
decommissioning obligations and will require the recognition of additional deferred tax assets and liabilities. The Group is
assessing the potential impact on the Group’s consolidated financial statements.
Notes to the Financial Statements
181
Jardine Matheson
Annual Report 2022
43 Financial Risk Management
Financial risk factors
The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, interest rate risk
and price risk), credit risk and liquidity risk.
The Group’s treasury function co-ordinates, under the directions of the board of Jardine Matheson Limited, financial risk
management policies and their implementation on a group-wide basis. The Group’s treasury policies are designed to
manage the financial impact of fluctuations in interest rates and foreign exchange rates and to minimise the Group’s
financial risks. The Group uses derivative financial instruments, principally interest rate swaps, caps and collars,
cross-currency swaps, forward foreign exchange contracts, foreign currency options, and commodity forward contracts and
options as appropriate for hedging transactions and managing the Group’s assets and liabilities in accordance with the
Group’s financial risk management policies. Financial derivative contracts are executed between third party banks and the
Group entity that is directly exposed to the risk being hedged. Hedge accounting is applied to remove the accounting
mismatch between the hedging instrument and the hedged item. The effective portion of the change in the fair value of
the hedging instrument is deferred into the cash flow hedge reserve through other comprehensive income and will be
recognised in profit and loss when the hedged item affects profit and loss. In general, the volatility in profit or loss can be
reduced by applying hedge accounting.
Hedge effectiveness is determined at the inception of the hedge relationship, and through periodic prospective
effectiveness assessments to ensure that an economic relationship exists between the hedged item and hedging
instrument.
For hedges of foreign currency purchases, the Group enters into hedge relationships where the critical terms of the hedging
instrument match exactly with the terms of the hedged item. The Group assesses whether the derivative designated in each
hedging relationship has been and expected to be effective in offsetting changes in cash flow of the hedged item using the
hypothetical derivative method.
Ineffectiveness may arise if the timing of the forecast transaction changes from what was originally estimated for hedges of
foreign currency purchases, or if there are changes in the credit risk of the Group or the derivative counterparty.
The Group enters into interest rate swaps and caps that have similar critical terms as the hedged item, such as reference
rate, reset dates, payment dates, maturities and notional amount. The Group does not hedge 100% of its loans, therefore the
hedged item is identified as a proportion of the outstanding loans up to the notional amount of the swaps. As all critical
terms matched during the year, effective economic relationship existed between the swaps and the loans.
Hedge ineffectiveness for interest rate swaps is assessed using the same principles as for hedges of foreign currency
purchases. It may occur due to:
(i) The credit value/debit value adjustment on the interest rate swaps which is not matched by the loan;
(ii) Differences in critical terms between the interest rate swaps and loans; and
(iii) The effects of the forthcoming reforms to IBOR, because these might take effect at a different time and have a different
impact on the hedged item (the floating-rate debt) and the hedging instrument (the interest rate swap used to hedge
the debt).
The ineffectiveness during 2022 or 2021 in relation to interest rate swaps was not material.
Notes to the Financial Statements
182
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Annual Report 2022
(i) Market risk
Foreign exchange risk
Entities within the Group are exposed to foreign exchange risk from future commercial transactions, net investments in
foreign operations and net monetary assets and liabilities that are denominated in a currency that is not the entity’s
functional currency.
Entities in the Group use cross-currency swaps, forward foreign exchange contracts and foreign currency options in a
consistent manner to hedge firm and anticipated foreign exchange commitments and manage their foreign exchange risk
arising from future commercial transactions. The Group does not usually hedge its net investments in foreign operations
except in circumstances where there is a material exposure arising from a currency that is anticipated to be volatile and the
hedging is cost effective. Group entities are required to manage their foreign exchange risk against their functional currency.
Foreign currency borrowings are swapped into the entity’s functional currency using cross-currency swaps except where the
foreign currency borrowings are repaid with cash flows generated in the same foreign currency. The purpose of these hedges
is to mitigate the impact of movements in foreign exchange rates on assets and liabilities and the profit and loss account of
the Group.
Currency risks as defined by IFRS 7 arise on account of monetary assets and liabilities being denominated in a currency that
is not the functional currency. At 31st December 2022 the Group’s Indonesian rupiah functional entities had United States
dollar denominated net monetary assets of US$438 million (2021: US$87 million). At 31st December 2022, if the United
States dollar had strengthened/weakened by 10% against the Indonesian rupiah with all other variables unchanged, the
Group’s profit after tax would have been US$34 million higher/lower (2021: US$7 million higher/lower), arising from foreign
exchange gains/losses taken on translation. The impact on amounts attributable to the shareholders of the Company would
be US$17 million higher/lower (2021: US$5 million higher/lower). This sensitivity analysis ignores any offsetting foreign
exchange factors and has been determined assuming that the change in foreign exchange rates had occurred at the balance
sheet date. The stated change represents management’s assessment of reasonably possible changes in foreign exchange
rates over the period until the next annual balance sheet date. There are no other significant monetary balances held by
Group companies at 31st December 2022 that are denominated in a non-functional currency. Differences resulting from the
translation of financial statements into the Group’s presentation currency are not taken into consideration.
Since the Group manages the interdependencies between foreign exchange risk and interest rate risk of foreign currency
borrowings using cross-currency swaps, the sensitivity analysis on financial impacts arising from cross-currency swaps is
included in the sensitivity assessment on interest rates under the interest rate risk section.
Interest rate risk
The Group is exposed to interest rate risk through the impact of rate changes on interest bearing liabilities and assets.
These exposures are managed partly by using natural hedges that arise from offsetting interest rate sensitive assets and
liabilities, and partly through fixed rate borrowings and the use of derivative financial instruments such as interest rate
swaps, caps and collars. The Group monitors interest rate exposure on a monthly basis by currency and business unit,
taking into consideration proposed financing and hedging arrangements. The Group’s guideline is to maintain 40% to 60%
of its gross borrowings, exclusive of the financial services companies, in fixed rate instruments. At 31st December 2022 the
Group’s interest rate hedge exclusive of the financial services companies was 55% (2021: 59%), with an average tenor of six
years (2021: seven years). The financial services companies borrow predominately at a fixed rate. The interest rate profile of
the Group’s borrowings after taking into account hedging transactions are set out in note 29.
Cash flow interest rate risk is the risk that changes in market interest rates will impact cash flows arising from variable rate
financial instruments. Borrowings at floating rates therefore expose the Group to cash flow interest rate risk. The Group
manages this risk by using forward rate agreements to a maturity of one year, and by entering into interest rate swaps,
caps and collars for a maturity of up to five years. Forward rate agreements and interest rate swaps have the economic effect
of converting borrowings from floating rate to fixed rate, caps provide protection against a rise in floating rates above a
pre-determined rate, whilst collars combine the purchase of a cap and the sale of a floor to specify a range in which an
interest rate will fluctuate. Details of interest rate swaps and cross currency swaps are set out in note 34.
Notes to the Financial Statements
183
Jardine Matheson
Annual Report 2022
Fair value interest rate risk is the risk that the value of a financial asset or liability and derivative financial instruments will
fluctuate because of changes in market interest rates. The Group manages its fair value interest rate risky entering into
interest rate swaps which have the economic effect of converting borrowings from fixed rate to floating rate, to maintain the
Group’s fixed rate instruments within the Group’s guideline.
At 31st December 2022, if interest rates had been 100 basis points higher/lower with all other variables held constant,
the Group’s profit after tax would have been US$12 million (2021: US$9 million) higher/lower, and hedging reserves would
have been US$107 million (2021: US$161 million) higher/lower as a result of fair value changes to cash flow hedges.
The sensitivity analysis has been determined assuming that the change in interest rates had occurred at the balance sheet
date and had been applied to the exposure to interest rate risk for both derivative and non-derivative financial instruments
in existence at that date. There is no significant sensitivity resulting from interest rate caps and collars. The 100 basis point
increase or decrease represents management’s assessment of a reasonably possible change in those interest rates which
have the most impact on the Group, specifically the United States, Hong Kong and Indonesian rates, over the period until the
next annual balance sheet date. In the case of effective fair value hedges, changes in the fair value of the hedged items
caused by interest rate movements balance out in the profit and loss account against changes in the fair value of the
hedging instruments. Changes in market interest rates affect the interest income or expense of non-derivative variable-
interest financial instruments, the interest payments of which are not designated as hedged items of cash flow hedges
against interest rate risks. As a consequence, they are included in the calculation of profit after tax sensitivities. Changes in
the market interest rate of financial instruments that were designated as hedging instruments in a cash flow hedge to hedge
payment fluctuations resulting from interest rate movements affect the hedging reserves and are therefore taken into
consideration in the equity-related sensitivity calculations.
Price risk
The Group is exposed to securities price risk because of its equity investments and limited partnership investment funds
(‘LP investment funds’) which are measured at fair value through profit and loss, and debt investments which are
measured at fair value through other comprehensive income. Gains and losses arising from changes in the fair value of
these investments are recognised in profit and loss or other comprehensive income according to their classification.
The performance of these investments are monitored regularly, together with an assessment of their relevance to the Group’s
long-term strategic plans. Details of these investments are contained in note 16.
The Group’s interest in these investments are unhedged. At 31st December 2022, if the price of these investments
had been 25% higher/lower with all other variables held constant, total equity would have been US$705 million
(2021: US$738 million) higher/lower, of which US$447 million (2021: US$514 million) relating to equity investments would
be reflected in operating profit as non-trading items. The sensitivity analysis has been determined based on a reasonable
expectation of possible valuation volatility over the next 12 months.
The Group is exposed to financial risks arising from changes in commodity prices, primarily coal, gold, steel rebar and
copper. The Group considers the outlook for coal, gold, steel rebar and copper prices regularly in considering the need for
active financial risk management. The Group’s policy is generally not to hedge commodity price risk, although limited
hedging may be undertaken for strategic reasons. In such cases the Group uses forward contracts and foreign currency
options to hedge the price risk. To mitigate or hedge the price risk, Group entities may enter into a forward contract and
foreign currency options to buy the commodity at a fixed price at a future date, or a forward contract to sell the commodity at
a fixed price or pre-determined range of prices at a future date.
Notes to the Financial Statements
184
Jardine Matheson
Annual Report 2022
(ii) Credit risk
The Group’s credit risk is primarily attributable to deposits with banks, contractual cash flows of debt investments carried at
amortised cost and those measured at fair value through other comprehensive income, credit exposures to customers and
derivative financial instruments with a positive fair value. The Group has credit policies in place and the exposures to these
credit risks are monitored on an ongoing basis.
The Group manages its deposits with banks and financial institutions and transactions involving derivative financial
instruments by monitoring credit ratings and capital adequacy ratios of counterparties, and limiting the aggregate risk to any
individual counterparty. The utilisation of credit limits is regularly monitored. Similarly transactions involving derivative
financial instruments are with banks with sound credit ratings and capital adequacy ratios. In developing countries it may be
necessary to deposit money with banks that have a lower credit rating, however the Group only enters into derivative
transactions with counterparties which have credit ratings of at least investment grade. Management does not expect any
counterparty to fail to meet its obligations.
The Group’s debt investments are considered to be low risk investments. The investments are monitored for credit
deterioration based on credit ratings from major rating agencies.
In respect of credit exposures to customers, the Group has policies in place to ensure that sales on credit without collateral
are made principally to corporate companies with an appropriate credit history and credit insurance is purchased for
businesses where it is economically effective. The Group normally obtains collateral over vehicles from consumer financing
debtors towards settlement of vehicle receivables. Customers give the right to the Group to sell the repossessed collateral
or take any other action to settle the outstanding receivable. Sales to other customers are made in cash or by major
credit cards.
The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the balance sheet after
deducting any impairment allowance.
(iii) Liquidity risk
Prudent liquidity risk management includes managing the profile of debt maturities and funding sources, maintaining
sufficient cash and marketable securities, and ensuring the availability of funding from an adequate amount of committed
credit facilities and the ability to close out market positions. The Group’s ability to fund its existing and prospective debt
requirements is managed by maintaining diversified funding sources with adequate committed funding lines from high
quality lenders, and by monitoring rolling short-term forecasts of the Group’s cash and gross debt on the basis of expected
cash flows. In addition long-term cash flows are projected to assist with the Group’s long-term debt financing plans.
At 31st December 2022, total available borrowing facilities amounted to US$26.8 billion (2021: US$28.8 billion) of which
US$16.2 billion (2021: US$16.7 billion) was drawn down. Of the committed facilities, US$4.9 billion which are referenced to
US$ LIBOR will expire beyond 30th June 2023, the cessation date of US$ LIBOR. Undrawn committed facilities, in the form of
revolving credit and term loan facilities, and undrawn uncommitted facilities totalled US$7.1 billion (2021: US$8.0 billion)
and US$3.5 billion (2021: US$4.1 billion), respectively.
Notes to the Financial Statements
185
Jardine Matheson
Annual Report 2022
The following table analyses the Group’s non-derivative financial liabilities, net-settled derivative financial liabilities and
gross-settled derivative financial instruments into relevant maturity groupings based on the remaining period at the balance
sheet date to the contractual maturity date. Derivative financial liabilities are included in the analysis if their contractual
maturities are essential for an understanding of the timing of the cash flows. The amounts disclosed in the table are the
contractual undiscounted cash flows.
Within
one
year
Between
one and
two years
Between
two and
three years
Between
three and
four years
Between
four and
five years
Beyond
five
years
Total
undiscounted
cash flows
US$m US$m US$m US$m US$m US$m US$m
At 31st December 2022
Borrowings 4,755 4,183 3,095 1,306 410 4,791 18,540
Lease liabilities 868 691 509 392 306 1,460 4,226
Creditors 8,039 66 44 20 22 57 8,248
Net settled derivative
financial instruments – 1 1 – – – 2
Gross settled derivative
financial instruments
– inflow 1,145 630 362 30 – – 2,167
– outflow 1,063 892 949 43 30 1,180 4,157
Estimated losses on
insurance contracts 254 – – – – – 254
At 31st December 2021
Borrowings 4,860 2,663 3,605 1,569 1,113 5,093 18,903
Lease liabilities 903 668 501 387 304 1,584 4,347
Creditors 7,164 78 51 23 13 51 7,380
Net settled derivative
financial instruments 6 1 – – – – 7
Gross settled derivative
financial instruments
– inflow 2,322 861 892 745 57 1,213 6,090
– outflow 2,091 834 759 743 59 1,210 5,696
Estimated losses on
insurance contracts 259 – – – – – 259
Included in total undiscounted borrowings at 31st December 2022, US$2,366 million are referenced to US$ LIBOR and
mature beyond 30th June 2023, the cessation date of US$ LIBOR.
Capital management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern whilst
seeking to maximise benefits to shareholders and other stakeholders. Capital is equity as shown in the consolidated
balance sheet plus net borrowings.
The Group actively and regularly reviews and manages its capital structure to ensure optimal capital structure and
shareholder returns, taking into consideration the future capital requirements of the Group and capital efficiency, prevailing
and projected profitability, projected operating cash flows, projected capital expenditures and projected strategic
investment opportunities. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends
paid to shareholders, purchase Group shares, return capital to shareholders, issue new shares or sell assets to reduce debt.
Notes to the Financial Statements
186
Jardine Matheson
Annual Report 2022
The Group monitors capital on the basis of the Group’s consolidated gearing ratio and consolidated interest cover before
taking into account the impact of IFRS 16 ‘Leases’. The gearing ratio is calculated as net borrowings divided by total equity.
Net borrowings is calculated as total borrowings less bank balances and other liquid funds. Interest cover is calculated as
the sum of underlying operating profit, before the deduction of amortisation/depreciation of right-of-use assets, net of
actual lease payments; and share of results of associates and joint ventures, divided by net financing charges excluding
interest on lease liabilities. The ratios are monitored both inclusive and exclusive of the Group’s financial services
companies, which by their nature are generally more highly leveraged than the Group’s other businesses. The Group does
not have a defined gearing or interest cover benchmark or range.
The ratios at 31st December 2022 and 2021 are as follows:
2022 2021
Gearing ratio exclusive of financial services companies (%) 13 11
Gearing ratio inclusive of financial services companies (%) 18 16
Interest cover exclusive of financial services companies (times) 15 14
Interest cover inclusive of financial services companies (times) 17 17
Fair value estimation
(i) Financial instruments that are measured at fair value
For financial instruments that are measured at fair value in the balance sheet, the corresponding fair value measurements
are disclosed by level of the following fair value measurement hierarchy:
(a) Quoted prices (unadjusted) in active markets for identical assets or liabilities (‘quoted prices in active markets’)
The fair values of listed securities and bonds are based on quoted prices in active markets at the balance sheet date.
The quoted market price used for listed investments held by the Group is the current bid price.
(b) Inputs other than quoted prices in active markets that are observable for the asset or liability, either directly or indirectly
(‘observable current market transactions’)
The fair values of derivative financial instruments are determined using rates quoted by the Group’s bankers at the balance
sheet date. The rates for interest rate swaps and caps, cross-currency swaps and forward foreign exchange contracts are
calculated by reference to market interest rates and foreign exchange rates.
The fair values of unlisted investments mainly include club and school debentures, are determined using prices quoted by
brokers at the balance sheet date.
(c) Inputs for assets or liabilities that are not based on observable market data (‘unobservable inputs’)
The fair values of other unlisted equity investments and LP investment funds are determined using valuation techniques by
reference to observable current market transactions (including price-to earnings and price-to book ratios of listed securities
of entities engaged in similar industries) or the market prices of the underlying investments with certain degree of entity
specific estimates or discounted cash flow by projecting the cash inflows from these investments.
There were no changes in valuation techniques during the year.
Notes to the Financial Statements
187
Jardine Matheson
Annual Report 2022
The table below analyses financial instruments carried at fair value, by the levels in the fair value measurement hierarchy:
Quoted
prices in active
markets
Observable
current market
transactions
Unobservable
inputs Total
US$m US$m US$m US$m
2022
Assets
Other investments
– equity investments 1,484 54 252 1,790
– debt investments 763 – 10 773
– limited partnership investment funds – – 256 256
2,247 54 518 2,819
Derivative financial instruments at fair value
– through other comprehensive income – 185 – 185
2,247 239 518 3,004
Liabilities
Contingent consideration payable – – (9) (9)
Derivative financial instruments at fair value
– through other comprehensive income – (20) – (20)
– through profit and loss – (4) – (4)
– (24) (9) (33)
2021
Assets
Other investments
– equity investments 1,565 53 437 2,055
– debt investments 777 – – 777
– LP investment funds – – 122 122
2,342 53 559 2,954
Derivative financial instruments at fair value
– through other comprehensive income – 42 – 42
– through profit and loss – 12 – 12
2,342 107 559 3,008
Liabilities
Contingent consideration payable – – (9) (9)
Derivative financial instruments at fair value
– through other comprehensive income – (78) – (78)
– (78) (9) (87)
An investment of US$233 million which was valued using ‘unobservable inputs’ in 2021 was transferred to valued using
‘quoted prices in active markets’ during 2022, upon flotation of the shares on a recognised stock exchange. There were no
transfers among the three categories during the year ended 31st December 2021.
Notes to the Financial Statements
188
Jardine Matheson
Annual Report 2022
Movement of unlisted equity and debt investments, and limited partnership investment funds, which are valued based on
unobservable inputs during the year ended 31st December are as follows:
2022 2021
US$m US$m
At 1st January 559 379
Exchange differences (28) (4)
Additions 217 152
Disposals (2) –
Transfer to ‘quoted prices in active markets’ (233) –
Net change in fair value during the year included in profit and loss 5 32
At 31st December 518 559
(ii) Financial instruments that are not measured at fair value
The fair values of current debtors, bank balances and other liquid funds, current creditors, current borrowings and current
lease liabilities are assumed to approximate their carrying amounts due to the short-term maturities of these assets and
liabilities.
The fair values of long-term borrowings are based on market prices or are estimated using the expected future payments
discounted at market interest rates. The fair values of non-current lease liabilities are estimated using the expected future
payments discounted at market interest rates.
Notes to the Financial Statements
189
Jardine Matheson
Annual Report 2022
Financial instruments by category
The fair values of financial assets and financial liabilities, together with carrying amounts at 31st December 2022 and 2021
are as follows:
Fair value
of hedging
instruments
Fair value
through
profit and
loss
Fair value
through other
comprehensive
income
Financial
assets at
amortised
costs
Other
financial
liabilities
Total
carrying
amount Fair value
US$m US$m US$m US$m US$m US$m US$m
2022
Financial assets
measured at
fair value
Other investments
– equity investments – 1,790 – – – 1,790 1,790
– debt investments – 10 763 – – 773 773
– limited partnership
investment funds – 256 – – – 256 256
Derivative financial
instruments 185 – – – – 185 185
185 2,056 763 – – 3,004 3,004
Financial assets
not measured at
fair value
Debtors – – – 8,463 – 8,463 8,067
Bank balances – – – 5,898 – 5,898 5,898
– – – 14,361 – 14,361 13,965
Financial liabilities
measured at
fair value
Derivative financial
instruments (24) – – – – (24) (24)
Contingent
consideration
payable – (9) – – – (9) (9)
(24) (9) – – – (33) (33)
Financial liabilities
not measured at
fair value
Borrowings – – – – (16,236) (16,236) (15,612)
Lease liabilities – – – – (3,723) (3,723) (3,723)
Trade and other
payable excluding
non-financial
liabilities – – – – (8,239) (8,239) (8,239)
– – – – (28,198) (28,198) (27,574)
Notes to the Financial Statements
190
Jardine Matheson
Annual Report 2022
Fair value
of hedging
instruments
Fair value
through
profit and
loss
Fair value
through other
comprehensive
income
Financial
assets at
amortised
costs
Other
financial
liabilities
Total
carrying
amount Fair value
US$m US$m US$m US$m US$m US$m US$m
2021
Financial assets
measured at
fair value
Other investments
– equity investments – 2,055 – – – 2,055 2,055
– debt investments – – 777 – – 777 777
– limited partnership
investment funds – 122 – – – 122 122
Derivative financial
instruments 54 – – – – 54 54
54 2,177 777 – – 3,008 3,008
Financial assets
not measured at
fair value
Debtors – – – 7,993 – 7,993 8,054
Bank balances – – – 7,282 – 7,282 7,282
– – – 15,275 – 15,275 15,336
Financial liabilities
measured at
fair value
Derivative financial
instruments (78) – – – – (78) (78)
Contingent
consideration
payable – (9) – – – (9) (9)
(78) (9) – – – (87) (87)
Financial liabilities
not measured at
fair value
Borrowings – – – – (16,658) (16,658) (16,944)
Lease liabilities – – – – (3,834) (3,834) (3,829)
Trade and other
payable excluding
non-financial
liabilities – – – – (7,371) (7,371) (7,371)
– – – – (27,863) (27,863) (28,144)
The financial instruments of the Group at 31st December 2022 which are referenced to IBOR with maturities beyond the
cessation of the respective benchmarks comprised long term borrowings and lease liabilities amounted to US$1,933 million
and US$619 million, respectively.
Notes to the Financial Statements
191
Jardine Matheson
Annual Report 2022
44 Critical Accounting Estimates and Judgements
Estimates and judgements used in preparing the financial statements are continually evaluated and are based on historical
experience and other factors, including expectations of future events that are believed to be reasonable according to
circumstances and conditions available. The existing and potential impacts arising from climate change and the COVID-19
pandemic have been considered when applying estimates and assumptions in the preparation of the financial statements,
including the Group’s assessment of impairment of assets and the independent valuers’ valuation of the Group’s investment
properties. Given the uncertainty of the impact of COVID-19, the actual results may differ from these accounting estimates.
The estimates and assumptions that have a significant effect on the reported amounts of assets and liabilities, and income
and expenses are discussed below.
Acquisition of subsidiaries, associates and joint ventures
The initial accounting on the acquisition of subsidiaries, associates and joint ventures involves identifying and determining
the fair values to be assigned to the identifiable assets, liabilities and contingent liabilities of the acquired entities. The fair
values of franchise rights, concession rights, tangible assets, right-of-use assets, investment properties and bearer plants
are determined by independent valuers by reference to market prices or present value of expected net cash flows from the
assets. Any changes in the assumptions used and estimates made in determining the fair values, and management’s ability
to measure reliably the contingent liabilities of the acquired entity will impact the carrying amount of these assets and
liabilities.
On initial acquisition or acquisition of further interests in an entity, an assessment of the level of control or influence
exercised by the Group is required. For entities where the Group has a shareholding of less than 50%, an assessment of the
Group’s level of voting rights, board representation and other indicators of influence is performed to consider whether the
Group has de facto control, requiring consolidation of that entity, or significant influence, requiring classification as an
associate, or joint control, requiring classification as a joint venture.
Investment properties
The fair values of investment properties, which are principally held by Hongkong Land, are determined by independent
valuers on an open market for existing-use basis calculated on the discounted net income allowing for reversionary
potential. For investment properties in Hong Kong, the Chinese mainland and Singapore, capitalisation rates in the range of
2.80% to 3.40% for office (2021: 2.75% to 3.35%) and 3.75% to 5.00% for retail (2021: 3.75% to 5.00%) are used by
Hongkong Land in the fair value determination.
Consideration has been given to assumptions that are mainly based on market conditions existing at the balance sheet date
and appropriate capitalisation rates. These estimates are regularly compared to actual market data and actual transactions
entered into by the Group.
The independent valuers have considered climate change, sustainability, resilience and environmental, social and
governance (‘ESG’) within their valuations. Properties held by the Group are considered to currently display ESG
characteristics that would be expected in the market, and therefore there were no direct and tangible pricing adjustments
required to the valuation of investment properties. The Group will monitor these considerations for each reporting period.
Impairment of assets
The Group tests annually whether goodwill and other assets that have indefinite useful lives suffered any impairment. Other
assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the
asset exceeds its recoverable amount. The recoverable amount of an asset or a cash-generating unit is determined based on
the higher of its fair value less costs to sell and its value-in-use, calculated on the basis of management’s assumptions and
estimates. Changing the key assumptions, including the amount of estimated coal and gold reserves, the discount rates or
the growth rate assumptions in the cash flow projections, could materially affect the value-in-use calculations.
The results of the impairment reviews undertaken at 31st December 2022 on the Group’s indefinite life franchise rights
indicated that no impairment charge was necessary. If there is a significant increase in the discount rate and/or a significant
adverse change in the projected performance of the business to which these rights attach, it may be necessary to take an
impairment charge to profit and loss in the future.
Notes to the Financial Statements
192
Jardine Matheson
Annual Report 2022
Management undertook an impairment assessment on the basis that the carrying amount of the investment in Siam City
Cement as at 31st December 2022 was higher than its fair value based on prevailing market share price, as well as the
ongoing challenging cost environment and outlook. The determination of the recoverable amount requires significant
judgements by management, particularly management’s view on key internal inputs and external market conditions which
impact future cash flows, discount rates and long-term growth rates. Management foresees that energy and other cost
pressures will remain elevated, while decarbonisation of cement production in the long-term will require significant
operational advances and technological innovation that will further increase costs and investments. This necessitated a
downward revision on management’s assumptions over projected growth rates used in the discounted cash flow models.
Based on management’s assessment, as the recoverable amount determined using value-in-use computation is lower than
the carrying amount of the investment, an impairment charge of US$114 million (2021: nil) was recognised. If there are
significant changes to the above estimates, it may be necessary to take an additional impairment charge to the profit and
loss account in the future. The sensitivity of carrying amount to key assumptions and estimates is disclosed in note 15.
The loss allowances for financial assets are based on assumptions about risk of default and expected loss rates. The Group
uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on the Group’s
past history, existing market conditions as well as forward looking estimates at the balance sheet date (refer note 17).
Income taxes
The Group is subject to income taxes in numerous jurisdictions. Significant judgement is required in determining the
worldwide provision for income taxes. There are many transactions and calculations for which the ultimate tax determination
is uncertain during the ordinary course of business. Where the final tax outcome of these matters is different from the
amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in
which such determination is made.
Provision for deferred tax follows the way management expects to recover or settle the carrying amount of the related assets
or liabilities, which the management may expect to recover through use, sale or combination of both. Accordingly, deferred
tax will be calculated at income tax rate, capital gains tax rate or combination of both. There is a rebuttable presumption in
International Financial Reporting Standards that investment properties measured at fair value are recovered through sale.
Thus, deferred tax on revaluation of investment properties held by the Group are calculated at the capital gains tax rate.
Recognition of deferred tax assets, which principally relate to tax losses, depends on the management’s expectation of
future taxable profit that will be available against which the tax losses can be utilised. The outcome of their actual utilisation
may be different.
Pension obligations
The present value of the pension obligations depends on a number of factors that are determined on an actuarial basis using
a number of assumptions. The assumptions used in determining the net cost/income for pensions include the discount rate.
Any changes in these assumptions will impact the carrying amount of pension obligations.
The Group determines the appropriate discount rate at the end of each year. This is the interest rate that should be used to
determine the present value of estimated future cash outflows expected to be required to settle the pension obligations.
In determining the appropriate discount rate, the Group considers the interest rates of high-quality corporate bonds that are
denominated in the currency in which the benefits will be paid and that have terms to maturity approximating the terms of
the related pension obligation.
Other key assumptions for pension obligations are based in part on current market conditions.
Notes to the Financial Statements
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Leases
Liabilities and the corresponding right-of-use assets arising from leases are initially measured at the present value of the
lease payments at the commencement date, discounted using the interest rates implicit in the leases, or if that rate cannot
be readily determinable, the Group uses the incremental borrowing rate. The Group generally uses the incremental borrowing
rate as the discount rate.
The Group applies the incremental borrowing rate with reference to the rate of interest that the Group would have to pay to
borrow, over a similar term as that of the lease, the funds necessary to obtain an asset of a similar value to the right-of-use
asset in the country where it is located.
Lease payments to be made during the lease term will be included in the measurement of a lease liability. The Group
determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to
extend the lease if it is reasonably certain to be exercised, or any period covered by an option to terminate the lease, if it is
reasonably certain not to be exercised.
The Group has the option, under some of its leases to lease the assets for additional terms. The Group applies judgement in
evaluating whether it is reasonably certain to exercise the option to renew. That is, the Group considers all relevant factors
that create an economic incentive for it to exercise the renewal. After the commencement date, the Group reassesses the
lease term if there is a significant event or change in circumstances that is within its control and affects its ability to exercise
or not to exercise the option to renew. The assessment of whether the Group is reasonably certain to exercise the options
impacts the lease terms, which significantly affects the amount of lease liabilities and right-of-use assets recognised.
Revenue recognition
The Group uses the percentage of completion method to account for its contract revenue of certain development properties
sales. The stage of completion is measured by reference to the contract costs incurred to date compared to the estimated
total costs for the contract. Significant assumptions are required to estimate the total contract costs and the recoverable
variation works that affect the stage of completion and the contract revenue respectively. In making these estimates,
management has relied on past experience and the work of specialists.
For revenue from the heavy equipment maintenance contracts, the Group exercises judgement in determining the level of
actual service provided to the end of the reporting period as a proportion of the total services to be reported, and estimated
total costs of the maintenance contracts. When it is probable that total contract costs will exceed total contract revenue,
the expected loss is immediately recognised as a current year expense.
For other contracts with customers which include multiple deliverables, the separate performance obligations are identified.
The transaction price is then allocated to each performance obligation based on their stand-alone selling prices. From time
to time, when a stand-alone selling price may not be directly observable, the Group estimated the selling price using
expected costs of rendering such services and adding an appropriate margin.
Non-trading items
The Group uses underlying business performance in its internal financial reporting to distinguish between the underlying
profits and non-trading items. The identification of non-trading items requires judgement by management, but follows the
consistent methodology as set out in the Group’s accounting policies.
Interest rate benchmark reform
Following the financial crisis, the reform and replacement of benchmark interest rates such as US$ LIBOR and other
interbank offered rates (‘IBORs’) has become a priority for global regulators. There is currently uncertainty around the timing
and precise nature of these changes on some IBORs.
To transition existing contracts and agreements that reference IBORs (including US$ LIBOR) to risk free rates (‘RFRs’) such as
US$ LIBOR to Secured Overnight Financing Rate, adjustments for term differences and credit differences might need to be
applied to RFRs, to enable the two benchmark rates to be economically equivalent on transition. The greatest change will be
amendments to the contractual terms of the IBORs-referenced floating-rate debt and the associated swap and the
corresponding update of the hedge designation. However, the changed reference rate might also affect other systems,
processes, risk and valuation models, as well as having tax and accounting implications.
Notes to the Financial Statements
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Group Treasury is managing the IBORs transition plan, which has progressed throughout 2022. US$ LIBOR is expected to
cease on 30th June 2023, and the Group’s transition plan is on track to ensure conversion of existing US$ LIBOR contracts by
the date of cessation.
Relief applied
The Group has applied the following reliefs that were introduced by the amendments made to IFRS 9 Financial Instruments in
September 2019 and August 2020:
(i) When considering the ‘highly probable’ requirement, the Group has assumed that the IBORs interest rate on which the
Group’s hedged debt is based does not change as a result of IBORs reform.
(ii) In assessing whether the hedge is expected to be highly effective on a forward-looking basis, the Group has assumed
that the IBORs interest rate on which the cash flows of the hedged debt and the interest rate swap that hedges it is not
altered by IBORs reform.
(iii) The Group has not recycled the cash flow hedge reserve relating to the period after the reforms are expected to
take effect.
(iv) For financial instruments measured using amortised cost measurement, changes to the basis for determining the
contractual cash flows required by interest rate benchmark reform are reflected by adjusting their effective interest rate.
No immediate gain or loss is recognised.
(v) For lease liabilities where there is a change to the basis for determining the contractual cash flows, the lease liability is
remeasured by discounting the revised lease payments using a discount rate that reflects the change in the interest rate
where the change is required by IBOR reform.
Assumptions made
In calculating the change in fair value attributable to the hedged risk of floating-rate debt, the Group has made the following
assumptions that reflect its current expectations:
(i) The IBORs-referenced floating-rate debt will move to RFRs during 2023 and the spread will be similar to the spread
included in the interest rate swap used as the hedging instrument.
(ii) No other changes to the terms of the floating-rate debt are anticipated.
Independent Auditors’ Report
To the members of Jardine Matheson Holdings Limited
Report on the audit of the Group financial statements
Opinion
In our opinion, Jardine Matheson Holdings Limited’s Group (“the Group”) financial statements (the “financial statements”):
• give a true and fair view of the state of the Group’s affairs as at 31st December 2022 and of its profit and cash flows for the
year then ended;
• have been properly prepared in accordance with International Financial Reporting Standards (IFRSs) as issued by the
International Accounting Standards Board (IASB); and
• have been prepared in accordance with the requirements of the Companies Act 1981 (Bermuda).
We have audited the financial statements, included within the Annual Report, which comprise: the Consolidated Balance
Sheet as at 31st December 2022; the Consolidated Profit and Loss Account, the Consolidated Statement of Comprehensive
Income, the Consolidated Cash Flow Statement, and the Consolidated Statement of Changes in Equity for the year then
ended; and the notes to the financial statements, which include a description of the significant accounting policies
(“thePrincipal Accounting Policies”).
Certain required disclosures have been presented in the Corporate Governance section, rather than in the Notes to the
financial statements. These disclosures are cross-referenced from the financial statements and are identified as audited.
Our opinion is consistent with our reporting to the Audit Committee.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law.
Ourresponsibilities under ISAs (UK) are further described in the Auditors’ 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 remained independent of the Group in accordance with the ethical requirements that are relevant to our audit of the
financial statements in the UK, which includes the Financial Reporting Council’s (“FRC’s”) Ethical Standard as applicable to
listed entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
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Our audit approach
Overview
Materiality
• Overall Group materiality: US$561 million (2021: US$290 million), based on 1.0% (2021: 0.5%) of the net assets of
theGroup.
• Specific Group materiality, applied to balances and transactions not related to investment properties: US$246 million
(2021: US$190 million), based on 5% of consolidated underlying profit before tax of the Group (2021: based on 5% of a
three-year average of consolidated underlying profit before tax of the Group).
Audit scope
• A full scope audit was performed on five entities – Jardine Cycle & Carriage Limited (which includes PT Astra
International Tbk), Hongkong Land Holdings Limited, DFI Retail Group Holdings Limited, Mandarin Oriental International
Limited (“MOIL”) and Jardine Motors Group UK Ltd (“Motors UK”).
• These entities, together with procedures performed on central functions and at the Group level, accounted for 94% of
the Group’s revenue, 91% of the Group’s profit before tax, 91% of the Group’s underlying profit before tax and 94% of
net assets.
Key audit matters
• Valuation of investment properties;
• Carrying values of certain investments in associates and joint ventures; and
• Provisioning for consumer financing debtors.
The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial
statements. In particular, we looked at where the Directors made subjective judgements, for example in respect of
significant accounting estimates that involved making assumptions and considering future events that are inherently
uncertain. As in all of our audits we also addressed the risk of management override of internal controls, including
evaluating whether there was evidence of bias by the Directors that represented a risk of material misstatement due to fraud.
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the audit of
the financial statements of the current period and include the most significant assessed risks of material misstatement
(whether or not due to fraud) identified by the auditors, including those which had the greatest effect on: the overall audit
strategy, the allocation of resources in the audit and directing the efforts of the engagement team. These matters, and any
comments we make on the results of our procedures thereon, 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.
This is not a complete list of all risks identified by our audit.
The key audit matters below are consistent with last year.
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Key audit matter How our audit addressed the key audit matter
Valuation of investment properties
Refer to note 44 (Critical Accounting
Estimates and Judgements) and note 13
(Investment Properties) to the financial
statements.
The fair value of the Group’s
investmentproperties amounted to
US$31,813 million at 31st December
2022, with a revaluation loss of
US$930 million recognised as a
non-trading item in the Consolidated
Profit and Loss account for the year.
TheGroup’s property portfolio
principally consists of commercial
properties.
The valuation of the Group’s investment
property portfolio is inherently
subjective due to, among other factors,
the individual nature of each property,
its location, prevailing market returns
and the expected future rentals for that
particular property.
The valuations were carried out by third
party valuers (the ‘valuers’). Valuations
are principally derived using the
income capitalisation method. There is
inherent estimation uncertainty and
judgement in determining a property’s
valuation as the valuers make
assumptions in key areas, in particular
in respect of capitalisation rates and
market rents.
We focused on the valuation of
investment properties due to the
significant judgements and estimates
involved in determining the valuations.
We understood management’s controls and processes for determining the
valuation of investment properties and assessed the inherent risk of material
misstatement by considering the degree of estimation uncertainty and the
judgement involved in determining assumptions to be applied.
We assessed the valuers’ qualifications and their expertise, considering whether
there were any matters that might have affected their objectivity or may have
imposed scope limitations upon their work. We found no evidence to suggest
thatthe objectivity of the valuers in their performance of the valuations was
compromised.
Our work focused on the highest value properties in the portfolio, in particular the
properties located in Central held by Hongkong Land, and MOIL’s commercial
property under development, in Hong Kong.
We read the valuation reports covering the majority of the Group’s investment
property portfolio to consider whether the valuation methodology used was
appropriate for each property and suitable for use in determining the carrying
value. We performed testing, on a sample basis, of the input data used in the
valuation process to satisfy ourselves of the accuracy of the property information
supplied to the valuers by management, for example agreeing lease terms to
tenancy agreements and other supporting documents.
We understood and assessed the controls over data used in the valuation of the
investment property portfolio and management’s review of the valuations.
The audit team, including our valuation experts, attended meetings with the
valuers at which the valuations, key assumptions and climate change risk
considerations were discussed. We compared the capitalisation rates used by the
valuers with an estimated range of expected rates, determined via reference to
published benchmarks and market information. We evaluated year-on-year
movements in capital values with reference to publicly available information and
rentals with reference to prevailing market rents. We evaluated whether the
assumptions used were appropriate in light of the evidence provided by relevant
transactions during the year.
With the support of our internal valuation experts, we also questioned the
external valuers as to the extent to which recent market transactions and expected
rental values, which they made use of in deriving their valuations, took into
account the impact of climate change and related ESG considerations.
Overall, we concluded that the assumptions used in the valuations were
appropriate.
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Key audit matter How our audit addressed the key audit matter
Carrying values of certain investments
in associates and joint ventures
Refer to note 44 (Critical Accounting
Estimates and Judgements) and note 15
(Associates and Joint Ventures) to the
financial statements.
As at 31st December 2022, investments
in associates and joint ventures totalled
US$17,856 million.
We focused in particular on the Group’s
investments in Siam City Cement Public
Company Limited (‘SCCC’) and
Robinsons Retail Holdings Inc (‘RRHI’).
Management undertook impairment
assessments, as required by
accounting standards, where indicators
of impairment were identified. Based
on management’s assessments the
recoverable amounts of both SCCC and
RRHI, were lower than the carrying
values of the investments. Impairment
charges of US$114 million and
US$171million, respectively, were
recognised as non-trading items in the
Consolidated Profit and Loss account
for the year.
There is inherent estimation uncertainty
and judgement in determining the
recoverable amount of the carrying
value of the investments. Assumptions
are made by management in preparing
their valuation models, particularly
management’s view on key internal
inputs and external market conditions
which impact future cash flows,
thediscount rates and long-term
growth rates.
We focused on the carrying value of
investments in associates and joint
ventures due to the significant
judgements and estimates involved to
determine whether the carrying values
of the investments are supportable.
We assessed the inherent risk of material misstatement by considering the degree
of estimation uncertainty and the judgement involved in determining assumptions
to be applied. We have understood and reviewed management’s impairment
assessment process, including the identification of indicators of impairment and
appropriateness of the valuation models used. In respect of RRHI and SCCC, due
to the prolonged and current deficit in the share price valuation when compared
against the Group’s carrying value, we challenged management on the existence
of impairment indicators. Management identified heightened risks of impairment
and we performed the following procedures on management’s subsequent
impairment models.
With the support of our valuation experts, we benchmarked and challenged
keyassumptions in management’s valuation models used to determine the
recoverable amounts against market data. This included whether assumptions of
the projected cash flows of the businesses, long term growth rates and discount
rates were appropriate.
We tested the discounted cash flow models used in the assessments, checked
theaccuracy of the calculations, compared historical budgeted performance with
actual results and agreed the financial information used with management
approved budgets to assess the reasonableness of the cash flows used in
themodels.
Our challenge focused particularly on the discount rates and long-term growth
rates used. We compared the discount rates used with the range of typical
discount rates used in similar businesses and considered whether management
had incorporated all relevant macro-economic and country-specific factors,
aswell as those specific to those investments.
For the growth rates we compared each rate used with the range of growth rates
used by similar businesses, considering whether management had considered
macro-economic and country-specific factors specific to the relevant businesses.
We also tested management’s historical estimation accuracy by comparing
previous projected growth rates against the actual growth achieved.
We evaluated the sensitivity analyses performed by management and performed
our own independent sensitivity analyses on the key assumptions and considered
a range of alternative outcomes to determine the sensitivity of the valuation
models to changes in these assumptions.
As the recoverable amounts determined by management were lower than the
carrying amounts of the investments, we checked the calculation of the
impairment charges recognised.
Overall, we found the assumptions made by management to determine the
discount rates, long-term growth rates and the cash flows used in the valuation
models to be reasonable.
We assessed the adequacy of the disclosures related to the carrying value of
investments in associates and joint ventures in the context of IFRS disclosure
requirements, including those relating to sensitivities, and agreed disclosures in
the financial statements to the models tested and the assumptions applied in
those models. We are satisfied that appropriate disclosure has been made.
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Key audit matter How our audit addressed the key audit matter
Provisioning for consumer financing
debtors
Refer to note 41 (Principal Accounting
Policies) and note 17 (Debtors) to the
financial statements.
As at 31st December 2022, net
consumer financing debtors of the
Group amounted to US$4,108 million,
primarily relating to PT Astra Sedaya
Finance (‘ASF’) and PT Federal
International Finance (‘FIF’),
subsidiaries of the Group, which form
part of PT Astra International Tbk.
Assessing the provisions for
impairment of consumer financing
debtors requires management to make
complex and significant judgements
over both the timing of recognition and
the estimation of any impairment
required.
Provisions for impairment are
calculated on a collective basis using
models driven by a number of
observable inputs and management
assumptions. Assumptions and
parameters used in the calculations are
based on historical data and current
customer credit data, and include the
delinquency status of the borrowers.
The historical loss rates are then
adjusted to reflect current and
forward-looking information on
macro-economic factors affecting the
settlement of the amounts due from
consumer financing debtors. There is
an inherent degree of uncertainty in
determining the expected future losses.
We focused on the provisioning for
consumer financing debtors due to the
complex and subjective judgements
involved in determining any
impairment provisions required.
We understood management’s controls and processes for determining the
provisions for consumer financing debtors and assessed the inherent risk of
material misstatement by considering the degree of estimation uncertainty and
the complexity of management’s models and judgement involved in determining
the assumptions applied.
We tested the design and operation of key controls over the credit reviews and
approval processes that management has in place on the granting financing.
Inaddition, for consumer financing debtors’ data and impairment calculations,
we performed the following to obtain sufficient audit evidence:
• understood the identification of impairment events and how management
identified all such events;
• assessed the classification of financing debtors that were impaired; and
• independently recalculated the provisions for impairment of financing debtors
and compared it with management’s calculation and understood any significant
differences identified.
We understood management’s basis for determining whether a financing debtor
is impaired and assessed whether that basis was justified through discussions
with management, our understanding of the Group’s lending portfolios and our
broader industry knowledge.
We assessed the models used and the assumptions applied by management,
such as the basis on which the probability of default is calculated and estimated
losses in the event of default, and how these compared with historical data
adjusting for current market conditions and trends. We assessed whether
historical experience considered by management was representative of current
circumstances and of recent losses incurred in the portfolios. We re-performed
provision calculations independently and understood any significant differences
identified, if any.
We tested, on a sample basis, the completeness and accuracy of the consumer
financing debtors’ data from underlying systems that are used in the calculations
and models to determine the impairment provisions.
In considering the appropriateness of provisions, we assessed whether consumer
financing debtors in higher risk segments had been appropriately considered and
captured in the impairment assessment by challenging management on their key
areas of judgement, including the segmentation of the portfolio, the period of
historical loss data used, identification of the most relevant macro-economic
factors affecting the settlement of the amounts due, and estimated market value
for collateral held, based on our understanding of the borrowers and current
market conditions.
We assessed whether management’s assumptions were supported by available
industry data, historical data and actual loss rate data.
Overall, based on the procedures performed, we found that the provisions for
impairment were supportable.
We also assessed the adequacy of the disclosures related to provisions for
consumer financing debtors in the context of IFRS disclosure requirements.
Weare satisfied that appropriate disclosure has been made.
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How we tailored the audit scope
Jardine Matheson Holdings Limited is a holding company of a diversified group of businesses, some of which are
separatelylisted.
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 structure of the Group, the accounting processes and controls, and the
industries in which it operates.
The Group’s accounting processes are based upon the finance function in each main business. Each business is responsible
for its own accounting records and controls and which report to a group finance function for that business. Each of the
Group’s listed subsidiaries have, in addition to their own group finance functions, corporate governance structures and
public reporting requirements. These businesses report financial information to the Group’s finance function in Hong Kong
to enable the preparation of the Group consolidated financial statements.
In establishing the overall approach to the Group audit, we determined the type of work that needed to be performed by
members of the Group engagement team or by component auditors from member firms within the PwC Network operating
under our instruction. Where the work was performed by component auditors, we determined the level of involvement
necessary for us to have in the audit work at those components to be able to conclude whether sufficient, appropriate audit
evidence had been obtained as a basis for our opinion on the financial statements as a whole. The Group engagement team
was involved in the significant reporting entities in scope for Group reporting during the audit cycle through a combination
of meetings, visits and conference calls. The lead Group audit partner and other senior team members undertook two visits
to Hong Kong and were involved throughout the year in regular conference calls and other forms of communication to direct
and oversee the audit. The lead Group audit partner and other senior team members also visited both Indonesia and
Singapore during the year to oversee and review the work of component teams in those locations, along with regular
communication through conference calls and remote review of the work of component teams.
For five entities – Jardine Cycle & Carriage Limited (which includes PT Astra International Tbk), Hongkong Land Holdings
Limited, DFI Retail Group Holdings Limited, Mandarin Oriental International Limited and Jardine Motors Group UK Ltd
(MotorsUK) – a full scope audit of the complete financial information was performed. The audit opinion of DFI Retail Group
Holdings Limited contains a qualification on the comparability of the prior year results of Yonghui Superstores Co., Ltd,
asignificant associate of DFI Retail Group Holdings Limited. No such qualification is required to these financial statements
given the significantly higher level of materiality. These entities, together with procedures performed on central functions
and at the Group level (on the consolidation and other areas of significant judgement), accounted for 94% of the Group’s
revenue, 91% of the Group’s profit before tax, 91% of the Group’s underlying profit before tax and 94% of net assets.
Thisgave us the evidence we needed for our opinion on the financial statements as a whole.
The impact of climate risk on our audit
In planning and executing our audit, we have considered the potential impact of climate change on the Group’s business
and its financial statements. We also considered the Group’s governance framework and preliminary risk assessment
process as outlined in the Task Force on Climate-related Financial Disclosures (“TCFD”) section within this Annual Report.
The Group has set out its commitments to decarbonise its portfolio of assets becoming “net-zero” in major regional
economies, including by 2050 in Hong Kong and Vietnam, and by 2060 in China and Indonesia. Further information is
provided in the Group’s TCFD section of this Annual Report. Whilst the Group is committed to net zero carbon emission by
2060, management continues to refine its plans to achieve this. The Group has started to quantify some of the impacts that
may arise, in particular focusing on their property, supermarket, hotel and mining businesses.
Climate change could have a significant impact on the Group’s financial business as the operations and strategy of the
Group are adapted to address the potential financial and non-financial risks which could arise from both the physical and
transitional risks. Management has evaluated these as disclosed in the TCFD section of this Annual Report.
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We considered the following areas could potentially be materially impacted by climate risk and consequently we focused our
audit work in these areas:
• Valuation of investment properties;
• Carrying value of coal mining assets;
• Carrying value of certain other tangible assets; and
• Carrying value of certain investments in associates and joint ventures.
To respond to the audit risks identified in these areas we tailored our audit approach to address these, in particular, we:
• Gained an understanding and evaluated whether the impact of both physical and transition risks arising due to climate
risk had been appropriately included in the valuation models of investment properties or recoverable value assessments
of the Group’s other assets;
• Reviewed and challenged management and the external valuers (where applicable) on how climate related risks had been
incorporated into the valuation models and recoverable value assessments; and
• Where climate risk relates to a key audit matter, our audit response is given in the key audit matters section of the report.
We also considered the consistency of the disclosures in relation to climate change (including the TCFD section) within the
Annual Report with the financial statements and our knowledge obtained from our audit. This included reading and
challenging the disclosures given in the narrative reporting within the other information to the impact disclosed within the
financial statements.
Our procedures did not identify any material impact in the context of our audit of the financial statements as a whole, or our
key audit matters, for the year ended 31st December 2022.
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality.
These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and
extent of our audit procedures on the individual financial statement line items and disclosures and in evaluating the effect of
misstatements, both individually and in aggregate on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Overall Group materiality
US$561 million (2021: US$290 million)
How we determined it
1.0% of the net assets of the Group (2021: 0.5% of the net assets of the Group).
Rationale for benchmark applied
Net assets is a primary measure used by the shareholders in assessing the
performance of the Group, together with the consolidated profit before tax and
consolidated underlying profit before tax, which we have used as the basis for our
specific materiality as detailed below.
We increased our benchmark from 0.5% to 1% in the year to align the measure with
general auditing practice.
We set a specific materiality level of US$246 million (2021: US$190 million), which was applied to balances and transactions
not related to investment properties. This was based upon 5% of the Group’s consolidated underlying profit before tax for
the year ended 31st December 2022 (2021: based upon 5% of the Group’s consolidated three-year average underlying profit
before tax, considering the Group’s consolidated underlying profit before tax for the years ended 31st December 2019,
31stDecember 2020 and 31st December 2021). In arriving at this judgement, we had regard to the fact that underlying profit
is an important financial indicator of the Group.
For each component in the scope of our Group audit, we allocated a materiality that is less than our overall Group materiality.
The range of overall materiality allocated across components was US$16 million to US$249 million. The range of specific
materiality allocated across components was US$3 million to US$160 million.
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We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected and
undetected misstatements exceeds overall materiality. Specifically, we use performance materiality in determining the scope
of our audit and the nature and extent of our testing of account balances, classes of transactions and disclosures, for
example in determining sample sizes. Our performance materiality was 75% (2021: 75%) of specific materiality, amounting
to US$184 million (2021: US$142 million) for the Group financial statements.
In determining the performance materiality, we considered a number of factors – the history of misstatements, risk
assessment and aggregation risk and the effectiveness of controls – and concluded that an amount in the middle of our
normal range was appropriate.
We agreed with the Audit Committee that we would report to them misstatements identified during our audit above
US$12million (2021: US$9 million), other than classifications within the Consolidated Profit and Loss Account or
Consolidated Balance Sheet, which were only reported above US$55 million (2021: US$58 million). We also reported
misstatements below this amount that in our view, warranted reporting for qualitative reasons.
Conclusions relating to going concern
Our evaluation of the Directors’ assessment of the Group’s ability to continue to adopt the going concern basis of
accountingincluded:
• Evaluating the inherent risks to the Group’s business models and analysed how those risks might affect the Group’s
financial resources or ability to continue operations over the going concern period;
• Assessing management’s base case and severe but plausible downside scenario models supporting the Board’s going
concern assessment, evaluating the process by which the assessments have been drawn up, ensuring that the
calculations in the model were mathematically accurate and that the overall methodology used was appropriate;
• Considering sensitivities over the level of available financial resources indicated by the Group’s financial forecasts taking
account of reasonably possible, but not unrealistic, adverse effects that could arise from potential adverse trading
conditions and impact the Group’s liquidity position over the going concern period;
• Evaluating the committed financing facilities currently available to the Group and ensuring that the models appropriately
included all contractual debt repayments and committed capital expenditures; and
• Agreeing the cash on hand and available facilities included in the going concern assessment as part of our year end
auditwork.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions
that, individually or collectively, may cast significant doubt on the Group’s ability to continue as a going concern for a period
of at least twelve months from when the financial statements are authorised for issue.
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting in
the preparation of the financial statements is appropriate.
As not all future events or conditions can be predicted, this conclusion is not a guarantee as to the Group’s ability to
continue as a going concern.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant
sections of this report.
Reporting on other information
The other information comprises all of the information in the Annual Report other than the financial statements and our
auditors’ report thereon. The Directors are responsible for the other information. Our opinion on the financial statements
does not cover the other information and, accordingly, we do not express an audit opinion or any form of assurance thereon.
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 we identify an apparent material inconsistency or material
misstatement, we are required to perform procedures to conclude whether there is a material misstatement of the financial
statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that
there is a material misstatement of this other information, we are required to report that fact. We have nothing to report
based on these responsibilities.
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Responsibilities for the financial statements and the audit
Responsibilities of the Directors for the financial statements
As explained more fully in the Responsibility Statement and the Corporate Governance section, the Directors are responsible
for the preparation of the financial statements in accordance with the applicable framework and for being satisfied that they
give a true and fair view. The Directors are also responsible for such internal control as they determine is necessary to enable
the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group’s ability 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.
Auditors’ 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 auditors’ 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 ISAs (UK) 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 these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with
our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent
to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Based on our understanding of the Group and industry, we identified that the principal risks of non-compliance with laws
and regulations related to, but were not limited to, the Companies Act 1981 (Bermuda), the Listing Rules, tax regulations,
employment regulations, health and safety regulation and equivalent local laws and regulations applicable to significant
reporting component teams, and we considered the extent to which non-compliance might have a material effect on the
financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the
financial statements such as the Companies Act 1981 (Bermuda).
We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including
the risk of override of controls), and determined that the principal risks were related to the posting of inappropriate journal
entries and management bias in accounting estimates and judgements. Audit procedures performed by the Group
engagement team and/or component auditors included:
• Gaining an understanding of the legal and regulatory framework applicable to the Group and the industries in which its
businesses operate, and considering the risk of any acts by the Group which may be contrary to applicable laws and
regulations, including fraud;
• Discussions with management and internal audit, including consideration of known or suspected instances of
non-compliance with laws and regulation and fraud;
• Understanding the results of whistleblowing procedures and related investigations. We focused on known and suspected
instances of non-compliance with laws and regulations that could give rise to a material misstatement in the Group
andCompany financial statements, including, but not limited to, the Companies Act 1981 (Bermuda), the Listing Rules,
taxlegislation, employment regulations, health and safety regulation and equivalent local laws and regulations applicable
to significant reporting component teams;
• Review of reporting component auditors’ work, including any matters reported by component auditors relating to
non-compliance with laws and regulations or fraud;
• Challenging assumptions and judgements made by management in their significant accounting estimates that involved
making assumptions and considering future events that are inherently uncertain. In particular, in relation to the valuation
of investment properties, the impairment assessments related to the carrying value of certain investments in associates
and joint ventures and provisions for consumer financing debtors (see related key audit matters above);
• We did not identify any key audit matters relating to irregularities, including fraud. As in all of our audits we also
addressed the risk of management override of internal controls, including testing journals, and evaluated whether there
was evidence of bias by the Directors that represented a risk of material misstatement due to fraud.
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There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of
non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial
statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one
resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations,
or through collusion.
Our audit testing might include testing complete populations of certain transactions and balances, possibly using data
auditing techniques. However, it typically involves selecting a limited number of items for testing, rather than testing
complete populations. We will often seek to target particular items for testing based on their size or risk characteristics.
Inother cases, we will use audit sampling to enable us to draw a conclusion about the population from which the sample
isselected.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and only for the Company’s members as a body in accordance
with Section 90 of the Companies Act 1981 (Bermuda) and for no other purpose. We do not, in giving these opinions, accept
or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it
may come, including without limitation under any contractual obligations of the Company, save where expressly agreed by
our prior consent in writing.
Partner responsible for the audit
The engagement partner on the audit resulting in this independent auditors’ report is John Waters.
Other matter
In due course, as required by the Financial Conduct Authority Disclosure Guidance and Transparency Rule 4.1.14R, these
financial statements will form part of the ESEF-prepared annual financial report filed on the National Storage Mechanism of
the Financial Conduct Authority in accordance with the ESEF Regulatory Technical Standard (‘ESEF RTS’). This auditors’ report
provides no assurance over whether the annual financial report will be prepared using the single electronic format specified
in the ESEF RTS.
PricewaterhouseCoopers LLP
Chartered Accountants
London
2nd March 2023
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Five Year Summary
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Profit and Loss*
2022 2021 2020 2019 2018
US$m US$m US$m US$m US$m
Revenue 37,724 35,862 32,647 40,922 42,527
Profit/(loss) attributable to
shareholders 354 1,881 (394) 2,838 1,722
Underlying profit attributable to
shareholders 1,584 1,513 1,085 1,589 1,655
Earnings/(loss) per share (US$) 1.22 6.01 (1.07) 7.56 4.58
Underlying earnings per share (US$) 5.49 4.83 2.95 4.23 4.40
Dividends per share (US$) 2.15 2.00 1.72 1.72 1.70
Balance Sheet*
2022 2021 2020 2019 2018
US$m US$m US$m US$m US$m
Total assets excluding
right-of-use assets 84,964 87,215 88,758 91,899 84,699
Right-of-use assets 4,184 4,274 4,768 5,129 5,451
Total assets 89,148 91,489 93,526 97,028 90,150
Total liabilities excluding
total lease liabilities (29,228) (29,287) (26,793) (27,795) (26,934)
Total lease liabilities (3,723) (3,834) (3,890) (4,162) (4,418)
Total liabilities (32,951) (33,121) (30,683) (31,957) (31,352)
Total equity 56,197 58,368 62,843 65,071 58,798
Shareholders’ funds 28,826 29,781 29,387 30,351 26,069
Net borrowings (excluding net
borrowings of financial services
companies) 7,515 6,635 3,720 4,786 5,913
Net asset value per share (US$) 99.47 102.87 81.32 81.90 69.19
Cash Flow*
2022 2021 2020 2019 2018
US$m US$m US$m US$m US$m
Cash flows from operating activities 4,825 5,076 5,275 4,865 5,157
Cash flows from investing activities (2,593) 231 (1,134) (700) (4,658)
Net cash flow before financing 2,232 5,307 4,141 4,165 499
Net cash flow after principal elements
of lease payments 1,357 4,413 3,179 3,149 (519)
Cash flow per share from operating
activities (US$) 16.71 16.22 14.32 12.96 13.71
* Figures in 2018 have been restated due to changes in accounting policies upon adoption of IFRS 16 ‘Leases’.
Responsibility Statements
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The Directors of the Company confirm to the best of their knowledge that:
(a) the consolidated financial statements prepared in accordance with International Financial Reporting Standards, including
International Accounting Standards and Interpretations adopted by the International Accounting Standards Board, give a
true and fair view of the assets, liabilities, financial position and profit and losses of the Group; and
(b) the Chairman’s Statement, Group Managing Director’s Review, Financial Review and the Principal Risks and Uncertainties
of this Annual Report, which constitute the management report required by the Disclosure Guidance and Transparency Rule
4.1.8, include a fair review of all information required to be disclosed under Rules 4.1.8 to 4.1.11 of the Disclosure Guidance
and Transparency Rules issued by the Financial Conduct Authority of the United Kingdom.
For and on behalf of the Board
John Witt
Graham Baker
Directors
2nd March 2023
Group Offices
Jardine Matheson Ltd
48th Floor, Jardine House
G.P.O. Box 70
Hong Kong
Telephone
Email
Website
(852) 2843 8288
jml@jardines.com
www.jardines.com
Directors
John Witt, Chairman
Y.K. Pang, Deputy Chairman
Graham Baker
Matthew Bland
Stephen Gore
Anne O’Riordan
Steve Sun
Group Corporate Secretary
Jonathan Lloyd
Matheson & Co., Ltd
3 Lombard Street
London EC3V 9AQ
United Kingdom
Telephone
Email
Website
(44 20) 7816 8100
enquiries@matheson.co.uk
www.matheson.co.uk
Adam Keswick
Jardine Pacific Ltd
48th Floor, Jardine House
G.P.O. Box 70
Hong Kong
Telephone
Email
(852) 2843 8288
jpl@jardines.com
Y.K. Pang
Jardine Motors Group Ltd
25th Floor, Devon House
Taikoo Place
979 King’s Road
Quarry Bay
Hong Kong
Telephone
Email
(852) 2579 2888
jmg@jardines.com
Hongkong Land Ltd
8th Floor
One Exchange Square
Central
Hong Kong
Telephone
Email
Website
(852) 2842 8428
gpobox@hkland.com
www.hkland.com
Robert Wong
DFI Retail Group Management Services Ltd
11th Floor, Devon House
Taikoo Place
979 King’s Road
Quarry Bay
Hong Kong
Telephone
Email
Website
(852) 2299 1888
DFIcontactus@DFIretailgroup.com
www.DFIretailgroup.com
Ian McLeod
Mandarin Oriental Hotel Group
International Ltd
8/F One Island East, Taikoo Place
18 Westlands Road
Quarry Bay
Hong Kong
Telephone
Email
Website
(852) 2895 9288
asia-enquiry@mohg.com
www.mandarinoriental.com
James Riley
Jardine Cycle & Carriage Ltd
239 Alexandra Road
Singapore 159930
Telephone
Email
Website
(65) 6473 3122
corporate.affairs@jcclgroup.com
www.jcclgroup.com
Benjamin Birks
PT Astra International Tbk
Menara Astra 59th Floor
Jln. Jend. Sudirman Kav. 5-6
Jakarta 10220
Indonesia
Telephone
Email
Website
(62 21) 508 43 888
corcomm@ai.astra.co.id
www.astra.co.id
Djony Bunarto Tjondro
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Group Offices
Bermuda
Jardine Matheson International Services Ltd
4th Floor, Jardine House
33-35 Reid Street
Hamilton HM 12
P.O. Box HM 1068
Hamilton HM EX
Telephone (1 441) 292 0515
Philip Barnes
Cambodia
Jardine Matheson Ltd
(Representative Office)
7th Floor, Exchange Square
No. 19 & 20 Street 106
Sangkat Wat Phnom
Khan Daun Penh
Phnom Penh 12202
Telephone (855 23) 986 804
Peter Beynon
China
Jardine Matheson (China) Ltd
(Representative Office)
Rm 3702, China World Office 1
China World Trade Centre
No. 1 Jianguomenwai Avenue
Chaoyang District
Beijing 100004
Telephone (86 10) 6505 2801
Steve Sun
Hong Kong SAR, China
Jardine Matheson Ltd
48th Floor, Jardine House
G.P.O. Box 70
Hong Kong
Telephone (852) 2843 8288
John Witt
Macau SAR, China
Jardine Matheson Ltd
(Representative Office)
Avenida Olimpica n°s 522-568
Va Nam Bloco 1 (Edf. lnd. Va Nam)
1 Andar Units A and H
Taipa, Macau
Telephone (853) 2857 6191
Steve Sun
Malaysia
Jardine Matheson Management Services
(Malaysia) Sdn Bhd
Mezzanine Floor
Giant Hypermarket Shah Alam Stadium
Lot 2, Persiaran Sukan, Seksyen 13
40200 Shah Alam, Selangor Darul Ehsan
Malaysia
Telephone (60 3) 5544 8512
Rossana Annizah Binti Ahmad Rashid
Myanmar
Jardine Matheson Management (SEA) Pte Ltd
No. 1/4 Parami Road, Level 2
Hlaing Township
Yangon
Telephone (95 1) 654 854
Peter Beynon
Netherlands
Jardine Matheson Europe B.V.
Transformatorweg 38
Unit 5.4
1014 AK Amsterdam
Telephone (31 20) 470 0258
Pim Bertels
Philippines
Jardine Matheson Ltd
c/o Hongkong Land
Room 1803, The Taipan Place
F. Ortigas Jr. Road
Ortigas Center
Pasig City 1605
Telephone (63 2) 8681 5164
A.B. Colayco
Singapore
Jardine Matheson (Singapore) Ltd
239 Alexandra Road
Singapore 159930
Telephone (65) 6220 5111
Benjamin Birks
Thailand
Jardine Matheson (Thailand) Ltd
16th-17th Floor, SPE Tower
252 Phaholyothin Road, Samsennai
Phayathai, Bangkok 10400
Telephone (66) 2 079 5965
Subhak Siwaraksa
United Kingdom
Matheson & Co., Ltd
3 Lombard Street
London EC3V 9AQ
Telephone (44 20) 7816 8100
Adam Keswick
Vietnam
Jardine Matheson Ltd
Unit 14.3, 14th Floor
E.town Central Building
11 Doan Van Bo Street
Ward 13, District 4
Ho Chi Minh City
Telephone (84 28) 3822 2340
Nirukt Sapru
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www.jardines.com