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4 Mar 2011 09:05
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To: Business Editor | 4th March 2011 For immediate release |
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The following announcement was issued today to a Regulatory Information Service approved by the Financial Services Authority in the United Kingdom.
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Jardine Strategic Holdings Limited
2010 Preliminary Announcement of Results
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Highlights
Β·; Underlying earnings per share* up 33%
Β·; Excellent results from across the Group
Β·; Significant increase in value of Hongkong Land's property portfolio
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"After an outstanding performance in 2010 growth will be harder to achieve in the current year, due largely to the reduced number of residential project completions planned by Hongkong Land. Nevertheless, the Group's businesses are continuing to invest in their strong market positions. The steady earnings growth and low levels of net debt achieved in recent years provide a sound financial base on which to support this development."
Β
Sir Henry Keswick, Chairman
4th March 2011
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Results
Year ended 31st December | ||||
2010 US$m | 2009 US$m (restatedβ ) | Β Change % | ||
Revenue together with revenue of Jardine Matheson, associates and joint ventures+ | Β 46,963 | Β 35,957 | Β +31 | |
Underlying profit attributable to shareholders* | 1,439 | 1,089 | +32 | |
Profit attributable to shareholders | 3,535 | 1,988 | +78 | |
Shareholders' funds | 16,350 | 12,697 | +29 | |
US$ | US$ | % | ||
Underlying earnings per share* | 2.32 | 1.75 | +33 | |
Earnings per share | 5.69 | 3.20 | +78 | |
Dividends per share | 0.21 | 0.20 | +5 | |
Net asset value per share# | 47.53 | 32.64 | +46 | |
+ Includes 100% of revenue from Jardine Matheson, associates and joint ventures. * The Group uses 'underlying profit attributable to shareholders' in its internal financial reporting to distinguish between ongoing business performance and non-trading items, as more fully described in note 1 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. # Net asset value per share is calculated on a market value basis, details of which are set out in note 18. β The accounts have been restated due to changes in accounting policies as set out in note 1. | ||||
The final dividend of USΒ’15.00 per share will be payable on 18th May 2011, subject to approval at the Annual General Meeting to be held on 12th May 2011, to shareholders on the register of members at the close of business on 18thΒ March 2011 and will be available in cash with a scrip alternative. The ex-dividend date will be on 16thΒ MarchΒ 2011, and the share registers will be closed from 21st to 25th March 2011, inclusive.
Jardine Strategic Holdings Limited
Preliminary Announcement of Results
For The Year Ended 31st December 2010
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Overview
The strong markets in Asia have underpinned some excellent performances from the Group companies and have enabled the Company to report another fine result for 2010. The contribution from Southeast Asia represented a greater proportion of the Group's underlying profit for the year, largely due to outstanding results from Astra in Indonesia.
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Performance
Jardine Strategic produced a record underlying profit in 2010 of US$1,439 million, an increase of 32%. Underlying earnings per share were 33% higher at US$2.32. The significant improvement benefited from comparison with a relatively weak first half in 2009. The Group's revenue in 2010, including 100% of Jardine Matheson, associates and joint ventures, was US$47 billion, compared with US$36 billion in 2009.
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Within Jardine Matheson's interests, Jardine Pacific saw good performances across its operations, leading to another record profit, while a strong first half enabled Jardine Motors also to produce an excellent result. Jardine Lloyd Thompson continued to progress well.
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Hongkong Land's impressive result included notable gains on completion of residential development projects, while Dairy Farm achieved higher earnings in most of its banners. Mandarin Oriental saw profits start to recover following improvements in occupancy and room rates. Jardine Cycle & Carriage's earnings reflected the record results achieved by Astra, enhanced on translation by the strength of the rupiah.Β
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Non-trading items in 2010 primarily consisted of the Group's share of the increase in the valuation of investment properties, including US$1,990 million from Hongkong Land and US$10 million from Jardine Pacific, and a US$87 million share of the increase in the fair value of Astra's plantations recognized within Jardine Cycle & Carriage. Accounting standards require these revaluations to be taken through the profit and loss account. The result was a profit attributable to shareholders for 2010 of US$3,535 million, compared with US$1,988 million in 2009. Following a change in accounting standards, the Group is no longer required to provide for deferred tax on valuation gains on which no such tax liability would arise.
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The Group enjoys strong operating cash flows, ample committed facilities and ready access to capital markets. Capital investment by the Group, on a consolidated basis, amounted to US$1.8 billion in 2010. The consolidated net debt at the end of 2010, excluding financial services companies, was US$2.3 billion, representing gearing of 7%.
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The Board is recommending a final dividend of USΒ’15.00 per share, an overall increase of 5% for the full year.
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Business Developments
Within Jardine Matheson, Jardine Pacific's earnings reflected both organic growth and expansion within its existing business portfolio. Developments included an increased shareholding in air cargo terminal operator HACTL, significant new infrastructure contracts won by Gammon, the growth of its Restaurants group in Taiwan and Vietnam through acquisitions, and the recent purchase by JOS of an IT distribution business. Jardine Motors continued to grow profitably in Southern China where it now has 17 outlets, with a further five under development. Jardine Lloyd Thompson's earnings benefited from the investment made in its traditional and emerging markets businesses through acquisitions, the recruitment of professionals and system upgrades.
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Hongkong Land's commercial property activities in Hong Kong and Singapore performed well in 2010 and the company continued to build its residential development portfolio with the emphasis on Singapore and mainland China. In February 2011, it completed the privatization of its subsidiary, MCL Land, a Singapore residential property developer. The reduced number of residential development completions scheduled for 2011 will result in a lower contribution to Hongkong Land's earnings from this sector than in recent years.
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Dairy Farm produced a satisfactory increase in earnings, ending the year with strong finances and leading positions for its main formats in their respective market segments. Expansion continued in 2010 with the total number of outlets increasing by 6% to 5,386. The group plans to invest further in the development of hypermarkets and supermarkets, particularly in Indonesia and Malaysia, and in the refurbishment of its existing store networks.
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Despite the recent challenging market conditions, Mandarin Oriental's growth strategy remains on track. Last year the group announced three additional hotel development projects; new properties in Abu Dhabi and Doha will mark the group's entry into the Middle East when they open in 2014, while a new hotel in Shanghai, opening in 2013, will be its fourth hotel in mainland China. This year Mandarin Oriental will also add a hotel in Paris.
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Astra benefited from the 6% growth of the Indonesian economy in 2010 and robust market conditions. Good performances from its automotive, financial services and heavy equipment activities enabled the group to achieve a record profit for the year. Its rate of growth, however, is expected to moderate in 2011.
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Outlook
After an outstanding performance in 2010 growth will be harder to achieve in the current year, due largely to the reduced number of residential project completions planned by Hongkong Land. Nevertheless, the Group's businesses are continuing to invest in their strong market positions. The steady earnings growth and low levels of net debt achieved in recent years provide a sound financial base on which to support this development.
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Sir Henry Keswick
Chairman
4th March 2011
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Operating Review
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Jardine Matheson
Jardine Matheson achieved a record underlying profit of US$1,364 million in 2010, an increase of 34%. Underlying earnings per share rose 33% to US$3.80. Jardine Matheson's profit attributable to shareholders of US$3,084 million reflected the increased investment property values and additional non-trading items. Shareholders' funds increased by 28% to US$13.7 billion.
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Β·; Jardine Pacific
Jardine Pacific's underlying profit rose 31% to US$156 million in 2010 as most of its businesses enjoyed stronger trading conditions. A gain of US$18 million arising on the revaluation of investment properties, together with gains from disposals, contributed to a profit attributable to shareholders of US$182 million, up from US$156 million in 2009. Shareholders' funds were US$599 million at the end of 2010, and the underlying return on average shareholders' funds was 30%.
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Gammon's contribution to underlying profit was down slightly at US$21 million, although its order book rose 30% to US$3 billion. Jardine Schindler and JEC both traded well in 2010. Hong Kong Air Cargo Terminals recorded a substantially higher contribution of US$52 million as improvement in cargo throughput was augmented by an increase in the group's shareholding to 42%. Jardine Aviation Services and Jardine Shipping Services benefited from increased activity. Jardine Restaurants' results included an encouraging first contribution from the KFC business in Taiwan. JOS produced increased earnings as consumer markets grew.
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Β·; Jardine Motors
Jardine Motors produced an underlying profit in 2010 of US$87 million, up 66%, as its businesses in Hong Kong and, in particular, mainland China enjoyed much improved trading conditions. Profit attributable to shareholders was also US$87 million, compared with US$64 million in 2009.
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A higher contribution from Zung Fu in Hong Kong and Macau resulted from an increase in deliveries of Mercedes-Benz passenger cars. There was also a good contribution from aftersales and commercial vehicle activities. The group continued to grow profitably in Southern China where new car deliveries rose from 9,200 units to over 15,600. Despite difficult trading conditions for dealerships in the United Kingdom, the business recorded an improved underlying profit, which included gains on two property disposals.
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Β·; Jardine Lloyd Thompson
Jardine Lloyd Thompson produced a very good performance in 2010, notwithstanding the continued soft rating environment and low interest rates. Total revenue rose to US$1,152 million, an increase of 21% in the company's reporting currency, reflecting above market growth and the benefit of acquisitions. Underlying profit before tax was US$201 million, an increase of 24% in its reporting currency. Including a significant tax credit, the company's contribution to the Group's underlying profit rose 34%.
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Jardine Lloyd Thompson's Risk & Insurance group, comprising its worldwide retail operations and its specialist, mainly London-based, insurance, wholesale and reinsurance broking, produced growth of 17% in revenue and 31% in underlying trading profit, with an increased trading margin of 22%. The group's Latin American and Asian activities recorded particularly encouraging results. The Employee Benefits business also had a successful year, with revenue increasing by 46% and a trading margin of 17%, up from 16% in the prior year, while the recently formed underwriting and distribution business, Thistle Insurance Services, made a satisfactory start. The company's ongoing business transformation project has exceeded expectations and is delivering notable cost and efficiency improvements.
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Hongkong Land
Market conditions remained favourable for Hongkong Land's commercial property interests in 2010, and its results also benefited from the recognition of profits on residential completions. Underlying profit was up 4% at US$810 million. Taking into account the increase in the value of investment properties, profit attributable to shareholders was US$4,739 million, compared with US$1,813 million in 2009, while net asset value per share rose 30%.
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Steady demand in the group's Hong Kong Central district portfolio enabled rental levels achieved on reversions to be maintained. Vacancy at the year end was just 2.9%. In Singapore, market conditions began to improve in the second half of the year. The first two office towers were completed at Marina Bay Financial Centre, in which the group has a oneβthird interest, while completion of the final tower, which is 66% pre-let, will follow in 2012.
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MCL Land recognized profits on two residential projects in Singapore, while the successful launch of The Estuary, completing in 2013, enabled the reversal of a US$39 million writedown previously made. The first residential tower at Marina Bay, which had been fully sold, was completed and the group benefited from the profit attributable to its one-third interest. A second tower will complete in 2013.
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Profits were also recognized on Hongkong Land's residential developments in Hong Kong and Macau. In mainland China, profits were recorded from residential projects in Beijing and Chongqing. The company recently acquired in joint venture a 190,000 sq. m. development site in the Jinjiang District of Chengdu, as well as a 386,000 sq. m. site in Chongqing (its first wholly-owned project on the Mainland) and increased its interest in a joint venture in Shenyang from 30% to 50%.
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In August 2010, the company announced its intention to privatize its 77%-owned Singaporeβlisted affiliate, MCL Land. An accompanying exit offer was made to the minority shareholders, and the privatization was completed in early 2011.
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Dairy Farm
Dairy Farm produced another good performance in 2010, with sales, including 100% of associates, increasing by 13% to US$9.1 billion and underlying profit rising 13% to US$410Β million. Favourable exchange movements enhanced both sales and profit by some 5%. Profit attributable to shareholders for the year was US$411 million, 13% higher.
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There were mixed performances from the group's activities in North Asia. In Hong Kong, its health and beauty and IKEA operations achieved excellent results and its supermarket chain traded reasonably, but 7-Eleven had a more difficult year. In Taiwan, IKEA improved its profitability further, but earnings from supermarkets declined. The 7-Eleven stores in Southern China faced further challenges, although the business stabilized in the second half. The expansion of the Mannings health and beauty business on the Mainland continued with the network now standing at 163 outlets. Restaurant associate, Maxim's, had a fine year with good performances from all its operations in Hong Kong, while its expansion of various formats in mainland China is progressing well.
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A buoyant economy in Singapore enabled Dairy Farm to achieve further growth in sales and trading profit. The group's operations in Malaysia performed well, with an excellent contribution from the Guardian health and beauty stores. In Indonesia, sales and profits continue to improve as both hypermarkets and supermarkets made progress. In its joint ventures in India, the health and beauty chain is trading profitably while in the supermarket business operating losses have been reduced.
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Mandarin Oriental
Improved economic conditions resulted in increased demand for most of Mandarin Oriental's hotels. Its strongest performances were seen in Asia, particularly Hong Kong and Singapore. Underlying profit rose to US$44 million in 2010, up from US$12 million. There were no nonβtrading items in 2010, while the profit attributable to shareholders in the prior year of US$83Β million included a gain from a property disposal.
The group has a total of 26 hotels in operation, with a further 16 under development. During 2010, three new projects were announced, comprising two in the Middle East and one in mainland China, while a project in the United States will now not proceed. A new hotel was opened in Macau in June 2010 under a long-term management contract with a Hongkong Land joint venture, and residences at the property have also been launched. There are now a total of 13 'Residences at Mandarin Oriental' projects open or under development from which the group will benefit from branding fees over the next few years.
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Jardine Cycle & Carriage
Jardine Cycle & Carriage produced an excellent result in 2010 with underlying profit up 55% at US$812 million. Its profit attributable to shareholders of US$944 million included a non-trading gain of US$132 million, which arose mainly on the revaluation of Astra's oil palm plantations, compared with a non-trading loss of US$12 million in 2009. Astra enjoyed improved performances from most of its major businesses. Its contribution to the underlying profit of Jardine Cycle & Carriage, up 62% to US$798 million, also reflected a stronger rupiah.
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The underlying profit contribution from the group's other motor interests was 5% lower at US$56 million. This was mainly due to reduced earnings in Singapore following restrictions in the government quota for new vehicle sales. Cycle & Carriage Bintang in Malaysia, which reported improved earnings on higher sales, is in the process of acquiring a small Mercedes-Benz dealership in Penang. In Indonesia, Tunas Ridean benefited from the good market. Truong Hai Auto Corporation made a lower contribution, but did well to increase its market share in the face of difficult trading conditions in Vietnam.
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Astra
Astra performed extremely well overall in 2010, achieving a record profit with improved contributions from all its businesses except contract mining. It produced a record net profit under Indonesian accounting standards of Rp14.4 trillion, up 43%, equivalent to US$1.6Β billion.
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The Indonesian wholesale market for motor cars experienced 57% growth, with Astra's sales increasing by 52% to 426,000 units. The group's market share declined slightly to 56%. The wholesale market for motorcycles also grew strongly, up 26%, and Astra Honda Motor did well to maintain its leading position selling 3.4 million units with a market share of 46%. Astra Otoparts reported a 49% increase in profits, supported by the strong demand for its products.
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Earnings of Astra's consumer finance operations benefited from growth in their overall loan books, stable interest margins and liquidity in the banking sector. In December 2010, the group completed the acquisition of the 47% of Astra Sedaya Finance it did not already own. Bank Permata's reported profit doubled in the positive economic environment. In the last quarter, the bank enhanced its capital adequacy ratio through a rights issue and also completed the acquisition of a domestic credit card issuer, GE Finance Indonesia.
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United Tractors' results were little changed, despite a 74% increase in Komatsu equipment sales, owing to lower income from its contract coal mining subsidiary, Pamapersada Nusantara. Coal production increased by 14% to 78 million tonnes and overburden removal by 9% to 651 million bcm, but the results were adversely impacted by poor weather conditions and the weaker US dollar.Β Astra Agro Lestari's profit improved by 21% due to higher palm oil prices and production gains.
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Elsewhere, there were increased contributions from Astra's infrastructure and logistics businesses as well as Astra Graphia, which is the sole distributor of Fuji Xerox equipment in Indonesia and is active in information technology.
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Further Interests
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Rothschilds Continuation
Rothschilds Continuation, in which the Company holds a 21% interest, is the holding company of an independent global financial advisory group with 49 offices in 36Β countries worldwide. The company's performance has seen improvement over the last year as conditions in the financial markets stabilized.
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Other
ACLEDA Bank of Cambodia, in which the Company purchased a 12% stake early last year, achieved its highest annual profit in 2010 and enters 2011 with expectations of further profit growth. By contrast, Asia Commercial Bank, 7% held, faced headwinds in Vietnam as the country sought to restore balanced growth while containing inflation. In India, Tata Power continued to focus on the construction and completion of its large generation projects supported by stable Indian utility earnings and improving returns from its Indonesian coal investments.Β The Company has a 3% investment.
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Anthony Nightingale
Managing Director
4th March 2011
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Jardine Strategic Holdings Limited | |||||||||||||||||||||||||||||
Consolidated Profit and Loss Account | |||||||||||||||||||||||||||||
for the year ended 31st December 2010 | |||||||||||||||||||||||||||||
2010 | 2009 | ||||||||||||||||||||||||||||
Underlying | Non- | Underlying | Non- | ||||||||||||||||||||||||||
business | trading | business | trading | ||||||||||||||||||||||||||
performance | items | Total | performance | items | Total | ||||||||||||||||||||||||
US$m | US$m | US$m | US$m | US$m | US$m | ||||||||||||||||||||||||
(restated) | (restated) | (restated) | |||||||||||||||||||||||||||
Revenue (note 2) | 25,498Β | - | 25,498Β | 18,905Β | - | 18,905Β | |||||||||||||||||||||||
Net operating costs (note 3) | (22,351) | 434Β | (21,917) | (16,650) | 61Β | (16,589) | |||||||||||||||||||||||
Change in fair value of | |||||||||||||||||||||||||||||
investment properties | - | 3,198Β | 3,198Β | - | 1,888Β | 1,888Β | |||||||||||||||||||||||
Operating profit | 3,147Β | 3,632Β | 6,779Β | 2,255Β | 1,949Β | 4,204Β | |||||||||||||||||||||||
Net financing charges | |||||||||||||||||||||||||||||
- financing charges | (217) | - | (217) | (157) | - | (157) | |||||||||||||||||||||||
- financing income | 99Β | - | 99Β | 93Β | - | 93Β | |||||||||||||||||||||||
(118) | - | (118) | (64) | - | (64) | ||||||||||||||||||||||||
Share of results of Jardine | |||||||||||||||||||||||||||||
Matheson (note 4) | 187Β | 12Β | 199Β | 125Β | 26Β | 151Β | |||||||||||||||||||||||
Share of results of associates | |||||||||||||||||||||||||||||
and joint ventures (note 5) | |||||||||||||||||||||||||||||
- before change in fair value | |||||||||||||||||||||||||||||
of investment properties | 807Β | 11Β | 818Β | 587Β | 53Β | 640Β | |||||||||||||||||||||||
- change in fair value of | |||||||||||||||||||||||||||||
investment properties | - | 731Β | 731Β | - | (431) | (431) | |||||||||||||||||||||||
807Β | 742Β | 1,549Β | 587Β | (378) | 209Β | ||||||||||||||||||||||||
Net discount on acquisition of | |||||||||||||||||||||||||||||
Hongkong Land (note 6) | - | - | - | - | 145Β | 145Β | |||||||||||||||||||||||
Sale of associates and | |||||||||||||||||||||||||||||
joint ventures (note 7) | - | 3Β | 3Β | - | 79Β | 79Β | |||||||||||||||||||||||
Profit before tax | 4,023Β | 4,389Β | 8,412Β | 2,903Β | 1,821Β | 4,724Β | |||||||||||||||||||||||
Tax (note 8) | (697) | (106) | (803) | (561) | (6) | (567) | |||||||||||||||||||||||
Profit after tax | 3,326Β | 4,283Β | 7,609Β | 2,342Β | 1,815Β | 4,157Β | |||||||||||||||||||||||
Attributable to: | |||||||||||||||||||||||||||||
Shareholders of the | |||||||||||||||||||||||||||||
Company (notes 9 & 11) | 1,439Β | 2,096Β | 3,535Β | 1,089Β | 899Β | 1,988Β | |||||||||||||||||||||||
Minority interests | 1,887Β | 2,187Β | 4,074Β | 1,253Β | 916Β | 2,169Β | |||||||||||||||||||||||
3,326Β | 4,283Β | 7,609Β | 2,342Β | 1,815Β | 4,157Β | ||||||||||||||||||||||||
US$Β | US$ | US$ | US$ | ||||||||||||||||||||||||||
Earnings per share (note 10) | |||||||||||||||||||||||||||||
- basic | 2.32Β | 5.69Β | 1.75 | 3.20Β | |||||||||||||||||||||||||
- diluted | 2.30Β | 5.54Β | 1.74 | 3.15Β | |||||||||||||||||||||||||
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Jardine Strategic Holdings Limited | ||||||||||
Consolidated Statement of Comprehensive Income | ||||||||||
for the year ended 31st December 2010 | ||||||||||
2010 | 2009 | |||||||||
US$m | US$m | |||||||||
(restated) | ||||||||||
Profit for the year | 7,609Β | 4,157Β | ||||||||
Revaluation of other investments | ||||||||||
- net gain arising during the year | 67Β | 160Β | ||||||||
- transfer to profit and loss | (13) | (131) | ||||||||
54Β | 29Β | |||||||||
Net actuarial gain on employee benefit plans | 17Β | 23Β | ||||||||
Net exchange translation differences | ||||||||||
- gains arising during the year | 218Β | 630Β | ||||||||
- transfer to profit and loss | - | (63) | ||||||||
218Β | 567Β | |||||||||
Cash flow hedges | ||||||||||
- net loss arising during the year | (7) | (15) | ||||||||
- transfer to profit and loss | 7Β | (5) | ||||||||
- | (20) | |||||||||
Share of other comprehensive income of | ||||||||||
Jardine Matheson | 9Β | 29Β | ||||||||
Share of other comprehensive income of associates | ||||||||||
and joint ventures | 248Β | 229Β | ||||||||
Tax relating to components of other comprehensive | ||||||||||
income (note 8) | (6) | - | ||||||||
Other comprehensive income for the year | 540Β | 857Β | ||||||||
Total comprehensive income for the year | 8,149Β | 5,014Β | ||||||||
Attributable to: | ||||||||||
Shareholders of the Company | 3,761Β | 2,241Β | ||||||||
Minority interests | 4,388Β | 2,773Β | ||||||||
8,149Β | 5,014Β | |||||||||
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Jardine Strategic Holdings Limited | ||||||||||||
Consolidated Balance Sheet | ||||||||||||
at 31st December 2010 | ||||||||||||
At 31st December | At 1st January | |||||||||||
2010 | 2009 | 2009 | ||||||||||
US$m | US$m | US$m | ||||||||||
(restated) | (restated) | |||||||||||
Assets | ||||||||||||
Intangible assets | 1,888Β | 1,694Β | 1,471Β | |||||||||
Tangible assets | 4,578Β | 3,886Β | 3,262Β | |||||||||
Investment properties | 18,061Β | 14,841Β | 17Β | |||||||||
Plantations | 954Β | 425Β | 353Β | |||||||||
Investment in Jardine Matheson | 1,172Β | 967Β | 796Β | |||||||||
Associates and joint ventures | 5,849Β | 4,468Β | 8,305Β | |||||||||
Other investments | 1,018Β | 817Β | 562Β | |||||||||
Non-current debtors | 1,889Β | 1,370Β | 1,032Β | |||||||||
Deferred tax assets | 121Β | 112Β | 98Β | |||||||||
Pension assets | 57Β | 51Β | 15Β | |||||||||
Non-current assets | 35,587Β | 28,631Β | 15,911Β | |||||||||
Properties for sale | 1,184Β | 787Β | - | |||||||||
Stocks and work in progress | 2,132Β | 1,611Β | 1,574Β | |||||||||
Current debtors | 3,665Β | 2,732Β | 1,872Β | |||||||||
Current investments | 6Β | 3Β | 4Β | |||||||||
Current tax assets | 130Β | 80Β | 76Β | |||||||||
Bank balances and other liquid funds | ||||||||||||
- non-financial services companies | 3,717Β | 3,521Β | 1,709Β | |||||||||
- financial services companies | 176Β | 156Β | 183Β | |||||||||
3,893Β | 3,677Β | 1,892Β | ||||||||||
11,010Β | 8,890Β | 5,418Β | ||||||||||
Non-current assets classified as held for | ||||||||||||
sale (note 12) | - | 105Β | 65Β | |||||||||
Current assets | 11,010Β | 8,995Β | 5,483Β | |||||||||
Total assets | 46,597Β | 37,626Β | 21,394Β | |||||||||
Equity | ||||||||||||
Share capital | 56Β | 56Β | 55Β | |||||||||
Share premium and capital reserves | 1,346Β | 1,345Β | 1,338Β | |||||||||
Revenue and other reserves | 16,470Β | 12,710Β | 10,421Β | |||||||||
Own shares held | (1,522) | (1,414) | (1,308) | |||||||||
Shareholders' funds | 16,350Β | 12,697Β | 10,506Β | |||||||||
Minority interests | 15,446Β | 12,265Β | 3,527Β | |||||||||
Total equity | 31,796Β | 24,962Β | 14,033Β | |||||||||
Liabilities | ||||||||||||
Long-term borrowings | ||||||||||||
- non-financial services companies | 4,201Β | 5,023Β | 1,754Β | |||||||||
- financial services companies | 1,128Β | 718Β | 563Β | |||||||||
5,329Β | 5,741Β | 2,317Β | ||||||||||
Deferred tax liabilities | 544Β | 420Β | 338Β | |||||||||
Pension liabilities | 141Β | 133Β | 94Β | |||||||||
Non-current creditors | 211Β | 154Β | 133Β | |||||||||
Non-current provisions | 82Β | 60Β | 48Β | |||||||||
Non-current liabilities | 6,307Β | 6,508Β | 2,930Β | |||||||||
Current creditors | 4,952Β | 4,064Β | 2,903Β | |||||||||
Current borrowings | ||||||||||||
- non-financial services companies | 1,854Β | 825Β | 483Β | |||||||||
- financial services companies | 1,403Β | 918Β | 798Β | |||||||||
3,257Β | 1,743Β | 1,281Β | ||||||||||
Current tax liabilities | 245Β | 312Β | 220Β | |||||||||
Current provisions | 40Β | 37Β | 27Β | |||||||||
Current liabilities | 8,494Β | 6,156Β | 4,431Β | |||||||||
Total liabilities | 14,801Β | 12,664Β | 7,361Β | |||||||||
Total equity and liabilities | 46,597Β | 37,626Β | 21,394Β | |||||||||
Jardine Strategic Holdings Limited | ||||||||||
Consolidated Statement of Changes in Equity | ||||||||||
for the year ended 31st December 2010 | ||||||||||
Β
Attributable to | |||||||||||||||||||||||||||||
Asset | Own | shareholders | Attributable | ||||||||||||||||||||||||||
Share | Share | Capital | Revenue | Contributed | revaluation | Hedging | Exchange | shares | of the | to minority | Total | ||||||||||||||||||
capital | Β premium | reserves | reserves | surplus | reserves | reserves | reserves | held | Company | interests | Equity | ||||||||||||||||||
US$m | US$m | US$m | US$m | US$m | US$m | US$m | US$m | US$m | US$m | US$m | US$m | ||||||||||||||||||
2010 | |||||||||||||||||||||||||||||
At 1st January | |||||||||||||||||||||||||||||
- as previously reported | 56 | 1,208Β | 137 | 11,133Β | 304 | 378Β | (31) | (28) | (1,414) | 11,743Β | 11,281Β | 23,024Β | |||||||||||||||||
- change in accounting policies for | |||||||||||||||||||||||||||||
- owner-occupied properties | - | - | - | (14) | - | (176) | - | 28Β | - | (162) | (106) | (268) | |||||||||||||||||
- adopting amendments to IAS 12 | - | - | - | 1,116Β | - | - | - | - | - | 1,116Β | 1,090Β | 2,206Β | |||||||||||||||||
- as restated | 56 | 1,208Β | 137 | 12,235Β | 304 | 202Β | (31) | - | (1,414) | 12,697Β | 12,265Β | 24,962Β | |||||||||||||||||
Total comprehensive income | - | - | - | 3,577Β | - | - | (9) | 193Β | - | 3,761Β | 4,388Β | 8,149Β | |||||||||||||||||
Dividends paid by the Company (note 13) | - | - | - | (124) | - | - | - | - | - | (124) | - | (124) | |||||||||||||||||
Dividends paid to minority shareholders | - | - | - | - | - | - | - | - | - | - | (742) | (742) | |||||||||||||||||
Employee share option schemes | - | - | 10 | - | - | - | - | - | - | 10Β | 1Β | 11Β | |||||||||||||||||
Scrip issued in lieu of dividends | - | - | - | 185Β | - | - | - | - | - | 185Β | - | 185Β | |||||||||||||||||
Repurchase of shares | - | (9) | - | - | - | - | - | - | - | (9) | - | (9) | |||||||||||||||||
Increase in own shares held | - | - | - | - | - | - | - | - | (108) | (108) | - | (108) | |||||||||||||||||
Subsidiary undertakings disposed of | - | - | - | - | - | - | - | - | - | - | (9) | (9) | |||||||||||||||||
Conversion of convertible bonds in a subsidiary | |||||||||||||||||||||||||||||
undertaking | - | - | - | - | - | - | - | - | - | - | 5Β | 5Β | |||||||||||||||||
Capital contribution from minority shareholders | - | - | - | - | - | - | - | - | - | - | 16Β | 16Β | |||||||||||||||||
Change in interests in subsidiary undertakings | - | - | - | (62) | - | - | - | - | - | (62) | (478) | (540) | |||||||||||||||||
At 31st December | 56 | 1,199Β | 147 | 15,811Β | 304 | 202Β | (40) | 193Β | (1,522) | 16,350Β | 15,446Β | 31,796Β | |||||||||||||||||
2009 | |||||||||||||||||||||||||||||
At 1st January | |||||||||||||||||||||||||||||
- as previously reported | 55 | 1,209Β | 129 | 9,227Β | 304 | 402Β | (38) | (275) | (1,308) | 9,705Β | 3,632Β | 13,337Β | |||||||||||||||||
- change in accounting policies for | |||||||||||||||||||||||||||||
- owner-occupied properties | - | - | - | (15) | - | (199) | - | 39Β | - | (175) | (105) | (280) | |||||||||||||||||
- adopting amendments to IAS 12 | - | - | - | 972Β | - | - | - | 4Β | - | 976Β | - | 976Β | |||||||||||||||||
- as restated | 55 | 1,209Β | 129 | 10,184Β | 304 | 203Β | (38) | (232) | (1,308) | 10,506Β | 3,527Β | 14,033Β | |||||||||||||||||
Total comprehensive income | - | - | - | 1,960Β | - | 42Β | 7 | 232Β | - | 2,241Β | 2,773Β | 5,014Β | |||||||||||||||||
Dividends paid by the Company (note 13) | - | - | - | (118) | - | - | - | - | - | (118) | - | (118) | |||||||||||||||||
Dividends paid to minority shareholders | - | - | - | - | - | - | - | - | - | - | (443) | (443) | |||||||||||||||||
Employee share option schemes | - | - | 8 | - | - | - | - | - | - | 8Β | 2Β | 10Β | |||||||||||||||||
Scrip issued in lieu of dividends | 1 | (1) | - | 176Β | - | - | - | - | - | 176Β | - | 176Β | |||||||||||||||||
Increase in own shares held | - | - | - | - | - | - | - | - | (106) | (106) | - | (106) | |||||||||||||||||
New subsidiary undertakings | - | - | - | - | - | - | - | - | - | - | 6,445Β | 6,445Β | |||||||||||||||||
Subsidiary undertakings disposed of | - | - | - | - | - | - | - | - | - | - | (3) | (3) | |||||||||||||||||
Equity component of convertible bonds in a | - | ||||||||||||||||||||||||||||
Β subsidiary undertaking | - | - | - | 4Β | - | - | - | - | - | 4Β | - | 4Β | |||||||||||||||||
Capital contribution from minority shareholders | - | - | - | - | - | - | - | - | - | - | 15Β | 15Β | |||||||||||||||||
Change in interests in subsidiary undertakings | - | - | - | (14) | - | - | - | - | - | (14) | (51) | (65) | |||||||||||||||||
Transfer | - | - | - | 43Β | - | (43) | - | - | - | - | - | - | |||||||||||||||||
At 31st December | 56 | 1,208Β | 137 | 12,235Β | 304 | 202Β | (31) | - | (1,414) | 12,697Β | 12,265Β | 24,962Β | |||||||||||||||||
Total comprehensive income included in revenue reserves comprises profit attributable to shareholders of the Company of US$3,535 million (2009: US$1,988 million), net fair value gain on other investments of US$40 million (2009: loss of US$17 million) and net actuarial gain on employee benefit plans of US$2 million (2009: loss of US$11 million). | Β | ||||||||||||||||||||||||||||
Β | |||||||||||||||||||||||||||||
Contributed surplus represents the excess in value of shares acquired in consideration for the issue of the Company's shares, over the nominal value of those shares issued. Under the Bye-Laws of the Company, the contributed surplus is distributable. | Β | ||||||||||||||||||||||||||||
Β | |||||||||||||||||||||||||||||
Β | |||||||||||||||||||||||||||||
Jardine Strategic Holdings Limited | |||||||||||
Consolidated Cash Flow Statement | |||||||||||
for the year ended 31st December 2010 | |||||||||||
2010 | 2009 | ||||||||||
US$m | US$m | ||||||||||
(restated) | |||||||||||
Operating activities | |||||||||||
Operating profit | 6,779Β | 4,204Β | |||||||||
Depreciation and amortization | 730Β | 553Β | |||||||||
Other non-cash items | (3,470) | (1,846) | |||||||||
Increase in working capital | (1,671) | (145) | |||||||||
Interest received | 102Β | 101Β | |||||||||
Interest and other financing charges paid | (199) | (147) | |||||||||
Tax paid | (835) | (548) | |||||||||
1,428Β | 2,172Β | ||||||||||
Dividends from associates and joint ventures | 606Β | 301Β | |||||||||
Cash flows from operating activities | 2,034Β | 2,473Β | |||||||||
Investing activities | |||||||||||
Purchase of Hongkong Land (note 14(a)) | - | 1,082Β | |||||||||
Purchase of other subsidiary undertakings (note 14(a)) | (49) | (42) | |||||||||
Purchase of associates and joint ventures (note 14(b)) | (227) | (53) | |||||||||
Purchase of other investments (note 14(c)) | (231) | (311) | |||||||||
Purchase of intangible assets | (156) | (90) | |||||||||
Purchase of tangible assets | (833) | (733) | |||||||||
Purchase of investment properties | (32) | (14) | |||||||||
Additions to plantations | (87) | (77) | |||||||||
Advance to associates, joint ventures and others (note 14(d)) | (220) | (288) | |||||||||
Repayment from associates and joint ventures (note 14(e)) | 286Β | 31Β | |||||||||
Sale of subsidiary undertakings (note 14(f)) | 20Β | (2) | |||||||||
Sale of associates and joint ventures (note 14(g)) | - | 90Β | |||||||||
Sale of other investments (note 14(h)) | 110Β | 213Β | |||||||||
Sale of intangible assets | 2Β | 2Β | |||||||||
Sale of tangible assets | 51Β | 64Β | |||||||||
Sale of investment properties | - | 1Β | |||||||||
Cash flows from investing activities | (1,366) | (127) | |||||||||
Financing activities | |||||||||||
Repurchase of shares | (9) | -Β | |||||||||
Capital contribution from minority shareholders | 16Β | 15Β | |||||||||
Repayment to minority shareholders | (11) | - | |||||||||
Change in interests in subsidiary undertakings (note 14(i)) | (540) | (65) | |||||||||
Sale of convertible bonds in a subsidiary undertaking | - | 33Β | |||||||||
Drawdown of borrowings | 6,459Β | 3,323Β | |||||||||
Repayment of borrowings | (5,630) | (3,503) | |||||||||
Dividends paid by the Company | (37) | (34) | |||||||||
Dividends paid to minority shareholders | (742) | (443) | |||||||||
Cash flows from financing activities | (494) | (674) | |||||||||
Net increase in cash and cash equivalents | 174Β | 1,672Β | |||||||||
Cash and cash equivalents at 1st January | 3,664Β | 1,882Β | |||||||||
Effect of exchange rate changes | 61Β | 110Β | |||||||||
Cash and cash equivalents at 31st December | 3,899Β | 3,664Β | |||||||||
Β
Jardine Strategic Holdings Limited | ||||
Notes | ||||
1. | Accounting Policies and Basis of Preparation | |||
The financial information contained in this announcement has been based on the audited results for the year ended 31st December 2010 which have been prepared in conformity with International Financial Reporting Standards, including International Accounting Standards and Interpretations adopted by the International Accounting Standards Board. | ||||
Previously, the Group's freehold land and buildings, and the building component of owner-occupied leasehold properties were stated at valuation. Independent valuations were performed every three years on an open market basis, and in the case of the building component of leasehold properties, on the basis of depreciated replacement cost. In the intervening years, the Directors reviewed the carrying values and adjustments were made where there were material changes. Revaluation surpluses and deficits were recognized in other comprehensive income and accumulated in equity under asset revaluation reserves, except for movements on individual properties below depreciated cost which were recognized in profit and loss. Leasehold land was carried at amortized cost. | ||||
With effect from 1st January 2010, the Group revised its accounting policy in respect of its freehold land and buildings and the building component of owner-occupied leasehold properties to the cost model, under which these assets are carried at cost less any accumulated depreciation and impairment. This change harmonizes the treatment of land and buildings, both freehold and leasehold, and aligns the Group's accounting policy with industry practice, enhancing the comparability of the Group's financial statements with those of its international peers. The Directors believe that the new policy provides reliable and more relevant financial information to the users of the financial statements. | ||||
This change in accounting policy has been accounted for retrospectively, and the comparative financial statements have been restated. | ||||
In 2010, the Group adopted the following standards, and amendments and interpretations to existing standards which are effective in the current accounting year and relevant to its operations: | ||||
Amendments to IFRS 2 | Group Cash-settled Share-based Payment Transactions | |||
Amendment to IAS 39 | Eligible Hedged Items | |||
IFRIC 17 | Distributions of Non-cash Assets to Owners | |||
IFRIC 18 | Transfers of Assets from Customers | |||
Improvements to IFRSs (2009) | ||||
Β
IAS 17 (amendment) 'Leases' is part of the 2009 improvement project. It specifies that a land lease may be classified as a finance lease when significant risks and rewards associated with the land are transferred to the lessee despite there being no transfer of title at the end of the lease term. Previously, all of the Group's leasehold land was included under land use rights in intangible assets and stated at cost less accumulated amortization. In accordance with the amendment, certain long-term interests in leasehold land have been classified as finance leases and grouped under tangible assets if substantially all risks and rewards relating to the land have been transferred to the Group. The amendment has been applied retrospectively to unexpired leases at the date of adoption of the amendment on the basis of information existing at the inception of the leases. | |||
The adoption of the following standards, amendments and interpretations does not have a material impact on the Group's accounting policies. | |||
The amendments to IFRS 2 'Group Cash-settled Share-based Payment Transactions' incorporate the guidance provided in IFRIC 8 'Scope of IFRS 2' and IFRIC 11 'IFRS 2 - Group and Treasury Share Transactions' and expand on the guidance in IFRIC 11 to address the classification of group arrangements that were not covered by that interpretation. | |||
The amendment to IAS 39 'Eligible Hedged Items' gives additional guidance on the designation of a hedged item and how hedged accounting should be applied in particular situations. | |||
IFRIC 17 'Distribution of Non-cash Assets to Owners' requires that a non-cash dividend payable should be recognized when the dividend is appropriately authorized and is no longer at the discretion of the entity. The dividend should be measured at the fair values of the net assets to be distributed. Any difference between the dividend paid and the carrying amount of the net assets distributed should be included in profit and loss. | |||
IFRIC 18 'Transfers of Assets from Customers' addresses the accounting by recipients for transfers of property, plant and equipment from customers and concludes that when an item of property, plant and equipment transferred meets the definition of an asset from the perspective of the recipient, the recipient should recognize the asset at its fair value on the date of transfer, with the credit being recognized as revenue in accordance with IAS 18 'Revenue'. | |||
IFRS 5 (amendment) 'Non-current Assets Held for Sale and Discontinued Operations' is part of the 2009 improvement project. It clarifies that the disclosure requirements in IFRSs other than IFRS 5 do not apply to non-current assets (or disposal groups) classified as held for sale of discontinued operations unless those IFRSs require (i) specific disclosures in respect of non-current assets (or disposal groups) classified as held for sale or discontinued operations, or (ii) disclosures about measurement of assets and liabilities within a disposal group that are not within the scope of the measurement requirement of IFRS 5 and the disclosures are not already provided in the consolidated financial statements. |
Β
Β Β | IAS 1 (amendment) 'Presentation of Financial Statements' is part of the 2009 improvement project. It clarifies that the potential settlement of a liability by the issue of equity is not relevant to its classification as current or non-current. | |||
IAS 36 (amendment) 'Impairment of Assets' is part of the 2009 improvement project. It clarifies that the largest cash-generating unit (or group of units) to which goodwill should be allocated for the purposes of impairment testing is an operating segment, as defined by paragraph 5 of IFRS 8. | ||||
IFRIC 16 (amendment) 'Hedges of a Net Investment in a Foreign Operation' is part of the 2009 improvement project. It states that in a hedge of a net investment in a foreign operation, qualifying hedging instruments may be held by any entity or entities within the group, including the foreign operation itself, as long as the designation, documentation and effectiveness requirements of IAS 39 that relate to a net investment hedge are satisfied. | ||||
The Group also early adopted the following amendments to an existing standard which are relevant to its operations: | ||||
Amendments to IAS 12 | Deferred Tax: Recovery of Underlying Assets | |||
The amendments to IAS 12 (effective from 1st January 2012) provides that the measurement of deferred tax liabilities and deferred tax assets arising from investment properties which are measured using the fair value model in IAS 40 should reflect a rebuttable presumption that the carrying amount of the underlying assets will be recovered through sale. | ||||
The early adoption of the amendments to IAS 12 has resulted in a change in accounting policy on the provision of deferred tax on revaluation of investment properties. Previously, provision for deferred tax was made at the income tax rates on the revaluation of, and the tax bases of, investment properties held under operating leases on the basis that their values would be recovered through use rather than through sale. In accordance with the amendments, deferred tax is provided at the income tax rates on allowances claimed on these properties and at the capital gains tax rates on the valuation in excess of cost. As the Group's long leasehold investment properties are located in Hong Kong and Singapore where sales of a capital nature in excess of cost are not taxable, deferred tax liabilities relating to investment properties have been reduced significantly. This change in accounting policy has been accounted for retrospectively and the comparative financial statements have been restated. | ||||
Apart from the above, there have been no changes to the accounting policies described in the 2009 annual financial statements. | ||||
The Group's reportable segments are set out in note 9. | ||||
Β
Effect of change in accounting policies: | ||||||||||
a) On the consolidated profit and loss account for the year ended 31st December | ||||||||||
Effect of | ||||||||||
Change to cost model | ||||||||||
for owner-occupied | Adopting amendments | |||||||||
properties | to IAS 12 | |||||||||
2010 | 2009 | 2010 | 2009 | |||||||
US$m | US$m | US$m | US$m | |||||||
Decrease in net operating costs | 23Β | 19Β | - | - | ||||||
Increase in share of results of Jardine | ||||||||||
Matheson | 3Β | 1Β | 1Β | 2Β | ||||||
Increase/(decrease) in share of results of | ||||||||||
associates and joint ventures | 6Β | 4Β | 111Β | (75) | ||||||
Increase in net discount on acquisition of | ||||||||||
Hongkong Land | - | - | - | 49Β | ||||||
(Increase)/decrease in tax | (5) | (4) | 528Β | 314Β | ||||||
Increase in profit after tax | 27Β | 20Β | 640Β | 290Β | ||||||
Attributable to: | ||||||||||
Shareholders of the Company | 11Β | 7Β | 325Β | 137Β | ||||||
Minority interests | 16Β | 13Β | 315Β | 153Β | ||||||
27Β | 20Β | 640Β | 290Β | |||||||
Increase in basic earnings per share (US$) | 0.02 | 0.01 | 0.52 | 0.22 | ||||||
Increase in diluted earnings per share (US$) | 0.02 | 0.01 | 0.50 | 0.21 | ||||||
On the adoption of IAS 17 (amendment), there is no impact on the consolidated profit and loss account. | ||||||||||
Β
b) On the consolidated balance sheet at 31st December | |||||||||||||||||
Increase/(decrease) | Increase/(decrease) | ||||||||||||||||
in assets | in equity/liabilities | ||||||||||||||||
Investment | Associates | Revenue | Deferred | ||||||||||||||
Intangible | Tangible | in Jardine | and joint | Deferred | and other | Minority | tax | ||||||||||
assets | assets | Matheson | ventures | tax assets | reserves | interests | liabilities | ||||||||||
US$m | US$m | US$m | US$m | US$m | US$m | US$m | US$m | ||||||||||
2010 | |||||||||||||||||
Effect of: | |||||||||||||||||
Change to cost model | |||||||||||||||||
for owner-occupied | |||||||||||||||||
properties | - | (222) | (22) | (88) | 14Β | (174) | (102) | (42) | |||||||||
Adopting IAS 17 | |||||||||||||||||
(amendment) | (416) | 416Β | - | - | - | - | - | - | |||||||||
Adopting amendments | |||||||||||||||||
to IAS 12 | - | - | 28Β | 166Β | - | 1,459Β | 1,391Β | (2,656) | |||||||||
Total | (416) | 194Β | 6Β | 78Β | 14Β | 1,285Β | 1,289Β | (2,698) | |||||||||
2009 | |||||||||||||||||
Effect of: | |||||||||||||||||
Change to cost model | |||||||||||||||||
for owner-occupied | |||||||||||||||||
properties | - | (222) | (21) | (78) | 4Β | (162) | (106) | (49) | |||||||||
Adopting IAS 17 | |||||||||||||||||
(amendment) | (373) | 373Β | - | - | - | - | - | - | |||||||||
Adopting amendments | |||||||||||||||||
to IAS 12 | - | - | 26Β | 47Β | - | 1,116Β | 1,090Β | (2,133) | |||||||||
Total | (373) | 151Β | 5Β | (31) | 4Β | 954Β | 984Β | (2,182) | |||||||||
2008 | |||||||||||||||||
Effect of: | |||||||||||||||||
Change to cost model | |||||||||||||||||
for owner-occupied | |||||||||||||||||
properties | - | (229) | (21) | (87) | 6Β | (175) | (105) | (51) | |||||||||
Adopting IAS 17 | |||||||||||||||||
(amendment) | (394) | 394Β | - | - | - | - | - | - | |||||||||
Adopting amendments | |||||||||||||||||
to IAS 12 | - | - | 24Β | 952Β | - | 976Β | - | - | |||||||||
Total | (394) | 165Β | 3Β | 865Β | 6Β | 801Β | (105) | (51) | |||||||||
2. | Revenue | |||||||||||
2010 | 2009 | |||||||||||
US$m | US$m | |||||||||||
By business: | ||||||||||||
Hongkong Land | 1,341Β | 801Β | ||||||||||
Dairy Farm | 7,971Β | 7,029Β | ||||||||||
Mandarin Oriental | 513Β | 438Β | ||||||||||
Jardine Cycle & Carriage | 1,320Β | 1,103Β | ||||||||||
Astra | 14,360Β | 9,537Β | ||||||||||
Intersegment transactions | (7) | (3) | ||||||||||
25,498Β | 18,905Β | |||||||||||
3. | Net Operating Costs | |||||||||||
2010 | 2009 | |||||||||||
US$m | US$m | |||||||||||
Cost of sales | (18,873) | (13,795) | ||||||||||
Other operating income | 784Β | 393Β | ||||||||||
Selling and distribution costs | (2,549) | (2,121) | ||||||||||
Administration expenses | (1,225) | (958) | ||||||||||
Other operating expenses | (54) | (108) | ||||||||||
(21,917) | (16,589) | |||||||||||
Net operating costs included the following gains/(losses) | ||||||||||||
from non-trading items: | ||||||||||||
Increase/(decrease) in fair value of plantations | 422Β | (64) | ||||||||||
Asset impairment | (1) | (13) | ||||||||||
Sale and closure of businesses | 14Β | (3) | ||||||||||
Sale of other investments | - | 132Β | ||||||||||
Restructuring of businesses | - | 1Β | ||||||||||
Repurchase of convertible bonds in Hongkong Land | - | 8Β | ||||||||||
Costs of acquisition of businesses | (1) | - | ||||||||||
434Β | 61Β | |||||||||||
4. | Share of Results of Jardine Matheson | |||||||||||
2010 | 2009 | |||||||||||
US$m | US$m | |||||||||||
By business: | ||||||||||||
Jardine Pacific | 98Β | 83Β | ||||||||||
Jardine Motors | 47Β | 35Β | ||||||||||
Jardine Lloyd Thompson | 24Β | 19Β | ||||||||||
Corporate and other interests | 30Β | 14Β | ||||||||||
199Β | 151Β | |||||||||||
Share of results of Jardine Matheson included the following | ||||||||||||
gains/(losses) from non-trading items: | ||||||||||||
Increase in fair value of investment properties | 10Β | 12Β | ||||||||||
Sale and closure of businesses | 3Β | 5Β | ||||||||||
Sale of other investments | - | 6Β | ||||||||||
Sale of property interests | 1Β | - | ||||||||||
Restructuring of businesses | (2) | (1) | ||||||||||
Restructuring of pension schemes | - | 2Β | ||||||||||
Value added tax recovery in Jardine Motors | - | 2Β | ||||||||||
Discount on acquisition of business | 1Β | - | ||||||||||
Costs on acquisition of business | (1) | - | ||||||||||
12Β | 26Β | |||||||||||
Results are shown after tax and minority interests in Jardine Matheson. | ||||||||||||
Β
5. | Share of Results of Associates and Joint Ventures | ||||||||||
2010 | 2009 | ||||||||||
US$m | US$m | ||||||||||
By business: | |||||||||||
Hongkong Land | 905Β | (145) | |||||||||
Dairy Farm | 47Β | 35Β | |||||||||
Mandarin Oriental | 4Β | - | |||||||||
Jardine Cycle & Carriage | 23Β | 22Β | |||||||||
Astra | 555Β | 257Β | |||||||||
Corporate and other interests | 15Β | 40Β | |||||||||
1,549Β | 209Β | ||||||||||
Share of results of associates and joint ventures included | |||||||||||
the following gains/(losses) from non-trading items: | |||||||||||
Increase/(decrease) in fair value of investment properties | 731Β | (431) | |||||||||
Asset impairment | - | (3) | |||||||||
Sale and closure of businesses | - | 4Β | |||||||||
Derecognition of perpetual liabilities in Rothschilds | |||||||||||
Continuation* | - | 49Β | |||||||||
Discount on acquisition of businesses | 11Β | 3Β | |||||||||
742Β | (378) | ||||||||||
Results are shown after tax and minority interests in the associates and joint ventures. | |||||||||||
* | Fair value gain arising on reclassification of perpetual notes to equity following removal of the contractual obligation to repay principal or to pay interest on those notes. | ||||||||||
Β
6. | Net Discount on Acquisition of Hongkong Land | ||||||||||
During 2009, the Company acquired an additional 0.9% interest in Hongkong Land increasing its holding to 50.01% by the end of June. For the purpose of these financial statements, 30th June 2009 was taken as the effective date of acquisition. | |||||||||||
In accordance with IFRS 3 (revised 2008), the Group remeasured its previously held interest in Hongkong Land at the acquisition date fair value calculated by reference to the quoted share price on that date and recognized the resulting loss, including reclassification adjustments of amounts previously recognized in other comprehensive income, in profit and loss. The Group simultaneously recognized a discount on acquisition in profit and loss, being the excess of the fair value of identifiable net assets over the aggregrate of the fair value of previously held interest and the fair value of consideration transferred (refer note 14(a)). | |||||||||||
US$m | |||||||||||
Discount on shares acquired prior to the date of acquisition | 71Β | ||||||||||
Fair value loss on remeasurement of previously held interest | |||||||||||
at the date of acquisition | (2,567) | ||||||||||
Reclassification adjustments of other comprehensive income | 63Β | ||||||||||
Discount on acquisition | 2,578Β | ||||||||||
145Β | |||||||||||
7. | Sale of Associates and Joint Ventures | ||||||||||
An analysis of sale of associates and joint ventures is set out below: | |||||||||||
2010 | 2009 | ||||||||||
US$m | US$m | ||||||||||
50% interest in Mandarin Oriental, Macau | -Β | 79Β | |||||||||
Other | 3Β | - | |||||||||
3Β | 79Β | ||||||||||
Β
8. | Tax | |||||||||||
2010 | 2009 | |||||||||||
US$m | US$m | |||||||||||
Tax charged to profit and loss is analyzed as follows: | ||||||||||||
Current tax | (709) | (562) | ||||||||||
Deferred tax | (94) | Β (5) | ||||||||||
(803) | (567) | |||||||||||
Greater China | (138) | (82) | ||||||||||
Southeast Asia | (663) | (467) | ||||||||||
United Kingdom | (3) | (3) | ||||||||||
Rest of the world | 1Β | (15) | ||||||||||
(803) | (567) | |||||||||||
Tax relating to components of other comprehensive income | ||||||||||||
is analyzed as follows: | ||||||||||||
Revaluation of other investments | - | (1) | ||||||||||
Actuarial valuation of employee benefit plans | (4) | (3) | ||||||||||
Cash flow hedges | (2) | 4Β | ||||||||||
(6) | - | |||||||||||
Tax on profits has been calculated at rates of taxation prevailing in the territories in which the Group operates. | ||||||||||||
Share of tax charge of Jardine Matheson of US$24 million and US$1 million (2009: US$15 million and US$2 million) are included in share of results of Jardine Matheson and share of other comprehensive income of Jardine Matheson respectively. Share of tax charge of associates and joint ventures of US$265 million and US$2 million (2009: charge of US$176 million and credit of US$1 million) are included in share of results of associates and joint ventures and share of other comprehensive income of associates and joint ventures respectively. | ||||||||||||
Β
9. | Profit attributable to Shareholders | ||||||||||
2010 | 2009 | ||||||||||
US$m | US$m | ||||||||||
Reportable segments: | |||||||||||
Jardine Matheson | 187Β | 125Β | |||||||||
Hongkong Land | 408Β | 387Β | |||||||||
Dairy Farm | 319Β | 283Β | |||||||||
Mandarin Oriental | 33Β | 7Β | |||||||||
Jardine Cycle & Carriage | 39Β | 40Β | |||||||||
Astra | 537Β | 329Β | |||||||||
1,523Β | 1,171Β | ||||||||||
Corporate and other interests | (84) | (82) | |||||||||
Underlying profit attributable to shareholders* | 1,439Β | 1,089Β | |||||||||
Increase in fair value of investment properties | 2,000Β | 538Β | |||||||||
Other non-trading items | 96Β | 361Β | |||||||||
Profit attributable to shareholders | 3,535Β | 1,988Β | |||||||||
* | Underlying profit attributable to shareholders is the measure of profit adopted by the Group in accordance with IFRS 8 'Operating Segments'. | ||||||||||
Β
10. | Earnings per Share | Β | ||||||||||||||||||
Β | ||||||||||||||||||||
Basic earnings per share are calculated on profit attributable to shareholders of US$3,535 million (2009: US$1,988 million) and on the weighted average number of 621 million (2009: 621 million) shares in issue during the year. | Β | |||||||||||||||||||
Β | ||||||||||||||||||||
Diluted earnings per share are calculated on profit attributable to shareholders of US$3,438 million (2009: US$1,957 million), which is after adjusting for the effects of the conversion of dilutive potential ordinary shares of Jardine Matheson, subsidiary undertakings, associates or joint ventures, and on the weighted average number of 621 million (2009: 621 million) shares in issue during the year. | Β | |||||||||||||||||||
Β | ||||||||||||||||||||
The weighted average number of shares is arrived at as follows: | Β | |||||||||||||||||||
Β | ||||||||||||||||||||
Ordinary shares | Β | |||||||||||||||||||
in millions | Β | |||||||||||||||||||
Β | ||||||||||||||||||||
2010 | 2009 | Β | ||||||||||||||||||
Β | ||||||||||||||||||||
Β | ||||||||||||||||||||
Weighted average number of shares in issue | 1,111Β | 1,100Β | Β | |||||||||||||||||
Company's share of shares held by Jardine Matheson | (490) | (479) | Β | |||||||||||||||||
Β | ||||||||||||||||||||
Β | ||||||||||||||||||||
Weighted average number of shares for earnings | Β | |||||||||||||||||||
per share calculation | 621Β | 621Β | ||||||||||||||||||
Β | ||||||||||||||||||||
Β | ||||||||||||||||||||
Additional basic and diluted earnings per share are also calculated based on underlying profit attributable to shareholders. A reconciliation of earnings is set out below: | Β | |||||||||||||||||||
2010 | 2009 | |||||||||||||||||||
Basic | Diluted | Basic | Diluted | |||||||||||||||||
earnings | earnings | earnings | earnings | |||||||||||||||||
per share | per share | per share | per share | |||||||||||||||||
US$m | US$ | US$ | US$m | US$ | US$ | |||||||||||||||
Profit attributable to shareholders | 3,535Β | 5.69Β | 5.54Β | 1,988Β | 3.20Β | 3.15Β | Β | |||||||||||||
Non-trading items (note 11) | (2,096) | (899) | Β | |||||||||||||||||
Underlying profit attributable to | Β | |||||||||||||||||||
shareholders | 1,439Β | 2.32Β | 2.30Β | 1,089Β | 1.75Β | 1.74Β | ||||||||||||||
Β
11. | 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 plantations; gains and losses arising from the sale of businesses, investments and properties; impairment of non-depreciable intangible assets 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. | ||||||||||||
2010 | 2009 | |||||||||||
US$m | US$m | |||||||||||
By business: | ||||||||||||
Jardine Matheson | 12Β | 26Β | ||||||||||
Hongkong Land | 1,990Β | 671Β | ||||||||||
Dairy Farm | 1Β | - | ||||||||||
Mandarin Oriental | - | 54Β | ||||||||||
Jardine Cycle & Carriage | - | 3Β | ||||||||||
Astra | 93Β | (12) | ||||||||||
Corporate and other interests | - | 157Β | ||||||||||
2,096Β | 899Β | |||||||||||
An analysis of non-trading items after interest, tax and minority interests is set out below: | ||||||||||||
Increase in fair value of investment properties | ||||||||||||
- | Hongkong Land | 1,990Β | 525Β | |||||||||
- | Jardine Matheson | 10Β | 12Β | |||||||||
- | other | - | 1Β | |||||||||
2,000Β | 538Β | |||||||||||
Increase/(decrease) in fair value of plantations | 87Β | (13) | ||||||||||
Asset impairment | (1) | (11) | ||||||||||
Sale and closure of businesses | ||||||||||||
- | 50% interest in Mandarin Oriental, Macau | - | 58Β | |||||||||
- | other | 7Β | 7Β | |||||||||
7Β | 65Β | |||||||||||
Sale of investments | - | 114Β | ||||||||||
Sale of property interests | 1Β | - | ||||||||||
Value added tax recovery in Jardine Motors | - | 1Β | ||||||||||
Repurchase of convertible bonds in Hongkong Land | - | 8Β | ||||||||||
Net discount on acquisition of Hongkong Land | - | 145Β | ||||||||||
Restructuring of businesses | (2) | - | ||||||||||
Restructuring of pension schemes | - | 2Β | ||||||||||
Derecognition of perpetual liabilities in Rothschilds | ||||||||||||
Continuation* | - | 49Β | ||||||||||
Discount on acquisition of businesses | 5Β | 1Β | ||||||||||
Costs on acquisition of businesses | (1) | - | ||||||||||
2,096Β | 899Β | |||||||||||
Β * | Fair value gain arising on reclassification of perpetual notes to equity following removal of the contractual obligation to repay principal or to pay interest on those notes. | |||||||||||
Β
12. | Non-current Assets Classified as Held for Sale | |||||||||
The major classes of assets classified as held for sale are set out below: | ||||||||||
2010 | 2009 | |||||||||
US$m | US$m | |||||||||
Intangible assets | - | 48Β | ||||||||
Tangible assets | - | 57Β | ||||||||
Total assets | - | 105Β | ||||||||
At 31st December 2009, the non-current assets classified as held for sale comprised Dairy Farm's interest in a retail property and a distribution centre in Malaysia. The retail property was sold during the year. The distribution centre with a carrying value of US$74 million remained unsold and was reclassified to tangible assets. | ||||||||||
Β
13. | Dividends | ||||||||||
2010 | 2009 | ||||||||||
US$m | US$m | ||||||||||
Final dividend in respect of 2009 of USΒ’14.00 | |||||||||||
(2008: USΒ’13.10) per share | 155Β | 143Β | |||||||||
Interim dividend in respect of 2010 of USΒ’6.00 | |||||||||||
(2009: USΒ’6.00) per share | 67Β | 66Β | |||||||||
222Β | 209Β | ||||||||||
Company's share of dividends paid on the shares | |||||||||||
held by Jardine Matheson | (98) | (91) | |||||||||
124Β | 118Β | ||||||||||
A final dividend in respect of 2010 of USΒ’15.00 (2009: USΒ’14.00) per share amounting to a total of US$167 million (2009: US$155 million) is proposed by the Board. The dividend proposed will not be accounted for until it has been approved at the Annual General Meeting. The net amount after deducting the Company's share of the dividends payable on the shares held by Jardine Matheson of US$74 million (2009: US$68 million) will be accounted for as an appropriation of revenue reserves in the year ending 31st December 2011. | |||||||||||
Β
14. | Notes to Consolidated Cash Flow Statement | ||||||||
(a) | Purchase of subsidiary undertakings | ||||||||
2009 | |||||||||
US$m | |||||||||
Hongkong Land | |||||||||
Tangible assets | 6Β | ||||||||
Investment properties | 12,911Β | ||||||||
Joint ventures | 2,028Β | ||||||||
Deferred tax assets | 4Β | ||||||||
Pension assets | 6Β | ||||||||
Non-current debtors | 69Β | ||||||||
Current assets | 2,259Β | ||||||||
Long-term borrowings | (3,509) | ||||||||
Deferred tax liabilities | (44) | ||||||||
Non-current creditors | (23) | ||||||||
Current liabilities | (915) | ||||||||
Minority interests | (102) | ||||||||
Fair value of net assets | 12,690Β | ||||||||
Adjustment for minority interests | (6,345) | ||||||||
Net assets acquired | 6,345Β | ||||||||
Discount on acquisition | (2,578) | ||||||||
Fair values of previously held interest and consideration transferred | 3,767Β | ||||||||
Fair value loss on remeasurement of previously held interest | 2,567Β | ||||||||
Carrying amount of previously held interest at the date of acquisition | 6,334Β | ||||||||
Attributable to interest held at beginning of year | (6,215) | ||||||||
Attributable to shares acquired prior to the date of acquisition | 119Β | ||||||||
Discount on shares acquired prior to the date of acquisition | (71) | ||||||||
Consideration paid | 48Β | ||||||||
Cash and cash equivalents of Hongkong Land at the date of | |||||||||
acquisition | (1,130) | ||||||||
Cash inflow | (1,082) | ||||||||
Β
2010 | 2009 | |||||||||||||||
Book | Fair value | Fair | Fair | |||||||||||||
value | adjustments | value | value | |||||||||||||
US$m | US$m | US$m | US$m | |||||||||||||
Β
Other subsidiary undertakings | Β | ||||||||||||||||||||
Tangible assets | 19Β | 1Β | 20Β | 1Β | Β | ||||||||||||||||
Current assets | 64Β | (3) | 61Β | 87Β | Β | ||||||||||||||||
Non-current creditors | (1) | - | (1) | (10) | Β | ||||||||||||||||
Current liabilities | (33) | (1) | (34) | (4) | Β | ||||||||||||||||
Minority interests | - | - | - | 2Β | Β | ||||||||||||||||
Β | |||||||||||||||||||||
Β | |||||||||||||||||||||
Net assets acquired | 49Β | (3) | 46Β | 76Β | Β | ||||||||||||||||
Β | |||||||||||||||||||||
Goodwill | 44Β | - | Β | ||||||||||||||||||
Β | |||||||||||||||||||||
Β | |||||||||||||||||||||
Total consideration | 90Β | 76Β | Β | ||||||||||||||||||
Adjustment for deferred consideration | - | (1) | Β | ||||||||||||||||||
Carrying value of associates and joint ventures | - | (29) | Β | ||||||||||||||||||
Cash and cash equivalents of subsidiary undertakings | Β | ||||||||||||||||||||
acquired | (41) | (4) | Β | ||||||||||||||||||
Net cash outflow | 49Β | 42Β | |||||||||||||||||||
Β
Net cash outflow for purchase of other subsidiary undertakings in 2010 of US$49 million mainly included Dairy Farm's acquisition of Bintang Retail Industries. | ||||
Net cash outflow for purchase of other subsidiary undertakings in 2009 of US$42 million mainly comprised Hongkong Land's increased interest in Maple Place in Beijing from 35% to 90%. | ||||
(b) | Purchase of associates and joint ventures in 2010 included US$80 million for Hongkong Land's acquisition of an additional 20% interest in Shenyang joint venture, US$13 million for Jardine Cycle & Carriage's acquisition of an additional 6% interest in PT Tunas Ridean, US$18 million, US$98 million and US$13 million for Astra's acquisition of an additional 19% interest in PT Pam Lyonnaise Jaya, subscription to Bank Permata's rights issue, and capital injection to its financial services joint ventures respectively. Purchase of associates and joint ventures in 2009 included US$44 million for Jardine Cycle & Carriage's acquisition of an additional 9% interest in Truong Hai Auto Corporation and US$4 million for the Company's additional investment in Jardine Rothschild Asia Capital. |
Β
(c) | Purchase of other investments in 2010 included US$163 million for Astra's acquisition of securities, and US$34 million and US$25 million for the Company's purchase of shares in Acleda Bank and The Bank of N.T. Butterfield & Son respectively. Purchase of other investments in 2009 included US$38 million and US$105 million for Hongkong Land's and Astra's purchase of securities respectively, and US$157 million for the Company's purchase of Tata Power. | ||||||||||
(d) | Advance to associates, joint ventures and others in 2010 and 2009 included Hongkong Land's loans to its property joint ventures of US$214 million and US$222 million respectively. | ||||||||||
(e) | Repayment from associates and joint ventures in 2010 and 2009 included US$275 million and US$31 million from Hongkong Land's property joint ventures. | ||||||||||
(f) | Sale of subsidiary undertakings | ||||||||||
2010 | 2009 | ||||||||||
US$m | US$m | ||||||||||
Intangible assets | 15Β | 2Β | |||||||||
Tangible assets | 12Β | 6Β | |||||||||
Plantations | 7Β | - | |||||||||
Deferred tax assets | 5Β | - | |||||||||
Current assets | 33Β | 5Β | |||||||||
Pension liabilities | (1) | - | |||||||||
Current liabilities | (20) | (2) | |||||||||
Net assets | 51Β | 11Β | |||||||||
Adjustment for minority interests | (9) | (3) | |||||||||
Net assets disposed of | 42Β | 8Β | |||||||||
Profit/(loss) on disposal | 14Β | (3) | |||||||||
Sale proceeds | 56Β | 5Β | |||||||||
Adjustment for deferred consideration | (11) | (1) | |||||||||
Adjustment for carrying value of associates and joint | |||||||||||
ventures | (22) | (3) | |||||||||
Cash and cash equivalents of subsidiary undertakings | |||||||||||
disposed of | (3) | (3) | |||||||||
Net cash inflow/(outflow) | 20Β | (2) | |||||||||
Sale proceeds in 2010 of US$56 million included US$28 million and US$27 million from Astra's sale of a 2% interest in PT Komatsu Remanufacturing Asia which became an associate and PT Surya Panen Subur respectively. | |||||||||||
(g) | Sale of associates and joint ventures in 2009 included US$90 million from Mandarin Oriental's sale of its 50% interest in Mandarin Oriental, Macau. | ||||||||||
Β
(h) | Sale of other investments in 2010 comprised Astra's sale of securities. Sale of other investments in 2009 included the Company's sale of its interest in Tata Industries of US$157 million and Astra's sale of securities of US$56 million. | |||||||||
2010 | 2009 | |||||||||
(i) | Change in interests in subsidiary undertakings | US$m | US$m | |||||||
Increase in attributable interests | ||||||||||
- Hongkong Land | 100Β | - | ||||||||
- Mandarin Oriental | 4Β | 16Β | ||||||||
- Jardine Cycle & Carriage | 84Β | 35Β | ||||||||
- other | 352Β | 15Β | ||||||||
Decrease in attributable interests | - | (1) | ||||||||
540Β | 65Β | |||||||||
Increase in attributable interests in other subsidiary undertakings in 2010 included US$160 million for Hongkong Land's acquisition of an additional 23% interest in MCL Land and US$178 million for Astra's acquisition of an additional 47% interest in PT Astra Sedaya Finance. Increase in attributable interests in other subsidiary undertakings in 2009 included US$11 million for Astra's acquisition of an additional interest in PT Marga Mandalasakti. | ||||||||||
Β
15. | Jardine Strategic Corporate Cash Flow and Net Cash | |||||||||
2010 | 2009 | |||||||||
US$m | US$m | |||||||||
Dividends receivable | ||||||||||
Subsidiary undertakings | 561Β | 385Β | ||||||||
Jardine Matheson | 328Β | 255Β | ||||||||
Associates | 2Β | 78Β | ||||||||
Other holdings | 15Β | 8Β | ||||||||
906Β | 726Β | |||||||||
Less taken in scrip | (328) | (255) | ||||||||
578Β | 471Β | |||||||||
Other operating cash flows | (97) | (37) | ||||||||
Cash flows from operating activities | 481Β | 434Β | ||||||||
Investing activities | ||||||||||
Purchase of associates and joint ventures | (5) | (52) | ||||||||
Purchase of other investments | (64) | (168) | ||||||||
Sale of other investments | - | 190Β | ||||||||
Cash flows from investing activities | (69) | (30) | ||||||||
Financing activities | ||||||||||
Repurchase of shares | (9) | - | ||||||||
Change in interests in subsidiary undertakings | (188) | (51) | ||||||||
Dividends paid by the Company | (37) | (34) | ||||||||
Cash flows from financing activities | (234) | (85) | ||||||||
Fair value adjustment on 6.375% Guaranteed Bonds | 9Β | 11Β | ||||||||
Net increase in net cash | 187Β | 330Β | ||||||||
Net cash/(debt) at 1st January | 110Β | (220) | ||||||||
Net cash at 31st December | 297Β | 110Β | ||||||||
Represented by: | ||||||||||
Bank balances and other liquid funds | 573Β | 394Β | ||||||||
6.375% Guaranteed Bonds | (276) | (284) | ||||||||
297Β | 110Β | |||||||||
Corporate cash flow and net cash comprises the cash flows and net cash or debt of the Company and of its investment holding and financing subsidiary undertakings. | ||||||||||
Β
16. | Capital Commitments and Contingent Liabilities | ||
Total capital commitments at 31st December 2010 amounted to US$1,939 million (2009: US$1,797 million). | |||
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. | |||
17. | Related Party Transactions | ||
In the normal course of business the Group undertakes a variety of transactions with certain of its associates and joint ventures, and with Jardine Matheson. | |||
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 2010 amounted to US$5,929 million (2009: US$3,703 million). The Group also sells motor vehicles and spare parts to its associates and joint ventures in Indonesia including PT Astra Honda Motor and PT Astra Daihatsu Motor. Total revenue from sale of motor vehicles and spare parts in 2010 amounted to US$643 million (2009: US$392 million). | |||
There were no other related party transactions that might be considered to have a material effect on the financial position or performance of the Group that were entered into or changed during the year. | |||
Β
18. | Market Value Basis Net Assets | |||||||||
2010 | 2009 | |||||||||
US$m | US$m | |||||||||
Jardine Matheson | 1,822Β | 1,830Β | ||||||||
Hongkong Land | 8,245Β | 5,567Β | ||||||||
Dairy Farm | 9,751Β | 6,287Β | ||||||||
Mandarin Oriental | 1,526Β | 1,095Β | ||||||||
Jardine Cycle & Carriage | 7,104Β | 4,743Β | ||||||||
Other holdings | 839Β | 690Β | ||||||||
Jardine Strategic Corporate | 256Β | 84Β | ||||||||
29,543Β | 20,296Β | |||||||||
US$ | US$ | |||||||||
Net asset value per share | 47.53Β | 32.64Β | ||||||||
'Market value basis net assets' are calculated based on the market price of the Company's holding for listed companies, with the exception of the holding in Jardine Matheson which has been calculated by reference to the market value of US$15,494 million (2009: US$10,371 million) less the Company's share of the market value of Jardine Matheson's interest in the Company. For unlisted companies a Directors' valuation has been used. | ||||||||||
Net asset value per share is calculated on 'market value basis net assets' of US$29,543 million (2009: US$20,296 million) and on 622 million (2009: 622 million) shares outstanding at the year end which excludes the Company's share of the shares held by Jardine Matheson of 493 million (2009: 485 million) shares. | ||||||||||
Β
Jardine Strategic Holdings Limited |
Principal Risks and Uncertainties |
The Board has overall responsibility for risk management and internal control. The process by which the Group identifies and manages risk will be set out in more detail in the Corporate Governance section of the Company's 2010 Annual Report (the 'Report'). The following are the principal risks and uncertainties facing the Company as required to be disclosed pursuant to the Disclosure and Transparency Rules issued by the Financial Services Authority of the United Kingdom and are in addition to the matters referred to in the Chairman's Statement and Operating Review. |
Economic Risk |
Most of the Group's businesses are exposed to the risk of negative developments in global and regional economies and financial markets, either directly or through the impact on the Group's joint venture partners, franchisors, bankers, suppliers or customers. These developments can result in recession, inflation, deflation, currency fluctuations, restrictions in the availability of credit, business failures, or increases in financing costs, oil prices and in the cost of raw materials. Such developments might increase operating costs, reduce revenues, lower asset values or result in the Group's businesses being unable to meet in full their strategic objectives. |
Commercial Risk and Financial Risk |
Risks are an integral part of normal commercial practices, and where practicable steps are taken to mitigate such risks. These risks are further pronounced when operating in volatile markets. |
A number of the Group's businesses make significant investment decisions in respect of developments or projects that take time to come to fruition and achieve the desired returns and are, therefore, subject to market risks. |
The Group's businesses operate in areas that are highly competitive, and failure to compete effectively in terms of price, product specification or levels of service can have an adverse effect on earnings. Significant pressure from such competition may lead to reduced margins. The quality and safety of the products and services provided by the Group's businesses are also important and there is an associated risk if they are below standard. |
The steps taken by the Group to manage its exposure to financial risk will be set out in the Financial Review and in a note to the Financial Statements in the Report. |
Concessions, Franchises and Key Contracts |
A number of the Group's businesses and projects are reliant on concessions, franchises, management or other key contracts. Cancellation, expiry or termination, or the renegotiation of any such concession, franchise, management or other key contracts, could have an adverse effect on the financial condition and results of operations of certain subsidiaries, associates and joint ventures of the Group. |
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Regulatory and Political Risk |
The Group's businesses are subject to a number of regulatory environments in the territories in which they operate. Changes in the regulatory approach to such matters as foreign ownership of assets and businesses, exchange controls, planning controls, emission regulations, tax rules and employment legislation have the potential to impact the operations and profitability of the Group's businesses. Changes in the political environment in such territories can also affect the Group's businesses. |
Terrorism, Pandemic and Natural Disasters |
A number of the Group's operations are vulnerable to the effects of terrorism, either directly through the impact of an act of terrorism or indirectly through the impact of generally reduced economic activity in response to the threat of or an actual act of terrorism. |
All Group businesses would be impacted by a global or regional pandemic which could be expected to seriously affect economic activity and the ability of our businesses to operate smoothly. In addition, many of the territories in which the Group operates can experience from time to time natural disasters such as earthquakes and typhoons. |
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Responsibility Statement | ||
The Directors of the Company confirm to the best of their knowledge that: | ||
(a) | the consolidated financial statements have been prepared in accordance with International Financial Reporting Standards, including International Accounting Standards and Interpretations adopted by the International Accounting Standards Board; and | Β |
(b) | the sections of the Company's 2010 Annual Report, including the Chairman's Statement, Operating Review and Principal Risks and Uncertainties, which constitute the management report include a fair review of all information required to be disclosed by the Disclosure and Transparency Rules 4.1.8 to 4.1.11 issued by the Financial Services Authority of the United Kingdom. | Β |
For and on behalf of the Board | ||
A.J.L. Nightingale | ||
Lord Leach of Fairford | ||
Directors | ||
4th March 2011 | ||
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The final dividend of USΒ’15.00 per share will be payable on 18th May 2011, subject to approval at the Annual General Meeting to be held on 12th May 2011, to shareholders on the register of members at the close of business on 18th March 2011, and will be available in cash with a scrip alternative. The ex-dividend date will be on 16th March 2011, and the share registers will be closed from 21st to 25th March 2011, inclusive. Shareholders will receive their cash dividends in United States dollars, unless they are registered on the Jersey branch register where they will have the option to elect for sterling. These shareholders may make new currency elections for the 2010 final dividend by notifying the United Kingdom transfer agent in writing by 21st April 2011. The sterling equivalent of dividends declared in United States dollars will be calculated by reference to a rate prevailing on 4th May 2011. Shareholders holding their shares through The Central Depository (Pte) Limited ('CDP') in Singapore will receive United States dollars unless they elect, through CDP, to receive Singapore dollars or the scrip alternative. | ||
Jardine Strategic | ||
Jardine Strategic is a holding company which takes long-term strategic investments in multinational businesses, particularly those with an Asian focus, and in other high quality companies with existing or potential links with the Group. Its principal attributable interests are in Jardine Matheson 54%, Hongkong Land 50%, Dairy Farm 78%, Mandarin Oriental 74% and Jardine Cycle & Carriage 70%, which in turn has a 50% interest in Astra. Jardine Strategic is 81%-held by Jardine Matheson. The Company also has a 21% interest in Rothschilds Continuation. | ||
Jardine Strategic Holdings Limited is incorporated in Bermuda and has a premium listing on the London Stock Exchange, with secondary listings in Bermuda and Singapore. The Company's interests are managed from Hong Kong by Jardine Matheson Limited. | ||
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For further information, please contact: | ||
Jardine Matheson Limited | ||
James Riley | (852) 2843 8229 | |
GolinHarris | ||
Kennes Young | (852) 2501 7987 | |
Full text of the Preliminary Announcement of Results and the Preliminary Financial Statements for the year ended 31st December 2010 can be accessed through the Internet at 'www.jardines.com'. | ||
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