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Creating
long-term,
sustainable
value
Jardine Matheson
Annual Report 2023
Jardine Matheson (‘Jardines’ or ‘the Group’)
isa diversified Asian-based group founded
inChina in 1832, with unsurpassed experience
in the region. Our broad portfolio of
market-leading businesses are well-positioned
to capture the themes of urbanisation and
therising middle-income population in Asia.
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.
CONTENTS
STRATEGIC REPORT
Introduction 1
Highlights 2
Group Structure 4
Our Presence 5
Group Businesses at a Glance 6
Creating Value 8
Chairman’s Statement 12
Group Managing Director’s Review 16
Financial Review 38
Sustainability 44
TCFD Report 48
GOVERNANCE REPORT
Directors’ Profiles 58
Corporate Governance 62
Remuneration Report 78
Audit Committee Report 83
Principal Risks and Uncertainties 88
Shareholder Information 97
FINANCIAL REPORT
Financial Statements 98
Independent Auditor’s Report 201
Five Year Summary 208
Responsibility Statements 209
Group Offices 210
Strategic Report p1
Governance Report p58
Financial Report p98
1
Jardine Matheson Annual Report 2023
Embedding
Sustainability
Strategic Priorities
The Group works with our businesses to deliver on our strategic priorities of:
The Group’s strategic priorities
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: Enhancing Leadership and
Entrepreneurialism, Evolving our
Portfolio, Driving Innovation and
Operational Excellence, and
Embedding Sustainability.
These values and priorities guide us
increating long-term, sustainable
value for our businesses and the
communities in which we operate in.
Our Operations
Across the Group, our over 443,000
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.
Our Presence
We operate principally in China and
South East 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 over 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.
Evolving
our Portfolio
Enhancing
Leadership and
Entrepreneurialism
Driving Innovation
and Operational
Excellence
2
Jardine Matheson Annual Report 2023
Highlights
•
Underlying profit up 5% to US$1.66 billion (+7% at CER
°
)
•
Record performance in South East Asia, driven by Astra
•
Strong recoveries at DFI Retail Group (‘DFI Retail’) and
Mandarin Oriental
•
Significant capital investments at Astra to drive future growth
•
Full year dividend up 5% to US$2.25
By geographical area*
Rest of the
World
7%
South East
Asia
56%
° CER means Constant Exchange Rates
* Based on underlying profit attributable to shareholders before corporate and other interests, which amounted to US$1,765 million in 2023 (2022: US$1,740 million).
Leveraging the growing prosperity of Asia
China
37%
2023
Jardine
Cycle&Carriage
US$102m
Jardine
MotorInterests
US$139m
Jardine Pacific
US$164m
Astra
US$786m
DFIRetail
US$120m
Mandarin
Oriental
US$65m
Hongkong Land
US$389m
Diversified portfolio of quality businesses
Underlying profit attributable to shareholders of US$1,661 million
(2022:US$1,584 million)
By business*
4%6%7%8%9%22%44%
3
Jardine Matheson Annual Report 2023
Highlights
Ω
The Group uses ‘underlying profit’ in its internal financial reporting to distinguish between ongoing business performance and non-trading items, as more fully described in note 40 to the
financial statements. Management considers this to be a key measure which provides additional information to enhance understanding of the Group’s underlying business performance.
#
Excluding net borrowings of financial services companies.
2023 financial highlights
Revenue (US$ billion)
US$36.0bn US$2.25
DPS (US$)
Underlying EPS
Ω
(US$)
US$5.74 US$2.37
Reported EPS (US$)
Cash flows from operating activities
(US$ billion)
US$4.6bn US$8.4bn & 15%
Net debt & gearing %
#
(US$ billion)
40.9
2019
32.6
2020
35.9
2021
37.5
2022
36.02023
1.72
2019
1.72
2020
2.00
2021
2.15
2022
2.252023
4.23
2019
2.95
2020
4.83
2021
5.49
2022
5.742023
7.56
2019
(1.07)
2020
2021
1.22
6.01
2022
2.372023
4.9
2019
5.3
2020
5.1
2021
4.8
2022
4.6
2023
4.8
2019
3.7
2020
6.6
2021
7.5
2022
8.4
7%
6%
11%
13%
15%2023
Results
2023
US$m
2022
US$m
Change
%
Revenue 36,049 37,496 (4)
Underlying profit beforetax
Ω
5,034 4,930 2
Underlying profit attributable to shareholders
Ω
1,661 1,584 5
Profit attributable to shareholders 686 354 94
Shareholders’ funds 29,010 28,850 1
Capital investments 4,668 3,507 33
US$ US$ %
Underlying earnings pershare
Ω
5.74 5.49 5
Earnings per share 2.37 1.22 94
Net asset (book) value per share 100.31 99.55 1
Dividends per share 2.25 2.15 5
People employed 285,000
4
Jardine Matheson Annual Report 2023
Group Structure
Percentagesshow effective ownership as at 7th March 2024.
Other
South East
Asian
companies
21.2%
53.3%
100%
50%
42%
100%
21.4% 50.1%
77.5%
80.2%
78.1%
50%
100%
50% 100%
5
Jardine Matheson Annual Report 2023
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
Taiwan
We are focussed in Asia.
Ourmarket-leading
businesses operate in
multiple sectors across
key markets of
Chinaand South East
Asia – principally
Indonesia, Singapore
and Vietnam.
* Includes major associates and joint ventures
30+
Countries and regions
443,000
Total people employed*
190+
Years
6
Jardine Matheson Annual Report 2023
Group Businesses at a Glance
*Figures in brackets show effective ownership at 7th March 2024.
The listed holding company of the Group which oversees a portfolio of market-leading
businesses and supports their long-term sustainable growth.
Jardine Matheson
Jardine Matheson has a wide range of automotive businesses,
withanextensive footprint in China and South East Asia. The Group
hasa long-standing strategic partnership with, and holds a 21.2%
interest in, 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). The sale of
Jardine Motors Group in the United Kingdom was completed in 2023.
Jardine Pacific’s diverse portfolio comprises industry leaders in the
areas of engineering and construction, transport services, automotive
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%)*
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 South East Asia, including a 43% interest in a 1.1 million sq. m. mixed-
use project in West Bund, Shanghai. (53.3%)*
7
Jardine Matheson Annual Report 2023
Group Businesses at a Glance
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 38 hotels,
nineresidences and 23 exclusive homes in 25 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. (80.2%)*
*Figures in brackets show effective ownership at 7th March 2024.
DFI Retail is a leading listed Pan-Asian retailer. The group operates
under a number of well-known brands across six divisions: food,
health and beauty, 7-Eleven, IKEA, restaurants and other retailing.
It 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%)*
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 more than 280 subsidiaries, associates and
joint ventures, and also more than 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 its Astra 2030 Sustainability
Aspirations which combine its focus on communities, climate and the planet.
These Aspirations 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.
Jardine Cycle & Carriage (‘JC&C’) is the investment holding company of
the Jardine Matheson Group in South East Asia, listed in Singapore.
JC&Cseeks to grow with South East 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. (78.1%)*
8
Jardine Matheson Annual Report 2023
Creating Value
Jardine Matheson is a diversified group with a strong focus on our core geographies of China and
South East Asia. We have builta solid foundation of experience and expertise in the Asia region over
more than 190 years, actively supporting our businesses and communities as they grow sustainably for
the longterm.
We create value by identifying opportunities through our longstanding networks and partnerships, and
actively allocating capital – all while maintaining a robust balance sheet and stable dividend growth.
CEO appointments
Having the right leadership in place – which includes a balance of drawing on our strong internal leadership bench as well as
strategically sourcing outside talent– is critical to achieving our ambitions. We have recently made a number of important
senior leadership appointments: Scott Price became Group Chief Executive at DFI Retail, Laurent Kleitman came in as Group
Chief Executive at Mandarin Oriental, Michael Smith has joined as Chief Executive of Hongkong Land, and Elton Chan has
been appointed Chief Executive of Jardine Pacific.
Enhancing Leadership and Entrepreneurialism
Our people are our greatest strength. We are committed to developing leaders with an entrepreneurial mindset, fostering a
culture of innovation and balanced risk-taking. Through continuous learning and development, we provide opportunities for
growth. Our commitment to inclusivity ensures that diverse perspectives are valued, creating an environment where our
people can thrive and contribute their best.
Inclusion, Equity & Diversity (‘IE&D’)
Jardines has set five-year targets for IE&D, with each
Group company establishing their own specific
objectives. For executives and senior leadership,
weaim to either achieve 50% female representation,
improve representation by 50%, ormaintain a
representation of 50%. Inaddition, the Group is
currently reviewing relevant policies and is fully
committed to making necessary amendments to foster
an inclusive workplace environment.
LearnFest 2023
The annual Jardines learning festival, LearnFest,
took place in June 2023. This week-long event saw
the active participation of over 50,000 colleagues
from 15 companies across 30 countries. Sessions
were conducted both online and in person,
providing a diverse and engaging learning
experience for all attendees.
9
Jardine Matheson Annual Report 2023
Creating Value
Evolving our Portfolio
We are evolving our portfolio to remain relevant to the needs of Asian consumers. With a longstanding focus on the growing
middle class and urbanisation, we have consistently positioned ourselves to capture the opportunities arising from these
trends. We are strengthening our existing core businesses to ensure their continued competitiveness, including by increasing
organic capex to fuel further growth and enable us to meet the demands of the dynamic markets in which we operate. We are
also expanding our footprint into new high-growth industries which align with emerging consumer preferences.
Disciplined capital recycling
In 2023, we sold our 28.22%-stake in Greatview Aseptic
Packaging Company to Shandong Xinjufeng Technology
Packaging, and the Group’s UK Motors business to Lithia &
Driveway, both as part of our ongoing focus on generating
long-term value in our core growth markets in Asia. The
sale of our 50%-stake inJardine Aviation Services (‘JASG’)
was completed in March 2024. Thistransaction will provide
expanded development opportunities for employees and
strengthens JASG’s position in the global aviation sector.
Astra invests in nickel mining and processing
United Tractors, a subsidiary of Astra, has acquired 90%
effective share ownership of PT Stargate Pasific
Resources and PT Stargate Mineral Asia, and a 19.99%
interest in NickelIndustries Limited, as part of its
continued diversification away from coal mining.
Increasing investments in electric vehicles
The EV market in Asia is rapidly expanding, and our
automotive businesses are seizing the opportunity to
increase their market share in this growing segment. JC&C
has formed a strategic partnership with Carro, a prominent
technology-driven used car platform, while Cycle & Carriage
Singapore has established a partnership with Great Wall
Motor to become the distributor of its EVs in Singapore.
ZungFu has also been appointed as the distributor of
smart’s new generation electric models in Hong Kong.
JC&C strengthens strategic partnership
with THACO
JC&C subscribed for US$350 million of convertible
bonds in THACO’s recent private placement, providing
JC&C with a secure path to increasing its shareholding
in one of Vietnam’s most dynamic unlisted companies.
We focus on having the right leaders in place across our businesses and work closely with them on
performance management to deliver on our key strategic priorities. We continuously raise the bar,
setting high standards ofgovernance and management for ourselves and our businesses.
In this section, we look at the progress Jardines has made in 2023 across our strategic priorities of: Enhancing Leadership
and Entrepreneurialism, Evolving our Portfolio, Driving Innovation and Operational Excellence, and Embedding
Sustainability.
10
Jardine Matheson Annual Report 2023
Creating Value
Driving Innovation and Operational Excellence
Operating in highly dynamic markets means we must continuously adapt to remain competitive. Recognising the
importance of digital transformation, our businesses have accelerated their adoption of digital ways of working
to enhance operational efficiency and effectiveness, including through the use of AI in our day-to-day
operations. We increased our investments in digital businesses and explored opportunities in digital
adjacencies. Embracing new technologies has also allowed our businesses to create more touchpoints for
consumers, providing enhanced experiences and fostering stronger connections.
Embracing Generative AI
In June 2023, Hack.Asia, Jardines’ innovation
hackathon, received an impressive 200+ Gen AI
submissions across 12 business units. Building on this
enthusiastic response, Jardines has successfully
developed six proofs of concept across eight business
units. We remain dedicated to supporting and
nurturing innovation within our organisation.
Astra expands digital infrastructure
Astra set up a JV with Equinix to develop Indonesia’s data
centre infrastructure and support the digital needs of
businesses. Astra also completed the acquisition of
online classifieds firm OLX Indonesia, as part of
strengthening its used-car ecosystem.
Jardine Service Centre
Jardine Service Centre (‘JSC’) is an in-house shared
service centre providing back-office support to the
global business units of Jardines, through the
administration of transactional and rule-based
activities. The opening of JSC supports Jardines’
ongoing commitment towards operational excellence
and innovation.
Enhancing our digital touchpoints
Our businesses are reaching customers in new and
different ways. Astra launched bank saqu, a digital
banking initiative dedicated to empowering
‘solopreneurs’ in Indonesia and attracted 100,000 new
customers in less than a month after launch. In Hong
Kong, leading lifestyle and virtual bank, livi bank,
started banking services for Hong Kong SMEs.
11
Jardine Matheson Annual Report 2023
Creating Value
Embedding Sustainability
We strongly believe that embedding sustainability is good business, and makes us and our communities stronger for the
future. Our businesses have been at the forefront of climate action, making bold carbon reduction commitments and setting
out detailed plans for reducing our carbon footprint. We recognise the collective impact that we can have and are actively
sharing our learnings and best practices across the Group – fostering collaboration and accelerating progress towards a
sustainable future. As a Group, we are committed to supporting our businesses and communities as they navigate a Just
Transition towards a net-zero future. For more details, refer to the Sustainability section of the Annual Report.
Improving access to education in Cambodia
The Acleda-Jardine Educational Foundation was set up
in 2017 with funds from the sale of Jardines’ interest in
ACLEDA Bank in 2015. In 2023, three primary schools
were completed, with over 360 children enrolled for
classes. Since its establishment, 11 schools have
beenbuilt.
SBTi commitments
Decarbonisation is a key focus of Jardines’ sustainability
strategy, and we have developed a framework to guide
efforts towards transitioning to net-zero by 2050, with an
initial nearer term focus on setting science-based
Scope1 and 2 carbon reduction targets for 2030.
Hongkong Land, DFI Retail, Gammon and HACTL have
achieved SBTi validation for their Scope 1 – 3 targets,
anda number of our other businesses will be seeking
validation in the coming year.
MINDSET’s long-term partnership with Mind HK
MINDSET has partnered Mind HK as a strategic partner
since 2019, aiming to improve mental health access in
Hong Kong. In 2023, we launched the iACT® Youth
Wellbeing Practitioners programme in collaboration with
Mind HK. This programme trains young individuals to
provide low-intensity interventions for Hong Kong’s youth
with mild to moderate mental health issues, addressing
the need for affordable services.
Biodiversity management
Jardines is committed to balancing business growth
with social well-being and environmental sustainability.
We aim to adopt industry-leading practices for
biodiversity management, while building up expertise
to understand our impact. We also continue to manage
a range of specific environmental and biodiversity-
related issues in our businesses. Further information on
our approach to biodiversity will be provided in the
Group’s forthcoming Sustainability Report, which is
expected to be published in May 2024.
12
Jardine Matheson Annual Report 2023
Chairman’s Statement
Jardines delivered a very solid performance in 2023, benefitting
from its diversified portfolio, with results above pre-pandemic levels.
Challenging conditions on the Chinese mainland and in Vietnam
adversely impacted Zhongsheng, Hongkong Land and THACO. Astra,
however, delivered a record performance in South East Asia and both
DFI Retail and Mandarin Oriental drove strong recoveries.
I want to thank our colleagues across the Group for their unwavering
commitment to their customers and businesses.
The Group anticipates a challenging year ahead, as a result of
ongoing economic headwinds in key markets, but with new
leadership in place across several Group companies, and an effective
long-term strategy, we are optimistic about the future and believe
that we are well-positioned to take advantage of opportunities for
mid- and long-term growth.
Ben Keswick, Executive Chairman
13
Jardine Matheson Annual Report 2023
Chairman’s Statement
2023 Overview
2023 saw the Group’s underlying profit rise to a new
high,as many of our businesses benefitted from the
post-pandemic reopening of markets, particularly in the
first half of the year. The Group’s diversified portfolio
continued to generate strong cash flows, supporting a
strong balance sheet and creating a solid foundation for
future growth. Fulldetails of the business’s performance,
and significant developments during the year, are provided
in the Group Managing Director’s Review.
The Board is recommending an increased final dividend of
US$1.65 per share, which produces a full-year dividend of
US$2.25 per share, up 5% from the prior year.
Governance
Our approach to governance reflects what the Board
believes is most appropriate for the Group’s unique
shareholding structure, size and its operations in Asia.
However, as our environment and the Group evolves, we
continue to review its effectiveness on an ongoing basis.
Inthe last year, we have brought greater diversity and
sectoral expertise to the Boards of both Jardine Matheson
and our listed subsidiaries, with multiple new executive
and independent non-executive appointments.
At the Company, Janine Feng and Keyu Jin joined the
Company’s Board on 5th May 2023 and 31st January 2024
respectively, as independent non-executive directors.
From1st April 2024, the Board will comprise 50%
independent non-executive directors.
Anthony Nightingale retired from the Board on 31st January
2024, and Y.K. Pang and David Hsu will step down from the
Board on 31st March 2024. Y.K. will remain as a Senior
Advisor of the Company. I would like to thank Anthony,
Y.K.and David for their contributions to the Board and the
wider Group over many years.
Janine Feng also joined the Audit Committee on 5th May
2023 and, following Michael Wu’s appointment to the
Committee in March 2023, in place of Adam Keswick,
whostood down with effect from the same date. The Board
considers that the Audit Committee now comprises only
independent non-executive directors.
Following recent changes, the audit committees of each
ofour listed subsidiary boards now have a majority of
independent members and are chaired by an independent
non-executive director.
443,000 employees by business*
Hongkong Land 5,000
202,000 Astra
110,500 DFI Retail
66,000 Jardine
Cycle & Carriage
14,500Mandarin
Oriental
Jardine Pacific 45,000
* Includes major associates and joint ventures.
14
Jardine Matheson Annual Report 2023
Chairman’s Statement
Sustainability
As a long-term business, sustainability is at the forefront
of our business practices and I am pleased to say we
havemade significant strides in progressing our agenda.
Theculture within the Group is fast becoming one where
sustainability is seen as a business opportunity and an
integral part of our day-to-day business lives.
We are increasingly focussed on the three main pillars of
our sustainability strategy: Leading Climate Action,
Driving Responsible Consumption and Shaping Social
Inclusion, and I am really pleased that the progress we
have made in these areas has been reflected in our
improved ESG ratings.
Good business is sustainable business, and with our
focussed approach we believe the future growth of the
Company will also benefit the communities in which we
invest. I am proud to say that sustainability is now
something that is embedded as a core element of our
strategy, and all future investments will take account of it
as a key part of the decision-making process.
I continue to chair our Sustainability Leadership Council,
which includes all Group CEOs, and together we will
continue to ensure that Jardines maximises the long-term
business opportunities that a consistent and integrated
sustainability programme should produce.
15
Jardine Matheson Annual Report 2023
Chairman’s Statement
Conclusion
Jardines delivered a very solid performance in 2023 as the
Group benefitted from its diversified portfolio, with results
above pre-pandemic levels. Our two large auto associates,
Zhongsheng and THACO, were significantly impacted by
tough market conditions on the Chinese mainland and
Vietnam respectively. Hongkong Land was also impacted
by the downturn in the Chinese property sector. Astra,
however, delivered a record performance and both
DFIRetail and Mandarin Oriental drove strong recoveries.
The Group enters 2024 facing continued challenging
market conditions in key segments in China and Vietnam,
as well as lower market prices for a number of Astra’s key
commodity outputs in Indonesia. However, we remain
confident in our long-term strategy and will continue to
create opportunities to deliver growth and long-term value,
benefitting from our diversified portfolio.
The Group performed well in 2023 and, despite facing
increasing headwinds in the second half of the year,
achieved a new record level of profit.
We remain focussed on addressing the short-term
challenges our businesses face from local and global
economic pressures. As the pace of change increases,
weare focussed on advancing our strategic priorities with
urgency, as outlined below.
Enhancing Leadership and Entrepreneurialism
In the last year, the Group has made several significant
senior appointments to enhance leadership and drive
future growth, including the appointment of new
chiefexecutives at DFI Retail, Mandarin Oriental and
Hongkong Land.
Scott Price succeeded Ian McLeod as Group Chief Executive
of DFI Retail with effect from 1st August 2023. Scott is an
experienced senior business executive with 25 years’
international experience, mostly in Asia, spanning the
retail, logistics and consumer packaged goods sectors.
Since joining DFI Retail, Scott has visited all its formats and
markets to meet colleagues and learn about the group’s
business and customers. He has introduced a new strategic
framework, which will support the group’s capital
allocation priorities and growth plans over the coming
three to five years. The new framework is centred on putting
the customer first – evolving the business at the same pace
as customers’ changing shopping behaviours; focussing
on the group’s people – embedding core values throughout
the group, speeding up decision making and improving
diversity, equity and inclusion to ensure local relevancy of
decision-making to customers; and driving improved
shareholder returns – through a disciplined capital and
resource allocation approach.
Laurent Kleitman succeeded James Riley as Group
ChiefExecutive of Mandarin Oriental with effect from
1stSeptember 2023. Laurent joined the group from LVMH,
where he was President and CEO of Parfums Christian Dior,
and brings many years’ experience in building iconic
consumer brands across the beauty and broader
FMCGsectors.
In his first few months at Mandarin Oriental, Laurent has
visited the group’s properties around the world, met with
owners and partners and spent time listening to and
learning from the group’s many colleagues. Going forward,
he aims to scale up the management business, further
elevate the brand to become the reference point in luxury
hospitality and enrich the group’s service proposition to
guests and owners.
In November 2023, we announced that Michael Smith will
succeed Robert Wong as the new Chief Executive of
Hongkong Land, effective 1st April 2024. Michael brings
30years of real estate, capital markets and investment
banking experience. He was most recently Regional
ChiefExecutive Officer of Europe and the US at Mapletree
Investments, a global real estate development, investment,
capital and property management company. Michael grew
Mapletree Investment’s Europe and US businesses through
his successful build-out of an entrepreneurial and
high-performance organisation.
Elton Chan, currently the Chief Executive of Jardine
Schindler Group and a non-Executive Director of
Zhongsheng, will succeed Y.K. Pang as Chief Executive of
the Jardine Pacific group of companies, with effect from
1stApril 2024. Prior to his current role at Jardine Schindler
Group, Elton was Managing Director of Zung Fu China.
Hejoined Jardines in 2004 and has worked in a range of
senior management roles across the Group.
I would like to thank Ian, James, Robert and Y.K. for their
significant contributions to the Group.
16
Jardine Matheson Annual Report 2023
Group Managing Director’s Review
John Witt, Group Managing Director
A crucial part of building an entrepreneurial culture is
finding, developing and keeping the right leadership
talent, and this is a high priority for the Group and its
companies. We also recognise the importance of
havingthe right management structure to support the
future development of our portfolio and identify new
growth areas.
During the year, we have continued to invest in developing
our leaders and giving them opportunities to advance their
careers within different businesses across the Group,
withmultiple senior management progressions happening
during the period.
We are also focussed on assessing and developing the
next generation of leaders across our businesses. We offer
colleagues the training and support they need to deal with
the challenges and opportunities they face, both in the
near- and the long-term. We supplement our talent
planning with Group-wide leadership development
programmes, co-designed with world-class institutions
including IMD and INSEAD.
Jardines also continues to build a diverse and inclusive
culture where anyone can succeed. Our strategy includes
afive-year Inclusion, Equity and Diversity target, with an
initial focus on gender representation. In addition,
eachGroup business has set its own targets for improving
Inclusion, Equity and Diversity in the workplace.
Evolving the Group Portfolio
We see the evolution of the Group’s portfolio as crucial to
ensuring the long-term growth and sustainability of our
business. We allocate capital towards strategic growth
initiatives, both at the Group level and within our
Groupcompanies, while divesting non-strategic and
lower-yielding assets.
Our diversified presence in China and South East Asia,
aswell as our balanced portfolio across sectors, has
enabled us to perform well even in challenging market
conditions. We continue to focus on further strengthening
our position in the high-potential markets of Asia and in
those industries where we can establish a leading position,
tocreate long-term value and ensure sustainable growth.
Our primary goal is to expand our operations in areas with
the greatest potential for future growth, including a number
of emerging ASEAN markets. We aim to align ourselves
withkey trends in these markets, such as continuing
urbanisation and the expanding middle class. We are
actively seeking growth opportunities in markets like
Indonesia and Vietnam, while also developing our
business interests in China.
We also recognise the 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
and carrying out share buybacks in our companies as
appropriate. Our strategy is supported by a strong balance
sheet, and we are increasingly focussed on ensuring
thatour investment opportunities align with our
sustainability goals.
During 2023 and, as we enter 2024, we have continued to
progress the simplification of the Group’s portfolio and lay
the foundations for the next stage of its growth. In March
2023, we completed the sale of our Motors business in the
United Kingdom for US$402 million. In September 2023,
the Group completed the sale of its 28.22% stake in
HongKong-listed Greatview Aseptic Packaging Company
for US$128 million. In March 2024, the Group completed
the sale of its 50% stake in Jardine Aviation ServicesGroup.
In March 2023, DFI Retail sold its Malaysia Grocery Retail
business and it completed the sale of several associated
properties over the course of the second half of the year.
In line with Mandarin Oriental’s strategy for driving future
growth, primarily through developing its management
business and realising capital, in 2023 the group sold its
Jakarta hotel to Astra and signed an option to sell its Paris
hotel, ineach case retaining the management contract.
Against the backdrop of challenging market conditions in
China, the Group continued to make strategic investments
in South East Asia.
Astra continued its diversification into non-coal assets,
aspart of its commitment to a just transition, with United
Tractors’ acquisition of interests in two nickel mining and
processing businesses: the acquisition of a 90% effective
share ownership of PT Stargate Pasific Resources and
PTStargate Mineral Asia, for total consideration of
US$319million; and the acquisition of a 19.99% interest
inNickel Industries, for US$616 million.
Astra took further steps to deliver its commitment to
transition away from coal and into renewables through the
acquisition by its subsidiary United Tractors, in December
2023, of a 49.6% interest for US$52 million in Supreme
Energy Sriwijaya, which owns an operating geothermal
project in South Sumatera with a total existing capacity
of98 MW.
17
Jardine Matheson Annual Report 2023
Group Managing Director’s Review
Astra progressed its healthcare strategy by investing an
additional US$100 million in Halodoc, a leading digital
health ecosystem platform in Indonesia, bringing its
ownership to 21%.
The Group’s commitment to South East Asia was reinforced
with JC&C investment of a further US$350 million in
TruongHai Group Corporation (‘THACO’) in Vietnam,
through subscription for a five-year convertible bond.
JC&Calso increased its interest in Refrigeration Electrical
Engineering (‘REE’) from 33.6% to 34.9% through a series
of on-market purchases, for around US$14 million. In
Singapore, JC&C completed a sale andleaseback
arrangement of its properties for US$225million.
The Company repurchased 4.4 million of its own shares for
cancellation in 2023 for US$209 million, primarily in order
to cancel the impact of scrip issues during the year on
overall share count and EPS. The Group also acquired
5.8million shares in JC&C for US$136 million during
theyear.
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.
Driving Innovation and Operational Excellence
The Group continues to focus on delivering operational
excellence in both its existing and new businesses, and
2023 saw strong progress in driving greater efficiency and
productivity. Many of the Group’s businesses progressed
improvement initiatives in the year, with HACTL increasing
its capacity to handle pallets by 30% by enhancing its use
of robotics, as well as introducing automation more
generally to increase efficiency. DFI Retail’s transformation
programme also continued to deliver real improvements
inoperating metrics across its banners. The Group is
progressing its implementation of an in-house Global
Business Services function to support the Group’s
businesses, while Mandarin Oriental has made
encouraging progress in driving operational efficiency
through modernising its systems and processes required
tosupport evolving business needs.
The increased efficiencies which are being delivered across
our businesses help them demonstrate adaptability and
agility in addressing the challenges they face in delivering
future growth.
The Group has continued to focus on driving innovation as
a key strategic priority. In November 2023, Astra launched
bank saqu, a digital banking service with a focus on small
business owners and small entrepreneurs in Indonesia.
Inthe automotive space, Astra acquired the leading online
used car platform in Indonesia. This has been integrated
with Astra’s existing used car business to create a
preeminent position in both online/offline used car sales as
the market grows. In June 2023, JC&C announced a used car
and aftersales partnership with Carro, a leading online
autoplatform.
Mandarin Oriental is implementing its Guest Experience
Programme, which will greatly improve the group’s ability to
recognise, understand and engage guests. A redesign of
Fans of M.O. will enhance MandarinOriental’s ability to
attract and retain guests. Mandarin Oriental is also
establishing a bespoke relationship management
service,to build brand-level loyalty with ultra-high net
worth guests.
We continue to seek new inorganic growth opportunities
inthe digital economy, emerging industries and new
geographies. This is well illustrated by Astra’s partnership
with Equinix, one of the world’s largest digital infrastructure
companies, to develop data centres in Indonesia, as well as
United Tractors’ acquisition of interests in Supreme Energy
Sriwijaya, Nickel Industries and Stargate.
Progressing Sustainability
Sustainability remains a key strategic priority for the Group.
In 2023, we continued to leverage and build on the work our
Group companies are doing on sustainability, to create an
aligned, focussed approach which maximises the impact
Jardines has in its communities and on the environment,
and enables us to create real scale in what we do.
In Leading Climate Action, we continue to build momentum
on our net-zero strategy and our businesses have set
decarbonisation targets to align with the trajectory needed
to limit global warming to 1.5°C. All our businesses have
also developed decarbonisation pathways to achieve their
targets for reducing Scope 1 and 2 emissions. We are
working towards understanding and reducing our Scope 3
emissions over time.
In Driving Responsible Consumption, most businesses have
identified their material waste streams and set individual
waste reduction/diversion targets, and we are looking for
synergies and cooperation opportunities between our
businesses on circular solutions. We are also building up
expertise to understand our dependencies and impacts on
biodiversity, so we can adopt industry-leading practices for
biodiversity management.
The Group continues to operate some businesses in
Indonesia which are the focus of stakeholders on
environmental and biodiversity-related issues, but we
believe that our businesses are taking appropriate and
extensive steps to protect biodiversity and the environment,
while at the same time supporting the communities where
they operate.
18
Jardine Matheson Annual Report 2023
Group Managing Director’s Review
In relation to Shaping Social Inclusion, we are prioritising
the promotion of access to quality education and efforts to
create greater awareness of mental health.
Summary of Performance
The Group delivered a good performance in 2023, with a
5% increase (+7% at Constant Exchange Rates (‘CER’)) in
underlying profit to US$1,661 million, and 5% growth
(+6%at CER) in underlying earnings per share to US$5.74.
Growth was primarily driven by strong results from Astra
and significantly improved contributions from DFI Retail
and Mandarin Oriental. Growth continued in the second
half in all three businesses, but saw a marked slowdown
asmarket conditions weakened (and prior year
comparables became tougher). There was a significantly
lower contribution in 2023 from Zhongsheng and
contributions from JC&C’s other businesses (ex-Astra),
Hongkong Land and Jardine Pacific were also lower. Further
details of the individual businesses are provided below.
Net non-trading items were negative. The net non-trading
losses in2023 consisted primarily of the Group’s fair value
losses arising from the revaluation of the Group’s
investment properties portfolio of US$1,066 million and
impairment of goodwill of US$172 million, offset by gain on
sale of property interests of US$105 million and the
US$101million share of Zhongsheng’s 2022 second half
profit (resulting from a change in accounting policy as
explained under the Zhongsheng section below).
Cashflow remained strong both at Group and parent
company level. The Group’s cash flows from operating
activities for the year was US$4.6 billion and free cashflow
at parent company
1
wasUS$778 million, amply covering
the Company’s external dividend payments by 1.7x. The
Group’s balance sheet remains strong with gearing of 15%,
slightly up from 13% at the end of 2022, despite significant
capex and enhanced external dividend payments at Astra
during the year.
The Group continued to focus during 2023 on making
organic and strategic investments to sustain the
businesses and drive future growth. The Group’s
organiccapital expenditure in 2023, including
expenditureon properties for sale, was US$3.4 billion
(2022: US$3.8 billion), and strategic investments
addedafurther US$1.8 billion (2022: US$1.5 billion) to
capital expenditure in 2023. Additional capital investment
within the Group’s associates and joint ventures was over
US$5.2billion (2022: 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.
These results demonstrate, once again, the value of our
diversified portfolio, enabling Jardines to produce a
resilient profit and cash performance, despite challenging
conditions in a number of our sectors and markets.
The strong performance of the Group’s businesses in
Indonesia, together with the challenges faced by our
businesses in Hong Kong and on the Chinese mainland,
ledto 56% of the Group’s profit for the period coming from
South East Asia and 37% from China.
Outlook
There was a very solid performance overall by the Group
in2023, exceeding pre-pandemic profit levels despite
increasingly challenging conditions as the year progressed.
The Group enters 2024 facing continued market challenges
in key segments in China and Vietnam, as well as lower
market prices for a number of Astra’s key commodity
outputs in Indonesia.
We remain confident, however, in our long-term strategy
across our core markets in Asia and will continue to focus
on our strategic priorities in order to deliver growth and
long-term value, benefitting from our diversified portfolio.
Certain financial information of the Group’s listed subsidiaries
presented and referred to in the following individual business
performance section represents the financial information of
each respective business of the Group as reported within their
own Annual Report (
‘100%basis’). References to profit
attributable to shareholders is therefore the performance
attributable to the shareholders of the respective business,
which we believe provides the reader a better understanding of
the relevant listed Group subsidiaries. The Jardine Matheson
Group’s attributable interest in each business is disclosed,
where relevant, within the segmental information in Note 2 of
the financial statements.
1
Free Cash Flow at parent company is defined as recurring dividends received from subsidiaries, associates, joint ventures and other investments, less corporate costs and net
interest expenses.
19
Jardine Matheson Annual Report 2023
Group Managing Director’s Review
Total capital investment of US$10.5 billion
(US$ million)
3,851 Hongkong Land
Mandarin Oriental 208
Jardine Pacific 119
Corporate 219
DFI Retail 1,419
3,359 Astra
248Jardine Motor
Interests
1,065Jardine
Cycle & Carriage
Managing Director
20
Jardine Matheson Annual Report 2023
• Underlying net profit of US$164 million, 10% lower than 2022
• Good performances by most businesses
• Consumer businesses impacted by weaker consumer sentiment in Hong Kong
• Jardine Schindler, Gammon and Transport Services saw improved performance
2023 2022 Change (%)
Gross revenue (including100% of associates
and joint ventures) (US$ billion) 7.3 6.6 10
Revenue (US$ billion) 2.1 2.1 3
Underlying profit attributable to shareholders
(US$million) 164 182 (10)
JARDINE
PACIFIC
21
Jardine Matheson Annual Report 2023
Group Managing Director’s Review
• Gammon
• HACTL
• Jardine Engineering Corporation (‘JEC’)
• Jardine Restaurants
• Jardine Schindler
• Zung Fu Hong Kong
Jardine Pacific
The Jardine Pacific group of companies reported underlying
profit of US$164 million, 10% lower than 2022. Therewere
good performances by most businesses, although the
group’s consumer businesses continued to be impacted by
weaker consumer sentiment in Hong Kong. The lower
underlying profit was primarily due to the absence of
government support and subsidies received last year
(US$28 million), as well as the net loss incurred by
JardineRestaurants.
There was significant focus in the year across the group’s
businesses on driving operational improvements, and the
benefits are now starting to be seen in better business
performance.
Within Jardine Pacific’s B2B businesses, Jardine Schindler
produced a good performance with higher sales, although
gross margins were impacted by mix. A stable contribution
from the Existing Installation business helped offset the
challenging New Installation market. JEC performed
satisfactorily and its Hong Kong businesses reported solid
performances. There were improvements from its regional
businesses in Thailand and Singapore, and its order book
remained strong.
Gammon reported higher profits, reflecting higher sales.
Margins remained under pressure due to the timing of
projects, but good cost control and higher financing
income helped drive a better performance. Gammon’s
ongoing operational improvement projects continue to
generate encouraging results.
Underlying profit by business
(excluding corporate & other interests) (US$ million)
Gross revenue (US$ billion)
Underlying profit attributable to shareholders
(US$million)
Gross Revenue (US$ million)
Jardine Pacific’s
6.8
2019
6.2
2020
5.7
2021
6.6
2022
7.32023
Underlying Profit Attributable
to Shareholders (US$ million)
Jardine Pacific’s
164
2019
182
2020
175
2021
182
2022
1642023
45 Gammon
42 Jardine Schindler
57 JEC
Jardine Restaurants (15)
Zung Fu Hong Kong 10
Transport Services 30
JP
Jardine Pacific
22
Jardine Matheson Annual Report 2023
Group Managing Director’s Review
In Transport Services, there was a satisfactory performance
from HACTL, despite lower cargo volume being handled
and higher financing costs. Jardine Aviation reported a net
profit for the year, benefitting from higher flight volumes as
the recovery in air travel continued, as well as improved
pricing from contract renewals. In March 2024, the group
completed the sale of its 50% stake in Jardine Aviation.
HACTL continues to face labour shortages.
The group’s consumer-facing businesses faced challenges.
Jardine Restaurants incurred a net loss, with macro
challenges seen across all markets and the absence of
government support received in Hong Kong last year. In
Hong Kong, weekend traffic has been impacted by the
trend of Hong Kong locals increasingly visiting Shenzhen,
and both Pizza Hut and KFC Hong Kong reported losses.
The Taiwan operations performed well despite intensified
competition, while the Vietnam businesses were impacted
by the slow recovery in the Vietnamese economy.
Zung Fu Hong Kong reported a lower profit year on year.
Despite higher Mercedes passenger cars deliveries and
better aftersales performance, the overall contribution from
Mercedes fell, driven by lower margins and commercial
vehicles sales. Hyundai experienced supply constraints
which impacted the number of car deliveries and margin.
The business also incurred start-up costs from its newly
acquired smart and Denza car distributorships.
Jardine Pacific reported a net non-trading gain of
US$23million in the year, compared to a net non-trading
loss of US$305 million in 2022. The 2022 non-trading loss
included a decrease in the fair value of the group’s
investment properties and impairment of the group’s
investments.
23
Jardine Matheson Annual Report 2023
• Contribution from Zhongsheng substantially lower due to challenging market
environment and accounting change to better reflect current progress
• The sale of the Group’s UK Motors business completed in 2023
JARDINE MOTOR
INTERESTS
Jardine Motor Interests
24
Jardine Matheson Annual Report 2023
Group Managing Director’s Review
The Group received a substantially lower underlying
contribution of US$139 million from its 21% interest in
Zhongsheng in 2023 (2022 reported contribution from
Zhongsheng was US$263 million), as its new car business
faced a challenging market environment for new luxury
vehicle sales volumes and margins during the year, due to
China’s EV transition and intense auto market competition.
As noted last year, we have changed our accounting for
Zhongsheng’s results in 2023 to reflect an estimate of their
results for the second half of the year, based on recent
external analysts’ forecasts. We believe this is a better way
to ensure the Group’s financial statements reflect current
progress and developments at Zhongsheng, amid the
fast-moving automotive market on the Chinese mainland.
This change has been adopted prospectively from
1stJanuary 2023 and, as such, the Group’s share of
Zhongsheng’s estimated 2023 results is presented as
underlying profit. Whereas, for the 2022 contribution from
Zhongsheng, the Group reported its results with six months
Zhongsheng Group’s
presence
410+
Dealerships
C.25
Collision centres
110+
Cities across the
Chinese mainland
in arrears. Had the current year accounting policy also
applied in 2022, the drop in underlying contribution from
Zhongsheng recognised in 2023 would have been
approximately 40% smaller. The Group’s share of its 2022
second half results is included as a non-trading item, so as
not to distort the current year’s underlying performance.
Despite the significant reduction in Zhongsheng’s 2023
contribution and continuing challenging market conditions,
we believe that Zhongsheng has strong market insight,
deep relationships on the Chinese mainland premium
vehicle segment, and superb capabilities to execute its
well-developed strategy focussing on aftermarket auto
services and used car business, which will deliver
long-term value for the Group.
In March 2023, the sale of the Group’s motors business in
the United Kingdom was completed.
25
Jardine Matheson Annual Report 2023
• Underlying profit down 5% to US$734 million
• Improved results from Investment Properties
• Lower development profits on the Chinese mainland
• Group financial position remains strong
• Dividend maintained, final dividend at US¢16 per share
2023 2022 Change (%)
Underlying profit attributable to shareholders (US$million) 734 776 (5)
Gross assets (US$ billion) 37.4 39.1 (4)
Net asset value per share (US$) 14.49 14.95 (3)
Figures above are 100% Hongkong Land basis
HONGKONG
LAND
Hongkong Land
26
Jardine Matheson Annual Report 2023
Group Managing Director’s Review
Hongkong Land’s underlying performance during the year
was impacted by lower profits from Development
Properties, which offset improved results from Investment
Properties. Challenging market conditions impacted total
contributions from Development Properties business on
the Chinese mainland. Profits from the group’s Investment
Properties increased, mainly due to an improved
performance from its luxury retail and Singapore office
portfolios, offsetting reduced contributions from the Hong
Kong office portfolio.
Underlying profit attributable to shareholders fell by 5% to
US$734 million. The loss attributable to shareholders was
US$582 million after including net non-cash losses of
US$1,317 million arising primarily from the revaluation of
the group’s Investment Properties portfolio. This compares
to a profit attributable to shareholders of US$203 million
in2022, which included net non-cash losses of
US$573million from lower property revaluations. In both
years, the net negative revaluation movements principally
arose in Hong Kong, where there was a gradual decrease in
valuations of the group’s prime office portfolio, primarily
due to a decline in market rents and a mild expansion of
capitalisation rates.
Investment Properties
In Hong Kong, the Central office market remained weak,
reflecting subdued capital market sentiment, although the
group’s Central office portfolio remained resilient and
continued to outperform the overall market. At the end of
2023, physical vacancy was 7.4%, while on a committed
basis it was 6.8%, compared with 4.7% at the end of 2022.
Vacancy was, however, well below the 9.9% vacancy for the
Central Grade A office market overall. Average office
rentswere HK$106 per sq. ft. in 2023, decreasing from
HK$111 per sq. ft. in the prior year due to negative
rentalreversions.
The group’s LANDMARK retail portfolio saw a steady
recovery in tenant sales and footfall in 2023, following the
relaxation of pandemic restrictions and the reopening of
Hong Kong’s borders. Average retail rents increased from
HK$177 per sq. ft. in 2022 to HK$203 per sq. ft. in 2023,
mainly due to mildly positive rental reversions and the
removal of temporary rent relief. Vacancy, on both a
physical and committed basis, remained low at 1.5%.
In Singapore, the group’s office portfolio continued to
perform well. Average office rents increased to S$10.9 per
sq. ft. in 2023, from S$10.6 per sq. ft. in 2022. On a
committed basis, vacancy in the group’s office portfolio
remained low at 0.9%, compared with 2.2% at the end
of2022.
Contributions from our luxury retail portfolio in Beijing
andMacau were higher than the prior year, as footfall and
retail sales improved following the lifting of pandemic
restrictions.
Chinese mainland
Hong Kong
Thailand
Malaysia
Singapore
Indonesia
Philippines
Macau
Cambodia
Investment
Properties –
Office
Investment
Properties –
Retail
Development
Properties
1.2 million sq. m.
Area of operational
commercial investment portfolio
under management
(including 100% of joint ventures)
27
Jardine Matheson Annual Report 2023
Group Managing Director’s Review
In Shanghai, work continued to progress well on the
WestBund development, the group’s 43%-owned prime
1.1million sq. m. mixed-use development. The project’s
first phase, consisting of a luxury residential tower and
serviced apartments, completed construction at the end
of2023, with residential sales to be launched in 2024.
Therest of the West Bund development is targeted to be
completed in phases from 2024 to 2027.
The combined value of the group’s prime Investment
Properties portfolio reduced by 5% in 2023.
Development Properties
As anticipated, the profit contribution from the group’s
Development Properties business on the Chinese mainland
was lower than the prior year, due to a combination of
lower sales, reduced profit margins and the impairment of
some residential for sale assets, in particular two
residential projects in Wuhan.
The group’s attributable interest in contracted sales in
2023 increased to US$1,530 million, from US$1,300 million
in2022. At 31st December 2023, the group had an
attributable interest of US$2,031 million in sold but
unrecognised contracted sales, compared with
US$2,087million at the end of 2022.
In Singapore, Development Properties profits
recognisedwere largely in line with the prior year.
Thegroup’s attributable interest in contracted sales was
US$587 million, compared with US$615 million in the prior
year. During the year, the group launched sales for 638-unit
Tembusu Grand – in which 59% was sold or reserved as at
the end of the year. There was solid sales performance at
the 638-unit Leedon Green and 407-unit Piccadilly Grand
and Galleria developments, which are both effectively
soldout.
The group’s joint venture projects in the rest of South East
Asia performed within expectations, producing a combined
profit contribution in line with the prior year.
Underlying profit attributable to shareholders
(US$million)
Net asset value per share (US$)
Underlying Earnings per Share (US¢)
Hongkong Land
1,076
2019
963
2020
966
2021
776
2022
7342023
Net Asset Value per Share (US$)
Hongkong Land
16.39
2019
15.30
2020
15.05
2021
14.95
2022
14.492023
Underlying operating profit by activity
(before corporate costs) (US$ million)
Gross assets by activity
984 Investment
Properties
273Development
Properties
HK Land
18%Development
Properties
82% Investment
Properties
HK Land
Gross assets by location
22%Chinese mainland
& Macau
South East Asia 12%
66% Hong Kong
HK Land
28
Jardine Matheson Annual Report 2023
• Substantial improvement in underlying profit
• Subsidiaries’ performance driven by recovery in Health and Beauty and
Convenience
• Associates’ performance supported by Maxim’s recovery
• Final dividend of US¢5.00 per share
2023 2022 Change (%)
Revenue including 100% of associates & joint ventures
(US$billion) 26.5 27.6 (4)
Revenue (US$ billion) 9.2 9.2 –
Underlying profit attributable toshareholders (US$million) 155 29 437
Figures above are 100% DFI Retail basis
DFI RETAIL
GROUP
29
Jardine Matheson Annual Report 2023
Group Managing Director’s Review
The past few years have been very challenging for
DFIRetail, its customers, colleagues and shareholders.
Following the pandemic, DFI Retail is resetting and aligning
its business to a new ‘Customer First, People Led,
Shareholder Driven’ strategic framework, which is crucial
tosupporting its capital allocation priorities and growth
plans to improve performance over the coming years.
The group reported underlying profit after tax of
US$155million for the full year, a substantial improvement
from the US$29 million reported in the prior year,
supported by strong growth in profitability across
subsidiaries and improved performance by associates.
Thegroup reported a non-trading loss of US$123 million,
predominantly due to the goodwill impairment in respect of
the Macau Food business and Giant Singapore, and foreign
exchange losses associated with the divestment of the
Malaysia Grocery Retail business. These losses were
partially offset by gains from property divestments,
resulting in total reported profits of US$32 million.
Food
Sales revenue for the Food division in 2023 was
US$3.3billion. Excluding the impact of the Malaysia
Grocery Retail divestment, revenue for the division was 5%
lower. Underlying operating profit for the division was
US$45 million for the year, compared to US$91 million in
the prior year.
Within North Asia, first half performance was impacted by
the absence this year of the pantry-stocking seen during
the fifth wave of COVID in Hong Kong in the equivalent
period last year. North Asia’s performance, however,
improved in the second half and profit during that period
also increased compared to the prior year. South East Asia
Food sales performance was adversely affected by intense
competition and weakening consumer sentiment caused
by rising cost of living pressures.
Convenience
Total Convenience sales were US$2.4 billion, an increase of
8% compared to the prior year. Like-for-like (‘LFL’) sales
grew by 5% compared to the prior year. Convenience
underlying operating profit was US$88 million for the year,
an increase of 74% compared to the prior year.
Within Hong Kong, there were strong sales in the first half,
with sales in the second half broadly in line with the prior
year, as results were impacted by the rising frequency of
outbound travel from Hong Kong residents, particularly
during weekends. Operating profit improved strongly due
to a favourable shift in mix away from cigarette sales, as
well as ongoing strong cost control.
7-Eleven South China benefitted from the Chinese economy
reopening. Profit increased significantly as a result of
strong LFL sales growth, favourable margin impact from
product mix shift and ongoing strong cost control. 7-Eleven
Singapore also reported strong sales growth, asthe
business continued to benefit from the economy reopening
and strong in-store execution, with profit almost doubling,
despite labour and utility cost pressures.
Health and Beauty
Health and Beauty division revenue increased by 21%
toUS$2.4 billion, with LFL sales growing by over 20%.
Underlying operating profit increased by 127% to
US$213million for the year.
The Mannings business, particularly in Hong Kong,
benefitted from the recovery in the economy and increased
tourism traffic. LFL sales were consistently strong over the
course of the year, which supported positive market share
momentum. Healthcare as a category performed strongly,
representing over 50% of Mannings’ revenue. Mannings’
profit increased significantly due to strong sales growth,
gross margin expansion, operating leverage and ongoing
strong cost control.
13
Asian countries and
territories
Some
11,000
Outlets
10.9
million sq. m.
Gross trading area
DFI Retail Group
30
Jardine Matheson Annual Report 2023
Group Managing Director’s Review
Home Furnishings
IKEA reported sales revenue of US$794 million, 5% behind
the prior year. Overall, LFL sales reduced by 7% in 2023,
due to reduced home renovation and furniture demand,
asa result of a softening in property market sentiment.
Operating profit was US$19 million, US$27 million behind
the prior year, primarily as a result of the revenue shortfall.
Associates
Maxim’s reported a strong recovery, as customers returned
to dining out. Its contribution to the group’s underlying
profit more than doubled relative to the prior year,
toUS$79 million.
The group’s share of Yonghui’s underlying losses was
US$36 million for the year, compared to a US$80 million
share of underlying losses in the prior year. The reduction
in losses was underpinned by an improvement in gross
margin and cost optimisation. Yonghui’s sales performance
in the year continued to be impacted by challenging
macroeconomic conditions and intense competition.
Robinsons Retail’s underlying profit contribution reduced
from US$24 million to US$15 million. Robinsons Retail
continued to report strong sales and core net earnings
growth. For reporting purposes, however, DFI Retail’s share
of Robinsons Retail’s underlying profits was adversely
impacted by foreign exchange losses and higher net
financing charges reported by Robinsons Retail.
#
Sales of goods.
Sales mix by format
#
Profit mix by format
†
Retail outlet numbers by format
Ω
Underlying profit attributable to shareholders
(US$million)
Underlying Profit Attributable
to Shareholders (US$ million)
Dairy Farm
Before effect of adopting IFRS 16
At IFRS 16 basis
321
2019
276
2020
105
2021
29
2022
1552023
Home Furnishings 9%
37% Food
27% Health and Beauty
Convenience 27%
DFI
Food 13%
Home Furnishings 5%
58% Health and Beauty
24% Convenience
DFI
Home Furnishings 26
Other Retailing 578
Food 1,907
3,791 Convenience
1,998 Restaurants
2,694 Health and
Beauty
DFI
†
Based on operating profit before effect of adopting IFRS 16 and excluding selling,
general and administrative expenses and non-trading items.
Ω
Including 100% of associates and joint ventures.
31
Jardine Matheson Annual Report 2023
• Underlying profit increased to US$81 million, from US$8 million in 2022
• Strong operating and financial performance driven by record rates
• Management fees grew by 30%, with strong recovery by hotels in Asia
• Increased development pipeline with two new hotel openings and eight new
management contracts announced
• Final dividend at US¢3.50 per share, resulting in total dividend of US¢5.00
per share
2023
US$m
2022
US$m
Change (%)
Combined total revenue of hotels owned and under
management* 1,890 1,568 21
Revenue 558 454 23
Underlying profit attributable to shareholders 81 8 966
Figures above are 100% Mandarin Oriental basis
* Combined revenue includes turnover of the group’s subsidiary hotels in addition to 100% of revenue from associate, joint venture and managed hotels.
MANDARIN
ORIENTAL
Mandarin Oriental
32
Jardine Matheson Annual Report 2023
Group Managing Director’s Review
In 2023, Mandarin Oriental’s performance benefitted from
consumers’ robust appetite for luxury leisure travel. The
group continued to provide the exceptional levels of service
for which the brand is legendary and secured record room
rates. The business also continued to build occupancy,
which translated into substantial improvements in Revenue
Per Available Room (‘RevPAR’) across almost all hotels.
Underlying profit increased to US$81 million, from
US$8million in 2022, with underlying earnings per share
atUS¢6.41, compared with US¢0.60 in 2022. Non-trading
losses of US$446 million primarily comprised a non-cash
decrease in the valuation of the Causeway Bay site under
development, resulting in a loss attributable to
shareholders of US$365 million.
Net debt fell to US$225 million at the end of 2023,
fromUS$376 million at the end of 2022. This reflected
significantly higher operating cashflow from the business,
net of ongoing capital investment, as well as proceeds
fromdisposals. Gearing as a percentage of adjusted
shareholders’ funds was 5%, compared to 8% at the end
of2022.
In 2023, the management business delivered strong
operating performance, with a 30% increase in hotel
management fees and a 55% improvement in EBITDA.
Combined Total Revenue for hotels under management was
US$1.9 billion in 2023, 21% above 2022. This increase was
driven primarily by a 29% increase in RevPAR, primarily due
to a gradual recovery of occupancy across all geographies, a
continuation of high rates in Europe, Middle East and Africa,
and a solid rebound in rates in Asia. Food & Beverage
(‘F&B’) revenue increased by 18% year-on-year.
Mandarin Oriental’s 13 owned properties reported a
combined EBITDA 63% higher than 2022, and most
properties maintained or improved their earnings. There
were materially improved contributions by Hong Kong and
Tokyo, both of which were severely impacted by stringent
travel restrictions in 2022. London and Geneva also
delivered considerably improved results, driven by better
RevPAR and F&B performance. There were lower earnings in
2023 from Singapore, due to its closure for renovation and
repositioning, and Miami.
In 2023, the group opened two new hotels and completed
one rebranding, expanding its portfolio to a total of
38hotels and nine residences. Eight new hotel and
residences projects were announced during the year.
Theseprojects will strengthen Mandarin Oriental’s brand
presence in a broader range of destinations and enrich its
customer proposition in existing locations. At the end of
2023, the group’s development pipeline had a total of 28
hotels and two standalone residences expected to open
over the next five years, with four of these expected in 2024.
Underlying profit/(loss) attributable to shareholders
(US$ million)
Underlying Profit Attributable
to Shareholders (US$ million)
MO
41
2019
(206)
2020
(68)
2021
8
2022
812023
Net asset value per share* (US$)
* With freehold and leasehold properties at valuation.
Net Asset Value per Share* (US$)
MO
4.70
2019
4.09
2020
3.93
2021
3.87
2022
3.672023
Hotel and residences portfolio
#
As of 7th March 2024.
Number of hotels in operation
Number of hotels and residences projects expected in the
next five years
34
24
36
36
26
30
#
38
#
23
33
20
2019
2020
2021
2022
2023
Combined total revenue of US$1,890 million of hotels
under management by geographical area (US$ million)
Asia 638
The Americas 255
997 Europe,
Middle East
& Africa
MO
As part of Mandarin Oriental’s regular review of its asset
portfolio, the property in Jakarta was sold to Astra in June
2023, while retaining the management contract. The group
has also announced the sale of the Paris hotel, while
retaining a long-term hotel agreement. The Causeway Bay
site in Hong Kong, which is being redeveloped as a mixed-
use office and retail complex, remains on track to complete
in the first half of 2025.
33
Jardine Matheson Annual Report 2023
• Underlying profit of US$1,160 million, 6% higher than 2022
• Improved performances from Astra and Direct Motor Interests
• THACO performance impacted by softer Vietnamese economy
• Stable contribution from Other Strategic Interests
• Proposed final dividend of US¢90 per share, total dividend of US¢118 for the
year, 6% higher than 2022
2023 2022 Change (%)
Revenue (US$ billion) 22.2 21.6 3
Underlying profit attributable toshareholders (US$million) 1,160 1,096 6
Figures above are 100% Jardine Cycle & Carriage basis
JARDINE
CYCLE & CARRIAGE
34
Jardine Matheson Annual Report 2023
Group Managing Director’s Review
Jardine Cycle & Carriage
• Astra
• Truong Hai Group Corporation
(‘THACO’)
• Direct Motor Interests:
▸
Cycle & Carriage Bintang
▸
Cycle & Carriage Myanmar
▸
Cycle & Carriage Singapore
▸
Tunas Ridean
Jardine Cycle & Carriage
• Other Strategic Interests:
▸ Refrigeration Electrical
Engineering Corporation (‘REE’)
▸ Siam City Cement (‘SCCC’)
▸ Vinamilk
JC&C’s underlying profit attributable to shareholders
increased by 6% to US$1,160 million, mainly supported by
record results from Astra. After accounting for non-trading
items, the group’s profit attributable to shareholders was
US$1,215 million, 64% higher than the previous year.
Thenon-trading items recorded in the year mainly
comprised a US$81 million gain from the sale and
leaseback of properties under Cycle & Carriage Singapore,
partly offset by unrealised fair value losses of
US$20million related to non-current investments.
Astra contributed US$1,019 million to the group’s
underlying profit, 12% higher than the previous year,
reflecting improved performances from most of its
businesses.
Direct Motor Interests contributed US$68 million,
anincrease of 8%, with higher profits from Tunas Ridean
inIndonesia and Cycle & Carriage Bintang in Malaysia.
The contribution from the group’s Other Strategic
Interestswas 2% down at US$84 million, due to lower
earnings reported by REE, offset by higher profits in SCCC.
THACO
THACO contributed US$36 million, 57% down from the
previous year. This was mainly due to a significantly lower
automotive profit, reflecting the slowdown of Vietnam’s
economy, weakened consumer sentiment and greater
competitive pressure. Unit sales were 28% down, with a
market share decline from 23% to 21%. Losses from its
agricultural operations were, however, lower than the
previous year.
Underlying profit of US$189 million (excluding Astra,
DMIcentral overheads and corporate) by business
(US$million)
Revenue (US$ billion)
Underlying profit attributable to shareholders
(US$million)
Revenue (US$ billion)
Jardine C&C
18.6
2019
13.2
2020
17.7
2021
21.6
2022
22.22023
Underlying Profit Attributable
to Shareholders (US$ million)
Jardine C&C
863
2019
429
2020
786
2021
1,096
2022
1,1602023
(4) Cycle & Carriage
Myanmar
9 Cycle & Carriage
Bintang
THACO: 36
Vinamilk 35
SCCC 17
REE 32
Other Strategic Interests:
Direct Motor Interests:
25 Cycle & Carriage
Singapore
39 Tunas Ridean
JC&C
The group’s continued commitment to Vietnam and THACO
was demonstrated by JC&C’s investment of a further
US$350 million in THACO through its subscription for a
five-year convertible bond.
35
Jardine Matheson Annual Report 2023
• Record earnings boosted by economic recovery, with strong performance
across most businesses
• Motorcycle sales grew by 22%, with an increase in market share, while car
market share increased in a soft market
• Enhanced final dividend of Rp421 per share will be proposed on the basis of
record results and elevated coal prices in the first half of 2023
• The group’s capex and investment for 2023 increased to US$3.0 billion
2023 2022 Change (%)
Revenue (US$ billion) 20.6 20.0 3
Underlying profit attributable toshareholders (US$ million) 2,175 1,991 9
Figures above are 100% Astra basis
ASTRA
36
Jardine Matheson Annual Report 2023
Group Managing Director’s Review
Astra’s consolidated revenue of US$20.6 billion and
underlying net profit of US$2,175 million under IFRS,
were3% and 9% higher than the previous year,
respectively. This earnings growth reflected improved
performances from most of the group’s businesses,
especially the automotive and financial services divisions.
The following performance review on Astra’s businesses
isbased on results prepared under Indonesian accounting
standards.
Under Indonesian accounting standards, Astrareported
arecord net income of Rp33.8 trillion, equivalent to
US$2.2billion, 17% higher than 2022 in its reporting
currency. Excluding the fair value loss on the group’s
investments inGoTo and Hermina, Astra’s net profit of
Rp34.0 trillion, orUS$2.2 billion, was 12% higher than the
same period last year in its reporting currency.
Automotive
Net income increased by 18% to US$750 million, reflecting
higher sales in the motorcycle and components
businesses.
The wholesale car market decreased by 4% to 1.0 million
units in 2023. Astra’s car sales in 2023 were 2% lower, but
market share increased from 55% to 56%. The wholesale
motorcycle market grew by 19% in 2023. Astra Honda
Motor’s sales increased by 22% compared with the prior
year and its market share increased from 77% to 78%.
The group’s 80%-owned components business,
AstraOtoparts, reported a 39% increase in net income to
US$121million in 2023, mainly due to improved operating
margin and higher contributions from its associates.
Financial Services
Net income increased by 30% to US$516 million in 2023,
primarily due to higher contributions from its consumer
finance businesses.
The group’s consumer finance and heavy equipment-
focussed finance businesses saw a 15% and 8% increase,
respectively, in new amounts financed to US$7.7 billion
and US$0.7 billion, respectively. The net income
contribution from the heavy equipment-focussed finance
businesses increased significantly by 75% to
US$12million, mainly due to a larger loan portfolio.
General insurance company Asuransi Astra Buana reported
a 14% increase in net income to US$92 million, mainly due
to higher insurance revenue. Thegroup’s life insurance
company, Asuransi Jiwa Astra, recorded a 2% increase in
gross written premiums to US$401 million.
56%
Market share for
new motor cars
78%
Market share for
new motorcycles
US$7.7bn
New consumer
financing
US$703m
New heavy
equipment
financing
Astra
37
Jardine Matheson Annual Report 2023
Group Managing Director’s Review
Underlying profit attributable to shareholders of
US$2,175 million by business (US$ 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
536
2019
270
2020
489
2021
574
2022
5612023
Motorcycle Sales including Associates
and Joint Ventures (thousand units)
Astra
4,911
2019
2,892
2020
3,929
2021
3,996
2022
4,8812023
Agribusiness 54
Property 11
682 Automotive
Information
Technology
7
Infrastructure
& Logistics
64
842 Heavy Equipment,
Mining,
Construction
and Energy
Financial Services 515
Astra
Heavy Equipment, Mining, Construction
andEnergy
Net income was stable at US$832 million, with improved
performances from construction machinery and mining
contracting offsetting lower contributions from the group’s
coal and gold mining businesses.
United Tractors reported a 2% decrease in net income to
US$1,354 million. Komatsu heavy equipment sales
decreased by 8%, while revenues from the parts and
service businesses were higher.
General contractor Acset Indonusa, 87.7%-owned by
UnitedTractors, reported a lower net loss of US$18 million,
compared with a net loss of US$30 million in the
previousyear.
Agribusiness
Net income decreased by 39% to US$55 million, largely
due to lower selling prices of crude palm oil.
Infrastructure and Logistics
Net income increased by 85% to US$64 million, due to
improved performance in its toll road, transportation
solutions and logistics businesses.
The group has interests in 396km of operational toll roads
along the Trans-Java network and in the Jakarta Outer Ring
Road. The group’s toll road concessions saw 7% higher
daily toll revenue during the year.
Serasi Autoraya’s net income increased by 26% to
US$14million, mainly due to higher contributions from
transportation solutions and logistics services, with
vehicles under contract relatively stable at 25,800 units,
which more than offset a lower contribution from used
carearnings.
Information Technology
The group’s information technology division, represented
by 76.9%-owned Astra Graphia, reported a 45% increase in
net income to US$7 million, primarily due to improved
operating margin.
Property
The group’s property division saw a 10% increase in net
income to US$9 million, mainly due to an improvement in
occupancy at Menara Astra.
38
Jardine Matheson Annual Report 2023
Financial Review
Results
Underlying business performance
2023
US$m
2022
US$m
Revenue 36,049 37,496
Operating profit
4,289 4,126
Net financing charges
(516) (428)
Share of results of associates
and joint ventures
1,261 1,232
Profit before tax
5,034 4,930
Tax
(932) (964)
Profit after tax
4,102 3,966
Non-controlling interests
(2,441) (2,382)
Underlying profit attributable to
shareholders
1,661 1,584
Non-trading items
(975) (1,230)
Net profit
686 354
US$ US$
Underlying earnings per share 5.74 5.49
Earnings per share 2.37 1.22
Graham Baker, Group Finance Director
The Group’s underlying profit and underlying earnings per
share both grew by 5% in 2023 (7% and 6% respectively at
constant exchange rates).
Solid performance despite challenging market conditions
in China and Vietnam, reflects the Group’s diversified
portfolio of leading businesses. Strong growth and a record
contribution from Astra, and significantly improved
contributions from DFI Retail and Mandarin Oriental, more
than offset lower contributions from two of our largest
associates, Zhongsheng and THACO.
Revenue
The Group’s revenue of US$36.0 billion in 2023 was 4%
less than the prior year, principally as a result of the
disposals of the Giant grocery business in Malaysia by
DFIRetail and Jardine Motors Group in the United Kingdom.
Revenue in the Group’s ongoing businesses grew by 2% in
the year.
Jardine Motor Interests reported an overall 92% decrease
in sales as the consolidation of the United Kingdom motors
business ceased in February 2023 and the sale of the
business completed in March 2023.
Astra recorded an increase in sales of 3% from 2022, with
higher sales in the majority of its businesses. Automotive
achieved higher sales in its car sales operations, while the
Financial Services businesses delivered increases in new
amounts financed, and the mining contracting and coal
mining operations increased volumes.
DFI Retail’s revenue was marginally lower than last year.
Strong sales growth in its Health and Beauty and
Convenience Store businesses benefitted from the
re-opening of borders and an increase in tourists. However,
the Food business saw a reduction in sales, mainly due to
the disposal of the operations in Malaysia, the increase in
outbound travelling, and fierce competition.
Mandarin Oriental’s subsidiary hotels recorded a 23%
increase in revenue, with strong demand and increased
occupancy at higher rates following the removal of travel
restrictions, particularly in Hong Kong. Higher revenue from
management contracts was recorded, with increased
management fees.
Jardine Cycle & Carriage’s Direct Motor Interests recorded a
6% increase in sales from 2022, driven by its motor vehicle
operations in Singapore.
Hongkong Land’s revenue decreased by 18% from 2022,
primarily due to Development Properties, with lower
residential properties sales on the Chinese mainland as
market sentiment remained weak, despite some
improvement in top-tier cities seen in the later part of
theyear.
39
Jardine Matheson Annual Report 2023
Financial Review
Jardine Pacific recorded a sales increase of 3%, mainly due
to JEC’s higher sales in the Hong Kong engineering operation
and higher passenger car sales in Zung Fu HongKong.
Gross revenue, including 100% of revenue from
associatesand joint ventures, which is a measure of the
fullextent of the Group’s operations, decreased by 4%
toUS$109.8 billion. The decrease was mainly from
Zhongsheng, DFI Retail’s associate Yonghui and Jardine
Cycle&Carriage’s associate in Vietnam, THACO; this was
partly offset by an increase from Hongkong Land’s property
associates and joint ventures and Astra’s associates in the
Indonesia Automotive and Heavy Equipment businesses.
Operating profit
Operating profit from the Group’s subsidiaries, excluding
non-trading items, was US$4,289 million, an increase of
US$163 million or 4%.
Astra’s underlying operating profit increased by 3% to
US$2,996 million, reflecting improved performances from
most of the group’s business divisions, especially the
automotive and financial services divisions. Profits
werelower in the Agribusiness due to lower crude palm
oilprices.
DFI Retail’s underlying operating profit was US$294million,
41% higher than 2022. Higher operating profit in Health
andBeauty was driven by strong healthcare sales in Hong
Kong and Convenience Stores, attributable to the increase
instore traffic following the border reopening. These
increases were partially offset by lower contributions from
Food business in Hong Kong, which was impacted by the
absence of pantry stocking seen during the fifth wave of
COVID in early 2022, and South East Asia which was
impacted by the competitive environment. The Home
Furnishings business reported lower profit from 2022
primarily due to the softer property market.
Mandarin Oriental recorded an underlying operating profit
ofUS$102 million, US$81 million higher than 2022. Most
ofits owned hotels, notably Hong Kong and Tokyo, reported
higher contributions, driven by increased occupancy and
higher rates. There was also a higher contribution from the
management business, driven by higher hotel management
fees and residences branding fees.
Jardine Cycle & Carriage’s motor operations reported an
underlying operating profit of US$84 million in 2023,
aheadof 2022 due to the favourable exchange translation
offoreign currency loans, whilst its motor operations
continued to produce stable contributions.
Hongkong Land’s underlying operating profit decreased by
US$52 million to US$793 million. Lower earnings from the
sale of Development Properties in Singapore and the
Chinese mainland were recorded, mitigated by higher
contributions from Investment Properties on the
Chinesemainland.
Jardine Pacific reported an operating profit of
US$63million, which was US$34 million down from 2022,
due to challenging conditions and asset impairments in the
Restaurant business. Performance of the businesses of the
group’s other subsidiaries was largely in line with 2022.
Jardine Motor Interests’ overall underlying operating profit
decreased by US$49 million or 98%, following the disposal
of the Group’s United Kingdom dealerships in the first
quarter of the year.
Net financing charges
Net financing charges at US$516 million were US$88million
higher compared to 2022, principally due to higher average
interest rates and the higher average level of net
borrowings. Interest cover, excluding financial services
companies, although decreased from 15 times to 12 times
in2023, remained ample, reflecting the Group’s cautious
approach to financial leverage. 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$1,261 million share of underlying results of
associates and joint ventures was US$29 million, or 2%,
higher than 2022.
The contribution from Astra’s associates and joint ventures
increased by US$80 million in 2023 to US$609 million,
resulting from the strong performance of its Automotive
business, with increased car sales volumes.
DFI Retail’s associates and joint ventures reported an
improved performance and recorded an overall profit of
US$43 million in 2023, US$78 million higher than 2022.
Thecontribution from Maxim’s, DFI Retail’s50%-owned
associate, was up US$41million to US$79million in 2023,
mainly due to business recovery in Hong Kong and the
Chinese mainland following the full reopening of the
economies. DFIRetail’s 21%-owned associate, Yonghui,
reported a lower loss at US$36 million in 2023, compared
toa US$80million loss in 2022, attributable to the
improvement in gross margin as well as cost optimisation.
DFI Retail’s 21%-owned associate Robinsons Retail
continued to report strong sales, but made a lower
contribution, caused by higher net financing charges and
unfavourable foreign exchange impact.
Jardine Pacific’s associates and joint ventures performed
better in 2023. Jardine Schindler reported improved
contribution, Gammon benefitted from higher financing
40
Jardine Matheson Annual Report 2023
Financial Review
income and Jardine Aviation Services reported a net profit
compared to a loss in 2022, driven by higher flight volume
as the recovery in air travel continued.
Contributions from Hongkong Land’s associates and
jointventures increased slightly by US$6 million to
US$235million. Higher average rental in Investment
Properties was partly offset by lower contributions from
Development Properties, with significantly lower sales
completions on the Chinese mainland, due to challenging
market conditions.
In Mandarin Oriental, a marginal loss from associates was
reported in 2023, compared to a profit of US$10 million in
2022, due to the closure of the Singapore hotel for
renovation.
The overall contribution from Jardine Cycle & Carriage’s
associates and joint ventures decreased by US$37 million
to US$122 million. Their 26.6%-owned associate in
Vietnam, THACO, reported a lower contribution impacted by
weaker consumer sentiment and intense competition. REE,
a 34.9%-owned associate, reported a lower contribution
due to unfavourable weather conditions leading to lower
profit from its renewable energy investments. These lower
contributions were offset by higher profits in the
automotive, financial services and leasing businesses
reported by Jardine Cycle & Carriage’s 49.9%-owned
associate TunasRidean in Indonesia. 25.5%-owned SCCC
delivered an improved contribution from 2022, due to the
absence of the one-off tax adjustment made in 2022.
The Group’s underlying contribution from Zhongsheng in
2023 of US$139 million was US$124 million lower than last
year, due to a challenging market environment on the
Chinese mainland and the accounting change to better
reflect current progress and development at Zhongsheng.
As noted last year, the Group has changed the accounting
for Zhongsheng’s results in 2023, to reflect an estimate of
their results for the second half of the year, based on
recent external analysts’ forecasts. This change has been
adopted prospectively from 1st January 2023 and, as such,
the Group’s share of Zhongsheng’s results for the year
ended 31st December 2023 is presented as underlying
profit. Whereas, for the 2022 prior year contribution from
Zhongsheng, the Group reported its results with six months
in arrears. Had the current policy also applied in 2022, the
drop in underlying contribution from Zhongsheng
recognised in 2023 would have been approximately 40%
smaller. The Group’s share of Zhongsheng’s 2022 second
half results is included as a non-trading item, so as not to
distort the current year’s underlying performance.
Tax
The underlying effective tax rate for the year was 25%,
which was broadly in line with that of 2022.
Non-trading Items
In 2023, the Group had net non-trading losses attributable
to shareholders of US$975million, which included a net
decrease of US$1,066 million in the fair value of
investment properties and impairment of goodwill of
US$172 million, offset by gains on the sale of properties
ofUS$105 million, and the US$101 million share of
Zhongsheng’s 2022 second half profit (resulting from a
change in accounting policy, see "Share of results of
associates and joint ventures" above).
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$327 million in the fair value of other
investments, and impairment of investment in associates
of US$320 million.
Dividends
The Board is recommending a final dividend of US$1.65 per
share for 2023, providing a total annual dividend for 2023
of US$2.25 per share, a 5% increase from 2022. The final
dividend will be payable on 15th May 2024, subject to
approval at the Annual General Meeting to be held on
8thMay 2024, to shareholders on the register of members
at the close of business on 22nd March 2024. The dividend
will be available in cash, with a scrip alternative.
Cash Flow
Summarised cash flow
2023
US$m
2022
US$m
Cash generated from operations 5,549 5,287
Net interest and other financing
charges paid (541) (387)
Tax paid (1,307) (1,006)
Dividends from associates and
joint ventures 883 931
Operating activities 4,584 4,825
Capital expenditure and
investments (4,668) (3,507)
Disposals and repayments from
associates and joint ventures 2,314 914
Cash flow before financing 2,230 2,232
Acquisition of the remaining
interest in Jardine Strategic (5) (21)
Principal elements of lease
payments (856) (875)
Other financing activities (2,511) (2,379)
Net decrease in cash and cash
equivalents (1,142) (1,043)
41
Jardine Matheson Annual Report 2023
Financial Review
Cash inflow from operating activities for the year was
US$4,584 million, compared with US$4,825 million in
2022. The decrease of US$241 million from 2022 was due
to lower operating profit in Hongkong Land, and higher tax
paid by Astra and Hongkong Land, offset by decreased
working capital, principally in Hongkong Land and Jardine
Cycle & Carriage.
Capital expenditure and investments for the year,
beforedisposals, amounted to US$4,668 million
(2022:US$3,507million). This included the following:
• US$1,667 million for the purchase of tangible assets,
which included US$1,377 million in Astra (of which
US$1,208 million was for the acquisition of heavy
equipment and machinery to accommodate increased
business activity, predominantly by Pamapersada),
andUS$173 million in DFI Retail for refurbishment of
existing stores;
• US$1,621 million for investments in various associates
and joint ventures, primarily Hongkong Land’s
investments of US$722 million in Development
Properties projects, most of which were joint venture
projects on the Chinese mainland in Chongqing and
Beijing, and Singapore; and Astra’s investment in
NickelIndustries of US$616million;
• US$671 million for the purchase of other investments,
which included US$288 million in Astra (of which
US$285 million represented the acquisition of securities
inrelation to its financial services businesses); and
Jardine Cycle & Carriage’s further investment in THACO
through subscription for a US$357million five-year
convertible bond; and
• US$378 million for the acquisition of subsidiaries, which
included US$285 million for Astra’s acquisition of PT
Anugerah Surya Pasific Resources, PT Stargate Pasific
Resources and PT Stargate Mineral Asia.
In 2022, the Group’s principal capital expenditure and
investments included:
• 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 on 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 digital health
ecosystem platform, 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.
The contribution to the Group’s cash flow from
disposalsfor the year amounted to US$2,314 million
(2022:US$914million), which included US$1,252 million
primarily related to repayments from associates and joint
ventures in Hongkong Land. TheGroupalso continued to
progress the simplification of its portfolio by divesting
non-core investments when opportunities arose:
• US$364 million from sale of tangible assets, primarily
DFI Retail’s sale and sale and leaseback of properties in
Singapore, Malaysia and Indonesia and Jardine Cycle &
Carriage’s sale of its properties in Singapore under a sale
and leaseback arrangement;
• US$359 million being proceeds received, net of
transaction costs, relating to sale of the automotive
dealership business in the United Kingdom;
• US$161 million, primarily from the sale of Astra’s
investment in relation to its financial services
businesses; and
• US$134 million from the sale of associates and joint
ventures, primarily Jardine Pacific’s investment in
Greatview Aseptic Packaging Company.
42
Jardine Matheson Annual Report 2023
Financial Review
The Group’s cash flow from disposals in 2022 included
principally:
• US$416 million primarily related to 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 the hotel in Washington
D.C. by Mandarin Oriental.
The Group continued to focus on making organic and
strategic investments to sustain the business and drive
future growth during 2023. TheGroup’s organic capital
expenditure, including expenditure on properties for sale,
was US$3.4 billion (2022: US$3.8 billion), and strategic
investments added a further US$1.8 billion
(2022:US$1.5billion) to capital expenditure in 2023.
Additional capital investment within the Group’s
associates and jointventures was over US$5.2 billion
(2022:US$4.3billion).
During the year, the Company also repurchased its own
shares (for cancellation) at a total cost of US$209 million
(2022: US$173 million). Additional shares in Group
companies were also purchased in 2023. Shares in Jardine
Cycle & Carriage were acquired at a total cost of
US$136million (2022: US$130 million) and Mandarin
Oriental shares at a total cost of US$18 million
(2022:US$1million). There were share buybacks in
Hongkong Land at a total cost of US$83 million
(2022:US$352 million). These purchases are recognised
aspart of financing activities in the Consolidated Cash
Flow Statement.
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
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 42 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 15% at 31st December
2023, up from 13% at the end of 2022. This principally
reflected higher capital expenditure (both organic and for
M&A) as well as enhanced dividend payments at Astra
during the year. Net borrowings, onthe same basis, were
US$8.4 billion at 31st December 2023, compared with
US$7.5 billion at the end of 2022. Astra’s financial
servicescompanies had net borrowings ofUS$3.4 billion
atthe end of the year, compared with US$2.8 billion at
theend of 2022.
Net borrowings* and total equity (US$ billion)
* Excluding net borrowings of Astra’s financial services companies.
Net borrowings
Total equity
3.7
58.4
6.6
7.5
56.3
55.9
8.4
62.8
4.8
65.1
2019
2020
2021
2022
2023
At the year end, undrawn committed facilities totalled
US$9.0 billion. In addition, the Group had liquid funds of
US$4.8 billion. During the year, the Group’s total equity
decreased by US$0.4 billion to US$55.9 billion.
43
Jardine Matheson Annual Report 2023
Financial Review
The average tenor of the Group’s borrowings at
31stDecember 2023 was 4.4 years, the same as 2022.
82%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 2023, 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. 91% of the borrowings for Astra’s financial
services companies were at fixed rates.
Borrowings profile at 31st December 2023
Shareholders’ Funds
Shareholders’ funds at 31st December 2023 are analysed
below, by business and by geographical area. There were
no significant changes from the prior year.
Interest rate*
Currency
Maturity
* Excluding Astra’s financial services companies.
Floating 45%
55% Fixed
JM Financial Review 1
Others 16%
USD 18%
33% IDR
33% HKD
JM Financial Review 2
> 5 years 28%
2-5 years 19%
33% < 1 year
20% 1-2 years
JM Financial Review 3
By geographical area
By business
#
Excluding Astra.
4%Jardine
Cycle & Carriage
Jardine Pacific 4%
DFI Retail 3%
Mandarin Oriental 8%
58% Hongkong Land
18% Astra
#
5%Jardine Motor
Interests
JM Financial Review 4
64% China
South East Asia 33%
Rest of the World 3%
JM Financial Review 5
Principal Risks and Uncertainties
A review of the principal risks and uncertainties facing the
Group is set out on pages 88 to 96.
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 Group has applied IFRS 17 “Insurance Contracts” for
the first time for the annual reporting period commencing
1st January 2023. As included in note 1 to the financial
statements, the adoption of IFRS 17 does not have a
material effect on the financial statements, but the
comparative financial statements have been restated as
the Group applied IFRS 17 using a retrospective approach.
Sustainability
Sustainability as a Key Enabler
Jardines has focussed on creating enduring value through
our approach to business since our founding nearly
twocenturies ago. From the outset, we have applied a
long-term perspective to growth, building resilience in
ourbusiness and supporting the communities we serve.
This wide historical lens informs our approach to
sustainability and serves as a foundation which guides
our decisions on how to shape our business for the future.
Our sustainability practices are underpinned by a focus on
innovation and resilience, and enable Jardines to mitigate
risk, enhanceoperational efficiencies, and maintain a
strong competitive position in the markets where we
operate. Wehave continued to pursue our vision for a
sustainable future by fostering greater collaboration
across our businesses and working to support them in
addressing sustainability issues which are material across
the Group. By integrating sustainability across the Group,
we are committed to delivering long-term solutions which
address the broad range of sustainability challenges we
face, while producing long-term value for all our
stakeholders.
Building Towards 2030
The diverse nature of the Group’s businesses provides a
great opportunity for collaboration in building resilience to
potential future impacts. Though each of our businesses
may have their own sustainability agendas, westrongly
support the creation of a shared mindset towards
long-term value creation.
The Group’s sustainability strategy, Building Towards 2030,
structures the Group’s response to social and
environmental megatrends affecting the outlook of our
businesses and the communities in which we operate. The
strategy has nine focus areas across three strategic pillars:
Leading Climate Action, Driving Responsible Consumption
and Shaping Social Inclusion. It is aligned with five of the
17 United Nations Sustainable Development Goals
(‘UNSDGs’), contributing to the global agenda to end
poverty, protect the planet and ensure peace and
prosperity for all people by 2030.
Our strategy provides an overarching sustainability vision
at the Group-level, that recognises the needs and
expectations of our diverse stakeholders. The Group has
identified key priorities to focus our sustainability
ambitions, streamline our efforts and allocate resources as
efficiently as possible. We uphold the autonomy of our
subsidiaries and affiliates, while simultaneously
encouraging alignment and collaboration between our
businesses, to harness the knowledge and expertise
available across the Group and unlock opportunities for
systemic change. Each of our businesses are encouraged
to ensure consistency with the Group’s sustainability
strategy in driving their individual sustainability agendas,
which are tailored to their respective industries and
geographies.
Of the three strategic pillars, climate action has been our
highest priority for the past couple of years. Our Group
businesses are progressing well on their decarbonisation
journey, with most having set science-based 1.5°C-aligned
targets and developed plans for achieving them. Moving
forward, we remain committed to our decarbonisation
objectives as we work with all our businesses to align with
Sustainability
Health
Education
LivelihoodNature
Plastic
Food
Carbon
Risk
Leading Climate
Action
Driving Responsible
Consumption
Shaping Social
Inclusion
Resilience
climate science and sector-based approaches to reduce
climate impacts, enhance resilience and unlock
opportunities for future growth in a transitioning world.
Sustainability Governance
Integrating sustainability within our existing governance
structure enables the strategic oversight, accountability
and reporting necessary to deliver long-term value
creation. The Company’s Board and Audit Committee
oversee our sustainability governance structure, supported
by strong day-to-day oversight by senior management.
Thisstructure is mirrored at the Group businesses and is
complemented by the Sustainability Leadership Council
(‘SLC’) – which brings together the chief executives of our
Group businesses and Jardine Matheson directors and
senior executives – as well as by working groups
focussedon each pillar of our sustainability strategy.
Thesegovernance structures are supported by the Group
Sustainability Team, which works closely with sustainability
representatives from across our Group businesses.
46
Jardine Matheson Annual Report 2023
Sustainability
The Company Board
Sustainability is a regular agenda item at Board and risk
management and control committee (‘RMCC’) meetings,
both for our individual businesses and at the Group level.
Specific items including climate action are raised and
discussed regularly at these meetings. Senior management
of the Group, some of whom who also sit on the Company’s
Board, are also members of the boards of our Group
businesses, where they emphasise the strategic
significance of sustainability to Jardines. This approach
ensures that our commitment to sustainability, including
climate action, is consistent across the Group’s businesses
and informs major business decisions. For details of the
Board, please refer to the Corporate Governance section of
this Report.
Audit Committee
The Audit Committee supports the Board in overseeing and
evaluating 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 which measure the
Group’s sustainability strategy, initiatives and goals, as
disclosed in the Company’s annual Sustainability Report.
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 this Report for details.
Sustainability Leadership Council
The SLC is led by Jardine Matheson Executive Chairman,
Ben Keswick. It currently comprises more than 20
members, and its core members include 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.
Meeting twice annually, the SLC serves as a collaboration
platform for senior management across the Group to
exchange insights and perspectives on sustainability
strategy, planning and direction for the Group. Emerging
sustainability trends, best practices and stakeholder
expectations are discussed regularly within the SLC.
Group-wide sustainability and climate-related risks and
opportunities are also discussed at the SLC, with the aim
ofimproving the Group’s performance and ensuring
consistent integration of sustainability considerations into
corporate policies and business operations.
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 to set sustainability
metrics and targets to effectively address material issues.
The leadership of each of the Group’s listed and private
businesses reports at least twice a year on the progress of
their sustainability agenda to their own boards (in the case
of listed businesses) or their respective RMCCs (in the case
of private businesses).
Sustainability Working Groups
Designated working groups support each of the pillars of
our sustainability strategy. The working groups are
comprised of, and chaired by colleagues from across our
businesses who are responsible for driving the aspects of
their sustainability agendas within their organisations.
Working within the purview of each respective
sustainability pillar, the working groups support the
execution of the Group’s sustainability strategy, as well as
identifying, developing and recommending initiatives
which will create synergies and strengthen cohesion and
cooperation between the Group businesses, as well as
sharing knowledge and experience across the Group.
Group Sustainability
The Group Sustainability Team supports the integration of
sustainability considerations into the Group’s broader
business strategies and operations, and provides advice
on sustainability-related issues. It also provides ongoing
guidance, advice and support to the Group’s businesses,
encouraging consistency in their approach to
sustainability. Collaborating closely with various
stakeholders including senior leadership, operational
teams, and external partners, the team also implements
sustainability initiatives and sets appropriate and relevant
ESG metrics and targets to track progress on material ESG
issues. Sustainability trends are regularly monitored and
are incorporated into the Group’s approach to improving
ratings, reporting and disclosures.
In addition, the team works with other Group functions
including Group Finance, Group Audit & Risk Management
(‘GARM’), Group People & Culture, Group Secretariat,
GroupLegal, Group Tax and Group Communications to
progress the Group’s sustainability ambitions, as well as to
obtain support on sustainability matters, including
budgets and reporting, sustainability risks and
opportunities, human capital, corporate governance,
business ethics, tax reporting and sustainability
communications.
47
Jardine Matheson Annual Report 2023
Sustainability
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 continual dialogue with our broad
range of stakeholders, to communicate our sustainability
ambitions and the progress we are making in achieving
them, as well as to seek their valuable input. Through
these engagements, we gather feedback to better
understand their perspectives and expectations on key
issues. Our stakeholders’ inputs help us confirm and
further refine our sustainability strategy and focus areas.
We regularly meet with our investors to share key
sustainability updates and inform them on our current
progress and future plans on sustainability. We also collect
our investors’ views and suggestions on the Group’s
sustainability strategy, performance and disclosure.
Weactively and systematically engage with rating
agencies, to ensure that their analysis of the Group’s
sustainability performance accurately reflects our
sustainability approach, commitments, actions and
progress. Through the coordinated efforts made across the
Group’s businesses, we have continued to achieve
significant improvement in our ESG ratings in 2023.
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 materials.
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 Committees
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
48
Jardine Matheson Annual Report 2023
Sustainability
The feedback gathered from our internal stakeholders and
businesses forms an integral part of our materiality
assessment process. Their perspectives are thoroughly
considered and have helped us to confirm and further
refine the Group’s sustainability priorities.
We keep abreast of the latest global reporting standards
and environmental and social megatrends, to identify new
and emerging sustainability issues relevant and material to
the Group. We gain valuable insights in our interactions as
a member of the World Business Council for Sustainable
Development (‘WBCSD’), and also reference the
sustainability reports of our Group businesses and our
peers, along with expert insights and the results of our
stakeholder engagement activities, to continuously review
and enhance our sustainability strategy and focus areas
against the rapidly evolving sustainability landscape.
Climate Action
Climate change will increasingly impact our business,
andwe are therefore actively identifying the physical and
transition risks confronting the Group, including
opportunities 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 have a deep understanding of 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.
TCFD Report
This section provides details on our climate journey based
on Taskforce for Climate-related Financial Disclosures
(‘TCFD’) recommendations. Please refer to the Consistency
with TCFD Requirements section on page 56 for a detailed
view on the extent of alignment with the recommendations.
Governance
The Jardine Matheson Board is ultimately responsible for
the overall strategic aims and objectives of the Company.
Sustainability updates, including climate-related strategy,
decarbonisation targets, initiatives and progress,
challenges and opportunities are reported to the Board at
least twice a year. One update occurs as part of the year-
end process, and reflects the outcomes of the annual
budget setting process, as part of which there is discussion
of capital allocation for organic and inorganic growth,
capital and operational expenditures, and the budget for
sustainability initiatives for the coming three years.
The Board is also responsible for the oversight of climate
risk management through the Audit Committee.
Environmental and climate risk is identified as one of the
principal risks faced by the Group, as it has materialised
and impacted our business operations and supply chain.
The principal risks faced by the business, as well as latest
developments and the progress of mitigation measures,
are reported to the Audit Committee bi-annually and
disclosed in the Audit Committee Report in this Report.
Climate action is one of the critical topics reviewed and
assessed by the SLC, which 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. The Company and
individual business units’ senior representatives will
provide corresponding updates on sustainability strategy
to their respective Boards. Sustainability-related policies
are also reviewed by the SLC. These include the
Group’sClimate Change Policy, which was published in
2022. All sustainability-related policies are periodically
reviewed by executive management and updated
asrequired.
49
Jardine Matheson Annual Report 2023
Sustainability
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.
The Group Sustainability Team, led by the Group Head of
Corporate Affairs and Sustainability, supports the Board,
SLC and Climate Action Working Group in developing the
overall sustainability strategy and related initiatives.
Amonthly meeting is held by the Group Sustainability Team
with the Executive Chairman, to report progress on our
sustainability agenda. The Climate Action Working Group
meets on a quarterly basis, and updates on its activities
are provided to the SLC twice ayear.
For more information on the roles and responsibilities of
those involved in our sustainability governance framework,
and management oversight of the sustainability agenda
(including climate risks and opportunities) across the
Group, please refer to the Sustainability Governance
section on page 45.
Strategy
Our Group commitment to climate action is set out in the
Group Climate Change Policy, published in June 2022.
Thepolicy outlines the principles that steer the Group and
our businesses to build resilience to climate change
impacts and the transition to a low-carbon economy.
Tohelp drive the shift to more renewable sources of energy,
Jardines has also published a clear commitment to
Supporting a Just Energy Transition, affirming our goals of
scaling up investments in renewable energy and adjacent
innovations, diversifying into non-coal mineral mining and
not investing in new coal mines or coal-fired power plants.
As an Asian-based conglomerate, we want to be a key
partner for the region in contributing to an orderly and
equitable transition.
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 three years), medium-
term (four 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, assessing
potential asset damage and business interruption.
Weanalysed the exposure and impact of both acute
1
and
chronic
2
hazards on more than 800 significant assets
across our Group businesses in 22 countries and regions.
The study was conducted utilising three Representative
Concentration Pathways (‘RCPs’) developed by the
Intergovernmental Panel on Climate Change (‘IPCC’)
3
.
In 2022, the Group initiated an assessment of transition
risks which might 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
climate science updates and significant changes in our
operating environments as a result of shifts in policy,
regulations and other signals.
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 diverse sectors of our Group businesses 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equip them with the right knowledge and resources for
climate resilience.
50
Jardine Matheson Annual Report 2023
Sustainability
A summary of the identified physical and transition risks that may have a material impact on our business, and our
mitigation measures in response , are included in the table below:
Physical risks Implications to the Group Potential impacts to operations Our response
Typhoon
Severity, as
measured by wind
speed, is
increasing in the
Chinese
mainland, Hong
Kong, Vietnam,
and the
Philippines.
More frequent and
destructive typhoons impact
Hongkong Land, DFI Retail,
some Mandarin Oriental
hotels and Jardine Pacific.
Expected onset: short to
medium term
• Increased damage to equipment,
facilities and properties
• Localised flooding and limited
access and egress to properties,
resulting in potential risks to the
safety of patrons and limitations
to commercial activity
• A greater occurrence of building
strain (including structural
damage) or loss of building
material fixtures and claddings,
resulting in damage, and
increased maintenance costs
and insurance premiums
• Decrease in demand due to
operational disruptions, tenants/
customers relocation and loss of
tourist attractions and tourism
appeal
• Increased trade disruptions and
damage to port infrastructure,
resulting in supply chain
disruptions
• Business continuity and
emergency evacuation planning,
and regular training, drills and
engagement with employees and
tenants
• Identify emerging technologies,
including smart, digital and
biotechnologies or new materials
to enhance building quality and
resilience
• Review of overflow and drainage
systems for locations susceptible
to flooding
• Review exposure to physical
hazards, including an analysis of
geographical flood plains, before
committing to new locations
• Engage with government bodies
on flood defences
• Ensure adequate insurance
coverage for physical asset
damage
• Dual sourcing and increasing
supplier resilience
Rainfall flooding
Severity, as
measured by flood
depth, is expected
to increase across
Asia.
More frequent and extreme
rainfall flooding impact our
low-lying and flood
vulnerable major assets in
Astra, Hongkong Land,
DFIRetail, JC&C and some
Mandarin Oriental hotels.
Expected onset: short to
medium term
Extreme heat
Measured by the
combined impact
of temperature
and humidity, it is
forecasted to
increase in the
period to 2030
across Asia.
Higher latitudes
are expected to be
most adversely
affected.
Increased ambient
temperatures and more
frequent heatwaves mostly
impact Astra, Hongkong
Land, DFI Retail, JC&C, and
Jardine Pacific businesses
such as Gammon.
Expected onset: medium to
long term
• Adverse effect on the health and
safety of employees working on
sites, e.g. heat stroke and heat
exhaustion
• Prolonged periods of hot days
exacerbating safety risk
• Reduction in thermal comfort for
tenants, resulting in increased
cooling demand and associated
costs across the properties
• Damage to equipment, facilities,
properties, inventory and
infrastructure, resulting in
business and supply chain
interruptions
• Physical checks for workers under
prolonged sun exposure and
extended/additional breaks
during times of high heat and
periods of persistently extreme
temperatures
• Active promotion of modern
construction methods such as
offsite fabrication
• Adopting and excelling in green
building sustainability
certification programmes
• Operational energy saving
measures and regular air-
conditioning equipment
maintenance and/or replacement
• Increase energy efficiency
through upgrading and retrofitting
existing buildings and system
optimisation
• Dual sourcing and increasing
supplier resilience
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Jardine Matheson Annual Report 2023
Sustainability
Physical risks Implications to the Group Potential impacts to operations Our response
Sea level rise
Severity, as
measured by the
rise of sea level, is
expected to
increase globally.
Increased sea level rise/
coastal inundation mostly
impacts Hongkong Land’s
Central portfolio buildings in
Hong Kong, which are
valuable assets to the
Group.
Expected onset: medium to
long term
• Permanent inundation of access
and egress points of our coastal
properties, resulting in
significant structural damage
• Inundation of assets, limiting
business continuity and future
business opportunities
• Increased maintenance costs
and insurance premiums
• Implement operational
procedures for emergency
extreme weather preparedness
including flooding and typhoons
• Engage the Hong Kong
government for adequate
planning and preparation of
extreme weather events,
including knowledge sharing of
risk assessment data and
management plans
• Engage other property developers
to exchange insights and
potentially collaborate on
solutions to effectively manage
climate risks
Transition risks
Implications to the Group Potential impacts to operations Our response
Carbon price
Direct (e.g. carbon
tax) or indirect
costs associated
with emissions
reduction
regulatory or fiscal
policies.
All our businesses will be
affected, however these
risks would be especially
impactful for those
operating in high energy
consuming and/or high
carbon emitting sectors,
namely Astra, Hongkong
Land, DFI Retail and
Gammon.
Expected onset: medium to
long term
• Increased cost of products,
services and raw materials such
as steel and cement
• Higher energy efficiency
requirements, resulting in
increased capital expenditures
and cost of operations
• Increased legal and regulatory
stringency, resulting in higher
risk of litigation, requiring
additional efforts for compliance
• Develop net-zero strategy to
reduce greenhouse emissions.
Afew of our business units’
(Hongkong Land, Gammon,
DFIRetail and Hactl) near-term
science-based targets have been
validated by SBTi
• Develop a strategy for a lower-
carbon supply chain, including
local sourcing efforts, country of
origin assessments, and
sustainable commodities
initiatives in DFI Retail
• Electrify equipment, e.g. Gammon
acquiring electric crawler cranes
• Reduce embodied carbon in
buildings/stores by sourcing
alternative low-carbon materials
such as low carbon certified
rebar, and explore methods to
reduce the carbon footprint of
concrete mixes (e.g. CarbonCure)
in our construction business
• Invest in energy efficiency, R&D
and innovation, e.g. JEDI from JEC
• 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.
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Jardine Matheson Annual Report 2023
Sustainability
Transition risks Implications to the Group Potential impacts to operations Our response
Polices and
regulations
Examples include
green building
policies and
electric vehicle
policies.
Green building policies are
applicable to most of our
businesses, and electric
vehicle policies are
applicable to our motor
businesses, i.e., Zung Fu
Hong Kong, JC&C and Astra.
Expected onset: medium to
long term
• Increased cost of products,
services and raw materials such
as steel and cement
• High energy efficiency
requirements, resulting in
increased capital expenditures
and cost of operations
• Increased legal and regulatory
stringency, resulting in higher
risk of litigation, requiring
additional efforts for compliance
• Continue to implement energy
efficiency projects to achieve
science-based targets
• Introduce new low-carbon
products and services, e.g.
electric vehicles in Zung Fu
HongKong andJC&C
• Invest in energy efficiency, R&D
and innovation, e.g. JEDI from JEC
• Monitor upcoming climate-related
regulatory requirements
• Build climate resilience capability
across the Group
• Engage with government bodies
and industry associations to
contribute to policy consultations
Climate-related
opportunities
Implications to the Group Potential impacts to operations Our response
Shifting consumer
preferences
towards low-
carbon buildings,
materials,
products and
services
This is an emerging
opportunity to capture
business growth for
Hongkong Land and
Gammon in the construction
and property sector, Astra,
JC&C and Zung Fu Hong
Kong in the automotive
sector, and JEC in the
engineering services sector.
Expected onset: medium to
long term
• Higher demand for minerals for
low-carbon technologies such as
copper, nickel and bauxite and
reduced demand of coal
• Increased demand and revenue
from low-carbon infrastructure
and buildings, sale of electric
vehicles, etc
• Publish a Just Energy Transition
statement to commit to no new
coal mine acquisitions and no
new investments into coal-fired
power plants
• Acquire new brands of electric
vehicles in Zung Fu Hong Kong
and JC&C; and support the
partners in the transition of
electric vehicles, e.g.Astra’s
investment in nickel mining
• Active engagement with tenants
to gauge expectations on green
building features and continue
toobtain green building
certifications in our properties
portfolio
• Continue to deliver certified green
building projects in our
construction business
• Develop lower carbon high-
performance concrete mixes with
the Hong Kong Construction
Industry Council’s Green Product
Certifications
• Invest in energy efficiency, R&D
and innovation, e.g. JEDI from JEC
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Jardine Matheson Annual Report 2023
Sustainability
Climate-related
opportunities
Implications to the Group Potential impacts to operations Our response
Renewable energy
and energy
efficiency
This is a present opportunity
to all businesses for the
foreseeable future.
• Reduced operating costs through
energy efficiency initiatives,
reduced waste to landfill and
increased material reusability
• Increased market value of
properties that are highly rated
as energy efficient and/or
climate resilient
• Actively expand our investments
in renewable energy sector:
– REE as Vietnam is one of the
region’s fast-growing markets
for renewables and REE has
been a leading developer of
sustainable infrastructure
since2010
– At Astra, along with investing in
hydro, wind and solar projects,
we are also exploring biomass
waste-to-energy
• Invest in alternative energy e.g.
solar panels connected to a
Feed-in Tariff
• Reuse structural steel to reduce
new purchases, and use offsite
modular integrated construction
fabrication in a potentially more
energy efficient environment
• Join Power Up Coalition to
accelerate early electrification in
Hong Kong’s construction
business
• Behavioural change programmes
to educate the colleagues on
energy savings measures
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 in the Risk Management section of this
Report 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 3-5 year 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 the Group
Sustainability Team, 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 in 2023 was the
development of a framework for a systematic incorporation
of sustainability considerations, including climate risks,
into capital allocation decisions. We will continue this work
in 2024 and share more details in due course.
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.
Risk Management
We have incorporated the best practices of enterprise risk
management into the process of climate risk identification,
assessment and management. The sustainability teams in
each of our Group businesses are responsible for climate
risk management and provide a business-specific climate
risk perspective to their risk management team in the
business. The Group’s approach to overall risk
management combines a bottom-up process with a top-
down strategic view. As with other principal risks and
uncertainties, material climate risks and mitigation
measures are reported to GARM and consolidated into the
Group risk register to formulate a risk heat map, which
guides risk prioritisation. The risk heat map is reported to
the Audit Committee twice a year.
54
Jardine Matheson Annual Report 2023
Sustainability
Both physical and transition risk reports from the 2021 and
2022 climate risk assessments have been provided to the
Group businesses to further explore the implications for,
and develop mitigation measures to minimise the impact
including property damage and business interruption.
Guidance and support on climate risk management and
mitigation measures planning are provided by GARM and
Group Sustainability, when needed. Climate risks have
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
carried out in 2021 and 2022, we have been developing a
Group approach to the integration of climate risk into the
existing risk management process and business risk
register, which aligns with best practices defined by
WBSCD, COSO, TCFD, and ISO 3001. Materialised climate-
related risk events/drivers will be included in the existing
business risk register, with updated Risk Taxonomy to keep
climate-related risk causes in view by the respective risk
owners. As climate risks may materialise over a longer time
horizon compared to typical enterprise risk management
horizons, a sub-register solely comprised of climate risks
and opportunities has also been created. The climate risk
sub-register formalises current efforts and monitoring
currently carried out across the businesses. It is a full list of
climate risks and opportunities over the short, medium and
long-term, which facilitates the discussion and knowledge
transfer on climate matters between teams. Sustainability
and risk management teams will monitor the risk signals
(e.g. carbon price policies) and evaluate the impact of each
climate risk under different climate scenarios. Once the
risks materialise and are significant, they will be included
in the existing business risk register to ensure the
accountability of the risk owners. For example, supply
chain disruption is an existing business risk managed by
supply chain directors at business unit level, but climate
risks could intensify the uncertainties of logistics.
Mitigating the risk of supply chain disruptions, including
the impact from climate risks, is the supply chain director’s
responsibility, assisted by the sustainability and risk
management teams.
The Group has been piloting this climate risk integration
approach with two business units, and the results were
presented to their internal risk management committees.
In2024, GARM and Group Sustainability will organise
training for other business units and formally roll out the
integration approach across the Group. GARM and Group
Sustainability will review the submitted and integrated
climate risks and provide feedback, if any, to the Group
businesses to improve the process and outcome. The
impact assessment for climate risks is currently based on
external research and management judgements. Climate
change modelling and more sophisticated financial impact
assessments will be conducted, based on a common set of
scenarios and assumptions, at a later stage when more
data points are transparent and available in the market.
As part of our ongoing climate risk management process,
one important objective has been the development of a
culture of climate action across our businesses. Climate
risk is an issue which is now frequently included in internal
risk management training and conferences. 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 progress we have made in building this
culture was evidenced at the 2023 Risk Management
Forum, where climate risk was a key presentation topic and
at the 2023 Finance Conference, where finance colleagues
participated in an interactive simulation of the financial
impacts of carbon prices. 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 in our
riskregisters.
Please refer to the Risk Management and Internal Control
section of this Report for details of the Group’s enterprise
risk management framework. 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
previous 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 aligned
with the GHG Protocol for measuring Scope 1 and 2
emissions, and we aggregated data to provide a Group-
55
Jardine Matheson Annual Report 2023
Sustainability
wide picture of our GHG emissions disclosed, by business
unit, in our annual Sustainability Reports. At the time of
publication of this Report, the Group’s 2023 performance is
still undergoing external assurance, and further details will
therefore be provided in the forthcoming Sustainability
Report 2023. The Group’s 2022 performance is extracted in
the table below:
Metric Unit of
measure
Group total
Scope 1 emissions Thousand
tCO2e
4,839.3
Scope 2 emissions
(location-based)
Thousand
tCO2e
1,460.4
Scope 2 emissions
(market-based)
Thousand
tCO2e
1,395.1
Total GHG emissions
(Scope 1 and market-
based Scope 2)
Thousand
tCO2e
6,234.4*
Total energy
consumption
Thousand GJ 34,118
Energy consumption
from renewable
sources
% 39%
* The data was subject to independent limited assurance by PricewaterhouseCoopers as
part of our 2022 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 our indirect emissions (Scope 3), which we
will start measuring at the Group level in 2024, with plans
to disclose in the near future. A few of our business units,
such as Hongkong Land and DFI Retail, have already
publicly disclosed their scope 3 data.
Decarbonisation has been a key focus area of the Group’s
sustainability strategy. In 2021, the Group developed a
framework to guide the decarbonisation efforts across the
Group towards our ultimate ambition to transition towards
net-zero by 2050, in line with climate science. Due to the
wide geographic spread of our activities, there is
significant variation in the regulatory and policy
environments affecting our businesses, which have
implications for the feasibility, cadence and pace of
potential decarbonisation initiatives. To account for
Jardines’ size and complexity, we have segmented our
businesses under two pathways, after close consultation
with our internal stakeholders, to prepare an outline for
progress towards a credible medium-term target and
ultimately a net-zero goal.
The first science-based targets path expects businesses to
align with credible, scientific approaches to
decarbonisation, including the international Science Based
Targets initiative (‘SBTi’) and sector-specific methodologies
consistent with a 1.5°C trajectory. Hongkong Land was the
first Group business to set a 1.5°C near-term target
5
which
was validated by SBTi in 2022. DFI Retail, Gammon and
Hactl followed suit in 2023. Other businesses continue on
the first path toward setting credible science-based
targets. The second TCFD path expects the Group’s
businesses in hard-to-abate sectors, which have significant
business continuity risk, to develop a transition plan to
continue their business in a low-carbon economy.
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. A significant milestone for the Group in 2023 was
the development of a scope 1 and 2 decarbonisation
pathway by all businesses, which includes the details and
timeline of different decarbonisation levers to achieve their
GHG reduction targets. These pathways will be reviewed
every year to track decarbonisation progress and adjusted
based on actual performance to determine upcoming
actions and priorities.
The Group’s transition plans to achieve its ultimate
ambition of net-zero by 2050, relies on all business units’
efforts and collaboration. In the short term, we focus on
decarbonising our scope 1 and 2 emissions following the
established pathways. Different initiatives such as energy
efficiency measures and staff engagement to drive
behavioural change are already in place. In the medium
term, we will continue to reduce our scope 1 and 2
emissions through renewable energy procurement and
start to focus on decarbonising our scope 3 emissions
through supplier engagement. In the long term, we will aim
to leverage emerging technologies and innovations to
address the remaining gaps.
5
SBTi defined near-term target as five to ten years, which is within the medium-term target as defined by Jardines.
56
Jardine Matheson Annual Report 2023
Sustainability
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 in the process of
identifying more 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) and (c), as a
conglomerate operating across a variety of sectors, setting
Group-wide metrics and targets to assess climate-related
risks and opportunities is complex. We will continue
exploring the metrics which are applicable across different
business units and industries in the short term.
Responsible Consumption
We seek to leverage the scale and reach of the Group in
promoting resource efficiency and circular business
operations. Our Group businesses come together through
our Responsible Consumption Working Group (‘RCWG’),
tocollaborate and drive the Group strategy at the
operational level.
In 2023, the RCWG met quarterly to progress work on the
implementation of ongoing waste initiatives and to
establish a coordinated approach to further enhance
circularity efforts across the Group. Through closer
collaboration between our businesses, 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. We will
continue to seek opportunities to leverage the diversity of
industries our Group businesses operate in, to promote
circular resource loops between our businesses.
Throughout 2023, one of the RCWG’s key objectives 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: food waste,
plastic waste and wood waste. Furthermore, with support
from the RCWG members and colleagues across the Group,
each major business unit has set or are well on the way to
setting, a waste-related target.
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
businesses. Knowledge sharing has been a core function of
the working groups, and we continue to invite subject
matter experts to share their insights on relevant topics.
We also engage our businesses to share their waste
management experiences and learnings with other sectors
within the Group. The RCWG will continue to actively seek
waste reduction collaboration opportunities, and actions
have been identified to follow up on recent 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. At the
UNBiodiversity Conference (‘COP15’) held in 2022,
governments established a series of goals and targets for
2030 and 2050 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 the increasing levels of interest in
biodiversity conservation, as well as looking for future
opportunities for the Group. In the coming year, we will
continue to work with external parties to provide training
and education on nature and biodiversity for our
businesses, mainly through the RCWG.
57
Jardine Matheson Annual Report 2023
Sustainability
We remain closely engaged with our businesses and
relevant stakeholders to address biodiversity issues,
including supporting the long-term preservation of the
Tapanuli orangutan in the area around the Martabe mine in
Indonesia. More up-to-date 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
Contributing to the sustainable growth of our cities and
supporting the people in our communities has been a
longstanding commitment at Jardines. Our community
investment strategy focuses on positive contributions
towards the issues of education, health – with a keen focus
on mental health – and livelihoods.
For over 40 years, the Jardine Foundation has been
providing access to higher education and 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. In 2023, the
Foundation turned its attention to supporting access to
leading universities in our operating markets in Asia.
Welaunched two new scholarship schemes with the
University of Hong Kong and the Universitas Gadjah Mada
in Indonesia, and now provide scholarships to 30 new
students each year.
Recognising the pressing need for increased access to
reliable quality mental health care and effective treatment
options, Jardines established MINDSET in Hong Kong in
2002, with a vision to create inclusive communities,
empowered to improve their mental health. When MINDSET
was first established, the mental health community was
underserved and affected by social stigma. Over the past
20 years, MINDSET has worked to raise awareness and
acceptance of mental health issues within the community.
As understanding of mental health has improved, MINDSET
has provided vital support to those who are tackling mental
health difficulties and helping individuals in mental health
recovery settle into the community. MINDSET collaborates
with several mental health organisations and since the
launch of MINDSET Hong Kong in 2002, over HK$92 million
has been raised to support 214,000 beneficiaries.
Following the initial success of MINDSET, operations
expanded into Singapore in 2011.
Volunteers play a key role in driving MINDSET initiatives.
Bybringing people from diverse backgrounds together,
weare able to collaborate on ideas and insights,
amplifying our impacts to promote mental health to a wider
audience. In 2023, the MINDSET Ambassador Programme
was launched, bringing together like-minded individuals
across the Group to support MINDSET in creating positive
impact on mental health awareness. Through the planning
and coordination of MINDSET initiatives, our ambassadors
contribute to the mental wellness of our communities.
This past year also marked the return of MINDSET’s annual
fundraising event “Walk Up Jardine House” in its physical
race format, for the first time since 2020. Through a hybrid
combination of physical and virtual races, over 2,500
participants across 69 businesses accumulated 15 million
steps – the equivalent of the height of 16,000 Jardine
Houses. The event raised a record HK$5 million for mental
health. MINDSET also invited nine NGO partners to host
mental health activities and games at the Walk Up Jardine
House Carnival.
58
Jardine Matheson Annual Report 2023
Directors’ Profiles
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, Hongkong Land and
MandarinOriental. He is also
chairman of Jardine Cycle & Carriage
and a commissioner of Astra. He has
an MBA from INSEAD.
John Witt was appointed Group
Managing Director in 2020, when he
also became managing director of
DFIRetail, 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 positions, including chief
financial officer of Hongkong Land
andMandarin Oriental Hotel Group.
Mr Witt is chairman of Jardine
Matheson Limited and is also a
director of Jardine Pacific, as well as a
commissioner and chairman of the
Executive Committee of Astra. He is a
Chartered Accountant and has an MBA
from INSEAD.
John Witt Y.K. Pang
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 from 2016 to
2021. He is chairman of Jardine
Pacific, Gammon, Hong Kong Air Cargo
Terminals and Zung Fu Hong Kong.
MrPang is also deputy chairman of
Jardine Matheson Limited, and a
director of Hongkong Land, Jardine
Matheson (China) and Mandarin
Oriental. 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.
Mr Pang will retire from the Board on
31st March 2024.
Executive Chairman
Executive Director Executive Director Executive Director
Group Managing Director Deputy Managing Director and
Chairman of Hong Kong
Ben Keswick
Committee Membership: Audit Committee | Chairman | Member
A
59
Jardine Matheson Annual Report 2023
Directors’ Profiles
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.
Janine Feng joined the Board in May
2023. She is a managing director at
Carlyle, focussed on Asian buyout
opportunities in the financial services,
consumer products and healthcare
sectors. Since joining Carlyle in 1998,
she has led various investments
including Carlyle Asia Partners’
investments in China Pacific
Insurance, Kaiyuan Hotel Group,
HaierElectronics, Focus Media,
andMicroPort.
Prior to joining Carlyle, she was a
financial analyst and later a senior
associate at Credit Suisse First
Boston’s investment banking group in
New York, where she focussed on
structured finance and project finance
transactions for four and a half years.
While at business school, she worked
as a management consultant at
McKinsey & Company, Inc.
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, member of the risk
committee and a member of the
nomination and remuneration
committee of The Saudi Awwal Bank.
He is also a director and member of
the audit committee and the risk and
health, safety and environment
committee of Saudi Aramco and a
member of the International Advisory
Council of Hong Kong Exchanges and
Clearing Limited.
Stuart Gulliver
Group Finance Director
Graham Baker Janine Feng
Executive Director Independent Non-executive Director Independent Non-executive Director
AA
60
Jardine Matheson Annual Report 2023
Directors’ Profiles
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.
Julian Hui Keyu Jin
Keyu Jin joined the Board in January
2024. She is a tenured professor of
Economics at the London School of
Economics and Political Science,
where she researches globalisation
and the Chinese economy. She is from
Beijing, China, and holds a B.A., M.A.
and PhD from Harvard University.
Dr Jin is an independent non-executive
director of Compagnie Financière
Richemont SA, the second-largest
luxury conglomerate, AInnovation,
anAI+ manufacturing solution
provider and of Stanhope Capital,
oneof the world’s largest independent
wealth management and advisory
firms. She is a member of China
Finance 40 and a member of the
economic council for the state of
Qatar. She has previously advised and
consulted for the World Bank, the IMF
and the New York Fed.
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. Mr Hsu will retire from the
Board on 31st March 2024.
Non-executive Director Independent Non-executive Director Independent Non-executive Director
61
Jardine Matheson Annual Report 2023
Directors’ Profiles
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, Hongkong Land and
Mandarin Oriental. He is also a
director of Ferrari NV, Schindler* and
Yabuli China Entrepreneurs Forum.
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.
Percy Weatherall 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 a member of the Council of the
Hong Kong Management Association.
Adam Keswick
Company Secretary
Jonathan Lloyd
Registered Office
Jardine House, 33-35 Reid Street, Hamilton, Bermuda
Executive Director Non-executive Director Independent Non-executive Director
A
* Mr Keswick will retire from the board of directors of Schindler on 19th March 2024.
62
Jardine Matheson Annual Report 2023
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 South East 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 192-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,
sustainable growth for our shareholders and benefits the communities where we operate.
• Credibility, stability and trust – the credibility, stability 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 long-standing 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.
Accordingly, the Company continues to focus on enhancing the Group’s approach to corporate governance more generally,
focussing on changes that benefit the Group.
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 has taken steps to increase
theindependence and diversity of its Board and the Company and the Group benefit from the expertise and experience
theybring.
Several changes were made to the governance of the Company during the year, including the appointments of Janine Feng
and Dr Keyu Jin, as Independent Non-Executive Directors of the Company on 5th May 2023 and 31st January 2024,
respectively. Anthony Nightingale stepped down from the Board on 31st January 2024 and Y.K. Pang and David Hsu retired
from the Board on 31st March 2024. Accordingly, from 1st April, the Board comprised 10 Directors of whom 50% are
considered Independent Non-Executive Directors, taking into account the independence considerations under the UK
Corporate Governance Code (the ‘Code’), and 20% are female.
Michael Wu, replacing Adam Keswick, and Janine Feng were also appointed to the Audit Committee on 2nd March and
5thMay 2023, respectively. The Company’s Audit Committee now comprises solely Independent Non-Executive Directors.
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
countries in which it operates.
Corporate Governance
63
Jardine Matheson Annual Report 2023
Corporate Governance
The Group has developed this approach over time and it 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.
Governance of the Company’s Listed Subsidiaries
The Company also continues to support enhancements to the governance of the Group’s listed subsidiaries, including the
appointment by Hongkong Land Holdings Limited (‘HKLH’) of a new Independent Non-Executive Director, Stuart Grant, who
brings additional sector expertise to the Board of HKLH. In addition, in 2023, each of DFI Retail Group Holdings Limited
(‘DFIRGH’) and Mandarin Oriental International Limited (‘MOIL’) appointed new Chief Executives and a new Chief Executive
for HKLH will start on 1st April 2024. Furthermore, over the past year, each of HKLH, DFIRGH and MOIL have appointed
Independent Non-Executive Directors as chairmen of their respective audit committees, and each audit committee now
comprises a majority of Independent Non-Executive Directors.
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.
The Company’s standard listing in London means that it is bound by many, but not all, of the same rules as premium-listed
companies under the UK Listing Rules, the Disclosure Guidance and Transparency Rules (the ‘DTRs’) issued by the Financial
Conduct Authority of the United Kingdom (the ‘FCA’), the UK Market Abuse Regulation (‘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 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.
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Jardine Matheson Annual Report 2023
Corporate Governance
Although 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, 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, the Company will issue
an announcement, 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 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.
The Management of the Group
Board
The Board is responsible for ensuring that the Group is appropriately managed and achieves its strategic objectives in a way
that is supported by the right culture, values and behaviours throughout the Group. The Group’s culture provides the
foundation for the delivery of our strategy and our long-term, sustainable success while generating value for shareholders.
Our workforce policies and practices are consistent with our values and support the long-term, sustainable success of the
Group. In addition, during the period, a Group-wide survey was conducted to assess the culture within the Group and enable
the Group’s management to identify actions which can be taken to further improve our culture.
The Board is also responsible for ensuring that appropriate systems and controls are in place throughout the Group to
enable efficient management and well-grounded decision-making. Our business processes incorporate efficient internal
reporting, robust internal controls, and supervision of current and emerging risk themes, all of which form a vital part of our
governance framework. As a key part of this, the Group Corporate Secretary has set up processes and systems to ensure that
all Directors receive information in a timely, accurate and clear manner. The Group uses a board paper distribution portal to
disseminate Board and Committee papers instantly and securely.
The Chairman facilitates discussions at Board meetings by ensuring all Directors have an opportunity to make comments and
ask questions. In addition, the Chairman, from time to time, discusses Group matters with Directors individually and
collectively outside of Board meetings. The Chairman also uses other gatherings of the Directors, such as Board dinners,
tofacilitate discussions in a less formal environment.
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Corporate Governance
The Board has 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 Board is
responsible for include:
• 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;
• ensuring relevant sustainability and ESG matters are incorporated into purpose, governance, strategy, decision-making
and risk management;
• overseeing the management of risk within the Group;
• 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’).
Board activity
1. Strategy
Throughout its long history, Jardines has successfully grown its businesses by following a series of core investment
principles. We have always sought to invest in sectors where there is strong growth, in leading companies, and with people
in whom we trust.
We have also always focussed on evolving our portfolio to reflect changes in the environment in which we operate and the
needs of our customers, and we have invested in new sectors and businesses, or divested non-core businesses and exited
sectors, whenever it has been appropriate.
Our application of these principles over many years has led to the diverse portfolio we have today, and has delivered steady
growth in returns, through economic cycles.
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Corporate Governance
To facilitate oversight and provide opportunities for the Board to challenge and measure progress against the Group’s
strategic priorities, at each Board meeting, the Group Managing Director provides an update on the operational and financial
performance of each business. In addition, the Board regularly conducts a ‘deep dive’ on one or more of the Group’s
businesses, to provide deeper insights and understanding progress of the relevant business against strategy.
Leading up to Board meetings, the Group holds meetings on strategy on various topics relevant to the Group. The meetings
provide Directors with the opportunity to review progress against strategic priorities, inform Directors about the latest trends
relevant to our businesses, assist the Directors in identifying opportunities and risks and give the Directors the opportunity
to contribute views and ask questions of management and share experiences for the benefit of the Group.
2. Operational Performance
We operate in highly dynamic markets and need to constantly innovate and pivot our businesses to remain relevant and
achieve long-term, sustainable success. In the past years, Asia has seen a large influx of new capital, the rapid rise of digital
companies and an increasing desire among consumers for convenient digital services. In response, we aim to put
innovation, operational excellence and an entrepreneurial spirit at the heart of everything we do.
At each Board meeting, an update is provided on each business segment, which offers important insights into the
opportunities and challenges faced by these areas. Inaddition, a deeper understanding of how our varied markets function
and perform and the implications for stakeholder-related issues equip the Board with the necessary perspective to enhance
strategic decision-making.
The Group attaches great importance to attracting, developing and retaining leadership talent at the Group level, as well as
supporting the management teams in our businesses to do the same for their organisations. As a Group, we strive to develop
leaders with an owner mindset and who are entrepreneurial in how they develop their businesses. This has helped the Group
to capitalise on new business opportunities to achieve long-term, sustainable growth. We continue to enhance our
performance management structures to recognise, reward and retain such talents. As the Group increasingly embraces
digital ways of working and invests in new economy businesses, we are focussed on recruiting and developing digital talent
across our Group companies. To provide the Board with oversight of talent attraction, development and retention, progress
of Inclusion, Equity and Diversity (‘IE&D’), and colleague engagement and movements, a report on the Group’s employees is
provided at every Board meeting.
Building leadership capability, to develop and grow diverse talent and strengthen future pipelines through tailored
development programmes, is a key focus for the Board. The Board is committed to creating an inclusive workplace and
reflecting the diversity of the communities we serve. The Group has a clear IE&D strategy in place to ensure that colleagues
treat each other in a way they would expect others to treat them.
3. Financial performance and risk
We take a disciplined, long-term approach to capital allocation, to maximise financial performance, maintain our financial
strength and manage risk. Over time, we have developed deep relationships with a diverse portfolio of well-capitalised,
leading banks and corporate partners, which have supported and continue to support our financial strength.
Our approach is underpinned by always maintaining a strong balance sheet and liquidity position, for both the Company and
its subsidiaries. This position has enabled the Group to move with confidence in making some of our most substantial past
acquisitions at times of market dislocation.
The Group Finance Director presents a detailed overview of the financial performance of the business at each meeting,
toensure the Board is provided with sufficient information to enable it to exercise the appropriate financial oversight,
andhas the opportunity to challenge management as appropriate. This includes details of the performance of each business
unit and an overview of the sales, profit, cash flow and capital expenditure.
The Board also reviews the Group’s capital allocation, dividend policy and shareholder returns as well as the management of
the Group debt levels, interest cover and capital markets activities.
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Corporate Governance
The Board has overall responsibility for risk management and is actively engaged in risk discussions. The Audit Committee,
on behalf of the Board, undertakes an annual assessment of the effectiveness of the management of the principal risks
facing the Group and actions taken to mitigate them, validating the key risks and approving any necessary actions arising
from the risk assessments. Maintaining and enhancing the risk and internal control environment is fundamental to the
Group’s governance framework and stewardship of the Company.
4. Governance and stakeholder engagement
The Group provides active leadership, support and governance to the boards and senior management of each of our
businesses, who are responsible for implementing strategy and driving performance and growth. This builds best-in-class
businesses, which generate long-term, sustainable value.
The Group Finance Director and the Group General Counsel provide Directors with regular updates on stakeholder
engagement, including engagement with shareholders, governments and other relevant third parties, and relevant
regulatory developments. Increasing the Directors’ understanding of our stakeholders’ views supports the Board’s
decision-making.
Updates from the Group Finance Director provide the Board with feedback on investor views and expectations, visibility of
market conditions, share price performance, shareholder returns and the future outlook.
Governance matters are discussed at Board meetings, including directors’ and officers’ insurance, litigation, regulatory
changes, review and approval of statutory reporting and shareholder documentation and governance-related matters.
The Group General Counsel and the Group Head of Corporate Affairs and Sustainability provide the Board with Sustainability
updates twice a year, which include the progress of the Group’s climate change agenda, and in particular decarbonisation,
as well as updates on the Group’s responsible consumption and social inclusion initiatives.
In addition, the Audit Committee Chair provides an update on the activities of the Audit Committee.
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 7th March 2024, the Board comprised 12 Directors, five of whom (42%) – Janine Feng, Keyu Jin, Stuart Gulliver,
JulianHui and Michael Wu – are considered Independent Non-Executive Directors, taking into account the independence
considerations under the Code. Anthony Nightingale stepped down from the Board on 31st January 2024 and David Hsu and
Y.K. Pang retired from the Board on 31st March 2024. Accordingly, from 1st April 2024, the Board comprised 10 Directors,
ofwhom 50% are considered Independent Non-Executive Directors, taking into account the independence considerations
under the Code. There are detailed succession plans in place to ensure that plans are in place for orderly succession to
theBoard.
The Board increased its gender diversity with the appointment of two female Independent Non-Executive Directors (20% of
the Board) in the last 12 months. More information on the actions the Group is taking in relation to diversity and inclusion
can be found in the IE&D section of this report on page 77.
The names of all the Directors and brief biographies appear on pages 58 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 Group Managing Director on a
combined basis from 1st January 2019.
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Corporate Governance
The Board also considered the diversity of the Group’s Board and senior executives in the context of the new Listing Rules
requirements that listed companies should publish information on the gender and ethnic representation of the Board and
executive management. As at 31st December 2023, being the reference date for the purposes of 14.3.33R(1)(a) of the
UKListing Rules, which requires the disclosure of certain diversity statistics, and as shown below:
• The Board met its target of having one Director from a minority ethnic background;
• The Company does not currently meet the target of the Board comprising at least 40% female directors, but will continue to
take IE&D considerations into account for future Board appointments; and
• The Board does not currently meet the target to have a female director occupying one of the senior Board positions
(chair,chief executive or chief financial officer). The Directors who hold these roles were appointed following formal,
rigorous and transparent nomination procedures and are the most suitable and experienced individuals for their roles
andthe Group’s needs. The Board will continue to take IE&D considerations into account for future appointments for
theseroles.
The Company did not meet the targets of the Board comprising at least 40% female directors, and having one of the senior
Board positions occupied by a female director, due to the significant change to the composition of the Board and senior
management which would be required to meet these requirements.
The Company has taken substantive steps in the past year to increase the diversity of the Board, with two female Non-
executive Directors appointed, in May 2023 and January 2024, bringing the proportion of female directors on the Board to
20%. The Company will continue to take IE&D considerations into account with respect to future appointments of directors
and senior Board positions.
The table below illustrates the ethnic background and gender diversity of the Group’s Board and executive management–
which includes the Group Corporate Secretary, but excludes administrative or support staff - pursuant to 14.3.33R(2) of the
UK Listing Rules, as at 31st December 2023, which is our chosen reference date in accordance with the UK Listing Rules.
As at 31st December 2023
(including Group Corporate Secretary)
Number of
board members
Percentage of
the board
1
Number of
senior positions
on the board
(CEO, CFO, SID
and Chair)
1
Number in
executive
management
(JML Board and
Group Corporate
Secretary)
Percentage
of executive
management
(JML Board
and Group
Corporate
Secretary)
Gender diversity
Men 11 92% 3 7 78%
Women 1 8% – 2 22%
Not specified/prefer not to say – – – – –
Ethnic diversity
White British or other White
(including minority-white groups) 7 58% 3 6 67%
Mixed/Multiple Ethnic Groups – – – – –
Asian/Asian British 5 42% – 3 33%
Black/African/Caribbean/Black British – – – – –
Other ethnic group, including Arab – – – – –
Not specified/ prefer not to say – – – – –
Note:
(1) Board numbers for gender diversity will change after the date of this report owing to the stepping down of Y.K. Pang and David Hsu on 31st March 2024.
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Corporate Governance
Data relating to the gender and ethnic diversity of the Board and executive management was gathered by the Group
Corporate Secretary via the collection of each individual’s identification documents, which are held within the Company’s
secure filing system. Apart from the retirement of Anthony Nightingale on 31st January 2024 and the appointment of Keyu Jin
on 31st January 2024, there have been no changes in Board composition since the reference date.
The Company has a Board Diversity Policy but does not have a separate Diversity Policy for the Audit Committee in place.
IE&D issues are, and will be, taken into account where relevant to Board and Audit Committee decisions.
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.
Board composition details as at 1st April 2024:
Age of Directors
Nationality Tenure of Directors
Directors’ experience
Capacity of Directors (Number of Directors)
4
1
5
40-49 50-59 60-69
5 1 4
British Canadian Chinese
6
8
9
8
8
8
Corporate Governance,
Risk Management and/or Sustainability
Financial Acumen
Stratagy & Business Acumen
Executive Leadership
International Business
Related Industry Knowledge/Experience
4
1
5
Independent
Non-Executive Directors
Non-Executive Director
Executive Directors
6 1 3
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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Corporate Governance
• 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 2023, the Board meeting was held in Singapore. The May 2023 Board meeting was held virtually. The Board
meetings in July and December 2023 were held in Shenzhen and Shanghai, China, respectively.
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.
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.
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Board Attendance
Directors are expected to attend all Board meetings. The table below shows the attendance at the scheduled 2023
Boardmeetings:
Meetings eligible
to attend % attendance
Current Directors
Executive Directors
Ben Keswick 4/4 100%
John Witt 4/4 100%
Y.K. Pang 3/4 75%
Graham Baker 4/4 100%
Adam Keswick 4/4 100%
Non-Executive Directors
Janine Feng
(1)
2/3 67%
Stuart Gulliver 4/4 100%
David Hsu 4/4 100%
Julian Hui 4/4 100%
Keyu Jin
(2)
– –
Percy Weatherall 4/4 100%
Michael Wu 4/4 100%
Former Director
Anthony Nightingale
(3)
4/4 100%
Notes:
(1) Janine Feng was appointed to the Board of the Company with effect from 5th May 2023.
(2) Keyu Jin was appointed to the Board of the Company with effect from 31st January 2024.
(3) Anthony Nightingale retired from the Board of the Company with effect from 31st January 2024.
Appointment and Retirement of Directors
There are detailed succession plans in place to ensure that plans are in place for orderly succession to the Board. The Board
is focussed on development and succession plans at both Board and executive level to strengthen the diverse management
pipeline. The Chairman, in conjunction with other Directors, reviews the size, composition, tenure and skills of the Board.
The Chairman leads the process for new appointments, monitors Board succession planning, and considers independence,
diversity, inclusion and Group governance matters when recommending appointments to the Board. Non-executive Directors
are appointed on merit, against objective criteria and are initially appointed for a three-year term.
Upon appointment, all new Directors receive a comprehensive induction programme over several months. This is designed
to facilitate their understanding of the business and is tailored to their individual needs. The Group General Counsel and the
Group Corporate Secretary are responsible for delivering the programme covering the Company’s core purpose and values,
strategy, key areas of the business and corporate governance.
The Chairman regularly assesses the time commitments of Directors to ensure that they each continue to have sufficient time
for their role. He also considers the potential additional time required in the event of corporate stress. Prior to appointment,
the Chairman assesses the commitments of a proposed candidate, including other directorships, to ensure they have
sufficient time to devote to the role. Any Director external appointments, which may affect existing time commitments
relevant to the Board, must be agreed with the Chairman in advance.
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Corporate Governance
In accordance with the Company’s Bye-laws, each new Director 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. The Company has determined that it is appropriate for the Chairman and the Group Managing
Director to be exempt from the retirement by rotation requirements because an important part of the Group’s 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 Company. The Group believes
that its stakeholders gain significant value from the long-standing 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.
In accordance with Bye-law 84, Graham Baker and Percy Weatherall will retire by rotation at the forthcoming Annual General
Meeting and, being eligible, offer themselves for re-election. Graham Baker has a service contract with a subsidiary of the
Company that has a notice period of six months. In accordance with Bye-law 91, Janine Feng and Keyu Jin will also retire at
the forthcoming Annual General Meeting and, being eligible, offer themselves for re-election. Neither Janine Feng, Keyu Jin
nor Percy Weatherall have service contracts with the Company or its subsidiaries.
Board and Audit Committee Training
During the year, the Board and Audit Committee received training in Gen AI and Cybersecurity, respectively.
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. The JML board has eight members, and their names appear on page 210 of this
Report.
Corporate 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.
The Group’s delegation of authority establishes a clear pathway for decision-making. This ensures that judgments are made
at the correct business level by the team members most equipped to do so. Every decision made aligns with our culture and
values, taking into account the advantages, risks, financial consequences, and effects on all stakeholders. The Board,
bolstered by the Audit Committee, places significant emphasis on maintaining high governance standards throughout the
Group. This reinforcement assists the Board in accomplishing its strategic goals and fulfilling key performance objectives.
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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 36,814,091 ordinary shares carrying 12.75% of the
voting rights; Butterfield Trust (Bermuda) Limited is interested in 39,985,555 ordinary shares carrying 13.84% of the voting
rights and First Eagle Investment Management, LLC is interested in 14,714,540 ordinary shares carrying 5.09% 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 7th
March 2024.
There were no contracts of significance with corporate substantial shareholders during the year under review.
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 175.
Engagement with shareholders, other stakeholders and colleagues
Engaging with our stakeholders, including our employees, investors, creditors, partners and government, enables us to
understand their perspectives and ensures we address their expectations and improve accordingly.
The Group regularly engages with its shareholders. Since the beginning of 2023, 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 has responded
to feedback from institutional shareholders and has increased the diversity and the number of Independent Non-Executives
on the Board.
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The Group also regularly engages with its workforce. In 2023, the Group conducted a group-wide engagement survey with a
response rate of 77%. The engagement survey was anonymous and provided colleagues with the ability to raise issues,
suggest improvements and give feedback on their experience of working for the Group. Based on the engagement survey
results, we developed action plans to address feedback and improve our colleagues’ engagement and address feedback at
various levels of the organisation: company-wide, functional, departmental and team-based. In addition, the Group has also
implemented shorter Pulse surveys on a periodic basis to track the progress of our engagement and IE&D initiatives which
had been set up to address feedback from the surveys. After the results of the various surveys, the Board believes that the
Group’s culture is aligned with its purpose, values and strategy and that its workforce policies and practices are consistent
with its values and support its long-term success.
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 2024 Sustainability Report, which will be published later this year and can be accessed
via the corporate website 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 2023, the Company repurchased and cancelled 4,377,400 ordinary shares for an
aggregate total cost of US$209 million. The ordinary shares, which were repurchased in the market, represented
approximately 1.5% of the Company’s issued ordinary share capital.
Annual General Meeting
The 2024 Annual General Meeting will be held on 8th May 2024. 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 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
training and 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.
In 2022, the Code of Conduct was 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. During the year, annual training on the refreshed Code of Conduct was 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 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 Board 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 Board routinely reviews
the effectiveness of the whistleblowing arrangements and reporting.
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 Group People & Culture (‘P&C’) 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 P&C
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.
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Inclusion, Equity & Diversity (‘IE&D’)
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.
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 IE&D Policy, which can be viewed at 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 IE&D principles across our business and P&C practices. This includes:
• ongoing collaboration with our Group companies to ensure a set of inclusive working arrangements and policies to
support IE&D;
• 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 in the organisation and
in each of the Group’s businesses.
The Company has a Group Head of IE&D, who leads initiatives to develop a Group-wide approach to IE&D 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 IE&D strategy to help progress our ambitions across the Group. New initiatives included a learning
campaign on inclusive leadership and a comprehensive review to enhance P&C policies and new processes which support
IE&D. We have also developed targets for increasing female representation in our 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$1.5 million per annum was
approved by shareholders at the 2022 AGM. Non-Executive Directors do not receive bonuses or any other incentive payments
or retirement benefits. The Non-Executive Directors are reimbursed for expenses properly incurred in performing their duties
as a Director of the Company. The schedule of fees paid to Directors in respect of 2023 is set out in the table below. Fees are
annual fees, unless otherwise stated:
US$
Base Non-Executive Director fee 100,000
Audit Committee Member fee 35,000
Audit Committee Chairman fee 50,000
Director
Director fee
US$
Audit Committee fee
US$
Total fees
US$
1 Ben Keswick (Chairman) – N/A –
2 John Witt – N/A –
3 Adam Keswick – N/A –
4 Graham Baker – N/A –
5 Y.K. Pang
(4)
– N/A –
6 Janine Feng
(1)
75,000 17,500 92,500
7 Stuart Gulliver 100,000 44,370 144,370
8 David Hsu
(4)
100,000 N/A 100,000
9 Julian Hui 100,000 N/A 100,000
10 Anthony Nightingale
(3)
100,000 35,000 135,000
11 Percy Weatherall 100,000 N/A 100,000
12 Michael Wu
(2)
100,000 17,500 117,500
Total 675,000 114,370 789,370
Notes:
(1) Janine Feng was appointed to the Board and the Audit Committee of the Company with effect from 5th May 2023.
(2) Michael Wu was appointed to the Audit Committee of the Company with effect from 2nd March 2023.
(3) Anthony Nightingale retired from the Board of the Company with effect from 31st January 2024.
(4) Y.K. Pang and David Hsu will retire from the Board of the Company on 31st March 2024.
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The Executive Directors
1
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 36,814,091 ordinary shares in the
Company, representing 12.75% of the Company’s issued share capital.
2
The Executive Directors do not 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 an Independent Non-Executive Director, 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. Those
dividends are accounted for by the Company as ordinary dividends and the amounts paid to the Executive Directors are not
borne by the Group or accounted for as expenses of 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 requiring all Executive Directors to accumulate and hold shares in the Company for the long-term.
In this regard, the Company has adopted a Directors’ Shareholding Policy (the ‘Policy’). The Policy requires that each of the
Executive Directors should build a meaningful and increasing shareholding in the Company over time.
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.
1
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.
2
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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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 their 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 2023
For the year ended 31st December 2023, the Company’s Directors received US$53.6 million (2022: US$66.6 million) in
aggregate, being:
• Distributions from the 1947 Trust of US$45.2 million (2022: US$$58.1 million); and
• Directors’ fees and employee benefits from the Group of US$8.4 million (2022: US$8.5 million).
Directors’ fees and employee benefits included:
• US$0.8 million (2022: US$0.5 million) in Directors’ fees;
• US$7.2 million (2022: US$7.8 million) in short-term employee benefits including salary, bonuses, accommodation and
deemed benefits in kind; and
• US$0.4 million (2022: US$0.2 million) in post-employment benefits.
The information set out in this section headed ‘Remuneration Outcomes in 2023’ forms part of the audited financial
statements.
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Directors’ Share Interests
The Directors of the Company and JML in office on 7th March 2024 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 50,158,750
(a) (b)
John Witt 308,989
Y.K. Pang 475,000
Graham Baker 58,905
Stuart Gulliver 55,822
David Hsu 180,625
Adam Keswick 42,761,497
(a) (b)
Percy Weatherall 41,478,941
(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 37,382,364 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 50,669
Stephen Gore 35,000
Anne O’Riordan 49,368
Steve Sun 6,100
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 36,814,091 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 36,814,091 ordinary shares held by the 1947 Trust.
In addition, as at 7th March 2024, Ben Keswick, John Witt, Y.K. Pang, David Hsu and Adam Keswick held options in respect of
120,000, 50,000, 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 2024, 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);
• Janine Feng; 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. Janine Feng was appointed as a member of the Audit Committee on 5th May 2023.
As announced on 24th November 2023, Anthony Nightingale resigned from the Audit Committee on 31st January 2024 and
the Audit Committee now comprises only Independent Non-Executive Directors.
The Company’s Executive 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; business ethics issues and the risks related to information
systems and procedures;
• independent oversight and responsibility for cybersecurity;
• 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 2023 included:
• reviewing the 2022 annual financial statements and 2023 half-yearly financial statements, with particular focus on the
valuation of investment properties, carrying value of assets and investments, 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 and compliance 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;
• 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 2023;
• reviewing the biennial assessment of the effectiveness of the Group’s Internal Audit function;
• reviewing audits of businesses by auditors other than PwC;
• reviewing confirmations provided in respect of the Group’s exposure to fraud;
• reviewing the assurance provided by PwC as External Auditor on the Group’s Sustainability metrics;
• reviewing the Group’s governance approach to cybersecurity management, data security and privacy management across
its businesses; and
• reviewing the independence, audit scope and fees of PwC as External Auditor and recommending their re-appointment as
the External Auditor.
Audit Committee Attendance
The table below shows the attendance at the scheduled 2023 Audit Committee meetings:
Meetings eligible
to attend
% attendance
Audit Committee members in 2023
Stuart Gulliver (Chairman) 2/2 100%
Janine Feng^ 1/1 100%
Adam Keswick* 1/1 100%
Anthony Nightingale** 2/2 100%
Michael Wu* 1/1 100%
^ Janine Feng was appointed to the Audit Committee on 5th May 2023.
* Adam Keswick resigned from the Audit Committee on 2nd March 2023. Michael Wu was appointed to the Audit Committee on 2nd March 2023.
** Anthony Nightingale resigned from the Audit Committee on 31st January 2024.
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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 2023 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.
At each annual general meeting (‘AGM’) of the Company, the Company is required to appoint an Auditor to hold office until
the conclusion of the next AGM. The Company’s previous Auditor was PricewaterhouseCoopers LLP (‘PwC UK’). In March
2023, the Audit Committee recommended that the Company appoint PricewaterhouseCoopers, Hong Kong (‘PwC HK’), also a
PricewaterhouseCoopers network firm and which had conducted much of the audit work on behalf of PwC UK for many years,
as its Auditor in place of PwC UK for future audit processes, to streamline audit procedures and align the location of the firm
acting as Auditor more closely with the location of the Company’s businesses. The Company’s shareholders approved the
appointment of PwC HK as the Company’s Auditor at the AGM on 4th May 2023.
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, identifies emerging risks and potential sources of future
risks, 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 (‘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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Corporate Governance
Each business unit is responsible for:
• identifying and assessing principal and emerging 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 and emerging 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 and emerging 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 Committees
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
Risk Governance Structure
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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
Company’s Board of Directors via Audit Committee and Group Audit and Risk
Management
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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 at least annually.
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.
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.
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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-engineering existing business processes to take advantage of new technological capabilities.
• Investing in and partnering with companies that can provide the Group access to different capabilities and
technologies.
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.
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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.
Geographic 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.
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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 human resources 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, human resources, digital, IT
and innovation technical capabilities for business transformation.
Climate physical and transition 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.
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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.
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.
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Corporate Governance
• Maintaining supplier insurance to cover logistics interruption.
• 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.
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.
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.
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Corporate Governance
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
• Engaging 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.
• Undertaking early scenario planning assessing the implications of new rules and preparing contingencies.
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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Corporate Governance
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
38 to 43 and Note 42 to the financial statements on pages 189 to 197.
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Corporate Governance
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 Group-wide 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.
Shareholder Information
Financial Calendar
2023 full-year results announced 7th March 2024
Shares quoted ex-dividend 21st March 2024
Share registers closed 25th to 29th March 2024
2023 final dividend scrip election period closes 26th April 2024
Annual General Meeting to be held 8th May 2024
2023 final dividend payable 15th May 2024
2024 half-year results to be announced 1st August 2024*
Shares quoted ex-dividend 22nd August 2024*
Share registers to be closed 26th to 30th August 2024*
2024 interim dividend scrip election period closes 27th September 2024*
2024 interim dividend payable 16th October 2024*
*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 2023 final dividend by notifying the United Kingdom transfer agent in
writing by 26th April 2024. The Sterling equivalent of dividends declared in United States Dollars will be calculated by reference to a
rate prevailing on 2nd May 2024.
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
IFC 5
St Helier
Jersey JE1 1ST
Channel Islands
United Kingdom Transfer Agent
Link Group
Central Square
29 Wellington Street
Leeds LS1 4DL, United Kingdom
Singapore Branch Registrar
Boardroom Corporate & Advisory Services Pte. Ltd.
1 Harbourfront Avenue
Keppel Bay Tower #14-07
Singapore 098632
Press releases and other financial information can be accessed at www.jardines.com.
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Jardine Matheson Annual Report 2023
2023
2022
Underlying Underlying
business Non-trading business Non-trading
performance
items
Total
performance
Total
US$m
US$m
US$m
US$m
US$m
US$m
Note
restated
restated
Revenue
3
36,049
–
36,049
37,496
–
37,496
Net operating costs
4
(31,760)
(75)
(31,835)
(33,370)
(363)
(33,733)
Change in fair value of
investment
properties
13
–
(1,779)
(1,779)
–
(930)
(930)
Operating profit
4,289
(1,854)
2,435
4,126
(1,293)
2,833
Net financing charges5
– financing charges
(769)
–
(769)
(625)
–
(625)
– financing income
253
–
253
197
–
197
(516)
–
(516)
(428)
–
(428)
Share of results of
associates and
jointventures
6
– before change in fair
value of investment
properties
1,261
107
1,368
1,232
(411)
821
– change in fair value
of investment
properties
–
18
18
–
(3)
(3)
1,261
125
1,386
1,232
(414)
818
Profit before tax
5,034
(1,729)
3,305
4,930
(1,707)
3,223
Tax
7
(932)
(11)
(943)
(964)
4
(960)
Profit after tax
4,102
(1,740)
2,362
3,966
(1,703)
2,263
Attributable to:
Shareholders of the
Company
8 & 9
1,661
(975)
686
1,584
(1,230)
354
Non-controlling
interests
2,441
(765)
1,676
2,382
(473)
1,909
4,102
(1,740)
2,362
3,966
(1,703)
2,263
US$
US$
US$
US$
Earnings per share
8
– basic
5.74
2.37
5.49
1.22
– diluted
5.73
2.37
5.49
1.22
Consolidated Profit and Loss Account
for the year ended 31st December 2023
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Jardine Matheson Annual Report 2023
2023
2022
Note
US$m
US$m
Profit for the year
2,362
2,263
Other comprehensive income/(expense)
Items that will not be reclassified to profit and loss:
Net exchange translation gain/(loss) arising during the year
88
(761)
Remeasurements of defined benefit plans
19
(18)
37
Net revaluation surplus before transfer to investment properties
– tangible assets
11
1
–
– right-of-use assets
12
63
39
Tax on items that will not be reclassified
4
(7)
138
(692)
Share of other comprehensive income/(expense) of associates and joint ventures
24
(467)
162
(1,159)
Items that may be reclassified subsequently to profit and loss:
Net exchange translation differences
– net gain/(loss) arising during the year
29
(526)
– transfer to profit and loss
111
4
140
(522)
Revaluation of other investments at fair value through other
comprehensiveincome
– net loss arising during the year
16
(12)
(20)
– transfer to profit and loss
–
(2)
(12)
(22)
Cash flow hedges
– net (loss)/gain arising during the year
(40)
92
– transfer to profit and loss
(36)
(7)
(76)
85
Tax relating to items that may be reclassified
9
(11)
Share of other comprehensive expense of associates and joint ventures
(78)
(487)
(17)
(957)
Other comprehensive income/(expense) for the year, net of tax
145
(2,116)
Total comprehensive income for the year
2,507
147
Attributable to:
Shareholders of the Company
729
(660)
Non-controlling interests
1,778
807
2,507
147
Consolidated Statement of Comprehensive Income
for the year ended 31st December 2023
99
Jardine Matheson Annual Report 2023
At 31st December
2023
2022
US$m
US$m
Note
restated
Assets
Intangible assets
10
2,274
2,485
Tangible assets
11
6,585
5,853
Right-of-use assets
12
4,080
4,184
Investment properties
13
30,166
31,813
Bearer plants
14
481
465
Associates and joint ventures
15
18,473
17,856
Other investments
16
3,329
2,801
Non-current debtors
17
3,833
3,269
Deferred tax assets
18
644
575
Pension assets
19
8
17
Non-current assets
69,873
69,318
Properties for sale
20
3,480
3,311
Stocks and work in progress
21
3,664
3,513
Current debtors
17
6,691
6,799
Current investments
16
55
18
Current tax assets
159
156
Cash and bank balances22
– non-financial services companies
4,519
5,526
– financial services companies
361
372
4,880
5,898
18,929
19,695
Assets classified as held for sale
23
380
65
Current assets
19,309
19,760
Total assets
89,182
89,078
Approved by the Board of Directors
John Witt
Graham Baker
Directors
7th March 2024
Consolidated Balance Sheet
at 31st December 2023
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Jardine Matheson Annual Report 2023
Consolidated Balance Sheet
At 31st December
2023
2022
US$m
US$m
Note
restated
Equity
Share capital
24
72
73
Share premium and capital reserves
26
22
26
Revenue and other reserves
28,916
28,751
Shareholders’ funds
29,010
28,850
Non-controlling interests
28
26,921
27,410
Total equity
55,931
56,260
Liabilities
Long-term borrowings29
– non-financial services companies
9,486
10,541
– financial services companies
1,647
1,532
11,133
12,073
Non-current lease liabilities
30
2,966
2,951
Deferred tax liabilities
18
862
791
Pension liabilities
19
370
368
Non-current creditors
31
268
200
Non-current provisions
32
359
336
Non-current liabilities
15,958
16,719
Current borrowings29
– non-financial services companies
3,419
2,500
– financial services companies
2,094
1,663
5,513
4,163
Current lease liabilities
30
754
772
Current tax liabilities
471
671
Current creditors
31
10,308
10,318
Current provisions
32
203
175
17,249
16,099
Liabilities directly associated with assets classified as held for sale
23
44
–
Current liabilities
17,293
16,099
Total liabilities
33,251
32,818
Total equity and liabilities
89,182
89,078
101
Jardine Matheson Annual Report 2023
Share
capital
Share
premium
Capital
reserves
Revenue
reserves
Asset
revaluation
reserves
Hedging
reserves
Exchange
reserves
Own
shares
held
Attributable to
shareholders of
the Company
Attributable to
non-controlling
interests
Total
equity
US$m US$m US$m US$m US$m US$m US$m US$m US$m US$m US$m
2023
At 1st January
– as previously reported 73 – 26 28,887
2,272 55 (2,487) – 28,826 27,371 56,197
– change in accounting policies (refer note 1) – – – 24 – – – – 24 39 63
– as restated 73 – 26 28,911 2,272 55 (2,487) – 28,850 27,410 56,260
Total comprehensive income – – – 662 51 (44) 60 – 729 1,778 2,507
Dividends paid by the Company (refer note 27) – – – (637) – – – – (637) – (637)
Dividends paid to non-controlling interests – – – – – – – – – (2,037) (2,037)
Unclaimed dividends forfeited – – – 2 – – – – 2 1 3
Employee share option schemes – – 10 – – – – – 10 3 13
Scrip issued in lieu of dividends – (1) – 183 – – – – 182 – 182
Repurchase of shares (1) – – (208) – – – – (209) – (209)
Capital contribution from non-controlling interests – – – – – – – – – 41 41
Share purchased for a share-based incentive plan in
a subsidiary – – – (7)
– – – – (7) (2) (9)
Subsidiaries acquired – – – – – – – – – 37 37
Subsidiaries disposed of – – – – – – – – – 5 5
Change in interests in subsidiaries – – – 75 – – – – 75 (315) (240)
Change in interests in associates and joint ventures – – – 15 – – – – 15 – 15
Transfer – 1 (14) 13 – – – – – – –
At 31st December 72 – 22 29,009 2,323 11 (2,427) – 29,010 26,921 55,931
2022
At 1st January
– as previously reported 179 – 25 34,926
2,242 (18) (1,350) (6,223) 29,781 28,587 58,368
– change in accounting policies (refer note 1) – – – 24 – – – – 24 39 63
– as restated 179 – 25 34,950 2,242 (18) (1,350) (6,223) 29,805 28,626 58,431
Total comprehensive income – – – 374 30 73 (1,137) – (660) 807 147
Dividends paid by the Company (refer note 27) – – – (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 28,911 2,272 55 (2,487) – 28,850 27,410 56,260
At the Company’s annual general meeting on 5th May 2022, shareholders approved the cancellation of the 59% shareholding
in the Company held by its subsidiaries by way of a reduction of capital in the Company. The capital reduction, which was
effective on 18th May 2022, constituted the final stage in the Group’s simplification of its parent company structure that
commenced in 2021.
Consolidated Statement of Changes in Equity
for the year ended 31st December 2023
102
Jardine Matheson Annual Report 2023
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
2023
At 1st January
– as previously reported
73
–
26
28,887
2,272
55
(2,487)
–
28,826
27,371
56,197
– change in accounting policies (refer note 1)
–
–
–
24
–
–
–
–
24
39
63
– as restated
73
–
26
28,911
2,272
55
(2,487)
–
28,850
27,410
56,260
Total comprehensive income
–
–
–
662
51
(44)
60
–
729
1,778
2,507
Dividends paid by the Company (refer note 27)
–
–
–
(637)
–
–
–
–
(637)
–
(637)
Dividends paid to non-controlling interests
–
–
–
–
–
–
–
–
–
(2,037)
(2,037)
Unclaimed dividends forfeited
–
–
–
2
–
–
–
–
2
1
3
Employee share option schemes
–
–
10
–
–
–
–
–
10
3
13
Scrip issued in lieu of dividends
–
(1)
–
183
–
–
–
–
182
–
182
Repurchase of shares
(1)
–
–
(208)
–
–
–
–
(209)
–
(209)
Capital contribution from non-controlling interests
–
–
–
–
–
–
–
–
–
41
41
Share purchased for a share-based incentive plan in
a subsidiary
–
–
–
(7)
–
–
–
–
(7)
(2)
(9)
Subsidiaries acquired
–
–
–
–
–
–
–
–
–
37
37
Subsidiaries disposed of
–
–
–
–
–
–
–
–
–
5
5
Change in interests in subsidiaries
–
–
–
75
–
–
–
–
75
(315)
(240)
Change in interests in associates and joint ventures
–
–
–
15
–
–
–
–
15
–
15
Transfer
–
1
(14)
13
–
–
–
–
–
–
–
At 31st December
72
–
22
29,009
2,323
11
(2,427)
–
29,010
26,921
55,931
2022
At 1st January
– as previously reported
179
–
25
34,926
2,242
(18)
(1,350)
(6,223)
29,781
28,587
58,368
– change in accounting policies (refer note 1)
–
–
–
24
–
–
–
–
24
39
63
– as restated
179
–
25
34,950
2,242
(18)
(1,350)
(6,223)
29,805
28,626
58,431
Total comprehensive income
–
–
–
374
30
73
(1,137)
–
(660)
807
147
Dividends paid by the Company (refer note 27)
–
–
–
(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
28,911
2,272
55
(2,487)
–
28,850
27,410
56,260
At the Company’s annual general meeting on 5th May 2022, shareholders approved the cancellation of the 59% shareholding
in the Company held by its subsidiaries by way of a reduction of capital in the Company. The capital reduction, which was
effective on 18th May 2022, constituted the final stage in the Group’s simplification of its parent company structure that
commenced in 2021.
Consolidated Statement of Changes in Equity
103
Jardine Matheson Annual Report 2023
2023
2022
Note
US$m
US$m
Operating activities
Cash generated from operations
33 (a)
5,549
5,287
Interest received
217
177
Interest and other financing charges paid
(758)
(564)
Tax paid
(1,307)
(1,006)
3,701
3,894
Dividends from associates and joint ventures
883
931
Cash flows from operating activities
4,584
4,825
Investing activities
Purchase of subsidiaries
33 (c)
(378)
(19)
Purchase of associates and joint ventures
33 (d)
(1,166)
(658)
Purchase of other investments
33 (e)
(671)
(645)
Purchase of intangible assets
(114)
(154)
Purchase of tangible assets
(1,667)
(1,014)
Additions to leasehold land under right-of-use assets
(31)
(53)
Additions to investment properties
(151)
(123)
Additions to bearer plants
(35)
(39)
Advances to associates and joint ventures
33 (f)
(455)
(802)
Repayments from associates and joint ventures
33 (g)
1,252
416
Sale of subsidiaries
33 (h)
365
–
Sale of associates and joint ventures
33(i)
134
30
Sale of other investments
33 (j)
161
228
Sale of intangible assets
–
3
Sale of tangible assets
33 (k)
364
230
Sale of right-of-use assets
38
7
Cash flows from investing activities
(2,354)
(2,593)
Financing activities
Issue of shares
–
1
Capital contribution from non-controlling interests
41
4
Acquisition of the remaining interest in Jardine Strategic
(5)
(21)
Change in interests in other subsidiaries
33 (l)
(240)
(708)
Purchase of own shares
24
(209)
(173)
Purchase of shares for a share-based incentive plan in a subsidiary
(9)
(20)
Drawdown of borrowings
29
9,873
9,047
Repayment of borrowings
29
(9,475)
(9,113)
Principal elements of lease payments
33 (m)
(856)
(875)
Dividends paid by the Company
(455)
(423)
Dividends paid to non-controlling interests
(2,037)
(994)
Cash flows from financing activities
(3,372)
(3,275)
Net decrease in cash and cash equivalents
(1,142)
(1,043)
Cash and cash equivalents at 1st January
5,879
7,278
Effect of exchange rate changes
59
(356)
Cash and cash equivalents at 31st December
33 (n)
4,796
5,879
Consolidated Cash Flow Statement
for the year ended 31st December 2023
104
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
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
Accounting Standards’), including International Accounting Standards (‘IAS’) and Interpretations as issued by the
International Accounting Standards Board (‘IASB’). 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 material accounting policies are included in note 40.
The Group has adopted the following standard and amendments for the annual reporting period commencing 1st January
2023.
IFRS 17 ‘Insurance Contracts’
(effective from 1st January 2023)
The standard covers recognition, measurement, presentation and disclosure for insurance contracts and is applicable to the
Group’s insurance businesses in Indonesia. Prior to the adoption of IFRS 17, profits were recognised in the profit and loss on
initial recognition of certain insurance contracts. Under IFRS 17, all profits are recognised in the profit and loss over the life of
the contracts as insurance services are provided. The adoption of IFRS 17 resulted in certain restatements to the Group’s
financial statements.
The effect of adopting IFRS 17 on the consolidated profit and loss account for the year ended 31st December 2022 was as
follows:
(a) On the consolidated profit and loss account
As
previously
reported
Adjustment
upon
adoption of
IFRS 17
Increase/
(decrease) Restated
For the year ended 31st December 2022 US$m US$m US$m
Revenue 37,724 (228) 37,496
Net operating costs (33,961) 228 (33,733)
Change in fair value of investment properties (930) – (930)
Operating profit 2,833 – 2,833
105
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
1 Basis of Preparation (continued)
(b) On the consolidated balance sheet
As
previously
reported
Adjustment
upon
adoption
of IFRS 17
Increase/
(decrease) Restated
At 31st December 2022 US$m US$m US$m
Assets
Intangible assets 2,528 (43) 2,485
Non-current debtors 3,222 47 3,269
Debtors 6,873 (74) 6,799
Total assets 89,148 (70) 89,078
Equity
Revenue and other reserves 28,727 24 28,751
Non-controlling interests 27,371 39 27,410
Total equity 56,197 63 56,260
Liabilities
Non-current creditors 191 9 200
Current tax liabilities 672 (1) 671
Current creditors 10,459 (141) 10,318
Total liabilities 32,951 (133) 32,818
Total equity and liabilities 89,148 (70) 89,078
The consolidated balance sheet on 1st January 2022 has not been presented, as the impact of adoption of IFRS 17 is not
significant.
Disclosure of Accounting Policies – Amendments to IAS 1 and IFRS Practice Statement 2
(effective from 1st January 2023)
The amendments require entities to disclose material rather than significant accounting policies. The amendments define
what is ‘material accounting policy information’ and explain how to identify when accounting policy information is material.
Material accounting policy information is information that, when considered together with other information included in an
entity’s financial statements, can reasonably be expected to influence decisions that the primary users of general purpose
financial statements make on the basis of those financial statements. IASB further clarifies that immaterial accounting policy
information does not need to be disclosed. If it is disclosed, it should not obscure material accounting information. To
support this amendment, the IASB also amended IFRS Practice Statement 2 Making Materiality Judgements to provide
guidance on how to apply the concept of materiality to accounting policy disclosures.
The material accounting policies following the adoption of IAS 1 are included in note 40.
Amendment to IAS 12 – Deferred Tax related to Assets and Liabilities arising from a Single Transaction
(effective from 1st January 2023)
The amendment requires deferred tax to be recognised 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 require the recognition of additional deferred tax assets and liabilities. On adoption of the
amendment, the deferred tax assets and liabilities had been restated in the notes to the financial statements (refer note 18)
with no impact on the balance sheet.
106
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
1 Basis of Preparation (continued)
Amendment to IAS 12 – International Tax Reform – Pillar Two Model Rules
(effective for annual reporting period commencing on or after 1st January 2023)
The amendment provides a temporary mandatory exception from deferred tax accounting in respect of Pillar Two income
taxes and certain additional disclosure requirements. The Group is within the scope of the OECD Pillar Two model rules,
and has applied the amendment from 1st January 2023.
Pillar Two legislation has been enacted or substantially enacted in certain jurisdictions in which the Group operates.
The legislation will be effective for the Group’s annual reporting period commencing 1st January 2024. Since the Pillar Two
legislation was not effective at 31st December 2023, the Group has no related current tax exposure.
The Group is in scope of the enacted or substantively enacted legislation and has performed an assessment of the Group’s
potential exposure to Pillar Two income taxes when the legislation comes into effect. The assessment of the potential
exposure to Pillar Two income taxes is based on the latest financial information for the year ended 31st December 2023 of
the constituent entities in the Group. Based on the assessment, the effective tax rates in most of the jurisdictions in which
the Group operates are above 15%. However, there are a limited number of jurisdictions where the effective tax rate is
slightly below or close to 15%. The Group does not expect a material exposure to Pillar Two income taxes in those
jurisdictions.
There are no other amendments which are effective in 2023 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 41).
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 6 to 7 and pages 20 to 37.
107
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
Jardine
Pacific
Jardine
Motor
Interests
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
2023
Revenue (refer note 3) 2,135 165 1,844 9,170
558 1,629 20,606 – (58) 36,049 – 36,049
Net operating costs (2,072) (164) (1,051) (8,876) (456) (1,545) (17,610) (44) 58 (31,760) (75) (31,835)
Change in fair value of investment properties – – – – – – – – – – (1,779) (1,779)
Operating profit 63 1 793 294 102 84 2,996 (44) – 4,289 (1,854) 2,435
Net financing charges
– financing charges (19) (1) (266) (152)
(18) (67) (204) (42) – (769) – (769)
– financing income 2 – 82 8 8 8 141 4 – 253 – 253
(17) (1) (184) (144) (10) (59) (63) (38) – (516) – (516)
Share of results of associates and joint ventures
– before change in fair value of investment properties 132 139 235 43
– 122 609 (19) – 1,261 107 1,368
– change in fair value of investment properties – – – – – – – – – – 18 18
132 139 235 43 – 122 609 (19) – 1,261 125 1,386
Profit before tax 178 139 844 193 92 147 3,542 (101) – 5,034 (1,729) 3,305
Tax (14) – (107) (42) (11) (13) (742) (3) – (932) (11) (943)
Profit after tax 164 139 737 151 81 134 2,800 (104) – 4,102 (1,740) 2,362
Non-controlling interests – – (348) (31) (16) (32) (2,014) – – (2,441) 765 (1,676)
Profit attributable to shareholders 164 139 389 120 65 102 786 (104) – 1,661 (975) 686
Net (borrowings)/cash (excluding net borrowings of financial
services companies)* (90) 24 (5,371) (618)
(225) (1,269) 124 (947) – (8,372)
Total equity 1,229 1,548 31,922 1,083 2,991 1,505 16,409 (312) (444) 55,931
2022
Revenue (refer note 3) 2,079 2,044 2,244 9,174
454 1,589 19,977 – (65) 37,496 – 37,496
Net operating costs (1,982) (1,994) (1,399) (8,965) (433) (1,517) (17,061) (84) 65 (33,370) (363) (33,733)
Change in fair value of investment properties – – – – – – – – – – (930) (930)
Operating profit 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 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 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 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 15,628 (853) (244) 56,260
* Net (borrowings)/cash is total borrowings less cash and bank balances (including balances classified as asset held for sale (refer note 23)). Net
borrowings of financial services companies amounted to US$3,380 million at 31st December 2023 (2022: US$2,823 million) and relates to Astra.
2 Segmental Information
Operating segments are identified on the basis of internal reports about components of the Group that are regularly reviewed
by the executive directors of the Company for the purpose of resource allocation and performance assessment. The Group has
seven operating segments (2022: seven) as more fully described on pages 6 to 7. No operating segments have been aggregated
108
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
Jardine
Pacific
Jardine
Motor
Interests
Hongkong
Land DFI Retail
Mandarin
Oriental
Jardine
Cycle &
Carriage Astra
Corporate
and other
interests
Intersegment
transactions
Underlying
business
performance
Non-
trading
items Group
US$m US$m US$m US$m US$m US$m US$m US$m US$m US$m US$m US$m
2023
Revenue (refer note 3) 2,135 165 1,844 9,170
558 1,629 20,606 – (58) 36,049 – 36,049
Net operating costs (2,072) (164) (1,051) (8,876) (456) (1,545) (17,610) (44) 58 (31,760) (75) (31,835)
Change in fair value of investment properties – – – – – – – – – – (1,779) (1,779)
Operating profit 63 1 793 294 102 84 2,996 (44) – 4,289 (1,854) 2,435
Net financing charges
– financing charges (19) (1) (266) (152)
(18) (67) (204) (42) – (769) – (769)
– financing income 2 – 82 8 8 8 141 4 – 253 – 253
(17) (1) (184) (144) (10) (59) (63) (38) – (516) – (516)
Share of results of associates and joint ventures
– before change in fair value of investment properties 132 139 235 43
– 122 609 (19) – 1,261 107 1,368
– change in fair value of investment properties – – – – – – – – – – 18 18
132 139 235 43 – 122 609 (19) – 1,261 125 1,386
Profit before tax 178 139 844 193 92 147 3,542 (101) – 5,034 (1,729) 3,305
Tax (14) – (107) (42) (11) (13) (742) (3) – (932) (11) (943)
Profit after tax 164 139 737 151 81 134 2,800 (104) – 4,102 (1,740) 2,362
Non-controlling interests – – (348) (31) (16) (32) (2,014) – – (2,441) 765 (1,676)
Profit attributable to shareholders 164 139 389 120 65 102 786 (104) – 1,661 (975) 686
Net (borrowings)/cash (excluding net borrowings of financial
services companies)* (90) 24 (5,371) (618)
(225) (1,269) 124 (947) – (8,372)
Total equity 1,229 1,548 31,922 1,083 2,991 1,505 16,409 (312) (444) 55,931
2022
Revenue (refer note 3) 2,079 2,044 2,244 9,174
454 1,589 19,977 – (65) 37,496 – 37,496
Net operating costs (1,982) (1,994) (1,399) (8,965) (433) (1,517) (17,061) (84) 65 (33,370) (363) (33,733)
Change in fair value of investment properties – – – – – – – – – – (930) (930)
Operating profit 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 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 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 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 15,628 (853) (244) 56,260
* Net (borrowings)/cash is total borrowings less cash and bank balances (including balances classified as asset held for sale (refer note 23)). Net
borrowings of financial services companies amounted to US$3,380 million at 31st December 2023 (2022: US$2,823 million) and relates to Astra.
to form the reportable segments. Set out below is an analysis of the Group’s underlying profit, net borrowings and total
equity by reportable segment.
109
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
2 Segmental Information (continued)
Set out below are analyses of the Group’s underlying profit attributable to shareholders and non-current assets,
by geographical areas:
2023 2022
US$m US$m
Underlying profit attributable to shareholders:
China 661 682
South East Asia 991 957
United Kingdom 11 35
Rest of the world
102 66
1,765 1,740
Corporate and other interests (104) (156)
1,661 1,584
Non-current assets*:
China 38,625 40,287
South East Asia 19,708 17,332
United Kingdom 319 590
Rest of the world 1,033 1,431
59,685 59,640
*
Excluding amounts due from associates and joint ventures, financial instruments, deferred tax assets and pension assets.
110
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
3 Revenue
Jardine
Pacific
Jardine
Motor
Interests
Hongkong
Land DFI Retail
Mandarin
Oriental
Jardine
Cycle &
Carriage
Intersegment
transactions
Astra and other Group
US$m US$m US$m US$m US$m US$m US$m US$m US$m
2023
By product and
service:
Property 4 – 1,844 1 – – 58 (8) 1,899
Motor vehicles 539 165 – – – 1,629 8,301 – 10,634
Retail and
restaurants 836 – – 9,169 – – – – 10,005
Financial services – – – – – – 1,757 – 1,757
Engineering,
heavy equipment,
mining and
construction 756 – – – – – 8,429 (49) 9,136
Hotels – – – – 558 – – (1) 557
Other* – – – – – – 2,061 – 2,061
2,135 165 1,844 9,170 558 1,629 20,606 (58) 36,049
By geographical
location of
customers:
China 1,504 – 1,766 6,276 136 – – (56) 9,626
South East Asia 199 – 78 2,494 15 1,629 20,606 (2) 25,019
United Kingdom – 165 – – 110 – – – 275
Rest of the world 432 – – 400 297 – – – 1,129
2,135 165 1,844 9,170 558 1,629 20,606 (58) 36,049
From contracts with
customers:
Recognised at a
point in time 1,456 165 706 9,157 163 1,578 18,234 – 31,459
Recognised
over time 674 – 204 12 376 44 318 (50) 1,578
2,130 165 910 9,169 539 1,622 18,552 (50) 33,037
From other sources:
Rental income
from investment
properties 5 – 934 1 – – 10 (8) 942
Revenue from
financial services
companies – – – – – – 1,758 – 1,758
Other – – – – 19 7 286 – 312
5 – 934 1 19 7 2,054 (8) 3,012
2,135 165 1,844 9,170 558 1,629 20,606 (58) 36,049
111
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
3 Revenue (continued)
Jardine
Pacific
Jardine
Motor
Interests
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
2022
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 – – – – – – 1,552 – 1,552
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 19,977 (65) 37,496
By geographical
location of
customers:
China 1,421 – 2,023 5,906 80 – – (64) 9,366
South East Asia 223 – 221 2,842 21 1,589 19,977 (1) 24,872
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 19,977 (65) 37,496
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 – – – – – – 1,552 – 1,552
Other – – 191 – 18 4 254 – 467
4 – 1,118 – 18 4 1,818 (8) 2,954
2,079 2,044 2,244 9,174 454 1,589 19,977 (65) 37,496
*
Included revenue from Agribusiness and Infrastructure & Logistics of US$1,363 million (2022: US$1,463 million) and US$551 million
(2022: US$487 million), respectively.
No interest income calculated using effective interest method had been included in revenue from contracts with customers
in 2023 and 2022.
Rental income from investment properties included variable rents of US$41 million (2022: US$31 million).
112
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
3 Revenue (continued)
Contract balances
Contract assets primarily relate to the Group’s rights to consideration for work completed but not billed, and are transferred
to receivables when the rights become unconditional which usually occurs when the customers are billed.
Costs to fulfil contracts includes costs recognised to fulfil future performance obligations on existing contracts that have not
yet been satisfied. Costs to obtain contracts include costs such as sales commission and stamp duty paid, as a result of
obtaining contracts. The Group has capitalised these costs and recognised in profit and loss when the related revenue is
recognised.
Contract liabilities primarily relate to the advance consideration received from customers relating to properties for sale,
sale of motor vehicles, unredeemed gift vouchers and loyalty points.
Contract assets and contract liabilities are further analysed as follows:
2023 2022
US$m US$m
Contract assets (refer note 17)
– properties for sale 10 5
– engineering, heavy equipment, mining and construction 129 91
– other
18 17
157 113
– provision for impairment (61) (59)
96 54
Contract liabilities (refer note 31)
– properties for sale 571 538
– motor vehicles 320 330
– retail and restaurants 209 239
– engineering, heavy equipment, mining and construction 163 148
– other 54 50
1,317 1,305
At 31st December 2023, costs to fulfil contracts and costs to obtain contracts amounted to US$90 million
(2022: US$80 million) and US$15 million (2022: US$7 million) were capitalised, and US$226 million (2022: US$370 million)
and US$1 million (2022: US$5 million) had been recognised in profit and loss during the year, respectively.
113
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
3 Revenue (continued)
Revenue recognised in relation to contract liabilities
Revenue recognised in the current year relating to carried-forward contract liabilities:
2023 2022
US$m US$m
Properties for sale 405 643
Motor vehicles 189 199
Retail and restaurants 214 175
Engineering, heavy equipment, mining and construction 82 64
Other 41 60
931 1,141
Revenue expected to be recognised on unsatisfied contracts with customers
Timing of revenue to be recognised on unsatisfied performance obligations:
Properties
for sale
Motor
vehicles
Engineering,
heavy
equipment,
mining and
construction Other Total
US$m US$m US$m US$m US$m
2023
Within one year 751 107 790 50 1,698
Between one and two years 82 36 313 6 437
Between two and three years 21 17 114 1 153
Between three and four years 4 8 36 1 49
Between four and five years 3 8 24 – 35
Beyond five years 2 – 70 – 72
863 176 1,347 58 2,444
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
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.
114
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
4 Net Operating Costs
2023 2022
US$m US$m
Cost of sales (25,775) (27,310)
Other operating income 634 493
Selling and distribution costs (3,918) (4,017)
Administration expenses (2,385) (2,296)
Other operating expenses (391) (603)
(31,835) (33,733)
The following credits/(charges) are included in net operating costs:
Cost of stocks recognised as expense (20,798) (22,241)
Cost of properties for sale recognised as expense (686) (1,004)
Amortisation of intangible assets (138) (184)
Depreciation of tangible assets (997) (957)
Amortisation/depreciation of right-of-use assets (913) (939)
Depreciation of bearer plants (30) (28)
Impairment of intangible assets
– goodwill (226) (6)
– other (14) (1)
(240) (7)
Impairment of tangible assets (9) (47)
Impairment of right-of-use assets (10) (3)
Write down of properties for sale (29) (6)
Write down of stocks and work in progress (45) (48)
Reversal of write down of stocks and work in progress 28 28
Impairment of financing debtors (95) (166)
Impairment of trade debtors, contract assets and other debtors (28) (14)
Operating expenses arising from investment properties (177) (169)
Employee benefit expense
– salaries and benefits in kind (3,617) (3,526)
– share options granted (12) (6)
– defined benefit pension plans (50) (46)
– defined contribution pension plans (85) (87)
(3,764) (3,665)
Expenses relating to low-value leases (1) (3)
Expenses relating to short-term leases (180) (129)
Expenses relating to variable lease payment not included in lease liabilities (46) (30)
Auditors’ remuneration
– audit (23) (22)
– non-audit services (7) (4)
(30) (26)
Gain on lease modification and termination 3 7
Sublease income 7 22
Dividend income from equity investments 70 61
Interest income from debt investments 61 53
Rental income from properties 11 13
Net operating costs included the following gains/(losses) from non-trading items:
Change in fair value of other investments 11 (395)
Impairment of goodwill (refer note 10) (226) (6)
Impairment of other assets – (3)
Sale and closure of businesses 36 (15)
Sale of a hotel property – 41
Sale of property interests 123 31
Restructuring of businesses (13) (7)
Other (6) (9)
(75) (363)
115
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
5 Net Financing Charges
2023 2022
US$m US$m
Interest expense
– bank loans and advances (354) (269)
– interest on lease liabilities (130) (114)
– other (255) (180)
(739) (563)
Interest capitalised 22 11
Commitment and other fees
(52) (73)
Financing charges (769) (625)
Financing income 253 197
(516) (428)
6 Share of Results of Associates and Joint Ventures
2023 2022
US$m US$m
By business:
Jardine Pacific 130 12
Jardine Motor Interests 238 263
Hongkong Land 253 193
DFI Retail 53 (212)
Mandarin Oriental (1) 10
Jardine Cycle & Carriage 122 45
Astra 611 531
Corporate and other interests (20) (24)
1,386 818
Share of results of associates and joint ventures included the following gains/(losses)
from non-trading items:
Change in fair value of investment properties 18 (3)
Change in fair value of other investments 11 (26)
Impairment
– investment in Robinsons Retail (refer note 15) – (171)
– investment in Siam City Cement (refer note 15) – (114)
– other – (100)
– (385)
Share of Zhongsheng’s results from 1st July 2022 to 31st December 2022 (refer note 9) 101 –
Other (5) –
125 (414)
Results are shown after tax and non-controlling interests in the associates and joint ventures.
116
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
7 Tax
2023 2022
US$m US$m
Tax charged to profit and loss is analysed as follows:
Current tax (1,043) (1,022)
Deferred tax 100 62
(943) (960)
China (160) (139)
South East Asia (761) (793)
United Kingdom (2) (6)
Rest of the world (20) (22)
(943) (960)
Reconciliation between tax expense and tax at the applicable tax rate*:
Tax at applicable tax rate (509) (543)
Income not subject to tax
– change in fair value of investment properties 8 –
– other items 216 123
Expenses not deductible for tax purposes
– change in fair value of investment properties (318) (139)
– other items (246) (266)
Tax losses and temporary differences not recognised (37) (51)
Utilisation of previously unrecognised tax losses and temporary differences 28 28
Recognition of previously unrecognised tax losses and temporary differences 7 5
Deferred tax assets written off (2) –
Deferred tax liabilities written back 2 12
Overprovision/(underprovision) in prior years 1 (13)
Withholding tax (92) (100)
Overprovision/(provision) of land appreciation tax in Chinese mainland 3 (11)
Change in tax rate – (3)
Other (4) (2)
(943) (960)
Tax relating to components of other comprehensive income is analysed as follows:
Remeasurements of defined benefit plans 4 (7)
Cash flow hedges 9 (11)
13 (18)
Share of tax charge of associates and joint ventures of US$282 million (2022: US$490 million) is included in share of results
of associates and joint ventures. Share of tax credit of US$1 million (2022: tax charge of US$30 million) is included in other
comprehensive income of associates and joint ventures.
*
The applicable tax rate for the year was 26.5% (2022: 22.6%) 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.
117
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
8 Earnings per Share
Basic earnings per share are calculated on profit attributable to shareholders of US$686 million (2022: US$354 million) and
on the weighted average number of 290 million (2022: 289 million) shares in issue during the year.
Diluted earnings per share are calculated on profit attributable to shareholders of US$686 million (2022: US$354 million),
which is after adjusting for the effects of the conversion of dilutive potential ordinary shares of subsidiaries, associates or
joint ventures, and on the weighted average number of 290 million (2022: 289 million) shares in issue during the year.
The weighted average number of shares is arrived at as follows:
Ordinary shares
in millions
2023 2022
Weighted average number of shares in issue 290 467
Company’s share of shares held by subsidiaries (refer note 24) – (178)
Weighted average number of shares for basic and diluted earnings per share calculation 290 289
There was no shares deemed to be issued for no consideration for the calculation of diluted earnings per share under the
Senior Share Executive Incentive Schemes for the year ended 31st December 2023 (2022: 721 shares).
Additional basic and diluted earnings per share are also calculated based on underlying profit attributable to shareholders.
A reconciliation of earnings is set out below:
2023 2022
Basic
earnings
per share
Diluted
earnings
per share
Basic
earnings
per share
Diluted
earnings
per share
US$m US$ US$ US$m US$ US$
Profit attributable to
shareholders 686 2.37 2.37 354 1.22 1.22
Non-trading items (refer note 9) 975 1,230
Underlying profit attributable to
shareholders 1,661 5.74 5.73 1,584 5.49 5.49
118
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
9 Non-trading Items
2023 2022
Profit before
tax
Attributable to
shareholders
Profit before
tax
Attributable to
shareholders
US$m US$m US$m US$m
By business:
Jardine Pacific 25 23 (305) (305)
Jardine Motor Interests 165 165 (22) (30)
Hongkong Land (1,290) (701) (646) (335)
DFI Retail (201) (156) (143) (112)
Mandarin Oriental (489) (394) (64) (46)
Jardine Cycle & Carriage 55 54 (308) (234)
Astra (40) (12) (88) (37)
Corporate and other interests 46 46 (131) (131)
(1,729) (975) (1,707) (1,230)
An analysis of non-trading items is set out below:
Change in fair value of investment properties
– Hongkong Land (1,307) (710) (646) (335)
– other (454) (356) (287) (269)
(1,761) (1,066) (933) (604)
Change in fair value of other investments 22 35 (421) (327)
Impairment of goodwill (refer note 10) (226) (172) (6) (5)
Impairment of associates (refer note 15) – – (385) (320)
Impairment of other assets – – (3) (2)
Share of Zhongsheng’s results from 1st July 2022
to 31st December 2022 101 101 – –
Sale and closure of businesses 35 44 (15) (24)
Sale of hotel properties – (2) 41 37
Sale of property interests 123 105 31 23
Restructuring of businesses (15) (11) (7) (5)
Other (8) (9) (9) (3)
(1,729) (975) (1,707) (1,230)
Zhongsheng’s annual results have historically been reported after the Group’s results announcement. In previous years,
the Group recognised its 21% share of Zhongsheng’s results based on publicly available reported results as at the Group’s
reporting date. Hence, Zhongsheng’s contribution to the Group’s 2022 results represented its share of Zhongsheng’s results
for the period from 1st July 2021 to 30th June 2022. From 2023, however, the Group has determined that a better
representation of Zhongsheng’s current performance would be given using management’s estimate of its share of
Zhongsheng’s results on a calendar year basis, based on an average of recent external analyst estimates.
This change has been adopted prospectively from 1st January 2023 as a change in estimate such that the Group’s 2023
results included its share of Zhongsheng’s results for an eighteen-month period from 1st July 2022 to 31st December 2023.
The Group’s share of Zhongsheng’s results for the year ended 31st December 2023 are presented as underlying profit, and
the results for 1st July 2022 to 31st December 2022 have been presented as a non-trading item so as not to distort the
current year’s underlying performance.
119
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
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
2023
Cost
– as previously reported 1,273 136 623 1,270 663 3,965
– change in accounting policies (refer note 1) – – – – (76) (76)
– as restated 1,273 136 623 1,270 587 3,889
Amortisation and impairment
– as previously reported (188) (1) (62) (772) (414) (1,437)
– change in accounting policies (refer note 1) – – – – 33 33
– as restated
(188) (1) (62) (772) (381) (1,404)
Net book value at 1st January as restated 1,085 135 561 498 206 2,485
Exchange differences 8 2 11 1 1 23
New subsidiaries 45 – – – 38 83
Additions – – 29 51 69 149
Disposals (72) – – – (6) (78)
Amortisation – – (13) (60) (65) (138)
Impairment charge (236) – – (12) (2) (250)
Net book value at 31st December 830 137 588 478 241 2,274
Cost 1,194 139 665 1,320 652 3,970
Amortisation and impairment (364) (2) (77) (842) (411) (1,696)
830 137 588 478 241 2,274
2022
Cost
– as previously reported 1,297 150 660 1,219 636 3,962
– change in accounting policies (refer note 1) – – – – (76) (76)
– as restated 1,297 150 660 1,219 560 3,886
Amortisation and impairment
– as previously reported (189) (2) (55) (706) (375) (1,327)
– change in accounting policies (refer note 1) – – – – 33 33
– as restated
(189) (2) (55) (706) (342) (1,294)
Net book value at 1st January as restated 1,108 148 605 513 218 2,592
Exchange differences (43) (13) (57) 1 (14) (126)
New subsidiaries 26 – – – – 26
Additions – – 26 55 107 188
Disposals – – – – (4) (4)
Amortisation – – (13) (70) (101) (184)
Impairment charge (6) – – (1) – (7)
Net book value at 31st December 1,085 135 561 498 206 2,485
Cost 1,273 136 623 1,270 587 3,889
Amortisation and impairment (188) (1) (62) (772) (381) (1,404)
1,085 135 561 498 206 2,485
120
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
10 Intangible Assets (continued)
2023 2022
US$m US$m
Goodwill allocation by business:
Jardine Pacific 31 74
Jardine Motor Interests – 50
DFI Retail 266 457
Mandarin Oriental 37 39
Astra 496 465
830 1,085
Goodwill relating to DFI Retail is allocated to groups of cash-generating units (‘CGU’) identified by banners or groups of stores
acquired in each geographical segment. Management has assessed the recoverable amount of each CGU based on value-in-
use calculations using cash flow projections in the approved budgets which have forecasts covering a period of three years
and projections for a further two years. Cash flows beyond the projection periods were extrapolated using the assumptions
on average sales growth rates, average annual profit growth rates, pre-tax discount rates and long-term growth rates. The
pre-tax discount rates reflected business specific risks relating to the relevant industries, business life-cycle and the risk
related to the places of operation.
Following the above impairment review, total goodwill relating to DFI Retail of US$171 million was impaired in 2023. Included
in the impairment were impairment charges of US$60 million and US$83 million against goodwill relating to its San Miu
business in Macau and Giant business in Singapore, respectively. Goodwill relating to San Miu in Macau was reduced to its
recoverable amount of US$120 million and goodwill relating to Giant business in Singapore was fully impaired.
The recoverable amounts based on the value-in-use calculation under the impairment review in DFI Retail in 2023 was
inherently sensitive to changes in assumptions. Summary of the significant assumptions used and sensitivities on how the
recoverable amounts would change if the assumptions changed by a reasonable amount for San Miu are listed below:
DFI Retail
Group’s
attributable
share
US$m US$m
Principal countries of operation Macau
Goodwill allocated after impairment 120
Assumptions used:
Cashflow projection period 5 years
Average sales growth rate 5.1%
Average gross profit growth rate 6.3%
Pre-tax discount rate 10.9%
Long-term growth rate 2.5%
Sensitivities on recoverable amounts:
A further impairment charge if:
– average sales growth rate conforms to long-term growth rate of 2.5% (34) (26)
– average gross profit growth rate 1.5% lower (36) (28)
– pre-tax discount rate 1.0% higher (16) (13)
– long-term growth rate 1.0% lower (12) (9)
For Giant business in Singapore, key assumptions used for value-in-use calculation included average sales growth rate of
1.0% and average gross profit growth rate of 0.3%. Cash flows beyond the five-year period are extrapolated using long-term
growth rate of 1.0% and pre-tax discount rate of 9.6%.
121
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
10 Intangible Assets (continued)
Key assumptions used for value-in-use calculations for the remaining significant balances of DFI Retail goodwill in 2023
include budgeted gross margins between 27% and 36% (2022: 21% and 29%) and long-term sales growth rates between 1%
and 4.5% (2022: 2% and 5%) to project cash flows, which vary across the group’s business segments and geographical
locations, over a five-year period, and are based on management expectations for the market development; and pre-tax
discount rates between 12% and 13% (2022: 8% and 16%) 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, DFI Retail management concluded that no further impairment was 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 on
goodwill arising from acquisition of Astra’s shares, 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 had 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 (2022: US$49 million) and heavy equipment of US$88 million (2022: US$86 million), are not
amortised as such rights will contribute cash flows for an indefinite period. Management has performed an impairment
review of the carrying amounts of franchise rights at 31st December 2023 and has concluded that no impairment has
occurred. The impairment review was made by comparing the carrying amounts of the cash-generating units in which the
franchise rights reside with the recoverable amounts of the cash-generating units. The recoverable amounts of the cash-
generating units are determined based on value-in-use calculations. These calculations use pre-tax cash flow projections
based on financial budgets approved by management covering a three-year period. Cash flows beyond the three-year period
are extrapolated using growth rates between 3% and 4% (2022: 3% and 4%). Pre-tax discount rates between 20% and 23%
(2022: 19% and 20%) reflecting specific risks relating to the relevant industries, are applied to the cash flow projections.
Other intangible assets comprise trademarks and computer software.
The amortisation charges are all recognised in arriving at operating profit and are included in cost of sales, selling and
distribution costs and administration expenses.
The remaining amortisation periods for intangible assets are as follows:
Concession rights by traffic volume over 32 to 36 years
Computer software up to 8 years
Deferred exploration costs by unit of production
Other various
122
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
11 Tangible Assets
Freehold
properties
Buildings
on
leasehold
land
Leasehold
improve-
ments
Mining
properties
Plant &
machinery
Furniture,
equipment
& motor
vehicles Total
US$m US$m US$m US$m US$m US$m US$m
2023
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)
Net book value at 1st January 858 1,291 509 757 1,654 784 5,853
Exchange differences 29 83 (49) (4) 19 2 80
New subsidiaries – – – 471 2 – 473
Additions 1 82 121 – 1,258 337 1,799
Disposals (114) (35) (23) – (40) (21) (233)
Revaluation surplus before
transfer to investment
properties – 1 – – – – 1
Transfer t0 investment properties – (9) – – – – (9)
Transfer from/(to) stock and work
in progress – – – – 16 (22) (6)
Reclassified from assets held for
sale – 17 – – – – 17
Classified as held for sale (307) (51) (7) – (16) (3) (384)
Depreciation charge (10) (92) (110) (66) (490) (229) (997)
Impairment charge (1) (2) (4) – (1) (1) (9)
Net book value at 31st December 456 1,285 437 1,158 2,402 847 6,585
Cost 541 2,378 1,472 2,223 6,807 2,297 15,718
Depreciation and impairment (85) (1,093) (1,035) (1,065) (4,405) (1,450) (9,133)
456 1,285 437 1,158 2,402 847 6,585
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
123
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
11 Tangible Assets (continued)
Rental income from properties and other tangible assets amounted to US$347 million (2022: US$292 million) with no
contingent rents for both 2023 and 2022.
The maturity analysis of the undiscounted lease payments to be received after the balance sheet date are as follows:
2023 2022
US$m US$m
Within one year 112 107
Between one and two years 60 55
Between two and five years 70 47
Beyond five years 25 22
267 231
At 31st December 2023, the carrying amount of tangible assets pledged as security for borrowings amounted to
US$367 million (2022: US$349 million) (refer note 29).
12 Right-of-use Assets
Leasehold
land Properties
Plant &
machinery
Motor
vehicles Total
US$m US$m US$m US$m US$m
2023
Cost 1,378 6,933 274 200 8,785
Amortisation/depreciation and impairment
(465) (3,779) (198) (159) (4,601)
Net book value at 1st January 913 3,154 76 41 4,184
Exchange differences 12 (1) 2 – 13
New subsidiaries 12 – – – 12
Additions 37 279 46 28 390
Disposals (26) (145) – – (171)
Revaluation surplus before transfer to investment
properties 63 – – – 63
Transfer to investment properties (74) – – – (74)
Transfer to stock and work in progress – – (1) – (1)
Reclassified from assets held for sale 29 – – – 29
Classified as held for sale (34) (18) – – (52)
Modifications to lease terms (12) 624 (1) (1) 610
Amortisation/depreciation charge (54) (784) (47) (28) (913)
Impairment charge – (10) – – (10)
Net book value at 31st December 866 3,099 75 40 4,080
Cost 1,369 7,187 145 86 8,787
Amortisation/depreciation and impairment (503) (4,088) (70) (46) (4,707)
866 3,099 75 40 4,080
124
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
12 Right-of-use Assets (continued)
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
Reclassified from assets held for sale 2 – – – 2
Classified as held for sale (6) – – – (6)
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
The typical lease term associated with the right-of-use assets are as follows:
Leasehold land 6 to 99 years
Properties 1 to 20 years
Plant & machinery 1 to 6 years
Motor vehicles 1 to 6 years
Leasehold land included a hotel property in Hong Kong with carrying value of US$122 million which is amortised over
894 years.
At 31st December 2023, the carrying amount of leasehold land pledged as security for borrowings amounted to
US$122 million (2022: US$122 million) (refer note 29). None of the other right-of-use assets were pledged at
31st December 2023 and 2022.
125
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
13 Investment Properties
Completed
commercial
properties
Under
development
commercial
properties
Completed
residential
properties
Under
development
residential
properties Total
US$m US$m US$m US$m US$m
2023
At 1st January 28,291 2,560 661 301 31,813
Exchange differences (59) (5) (2) (1) (67)
Additions 59 80 – – 139
Disposals (23) – – – (23)
Net transfer from tangible assets 7 2 – – 9
Transfer from right-of-use assets 74 – – – 74
Change in fair value (1,331) (487) 17 22 (1,779)
At 31st December 27,018 2,150 676 322 30,166
Freehold properties 149
Leasehold properties 30,017
30,166
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
#
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 2023 and 2022 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 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.
126
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
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 and Mandarin Oriental 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.
Prior to 2023, the fair value of Mandarin Oriental’s under development commercial property was derived using the direct
comparison method and the residual method with equal weighting. Due to a lack of recent comparable transactions which
reflect the current market conditions, it is considered that the previous comparable site transactions used in the direct
comparison method have become outdated. As a result, the direct comparison method was not considered appropriate and
does not form part of the basis for assessment of value of the site at 31st December 2023. As such, the fair value of the under
development commercial property was derived using the residual method at 31st December 2023. The change in the
valuation methodology to reflect residual, value-in-use estimates, is in line with the market practice as the development of
the site progresses toward completion.
The Group’s policy is to recognise transfers between fair value measurement categories 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 2023 and 2022:
Fair value at
31st December
2023
Range of significant unobservable inputs
Valuation method
Prevailing market
rent per month
Capitalisation/
discount rate
US$m US$ %
Hongkong Land
Completed properties:
Hong Kong 24,757 Income capitalisation 5.9 to 28.2 per square foot 2.90 to 5.00
Chinese mainland 952 Income capitalisation 104.4 per square metre 3.75
Singapore 597 Income capitalisation 7.7 per square foot 3.35 to 4.80
Cambodia
82 Discounted cash flow 21.0 to 30.0 per square metre 12.50 to 13.50
Total
26,388
Mandarin Oriental
Under development property:
Hong Kong
1,972 Residual* 8.2 to 10.4 per square foot 2.55 to 3.95
127
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
13 Investment Properties (continued)
Fair value at
31st December
2022
Range of significant unobservable inputs
Valuation method
Prevailing market rent per month/
average unit price
Capitalisation/
discount rate
US$m US$ %
Hongkong Land
Completed properties:
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
Mandarin Oriental
Under development property:
Hong Kong
2,385 Direct comparison Average unit price of
3,951.6 per square foot
N/A
Residual* Prevailing market rent per month
of 8.3 to 10.0 per square foot
2.45 to 3.85
*
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. Capitalisation and discount rates are estimated by independent valuers based on the risk
profile of the properties being valued.
128
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
13 Investment Properties (continued)
An increase/decrease to prevailing market rent will increase/decrease valuations, while an increase/decrease to
capitalisation/discount rate will decrease/increase valuations. Sensitivity analyses have been performed to assess the
impact on the valuations of changes in the two significant unobservable inputs for prevailing market rents and capitalisation
rates on Hongkong Land’s completed commercial properties and Mandarin Oriental’s under development commercial
property in Hong Kong, which contributed 89% of the total investment properties at 31st December 2023. The impact of any
reasonably possible change in the assumptions for other investment properties would not be material. The Group believes
this captures the range of variations in these key valuation assumptions. The results are shown in the table below:
Increase/(decrease) in valuations
Hongkong Land
Completed properties
Mandarin Oriental
Under development property
Change in
assumption
Increase in
assumption
Decrease in
assumption
Increase in
assumption
Decrease in
assumption
% US$m US$m US$m US$m
Prevailing market rent per month 5.00 1,159 (1,150) 110 (115)
Capitalisation rate 0.10 (710) 755 (83) 83
The maturity analysis of lease payments, showing the undiscounted lease payments to be received over the remainder of the
contractual lease term after the balance sheet date, including the estimated impact on lease payments from contractual rent
reviews, are as follows:
2023 2022
US$m US$m
Within one year 769 787
Between one and two years 585 648
Between two and three years 440 479
Between three and four years 316 365
Between four and five years 177 276
Beyond five years 318 386
2,605 2,941
Generally the Group’s operating leases in respect of investment properties are for terms of three or more years.
At 31st December 2023, the carrying amount of investment properties pledged as security for borrowings amounted to
US$952 million (2022: US$936 million) (refer note 29).
129
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
14 Bearer Plants
2023 2022
US$m US$m
Cost 702 734
Depreciation
(237) (235)
Net book value at 1st January 465 499
Exchange differences 9 (47)
Additions 37 41
Depreciation charge (30) (28)
Net book value at 31st December 481 465
Immature bearer plants 97 104
Mature bearer plants 384 361
481 465
Cost 749 702
Depreciation (268) (237)
481 465
The Group’s bearer plants are primarily for the production of palm oil.
At 31st December 2023 and 2022, the Group’s bearer plants had not been pledged as security for borrowings.
130
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
15 Associates and Joint Ventures
2023 2022
US$m US$m
Associates
Listed associates
– Yonghui 315 380
– Zhongsheng 1,301 1,207
– Siam City Cement 309 309
– Robinsons Retail 308 284
– Nickel Industries 609 –
– other
275 318
3,117 2,498
Unlisted associates
1,969 1,683
Share of attributable net assets 5,086 4,181
Goodwill on acquisition
1,199 1,202
6,285 5,383
Amounts due from associates 466 461
6,751 5,844
Joint ventures
Share of attributable net assets of unlisted joint ventures 9,703 9,345
Goodwill on acquisition
96 94
9,799 9,439
Amounts due from joint ventures 1,923 2,573
11,722 12,012
18,473 17,856
Fair value of the Group’s listed associates at 31st December 2023, which were based on the quoted prices in active markets,
amounted to US$3,468 million (2022: US$4,907 million).
Amounts due from associates are interest free, unsecured and have no fixed terms of repayment.
Amounts due from joint ventures bear interests at fixed rates up to 11% per annum and are repayable within one to
twelve years.
Associates Joint ventures
2023 2022 2023 2022
US$m US$m US$m US$m
Movements of associates and joint ventures during the year:
At 1st January 5,844 6,328 12,012 11,652
Share of results after tax and non-controlling interests 528 146 858 672
Share of net exchange translation (loss)/gain arising during
the year after non-controlling interests (99) (439) 44 (669)
Share of other comprehensive (expense)/income after tax and
non-controlling interests (5) 131 6 23
Dividends received (235) (265) (648) (666)
Acquisitions, other increases in attributable interests
and advances 817 69 862 2,101
Other disposals, decreases in attributable interests
and repayment of advances (102) (128) (1,408) (1,098)
Other 3 2 (4) (3)
At 31st December 6,751 5,844 11,722 12,012
131
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
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 2023 and concluded that no impairment had occurred.
At 31st December 2023, the fair values of DFI Retail’s investment in Yonghui and Robinsons Retail, and Jardine Cycle &
Carriage’s investment in Siam City Cement were below their respective carrying values. Management had performed
impairment reviews on their carrying values and concluded that the value-in-use calculations supported no impairment
charges were required.
In 2022, partial impairments of investments in Robinsons Retail of US$171 million (Group’s attributable share of
US$133 million) and Siam City Cement of US$114 million (Group’s attributable share of US$87 million) were recognised
within non-trading items under the share of results of associates and joint ventures in the profit and loss in 2022.
The impairment reviews were performed by comparing the carrying amounts of the associates with the recoverable amounts.
The recoverable amounts were determined based on value-in-use calculations using cashflow projections approved by
management covering projection periods considered appropriate. Cashflows beyond the projection periods were
extrapolated using the estimates. The growth rates did not exceed the long-term average industry growth rates in the
countries of operation, and the pre-tax discount rates reflected business specific risks relating to the relevant industries and
the risk related to the countries of operation.
The recoverable amounts based on the value-in-use calculations under the impairment reviews on Yonghui, Robinsons Retail
and Siam City Cement in 2023 and 2022 were inherently sensitive to changes in assumptions. Summary of significant
assumptions used and sensitivities on recoverable amounts for these impairment reviews in 2023 and 2022 were as follows:
Yonghui Robinsons Retail Siam City Cement
DFI Retail
Group’s
attributable
share DFI Retail
Group’s
attributable
share
Jardine Cycle
& Carriage
Group’s
attributable
share
US$m US$m US$m US$m US$m US$m
2023
Principal countries of operation China
The
Philippines
Thailand
and
Vietnam
Goodwill allocated 477 125 94
Assumptions used:
Cashflow projection period 5 years 5 years 4 years
Average revenue growth rate 3.6% 4.0% N/A
Average PBIT growth rate 1.6% 10.7% N/A
Pre-tax discount rate 8.4% 13.7% 13.4%
Long-term growth rate 2.0% 3.0% 2.6 – 3.5%
Sensitivities on recoverable amounts:
An impairment charge if:
– average revenue growth 1.0%
lower (322) (250) (29) (22) N/A N/A
– EBITDA margin 4.0% lower N/A N/A N/A N/A (83) (65)
– PBIT margin 0.4% lower (121) (93) N/A N/A N/A N/A
– pre-tax discount rate 1.0% higher (113) (88) – – (13) (10)
– long-term growth rate
– 0.5% lower (21) (17) N/A N/A – –
– 1.0% lower N/A N/A – – N/A N/A
132
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
15 Associates and Joint Ventures (continued)
Robinsons Retail Siam City Cement
DFI Retail
Group’s
attributable share Jardine Cycle & Carriage
Group’s
attributable share
US$m US$m US$m US$m
2022
Principal countries of operation The Philippines Thailand and Vietnam
Goodwill allocated 124 94
Assumptions used:
Cashflow projection period 5 years 4 years
Average revenue growth rate 4.0% N/A
Average PBIT growth rate 11.0% N/A
Pre-tax discount rate 15.2% 11.9%
Long-term growth rate 3.0% 2.6% – 3.5%
Sensitivities on recoverable amounts:
A further impairment charge if:
– average 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)
– average 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
– 0.5% lower N/A N/A (27) (21)
– 1.0% lower (30) (23) N/A N/A
(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 2023 and 2022:
Name of entity Nature of business
Place of incorporation/
principal place of business/
place of listing
% of ownership
interest
2023 2022
Zhongsheng Group Holdings Limited
(‘Zhongsheng’)
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’)
Food China/Chinese mainland/
Shanghai
21
21
Robinsons Retail Holdings, Inc.
(‘Robinsons Retail’)
Food, 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
133
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
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
2023
Non-current assets
6,214 2,663 5,321 2,024 1,841 3,765 21,828
Current assets
Cash and cash equivalents 2,257 201 931 164 176 66 3,795
Other current assets
5,190 291 1,725 591 268 3,264 11,329
Total current assets
7,447 492 2,656 755 444 3,330 15,124
Non-current liabilities
Financial liabilities* (2,181) (933) (2,980) (632) (424) (1,313) (8,463)
Other non-current liabilities*
(488) (169) (32) (104) (151) (182) (1,126)
Total non-current liabilities
(2,669) (1,102) (3,012) (736) (575) (1,495) (9,589)
Current liabilities
Financial liabilities* (2,524) (708) (999) (179) (224) (1,728) (6,362)
Other current liabilities*
(2,401) (107) (2,628) (382) (249) (1,639) (7,406)
Total current liabilities
(4,925) (815) (3,627) (561) (473) (3,367) (13,768)
Non-controlling interests (43) (131) (7) (82) (26) (297) (586)
Net assets 6,024 1,107 1,331 1,400 1,211 1,936 13,009
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
*
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 sheets at 30th June 2023 and 2022.
†
Based on the unaudited summarised balance sheets at 30th September 2023 and 2022.
134
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
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
2023
Revenue 24,172 3,109 10,719 3,411 1,206 2,836 45,453
Depreciation and amortisation N/A (441) (485) (131) (104) (150) N/A
Interest income N/A 3 19 6 3 89 N/A
Interest expense N/A (46) (192) (51) (37) (224) N/A
Profit/(loss) from underlying
business performance N/A 204 (194) 110 84 155 N/A
Tax
N/A (41) (1) (28) (17) (10) N/A
Profit/(loss) after tax from
underlying business
performance N/A 163 (195) 82 67 145 N/A
Profit/(loss) after tax from
non-trading items
N/A (2) (51) 98 – – N/A
Profit/(loss) after tax 670 161 (246) 180 67 145 977
Other comprehensive income/
(expense) N/A 4 – (12) (2) – N/A
Total comprehensive income/
(expense) 670 165 (246) 168 65 145 967
Dividends received from
associates 71 35 – 11 20 27 164
2022
Revenue 26,587 2,524 13,054 3,237 1,416 3,702 50,520
Depreciation and amortisation (421) (406) (655) (138) (108) (144) (1,872)
Interest income 35 2 36 7 2 122 204
Interest expense (180) (35) (343) (36) (29) (192) (815)
Profit/(loss) from underlying
business performance 1,323 88 (457) 148 87 346 1,535
Tax
(345) (10) 12 (21) (32) (34) (430)
Profit/(loss) after tax from
underlying business
performance 978 78 (445) 127 55 312 1,105
Profit/(loss) after tax from
non-trading items
– 28 (93) (7) – – (72)
Profit/(loss) after tax 978 106 (538) 120 55 312 1,033
Other comprehensive
(expense)/income (134) (23) – (6) 3 – (160)
Total comprehensive income/
(expense) 844 83 (538) 114 58 312 873
Dividends received from
associates 54 28 6 11 20 55 174
Ω
2023 information was based on management’s estimate, using an average of analyst estimates for the year ended 31st December 2023 as financial
data for Zhongsheng is not available when the Group produces its consolidated financial results. 2022 information was based on the audited
summarised statements of comprehensive income for the 12 months ended 31st December 2022.
†
Based on the unaudited summarised statements of comprehensive income for the 12 months ended 30th September 2023 and 2022.
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.
135
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
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
2023
Net assets 6,024 1,107 1,331 1,400 1,211 1,936 13,009
Interest in associates (%) 21 50 21 21 26 27
Group’s share of net assets
in associates 1,277 554 285 301 309 515 3,241
Goodwill 285 – 477 125 94 158 1,139
Other 24 – 30 7 – – 61
Carrying value 1,586 554 792 433 403 673 4,441
Fair value
#
1,209 N/A 760 226 301 N/A N/A
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 1,306 510 349 269 309 516 3,259
Goodwill 291 – 476 124 94 163 1,148
Other (99) – 31 15 – – (53)
Carrying value 1,498 510 856 408 403 679 4,354
Fair value
#
2,605 N/A 1,004 305 388 N/A N/A
The 2022 comparative figures for Zhongsheng have been re-presented.
#
Fair values of the listed associates were based on quoted prices in active markets at 31st December 2023 and 2022.
Ω
Based on the unaudited summarised balance sheets at 30th June 2023 and 2022.
†
Based on the unaudited summarised balance sheets at 30th September 2023 and 2022.
136
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
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 income and carrying amount of these associates.
2023 2022
US$m US$m
Share of profit 127 199
Share of other comprehensive (expense)/income (6) 62
Share of total comprehensive income 121 261
Carrying amount of interests in these associates 2,310 1,490
Contingent liabilities relating to the Group’s interest in associates
2023 2022
US$m US$m
Financial guarantee in respect of facilities made available to an associate – 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 2023 and 2022:
Nature of business
Place of incorporation and
principal place of business
% of ownership interest
2023 2022
Hongkong Land
– Shanghai Yibin Property Co. Ltd. Property investment Shanghai 43 43
– 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
137
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
15 Associates and Joint Ventures (continued)
Summarised financial information for material joint ventures
Summarised balance sheets at 31st December:
Shanghai
Yibin
Property
Co. Ltd.
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 US$m
2023
Non-current assets
3,411 1,137 3,883 2,990 2,987 1,301 15,709
Current assets
Cash and cash
equivalents 66 98 29 29 12 932 1,166
Other current assets
1,304 44 4 3 2 466 1,823
Total current assets
1,370 142 33 32 14 1,398 2,989
Non-current liabilities
Financial liabilities* (325) – (1,302) (1,223) (802) – (3,652)
Other non-current
liabilities*
(31) (126) – (21) (218) (264) (660)
Total non-current
liabilities
(356) (126) (1,302) (1,244) (1,020) (264) (4,312)
Current liabilities
Financial liabilities* – – (1) (8) (2) – (11)
Other current
liabilities*
(148) (41) (77) (46) (49) (1,134) (1,495)
Total current
liabilities (148) (41) (78) (54) (51) (1,134) (1,506)
Net assets 4,277 1,112 2,536 1,724 1,930 1,301 12,880
2022
Non-current assets
3,301 1,166 3,752 2,901 2,916 1,182 15,218
Current assets
Cash and cash
equivalents 13 55 19 27 11 820 945
Other current assets
1,240 46 4 3 3 512 1.808
Total current assets
1,253 101 23 30 14 1,332 2,753
Non-current liabilities
Financial liabilities* (97) – (1,272) (1,181) (765) – (3,315)
Other non-current
liabilities*
(28) (127) – (21) (215) (240) (631)
Total non-current
liabilities
(125) (127) (1,272) (1,202) (980) (240) (3,946)
Current liabilities
Financial liabilities* – – (1) (10) (2) – (13)
Other current
liabilities*
(74) (46) (58) (43) (47) (1,073) (1,341)
Total current
liabilities (74) (46) (59) (53) (49) (1,073) (1,354)
Net assets 4,355 1,094 2,444 1,676 1,901 1,201 12,671
*
Financial liabilities exclude trade and other payables and provisions, which are presented under other current and non-current liabilities.
138
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
15 Associates and Joint Ventures (continued)
Summarised statements of comprehensive income for the year ended 31st December:
Shanghai
Yibin
Property
Co. Ltd.
Properties
Sub F, Ltd
BFC
Development
LLP
Central
Boulevard
Development
Pte Ltd
One
Raffles
Quay
Pte Ltd
PT Astra
Honda
Motor Total
US$m US$m US$m US$m US$m US$m US$m
2023
Revenue _ 81 171 133 131 6,160 6,676
Depreciation and
amortisation _ (4) – – – (101) (105)
Interest income 1 1 – – – 43 45
Interest expense – – (54) (44) (29) – (127)
Profit from underlying
business performance (3) 31 74 57 70 693 922
Tax
1 (4) (12) (10) (12) (145) (182)
Profit/(loss) after tax from
underlying business
performance (2) 27 62 47 58 548 740
Profit/(loss) after tax from
non-trading items
9 (7) 55 22 – – 79
Profit after tax 7 20 117 69 58 548 819
Other comprehensive
income/(expense) (85) (2) 38 26 30 (4) 3
Total comprehensive
income/(expense) (78) 18 155 95 88 544 822
Dividends received from joint
ventures – – 21 16 19 234 290
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 (3) 27 67 55 67 532 745
Tax
1 (3) (11) (9) (11) (118) (151)
Profit/(loss) after tax from
underlying business
performance (2) 24 56 46 56 414 594
Profit/(loss) after tax from
non-trading items
8 (29) (1) – (1) – (23)
Profit/(loss) after tax 6 (5) 55 46 55 414 571
Other comprehensive
income/(expense) (394) – 13 43 28 2 (308)
Total comprehensive
income/(expense) (388) (5) 68 89 83 416 263
Dividends received from joint
ventures – – 17 15 19 217 268
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.
139
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
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:
Shanghai
Yibin
Property
Co. Ltd.
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 US$m
2023
Net assets 4,277 1,112 2,536 1,724 1,930 1,301 12,880
Interest in joint
ventures (%) 43 49 33 33 33 50
Group’s share of net
assets in joint
ventures 1,839 545 845 575 643 651 5,098
Amounts due from
joint ventures – – – – 39 – 39
Carrying value 1,839 545 845 575 682 651 5,137
2022
Net assets 4,355 1,094 2,444 1,676 1,901 1,201 12,671
Interest in joint
ventures (%) 43 49 33 33 33 50
Group’s share of net
assets in joint
ventures 1,873 536 815 559 634 600 5,017
Amounts due from
joint ventures – – 424 – 38 – 462
Carrying value 1,873 536 1,239 559 672 600 5,479
The Group has interests in a number of individually immaterial joint ventures. The following table analyses, in aggregate,
the share of profit and other comprehensive income and carrying amount of these joint ventures.
2023 2022
US$m US$m
Share of profit 491 413
Share of other comprehensive expense (29) (326)
Share of total comprehensive income 462 87
Carrying amount of interests in these joint ventures 6,585 6,533
Commitments and contingent liabilities in respect of joint ventures
The Group has the following commitments relating to its joint ventures as at 31st December:
2023 2022
US$m US$m
Commitment to provide funding if called 745 945
There were no contingent liabilities relating to the Group’s interest in the joint ventures at 31st December 2023 and 2022.
140
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
16 Other Investments
2023 2022
US$m US$m
Equity investments measured at fair value through profit and loss
Listed securities
– Schindler Holdings 301 229
– Toyota Motor Corporation 265 198
– Vietnam Dairy Products Joint Stock Company (‘Vinamilk’) 618 715
– Other
311 342
1,495 1,484
Unlisted securities 255 306
1,750 1,790
Debt investments measured at fair value through profit and loss 418 10
Debt investments measured at fair value through other comprehensive income 916 763
Limited partnership investment funds measured at fair value through profit and loss 300 256
3,384 2,819
Non-current 3,329 2,801
Current 55 18
3,384 2,819
Debt investments comprised of listed bonds.
Movements during the year:
At 1st January 2,819 2,954
Exchange differences 55 (119)
Additions 685 643
Disposals and capital repayments (160) (229)
Reclassification of other investments to associates and joint ventures (35) –
Unwinding of premium (1) –
Change in fair value recognised in profit and loss 33 (410)
Change in fair value recognised in other comprehensive income (12) (20)
At 31st December 3,384 2,819
Movements of equity investments and limited partnership investment funds which were valued based on unobservable
inputs during the year are disclosed in note 42.
Management considers debt investments have low credit risk when they have a low risk of default based on credit ratings
from major rating agencies.
141
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
17 Debtors
2023 2022
US$m US$m
Consumer financing debtors
– gross 4,847 4,448
– provision for impairment (330) (340)
4,517 4,108
Financing lease receivables
– gross investment 680 569
– unearned finance income
(70) (64)
– net investment 610 505
– provision for impairment (35) (31)
575 474
Financing debtors 5,092 4,582
Trade debtors
– third parties 2,053 2,425
– associates 46 49
– joint ventures
163 118
2,262 2,592
– provision for impairment (73) (98)
2,189 2,494
Contract assets (refer note 3)
– gross 157 113
– provision for impairment (61) (59)
96 54
Other debtors
– third parties 2,926 2,712
– associates 130 140
– joint ventures
137 121
3,193 2,973
– provision for impairment (46) (35)
3,147 2,938
10,524 10,068
Non-current
– consumer financing debtors 2,342 2,013
– financing lease receivables 248 227
– trade debtors 2 –
– other debtors 1,241 1,029
3,833 3,269
Current
– consumer financing debtors 2,175 2,095
– financing lease receivables 327 247
– trade debtors 2,187 2,494
– contract assets 96 54
– other debtors 1,906 1,909
6,691 6,799
10,524 10,068
142
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
17 Debtors (continued)
2023 2022
US$m US$m
Analysis by geographical area of operation:
China 922 852
South East Asia 9,488 9,024
United Kingdom 18 78
Rest of the world 96 114
10,524 10,068
Analysis by fair value:
Consumer financing debtors 4,010 3,741
Financing lease receivables
550 451
Financing debtors 4,560 4,192
Trade debtors 2,189 2,494
Other debtors* 1,452 1,506
8,201 8,192
*
Excluding prepayments and other non-financial debtors.
The fair values of financing debtors are determined based on a discounted cash flow method using unobservable inputs,
which are mainly rates of 10% to 37% per annum (2022: 10% to 37% per annum). The higher the discount rates, the lower
the fair value.
The fair values of other debtors, other than short-term debtors, are estimated using the expected future receipts discounted
at market rates ranging from 5% to 13% per annum (2022: 6% to 13% per annum). The fair value of short-term debtors
approximates their carrying amounts. Derivative financial instruments are stated at fair value. The higher the discount rates,
the lower the fair value.
Financing debtors
Financing debtors comprise consumer financing debtors and financing lease receivables. They primarily relate to Astra’s
motor vehicle and motorcycle financing businesses.
Financing debtors are due within five years (2022: five years) from the balance sheet date and the interest rates range from
7% to 48% per annum (2022: 7% to 45% per annum).
An analysis of financing lease receivables is set out below:
2023 2022
US$m US$m
Lease receivables 680 569
Guaranteed residual value 241 182
Security deposits
(241) (182)
Gross investment 680 569
Unearned finance income (70) (64)
Net investment 610 505
143
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
17 Debtors (continued)
The maturity analyses of financing lease receivables at 31st December are as follows:
2023 2022
Gross
investment
Net
investment
Gross
investment
Net
investment
US$m US$m US$m US$m
Within one year 396 347 306 263
Between one and two years 213 196 191 174
Between two and five years 68 64 72 68
Beyond five years 3 3 – –
680 610 569 505
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. 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.
144
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
17 Debtors (continued)
The Group provides for credit losses against the financing debtors as follows:
2023 2022
Expected
credit loss
rate
Estimated gross
carrying amount
at default
Expected
credit loss
rate
Estimated gross
carrying amount
at default
% US$m % US$m
Performing 1.46 – 8.00 4,187 2.15 – 13.58 3,666
Underperforming 1.46 – 32.57 1,165 2.15 – 37.60 1,161
Non-performing 34.20 – 66.00 105 42.00 – 66.00 126
5,457 4,953
Movements of provisions for impairment of financing debtors are as follows:
Performing Underperforming Non-performing Total
US$m US$m US$m US$m
2023
At 1st January (164) (117) (90) (371)
Exchange differences (3) (3) (2) (8)
(Additional provisions)/writeback 79 (114) (60) (95)
Transfer (94) 62 32 –
Write off/utilisation – 55 54 109
At 31st December (182) (117) (66) (365)
2022
At 1st January (182) (148) (34) (364)
Exchange differences 16 13 6 35
(Additional provisions)/writeback 46 (177) (35) (166)
Transfer (44) 133 (89) –
Write off/utilisation – 62 62 124
At 31st December (164) (117) (90) (371)
At 31st December 2023 and 2022, there are no financing debtors that are written off but still subject to enforcement
activities.
145
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
17 Debtors (continued)
Trade and other debtors
The average credit period on sale of goods and services varies among Group businesses and is generally not more than
60 days.
Other debtors net of provision for impairment are further analysed as follows:
2023 2022
US$m US$m
Derivative financial instruments (refer note 34) 73 185
Loans to employees 38 32
Other amounts due from associates 130 140
Other amounts due from joint ventures 137 121
Rental and other deposits 182 182
Repossessed collateral of finance companies 41 16
Restricted bank balances and deposits 49 43
Other receivables
810 793
Financial assets 1,460 1,512
Costs to fulfil contracts (refer note 3) 90 80
Costs to obtain contracts (refer note 3) 15 7
Prepayments 974 943
Insurance contract assets 68 46
Reinsurance contract assets 131 100
Other 409 250
3,147 2,938
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.
146
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
17 Debtors (continued)
The loss allowance for both trade debtors and contract assets at 31st December 2023 and 2022 were determined as follows:
Below
30 days
Between
31 and 60 days
Between
61 and 120 days
More than
120 days Total
2023
Trade debtors
Expected loss rate (%) 0.9 3.5 4.5 46.4
Gross carrying amount (US$m) 1,950 133 76 103 2,262
Loss allowance (US$m) (17) (5) (3) (48) (73)
Contract assets
Expected loss rate (%) 39.1 N/A N/A N/A
Gross carrying amount (US$m) 157 – – – 157
Loss allowance (US$m) (61) – – – (61)
2022
Trade debtors
Expected loss rate (%) 0.2 1.9 5.2 57.5
Gross carrying amount (US$m) 2,220 150 69 153 2,592
Loss allowance (US$m) (4) (3) (3) (88) (98)
Contract assets
Expected loss rate (%) 52.3 N/A N/A N/A
Gross carrying amount (US$m) 113 – – – 113
Loss allowance (US$m) (59) – – – (59)
Movements in the provisions for impairment are as follows:
Trade debtors Contract assets Other debtors
2023 2022 2023 2022 2023 2022
US$m US$m US$m US$m US$m US$m
At 1st January
– as previously
reported
(100) (101) (59) (64) (35) (38)
– change in
accounting policies
(refer note 1)
2 2 – – – –
– as restated (98) (99) (59) (64) (35) (38)
Exchange differences (2) 7 (1) 6 – 3
Additional provisions (19) (17) (1) (2) (21) (10)
Unused amounts
reversed 8 5 – 1 5 9
Amounts written off 38 6 – – 5 1
At 31st December (73) (98) (61) (59) (46) (35)
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 2023, the carrying amount of consumer financing debtors and other debtors pledged as security for
borrowings amounted to US$16 million and US$12 million (2022: US$17 million and US$16 million), respectively
(refer note 29). Financing lease receivables, trade debtors and contract assets had not been pledged as security for
borrowings at 31st December 2023 and 2022.
147
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
18 Deferred Tax Assets/(Liabilities)
Accelerated
tax
depreciation
Fair value
gains/
(losses) Losses
Employee
benefits
Lease
liabilities
and other
temporary
differences Total
US$m US$m US$m US$m US$m US$m
2023
At 1st January
– as previously reported (124) (349) 77 107 73 (216)
– change in accounting policies
(refer note 1)
(300) – – – 300 –
– as restated (424) (349) 77 107 373 (216)
Exchange differences (6) – – 2 11 7
New subsidiaries – (112) – – (12) (124)
Disposals 7 – – (3) (1) 3
Credited/(charged) to profit and loss (51) (3) 14 11 129 100
Credited to other comprehensive
income – 9 – 4 – 13
Classified as held for sale 11 – – – (12) (1)
At 31st December (463) (455) 91 121 488 (218)
Deferred tax assets (149) (49) 53 113 676 644
Deferred tax liabilities (314) (406) 38 8 (188) (862)
(463) (455) 91 121 488 (218)
2022
At 1st January
– as previously reported (133) (367) 38 114 123 (225)
– change in accounting policies
(refer note 1)
(291) – – – 291 –
– as restated (424) (367) 38 114 414 (225)
Exchange differences 6 7 (2) (11) (30) (30)
Disposals – – – – (5) (5)
Credited/(charged) to profit and loss (6) 22 41 11 (6) 62
Charged to other comprehensive
income – (11) – (7) – (18)
At 31st December (424) (349) 77 107 373 (216)
Deferred tax assets (166) (48) 74 102 613 575
Deferred tax liabilities (258) (301) 3 5 (240) (791)
(424) (349) 77 107 373 (216)
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$226 million (2022: US$296 million) arising from unused tax losses of US$1,022 million
(2022: US$1,308 million) have not been recognised in the financial statements. Included in the unused tax losses,
US$357 million have no expiry date and the remaining balance will expire at various dates up to and including 2031.
Deferred tax liabilities of US$644 million (2022: US$627 million) arising on temporary differences associated with
investments in subsidiaries of US$6,206 million (2022: US$6,445 million) have not been recognised as there is no current
intention of remitting the retained earnings of these subsidiaries to the holding companies in the foreseeable future.
148
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
19 Pension Plans
The Group operates defined benefit pension plans in the main territories in which it operates, with the major plans in Hong
Kong. Most of the pension plans are final salary defined benefit plans, calculated based on members’ length of service and
their salaries in the final years leading up to retirement. In Hong Kong, the pension benefits are usually paid in one lump
sum. With the exception of certain plans in Hong Kong, all the other defined benefit plans are closed to new members.
In addition, although all plans are impacted by the discount rate, liabilities in Hong Kong are driven by salary growth.
The Group’s defined benefit plans are either funded or unfunded, with the assets of the funded plans held independently of
the Group’s assets in separate trustee administered funds. Plan assets held in trusts are governed by local regulations and
practices in each country. Responsibility for governance of the plans, including investment decisions and contribution
schedules, lies jointly with the company and the boards of trustees. The Group’s major plans are valued by independent
actuaries annually using the projected unit credit method.
The amounts recognised in the consolidated balance sheet are as follows:
2023 2022
US$m US$m
Fair value of plan assets 595 742
Present value of funded obligations
(595) (775)
– (33)
Present value of unfunded obligations (362) (318)
Net pension liabilities (362) (351)
Analysis of net pension liabilities:
Pension assets 8 17
Pension liabilities (370) (368)
(362) (351)
149
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
19 Pension Plans (continued)
The movement in the net pension liabilities is as follows:
Fair value
of plan
assets
Present
value of
obligations Total
US$m US$m US$m
2023
At 1st January 742 (1,093) (351)
Current service cost – (60) (60)
Interest income/(expense) 27 (15) 12
Past services cost and losses on settlements – (1) (1)
Administration expenses (1) – (1)
26 (76) (50)
768 (1,169) (401)
Exchange differences 8 (16) (8)
New subsidiaries – (1) (1)
Disposals (154) 165 11
Remeasurements
– return on plan assets, excluding amounts included in interest income 14 – 14
– change in financial assumptions – (20) (20)
– experience losses – (12) (12)
14 (32) (18)
Contributions from employers 33 – 33
Contributions from plan participants 3 (3) –
Benefit payments (77) 99 22
At 31st December 595 (957) (362)
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)
150
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
19 Pension Plans (continued)
The weighted average duration of the defined benefit obligations at 31st December 2023 is 10 years (2022: 11 years).
Expected maturity analysis of undiscounted pension benefits at 31st December is as follows:
2023 2022
US$m US$m
Within one year 126 131
Between one and two years 105 105
Between two and five years 288 309
Between five and ten years 496 512
Between ten and fifteen years 595 620
Between fifteen and twenty years 892 796
Beyond twenty years 2,976 2,471
5,478 4,944
The principal actuarial assumptions used for accounting purposes at 31st December are as follows:
Hong Kong Others
2023 2022 2023 2022
% % % %
Discount rate 4.3 5.2 6.3 6.2
Salary growth rate 4.0 4.0 6.3 5.4
Inflation rate N/A N/A 3.4 3.2
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 71 (82)
Salary growth rate 1 (76) 65
Inflation rate 1 (1) 1
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.
151
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
19 Pension Plans (continued)
The analysis of the fair value of plan assets at 31st December is as follows:
2023 2022
US$m US$m
Equity investments
Asia Pacific 9 13
Europe 4 4
North America 8 9
Global 1 –
22 26
Debt investments
Asia Pacific 24 27
Europe 4 4
North America 9 8
Global 3 3
40 42
Investment funds
Asia Pacific 97 93
Europe 126 305
North America 221 216
Global 90 86
534 700
Total investments 596 768
Cash and cash equivalents 27 38
Benefits payable and other (28) (64)
595 742
At 31st December 2023, 92% of equity investments, 93% of debt investments and 67% of investment funds were quoted on
active markets (2022: 93%, 98% and 52%, 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 latest ALM review was completed in 2021. The next ALM review is
scheduled for 2024.
At 31st December 2023, the Hong Kong and United Kingdom plans had assets of US$473 million and US$87 million
(2022: US$466 million and US$233 million), respectively. The decrease in plan assets was due to the Group’s sale of its
automotive dealership business in the United Kingdom.
The Group maintains an active and regular contribution schedule across all the plans. The contributions to all its plans in
2023 were US$33 million and the estimated amount of contributions expected to be paid to all its plans in 2024 is
US$31 million.
152
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
20 Properties for Sale
2023 2022
US$m US$m
Properties in the course of development 1,960 2,536
Completed properties 1,520 775
3,480 3,311
At 31st December 2023, properties in the course of development amounting to US$822 million (2022: US$1,749 million) were
not scheduled for completion within the next twelve months.
At 31st December 2023, the carrying amount of properties for sale pledged as security for borrowings amounted to
US$848 million (2022: US$1,329 million) (refer note 29).
21 Stocks and Work in Progress
2023 2022
US$m US$m
Finished goods 3,153 3,040
Work in progress 59 65
Raw materials 162 149
Spare parts 127 98
Other 163 161
3,664 3,513
At 31st December 2023, no stocks and work in progress were pledged as security for borrowings (2022: US$1 million) (refer
note 29).
153
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
22 Cash and Bank Balances
2023 2022
US$m US$m
Deposits with banks and financial institutions 2,614 2,323
Bank balances 2,064 3,412
Cash balances 202 163
4,880 5,898
Analysis by currency:
Chinese renminbi 531 455
Euro 24 57
Hong Kong dollar 360 269
Indonesian rupiah 2,120 2,588
Japanese yen 24 14
Macau patacas 25 21
Malaysian ringgit 48 41
New Taiwan dollar 70 67
Singapore dollar 315 545
United Kingdom sterling 24 60
United States dollar 1,312 1,743
Other 27 38
4,880 5,898
The weighted average interest rate on deposits with banks and financial institutions at 31st December 2023 was 3.6%
(2022: 2.4%) per annum.
Deposits and bank balances at 31st December 2023 included US$82 million related to property sale proceeds placed with
banks in accordance with the requirements of property development on the Chinese mainland and were restricted for use
until certain conditions were fulfilled.
23 Assets and Liabilities Classified as Held for Sale
The major classes of assets and liabilities directly associated with assets classified as held for sale are set out below:
2023 2022
US$m US$m
Tangible assets 325 22
Right-of-use assets 25 43
Deferred tax assets 1 –
Current assets* 29 –
Total assets 380 65
Current liabilities 44 –
*
Included cash and bank balances of US$14 million (2022: nil) (refer note 33(n)).
154
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
24 Share Capital
2023 2022
US$m US$m
Authorised:
1,000,000,000 shares of US¢25 each 250 250
Ordinary shares
in millions
2023 2022
2023 2022
US$m US$m
Issued and fully paid:
At 1st January 289 716 73 179
Scrip issued in lieu of dividends 4 3 – 1
Repurchased and cancelled (4) (3) (1) (1)
Reduction of capital – (427) – (106)
At 31st December 289 289 72 73
During the year, the Company repurchased 4 million (2022: 3 million) ordinary shares from the stock market at a cost of
US$209 million (2022: US$171 million), which was accounted for by charging US$1 million (2022: US$1 million) to share
capital, nil (2022: US$2 million) to share premium and US$208 million (2022: US$168 million) to revenue reserves.
The Company reduced its share capital by 427 million or the 59% shareholding held by subsidiaries, 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.
23 Assets and Liabilities Classified as Held for Sale (continued)
At 31st December 2023, assets and liabilities classified as held for sale principally related to Mandarin Oriental’s hotel in
Paris (the ‘Paris Hotel’) with net assets of US$308 million.
In December 2023, Mandarin Oriental has signed a preliminary sale agreement with an option to sell its interests in the Paris
Hotel for US$227 million. The two retail units at the main entrance of the Paris Hotel are not included in the sale and were
being actively marketed for sale at 31st December 2023. Mandarin Oriental will retain a long-term management agreement to
manage and brand the Hotel.
Mandarin Oriental’s acceptance of the offer for its interests in the Paris Hotel is subject to completion of a consultation
process with the relevant Works Council. Subject to that process and to the statutory right of pre-emption by the City of Paris,
among other conditions, it is anticipated that final documentation will be signed and completion of the sale will take place
on or after 31st March 2024.
155
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
25 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 2023
and 2022.
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:
2023 2022
Weighted
average
exercise
price
Options
in millions
Weighted
average
exercise
price
Options
in millions
US$ US$
At 1st January 59.9 1.3 58.9 1.7
Exercised – – 51.3 (0.2)
Cancelled 64.5 (0.2) 61.6 (0.2)
At 31st December 58.8 1.1 59.9 1.3
The average share price during the year was US$46.8 (2022: US$53.2) per share.
Outstanding at 31st December:
Exercise
price
Options
in millions
Expiry date US$ 2023 2022
2023 64.9 – 0.1
2024 59.6 – 0.1
2025 63.4 0.1 0.1
2026 53.9 – 56.6 0.5 0.5
2027 65.6 0.2 0.2
2028 63.4 0.3 0.3
Total outstanding 1.1 1.3
of which exercisable 1.1 1.2
156
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
26 Share Premium and Capital Reserves
Share
premium
Capital
reserves Total
US$m US$m US$m
2023
At 1st January – 26 26
Capitalisation arising on scrip issued in lieu of dividends (1) – (1)
Employee share option schemes
– value of employee services – 10 10
Transfer 1 (14) (13)
At 31st December – 22 22
2022
At 1st January – 25 25
Capitalisation arising on scrip issued in lieu of dividends (1) – (1)
Repurchase of shares (refer note 24) (2) – (2)
Reduction of capital (refer note 24) (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
Capital reserves represent the value of employee services under the Group’s employee share option schemes.
At 31st December 2023, US$13 million (2022: US$17 million) related to the Company’s Senior Executive Share Incentive
Schemes.
27 Dividends
2023 2022
US$m US$m
Final dividend in respect of 2022 of US$1.60 (2021: US$1.56) per share 463 1,114
Interim dividend in respect of 2023 of US$0.60 (2022: US$0.55) per share
174 159
637 1,273
Company’s share of dividends paid on the shares held by subsidiaries – (666)
637 607
Shareholders elected to receive scrip in respect of the following:
Final dividend in respect of previous year 132 138
Interim dividend in respect of current year 50 46
182 184
A final dividend in respect of 2023 of US$1.65 (2022: US$1.60) per share amounting to a total of US$477 million
(2022: US$463 million) is proposed by the Board. The dividend proposed will not be accounted for until it has been approved
at the 2024 Annual General Meeting and will be accounted for as an appropriation of revenue reserves in the year ending
31st December 2024. Final dividend in respect of 2022 of US$463 million was charged to reserves in the year ended
31st December 2023.
157
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
28 Non-controlling Interests
2023 2022
US$m US$m
By business:
Hongkong Land 14,895 15,689
DFI Retail 228 224
Mandarin Oriental 566 670
Jardine Cycle & Carriage 337 241
Astra 10,895 10,586
26,921 27,410
Summarised financial information on subsidiaries with material non-controlling interests
Set out below are the summarised financial information for each subsidiary that has non-controlling interests that are
material to the Group.
Summarised balance sheets at 31st December:
Hongkong
Land DFI Retail
Mandarin
Oriental
Jardine
Cycle &
Carriage* Astra*
US$m US$m US$m US$m US$m
2023
Current
Assets 4,556 1,386 598 11,564 11,157
Liabilities
(2,674) (3,527) (625) (9,197) (7,935)
Total current net assets/(liabilities)
1,882
(2,141) (27)
2,367
3,222
Non-current
Assets 36,209 5,725 3,147 20,829 17,610
Liabilities
(6,104) (2,596) (154) (5,381) (4,629)
Total non-current net assets 30,105 3,129 2,993 15,448 12,981
Net assets 31,987 988 2,966 17,815 16,203
Non-controlling interests 22 8 5 9,776 3,377
2022
Current
Assets 4,686 1,440 329 12,057 11,639
Liabilities
(2,415) (3,673) (186) (8,431) (7,401)
Total current net assets/(liabilities)
2,271 (2,233) 143 3,626 4,238
Non-current
Assets 37,911 5,886 3,924 17,176 14,466
Liabilities
(6,855) (2,712) (769) (4,290) (3,249)
Total non-current net assets 31,056 3,174 3,155 12,886 11,217
Net assets 33,327 941 3,298 16,512 15,455
Non-controlling interests 24 (6) 4 9,341 3,272
*
Jardine Cycle & Carriage has 50.1% interest in Astra.
158
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
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$m
2023
Revenue 1,844 9,170 558 22,235 20,606
Profit after tax from underlying business
performance 737 151 81 2,943 2,871
Profit/(loss) after tax from non-trading items
(1,314) (121) (446) 34 (37)
Profit/(loss) after tax (577) 30 (365) 2,977 2,834
Other comprehensive income/(expense) (186) 70 52 237 4
Total comprehensive income/(expense) (763) 100 (313) 3,214 2,838
Total comprehensive income allocated to
non-controlling interests 4 3 1 1,909 689
Dividends paid to non-controlling interests (1) – – (1,683) (816)
2022
Revenue 2,244 9,174 454 21,566 19,977
Profit after tax from underlying business
performance 776 21 8 2,855 2,756
Loss after tax from non-trading items
(576) (142) (57) (399) (91)
Profit/(loss) after tax 200 (121) (49) 2,456 2,665
Other comprehensive income/(expense) (642) (90) 34 (1,221) 118
Total comprehensive income/(expense) (442) (211) (15) 1,235 2,783
Total comprehensive income/(expense) allocated
to non-controlling interests (10) (6) – 1,078 812
Dividends paid to non-controlling interests (1) – – (642) (261)
*
Jardine Cycle & Carriage has 50.1% interest in Astra.
159
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
28 Non-controlling Interests (continued)
Summarised cash flows at 31st December:
Hongkong
Land DFI Retail
Mandarin
Oriental
Jardine
Cycle &
Carriage* Astra*
US$m US$m US$m US$m US$m
2023
Cash flows from operating activities
Cash generated from operations 1,059 1,183 148 3,048 2,959
Interest received 46 9 9 146 141
Interest and other financing charges paid (251) (153) (18) (273) (210)
Tax paid (287) (41) (3) (956) (854)
Dividends from associates and joint ventures
135 46 5 506 451
Cash flows from operating activities 702 1,044 141 2,471 2,487
Cash flows from investing activities 269 (95) 31 (3,039) (2,842)
Cash flows from financing activities
(1,021) (868) (215) (724) (933)
Net increase/(decrease) in cash and
cash equivalents (50) 81 (43) (1,292) (1,288)
Cash and cash equivalents at 1st January 1,171 214 226 4,018 3,896
Effect of exchange rate changes (9) 3 7 56 61
Cash and cash equivalents at 31st December 1,112 298 190 2,782 2,669
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
*
Jardine Cycle & Carriage has 50.1% interest in Astra.
The information above is before any inter-company eliminations.
160
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
29 Borrowings
2023 2022
Carrying
amount
Fair
value
Carrying
amount
Fair
value
US$m US$m US$m US$m
Current
– bank overdrafts 16 16 19 19
– other bank advances 1,243 1,243 1,260 1,260
– other advances 1 1 3 3
1,260 1,260 1,282 1,282
Current portion of long-term borrowings
– bank loans 3,293 3,293 2,340 2,340
– bonds and notes 960 960 540 540
– other loans – – 1 1
4,253 4,253 2,881 2,881
5,513 5,513 4,163 4,163
Long-term borrowings
– bank loans 5,389 5,367 6,648 6,626
– bonds and notes 5,733 5,304 5,418 4,816
– other loans 11 11 7 7
11,133 10,682 12,073 11,449
16,646 16,195 16,236 15,612
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 9.2% (2022: 2.1% to 8.5%) 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.
2023 2022
US$m US$m
Secured 1,422 1,524
Unsecured 15,224 14,712
16,646 16,236
Secured borrowings at 31st December 2023 included Hongkong Land’s bank borrowings of US$943 million
(2022: US$873 million) which were secured against its investment properties and properties for sale, Mandarin Oriental’s
bank borrowings of US$415 million (2022: US$600 million) which were secured against its tangible assets and right-of-use
assets, and Astra’s bank borrowings of US$64 million (2022: US$51 million) which were secured against its various assets.
161
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
29 Borrowings (continued)
Fixed rate borrowings
Weighted
average
interest rates
Weighted
average period
outstanding
Floating rate
borrowings Total
By currency: % Years US$m US$m US$m
2023
Chinese renminbi 3.5 3.0 187 1,299 1,486
Hong Kong dollar 4.2 5.7 4,013 1,437 5,450
Indonesian rupiah 5.9 1.7 4,189 1,261 5,450
Malaysian ringgit 4.3 – – 16 16
Singapore dollar 3.9 15.4 225 654 879
Thai baht 3.6 – – 336 336
United Kingdom sterling 3.0 0.3 51 13 64
United States dollar 4.0 6.3 1,792 1,161 2,953
Other 3.4 0.1 4 8 12
10,461 6,185 16,646
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
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:
2023 2022
US$m US$m
Floating rate borrowings 6,185 6,110
Fixed rate borrowings
– within one year 2,799 2,676
– between one and two years 2,264 2,010
– between two and three years 1,022 1,419
– between three and four years 245 144
– between four and five years 220 207
– beyond five years 3,911 3,670
10,461 10,126
16,646 16,236
162
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
29 Borrowings (continued)
Details of the bonds and notes outstanding at 31st December are as follows:
2023 2022
Maturity
Interest rates
% Nominal values
Current
Non-
current Current
Non-
current
US$m US$m US$m US$m
Hongkong Land
3.95% 10-year notes 2023 3.95 HK$1,100 million – – 141 –
3.95% 10-year notes 2023 3.95 HK$300 million – – 38 –
4.625% 10-year notes 2024 4.625 US$400 million 400 – – 395
4.10% 15-year notes 2025 4.10 HK$300 million – 38 – 38
4.50% 15-year notes 2025 4.50 US$600 million – 603 – 604
3.75% 15-year notes 2026 3.75 HK$302 million – 39 – 39
3.50% 3-year notes 2026 3.50 CNY330 million – 46 – –
3.50% 3-year notes 2026 3.50 CNY1,000 million – 140 – –
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 – 41 – 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 – 596
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 – 496
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
5.25% 10-year notes 2033 5.25 US$400 million – 398 – –
4.12% 15-year notes 2033 4.12 HK$700 million – 89 – 89
4.85% 10-year notes 2033 4.85 HK$300 million – 38 – –
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 – 112 – 110
3.45% 20-year notes 2039 3.45 S$150 million – 113 – 111
5.25% 30-year notes 2040 5.25 HK$250 million – 32 – 32
Astra Sedaya Finance (‘ASF’)
Berkelanjutan IV Tahap II bonds 2024 9.20 Rp623 billion 39 – – 38
Berkelanjutan IV Tahap III bonds 2024 7.95 Rp236 billion 15 – – 15
Berkelanjutan IV Tahap IV bonds 2023 7.00 Rp1,301 billion
– – 78 –
Berkelanjutan V Tahap I bonds 2023 7.60 Rp473 billion – – 28 –
Berkelanjutan V Tahap II bonds 2024 6.35 Rp1,608 billion 101 – – 99
Berkelanjutan V Tahap III bonds 2024 5.30 Rp1,459 billion 86 – – 85
Berkelanjutan V Tahap IV bonds 2025 5.70 Rp1,972 billion – 121 65 119
Berkelanjutan V Tahap V bonds 2025 – 2027 6.35 – 6.50 Rp380 billion – 25 30 24
Berkelanjutan VI Tahap I bonds 2024 – 2026 5.50 – 6.00 Rp2,500 billion 34 128 – –
Berkelanjutan VI Tahap II bonds 2024 – 2028 6.05 – 6.45 Rp1,000 billion 12 50 – –
163
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
29 Borrowings (continued)
Details of the bonds and notes outstanding at 31st December are as follows (continued):
2023 2022
Maturity
Interest rates
% Nominal values
Current
Non-
current Current
Non-
current
US$m US$m US$m US$m
Federal International
Finance (‘FIF’)
Berkelanjutan IV Tahap II bonds 2023 7.25 Rp645 billion – – 41 –
Berkelanjutan V Tahap I bonds 2024 6.25 Rp872 billion 57 – – 55
Berkelanjutan V Tahap II bonds 2024 5.30 Rp775 billion 44 – – 43
Berkelanjutan V Tahap III bonds 2025 5.60 Rp807 billion – 43 74 42
Berkelanjutan V Tahap IV bonds 2025 6.80 Rp676 billion – 40 27 40
Berkelanjutan V Tahap V bonds 2024 – 2026 6.00 – 6.80 Rp3,000 billion 66 127 – –
Berkelanjutan VI Tahap I bonds 2024 – 2026 5.50 – 6.00 Rp1,000 billion 35 28 – –
Berkelanjutan VI Tahap II bonds 2024 – 2026 6.40 – 6.75 Rp1,100 billion 50 16 – –
SAN Finance
Berkelanjutan IV Tahap I bonds 2025 7.05 Rp750 billion – 32 7 32
Berkelanjutan IV Tahap II bonds 2024 – 2028 6.00 – 7.25 Rp1,500 billion 21 65 – –
Serasi Autoraya (‘SERA’)
Berkelanjutan I Tahap I bonds 2023 8.35 Rp167 billion – – 11 –
Jardine Matheson
2031 bonds 2031 2.50 US$800 million – 790 – 788
2036 bonds 2036 2.875 US$400 million – 392 – 391
960 5,733 540 5,418
All notes and bonds were unsecured at 31st December 2023 and 2022.
The ASF bonds, FIF bonds, SAN Finance bonds and SERA bonds were issued by wholly-owned subsidiaries of Astra.
The movements in borrowings are as follows:
Bank
overdrafts
Long-term
borrowings
Short-term
borrowings Total
US$m US$m US$m US$m
2023
At 1st January 19 12,073 4,144 16,236
Exchange differences (1) (1) (6) (8)
New subsidiaries – – 26 26
Disposals – (12) (10) (22)
Amortisation of borrowing costs – 6 10 16
Transfer – (4,507) 4,507 –
Change in fair value – 2 – 2
Change in bank overdrafts (2) – – (2)
Drawdown of borrowings – 7,273 2,600 9,873
Repayment of borrowings – (3,701) (5,774) (9,475)
At 31st December 16 11,133 5,497 16,646
164
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
30 Lease Liabilities
2023 2022
US$m US$m
At 1st January 3,723 3,834
Exchange differences 2 (131)
Additions 348 416
Disposals (240) –
Classified as held for sale (20) –
Modifications to lease terms 763 479
Lease payments (986) (989)
Interest expense 130 114
At 31st December 3,720 3,723
Non-current 2,966 2,951
Current 754 772
3,720 3,723
Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease
agreements do not impose any covenants other than the security interests in the leased assets that are held by the lessor.
The Group is not exposed to any residual guarantees in respect of the leases entered into at 31st December 2023 and 2022.
The Group has not entered into any material lease contracts which have not commenced at 31st December 2023 and 2022.
29 Borrowings (continued)
Bank
overdrafts
Long-term
borrowings
Short-term
borrowings Total
US$m US$m US$m US$m
2022
At 1st January 4 12,299 4,355 16,658
Exchange differences (1) (236) (203) (440)
New subsidiaries – 66 3 69
Amortisation of borrowing costs – 5 12 17
Transfer – (3,298) 3,298 –
Change in fair value – (18) – (18)
Change in bank overdrafts 16 – – 16
Drawdown of borrowings – 5,852 3,195 9,047
Repayment of borrowings – (2,597) (6,516) (9,113)
At 31st December 19 12,073 4,144 16,236
165
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
31 Creditors
2023 2022
US$m US$m
Trade creditors
– third parties 4,294 4,336
– associates 91 136
– joint ventures 286 267
4,671 4,739
Accruals 2,154 2,427
Other amounts due to joint ventures 138 141
Rental and other refundable deposits 315 359
Contingent consideration payable 11 9
Derivative financial instruments (refer note 34) 70 24
Other creditors
720 492
Financial liabilities 8,079 8,191
Contract liabilities (refer note 3) 1,317 1,305
Insurance contract liabilities 921 813
Rental income received in advance 28 26
Other 231 183
10,576 10,518
Non-current 268 200
Current 10,308 10,318
10,576 10,518
Analysis by geographical area of operation:
China 3,964 3,782
South East Asia 6,187 6,010
United Kingdom 24 296
Rest of the world 401 430
10,576 10,518
Derivative financial instruments are stated at fair value. Other creditors are stated at amortised cost. The fair values of these
creditors approximate their carrying amounts.
166
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
32 Provisions
Motor
vehicle
warranties
Closure cost
provisions
Reinstate-
ment and
restoration
costs
Statutory
employee
entitlements Others Total
US$m US$m US$m US$m US$m US$m
2023
At 1st January 71 25 209 171 35 511
Exchange differences 1 – – 3 1 5
New subsidiaries – – 1 – – 1
Additional provisions 4 7 18 27 46 102
Disposals – – (12) – – (12)
Unused amounts reversed (3) (17) (6) – – (26)
Utilised (1) (2) (1) (2) (13) (19)
At 31st December 72 13 209 199 69 562
Non-current – 1 171 171 16 359
Current 72 12 38 28 53 203
72 13 209 199 69 562
2022
At 1st January 70 36 204 163 29 502
Exchange differences – (2) (3) (15) (3) (23)
Additional provisions 6 5 14 25 13 63
Unused amounts reversed (2) (5) (2) – – (9)
Utilised (3) (9) (4) (2) (4) (22)
At 31st December 71 25 209 171 35 511
Non-current – – 172 145 19 336
Current 71 25 37 26 16 175
71 25 209 171 35 511
Motor vehicle warranties are estimated liabilities that fall due under the warranty terms offered on sale of new and used
vehicles beyond that which are reimbursed by the manufacturers.
Closure cost provisions are established when legal or constructive obligations arise on closure or disposal of businesses.
Provisions for reinstatement and restoration costs comprised the estimated costs, to be incurred by the Group as lessees,
in dismantling and removing the underlying assets, restoring the sites on which they are located or restoring the underlying
assets to the condition required by the terms and conditions of the leases.
Statutory employee entitlements include long service leave and jubilee awards for employees.
Other provisions principally comprise provisions in respect of indemnities on disposal of businesses and legal claims.
167
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
33 Notes to Consolidated Cash Flow Statement
(a) Cash generated from operations
2023 2022
US$m US$m
By nature:
Operating profit 2,435 2,833
Adjustments for:
Depreciation and amortisation (refer note 33(b)) 2,078 2,108
Change in fair value of investment properties 1,779 930
Profit on sale of subsidiaries (7) (42)
(Profit)/loss on sale of associates and joint ventures (39) 29
Profit on sale of other investments – (2)
Loss on sale of right-of-use assets 1 1
Loss on sale of intangible assets 2 1
Profit on sale of tangible assets (132) (37)
Loss on sale of repossessed collateral of finance companies 55 37
Fair value (gain)/loss on other investments (33) 410
Fair value (gain)/loss on agricultural produce (2) 11
Impairment of intangible assets 240 7
Impairment of tangible assets 9 47
Impairment of right-of-use assets 10 3
Impairment of debtors 123 180
Write down of properties for sale 29 6
Write down of stocks and work in progress 45 48
Reversal of write down of stocks and work in progress (28) (28)
Gain on lease modification and termination (3) (7)
Rent concessions – (17)
Change in provisions 80 44
Net foreign exchange (gain)/loss (3) 55
Gain on bargain purchase on acquisition of businesses (32) (37)
Amortisation of borrowing costs for financial services companies 8 9
Options granted under employee share option schemes 12 6
4,192 3,762
6,627 6,595
Change in working capital:
Increase in concession rights (31) (25)
Decrease in properties for sale 10 28
Increase in stocks and work in progress (588) (1,074)
Increase in debtors (702) (1,149)
Increase in creditors and provisions 239 905
(Decrease)/increase in pension obligations (6) 7
(1,078) (1,308)
5,549 5,287
168
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
33 Notes to Consolidated Cash Flow Statement (continued)
(b) Depreciation and amortisation
2023 2022
US$m US$m
By business:
Jardine Pacific 143 145
Jardine Motor Interests 2 20
Hongkong Land 18 18
DFI Retail 827 861
Mandarin Oriental 51 58
Jardine Cycle & Carriage 23 21
Astra 1,014 985
2,078 2,108
(c) Purchase of subsidiaries
2023
Fair value
US$m
Non-current assets (526)
Current assets (371)
Non-current liabilities 137
Current liabilities 164
Non-controlling interests
38
Fair value of identifiable net assets acquired (558)
Goodwill (45)
Gain on bargain purchase
32
Total consideration (571)
Carrying value of associates and joint ventures 102
Cash and cash equivalents of subsidiaries acquired 91
Net cash outflow (378)
For the subsidiaries acquired during 2023, the fair values of the identifiable assets and liabilities at the acquisition dates are
provisional and will be finalised within one year after the acquisition dates.
Net cash outflow for purchase of subsidiaries in 2023 included a total of US$285 million for Astra’s acquisition of 67% of PT
Anugerah Surya Pasific Resources (‘ASPR’), 70% of PT Stargate Pasific Resources (‘SPR’) and 70% of PT Stargate Mineral Asia
(‘SMA’), which engage in nickel mining and processing in Indonesia. ASPR has 30% interest in each of SPR and SMA, thus
the Group has direct and indirect attributable interest totalling 90% in each of SPR and SMA. In addition, Astra acquired a
100% interest in PT Tokobagus, a company operating a leading classifieds platform in Indonesia under the OLX brand, for
US$63 million.
Goodwill in 2023 mainly arose from the acquisition of PT Tokobagus, which provides synergy with the Group’s existing
automotive business creating a leading used car omnichannel platform and further expand the automotive value chain.
The goodwill is not expected to be deductible for tax purposes.
Revenue and profit after tax since acquisition in respect of subsidiaries acquired during the year amounted to US$43 million
and US$7 million, respectively. Had the acquisitions occurred on 1st January 2023, consolidated revenue and profit after tax
for the year ended 31st December 2023 would have been US$36,091 million and US$2,345 million, respectively.
169
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
33 Notes to Consolidated Cash Flow Statement (continued)
(d) Purchase of associates and joint ventures in 2023 included US$287 million for Hongkong Land’s investment on the
Chinese mainland; US$14 million for Jardine Cycle & Carriage’s additional interest in Refrigeration Electrical Engineering
Corporation; US$616 million, US$53 million, US$25 million and US$99 million for Astra’s acquisition of a 20% interest in
Nickel Industries, a 49.6% interest in PT Supreme Energy Sriwijaya, a 25% interest in PT Equinix Indonesia JKT and an
additional 14% interest in Hal0doc (after which became a 21%–held associate), respectively.
Purchase in 2022 included US$213 million for Hongkong Land’s investments on 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.
(e) Purchase of other investments in 2023 included US$357 million for Jardine Cycle & Carriage’s subscription to THACO’s
convertible bonds and US$285 million for Astra acquisition of securities in relation to its financial services businesses.
Purchase in 2022 included Astra’s acquisition of securities in relation to its financial services businesses 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; and Corporate’s investment in limited partnership investments funds
for US$151 million.
(f) Advances to associates and joint ventures in 2023 included Hongkong Land’s advances to its property joint ventures of
US$434 million and Mandarin Oriental’s advance to its associate hotel of US$20 million.
Advances to associates and joint ventures in 2022 included Hongkong Land’s advances to its property joint ventures.
(g) Repayments from associates and joint ventures in 2023 included Hongkong Land’s repayments from its property joint
ventures of US$1,184 million and Mandarin Oriental’s repayments from its associate and joint venture hotels of
US$67 million.
Repayments from associates and joint ventures in 2022 included repayments from Hongkong Land’s property joint ventures.
170
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
33 Notes to Consolidated Cash Flow Statement (continued)
(h) Sale of subsidiaries
2023
US$m
Non-current assets 441
Current assets 467
Non-current assets held for sale 50
Non-current liabilities (232)
Current liabilities (466)
Non-controlling interests
(3)
Net assets 257
Cumulative exchange translation losses 118
Profit on disposal 7
Transaction costs and other payable
47
Sales proceeds 429
Cash and cash equivalents of subsidiaries disposed of (64)
Net cash inflow 365
Net cash inflow for sale of subsidiaries in 2023 comprised US$359 million inflow from the Group’s sale of its automotive
dealership business in the United Kingdom and US$29 million inflow from Hongkong Land’s sale of a property interest in
Vietnam; offset by US$23 million cash outflow from DFI Retail’s divestment of its Malaysia grocery retail business.
(i) Sale of associates and joint ventures included US$126 million for Jardine Pacific’s sale of Greatview Aseptic Packaging.
(j) Sale of other investments in 2023 and 2022 included Astra’s sale of securities in relation to its financial services
businesses.
(k) Sale of tangible assets in 2023 included US$106 million for DFI Retail’s sale and sale and leaseback of properties in
Singapore, Malaysia and Indonesia; and US$225 million for Jardine Cycle & Carriage’s sale of its properties in Singapore
under a sale and leaseback arrangement.
Sale in 2022 included US$131 million for Mandarin Oriental’s sale of a hotel property.
171
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
33 Notes to Consolidated Cash Flow Statement (continued)
(l) Change in interests in subsidiaries
2023 2022
US$m US$m
Increase in attributable interests
– Hongkong Land (83) (352)
– Jardine Cycle & Carriage (136) (130)
– Mandarin Oriental (18) (1)
– other (3) (225)
(240) (708)
Increase in 2022 included US$214 million for repurchase of shares in Astra’s subsidiary, United Tractors, which
consequentially increased Astra’s interest from 59.5% to 61.1%.
(m) Cash outflows for leases
2023 2022
US$m US$m
Lease rentals paid (1,213) (1,151)
Additions to leasehold land under right-of-use assets (31) (53)
(1,244) (1,204)
The above cash outflows are included in
– operating activities (357) (276)
– investing activities (31) (53)
– financing activities (856) (875)
(1,244) (1,204)
(n) Analysis of balances of cash and cash equivalents
2023 2022
US$m US$m
Cash and bank balances* (refer note 22) 4,798 5,898
Bank overdrafts (refer note 29) (16) (19)
Cash and bank balances of subsidiaries classified as held for sale (refer note 23) 14 –
4,796 5,879
*
Excluding deposits and bank balances of US$82 million not available for use within three months from 31st December 2023 (2022: nil).
172
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
34 Derivative Financial Instruments
The fair values of derivative financial instruments at 31st December are as follows:
2023 2022
Positive
fair
value
Negative
fair
value
Positive
fair
value
Negative
fair
value
US$m US$m US$m US$m
Designated as cash flow hedges
– forward foreign exchange contracts 2 4 22 5
– interest rate swaps and caps 18 – 40 –
– cross currency swaps 51 66 123 15
71 70 185 20
Designated as fair value hedges
– forward foreign exchange contracts – – – 1
– cross currency swaps 1 – – 3
1 – – 4
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 2023 were US$522 million
(2022: US$812 million).
Interest rate swaps and caps
The notional principal amounts of the outstanding interest rate swap and cap contracts at 31st December 2023 were
US$1,010 million (2022: US$850 million).
At 31st December 2023, the fixed interest rates relating to interest rate swaps and caps varied from 0.7% to 4.7%
(2022: 0.4% to 2.1%) per annum.
The fair values of interest rate swaps at 31st December 2023 were based on the estimated cash flows discounted at market
rates ranging from 0.9% to 6.0% (2022: 0.9% to 6.0%) per annum.
Cross currency swaps
The contract amounts of the outstanding cross currency swap contracts at 31st December 2023 were US$3,603 million
(2022: US$3,543 million).
Commodity options and commodity zero collars
The Group had no outstanding commodity options and commodity zero collars at 31st December 2023. The contract amounts
of the outstanding commodity options and commodity zero collars at 31st December 2022 were US$38 million and
US$10 million, respectively.
173
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
35 Commitments
2023 2022
US$m US$m
Capital commitments:
Authorised not contracted
– investments in joint ventures – 26
– capital expenditure and investments 739 576
739 602
Contracted not provided
– investments in joint ventures 745 945
– capital expenditure and investments 799 953
1,544 1,898
2,283 2,500
Operating lease commitments for short-term and low-value leases which were due within one year amounted to
US$13 million at 31st December 2023 (2022: US$19 million).
Total future sublease payments receivable amounted to US$2 million at 31st December 2023 (2022: US$19 million).
36 Contingent Liabilities
Following the acquisition of the 15% 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 ongoing. It is anticipated that
the court appraisal process will not be concluded for at least a further 12 months and will likely extend further. The Board
believes that the US$33 per share that was paid represented fair value to Jardine Strategic minority shareholders and is of
the opinion that no provision is required in relation to these claims.
Various Group companies are involved in litigation arising in the ordinary course of their respective businesses. Having
reviewed outstanding claims and taking into account legal advice received, the Directors are of the opinion that adequate
provisions have been made in the financial statements.
174
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
37 Related Party Transactions
In the normal course of business the Group undertakes a variety of transactions with certain of its associates and
joint ventures.
2023 2022
US$m US$m
Sales to associates and joint ventures
– motor vehicles and spare parts 810 763
– coal 977 640
– crude palm oil 440 416
2,227 1,819
Purchases from associates and joint ventures
– motor vehicles and spare parts 6,484 6,142
– ready-to-eat products 47 42
6,531 6,184
Services received from associates and joint ventures
– point-of-sale system implementation and consultancy services 17 13
The Group manages six (2022: six) associate and joint venture hotels. Management fees received by the Group in 2023 from
these managed hotels amounted to US$14 million (2022: US$15 million).
The Group has engaged one of its joint ventures in the construction business for the redevelopment of a Group’s
commercial property in Hong Kong. The value of works completed amounted to US$60 million as of 31st December 2023
(2022: US$14 million).
Amounts of outstanding balances with associates and joint ventures are included in debtors and creditors, as appropriate
(refer notes 17 and 31).
Details of Directors’ remuneration (being the key management personnel compensation) are shown on page 81 under the
heading of ‘Remuneration Outcomes in 2023’.
The Company’s Directors’ remuneration includes payments made by a trust created in 1947 (the ‘1947 Trust’) which
represents distributions from the income of the 1947 Trust. The 1947 Trust’s income consists solely of ordinary dividends it
receives on its shareholding in the Company. The 1947 Trust was established and acts independently of, and is not controlled
by the Company. Accordingly, the dividends that the Company paid to the 1947 Trust on its shareholding are accounted for as
ordinary dividends and the amounts paid to the Company’s Directors by the 1947 Trust are not accounted for as expenses of
the Group. However, as the amounts paid to the directors related to their service to the Company and depends on their
performance, they have been included as part of the disclosure of Directors’ remuneration.
175
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
38 Summarised Balance Sheet of the Company
Included below is certain summarised balance sheet information of the Company disclosed in accordance with Bermuda law.
2023 2022
US$m US$m
Subsidiaries 1,659 1,659
Current assets 586 467
Total assets 2,245 2,126
Share capital (refer note 24) 72 73
Share premium and capital reserves (refer note 26) 13 17
Revenue and other reserves
1,481 1,823
Shareholders’ funds 1,566 1,913
Current liabilities 679 213
Total equity and liabilities 2,245 2,126
Subsidiaries are shown at cost less amounts provided.
176
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
39 Principal Subsidiaries
The Group’s principal subsidiaries at 31st December 2023 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 2023 held by
2023 2022
the Group
non-controlling
interests
% % % %
DFI Retail Group Holdings Ltd Bermuda/
China and
South East Asia
Food, health and
beauty, 7-Eleven, IKEA,
restaurants and
other retailing
78
78
78 22
Hongkong Land Holdings Ltd Bermuda/
China and
South East Asia
Property investment,
management &
development
53
53
53 47
Jardine Cycle & Carriage Ltd Singapore/
South East Asia
A 50.1% interest in
PT Astra International
Tbk, motor trading and
holding
78
76
78 22
Jardine Matheson Ltd Bermuda/
Hong Kong
Group management
100
100
100 –
Jardine Pacific Holdings Ltd Bermuda/
China and
South East Asia
Engineering &
construction, motor
trading, transport
services and
restaurants
100
100
100 –
Jardine Strategic Ltd Bermuda/
China and
South East Asia
Holding
100
100
100 –
Mandarin Oriental
International Ltd
Bermuda/
Worldwide
Hotel investment &
management
80
79
80 20
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
39
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.
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Notes to the Financial Statements
40 Material 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.
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Jardine Matheson Annual Report 2023
Notes to the Financial Statements
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. 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.
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Notes to the Financial Statements
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 40 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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Notes to the Financial Statements
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.
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.
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.
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Notes to the Financial Statements
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. A portion of the properties for sale is leased out prior to sales to enhance shareholder profitability. These leased
properties are classified and accounted for as properties for sale. 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
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Notes to the Financial Statements
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
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 bank balances
Cash and deposits with banks, which are restricted in use (‘restricted cash and bank balances’), are classified as cash and
bank balances. If such balances are restricted in use for a period exceeding one year, they are classified as part of other
debtors.
For the purposes of the cash flow statement, cash and cash equivalents comprise deposits with banks and financial
institutions, bank and cash balances, and other liquid investments, net of bank overdrafts. In the balance sheet, bank
overdrafts are included in current borrowings. Restricted cash and bank balances that are not available for use within three
months from the balance sheet date are excluded from cash and cash equivalents.
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 cash and bank balances 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.
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Jardine Matheson Annual Report 2023
Notes to the Financial Statements
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.
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
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.
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.
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Jardine Matheson Annual Report 2023
Notes to the Financial Statements
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
Contracts under which the Group accepts significant insurance risk are classified as insurance contracts. Contracts held by
the Group under which it transfers significant insurance risk related to underlying insurance contracts are classified as
reinsurance contracts.
On initial recognition, insurance contracts are measured as the total of (a) the fulfilment cash flows (“FCF”), adjusted to
reflect the time value of money and the associated financial risks, and a risk adjustment for non-financial risk; and
(b) the contractual service margin (“CSM”). The FCF are the current estimates of the future cash flows within the contract
boundary that the Group expects to collect from premiums and pay out for claims, benefits and expenses, adjusted to reflect
the timing and the uncertainty of those amounts. The CSM is a component of the carrying amount of the insurance contract
asset or liability representing the unearned profit that the Group will recognise as it provides insurance contract services in
the future. Subsequently, the carrying amount at each reporting date is the sum of the liability for remaining coverage and
the liability for incurred claims. The liability for remaining coverage comprises (a) the FCF that relate to services that will be
provided under the contracts in future periods and (b) any remaining CSM at that date. The liability for incurred claims
includes the FCF for incurred claims and expenses that have not yet been paid, including claims that have been incurred but
not yet reported.
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Notes to the Financial Statements
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 and debt 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.
186
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
Investment properties
Rental income from investment properties are accounted for on an accrual basis over the lease terms.
(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 contracts
recognised in the period represents the transfer of services provided at an amount that reflects the portion of consideration
that the Group expects to be entitled to in exchange for those services. For insurance contracts not measured under the
premium allocation approach, the Group reduces the liability for remaining coverage and recognises insurance revenue for
the services provided.
(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.
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Jardine Matheson Annual Report 2023
Notes to the Financial Statements
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.
41 Standards and Amendments Issued But Not Yet Effective
A number of amendments effective for accounting periods beginning after 2023 have been published and will be adopted by
the Group from their effective dates. The Group is currently assessing the potential impact of these amendments but expects
their adoption will not have a significant impact on the Group’s consolidated financial statements.
188
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
42 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; and
(ii) Differences in critical terms between the interest rate swaps and loans.
The ineffectiveness during 2023 or 2022 in relation to interest rate swaps was not material.
(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.
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Jardine Matheson Annual Report 2023
Notes to the Financial Statements
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 2023, the Group’s Indonesian rupiah functional entities had United States
dollar denominated net monetary liabilities of US$391 million (2022: assets of US$438 million). At 31st December 2023,
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$30 million lower/higher (2022: US$34 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$13 million lower/higher (2022: US$17 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 2023 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 2023, the Group’s
interest rate hedge exclusive of the financial services companies was 55% (2022: 55%), with an average tenor of six years
(2022: six 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.
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 risk by 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 2023, 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$4 million (2022: US$12 million) higher/lower, and hedging reserves would have
been US$124 million (2022: US$107 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
190
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
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 is unhedged. At 31st December 2023, if the price of these investments had
been 25% higher/lower with all other variables held constant, total equity would have been US$846 million
(2022: US$705 million) higher/lower, of which US$437 million (2022: US$447 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 these commodities 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.
(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 contractually provide the Group with the right 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.
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Jardine Matheson Annual Report 2023
Notes to the Financial Statements
(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 2023, total available borrowing facilities amounted to US$29.4 billion (2022: US$26.8 billion) of which
US$16.6 billion (2022: US$16.2 billion) was drawn down. Undrawn committed facilities, in the form of revolving credit and
term loan facilities, and undrawn uncommitted facilities totalled US$9.0 billion (2022: US$7.1 billion) and US$3.8 billion
(2022: US$3.5 billion), respectively.
The following table analyses the Group’s non-derivative financial liabilities, net-settled derivative financial liabilities and
gross-settled derivative financial instruments into relevant maturity groupings based on the remaining period at the balance
sheet date to the contractual maturity date. Derivative financial liabilities are included in the analysis if their contractual
maturities are essential for an understanding of the timing of the cash flows. The amounts disclosed in the table are the
contractual undiscounted cash flows.
Within
one
year
Between
one and
two years
Between
two and
three years
Between
three and
four years
Between
four and
five years
Beyond
five
years
Total
undiscounted
cash flows
US$m US$m US$m US$m US$m US$m US$m
At 31st December 2023
Borrowings 6,098 3,994 2,510 645 639 5,259 19,145
Lease liabilities 884 710 531 421 373 1,378 4,297
Creditors 7,824 64 35 23 16 48 8,010
Gross settled derivative
financial instruments
– inflow 1,447 992 266 52 50 1,648 4,455
– outflow 1,419 983 267 53 50 1,639 4,411
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 7,958 66 44 20 22 57 8,167
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
192
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
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.
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 cash and bank balances. 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 2023 and 2022 are as follows:
2023 2022
Gearing ratio exclusive of financial services companies (%) 15 13
Gearing ratio inclusive of financial services companies (%) 21 18
Interest cover exclusive of financial services companies (times) 12 15
Interest cover inclusive of financial services companies (times) 14 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 and debt 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.
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Jardine Matheson Annual Report 2023
Notes to the Financial Statements
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
2023
Assets
Other investments
– equity investments 1,495 56 199 1,750
– debt investments 916 – 418 1,334
– limited partnership investment funds – – 300 300
2,411 56 917 3,384
Derivative financial instruments at fair value
– through other comprehensive income – 71 – 71
– through profit and loss – 2 – 2
2,411 129 917 3,457
Liabilities
Contingent consideration payable – – (11) (11)
Derivative financial instruments at fair value
– through other comprehensive income – (70) – (70)
– (70) (11) (81)
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)
194
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
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:
2023 2022
US$m US$m
At 1st January 518 559
Exchange differences 18 (28)
Additions 398 217
Disposals (4) (2)
Reclassification of other investments to associates and joint ventures (35) –
Transfer to ‘quoted prices in active markets’ – (233)
Net change in fair value during the year included in profit and loss 22 5
At 31st December 917 518
An investment of US$233 million which was valued using ‘unobservable inputs’ in 2021 was transferred to valued using
‘quoted prices in active markets’ during 2022, upon flotation of the shares on a recognised stock exchange. There were no
transfers among the three categories during the year ended 31st December 2023.
(ii) Financial instruments that are not measured at fair value
The fair values of current debtors, cash and bank balances, current creditors, current borrowings and current lease liabilities
are assumed to approximate their carrying amounts due to the short-term maturities of these assets and liabilities.
The fair values of long-term borrowings are based on market prices or are estimated using the expected future payments
discounted at market interest rates. The fair values of non-current lease liabilities are estimated using the expected future
payments discounted at market interest rates.
195
Jardine Matheson Annual Report 2023
Notes to the Financial Statements
Financial instruments by category
The fair values of financial assets and financial liabilities, together with carrying amounts at 31st December 2023 and 2022
are as follows:
Fair value
of hedging
instruments
Fair value
through
profit and
loss
Fair value
through other
comprehensive
income
Financial
assets at
amortised
costs
Other
financial
liabilities
Total
carrying
amount Fair value
US$m US$m US$m US$m US$m US$m US$m
2023
Financial assets
measured at
fair value
Amounts due from
associates – – – 466 – 466 466
Amounts due from joint
ventures – – – 1,923 – 1,923 1,923
Other investments
– equity investments – 1,750 – – – 1,750 1,750
– debt investments – 418 916 – – 1,334 1,334
– limited partnership
investment funds – 300 – – – 300 300
Derivative financial
instruments 73 – – – – 73 73
73 2,468 916 2,389 – 5,846 5,846
Financial assets
not measured at
fair value
Debtors – – – 8,668 – 8,668 8,128
Bank balances – – – 4,880 – 4,880 4,880
– – – 13,548 – 13,548 13,008
Financial liabilities
measured at
fair value
Derivative financial
instruments (70) – – – – (70) (70)
Contingent
consideration
payable – (11) – – – (11) (11)
(70) (11) – – – (81) (81)
Financial liabilities
not measured at
fair value
Borrowings – – – – (16,646) (16,646) (16,195)
Lease liabilities – – – – (3,720) (3,720) (3,720)
Trade and other
payable excluding
non-financial
liabilities – – – – (7,998) (7,998) (7,998)
– – – – (28,364) (28,364) (27,913)
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Jardine Matheson Annual Report 2023
Notes to the Financial Statements
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
Amounts due from
associates – – – 461 – 461 461
Amounts due from joint
ventures – – – 2,573 – 2,573 2,573
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 3,034 – 6,038 6,038
Financial assets
not measured at
fair value
Debtors – – – 8,403 – 8,403 8,007
Bank balances – – – 5,898 – 5,898 5,898
– – – 14,301 – 14,301 13,905
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 – – – – (8,158) (8,158) (8,158)
– – – – (28,117) (28,117) (27,493)
The 2022 comparative figures have been re-presented to include amounts due from associates and joint ventures.
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Notes to the Financial Statements
43 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 has 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.
The estimates and assumptions that have a significant effect on the reported amounts of assets and liabilities, and income
and expenses are discussed below.
Significant areas of estimation uncertainty
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 completed commercial investment properties, which are 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 these investment properties in Hong Kong, the Chinese mainland and Singapore, capitalisation
rates in the range of 2.90% to 3.50% for office (2022: 2.80% to 3.40%) and 3.75% to 5.00% for retail (2022: 3.75% to 5.00%)
are used by Hongkong Land in the fair value determination.
The fair value of the under development commercial property in Hong Kong, which are held by Mandarin Oriental, is
determined by independent valuers on an open market basis using the residual method. The residual method is also based
on assumptions about the estimated costs to complete the development, the developer’s estimated profit and margin for
risk, prevailing market rent and capitalisation rates in the range of 2.55% to 3.95% (2022: 2.45% to 3.85%).
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.
An insignificant portion of the Group’s completed commercial investment properties in Hong Kong are being used for its own
purposes including as offices, hotel and retail outlets. These represented approximately 3% (2022: 3%) of the total fair value
of the Group’s investment properties at 31st December 2023.
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
198
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Notes to the Financial Statements
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 2023 on the Group’s goodwill were included in note 10.
The results of the impairment reviews undertaken at 31st December 2023 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.
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.
Significant areas of judgement
Impairment of financial assets
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.
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.
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Notes to the Financial Statements
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.
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Independent Auditor’s Report
To the Members of Jardine Matheson Holdings Limited
(incorporated in Bermuda with limited liability)
Report on the Audit of the Consolidated Financial Statements
Opinion
What we have audited
The consolidated financial statements of Jardine Matheson Holdings Limited (the “Company”) and its subsidiaries
(the“Group”) included within the Annual Report, which comprise:
• the Consolidated Balance Sheet at 31st December 2023;
• the Consolidated Profit and Loss Account for the year then ended;
• the Consolidated Statement of Comprehensive Income for the year then ended;
• the Consolidated Statement of Changes in Equity for the year then ended;
• the Consolidated Cash Flow Statement for the year then ended; and
• the Notes to the Financial Statements, comprising material accounting policy information and other explanatory
information.
Certain required disclosures have been presented elsewhere in the Annual Report, rather than in the notes to the
consolidated financial statements. These disclosures are cross-referenced from the consolidated financial statements and
are identified as audited.
Our opinion
In our opinion, the consolidated financial statements give a true and fair view of the consolidated financial position of the
Group as at 31st December 2023, and of its consolidated financial performance and its consolidated cash flows for the year
then ended in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board
(“IASB”).
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (“ISAs”). Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We are independent of the Group in accordance with the International Code of Ethics for Professional Accountants (including
International Independence Standards) issued by the International Ethics Standards Board for Accountants (“IESBA Code”),
and we have fulfilled our other ethical responsibilities in accordance with the IESBA Code.
Our Audit Approach
Overview
Materiality
• Overall Group materiality: US$559 million, based on 1% of the net assets of the Group.
• Specific Group materiality, applied to balances and transactions not related to investment properties: US$251 million,
based on 5% of consolidated underlying profit before tax of the Group.
Audit scope
• A full scope audit was performed on four entities – Jardine Cycle & Carriage Limited (which includes PT Astra
International Tbk), Hongkong Land Holdings Limited, DFI Retail Group Holdings Limited and Mandarin Oriental
International Limited.
• These entities, together with procedures performed at the Group level, accounted for 93% of the Group’s revenue, 89%
of the Group’s profit before tax, 92% of the Group’s underlying profit before tax and 93% of the Group’s net assets.
Key audit matters identified in our audit are summarised as follows:
• Valuation of investment properties; and
• Provisioning for consumer financing debtors.
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Independent Auditor’s Report
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the
consolidated financial statements. In particular, we considered 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 among other matters, consideration of whether there was evidence of bias by the Directors that represented a risk
of material misstatement due to fraud.
Materiality
The scope of our audit was influenced by our application of materiality. An audit is designed to obtain reasonable assurance
whether the consolidated financial statements are free from material misstatement. Misstatements may arise due to fraud or
error. They are considered material if individually or in aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of the consolidated financial statements.
Based on our professional judgement, we determined certain quantitative thresholds for materiality, including the overall
Group materiality for the consolidated financial statements as a whole as set out in the table below. These, together with
qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit
procedures and to evaluate the effect of misstatements, both individually and in aggregate on the consolidated financial
statements as a whole.
Overall Group materiality
US$559 million
How we determined it
1% of the net assets of the Group
Rationale for the materiality
benchmark applied
Net assets is a primary measure used by the shareholders in assessing the
performance of the Group, together with consolidated underlying profit before tax,
which we have used as the basis for our specific materiality as detailed below.
We set a specific materiality level of US$251 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 2023. In arriving at this judgement, we had regard to the fact that underlying profit is one of the primary
financial indicators 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.
We agreed with the Audit Committee that we would report to them misstatements identified during our audit above
US$12million, other than classifications within the Consolidated Profit and Loss Account or Consolidated Balance Sheet,
which were only reported above US$55 million. We would also report misstatements below these amounts that in our view,
warranted reporting for qualitative reasons.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
consolidated financial statements of the current period. These matters were addressed in the context of our audit of the
consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion
on these matters.
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Key Audit Matter How our audit addressed the Key Audit Matter
Valuation of investment properties
Refer to note 43 (Critical Accounting
Estimates and Judgements) and note 13
(Investment Properties) to the
consolidated financial statements.
The fair value of the Group’s
investmentproperties amounted to
US$30,166 million at 31st December
2023, with a revaluation loss of
US$1,779 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 rents
and the expected future rentals for that
particular property.
The valuations were carried out by third
party valuers (the ‘valuers’). Valuations
of the completed commercial properties
were 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
prevailing market rents.
The valuation of the under development
commercial property is derived using
the residual method. Judgement is
required in determining the estimated
capital value, estimated costs to
complete and expected developer’s
profit margin.
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
completed commercial properties and the under development commercial
property located in Hong Kong, held by Hongkong Land and Mandarin Oriental
respectively, which are subsidiaries of the Group.
We read a sample of the valuation reports covering the majority of the Group’s
investment property portfolio to consider whether the valuation methodology
used was appropriate in determining the fair value. We performed testing, on a
sample basis, of the input data used in the valuations to satisfy ourselves of the
accuracy of the property information supplied to the valuers by management,
forexample agreeing lease data to tenancy agreements and other supporting
documents.
We evaluated the key controls over the valuation of the investment property
portfolio, including the data used in the valuations.
The audit team, including our valuation experts, attended meetings with the
valuers at which the valuations, methodology and key assumptions used, 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 the year-on-year movements in fair values with reference to
prevailing market conditions. We evaluated whether the capitalisation rates and
prevailing market rents used were appropriate in light of the evidence provided by
relevant recent transactions.
In respect of the valuation of the under development commercial property,
weassessed the appropriateness of the key assumptions adopted in the
assessment of the estimated capital value by comparing them with available
market data on yields and unit rentals. We compared the developer’s profit to the
market norm and evaluated the estimated construction costs to complete against
the approved budget.
With the support of our 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.
Based on the procedures performed, we found the key assumptions used in the
valuations were appropriate.
We also assessed the adequacy of the disclosures related to investment
properties and related fair value measurements in the context of IFRS Accounting
Standards. We are satisfied that appropriate disclosure has been made.
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Independent Auditor’s Report
Key Audit Matter How our audit addressed the Key Audit Matter
Provisioning for consumer financing
debtors
Refer to note 40 (Material Accounting
Policies) and note 17 (Debtors) to the
consolidated financial statements.
As at 31st December 2023, consumer
financing debtors of the Group
amounted to US$4,517 million, held
primarily in PT Astra Sedaya Finance
(‘ASF’) and PT Federal International
Finance (‘FIF’), subsidiaries of the
Group.
The provisions for impairment were
calculated using complex expected
credit loss models based on
segmentation of the consumer
financing debtors portfolio that
sharedsimilar characteristics and
incorporated a number of inputs and
assumptions.
Assessing the provisions for
impairment of consumer financing
debtors required management to
consider the delinquency status of
consumer financing debtors and make
judgements over expected credit loss
rates, which were an estimation of any
impairment required considering the
probability of default, estimated
irrecoverable amounts and forecasts of
economic conditions. There is an
inherent degree of uncertainty in
estimating the expected credit loss
rates, which were determined using
historical data adjusted to reflect
current and forward-looking
information on macroeconomic factors.
We focused on the provisioning for
consumer financing debtors due to the
complex models and significant
assumptions 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 evaluated the methodology used in the models against the requirements of
the accounting standards and, on a sample basis, tested the accuracy of the
consumer financing debtors data used in the models to relevant supporting
documents. We also tested the completeness of the data to information
technology systems and, on a sample basis, to underlying supporting documents.
We assessed management’s basis for determining when there was an increase in
credit risk for the consumer financing debtors, whether that basis was justified
and whether the debtors that experienced an increase in credit risk were grouped
based on their delinquency status in the models.
We assessed the expected credit loss rates assumptions applied by management
in its models and whether historical experience considered by management was
representative of current circumstances and losses incurred. In assessing the
assumptions, we challenged management on the key areas of judgement,
including the segmentation of the debtors, the period of historical data used, the
historical amount recovered against delinquent debtors and the relevant
macroeconomic factors identified affecting the recoverability of the debtors and
assessed these against available industry, historical and actual loss rate data.
We also independently recalculated the impairment provisions and compared
them to management’s provisions.
Based on the procedures performed and the available evidence, we found that the
assumptions used and 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 Accounting Standards. We are
satisfied that appropriate disclosure has been made.
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Independent Auditor’s Report
How We Tailored Our Group 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 in order to perform sufficient work to enable us to provide an opinion on the consolidated
financial statements as a whole, taking into account the structure of the Group, the accounting processes and controls, and
the industries in which the Group operates.
The Group’s accounting processes are based upon the finance function in each main business. Each business reports to a
group finance function for that business and is responsible for its own accounting records and controls. Each of the Group’s
listed subsidiaries have, in addition to their own group finance functions, corporate governance structures and public
reporting requirements. With the appropriate level of oversight, these businesses report financial information to the Group’s
finance function to enable the preparation of the Group’s 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 engagement partner and other senior team members undertook a number of
visits to Singapore and Indonesia during the year to direct and oversee the audit, along with regular communication through
conference calls and on site review of the work of component teams in those locations.
For four entities – Jardine Cycle & Carriage Limited (which includes PT Astra International Tbk), Hongkong Land Holdings
Limited, DFI Retail Group Holdings Limited and Mandarin Oriental International Limited– a full scope audit of the complete
financial information was performed. These entities, together with procedures performed at the Group level (on the
consolidation and other areas involving significant judgement), accounted for 93% of the Group’s revenue, 89% of the
Group’s profit before tax, 92% of the Group’s underlying profit before tax and 93% of the Group’s net assets.
This gave us the evidence we needed for our opinion on the consolidated financial statements as a whole.
Other Information
The directors of the Company are responsible for the other information. The other information comprises all of the
information included in the annual report other than the consolidated financial statements and our auditor’s report thereon.
Our opinion on the consolidated financial statements does not cover the other information and we do not express any form
of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or
our knowledge obtained in the audit, or otherwise appears to be materially misstated.
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 in this regard.
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Independent Auditor’s Report
Responsibilities of Directors and the Audit Committee for the Consolidated Financial Statements
As explained more fully in the Responsibility Statements and the Corporate Governance section in the Annual Report,
thedirectors of the Company are responsible for the preparation of the consolidated financial statements that give a true
and fair view in accordance with IFRS Accounting Standards as issued by the IASB, and for such internal control as the
directors determine is necessary to enable the preparation of consolidated financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the consolidated 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.
The Audit Committee assists the directors in discharging their responsibilities for overseeing the Group’s financial reporting
process.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs
will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of these consolidated financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism
throughout the audit. We also:
• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is
higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations,
or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by the directors.
• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on
the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to
draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the
date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going
concern.
• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the
disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a
manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within
the Group to express an opinion on the consolidated financial statements. We are responsible for the direction,
supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with the Audit Committee regarding, among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
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Independent Auditor’s Report
We also provide the Audit Committee with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on
our independence, and where applicable, actions taken to eliminate threats or safeguards applied.
From the matters communicated with the Audit Committee, we determine those matters that were of most significance in the
audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe
these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when,
inextremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Use of this report
This report, including the opinion, 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.
The engagement partner on the audit resulting in this independent auditor’s report is Sean William Tuckfield.
Other Matter
In due course, as required by the United Kingdom Financial Conduct Authority Disclosure Guidance and Transparency Rule
4.1.14R, these consolidated 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 auditor’s report provides no assurance over whether the annual financial report will be prepared using the
single electronic format specified in the ESEF RTS.
PricewaterhouseCoopers
Certified Public Accountants
Hong Kong,
7th March 2024
207
Jardine Matheson Annual Report 2023
Five Year Summary
Profit and Loss*
2023 2022 2021 2020 2019
US$m US$m US$m US$m US$m
Revenue 36,049 37,496 35,862 32,647 40,922
Profit/(loss) attributable to
shareholders 686 354 1,881 (394) 2,838
Underlying profit attributable to
shareholders 1,661 1,584 1,513 1,085 1,589
Earnings/(loss) per share (US$) 2.37 1.22 6.01 (1.07) 7.56
Underlying earnings per share (US$) 5.74 5.49 4.83 2.95 4.23
Dividends per share (US$) 2.25 2.15 2.00 1.72 1.72
Balance Sheet*
2023 2022 2021 2020 2019
US$m US$m US$m US$m US$m
Total assets excluding
right-of-use assets 85,102 84,894 87,215 88,758 91,899
Right-of-use assets
4,080 4,184 4,274 4,768 5,129
Total assets 89,182 89,078 91,489 93,526 97,028
Total liabilities excluding total
leaseliabilities (29,531) (29,095) (29,287) (26,793) (27,795)
Total lease liabilities
(3,720) (3,723) (3,834) (3,890) (4,162)
Total liabilities (33,251) (32,818) (33,121) (30,683) (31,957)
Total equity 55,931 56,260 58,368 62,843 65,071
Shareholders’ funds 29,010 28,850 29,781 29,387 30,351
Net borrowings (excluding net
borrowings of financial services
companies) 8,372 7,515 6,635 3,720 4,786
Net asset value per share (US$) 100.31 99.55 102.87 81.32 81.90
Cash Flow
2023 2022 2021 2020 2019
US$m US$m US$m US$m US$m
Cash flows from operating activities 4,584 4,825 5,076 5,275 4,865
Cash flows from investing activities (2,354) (2,593) 231 (1,134) (700)
Net cash flow before financing 2,230 2,232 5,307 4,141 4,165
Net cash flow after principal elements
of lease payments 1,374 1,357 4,413 3,179 3,149
Cash flow per share from operating
activities (US$) 15.83 16.71 16.22 14.32 12.96
*
Figures in 2022 have been restated due to changes in accounting policies upon adoption of IFRS 17 ‘Insurance Contracts’.
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Jardine Matheson Annual Report 2023
Responsibility Statements
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 as issued by the International Accounting Standards Board, give a
true and fair view of the assets, liabilities, financial position and profit or loss of the Group; and
(b) the Chairman’s Statement, Group Managing Director’s Review, Financial Review and the description of Principal Risks
and Uncertainties facing the Group as set out in 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
7th March 2024
209
Jardine Matheson Annual Report 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
Jacqueline Tan
Group Corporate Secretary
Jonathan Lloyd
Matheson & Co., Ltd
12 Upper Grosvenor Street
London
W1K 2ND
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*
Hongkong Land Ltd
8th Floor
One Exchange Square
Central
Hong Kong
Telephone
Email
Website
(852) 2842 8428
gpobox@hkland.com
www.hkland.com
Michael Smith
DFI Retail Group Management
Services Limited
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
Scott Price
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
Laurent Kleitman
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
* Mr Pang will retire from the Board on 31st March 2024.
210
Jardine Matheson Annual Report 2023
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
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
12 Upper Grosvenor Street
London
W1K 2ND
Telephone (44 20) 7816 8100
Adam Keswick
Vietnam
Jardine Matheson (Vietnam) 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
211
Jardine Matheson Annual Report 2023
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
www.jardines.com