Annual Report 2022
DFI Retail Group’s parent company, DFI Retail Group 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. The Group’s businesses are managed
from Hong Kong by DFI Retail Group Management Services Limited through its regional
offices. DFI Retail Group is a member of the Jardine Matheson Group.
A member of the Jardine Matheson Group
OUR GOAL
To give our customers
across Asia a store they
TRUST, delivering QUALITY,
SERVICE and VALUE.”
“
40 Financial Review
45 TCFD Report
51 Directors’ Profiles
53 Our Leadership
56 Financial Statements
128 Independent Auditors’ Report
138 Five Year Summary
139 Responsibility Statements
140 Corporate Governance
167 Shareholder Information
168 Retail Outlet Summary
169 Management and Offices
2 Corporate Information
3 DFI Retail Group At-a-Glance
4 Highlights
6 Chairman’s Statement
10 Group Chief Executive’s Review
16 Business Review
16 Food
22 Health & Beauty
28 Home Furnishings
34 Restaurants
38 Other Associates
CONTENTS
CORPORATE INFORMATION
Directors
Ben Keswick
Chairman
John Witt
Managing Director
Ian McLeod
Group Chief Executive
Clem Constantine
Dave Cheesewright
Weiwei Chen
Adam Keswick
Anthony Nightingale
Christian Nothhaft
Company Secretary
Jonathan Lloyd
Registered Office
DFI Retail Group Management
Services Limited
Directors
John Witt
Chairman
Ian McLeod
Group Chief Executive
Clem Constantine
Chief Financial Officer and Property Director
Chris Bush
Chief Executive Officer – DFI Retail Southeast Asia
Choo Peng Chee
Chief Executive Officer – DFI Retail North Asia
Martin Lindström
Chief Executive Officer – IKEA
Michael Wu
Chairman and Managing Director, Maxim’s
Graham Baker
Matthew Bland
(joined the Board on 1st April 2022)
David Hsu
(retired on 1st August 2022)
Anne O’Riordan
Y.K. Pang
Jeremy Parr
(retired on 31st March 2022)
Steve Sun
(joined the Board on 1st August 2022)
Corporate Secretary
Jonathan Lloyd
2
DFI Retail Group Holdings Limited Annual Report 2022
Taiwan
IKEA
Brunei
Guardian
Indonesia
Hero
Guardian
IKEA
Malaysia
Cold Storage
Giant
Mercato
TMC
Guardian
Maxim’s
Vietnam
Guardian
Maxim’s
Cambodia
Lucky
Guardian
Maxim’s
Thailand
Maxim’s
Macau
San Miu
7-Eleven
Mannings
IKEA
Maxim’s
Laos
Maxim’s
Chinese Mainland
Yonghui
7-Eleven
Mannings
Maxim’s
The Philippines
Robinsons
Singapore
Cold Storage
CS Fresh
Giant
Jason’s Deli
Market Place
7-Eleven
Guardian
Maxim’s
12
Asian markets
and territories
DFI RETAIL GROUP AT-A-GLANCE
Geographical
Locations
Grocery Retail
Convenience Stores
Health and Beauty
Home Furnishings
Restaurants
Other Retailing
Hong Kong
Market Place
Wellcome
7-Eleven
Mannings
IKEA
Maxim’s
13
Asian markets
and territories
Figures as at December 2022
10,663
outlets
(Including associates and joint ventures)
3
HIGHLIGHTS
2022 2021 Change
Results US$m US$m %
Revenue
– subsidiaries 9,174 9,188 –
– including associates and joint ventures* 27,597 27,861 (1)
Underlying EBITDA
†
1,070 1,200 (11)
Underlying profit attributable to shareholders
‡
29 105 (72)
Net non-trading items (143) (2) n/a
(Loss)/profit attributable to shareholders (115) 103 n/a
Net debt 866 844 3
US¢ US¢ %
Underlying earnings per share
‡
2.14 7.73 (72)
Basic (loss)/earnings per share (8.51) 7.61 n/a
Dividends per share 3.00 9.50 (68)
Net asset value per share
^
69.98 93.67 (25)
Store Network* 2022 2021 Net change
Food 5,620 5,506 +114
– Grocery Retail 2,024 1,956 +68
– Convenience Stores 3,596 3,550 +46
Health and Beauty 2,552 2,380 +172
Home Furnishings 23 19 +4
Restaurants 1,908 1,801 +107
Other Retailing 560 580 -20
10,663 10,286 +377
*
Including 100% of associates and joint ventures.
†
Underlying EBITDA represents underlying operating profit before depreciation and amortisation.
‡
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 38 to the financial statements. Management considers this to be a key measure which provides additional information to enhance
understanding of the Group’s underlying business performance.
^
Net asset value per share is based on the book value of shareholders’ funds.
•
Substantial sequential improvement in underlying profitability in
second half
•
Lower full year underlying profit due to continuing impact of
pandemic, inflationary pressure, increased investment in digital
•
Ongoing transformation programme continues to drive improvement
•
Final dividend of US¢2.00 per share
4
DFI Retail Group Holdings Limited Annual Report 2022
Total Revenue
*
Underlying Earnings per Share Ordinary Dividends per Share
Underlying Profit Attributable to Shareholders
US$
27.6 billion
US¢
2.14
US¢
3.00
US$
29 million
21
15
18
12
6
9
3
24
27
30
US$b
0
2018 2019 202220212020
20
15
10
5
25
30
US¢
0
2018 2019 202220212020
US$m
300
200
100
400
0
2018 2019 202220212020
US¢
21
15
12
9
3
6
18
24
0
2018 2019 2020 2021 2022
Total Revenue
*
-1 %
Underlying Profit
-72 %
Number of Stores
*
10,663
Number of Employees
*
some 216,000 people
Grocery Retail
Home Furnishings
Convenience Stores
Restaurants
Health and Beauty
Others
Interim dividend
Final dividend
5
CHAIRMAN’S STATEMENT
“While 2022 was another challenging year for DFI Retail Group,
with the pandemic continuing to impact the financial performance
of the Group’s subsidiaries and associates, profitability improved
substantially in the second half of the year. Continued progress in
implementing the Group’s ongoing transformation plan helped the
business deliver improvements in underlying performance. We expect
to see the Group’s performance to improve in 2023, although we will
continue to monitor the impact of inflationary pressures and changes
in consumer sentiment. The Group’s overall results will largely depend
on the recovery in Hong Kong of its health and beauty and restaurants
businesses, and an improved performance by its associate Yonghui
on the Chinese mainland. We remain confident in the medium- to
long-term growth prospects of the Group.”
Overview
2022 was another challenging year for the Group.
A combination of inflationary pressures and
customer behavioural shifts driven by the pandemic
significantly impacted first-half financial
performance, reducing profit contributions from
the Grocery Retail and Convenience divisions.
Results from the Group’s associates were also
similarly adversely affected.
There was, however, a substantial improvement
in profitability in the second half of the year, with
underlying profit of US$80 million for the period,
compared with an underlying loss of US$52 million
in the first half. The Group continues to adapt to
changes in consumer preferences and, despite the
external challenges, has increased investments
in digital in the year. While these investments
impacted profitability in the year, they are required
to meet customers’ evolving needs and to drive
long-term shareholder value.
6
DFI Retail Group Holdings Limited Annual Report 2022
16%
6%
9%
1%
51%
17%
1%
15%
5%
21%
39%
19%
2022
Sales Mix
†
2022
Profit Mix
‡
Grocery Retail
Convenience Stores
Health and Beauty
†
Sales of goods, including share of associates and joint ventures.
‡
Based on operating profit before effect of adopting IFRS 16 and share of results of associates
and joint ventures, excluding selling, general and administrative expenses and non-trading items.
Home Furnishings
Restaurants
Other Retailing
Operating performance
Total revenue for the Group, including 100% of
associates and joint ventures, was US$27.6 billion,
slightly behind 2021 levels. Reported subsidiary
sales were US$9.2 billion, broadly in line with the
prior year. Strong revenue growth in Health and
Beauty was partially offset by lower sales within
the Grocery Retail division. The fall in sales in
Grocery Retail was primarily driven by the easing of
movement restrictions in Southeast Asia, which led
to a reduction in eating at home by customers, and
by store disruptions in Singapore due to essential
renovations to improve our Cold Storage offering.
The Group reported an underlying profit after
tax of US$29 million for the full year, inclusive of
US$35 million losses attributable to associates and
joint ventures. The Group reported encouraging
performance in the second half, with underlying
profit after tax of US$80 million, representing a
US$132 million increase in profitability relative
to the first half. The Group’s reported loss of
US$115 million reflected an impairment loss of
US$171 million in respect of the Group’s investment
in Robinsons Retail.
7
Chairman’s Statement
The profitability of the Health and Beauty division
increased significantly, due to strong growth
in revenue in Hong Kong and Southeast Asia.
Profitability for the Grocery Retail division, however,
was adversely impacted by lower like-for-like sales,
reflecting spikes in demand in the prior year, as well
as inflationary pressures, which affected cost of
goods sold as well as operating costs. Grocery
Retail profit was, however, higher than 2019 levels.
The full year profitability of both Convenience and
IKEA was broadly in line with the prior year.
Convenience, however, saw profits increase
significantly in the second half relative to breakeven
levels in the first half. This was due to gradual
normalisation of customer traffic following the
easing of movement restrictions across our key
markets, particularly Hong Kong.
Operating cash flow for the period, after lease
payments, was a net inflow of US$279 million,
compared with US$270 million in 2021. As at
31st December 2022, the Group’s net debt was
US$866 million, compared with US$844 million
at 31st December 2021. The Group continues to
balance the priority of maintaining a strong
balance sheet position with the need to support
ongoing investments in business and digital
transformation.
The Board recommends a final dividend for 2022 of
US¢2.00 per share (2021 final dividend: US¢6.50).
Business developments
Driving digital innovation remains a key strategic
priority for the Group. During the year, the Group
invested significant resources both in building
capability and in progressing operational initiatives
to enhance our e-commerce and digital offering, in
order to drive enhanced customer loyalty and more
meaningful customer relationships. In May 2022,
we launched
yuu-to-me
, offering customers an
integrated one-stop online shopping experience.
Following the success of the rollout of the
yuu
Rewards loyalty programme in Hong Kong, the
Group launched
yuu
Rewards in Singapore in
October 2022. The programme in Singapore
benefits from partnerships with a number of
leading local brands. The Group expects to
continue investing in digital initiatives across its
markets to drive long-term value for shareholders.
Key programmes continued to be introduced
throughout the year to support the Group’s
Corporate Social Responsibility priorities of serving
communities, sustaining the planet and sourcing
responsibly. The Group is committed to
a near-term target of halving our Scope 1 and 2
carbon emissions by 2030 and to achieving net-zero
by 2050. DFI is making good progress in reducing
carbon emissions, reducing Scope 1 and 2
emissions by 10% between 2021 and 2022.
The Group is also working on a plan to reduce
Scope 3 emissions.
8
DFI Retail Group Holdings Limited Annual Report 2022
In February 2023, the Group announced that it had
entered into an agreement to sell its Malaysian
Grocery Retail businesses to a leading local retail
group, led by successful local entrepreneur, Datuk
Andrew Lim. The Group remains fully committed
to its other retail businesses in Malaysia and will
continue to accelerate growth in the Health and
Beauty segment through Guardian stores.
People
We would like to express our deep gratitude for the
continuing dedication and hard work of our team
members in putting our customers first, despite the
ongoing difficulties associated with the pandemic
across our markets.
Prospects
The Group has been encouraged by the significant
improvement in performance in the second half of
2022. We expect to see the Group’s performance
improve in 2023, although we will continue to
monitor the impact of inflationary pressures and
changes in consumer sentiment. The Group’s
overall results will largely depend on the recovery
in Hong Kong of its Health and Beauty and
Restaurants businesses, and an improved
performance by its associate Yonghui on the
Chinese mainland. We remain confident in the
medium- to long-term growth prospects of
the Group.
Ben Keswick
Chairman
2nd March 2023
9
GROUP CHIEF EXECUTIVE’S REVIEW
“Despite challenges faced in 2022, there was encouraging
improvement in profitability in the second half of the year. Our
teams across the Group have continued to focus on delivering
against the Group’s transformation objectives, working hard
to manage our various businesses day-to-day, in highly volatile
and unpredictable trading circumstances. Overall, the return
to pre-pandemic normality in our markets, combined with the
effective execution of our business strategy, give us confidence
in the medium- to long-term trading prospects of the Group.”
Introduction
2022 was another extremely challenging year for
the Group, from the perspective both of operational
disruption and macroeconomic headwinds. The
Group’s businesses in our home market of Hong
Kong were badly impacted by the fifth COVID wave
and related lockdown restrictions, which hit the
city during the first quarter of the year. We saw
significant shifts in customer behaviour, creating
strain on both the supply chain and store operations.
Life in Hong Kong has, however, returned to some
form of normality as the year has progressed and
pandemic restrictions have lifted.
The Group continued to see underlying losses from
its investment in Yonghui, although they were
reduced from the previous year. Yonghui’s sales and
profits improved in the first half of the year, but its
performance in the second half was impacted by
pandemic restrictions, the slowdown in the overall
macroeconomic environment and its investments
in digital. Pandemic-related restrictions also
adversely affected our 7-Eleven and Mannings
businesses on the Chinese mainland.
In Southeast Asia (‘SEA’), we faced a different set
of challenges. The economies in our SEA markets
began reopening at the beginning of the year,
10
DFI Retail Group Holdings Limited Annual Report 2022
59%
6%
6%
2%
17%
1%
9%
83%
3%
3%
2%
4%
5%
Grocery Retail
Convenience Stores
Health and Beauty
* Including 100% of associates and joint ventures.
Home Furnishings Store Support Centre
and Shared Services
Restaurants
Other Retailing
some
216,000
people
Total
Employees
*
>120million
square feet
Total Gross
Trading Area
*
supporting sales recovery for some retail formats.
Pent-up demand for travel and other services,
however, reduced demand for eating at home
and, thus, impacted performance in Grocery Retail.
The Group faced unprecedented cost inflation in the
period, impacting the cost of goods, our operating
costs and consumer sentiment, particularly in
our SEA Grocery Retail business. The pandemic
has also accelerated customer preferences for
shopping online. We are therefore balancing the
need to invest in digital capacity and capability and
concurrently ensuring that we remain competitive
by being disciplined in spending.
Our teams across the Group have continued to focus
on delivering against the Group’s transformation
objectives, working hard to manage our various
businesses day-to-day, in highly volatile and
unpredictable trading circumstances. I am grateful
to all our colleagues for the commitment they
have shown, as well as their many achievements
during the year.
2022 performance
The Group reported total sales revenue from
its subsidiaries of US$9.2 billion, broadly in line
with the prior year. Total revenue for the Group,
including 100% of associates and joint ventures,
was US$27.6 billion, slightly behind 2021 levels.
11
Group Chief Executive’s Review
The Group reported a subsidiaries underlying profit
of US$64 million for the full year. Inclusive of
US$35 million underlying losses attributable to
associates and joint ventures, the Group reported
underlying profit of US$29 million for the full
year. There was an encouraging improvement
in second-half underlying profit to US$80 million,
over 10% higher than the same period last year,
and representing a US$132 million increase in
profitability from the US$52 million underlying
loss incurred in the first half.
Our Health and Beauty business saw double-digit
sales growth and over 60% profit growth for the
full year, as Mannings in Hong Kong continued to
gain market share and Guardian in SEA benefitted
from markets reopening. The performance of the
business was, however, still considerably behind that
of 2019. The profitability of our Convenience and
IKEA businesses was broadly in line with the prior
year, despite significant COVID-related disruption,
particularly in the first half in Hong Kong, as well as
availability challenges as a result of extensive supply
chain disruption. IKEA’s sales and profits were also
ahead of its performance in 2019. Grocery Retail,
which benefitted from restaurant dining restrictions
last year, saw lower profits in 2022. Profitability
was also impacted by inflationary pressures, which
affected cost of goods sold as well as operating
costs. Although Grocery Retail profits reduced year
on year, the transformation programme that began
five years ago has laid strong foundations for
the Group’s businesses, supporting significantly
enhanced levels of profit for the Grocery Retail
division in 2022 compared to those of 2019.
The Group’s share of underlying losses from
associates and joint ventures was US$35 million, as
key associates continued to be impacted by COVID-
related disruption in the year. Maxim’s saw its profits
impacted by social distancing restrictions in Hong
Kong and China in the first quarter, which led to a
loss in the first half. Maxim’s profitability recovered
strongly in the second half, however, demonstrating
the underlying resilience of the business and its
diversified pan-Asian portfolio. The Group’s share
of underlying Yonghui’s losses was US$80 million,
as its performance was impacted by pandemic
restrictions, as well as its ongoing investment in
digital transformation. Robinsons Retail reported
strong revenue and profit growth, as it benefitted
from the reopening of the Philippines economy.
Business initiatives and developments
Own brand
The Group’s Own Brand business is performing
increasingly strongly, with significant effort
invested in driving profitable growth in this area.
New contemporary designs for the Meadows brand
have highlighted the brand’s quality and ensured
on-shelf credibility and impact. Every new product
over the last three years across Grocery, General
Merchandise and Health and Beauty has included
a completely new pack design: almost 10,000 in all,
covering the launch of around 3,500 SKUs. With
over 2,300 new and relaunched Grocery Own Brand
items on the shelf, volume penetration has increased
by more than 50% compared to three years ago
and is now in the double-digit range.
12
DFI Retail Group Holdings Limited Annual Report 2022
Health and Beauty has followed the success of the
Own Brand relaunches in Food by introducing new
ranges of both Mannings and Guardian products
at pace in 2022. There are now over 1,300 new or
revised items in stores with new design and market
positioning, and over 900 more items are planned
for 2023. The new ranges have been very well
received, with Own Brand now accounting for
one in every four Mannings items purchased by
our customers and our Own Brand cotton range
achieving the number one market share position
not just in Mannings but throughout Hong Kong.
Digital
Driving digital innovation remains a key strategic
priority for the Group. Since its launch in July 2020,
the performance of the
yuu
Rewards coalition
loyalty programme has exceeded expectations,
with over four million members having signed up.
The
yuu
-niverse has continued to expand over the
past two years, with the addition of restaurant,
insurance and fuel partners. In January 2023,
yuu
Rewards expanded its scope further, with travel
partner Agoda joining the programme. We remain
excited about the future prospects of
yuu
Rewards
and look forward to expanding the
yuu
-niverse
further as we unlock additional partnership
opportunities.
In May 2022,
yuu-to-me
e-commerce functionality
was launched on the
yuu
app, offering customers
an integrated one-stop online shopping experience
and home delivery across leading Hong Kong
brands to customers. Initial performance has
been encouraging, with strong growth in order
values and per-user spending. The team has also
worked hard to drive significant improvements
in operational excellence and the online customer
shopping experience, with over 96% of orders now
delivered ‘on time’ and 87% ‘in full’, and product
fulfilment of all orders reaching almost 99%.
The Group has also invested in capability to support
our digital ambitions. We have recruited a number
of high calibre individuals who bring extensive
relevant global digital retail experience, in areas
including online warehousing, online platforms,
social media platforms and traditional offline retail
digital transformation.
The Group has built on the success of the
yuu
Rewards loyalty programme in Hong Kong by
launching
yuu
Rewards in Singapore in October
2022. We have entered partnerships with minden.ai,
a tech venture founded by Temasek, BreadTalk
Group, DBS Bank, PAssion Card, Mandai Wildlife
Group and Singtel. The coalition loyalty programme
unites some of Singapore’s most popular brands,
offering customers an effortless way to earn rewards
on everyday purchases across over 1,000 outlets.
Initial performance has been very encouraging,
with over one million members joining since launch.
13
Group Chief Executive’s Review
Business portfolio optimisation
On 23rd February 2023, the Group announced that
it had entered into an agreement to transition its
Malaysian Grocery Retail businesses to a leading
local retail group led by successful local
entrepreneur, Datuk Andew Lim. Completion of the
transaction is expected to take place in early March
2023, and will provide further growth opportunities
to our team members and enable greater
competitiveness, service and value for customers in
Malaysia. The Group remains fully committed to its
other retail businesses in Malaysia and
will enhance its strategic focus on the fast-growth
health and beauty segment through Guardian stores.
Corporate social responsibility
Over the course of 2022, we have continued to
make strong progress in supporting our Corporate
Social Responsibility (CSR) mission
to provide
environmental and social benefits to the communities
we serve
. A number of programmes have been
introduced to support our key CSR focus areas:
serving communities, sustaining the planet and
sourcing responsibly. 2022 was also the first year
the Group began to disclose a comprehensive set
of quantitative ESG metrics with reference to
the Global Reporting Initiative standard and the
United Nations Sustainable Development Goals.
Serving communities
The Group’s businesses are important cornerstones
of the communities we serve and our first CSR
focus area of serving communities reflects our
mission to improve people’s lives – especially those
in underprivileged communities. Over the course of
the past 18 months, a number of new programmes
have been introduced to make a tangible and
lasting impact on the communities we serve.
In November 2021, Wellcome teamed up with
long-term partner Foodlink to launch
Sik Jor Fan Mei
,
a Rice Donation Charity Programme. Under the
programme, Wellcome pledges to donate HK¢50 for
every kilogram of
Yu Pin King
brand rice sold
at its stores to help those in need. The aim of the
programme was originally to raise HK$5 million
within 365 days. We have achieved our targets
significantly earlier – only five months after the
launch.
Following the success of the
Sik Jor Fan Mei
programme in Hong Kong, we have launched
similar charity programmes in Singapore and
Malaysia. Working with The Food Bank Singapore,
a non-profit organisation that provides free meals
and dry rations to families in need, we launched
the
Have You Eaten?
programme, under which
DFI donates SG¢10 for every kilogram of Meadows
Own Brand rice sold, with a goal of donating a
million meals to help those in hardship over the next
two years. In Malaysia, the
Sudah Makan?
Initiative
was launched in the same month, in collaboration
with The Lost Food Project.
In the second half of the year, Guardian launched
its community service programme
Guardiancares
across SEA, aimed at raising the self-esteem of
children from low-income families. Under this
initiative, donations to buy bath care products
for those in need will be made for every one litre
of Guardian bath care product sold. The aim is
to provide enough products for 20 million baths
for underprivileged children across SEA.
14
DFI Retail Group Holdings Limited Annual Report 2022
Sustaining the planet
The Group has set ambitious climate targets,
aligned with the Paris Agreement, to prevent the
harm caused by climate change to ecosystems and
societies. The Group is committed to a near-term
target of halving our Scope 1 and 2 emissions by
2030 and to achieving net zero by 2050. DFI has
already made good progress in reducing its emissions,
reducing Scope 1 and 2 emissions by 10% between
2021 and 2022. The Group is working on a plan to
reduce Scope 3 carbon emissions. A range of
energy saving and efficiency enhancement
initiatives have been implemented in 2022, which
are expected to reduce consumption in 2023.
The Group is supporting the transition towards a
circular economy by reducing and managing waste.
Food waste and loss are significant drivers of global
food insecurity and climate change. Since 2018 the
Group has adopted a holistic strategy for reducing
food waste, through its
Fresher for Customers
programme. The programme focusses on
improving supply chain, warehouse, logistics and
operational management to deliver fresher produce
to customers and reduce the ratio of food loss
significantly. Overall, food waste has been reduced
by nearly 40% since 2017. In addition to food waste
reduction, the Group aims to increase the
proportion of diverted waste to 80% by 2030.
The Group is changing the way we develop and
source products and packaging to reduce plastic
consumption. We are working to switch our
Own Brand products to more environmentally
friendly materials or reusable packaging, reducing
unnecessary plastic packaging and increasing
the use of recycled content. The Group is exploring
ways of transitioning away from single use plastic
bags and also encouraging increased recycling
from customers.
Sourcing responsibly
The Group’s responsible sourcing initiatives focus
on safeguarding animal welfare, respecting human
welfare and protecting biodiversity. The Group is
working hard with our suppliers to offer customers
products sourced in an ethical, transparent and
responsible way. We are committed to no animal
testing in all our Own Brand products, except
where it is legally required. On limiting the scale
of deforestation, we have obtained international
certifications to protect forest ecosystems,
including certified paper from sustainable forestry
sources and Rainforest Alliance certified coffee for
our Convenience business in Hong Kong. To protect
marine life, 34% of our Own Brand seafood
products have obtained certifications such as
Marine Stewardship Council (MSC), where 100%
of canned tuna are certified.
The year ahead
The lifting of pandemic restrictions on the Chinese
mainland is having a positive impact on the Hong
Kong and Chinese mainland economies and the
Group is cautiously optimistic that the Group will
see improved overall performance in 2023. There
remain additional market challenges, however,
including rising interest rates, inflationary and wage
pressures and uncertainty as to the impact these
factors will have on consumer sentiment. Overall,
the return to pre-pandemic normality in our
markets, combined with the effective execution
of our business strategy, give us confidence in
the medium- to long-term trading prospects of
the Group.
Ian McLeod
Group Chief Executive
2nd March 2023
15
BUSINESS REVIEW
The Group has been encouraged by underlying
performance, with Grocery Retail profitability
significantly above 2019 levels, supported
by the Group’s transformation initiatives.
Encouragingly, Convenience profitability
in the second half improved significantly
compared to the first half.
FOOD
16
DFI Retail Group Holdings Limited Annual Report 2022
51%
17%
5%
21%
Wellcome’s underlying operating metrics
continued to strengthen and market
share has also continued to increase
Group Sales
*
Group Profit
†
Grocery Retail Convenience Stores
* Sales of goods, including share of associates and joint ventures.
†
BasedonoperatingprofitbeforeeffectofadoptingIFRS16andshareofresultsofassociates
and joint ventures, excluding selling, general and administrative expenses and non-trading items.
68% 26%
17
Cambodia
Malaysia
Indonesia
Chinese Mainland
Hong Kong
Macau
The Philippines
Singapore
Operating Profit
US$
141 million
Store Network
‡
5,620 stores
Total Sales of Goods
‡
US$
20.7 billion
‡
Including100%ofassociatesandjointventures.
Convenience Stores
Grocery Retail
DFI Retail Group’s Grocery
Retail business has been
serving our customers for
over 70 years striving to
achieve our goal of giving
customers a proposition
they trust, delivering
quality, service and value.
Grocery Retail
Reported sales for the Grocery Retail division in
2022wereUS$3.9billion.Excludingtheimpact
of the Giant Indonesia restructure, revenue for
thedivisionreducedby4%.Underlyingoperating
profitforthedivisionwasUS$91millionforthe
year. Profitability was lower than the prior year,
primarily due to the absence of the panic buying
seenin2021,furthercompoundedbyrisingcost
of goods sold and operating expenses. Despite
thechallengesfacedthroughout2022,however,
the Group has been encouraged by underlying
performance, with Grocery Retail profitability
significantlyabove2019levels,supportedby
the Group’s transformation initiatives.
There was mixed performance by Wellcome
HongKongin2022.Wellcomereportedstrong
like-for-like (‘LFL’) sales growth in the first quarter,
as the fifth wave of the pandemic and related
restaurant restrictions drove strong demand
from customers for core grocery and protective
products. This surge in demand created significant
operational challenges, which were overcome
by extraordinary team effort and dedication.
18
DFI Retail Group Holdings Limited Annual Report 2022
Business Review Food
Wellcome’s
re-modelled
stores continue
to perform well,
with double-digit
sales uplifts
When demand was at its peak, with LFL volume
growthofupto40%,ourstoreoperationsand
supply chain teams experienced staff shortage
levelsof40%,duetoariseinCOVIDinfections
and the impact of quarantine requirements. This
placed immense pressure on the remaining team
members to continue to serve the community.
There were also significant disruptions to the
vendor supply chain, requiring our commercial
teams to adapt quickly to ensure enough
availability on shelf. During the peak of the
fifth wave our supplier service levels halved,
with global lead times for replenishment stock
also increasing significantly. It was a testament
to the tireless efforts of our team that we were
able to continue to serve the community during
this crucial time and restore supply levels much
faster than originally anticipated.
19
GroceryRetailOwnBrandpenetrationhas
now reached double-digit in volume terms,
almost double the levels at the beginning
of 2020
Wellcome Hong Kong operations and LFL sales
began to normalise during the second quarter,
astheeconomyreopened.Overthecourseof
2022,Wellcome’sunderlyingoperatingmetrics
continued to strengthen and market share has
also continued to increase. This has been
supported by rising customer perception scores
over the course of the year, driven by our Every
Day Low Prices campaign and strong execution on
ourOwnBrandranges.OwnBrandpenetration
has now reached double-digit percentages in
volume terms, almost double the levels seen
atthebeginningof2020.Re-modelledstores
continue to perform well, with double-digit
sales uplifts.
SEA Grocery Retail performance in the year was
adversely impacted by sales normalisation from
the higher base previously seen as a result of
pandemic restrictions, as well as by the disruption
caused by renovation work to our stores and
reduced consumer spending appetite due to rapid
interest rate hikes and significant inflationary
pressure. Inflationary pressure has affected
top-line sales revenue and also created margin
pressure. The inflation rate in Singapore reached
itshighestlevelin14yearsintheperiodandled
to pressure on both labour and utility costs.
20
DFI Retail Group Holdings Limited Annual Report 2022
Business Review Food
With over 40 years of delivering the
convenience shopping experience,
DFI Retail Group operates the 7-Eleven
franchise in Hong Kong, Macau, South
China and Singapore and offers innovative
products and services to customers.
Convenience
TotalConveniencesaleswereUS$2.3billion,
anincreaseof1%comparedtotheprioryear.
Convenience underlying operating profit was
US$51millionfortheyear,broadlyinlinewiththe
prior year. Encouragingly, profitability in the second
half improved significantly compared to the first
half,withtheGroupreportingUS$51millionprofit
compared to the breakeven result in the first half.
The Convenience division experienced contrasting
operating trends to our Grocery Retail businesses in
their respective regions. In Singapore, our businesses
saw a strong recovery as the economy reopened.
Throughout the course of the year, we have seen
accelerating LFL sales trends, with double-digit LFL
growth over the past three quarters. Profitability in
Singapore has also increased significantly as a result.
Within Hong Kong, the fifth wave led to negative
LFL sales in the first quarter, which significantly
impacted profitability. However, as Hong Kong
has progressively removed pandemic restrictions,
we have seen LFL sales improve over
the remainder of the year. As a result, profitability
for7-EleveninHongKonginthesecondhalfwas
nearly four times as much as that reported in the
first half.
While each of our businesses has been impacted
by the pandemic and the related movement and
trading restrictions, none have been more affected
than our businesses in the Chinese mainland. In the
firstquarter,theCOVIDwaveacrossseveralcities
ledtoservicesforaround300storesbeingsuspended,
or to their hot ready-to-eat meals offer being
heavily restricted. More recently, in November,
thesituationworsened,withthenumberofCOVID
cases in Guangdong hitting all-time highs. Drastic
measures were imposed in the city and more
than600ofourstoresexperiencedseveretrading
disruptions. Despite the inherent challenges arising
from the lifting of restrictions in recent weeks, stores
can now begin trade with some degree of normality
once more. We are encouraged by the more recent
performance following the lifting of pandemic
restrictions on the Chinese mainland.
7-Eleven Concept — Palawan Beach, Sentosa, Singapore
21
BUSINESS REVIEW
Health and Beauty division revenue
increased by 12%, driven by strong
double-digit LFL sales growth.
Underlying profit increased by 66%.
HEALTH
& BEAUTY
22
DFI Retail Group Holdings Limited Annual Report 2022
Mannings celebrated its 50th
anniversary and remains focussed
on delivering quality, service and value
to our customers, paving our way to
becoming the most trusted health
and beauty retailer
Health & Beauty
Group Sales
*
Group Profit
†
* Sales of goods, including share of associates and joint ventures.
†
BasedonoperatingprofitbeforeeffectofadoptingIFRS16andshareofresultsofassociates
and joint ventures, excluding selling, general and administrative expenses and non-trading items.
16% 39%
23
Cambodia
Vietnam
Malaysia
Brunei
Indonesia
Chinese Mainland
Hong Kong
Macau
The Philippines
Singapore
Operating Profit
US$
94 million
Store Network
‡
2,552 stores
Total Sales of Goods
‡
US$
2.6 billion
‡
Including100%ofassociatesandjointventures.
Health & Beauty
DFI Retail Group’s Health
and Beauty business
operates across Asia
through well-established
and trusted brands such
as Mannings and GNC in
North Asia, and Guardian
in Southeast Asia, serving
our customers with a
wide range of health,
beauty, personal care
and baby care products.
Health & Beauty
Health and Beauty division revenue increased
by12%toUS$2.0billion,drivenbystrong
double-digit LFL sales growth. Underlying
operatingprofitincreasedby66%toUS$94
million, driven by solid sales growth.
In Hong Kong, the Mannings business benefitted
from strong demand for COVID-related items
(such as medicines, vitamins, paper products,
masks, hand sanitiser and cold & flu medication)
in the first quarter. Like the Wellcome team, the
Mannings team also exhibited extraordinary
resilience in the face of COVID-related challenges.
At the peak of demand, staff shortages at the
Manningsdistributioncentrereachedover40%,
24
DFI Retail Group Holdings Limited Annual Report 2022
Business Review Health & Beauty
andout-of-stockswerebetween25%and40%,
depending on the product category. The Mannings
team continues to execute its offering well, with
record high market share levels. At the same time,
customer promotions are also being optimised, with
a balance between full-price sales and promotion
participation. On Own Brand, Mannings has also
made some encouraging progress, achieving strong
volume penetration.
Health and Beauty Own Brand products
now accounting for
one in every four
Mannings items
purchased by
our customers
25
In SEA, LFL sales for our Guardian business saw
double-digit growth, with profitability also
growing strongly. The performance of our
Guardian business over the past two years has
been severely hampered by COVID and associated
restrictions. As countries within SEA have removed
pandemic restrictions, however, traffic has grown
and there has been an associated LFL sales
improvement. Guardian Singapore reported
strong double-digit LFL sales growth, driven by
Mannings’
Own Brand
cotton range achieved the no. 1 market
share position in Hong Kong
26
DFI Retail Group Holdings Limited Annual Report 2022
Business Review Health & Beauty
LFL sales for our
Guardian business
saw double-digit
growth, with
profitability also
growing strongly
strong demand for COVID-related items, as well as
a recovery in the performance of tourist stores.
Guardian Malaysia reported strong growth in sales
and profitability as result of a recovery in both
tourist and mall store sales. Guardian Indonesia
reportedover30%growthinLFLsales,supported
by a recovery in mall foot traffic.
27
BUSINESS REVIEW
IKEA reported sales revenue was 3%
ahead of the prior year. Operating
profit was slightly ahead of the prior
year, despite challenging external
conditions and supply chain
constraints impacting availability.
HOME
FURNISHINGS
28
DFI Retail Group Holdings Limited Annual Report 2022
IKEA’s business performance, particularly
in the first half, was hampered by the
impact of COVID and global supply chain
constraints. Throughout the second
half, however, we began to see some
improvements in traffic and sales
Home Furnishings
* Sales of goods, including share of associates and joint ventures.
†
BasedonoperatingprofitbeforeeffectofadoptingIFRS16andshareofresultsofassociates
and joint ventures, excluding selling, general and administrative expenses and non-trading items.
Group Sales
*
Group Profit
†
6% 19%
29
Indonesia
Hong Kong
Taiwan
Macau
Operating Profit
US$
46 million
Store Network
‡
23 stores
Total Sales of Goods
‡
US$
839 million
‡
Including100%ofassociatesandjointventures.
Home Furnishings
The world’s largest furniture
retailer, IKEA, is operated
by DFI Retail Group in
Hong Kong, Macau, Taiwan
and Indonesia. Renowned
for design, functionality
and quality at affordable
prices, IKEA offers a
comprehensive range
of attractive home
furnishing products,
underpinned by a
solid commitment to
sustainability.
Home
Furnishings
IKEAreportedsalesrevenueofUS$839million,3%
ahead of the prior year. Overall, LFL sales for the
year were impacted by COVID-related restrictions
in the first half and supply chain constraints,
which impacted stock availability. Operating
profitwasUS$46million,slightlyaheadofthe
prior year, primarily due to strong cost control.
30
DFI Retail Group Holdings Limited Annual Report 2022
Business Review Home Furnishings
Strong
e-commerce
growth and
double-digit
penetration
31
IKEA’s business performance, particularly in the
first half, was hampered by the impact of COVID
through reduced customer visits, operating capacity
constraints and shortened trading hours. In addition,
global supply chain constraints continued to impact
stock availability. Throughout the second half,
however, we began to see some improvements
in traffic and sales, especially in Indonesia.
32
DFI Retail Group Holdings Limited Annual Report 2022
Business Review Home FurnishingsBusiness Review Home Furnishings
In Indonesia,
total trading
area increasing
by over 150%
against 2019
levels
In Indonesia, the Group has invested significant
capital over the past two to three years to grow its
IKEA footprint, with total trading area increasing
byover150%against2019levels.Whilerecent
trading performance has been impacted by COVID
as well as global supply chain constraints, the
Group remains optimistic that performance will
improve as external conditions normalise and IKEA
is well-positioned to be a significant player in the
Indonesian market over time.
33
Maxim’s has become more resilient after
mooncake sales season and easing of
dining restriction in 2nd half.
RESTAURANTS
BUSINESS REVIEW
34
DFI Retail Group Holdings Limited Annual Report 2022
Maxim’s remains committed to
pursuing its multi-brand strategy
* Sales of goods, including share of associates and joint ventures.
†
BasedonoperatingprofitbeforeeffectofadoptingIFRS16andshareofresultsofassociates
and joint ventures, excluding selling, general and administrative expenses and non-trading items.
Group Sales
*
Group Profit
†
Restaurants
9% 15%
35
Cambodia
Laos
Thailand
Vietnam
Malaysia
Chinese Mainland
Hong Kong
Macau
Singapore
Share of Results
US$
52 million
Store Network
‡
1,908 stores
Sales
‡
US$
2.5 billion
‡
Including100%ofassociatesandjointventures.
Restaurants
Founded in 1956, Maxim’s
is a household name
in Hong Kong, famous
for its mooncakes and
successful restaurants,
bakeries, cafes and
catering. The Maxim’s
network has expanded
across Asia Pacific, with
over 1,900 outlets in
Hong Kong, Macau,
Chinese mainland,
Vietnam, Cambodia,
Laos, Thailand, Singapore
and Malaysia.
Restaurants
Maxim’s reported strong
sales performance in SEA
due to restriction-free social
distancing measures and
border reopening to
international travellers
36
DFI Retail Group Holdings Limited Annual Report 2022
Business Review Restaurants
The performance of Maxim’s for the full year was
severely hampered by a very challenging first
quarter as result of the fifth wave in Hong Kong,
which led to a large number of restrictions on
movement and dining. LFL sales were significantly
impacted and the Group’s share of underlying
Maxim’slosseswasUS$26millioninthefirsthalf.
Maxim’s performance improved as the year
progressed, due to a solid mooncake sales
performance and the easing of dining restrictions.
The Group’s overall share of Maxim’s underlying
profitswasUS$38millionforthefullyear,
representing a significant turnaround from the
US$26millionlossreportedinthefirsthalf.
37
BUSINESS REVIEW
The Group’s investment in Yonghui
and Robinsons Retail continued to
demonstrate our diversified business
portfolio strategy. Underlying
results from our associates improved
relative to last year.
OTHER
ASSOCIATES
38
DFI Retail Group Holdings Limited Annual Report 2022
The Group’s share of underlying Yonghui losses
was US$80 million for the year, compared to a
US$90 million underlying share of losses in the
prior year. Yonghui’s LFL sales improved in the
first half of the calendar year, which translated
into improved profitability. Performance in
the second half, however, was impacted by
pandemic restrictions which severely disrupted
store trading hours, as well as the slowdown
in the overall macroeconomic environment.
Yonghui’s profitability was also impacted by
investments in its digital transformation and
by margin dilution from a greater level of
e-commerce sales.
Robinsons Retail reported strong growth in
2022, as it benefitted from the reopening of
the Philippines economy, which has supported
rising customer traffic and increased tourism.
Improved product mix and strong cost control
led to an increase in operating margin expansion.
Despite inflationary pressures, the retail climate
in the Philippines remains healthy, and the
reopening of the country has translated
into higher volumes. Robinsons Retail’s
underlying profit contribution to the Group
was US$24 million in 2022, an over 60%
increase relative to the US$14 million
contribution in 2021.
Other Associates
Chinese Mainland
The Philippines
39
Accounting policies
The accounting policies are consistent with those
of the previous year except for the reclassification
of revenue as stated in note 1 to the financial
statements. The Directors continue to review
the appropriateness of the accounting policies
adopted by the Group, regarding developments in
International Financial Reporting Standards (‘IFRS’).
In 2022, the Group has applied Covid-19-Related
Rent Concessions beyond 30th June 2021
(Amendment to IFRS 16) that extends, by one year,
the May 2020 amendment. The amendment allows
reduction in lease payments that affects payments
originally due on or before 30th June 2022, which
are granted as a direct consequence of the
COVID-19 pandemic, to be recognised in the profit
and loss over the period in which they cover, subject
to satisfying specific conditions, rather than as a
modification of the lease following IFRS 16 ‘Leases’.
The adoption of the Amendment results in the
recognition of US$15 million
(2021: US$43 million)
of rent concessions in other operating income
during the year.
Results
2022 was another challenging year for
DFI Retail Group, with the Group’s reported
financial results impacted by the continuation of
the COVID-19 pandemic as well as macroeconomic
challenges and inflationary pressures. However,
the Group has been encouraged by significant
improvement in underlying profitability in the
second half of the year, which has been underpinned
by strengthened underlying fundamental following
implementation of transformation initiatives.
“The Group has been encouraged by significant
improvement in underlying profitability in the second
half of the year, which has been underpinned by
strengthened underlying fundamental following
implementation of transformation initiatives.”
North Asia Southeast Asia
* Sales of goods, including share of associates and joint ventures.
†
Including 100% of associates and joint ventures.
28%
72%
46%
54%
2022
Sales Mix
*
2022
Retail Outlet Mix
†
FINANCIAL REVIEW
40
DFI Retail Group Holdings Limited Annual Report 2022
Strong sales growth in the Health and Beauty
business was driven by double-digit like-for-like sales
growth in key markets. In Hong Kong, Mannings
business benefitted from effective in-store
execution and strong demand for COVID-related
items. In Southeast Asia, profitability for Guardian
increased due to strong sales growth and recovery
in the tourist store sales.
Sales in Home Furnishings business were 3% ahead
of last year while the operating profit increased
by 1%. The overall business performance was
impacted by COVID-related restrictions as well as
the global supply chain constraints that caused
challenges to stock availability.
Net financing charges increased by US$3 million
compared to 2021, reflecting the higher interest
rates on external borrowings, offset by the lower
interest expenses charged on leases resulting from
the front-loaded characteristics of IFRS 16 ‘Leases’.
The Group’s share of the underlying results of
associates and joint ventures was US$35 million
loss, with underlying performance improving in the
second half.
Contribution from Maxim’s underlying results
decreased by 27% to US$38 million in 2022,
primarily as a result of the government-imposed
restrictions on movements and dining in first half.
Revenue, excluding those of associates and joint
ventures, totalled US$9.2 billion, which was broadly
in line with last year. Total revenue, including 100%
of associates and joint ventures, was 1% down at
US$27.6 billion.
Underlying profit for the Group’s subsidiaries was
US$64 million, a 56% reduction compared with prior
year. This was primarily due to the combination
of inflationary pressures and customer behavioural
shifts driven by the pandemic, particularly in the
first half.
Grocery Retail business reported operating profit
reduction primarily due to the absence of the panic
buying seen last year, further compounded by the
inflationary pressure on rising inventories costs and
operating expenses. Despite the challenges faced
throughout 2022, however, the Group has been
encouraged by underlying performance, with
Grocery Retail profitability significantly above
2019 levels, supported by the Group’s ongoing
transformation programme.
Sales and profitability in Convenience business
were broadly in line with last year. Significant
improvements were seen in second half of the year
as the Group began to experience normalisation
of customer traffic following easing of movement
restrictions across our key markets, particularly in
Hong Kong.
400
1,200
800
1,600
US$m
0
2018
2019
2022
20212020
Underlying EBITDA Net Asset Value per Share
202220212020
2019
US¢
2018
90
30
60
120
0
41
Financial Review
The Group’s share of Yonghui’s underlying losses
was US$80 million for the year, compared to
US$90 million in the prior year. Yonghui’s profitability
was impacted by store disruption caused by the
pandemic, investments costs associated with digital
transformation and margin dilution from a greater
level of e-commerce sales. The Group’s interest in
Yonghui, increased from 21.08% to 21.13%, following
a share buyback by Yonghui during the year.
The Group’s share of underlying results in Robinsons
Retail increased by 66% to US$24 million. Strong
growth was due to the reopening of the Philippines
economy resulting from the rising customer traffic
and increased tourism. During the year, the Group’s
interest in Robinsons Retail also increased from
20.76% to 21.30% following a share buyback by
Robinsons Retail. Despite the encouraging results,
the Group recorded a non-trading impairment
charge of US$171 million with respect to the
holding value of its investment in Robinsons Retail
as rising interest rates globally have impacted
valuations across all asset classes.
The tax charge for 2022 was US$31 million, 47%
lower than 2021, mainly due to overall decrease in
operating profit during the year.
Non-trading items of US$143 million were reported
in 2022, principally from the impairment charge
of the Group’s Robinsons Retail investment, partly
offset by the profit on disposal of certain properties
in Hong Kong, Malaysia, Singapore and Indonesia,
together with other gains on the changes in interests
in associates and joint ventures.
Underlying profit attributable to shareholders was
US$29 million, down 72% from US$105 million in
2021. Underlying earnings per share of US¢2.14
were also down by 72%, as compared with US¢7.73
in 2021.
Cash flow
2022 2021
Summarised Cash Flow US$m US$m
Underlying operating
profit 209 314
Depreciation and
amortisation 861 886
Increase in working
capital (7) (10)
Net interest and
other financing
charges paid (121) (116)
Tax paid (43) (110)
Dividends received
from associates 45 46
Other (4) (68)
Cash flows from
operating activities 940 942
Principal elements of
lease payments (661) (672)
Cash flows from
operating activities
after lease payments 279 270
Normal capital
expenditure (244) (212)
Investments (28) (7)
Disposals 71 94
Cash flows from
investing activities (201) (125)
Cash flows before
financing but after
lease payments 78 145
42
DFI Retail Group Holdings Limited Annual Report 2022
The Group maintained solid cash flows from
operating activities after lease payments of
US$279 million in the year, compared with
US$270 million in 2021. Normal capital expenditure
was higher at US$244 million versus US$212 million
in 2021 principally due to the investment in digital
capacity and refurbishment of the existing estate.
Balance sheet
Total assets, excluding cash and bank balances,
were US$7.1 billion, down US$299 million compared
to 2021. The decrease was mainly due to the
impairment charge on the Group’s investment in
Robinsons Retail and the unfavourable exchange
movements in Asian currencies on translation to
the reported currency, United States dollar, partly
offset by the increased inventory balances due to
stock piling for early Chinese New Year in 2023.
Net operating assets were US$941 million at the
end of 2022, a 26% drop from previous year.
The Group ended the year with net debt of
US$866 million, broadly in line with last year’s level.
Dividend
The Board is recommending a final dividend of
US¢2.00 per share, giving a total dividend of
US¢3.00 per share for the year.
Financing
As of 31st December 2022, the Group had a
gross debt of US$1,096 million, an increase of
US$42 million from 2021. The gross debt is funded
by total committed and uncommitted lines of
US$3,051 million, with US$1,403 million committed
and US$552 million uncommitted facilities being
unused and available. The Group had cash
balances of US$231 million. The available undrawn
committed facilities and the cash pooling scheme
continued to provide good support and flexibility
to the Group for cash and liquidity needed for
the operation.
Where required, and typically for working capital
purposes, borrowings are normally taken out in local
currencies by the Group’s operating subsidiaries to
fund daily operations. Borrowings to fund any
strategic expansion of the Group are managed
centrally and typically funded in United States
dollars and Hong Kong dollars, with hedging of
foreign exchange and interest rate risk as may be
appropriate depending on the investment.
48%
10%
15%
21%
6%
Grocery Retail
Convenience Stores
Health and Beauty
Home Furnishings
IT / Distribution Centres
US$244
million
2022
Normal Capital
Expenditure
At 31st December 2022, the Group’s businesses,
including associates and joint ventures, operated
a total of 10,663 stores across all formats in 13
markets, compared with 10,286 stores at the end
of 2021. Included in this total are 1,074 Yonghui
stores, 1,908 Maxim’s stores and 2,261 Robinsons
Retail stores.
43
Financial Review
Despite the ongoing challenges posed by pandemic,
the Group remains encouraged by the momentum
of its ongoing transformation and is confident
that it is delivering sustainable improvements to
the business over-time which will drive medium-
to long-term growth.
Audit opinion
With Yonghui’s contribution to the Group’s
financial results, the Group’s external auditors,
PricewaterhouseCoopers, determined that a full
scope audit of Yonghui’s results is required as part
of their audit of the Group’s financial statements.
The Group equity accounts for its share of Yonghui’s
results on a three-month lag such that Yonghui’s
results for the 12 months ended 30th September
are included in the Group’s financial results for the
calendar year.
A full scope audit for Yonghui could not be done
in 2021 as Yonghui’s management concluded that
it was impractical for an additional audit to be
conducted given the extent of the time and efforts
required. Consequently, the Group’s 2021 audit
opinion was qualified to reflect this fact.
In 2022, the Group has engaged Ernst & Young
to perform a full scope audit for the 12 months
ended 30th September 2022 with the consent
from Yonghui’s management, with audit results
fully reported to PricewaterhouseCoopers as Group
auditor. Accordingly, an unqualified opinion on
the Group’s financial statements for the year ended
31st December 2022 is issued, with a qualification
on the comparability of the financial results with
those for the year ended 31st December 2021.
Financial risk management
A comprehensive discussion of the Group’s financial
risk management policies is included in note 40
to the financial statements. The Group manages
its exposure to financial risk using a variety of
techniques and instruments. The main objectives
are to limit exchange and interest rate risks and
to provide a degree of certainty about costs. It is
our policy not to engage in speculative derivative
transactions. The investment of the Group’s cash
resources is managed to minimise risk while seeking
to enhance yield. Overall, the Group’s funding
arrangements are designed to keep an appropriate
balance between equity and debt (short and
long-term), to maximise flexibility for the future
development of the business.
Principal risks and uncertainties
A review of the principal risks and uncertainties
facing the Group is set out on pages 161 to 166 of
the annual report.
Clem Constantine
Chief Financial Officer
2nd March 2023
44
DFI Retail Group Holdings Limited Annual Report 2022
45
TASK FORCE ON CLIMATE-RELATED
FINANCIAL DISCLOSURES (‘TCFD’)
To manage physical and transition climate risks proactively, DFI Retail Group has completed a climate risk analysis as
per the recommendations of the Task Force on Climate-Related Financial Disclosures (‘TCFD’). This report represents our
climate related financial disclosures consistent with the TCFD recommendations. Further work is underway to enhance
the assessment and the mapping of climate risks over the short, medium, and long term.
Governance
Climate Task
Force 1
Eliminating Harmful
Refrigerants
(Scope 1 Emissions)
Climate Task
Force 2
Reducing Fuel
Usage
(Scope 1 Emissions)
Climate Task
Force 3
Reducing Energy
Usage
(Scope 2 Emissions)
Climate Task
Force 4
Tracking and
Reporting
DFI Board
DFI Leadership Team
Positive Action Group: Sustaining the Planet
Sustainability Leadership Council (‘JM’)
Climate Action Working Group(‘JM’)
Oversight, AdviceImplementation
DFI has implemented a governance framework as illustrated above.
The Board’s oversight of climate-related risks and opportunities
DFI Board is ultimately responsible for ensuring the Group is managing its climate risks, Greenhouse Gas (‘GHG’)
emissions, and sustainability objectives. The Board manages this through considering and approving key initiatives.
For example, in 2022 they have approved the Company’s carbon footprint baseline, and Net Zero plans including the
necessary capital expenditure for 2022 and 2023. Furthermore, they receive updates on climate and sustainability risks
and mitigation measures.
The Sustainability Leadership Council (‘SLC’) comprises of the Chief Executives of all Jardine Matheson (‘JM’) Business
Units, which includes DFI. Meeting twice a year, the SLC serves as a collaboration platform for the senior management
from across the JM Group to exchange insights and perspectives on sustainability strategy, planning, and direction for the
JM Group including DFI.
The SLC receives updates on global and regional climate and sustainability trends, policies, initiatives, and activities
undertaken by JM Group businesses including DFI. 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.
Sustainability-related policies, including JM Group’s Climate Change Policy, were reviewed by the SLC and published
in 2022. All sustainability-related policies are periodically reviewed by executive management and updated as required.
46
DFI Retail Group Holdings Limited Annual Report 2022
TCFD Report
Management’s role in assessing and managing climate-related risks and opportunities
DFI’s Leadership Team will review progress against DFI’s Net Zero targets at least twice a year starting in 2023. Actual
results will be reviewed and plans to deliver the short, medium, and long-term targets will be discussed. The time horizons
to analyse climate-related risks and opportunities are defined as short term (between now and 2025), medium term
(2025-2030), and long term (2030-2050 and onwards).
The Positive Action Group (‘PAG’) for Sustaining the Planet is chaired by the Group Chief Executive and meets every 6 weeks
to discuss progress, provide clarity on priorities, remove obstacles that might prevent progress, and make decisions if needed.
This makes sure that we stay on track to deliver our short, medium, and long term objectives.
The Climate Action Working Group (‘CAWG’) fosters collaboration between the various Business Units (‘BU’) of JM and
creates a community of expertise. Comprising enthusiastic and committed representatives from each BU, the CAWG
meets on a quarterly basis to collaborate on the Climate strategy and to drive a shared agenda forward. DFI’s Climate
Task Force teams regularly contribute to the CAWG, including sharing initiatives to reduce scope 1 and 2 emissions, and
learning from other Business Units that have already taken action.
The organisation’s processes for managing climate-related risks
The Climate Task Forces (‘CTF’) are responsible for the implementation of the plans needed to deliver DFI’s climate targets.
The CTF are sponsored by the group CFO and chaired by senior leaders: the Construction Director leads the Eliminating
Harmful Refrigerants CTF, our Supply Chain Directors the Reducing Fuel Usage CTF, our Facilities Management Director
the Reducing Energy Usage CTF and our Head of ESG Reporting the Tracking and Reporting CTF. The CTFs meet bi-weekly
and are supported by our Sustainability Lead, Head of ESG Reporting, and Senior Finance Director.
Risk Management
How processes for identifying, assessing, and managing climate-related risks are integrated into the
organisation’s overall risk management
DFI’s existing risk management approach adopts the ISO 31000 and COSO principles. The DFI Risk Management team
manage this approach, which consists of a bi-annual exercise, where DFI business units are required to revisit their respective
risk registers. This process entails the identification of new risks, the review of existing risks, and risk mitigation strategies.
These risk registers then form the basis of our consolidated view of DFI Group’s risk profile, and are reported for consolidation
at JM Group. Both Physical and Transition Risk
have been integrated into this existing DFI risk management approach.
The organisation’s processes for identifying and assessing climate-related risks
In 2022 both Physical and Transition Risk workshops were held for the first time with senior business leaders, with the
objective of aligning on both DFI’s climate strategy and the planned mitigations to each risk. The results of these
workshops have been incorporated into the risk management approach, and these workshops will be held on an
annual basis.
47
* These scenarios are in line with the Representative Concentration Pathways, indicating GHG concentrations used by the IPCC. RCP4.5, RCP 6.0, and
RCP8.5 correlate with temperature rises of 1.8°C, 2.2°C, 3.7°C by 2100.
The metrics used by the organization to assess climate-related risks and opportunities are in line with its
strategy and risk management process
In order to help quantify and prioritise climate risks, a risk assessment model has been established across 3 different
climate scenarios*: 1.8 °C, 2.2 °C, and 3.7 °C increase by 2100 (with financial impact of each of these scenarios over
the short, medium, and long term). We have chosen these scenarios as we understand them to be science based and
in line with the Representative Concentration Pathways used by the Intergovernmental Panel on Climate Change (‘IPCC’).
All of these scenarios are considered possible depending on the volume of GHG emitted in the years to come.
Transitioning to a net-zero economy will bring about regulatory, technological, legal, market, and reputational changes
that we believe will likely impact DFI in the medium to long term. These risks are higher in the 1.8 °C and 2.2 °C increase
scenarios. However, physical risks will likely be greater in the 2.2 °C and 3.7 °C increase scenarios due to increased
likelihood of extreme weather events.
Strategy
The impact of climate-related risks and opportunities on the organisation’s businesses, strategy, and
financial planning
We believe that climate risks are emerging in the short term, but are most likely to materialise in the medium and
long-term. In response, we have formulated a strategy for responding to climate risk in the short term, and further work
is underway to mitigate these risks over the medium and long term. We understand that this is not fully consistent with
the additional TCFD guidance for all sectors, but we will continue to improve our disclosure in DFI’s 2023 TCFD report.
The resilience of the organisation’s strategy, taking into consideration different climate-related scenarios
The risk assessment model considers DFI’s store and distribution centre geographical footprint, where the exposure of
each location to extreme weather events is calculated by the likelihood of each of these events (increasing in probability
as temperatures increase over the short, medium, and long term in each temperature scenario) multiplied by the
potential financial impact of each event occurring in any given year. Potential financial impacts include owned asset
damage, and business and supply chain disruption.
Based on the outcomes of the assessment we have concluded that the financial impact of physical risks on our asset
values is not likely to be significant (<US$ 250,000 assessed
net impact) to our profitability, and therefore this is not
separately disclosed. However, the assessment will be updated annually, and if future impacts are re-assessed to be
significant they will be included in this annual TCFD report.
In addition to this model, we considered the physical risk of the supply of 5 key commodities (Rice, Wheat, Soy,
Sugar Cane, and Coffee), and concluded that in the short and medium term there is no significant financial impact
(<US$250,000). We are still assessing the potential impact in the long term.
48
DFI Retail Group Holdings Limited Annual Report 2022
TCFD Report
The climate-related risks and opportunities the organisation has identified over the short, medium, and long term
As a result of this risk assessment model, a summary of the physical risks with the greatest potential financial impact on
our business, and our response (current and planned mitigation measures), is included in the table below. Also included
are transition risks (with potential impact and response) concluded upon in the transition risk workshops conducted with
DFI business leaders. A full assessment of opportunities to DFI has also been completed, but as no net benefits have been
concluded these are not separately disclosed.
Physical Risks Potential Impacts DFI’s Response
Typhoon
Severity as measured by wind speed
is increasing in Southeast Asia and
is expected to move north, with
more frequent and destructive
typhoons across DFI markets.
• Disruption of services and
business operations
• Damage to equipment, facilities
and properties
• Decrease in demand due to
business disruption,
and customers moving
to different areas
• Supply Chain disruptions
• Business continuity planning for
all locations
• Review of overflow and drainage
systems for locations susceptible
to flooding
• Review geographical flood
plains before committing to
new locations
• Maintain standard operating
procedures and evacuation plans
• Dual sourcing and increasing
supplier resilience
Rainfall Flooding
Severity as measured by flood
depth is expected to increase
across Asia. This will have
implications for our low lying
and flood vulnerable locations.
Extreme Heat
Measured by the combined impact
of temperature and humidity on
the human body and is forecasted
to increase in the period to 2030
across Asia.
• Higher energy costs for cooling
• Damage to buildings
and inventory
• Adverse effect on employees’
health and safety
• Supply Chain disruptions
• Energy and refrigeration
efficiency initiatives
• Planned preventative maintenance
of air-conditioning equipment
• Maintain safety at work
procedures for employees working
in extreme heat conditions
• Dual sourcing and increasing
supplier resilience
Transition Risks Potential Impacts DFI’s Response
Carbon Price
Direct (e.g. Carbon tax) or indirect
costs associated with emissions
reduction regulatory or fiscal policies.
• Higher raw material prices
• Higher operating costs
• High energy efficiency
requirements
• Reductions in Scope 1 and 2
GHG emissions (refer detail
following this table)
• Develop a strategy for a
lower-carbon supply chain,
including (but not limited to)
local sourcing efforts, country
of origin assessments, and
sustainable commodities
initiatives.
• Reducing embodied carbon
in new stores
Energy Price
The rising prices of primary and
secondary energy (fossil fuels
and electricity).
Policies and Regulations
Including green building policies
and related requirements.
49
Scope 1 and Scope 2 GHG emissions, and the related risks
To elaborate on DFI’s response to reduce Scope 1 and 2 GHG emissions: most of our scope 1 and 2 GHG emissions come
from energy consumption and refrigerant leakages. We are investing US$15-20 million per year (which represents around
15% of our total capital commitments each year) into climate initiatives related to energy efficiency, refrigerant
management, and electrifying our fleet. With all these initiatives, we are committed to achieving our reduction targets
for scope 1 and 2 emissions.
Scope 1 and 2 emissions
Reducing harmful refrigerants
DFI is reducing refrigerant gas emissions by installing leak detectors, deploying dedicated leak fix teams, replacing high
global warming gasses, and installing new systems which have a lower refrigeration gas charge. In 2022, DFI was the first
retailer in Hong Kong to install a Water Loop refrigeration system, which reduces the refrigeration gas charge compared
to a traditional centralised system by approximately 90%. Our medium-term target by 2030 is to reduce our leakage rate
to global supermarket best practices.
Reducing energy usage
Most of our electricity is used in DFI’s Grocery Retail and Convenience Stores businesses. To help reduce energy
consumption, DFI has implemented energy behavioural change campaigns, leading to a 2% energy consumption reduction
on a like-for-like basis (locations that have had a full 12 months of electricity consumption in both 2021 and 2022).
The Group also completed LED lighting roll-out across our retail networks, covering almost 1,000 stores in Hong Kong,
Singapore, and Malaysia. We also began implementing technologies to improve refrigeration equipment efficiency.
Meanwhile, Wellcome installed one of the largest solar panel systems in Hong Kong on the rooftop of its Fresh Food
Processing Centre, generating one million kWh of electricity per year, and the IKEA Kaohsiung store in Taiwan now has a
solar panel on the roof with 0.9 million kWh annual capacity. By 2026, we are committed to installing solar panels on all
retail properties which DFI owns.
Reducing fuel usage
Our priority is to improve fuel usage efficiency by optimising truck loads and where possible routing. In the Hong Kong
market, we are actively seeking opportunities to purchase our first electric truck, with the goal of electrifying the rest of
our fleet in the medium to long term.
Metrics and Targets*
The targets used by the organisation to manage climate-related risks and opportunities and performance
against targets
DFI has set ambitious climate targets that are aligned with The Paris Agreement to revert the harm of climate change on
ecosystems and societies. We are committed to halving our scope 1 and 2 emissions by 2030 and achieving net zero by
2050 (all from a baseline year of 2021).
*
Scope 1, 2, and 3 reporting follows the methodology for the mapped GRI Indicators: 305-1 Direct (scope 1) GHG emissions, 305-2 Energy indirect
(scope 2) GHG emissions, 305-3 Other indirect (scope 3) GHG emissions, 305-4 GHG emissions intensity, 305-5 Reduction of GHG emissions.
50
DFI Retail Group Holdings Limited Annual Report 2022
TCFD Report
Disclose Scope 1, Scope 2, and, if appropriate Scope 3 GHG emissions
DFI is progressing well towards its 2050 net zero target. From 2021 to 2022, DFI has reduced Scope 1 GHG emissions
by 24%. Scope 2 GHG emissions have increased 0.4% from 2021 to 2022, as the 2% like-for-like energy consumption
reduction has been offset by new store openings in China, Indonesia, and Cambodia. Several energy efficiency initiatives
have been implemented at the end of 2022, which are expected to reduce consumption in 2023 and beyond.
DFI Group Scope 1 and 2 GHG Emissions
2022
kt CO
2
e
2021
kt CO
2
e % change
Refrigerants 281 370 -24%
Fuel for Owned Trucks 8 9 -10%
Total Scope 1 289 379 -24%
Electricity 488 486 +0.4%
Total Scope 2 488 486 +0.4%
Total Scope 1 and Scope 2 777 865 -10%
Intensity
Per US$m Net Sales
85 Tonnes 96 Tonnes -11%
GHG emissions are measured on a per store level, reported and discussed monthly in the PAG. Progress against annual
targets is tracked, with annual targets formed from DFI’s planned pathway to net zero for GHG emissions.
In 2022, we have managed to quantify the 2021 baseline for Scope 3 GHG emissions. The majority of Scope 3 categories
have been calculated by multiplying spend data with Environmentally-Extended Input-Output (‘EEIO’) emission factors
(‘EF’). Where category specific emissions factors are readily available, these have been used (including but not limited to
upstream electricity EF, commuting EF,
and waste disposal EF). Rice, dairy, and meat account for a large part of Scope 3
GHG emissions, driven by upstream agricultural activities.
DFI is working on a plan to reduce Scope 3 emissions. Achieving significant emissions reduction in our value chain will
require governments’ intervention, substantive collaboration with suppliers, and communication with customers.
As such, our ability to influence carbon reduction presents both a risk and an opportunity, and success will be decided
by our relationships both upstream and downstream in our value chain.
DFI Group Scope 3 GHG Emissions 2021
Scope 3 GHG emissions from the value chain (thousand tonnes) 5,290
Scope 3 as a percentage of total 2021 GHG emissions (Scope 1 + 2 + 3) 86%
DIRECTORS’ PROFILES
Ben Keswick
Chairman
Ben Keswick joined the Board as Managing Director in April 2012 and held the
position until June 2020. He has been Chairman since 2013. He was also
managing director of Jardine Matheson from 2012 to 2020. He has held a number
of executive positions since joining the Jardine Matheson 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. He is executive chairman of Jardine Matheson and chairman of Hongkong
Land and Mandarin Oriental. He is also chairman of Jardine Cycle & Carriage
and a commissioner of Astra. He is a director of Yonghui Superstores and held
the position of chairman between 2018 and 2020. He has an MBA from INSEAD.
John Witt
*
Managing Director
John Witt joined the Board in 2016 and was appointed Managing Director in June
2020. He has been with the Jardine Matheson group since 1993 and has held a
number of senior finance positions, including group finance director of Jardine
Matheson from 2016 to 2020 and the chief financial officer of Hongkong Land.
John is chairman of Jardine Matheson Limited, group managing director of Jardine
Matheson and managing director of Hongkong Land and Mandarin Oriental. He is
also a director of Jardine Pacific and Jardine Motors, as well as a commissioner and
chairman of the executive committee of Astra. John is a Chartered Accountant
and has an MBA from INSEAD.
Ian McLeod
*
Group Chief Executive
Ian McLeod joined the Board as Group Chief Executive in 2017. He has extensive
experience in the retail sector and was previously chief executive of Southeastern
Grocers in the United States, before which he was managing director of Coles in
Australia. He is also a director of Yonghui Superstores and a commissioner of Hero.
Clem Constantine
*
Chief Financial Officer and
Property Director
Clem Constantine joined the Board as Chief Financial Officer in 2019, having joined
the DFI leadership team as Property Director in 2018. He is a Chartered
Accountant with extensive experience in senior finance and property roles in the
retail sector. He has previously held finance, international and property
directorships with Marks and Spencer, the Arcadia group, Debenhams and the
Burton Group in the United Kingdom.
*
Executive Director
51
Directors’ Profiles
Dave Cheesewright
Dave Cheesewright joined the Board in 2021. He is currently a non-executive
director of Coles Group Limited and Rapha Racing Ltd. He was the former
president and chief executive officer of Walmart International.
Weiwei Chen
Weiwei Chen joined the Board in 2021. She is currently a non-executive director of
HBM Holding Ltd., an independent non-executive director of LianBio and board
senior adviser to PharmPlus. She was the former vice president and chief financial
officer, China of Starbucks and chief financial officer, China Division of Yum!
Brands.
Adam Keswick
Adam Keswick joined the Board in 2012. Having joined Jardine Matheson in
2001, he was appointed to the Jardine Matheson board in 2007 and was deputy
managing director from 2012 to 2016. Adam is a director of Hongkong Land
and Mandarin Oriental. He is also a director of Ferrari NV, Schindler and Yabuli
China Entrepreneurs Forum and vice chairman of the supervisory board of
Rothschild & Co.
Anthony Nightingale
Anthony Nightingale joined the Board in 2006 and was Managing Director
of the Company from 2006 to 2012. He is also a director of Hongkong Land,
Jardine Cycle & Carriage, Jardine Matheson, Shui On Land and Vitasoy, and a
commissioner of Astra. He is chairperson of The Sailors Home and Missions to
Seafarers in Hong Kong. He is a past chairman of the Hong Kong General
Chamber of Commerce and served on many Hong Kong Government committees
from 1992 to 2022, also representing Hong Kong on the APEC Business Advisory
Council from 2005 to 2017.
Christian Nothhaft
Christian Nothhaft joined the Board in 2021. He is currently the chair of Active
Capital Partners Limited and entrepreneur in residence with Warburg Pincus LLC.
He was the former CEO of Watsons Personal Care Stores, China and managing
director of Fortress.
52
DFI Retail Group Holdings Limited Annual Report 2022
OUR LEADERSHIP
Ian McLeod
Group Chief Executive
Ian McLeod is currently Group Chief Executive for the DFI Retail Group; a multi-sector
retailer, based in Hong Kong operating in 13 different Asian markets, with over
10,600 retail outlets across the group and its associated companies.
Ian has over 35 years of deep retail transformation experience from around the
world spending his early career with Asda in the United Kingdom and Walmart in
Germany. He joined the Halfords Group in the United Kingdom in 2003 where he
was appointed as Chief Executive. In 2008, he moved to Australia as Managing
Director of Coles Retail Group, which had 2,200 outlets and 100,000 employees.
In his leadership role at Coles, he oversaw fundamental improvements in product
quality, value, operational efficiency, customer service and new store formats, as
well as change in company culture. This resulted in Coles producing substantial
increases in both turnover and profits, and significant market outperformance over
a period of 60 consecutive quarters.
Following Coles, Ian spent two years introducing substantive change within
Southeastern Grocers, an underperforming grocery chain in the United States, before
joining the DFI Retail Group in late 2017. He attended the Harvard Business School
Advanced Management Program in 1999 and was awarded an Honorary Doctorate
in Scotland in 2010 for services to Business and Retail.
Choo Peng Chee
Chief Executive Officer –
DFI Retail North Asia
Choo was appointed CEO DFI Retail North Asia in August 2021, covering all food
retail operations (grocery retail and convenience stores) in Hong Kong, Macau,
Chinese mainland, as well as the convenience format in Singapore. He is a director
of the DFI Retail Group Management Services Board since 2013, a member of the
Executive Board of the DFI Retail Group and a Board Member of Robinsons Retail
Holdings, Inc. – an associate company of DFI Retail Group.
He joined the Group in 2000 and was the Chief Executive Officer of Cold Storage,
Market Place and Shop N Save in Singapore from 2005 to 2009. He subsequently
served as the Chief Executive Officer for Wellcome Hong Kong from 2010, and was
appointed as the Regional Director, North Asia (Food) in 2013, and CEO – North Asia
& Group Convenience in 2018.
Choo brings with him more than 35 years of retail experience to this role and has
an MBA in Retailing from the University of Stirling, Scotland.
Chris Bush
Chief Executive Officer –
DFI Retail Southeast Asia
Chris Bush was appointed CEO DFI Retail Southeast Asia in August 2021, leading
both Food, as well as Health and Beauty businesses in the region.
Chris is a highly experienced senior retailer with an impressive track record in
leadership roles in Tesco for over 30 years, including CEO and Managing Director
roles in Malaysia, Thailand, Korea and the U.K. After a consultancy role for
a major retailer in the United States, Chris joined the DFI Retail Group in 2018
to lead the transformation of the food business in Indonesia and was appointed
CEO – Southeast Asia Food Business in 2019.
Chris has Business background and executive training from Manchester Business
school in the United Kingdom and INSEAD in France.
53
Our Leadership
Clem Constantine
Chief Financial Officer and
Property Director
Clem took up the position of CFO and Property Director in August 2019, having
joined the Group’s leadership team in September 2018. He is a Chartered
Accountant with extensive experience of senior finance and property roles in
the retail sector. He has previously held finance, international and property
directorships with Marks and Spencer, the Arcadia Group, Debenhams and
the Burton Group in the United Kingdom.
Johnny Wong
Chief Executive Officer –
DFI Digital
Johnny Wong was appointed CEO DFI Digital in August 2021.
Johnny leads key DFI’s Digital Businesses (
yuu
HK and Singapore CART) and
DFI’s Group Technology. He drives digital and retail IT transformation across the
group, online-to-offline (O2O), and online-only channels, including digital loyalty,
multi-banner eCommerce, quick commerce, and group data analytics. Johnny
brings with him extensive digital and transformation experience from roles spanning
the US, Australia, South America, and Southeast Asia. He has previously held
business and technology leadership roles at tech start-ups, Oracle, BCG, Google,
Mercado Libre, Lazada, NTUC Enterprise, and Singapore’s FairPrice Group.
Johnny has an MBA from Wharton, a Master’s in Computer Science from Stanford,
and a Bachelor’s in Electrical Engineering and Computer Science from UC Berkeley.
Andrew Wong
Chief Executive Officer –
Health and Beauty North Asia
Andrew was appointed CEO Health and Beauty North Asia in August 2021,
responsible for the Mannings’ business in Hong Kong, Macau and Chinese mainland.
Andrew’s career spun from start-ups to the public sector and subsequently, to
the business sector. For the past 16 years, he found his passion in the food and
beverage industry and had the opportunity to gain deep insights into the broader
Asian markets. He has been Group Chief Executive of Jardine Restaurant Group
since 2018, overseeing the business strategy and operations across Asia. Prior
to that, Andrew was SSP Group’s Regional Managing Director for Asia Pacific,
responsible for business development in the region. He also held various leadership
roles at DFI and Pacific Coffee in the past.
Andrew is a Chairman of MINDSET, a registered charity in Hong Kong founded
by the Jardine Matheson Group devoted to making a positive and sustainable
difference in mental health.
Soren Lauridsen
Chief Executive Officer –
Health and Beauty
Southeast Asia
Soren was appointed CEO Health and Beauty Southeast Asia in April 2018 and
holds several Board positions.
Prior to joining Guardian, Soren, has taken on many senior leadership roles and
acted as chairman of various boards in the past decades across Southeast Asia,
covering mainly Unilever and Carlsberg. Joining the Group in March 2017 from
the AJE Group as the Regional Director of Asia and Managing Director of Thailand,
he holds vast experiences across Southeast Asia and in-depth knowledge in fast
moving consumer goods.
Martin Lindström
Chief Executive Officer – IKEA
Martin was appointed CEO IKEA in August 2021 responsible for the Group’s IKEA
operations in Taiwan, Hong Kong, Macau and Indonesia. He joined the Group in
2007 as General Manager of IKEA Taiwan and subsequently CEO of the Group’s
IKEA business in 2010 and Group Director, IKEA in 2013.
Martin has more than 20 years’ experience in a variety of senior positions with
the IKEA business in Europe, Eastern Europe and more than a decade in the Asia
Pacific region.
54
DFI Retail Group Holdings Limited Annual Report 2022
Danni Peirce
Managing Director –
Guardian Singapore
Danni was appointed Managing Director of Guardian Singapore in September 2022.
Prior to this Danni was CEO of
yuu
rewards, having joined DFI Retail Group in 2018
as Commercial Director for North Asia Food & Group Convenience.
Danni started her career with Deloitte before moving into retail, joining Tesco
in the UK in 2006. She subsequently joined Coles in Australia, where she held
a number of commercial leadership positions. Following this, she moved to work
for Southeastern Grocers in the United States.
Danni has a management degree from the University of Nottingham, UK and
executive training from INSEAD, Singapore.
Marcus Spurrell
Chief Technology Officer
Marcus joined in October 2018 and is currently the Chief Technology Officer.
He has over 25 years management experience in the digital & technology field, with
a focus on product development, e-commerce marketing/operations, data &
analytics, loyalty and personalisation. Prior to joining DFI, he was Senior Vice
President for Digital, Loyalty and Personalisation at Ahold Delhaize Group where he
led a transformation of its loyalty programmes. He also held several Digital and
e-commerce leadership roles for Adidas Group across Asia Pacific, USA, and Europe.
Marcus has a joint honours degree in Japanese and Economics from SOAS London
University and has lived in Asia for over 16 years.
Charlie Wood
General Counsel,
Head of Audit, QC Technical
and HR Central Services
Charlie was appointed General Counsel, Head of Audit, QC Technical and
HR Central Services in August 2021. He was initially recruited in September 1999
to set up a legal department for the Group in Hong Kong, and subsequently
became responsible for the legal affairs of DFI in North Asia, and Group Counsel
in 2007.
Charlie qualified as a solicitor in England and worked in private practice in London
for three years before moving to Vietnam in 1995 to work for an international
law firm.
55
56
DFI Retail Group Holdings Limited Annual Report 2022
for the year ended 31st December 2022
| CONSOLIDATED PROFIT AND LOSS ACCOUNT | |||||||
2022 | 2021 | ||||||
| Underlying | Non- | Underlying | Non- | ||||
| business | trading | business | trading | ||||
| performance | items | Total | performance | items | Total | ||
| Note | US$m | US$m | US$m | US$m | US$m | US$m | |
| restated | restated | restated | |||||
| Revenue | 2 | ||||||
| Net operating costs | 3 | ( | ( | ( | ( | ( | |
| Operating profit | 4 | ( | |||||
Financing charges | ( | ( | ( | ( | |||
Financing income | |||||||
| Net financing charges | 5 | ( | ( | ( | ( | ||
Share of results of associates and joint ventures | 6 | ( | ( | ( | ( | ( | ( |
(Loss)/profit before tax | ( | ( | ( | ||||
| Tax | 7 | ( | ( | ( | ( | ||
(Loss)/profit after tax | ( | ( | ( | ||||
| Attributable to: | |||||||
Shareholders of the Company | ( | ( | ( | ||||
Non-controlling interests | ( | ( | ( | ( | ( | ||
( | ( | ( | |||||
US¢ | US¢ | US¢ | US¢ | ||||
| (Loss)/earnings per share | 8 | ||||||
– basic | ( | ||||||
– diluted | ( | ||||||
| For details of the restatement, refer to note 1. |
*
*
*
*
57
| CONSOLIDATED STATEMENT OF | |||
| COMPREHENSIVE INCOME | |||
| for the year ended 31st December 2022 | 2022 | 2021 | |
| Note | US$m | US$m | |
(Loss)/profit for the year | ( | ||
| Other comprehensive (expense)/income | |||
| Items that will not be reclassified to profit or loss: | |||
| Remeasurements of defined benefit plans | 18 | ||
| Net revaluation surplus before transfer to investment properties | |||
| – right-of-use assets | 12 | ||
| Tax relating to items that will not be reclassified | 7 | ( | ( |
Share of other comprehensive income of associates and joint ventures | |||
| Items that may be reclassified subsequently to profit or loss: | |||
| Net exchange translation differences | |||
– net loss arising during the year | ( | ( | |
– transfer to profit and loss | |||
( | ( | ||
| Cash flow hedges | |||
– net gain arising during the year | |||
– transfer to profit and loss | ( | ||
| Tax relating to items that may be reclassified | 7 | ( | ( |
Share of other comprehensive expense of associates and joint ventures | ( | ( | |
( | ( | ||
Other comprehensive (expense)/income for the year, net of tax | ( | ||
Total comprehensive income for the year | ( | ||
| Attributable to: | |||
Shareholders of the Company | ( | ||
Non-controlling interests | ( | ( | |
( |
58
DFI Retail Group Holdings Limited Annual Report 2022
at 31st December 2022
| CONSOLIDATED BALANCE SHEET | |||
2022 | 2021 | ||
| Note | US$m | US$m | |
| Net operating assets | |||
| Intangible assets | 10 | ||
| Tangible assets | 11 | ||
| Right-of-use assets | 12 | ||
| Investment properties | 13 | ||
| Associates and joint ventures | 14 | ||
| Other investments | 15 | ||
| Non-current debtors | 16 | ||
| Deferred tax assets | 17 | ||
| Pension assets | 18 | ||
Non-current assets | |||
Stocks | |||
| Current debtors | 16 | ||
Current tax assets | |||
| Cash and bank balances | 19 | ||
| Non-current assets held for sale | 20 | ||
Current assets | |||
| Current creditors | 21 | ( | ( |
| Current borrowings | 22 | ( | ( |
| Current lease liabilities | 23 | ( | ( |
Current tax liabilities | ( | ( | |
| Current provisions | 24 | ( | ( |
Current liabilities | ( | ( | |
Net current liabilities | ( | ( | |
| Long-term borrowings | 22 | ( | ( |
| Non-current lease liabilities | 23 | ( | ( |
| Deferred tax liabilities | 17 | ( | ( |
| Pension liabilities | 18 | ( | ( |
| Non-current creditors | 21 | ( | ( |
| Non-current provisions | 24 | ( | ( |
Non-current liabilities | ( | ( | |
59
2022 | 2021 | ||
| Note | US$m | US$m | |
| Total equity | |||
| Share capital | 25 | ||
| Share premium and capital reserves | 27 | ||
Revenue and other reserves | |||
Shareholders’ funds | |||
Non-controlling interests | ( | ||
Approved by the Board of Directors
Ian McLeod
Clem Constantine
Directors
2nd March 2023
60
DFI Retail Group Holdings Limited Annual Report 2022
CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY
for the year ended 31st December 2022
| Attributable | |||||||
| to | Attributable | ||||||
| Revenue | shareholders | to non- | |||||
| Share | Share | Capital | and other | of the | controlling | Total | |
| capital | premium | reserves | reserves | Company | interests | equity | |
US$m | US$m | US$m | US$m | US$m | US$m | US$m | |
| 2022 | |||||||
| At 1st January | |||||||
Total comprehensive income | ( | ( | ( | ( | |||
Dividends paid by the Company | ( | ( | ( | ||||
Dividends paid to non-controlling interests | ( | ( | |||||
| Unclaimed dividends | |||||||
| forfeited | |||||||
| Share-based long-term | |||||||
| incentive plans | |||||||
Shares purchased for a share-based long- term incentive plan | ( | ( | ( | ||||
| Change in interests | |||||||
in associates and joint ventures | ( | ( | ( | ||||
| Transfer | ( | ||||||
| At 31st December | ( | ||||||
| 2021 | |||||||
| At 1st January | |||||||
Total comprehensive income | ( | ||||||
Dividends paid by the Company | ( | ( | ( | ||||
Dividends paid to non-controlling interests | ( | ( | |||||
| Exercise of options | ( | ||||||
| Share-based long-term | |||||||
| incentive plans | |||||||
| Change in interests | |||||||
in associates and joint ventures | |||||||
| Transfer | ( | ||||||
| At 31st December | |||||||
Revenue and other reserves at 31st December 2022 comprised revenue reserves of US$1,127.2 million
(2021:
US$1,363.1 million)
, hedging reserves of US$38.6 million
(2021: US$9.0 million)
, revaluation reserves of US$38.2 million
(2021: nil)
and exchange reserves of US$399.7 million loss
(2021: US$240.3 million loss)
.
61
for the year ended 31st December 2022
| CONSOLIDATED CASH FLOW STATEMENT | |||
2022 | 2021 | ||
| Note | US$m | US$m | |
| Operating activities | |||
| Operating profit | 4 | ||
| Depreciation and amortisation | 30(a) | ||
| Other non-cash items | 30(b) | ( | ( |
| Increase in working capital | 30(c) | ( | ( |
Interest received | |||
Interest and other financing charges paid | ( | ( | |
Tax paid | ( | ( | |
Dividends from associates and joint ventures | |||
Cash flows from operating activities | |||
| Investing activities | |||
| Purchase of subsidiaries | 30(d) | ( | |
| Purchase of associates and joint ventures | 30(e) | ( | ( |
| Purchase of other investments | 30(f) | ( | ( |
Purchase of intangible assets | ( | ( | |
Purchase of tangible assets | ( | ( | |
| Advances to associates and joint ventures | 30(g) | ( | |
| Sale of associates and joint ventures | 30(h) | ||
| Sale of properties | 30(i) | ||
Sale of other tangible assets | |||
Cash flows from investing activities | ( | ( | |
| Financing activities | |||
| Purchase of shares for a share-based long-term incentive plan | 30(j) | ( | |
| Drawdown of borrowings | 22 | ||
| Repayment of borrowings | 22 | ( | ( |
| Net increase in other short-term borrowings | 22 | ||
| Principal elements of lease payments | 30(k) | ( | ( |
| Dividends paid by the Company | 28 | ( | ( |
Dividends paid to non-controlling interests | ( | ( | |
Cash flows from financing activities | ( | ( | |
Net increase/(decrease) in cash and cash equivalents | ( | ||
Cash and cash equivalents at 1st January | |||
Effect of exchange rate changes | ( | ( | |
| Cash and cash equivalents at 31st December | 30(l) |
62
DFI Retail Group Holdings Limited Annual Report 2022
Details of the Group’s principal accounting policies are included in note 38.
The Group’s reportable segments are set out in notes 2, 4 and 6 and are described on page 63.
NOTES TO THE FINANCIAL STATEMENTS
63
Revenue and share of results of Yonghui and Robinsons Retail represent 12 months from October 2021 to September 2022
(2021: October 2020 to September 2021)
, based on their latest published announcements
(note 6)
.
*
For details of restatement, refer to note 1.
64
DFI Retail Group Holdings Limited Annual Report 2022
Notes to the Financial Statements
*
For details of restatement, refer to note 1.
65
66
DFI Retail Group Holdings Limited Annual Report 2022
Notes to the Financial Statements
67
6. Share of Results of Associates and Joint Ventures
2022
^
2021
^
US$m US$m
Analysis by operating segment:
Food (269.0) (91.9)
– Grocery retail (269.0) (90.2)
– Convenience stores – (1.7)
Health and Beauty 1.4 0.9
Restaurants 52.2 51.7
Other Retailing 3.4 (2.5)
(212.0) (41.8)
Share of results in grocery retail segment included an impairment charge on interest in Robinsons Retail which amounted
to US$170.8 million in 2022
(note 14)
.
Share of results of associates and joint ventures included the following gains/(losses) from non-trading items
(note 9)
:
2022
^
2021
^
US$m US$m
Impairment charge on interest in Robinsons Retail (170.8) –
Impairment charge of Yonghui’s investments (17.2) (13.9)
Change in fair value of Maxim’s investment property 14.3 –
Change in fair value of Yonghui’s investment property 5.7 –
Change in fair value of Yonghui’s equity investments (11.9) 12.3
Change in fair value of Robinsons Retail’s equity investments (1.4) 0.1
Net gain from divestment of an investment by Yonghui 4.1 –
Net gains from sale of debt investments by Robinsons Retail 0.1 0.1
(177.1) (1.4)
Results are shown after tax and non-controlling interests in the associates and joint ventures.
In relation to the COVID-19 pandemic, included in share of results of associates and joint ventures were the Group’s
share of the government grants and rent concessions of US$17.7 million
(2021: US$13.7 million)
and US$13.7 million
(2021: US$18.1 million)
, respectively, for the year ended 31st December 2022.
^
Included 12 months results from October 2021 to September 2022
(2021: October 2020 to September 2021)
for Yonghui and Robinsons Retail
(note 2)
.
68
DFI Retail Group Holdings Limited Annual Report 2022
Notes to the Financial Statements
*
The applicable tax rate for the year was 14.9%
(2021: 16.1%)
and represented the weighted average of the rates of taxation prevailing in the territories in
which the Group operates. The decrease in applicable tax rate was mainly attributable to a change in the geographic mix of the Group’s results.
69
70
DFI Retail Group Holdings Limited Annual Report 2022
Notes to the Financial Statements
9. Non-trading Items
An analysis of non-trading items in operating profit and (loss)/profit attributable to shareholders is set out below:
Operating profit
(Loss)/profit attributable
to shareholders
2022 2021 2022 2021
US$m US$m US$m US$m
Impairment of intangible assets (6.3) – (6.3) –
Impairment of right-of-use assets (2.2) – (2.1) –
Gain on partial disposal of a joint venture 6.9 – 6.9 –
Gain on acquisition of an associate 11.2 – 11.2 –
Profit on sale of properties
(note 30(i))
31.1 27.2 29.2 27.0
Business restructuring costs (5.8) (30.7) (5.4) (27.8)
Change in fair value of equity investments 0.2 0.5 0.2 0.5
Impairment charge on interest in Robsinsons Retail
(note 6)
– – (170.8) –
Share of impairment charge of Yonghui’s investments – – (17.2) (13.9)
Share of change in fair value of Maxim’s
investment property – – 14.3 –
Share of change in fair value of Yonghui’s
investment property – – 5.7 –
Share of change in fair value of Yonghui’s
equity investments – – (11.9) 12.3
Share of change in fair value of Robinsons Retail’s
equity investments – – (1.4) 0.1
Share of net gain from divestment of an investment
by Yonghui – – 4.1 –
Share of net gains from sale of debt investments
by Robinsons Retail – – 0.1 0.1
35.1 (3.0) (143.4) (1.7)
In April 2022, the Group acquired 100% interests in DFI Digital (Hong Kong) Limited (‘Digital Hong Kong’) and
DFI Digital (Singapore) Pte. Limited (‘Digital Singapore’) from its joint venture, Retail Technology Asia Limited (‘RTA’).
Following the acquisitions, Digital Hong Kong and Digital Singapore became wholly-owned subsidiaries of the Group.
Goodwill amounting to US$13.2 million was recognised and an impairment charge of US$6.3 million on the related
goodwill was recorded during the year.
Gain on partial disposal of a joint venture represented the gain arising from the Group’s disposal of 8.5% of its interest
in RTA, a 50%-owned joint venture in May 2022. The Group’s interest in RTA is reduced to 41.5% upon the completion of
the transaction.
Gain on acquisition of an associate related to the Group’s acquisition of 40% interest in Minden International Pte. Ltd.
(‘Minden’) from a third party in September 2022. Minden supports the Group’s customer loyalty programme in Singapore.
Business restructuring costs in 2021 mainly related to the exit costs for withdrawal of the Group’s Giant brand investment
in Indonesia. In addition, certain balance of restructuring costs relating to the Group’s 2018 restructuring of its Southeast
Asia Food business was also included in the restructuring costs in 2022 and 2021.
71
72
DFI Retail Group Holdings Limited Annual Report 2022
Notes to the Financial Statements
73
11. Tangible Assets
Freehold
properties
Buildings
on
leasehold
land
Leasehold
improvements
Plant &
machinery
Furniture,
equipment
& motor
vehicles Total
US$m US$m US$m US$m US$m US$m
2022
Cost 59.0 304.0 904.0 765.5 353.2 2,385.7
Depreciation and impairment (12.1) (121.0) (617.8) (546.6) (284.9) (1,582.4)
Net book value at 1st January 46.9 183.0 286.2 218.9 68.3 803.3
Exchange differences (1.8) (12.7) (14.7) (8.2) (2.8) (40.2)
New subsidiaries – – – – 0.1 0.1
Additions – 0.2 96.3 81.6 30.7 208.8
Disposals – (10.6) (1.8) (1.5) (0.3) (14.2)
Transfer to investment
properties
(note 13)
– (0.3) – – – (0.3)
Depreciation charge (1.1) (5.6) (61.4) (60.1) (22.6) (150.8)
(Impairment)/reversal
of impairment charge (1.9) 0.7 1.1 0.3 0.1 0.3
Reclassified to non-current
assets held for sale
(note 20)
– (1.2) – – – (1.2)
Reclassified to right-of-use
assets
(note 12)
– (2.9) – – – (2.9)
Transfer – – – 1.1 (1.1) –
Net book value at 31st December 42.1 150.6 305.7 232.1 72.4 802.9
Cost 56.8 242.9 932.4 799.0 324.5 2,355.6
Depreciation and impairment (14.7) (92.3) (626.7) (566.9) (252.1) (1,552.7)
42.1 150.6 305.7 232.1 72.4 802.9
2021
Cost 73.0 403.3 833.0 765.2 347.9 2,422.4
Depreciation and impairment (15.9) (165.9) (579.0) (598.3) (291.4) (1,650.5)
Net book value at 1st January 57.1 237.4 254.0 166.9 56.5 771.9
Exchange differences (1.8) (4.0) 0.2 (1.0) (0.3) (6.9)
Additions – – 92.7 102.2 36.5 231.4
Disposals – (0.4) (1.3) (2.7) (3.4) (7.8)
Depreciation charge (1.2) (6.7) (60.6) (56.2) (20.7) (145.4)
(Impairment)/reversal
of impairment charge (0.5) (3.4) 1.2 (2.1) (0.3) (5.1)
Reclassified to non-current
assets held for sale
(note 20)
(6.7) (28.1) – – – (34.8)
Transfer – (11.8) – 11.8 – –
Net book value at 31st December 46.9 183.0 286.2 218.9 68.3 803.3
Cost 59.0 304.0 904.0 765.5 353.2 2,385.7
Depreciation and impairment (12.1) (121.0) (617.8) (546.6) (284.9) (1,582.4)
46.9 183.0 286.2 218.9 68.3 803.3
74
DFI Retail Group Holdings Limited Annual Report 2022
Notes to the Financial Statements
11. Tangible Assets continued
Rental income from properties amounted to US$10.6 million
(2021: US$11.0 million)
with no contingent rents
(2021: nil)
.
The maturity analysis of the undiscounted lease payments to be received after the balance sheet date is as follows:
2022 2021
US$m US$m
Within one year 9.9 13.4
Between one and two years 4.4 5.4
Between two and five years 4.5 10.4
Beyond five years 1.3 1.5
20.1 30.7
There were no tangible assets pledged as security for borrowings at 31st December 2022 and 2021.
12. Right-of-use Assets
Leasehold
land Properties
Furniture,
equipment
& other Total
US$m US$m US$m US$m
2022
Net book value at 1st January 120.3 2,626.5 0.8 2,747.6
Exchange differences (7.5) (66.0) (0.1) (73.6)
Additions – 175.2 0.2 175.4
Revaluation surplus before transfer to investment properties 38.2 – – 38.2
Transfer to investment properties
(note 13)
(39.5) – – (39.5)
Modifications to lease terms – 503.0 0.1 503.1
Amortisation/depreciation charge (2.6) (675.7) (0.4) (678.7)
Impairment charge (0.9) – – (0.9)
Reclassified to non-current assets held for sale
(note 20)
(4.4) – – (4.4)
Reclassified from tangible assets
(note 11)
2.9 – – 2.9
Net book value at 31st December 106.5 2,563.0 0.6 2,670.1
2021
Net book value at 1st January 177.8 2,693.0 1.3 2,872.1
Exchange differences (3.2) (18.1) – (21.3)
Additions – 109.1 0.1 109.2
Modifications to lease terms – 547.2 – 547.2
Amortisation/depreciation charge (4.0) (704.7) (0.6) (709.3)
Reclassified to non-current assets held for sale
(note 20)
(50.3) – – (50.3)
Net book value at 31st December 120.3 2,626.5 0.8 2,747.6
75
12. Right-of-use Assets continued
Furniture, equipment and other comprise furniture, equipment, plant and machinery, motor vehicles and other.
The typical lease terms associated with the right-of-use assets are as follows:
Leasehold land 25 to 999 years
Properties 1 to 40 years
Furniture, equipment & other 1 to 5 years
There was no leasehold land pledged as security for borrowings at 31st December 2022 and 2021.
13. Investment Properties
2022
US$m
At 1st January –
Transfer from tangible assets
(note 11)
0.3
Transfer from right-of-use assets
(note 12)
39.5
At 31st December 39.8
At 31st December 2022, an owner-occupied property was transferred to investment property in view of the change in
intention to hold the property for long-term rental yield. On the date of transfer, the property was accounted for at its
fair value and US$38.2 million was credited to the revaluation reserves
(note 12).
The Group measures its investment properties at fair value. The fair value of the Group’s investment property at
31st December 2022 has been determined on the basis of valuation carried out by an independent valuer who holds a
recognised relevant professional qualification and has recent experience in the location and segment of the investment
property valued. The investment property is a leasehold property located in Hong Kong.
The valuation conforms to the International Valuation Standards issued by the International Valuation Standards Council
and the HKIS Valuation Standards issued by the Hong Kong Institute of Surveyors.
Fair value of the investment property is derived using the direct comparison method. This valuation method is based on
comparing the property to be valued directly with other comparable properties, which have recently transacted. Comparable
premises are generally located in the surrounding areas or in other sub-markets which are comparable to the property.
However, given the heterogeneous nature of real estate properties, appropriate adjustments are usually required to allow
for any qualitative differences that may affect the price likely to be achieved by the property under consideration.
The maturity analysis of lease payments, showing the undiscounted lease payments to be received after the balance
sheet date are as follows:
2022
US$m
Within one year 0.8
Between one and two years 0.8
Between two and five years 0.4
2.0
At 31st December 2022, there was no investment property pledged as security for borrowings. There was no investment
property at 31st December 2021.
76
DFI Retail Group Holdings Limited Annual Report 2022
Notes to the Financial Statements
14. Associates and Joint Ventures
2022 2021
US$m US$m
Associates
Listed associates 662.8 826.8
Unlisted associates 519.4 496.8
Share of attributable net assets 1,182.2 1,323.6
Goodwill on acquisition 600.1 834.2
1,782.3 2,157.8
Joint ventures
Unlisted joint ventures (2.1) 6.5
Amount due from a joint venture 1.2 –
(0.9) 6.5
1,781.4 2,164.3
Amount due from a joint venture is unsecured and interest-bearing at a fixed rate of 3.13% per annum and is repayable
within one year.
Associates Joint ventures
2022 2021 2022 2021
US$m US$m US$m US$m
Movements of associates and joint ventures during the year:
At 1st January 2,157.8 2,235.5 6.5 21.0
Exchange differences (145.2) (25.6) 0.1 (0.2)
Share of results after tax and non-controlling interests (197.9) (25.9) (14.1) (15.9)
Share of other comprehensive expense after tax
and non-controlling interests (0.1) (0.1) – –
Dividends received (44.8) (46.4) – –
Acquisition, capital injections and advances 11.2 – 9.5 1.6
Other movements in attributable interests 1.3 20.3 (2.9) –
At 31st December 1,782.3 2,157.8 (0.9) 6.5
Fair value of listed associates 1,308.7 1,619.3
In September 2022, the Group completed the acquisition of 40% interest in Minden from a third party. A gain on
acquisition of an associate amounted to US$11.2 million was recognised in the profit and loss during the year.
77
14. Associates and Joint Ventures continued
An impairment review was performed by the management on the carrying amount of Robinsons Retail in view of the
challenging market conditions faced by Robinsons Retail. Following the review, an impairment charge of US$170.8 million
was recognised under the share of results of associates and joint ventures in the profit and loss in 2022. The impairment
review was performed by comparing the carrying amount of Robinsons Retail with its recoverable amount. The recoverable
amount is determined based on a value-in-use calculation using cash flow projections approved by management
covering a five-year period. Key assumptions used for value-in-use calculation include average revenue growth rate of
4.0% and average annual profit before interest and tax growth rate of 11.0%. Cash flows beyond the five-year period
are extrapolated using growth rate of 3.0% and pre-tax discount rate of 15.2%. The growth rate does not exceed the
long-term average industry growth rates in the Philippines, and the pre-tax discount rate reflects specific risks relating
to the relevant industry.
For the recoverable amount of Robinsons Retail:
• If the average revenue growth rate used in the value-in-use calculation had been 1% higher/lower than
management’s estimates, the Group would have a higher headroom of US$47.8 million or recognised a further
impairment charge of US$61.7 million;
• If the average annual profit before interest and tax growth rate used in the value-in-use calculation had been 1%
higher/lower than management’s estimates, the Group would have a higher headroom of US$18.3 million or
recognised a further impairment charge of US$15.2 million;
• If the estimated pre-tax discount rate applied to the discounted cash flows had been 1% higher/lower than
management’s estimates, the Group would have recognised a further impairment charge of US$30.7 million or a
higher headroom of US$36.2 million, and
• If the long-term growth rate applied to the discounted cash flows had been 1% higher/lower than management’s
estimates, the Group would have a higher headroom of US$37.8 million or recognised a further impairment charge
of US$30.2 million.
(a) Investment in associates
The material associates of the Group are listed below. These associates have share capital consisting solely of ordinary
shares, which are held directly by the Group. The country of incorporation is also their principal place of business, and the
proportion of ownership interest is the same as the proportion of voting rights held.
Nature of investments in material associates in 2022 and 2021:
% of ownership interest
Name of entity Nature of business
Country of incorporation/
place of listing 2022 2021
Maxim’s Caterers Limited
(‘Maxim’s’)
Restaurants Hong Kong/Unlisted 50 50
Yonghui Superstores Co., Ltd
(‘Yonghui’)
Grocery retail Chinese mainland/ Shanghai 21.13 21.08
Robinsons Retail Holdings, Inc.
(‘Robinsons Retail’)
Grocery retail,
convenience,
health and beauty,
department stores,
specialty and
DIY stores
The Philippines/
The Philippines
21.30 20.76
Following share buybacks in Yonghui and Robinsons Retail, the Group’s interests in Yonghui increased from 21.08% to
21.13% and Robinsons Retail increased from 20.76% to 21.30% in September 2022.
78
DFI Retail Group Holdings Limited Annual Report 2022
Notes to the Financial Statements
14. Associates and Joint Ventures continued
(a) Investment in associates continued
Summarised financial information for material associates
Summarised balance sheets at 31st December (unless otherwise indicated):
Maxim’s Yonghui Robinsons Retail
2022 2021 2022* 2021
†
2022* 2021
†
US$m US$m US$m US$m US$m US$m
Non-current assets 2,505.6 2,557.5 6,130.7 7,520.2 1,598.1 1,864.4
Current assets
Cash and cash equivalents 219.1 247.2 1,136.7 1,941.9 226.5 291.1
Other current assets 286.0 271.4 1,954.5 2,426.1 553.5 571.1
Total current assets 505.1 518.6 3,091.2 4,368.0 780.0 862.2
Non-current liabilities
Financial liabilities
‡
(992.2) (877.5) (3,638.1) (3,801.3) (384.9) (447.1)
Other non-current liabilities (163.5) (191.1) (34.9) (51.5) (101.6) (123.7)
Total non-current liabilities (1,155.7) (1,068.6) (3,673.0) (3,852.8) (486.5) (570.8)
Current liabilities
Financial liabilities
‡
(600.2) (768.7) (1,243.2) (2,358.6) (179.6) (171.7)
Other current liabilities (112.7) (121.2) (2,617.4) (3,260.7) (368.2) (431.3)
Total current liabilities (712.9) (889.9) (3,860.6) (5,619.3) (547.8) (603.0)
Non-controlling interests (123.2) (124.0) (39.2) (92.0) (81.0) (100.8)
Net assets 1,018.9 993.6 1,649.1 2,324.1 1,262.8 1,452.0
*
Based on unaudited summarised balance sheet at 30th September 2022.
†
Based on unaudited summarised balance sheet at 30th September 2021.
‡
Excluded trade and other payables and provisions, which are presented under other current and non-current liabilities.
79
14. Associates and Joint Ventures continued
(a) Investment in associates continued
Summarised financial information for material associates continued
Summarised statements of comprehensive income for the year ended 31st December (unless otherwise indicated):
Maxim’s Yonghui Robinsons Retail
2022 2021 2022
^
2021
#
2022
^
2021
#
US$m US$m US$m US$m US$m US$m
Revenue 2,524.0 2,455.2 13,053.5 13,013.4 3,237.3 3,087.6
Depreciation and amortisation (405.8) (425.8) (654.9) (602.1) (137.7) (144.6)
Interest income 1.6 1.7 36.4 44.7 6.8 10.7
Interest expense (34.9) (35.9) (342.9) (407.1) (36.4) (44.0)
Profit/(loss) from underlying
business performance 86.7 123.2 (457.1) (577.9) 148.7 89.9
Income tax (expense)/credit (9.6) (24.4) 11.9 58.3 (21.4) (12.8)
Profit/(loss) after tax from
underlying business performance 77.1 98.8 (445.2) (519.6) 127.3 77.1
Profit/(loss) after tax from
non-trading items 28.7 – (92.7) (7.6) (7.1) 1.1
Profit/(loss) after tax 105.8 98.8 (537.9) (527.2) 120.2 78.2
Non-controlling interests (1.3) 4.6 53.6 73.5 (10.1) (5.1)
Profit/(loss) after tax and
non-controlling interests 104.5 103.4 (484.3) (453.7) 110.1 73.1
Other comprehensive
(expense)/income (23.3) (14.9) (0.1) 0.2 (5.9) (6.7)
Total comprehensive income 81.2 88.5 (484.4) (453.5) 104.2 66.4
Dividends received from associates 28.1 28.3 5.7 6.0 11.0 12.1
^
Based on unaudited summarised statement of comprehensive income for the 12 months ended 30th September 2022.
#
Based on unaudited summarised statement of comprehensive income for the 12 months ended 30th September 2021.
The information contained in the summarised balance sheets and statements of comprehensive income reflect the
amounts presented in the financial statements of the associates adjusted for differences in accounting policies between
the Group and the associates, and fair value of the associates at the time of acquisitions.
80
DFI Retail Group Holdings Limited Annual Report 2022
Notes to the Financial Statements
81
15. Other Investments
2022 2021
US$m US$m
Equity investments measured at fair value through profit and loss
– unlisted equity investments 11.7 11.5
Debt investments measured at fair value through profit and loss
– unlisted debt investments 10.0 –
21.7 11.5
Debt investments comprised unlisted convertible bonds. All equity and debt investments are non-current assets.
2022 2021
US$m US$m
Movements during the year:
At 1st January 11.5 6.0
Additions 10.0 5.0
Change in fair value recognised in profit and loss 0.2 0.5
At 31st December 21.7 11.5
82
DFI Retail Group Holdings Limited Annual Report 2022
Notes to the Financial Statements
83
84
DFI Retail Group Holdings Limited Annual Report 2022
Notes to the Financial Statements
85
86
DFI Retail Group Holdings Limited Annual Report 2022
Notes to the Financial Statements
87
88
DFI Retail Group Holdings Limited Annual Report 2022
Notes to the Financial Statements
89
90
DFI Retail Group Holdings Limited Annual Report 2022
Notes to the Financial Statements
91
92
DFI Retail Group Holdings Limited Annual Report 2022
Notes to the Financial Statements
93
94
DFI Retail Group Holdings Limited Annual Report 2022
Notes to the Financial Statements
95
26. 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 first, second and third anniversary of the date of grant and may be subject to the achievement of
performance conditions.
An LTIP was adopted by the Company on 5th March 2015. During 2022, conditional awards amounted to US$2.5 million
and 5,182,398 shares were awarded under the LTIP. Under these awards, shares are granted to selected executives to
align their long-term rewards with shareholders’ interest. Conditions, if any, are at the discretion of the Directors. The fair
value of the share awards granted during the year was US$16.9 million. The inputs into the discounted cash flow valuation
model were share price of US$2.96 per share at the grant date, dividend yield of 3.25% and annual risk-free interest rates
ranged from 1.66% to 2.46%. There were no share awards granted in 2021.
Prior to the adoption of the LTIP, The Dairy Farm International Share Option Plan 2005 provided selected executives
with options to purchase ordinary shares in the Company. The exercise prices of the granted options were, in general,
based on the average market prices for the five trading days immediately preceding the dates of grant of the options.
Options are normally vested over a period of up to three years and are exercisable for up to ten years following the date
of grant. No options were granted in 2022 and 2021.
96
DFI Retail Group Holdings Limited Annual Report 2022
Notes to the Financial Statements
26. Share-based Long-term Incentive Plans continued
Movements of the outstanding conditional awards during the year:
Conditional awards
in millions
2022 2021
At 1st January 0.4 0.6
Granted 5.4 –
Lapsed (0.3) –
Released (0.4) (0.2)
At 31st December 5.1 0.4
Outstanding conditional awards at 31st December:
Conditional awards
in millions
Awards vesting date 2022 2021
2022 – 0.2
2023 1.8 0.2
2024 1.6 –
2025 1.7 –
Total outstanding 5.1 0.4
At 31st December 2022, there were also outstanding conditional awards of US$2.0 million
(2021: nil)
related to the
US$2.5 million conditional awards awarded during the year. The awards vesting date is set out below:
Conditional awards
Awards vesting date
2022
US$
2021
US$
2023 0.5 –
2024 0.5 –
2025 0.5 –
2026 0.5 –
Total outstanding 2.0 –
97
98
DFI Retail Group Holdings Limited Annual Report 2022
Notes to the Financial Statements
28. Dividends
2022 2021
US$m US$m
Final dividend in respect of 2021 of US¢6.50
(2020: US¢11.50)
per share 87.9 155.6
Interim dividend in respect of 2022 of US¢1.00
(2021: US¢3.00)
per share 13.5 40.6
101.4 196.2
Dividends on shares held by a subsidiary of the Group under a share-based
long-term incentive plan (0.5) –
100.9 196.2
A final dividend in respect of 2022 of US¢2.00
(2021: US¢6.50)
per share amounting to a total of US$27.1 million
(2021: US$87.9 million)
is proposed by the Board. The dividend proposed will not be accounted for until it has been
approved at the 2023 Annual General Meeting. This amount will be accounted for as an appropriation of revenue
reserves in the year ending 31st December 2023.
99
29. Geographical Analysis of Non-current Assets
Set out below is an analysis of the Group’s non-current assets, excluding financial instruments, non-current debtors,
deferred tax assets and pension assets, by geographical area:
2022 2021
US$m US$m
North Asia 3,543.2 3,874.6
Southeast Asia 2,162.9 2,252.5
At 31st December 5,706.1 6,127.1
100
DFI Retail Group Holdings Limited Annual Report 2022
Notes to the Financial Statements
101
30. Notes to Consolidated Cash Flow Statement continued
(f) Purchase of other investments mainly related to the Group’s subscription of a five-year convertible bond of Pickupp
Limited, a delivery platform founded in Hong Kong, for a principal of US$10.0 million in January 2022.
Purchase in 2021 mainly related to the Group’s investment in the equity interest of Pickupp Limited.
(g) Advances to associates and joint ventures represented the Group’s advances to its health and beauty joint venture in
Thailand in 2022.
(h) Sale of associates and joint ventures mainly related to the proceeds from the Group’s disposal of 8.5% of its interest in
RTA amounted to US$6.9 million in May 2022.
(i) Sale of properties in 2022 mainly related to disposal of three properties in Indonesia and one property in Hong Kong,
Singapore and Malaysia, respectively, for a total cash consideration of US$63.6 million, and a gain on disposal of
properties amounted to US$31.1 million was recognised
(note 9).
Sale of properties in 2021 mainly related to disposal of six properties in Malaysia, three properties in Taiwan, two properties
in Hong Kong and two properties in Indonesia for a total cash consideration of US$86.3 million, and a gain on disposal of
properties amounted to US$27.2 million was recorded
(note 9).
(j) Purchase of shares for a share-based long-term incentive plan in 2022 related to the purchase of 7,912,100 ordinary
shares from the stock market by a subsidiary of the Group for a total consideration of US$20.0 million.
(k) Cash outflows for leases
2022 2021
US$m US$m
Lease rentals paid (746.9) (762.3)
Additions to right-of-use assets – –
(746.9) (762.3)
The above cash outflows are included in
– operating activities (86.3) (90.3)
– investing activities – –
– financing activities (660.6) (672.0)
(746.9) (762.3)
(l) Analysis of balances of cash and cash equivalents
2022 2021
US$m US$m
Cash and bank balances
(note 19)
230.7 210.4
Bank overdrafts
(note 22)
(17.0) (0.4)
213.7 210.0
102
DFI Retail Group Holdings Limited Annual Report 2022
Notes to the Financial Statements
103
34. Related Party Transactions
The parent company of the Group is Jardine Strategic Limited (‘JSL’) and the ultimate parent company is Jardine
Matheson Holdings Limited (‘JMH’). Both companies are incorporated in Bermuda.
In the normal course of business, the Group undertakes a variety of transactions with JMH and certain of its subsidiaries,
associates and joint ventures. The more significant of such transactions are described below.
The Group pays management fees to Jardine Matheson Limited (‘JML’), a wholly-owned subsidiary of JMH, under the
terms of a Management Services Agreement, for certain management consultancy services provided by JML. The
management fees paid by the Group to JML in 2022 were US$0.3 million
(2021: US$0.5 million).
The Group also paid
directors’ fees of US$0.3 million in 2022
(2021: US$0.3 million)
to JML.
The Group rents properties from Hongkong Land (‘HKL’) and Mandarin Oriental Hotel Group (‘MOHG’), subsidiaries of
JMH. The lease payments paid by the Group to HKL and MOHG in 2022 were US$2.8 million
(2021: US$2.7 million)
and
US$0.7 million
(2021: US$0.7 million),
respectively. The Group’s 50%-owned associate, Maxim’s, also paid lease
payments of US$8.3 million
(2021: US$10.6 million)
to HKL in 2022.
The Group obtains repairs and maintenance services from Jardine Engineering Corporation (‘JEC’), a subsidiary of JMH.
The total fees paid by the Group to JEC in 2022 amounted to US$3.5 million
(2021: US$2.9 million)
.
104
DFI Retail Group Holdings Limited Annual Report 2022
Notes to the Financial Statements
34. Related Party Transactions continued
Maxim’s supplies ready-to-eat products at arm’s length to certain subsidiaries of the Group. In 2022, these amounted to
US$41.9 million
(2021: US$33.8 million)
.
The Group’s digital joint venture, RTA group, implements point-of-sale system and provides consultancy services to the
Group. The total fees paid by the Group to RTA group in 2022 amounted to US$13.1 million
(2021: US$5.0 million)
.
Amounts of outstanding balances with associates and joint ventures are included in debtors and creditors, as appropriate.
Balances with group companies of JMH at 31st December 2022 and 2021 are immaterial, unsecured, and have no fixed
terms of repayment.
Details of Directors’ remuneration (being key management personnel compensation) are shown on page 155 under the
heading of ‘Remuneration Outcomes in 2022’.
35. Summarised Balance Sheet of the Company
Included below is certain summarised balance sheet information of the Company at 31st December disclosed in
accordance with Bermuda law.
2022 2021
US$m US$m
Subsidiaries, at cost less provision* 616.2 556.8
Current liabilities (10.6) (3.8)
Net operating assets 605.6 553.0
Share capital
(note 25)
75.2 75.2
Share premium and capital reserves
(note 27)
67.6 60.2
Revenue and other reserves 462.8 417.6
Shareholders’ funds 605.6 553.0
*
Included intercompany balances due from/(to) subsidiaries.
36. Post Balance Sheet Event
In February 2023, the Group entered into sale and purchase agreements with a third party to dispose of certain of
its subsidiaries and assets in Malaysia which support the operation of the Group’s grocery retail business in Malaysia.
These transactions are expected to be completed in the first half of 2023. Upon completion of the transactions, the
Group will exit the grocery retail business in Malaysia. The Group is assessing the impact of these transactions on the
financial statements. Based on a preliminary assessment, it is estimated that a loss of approximately US$50.0 million to
US$70.0 million, mainly from the realisation of non-cash exchange translation differences, will be charged to the profit
and loss account in the year ending 31st December 2023.
105
106
DFI Retail Group Holdings Limited Annual Report 2022
Notes to the Financial Statements
107
38. Principal Accounting Policies continued
108
DFI Retail Group Holdings Limited Annual Report 2022
Notes to the Financial Statements
109
110
DFI Retail Group Holdings Limited Annual Report 2022
Notes to the Financial Statements
111
112
DFI Retail Group Holdings Limited Annual Report 2022
Notes to the Financial Statements
113
114
DFI Retail Group Holdings Limited Annual Report 2022
Notes to the Financial Statements
115
116
DFI Retail Group Holdings Limited Annual Report 2022
Notes to the Financial Statements
39. Standards and Amendments Issued But Not Yet Effective
A number of amendments effective for accounting periods beginning after 2022 have been published and will be
adopted by the Group from their respective effective dates. The Group is currently assessing the potential impact of
these amendments but expects the adoption will not have a significant impact on the Group’s consolidated financial
statements. The more important amendments are set out below.
(i) Amendment to IAS 12 – Deferred Tax related to Assets and Liabilities arising from a Single Transaction (effective
1st January 2023) requires companies to recognise deferred tax on transactions that, on initial recognition, give rise
to equal amounts of taxable and deductible temporary differences. They typically apply to transactions such as
leases of lessees and decommissioning obligations and will require the recognition of additional deferred tax assets
and liabilities. The Group is assessing the potential impact on the Group’s consolidated financial statements.
117
(i) Market risk
Foreign exchange risk
Entities within the Group are exposed to foreign exchange risk arising 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.
The Group uses forward foreign exchange contracts and foreign currency options in a consistent manner to hedge firm
and anticipated foreign exchange commitments and manage foreign exchange risk arising from future commercial
transactions. 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. There are no significant monetary balances held by Group companies
at 31st December 2022 that are denominated in a non-functional currency. Differences resulting from the translation
of financial statements into the Group’s presentation currency are not taken into consideration.
Interest rate risk
The Group is exposed to interest rate risk through the impact of rate changes on interest-bearing assets and liabilities.
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 including interest
rate swaps. The Group monitors interest rate exposure on a regular 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
long-term non-working capital gross borrowings in fixed rate instruments. At 31st December 2022, the Group’s fixed rate
borrowings were 45%
(2021: 46%)
on the total borrowings, with an average tenor of 0.2 year
(2021: 0.2 year)
. The interest
rate profile of the Group’s borrowings after taking into account hedging transactions is set out in note 22.
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 entering into interest rate swaps for a maturity of up to three years. Interest rate swaps have
the economic effect of converting borrowings from floating rate to fixed rate. Details of interest rate swaps are set out in
note 31.
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.
118
DFI Retail Group Holdings Limited Annual Report 2022
Notes to the Financial Statements
40. Financial Risk Management continued
Financial risk factors continued
(i) Market risk continued
Interest rate risk
continued
At 31st December 2022, if interest rates had been 100 basis points higher/lower with all other variables held constant, the
Group’s loss after tax would have been US$4.4 million higher/lower
(2021: profit after tax would have been US$3.9 million
lower/higher)
, and hedging reserves would have been US$6.0 million
(2021: US$11.3 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. 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 Malaysian, Hong Kong and Indonesian rates, over the period until the next annual
balance sheet date. In the case of effective fair value hedges, changes in the fair value of the hedged items caused by
interest rate movements balance out in the profit and loss account against changes in the fair value of the hedging
instruments. Changes in market interest rates affect the interest income or expense of non-derivative variable-interest
financial instruments, the interest payments of which are not designated as hedged items of cash flow hedges against
interest rate risks. As a consequence, they are included in the calculation of profit after tax sensitivities. Changes in the
market interest rate of financial instruments that were designated as hedging instruments in a cash flow hedge to hedge
payment fluctuations resulting from interest rate movements affect the hedging reserves and are therefore taken into
consideration in the equity-related sensitivity calculations.
(iii) Liquidity risk
Prudent liquidity risk management includes managing the profile of debt maturities and funding sources, maintaining
sufficient cash 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.
Long-term cash flows are projected to assist with the Group’s long-term debt financing plans. In addition, the Group
has implemented a global liquidity cash pooling scheme, which enables the Group to manage and optimise its working
capital funding requirement on a daily basis.
119
40. Financial Risk Management continued
Financial risk factors continued
(iii) Liquidity risk continued
At 31st December 2022, total available borrowing facilities amounted to US$3,051.2 million
(2021: US$2,938.4 million)
,
of which US$1,927.0 million
(2021: US$1,833.6 million)
were committed facilities. A total of US$1,096.3 million
(2021: US$1,054.3 million)
from both committed and uncommitted facilities was drawn down. Of the committed
facilities, US$400.0 million which are referenced to US$ LIBOR will be expired beyond 30th June 2023, the cessation
date of US$ LIBOR. Undrawn committed facilities, in the form of revolving credit facilities, totalled US$1,403.1 million
(2021: US$1,248.6 million)
.
The following table analyses the Group’s non-derivative financial liabilities, net-settled derivative financial liabilities and
gross-settled derivative financial instruments into relevant maturity groupings based on the remaining period at the
balance sheet date to the contractual maturity date. Derivative financial liabilities are included in the analysis if their
contractual maturities are essential for an understanding of the timing of the cash flows. The amounts disclosed in the
table below are the contractual undiscounted cash flows.
Within
one year
Between
one and
two years
Between
two and
three
years
Between
three and
four years
Between
four and
five years
Beyond
five years
Total
undiscounted
cash flows
US$m US$m US$m US$m US$m US$m US$m
At 31st December 2022
Creditors 1,937.1 1.4 1.2 0.7 0.1 4.3 1,944.8
Borrowings 854.1 261.6 0.9 0.7 0.3 – 1,117.6
Lease liabilities 667.5 522.2 401.5 311.1 240.0 1,160.5 3,302.8
Net-settled derivative
financial instruments – – – – – – –
Gross-settled derivative
financial instruments
– inflow 421.7 – – – – – 421.7
– outflow 421.9 – – – – – 421.9
At 31st December 2021
Creditors 1,878.4 8.8 0.4 – 0.1 0.4 1,888.1
Borrowings 755.4 48.2 271.0 – – – 1,074.6
Lease liabilities 716.2 521.8 393.6 305.2 236.0 1,219.6 3,392.4
Net-settled derivative
financial instruments – – – – – – –
Gross-settled derivative
financial instruments
– inflow 787.6 – – – – – 787.6
– outflow 787.5 – – – – – 787.5
Included in total undiscounted borrowings at 31st December 2022, US$249.8 million
(2021: US$249.8 million)
are
referenced to US$ LIBOR and mature beyond 30th June 2023, the cessation date of US$ LIBOR.
120
DFI Retail Group Holdings Limited Annual Report 2022
Notes to the Financial Statements
40. Financial Risk Management continued
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 are based on quoted prices in active markets at the balance sheet date.
(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 forward foreign exchange contracts are calculated by
reference to market interest rates and foreign exchange rates.
The fair values of unlisted equity investments, club debentures, are determined using prices quoted by brokers at
the balance sheet date.
121
40. Financial Risk Management continued
Fair value estimation continued
(i) Financial instruments that are measured at fair value continued
(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 are determined using valuation techniques
by reference to observable current market transactions 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.
122
DFI Retail Group Holdings Limited Annual Report 2022
Notes to the Financial Statements
40. Financial Risk Management continued
Fair value estimation continued
(i) Financial instruments that are measured at fair value continued
123
40. Financial Risk Management continued
Fair value estimation continued
124
DFI Retail Group Holdings Limited Annual Report 2022
Notes to the Financial Statements
40. Financial Risk Management continued
Fair value estimation continued
The fair values of financial assets and financial liabilities approximate their carrying amounts.
At 31st December 2022, the Group had leases liabilities amounted to US$619.2 million impacted by SOR/SIBOR which
were referenced to IBOR with maturities/expiration beyond the cessation of the respective benchmarks.
125
Leases
Liabilities and the corresponding right-of-use assets arising from leases are initially measured at the present value of
the lease payments at the commencement date, discounted using the interest rates implicit in the leases, or if that
rate cannot be readily determinable, the Group uses the incremental borrowing rate. The Group generally uses the
incremental borrowing rate as the discount rate.
The Group applies the incremental borrowing rate with reference to the rate of interest that the Group would have to
pay to borrow, over a similar term as that of the lease, the funds necessary to obtain an asset of a similar value to the
right-of-use asset in the country where it is located.
Lease payments to be made during the lease term will be included in the measurement of a lease liability. The Group
determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to
extend the lease if it is reasonably certain to be exercised, or any period covered by an option to terminate the lease, if it
is reasonably certain not to be exercised.
126
DFI Retail Group Holdings Limited Annual Report 2022
Notes to the Financial Statements
41. Critical Accounting Estimates and Judgements continued
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 obligations.
Other key assumptions for pension obligations are based in part on current market conditions.
Impairment of assets
The Group tests annually whether goodwill and other assets that have indefinite useful lives suffered any impairment.
Other assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying
amount of the asset exceeds its recoverable amount. The recoverable amount of an asset or a cash-generating unit
is determined based on the higher of its fair value less costs to sell and its value-in-use, calculated on the basis of
management’s assumptions and estimates. Changing the key assumptions, including the discount rates or the growth
rate assumptions in the cash flow projections, could materially affect the value-in-use calculations.
Income taxes
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.
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.
Buying income
The Group receives buying income, including supplier incentives, rebates and discounts, which are deducted from cost of
sales on an accrual basis. Management is required to make estimates in determining the expected entitlement which has
been earned up to the balance sheet date for each relevant supplier contract and the timing of recognition.
There is limited estimation involved in recognising income for fixed amounts agreed with suppliers.
Non-trading items
The Group uses underlying business performance in its internal financial reporting to distinguish between the underlying
profit 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.
127
41. Critical Accounting Estimates and Judgements continued
Interest rate benchmark reform
Following the financial crisis, the reform and replacement of benchmark interest rates such as US$ LIBOR and other
interbank offered rates (‘IBORs’) has become a priority for global regulators. There is currently uncertainty around the
timing and precise nature of these changes on some IBORs.
To transition existing contracts and agreements that reference IBORs (including US$ LIBOR) to risk free rates (‘RFRs’)
such as US$ LIBOR to Secured Overnight Financing Rate, adjustments for term differences and credit differences might
need to be applied to RFRs, to enable the two benchmark rates to be economically equivalent on transition. The greatest
change will be amendments to the contractual terms of the IBORs-referenced floating-rate debt and the associated
swap and the corresponding update of the hedge designation. However, the changed reference rate might also affect
other systems, processes, risk and valuation models, as well as having tax and accounting implications.
Group Treasury is managing the IBORs transition plan, which has progressed throughout 2022. US$ LIBOR is expected to
cease on 30th June 2023, and the Group’s transition plan is on track to ensure conversion of existing US$ LIBOR contracts
by the date of cessation.
Relief applied
The Group has applied the following reliefs that were introduced by the amendments made to IFRS 9 ‘Financial
128
DFI Retail Group Holdings Limited Annual Report 2022
To the members of DFI Retail Group Holdings Limited
Report on the audit of the Group financial statements
Qualified opinion
In our opinion, except for the possible effects of the matter described in the basis for qualified opinion paragraph below,
DFI Retail Group Holdings Limited’s Group (the ‘Group’) financial statements (the ‘financial statements’):
• giveatrueandfairviewofthestateoftheGroup’saffairsasat31stDecember2022andofitslossandcashflows
for the year then ended;
• have been properly prepared in accordance with International Financial Reporting Standards (IFRSs) as issued by
the International Accounting Standards Board (IASB); and
• havebeenpreparedinaccordancewiththerequirementsoftheCompaniesAct1981(Bermuda).
We have audited the financial statements, included within the Annual Report, which comprise: the Consolidated Balance
Sheetasat31stDecember2022;theConsolidatedProfitandLossAccount,theConsolidatedStatementofComprehensive
Income, the Consolidated Cash Flow Statement, the Consolidated Statement of Changes in Equity for the year then
ended; and the Notes to the financial statements, which include a description of the significant accounting policies
(‘thePrincipalAccountingPolicies’).
Certain required disclosures have been presented in the Corporate Governance section, rather than in the Notes to the
financialstatements.Thesedisclosuresarecross-referencedfromthefinancialstatementsandareidentifiedasaudited.
OuropinionisconsistentwithourreportingtotheAuditCommittee.
Basis for qualified opinion
Ouropiniononthefinancialstatementsfortheyearended31stDecember2021wasqualifiedaswewereunableto
obtainsufficientauditevidenceovertheGroup’sshareoflossfortheyearofitsassociate,YonghuiSuperstoresCo.,Ltd
(‘Yonghui’),andforthecarryingamountoftheGroup’sinvestmentinYonghuiasat31stDecember2021.Accordingly,
wewereunabletodeterminewhetheranyadjustmentstotheseamountswerenecessary.Aspartofourauditofthe
Group’s2022financialstatements,wehavebeenabletoobtainsufficientevidenceovertheGroup’sshareofresults
includedinthecurrentyearProfitandLossAccount.Nonetheless,ouropinionfortheyearended31stDecember2022
is qualified because of the possible effects of this matter on the comparability of the current year’s figures with the
correspondingfiguresinrespectoftheshareofresultsofassociatesandjointventures.
WeconductedourauditinaccordancewithInternationalStandardsonAuditing(UK)(‘ISAs(UK)’)andapplicablelaw.
Our responsibilities under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the financial
statementssectionofourreport.Webelievethattheauditevidencewehaveobtainedissufficientandappropriateto
provideabasisforourqualifiedopinion.
Independence
We remained independent of the Group in accordance with the ethical requirements that are relevant to our audit of the
financial statements in the UK, which includes the Financial Reporting Council’s (‘FRC’s’) Ethical Standard, as applicable
tolistedentities,andwehavefulfilledourotherethicalresponsibilitiesinaccordancewiththeserequirements.
Our audit approach
Overview
Materiality
• OverallGroupmateriality:US$22.9million
(2021:US$14.8million)
• Basedon0.25%oftotalrevenue
(2021:Basedon5%ofathree-yearaverageofunderlyingprofitbeforetax)
INDEPENDENT AUDITORS’ REPORT
129
Audit scope
• A full scope audit was performed on eight entities including six subsidiaries and two associates, Yonghui and Maxim’s
CaterersLimited(‘Maxim’s’).
• Theseentities,togetherwithproceduresperformedoncentralfunctionsandattheGrouplevel,accountedfor92%
oftheGroup’srevenue,77%oftheGroup’slossbeforetax,and70%oftheGroup’sunderlyingprofitbeforetax.
Key audit matters
• CarryingvalueofinvestmentinRobinsonsRetailHoldings,Inc.(‘RobinsonsRetail’);
• Buying income; and
• IT environment
The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial
statements.Inparticular,welookedatwheretheDirectorsmadesubjectivejudgements,forexampleinrespectof
significant accounting estimates that involved making assumptions and considering future events that are inherently
uncertain.Asinallofourauditswealsoaddressedtheriskofmanagementoverrideofinternalcontrols,includingevaluating
whethertherewasevidenceofbiasbytheDirectorsthatrepresentedariskofmaterialmisstatementduetofraud.
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the audit
of the financial statements of the current period and include the most significant assessed risks of material misstatement
(whether or not due to fraud) identified by the auditors, including those which had the greatest effect on: the overall audit
strategy;theallocationofresourcesintheaudit;anddirectingtheeffortsoftheengagementteam.Thesematters,and
any comments we make on the results of our procedures thereon, were addressed in the context of our audit of the financial
statementsasawhole,andinformingouropinionthereon,andwedonotprovideaseparateopiniononthesematters.
Other than the matter described in the basis for qualified opinion paragraph above, we determined the matters
describedbelowtobethekeyauditmatterstobecommunicatedinourreport.Thisisnotacompletelistofallrisks
identifiedbyouraudit.
Thekeyauditmattersbelowareconsistentwithlastyear.
Key audit matter
Carrying value of investment in Robinsons Retail
Holdings, Inc. (‘Robinsons Retail’)
Refertonote41(CriticalAccountingEstimatesand
Judgements),note14(AssociatesandJointVentures)and
note9(Non-tradingItems)tothefinancialstatements.
Asat31stDecember2022,thecarryingvalueofthe
Group’s investment in its associate, Robinsons Retail,
was higher than its fair value based on its prevailing
marketshareprice.
Management undertook an impairment assessment,
as required by accounting standards, as there was
anindicatorofimpairmentidentified.Basedon
management’s assessment the recoverable amount
waslowerthanthecarryingvalueoftheinvestment.
AnimpairmentchargeofUS$171millionwasrecognised
asanon-tradingitemintheConsolidatedProfitand
LossAccountfortheyear.
How our audit addressed the key audit matter
We assessed the inherent risk of material misstatement
by considering the degree of estimation uncertainty and
the judgement involved in determining the assumptions
tobeapplied.Wehaveunderstoodandreviewedwhat
indicators of impairment had been identified and the
appropriatenessofthevaluationmodelused.Duetothe
prolonged and current deficit to the share price valuation
when compared against the Group’s carrying value, we
challenged management on the existence of an indicator
ofimpairment.Weperformedthefollowingprocedures
overmanagement’ssubsequentimpairmentmodel.
With the support of our valuation experts, we benchmarked
and challenged key assumptions in management’s valuation
model used to determine the recoverable amount against
marketdata.Thisincludedwhethertheassumptionsof
projected cash flows of the business, the discount rate,
andthelong-termgrowthratewereappropriate.
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DFI Retail Group Holdings Limited Annual Report 2022
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Key audit matter
Carrying value of investment in Robinsons Retail
Holdings, Inc. (‘Robinsons Retail’)
continued
There is inherent estimation uncertainty and judgement
in determining the recoverable amount of the carrying
valueoftheinvestment.Assumptionsaremadeby
management in preparing their value in use model,
particularly management’s view on key internal inputs
and external market conditions which impact future cash
flows,thediscountrateandthelong-termgrowthrate.
We focussed on the carrying value of the Group’s
investment in Robinsons Retail due to the significant
judgements and estimates involved to determine whether
thecarryingvalueoftheinvestmentwassupportable.
How our audit addressed the key audit matter
We tested the discounted cash flow model used in the
assessment, checked the accuracy of the calculations,
compared historical budgeted performance with actual
results and agreed the figures used with the management
approved budgets to assess the reasonableness of the
cashflowsusedinthemodel.
Our challenge focussed particularly on the discount rate
andlong-termgrowthrateused.Wecomparedthe
discount rate used with the range of typical discount
rates used in similar businesses and considered whether
management had incorporated all relevant macroeconomic
andcountry-specificfactors,aswellasthosespecificto
RobinsonsRetail.
For the growth rate we compared this with the range
of growth rates used by similar businesses, considering
whethermanagementhadconsideredmacro-economic
andcountry-specificfactorsspecifictoRobinsonsRetail.
We also tested management’s historical estimation
accuracy by comparing previous projected growth rates
againsttheactualgrowthachieved.
We evaluated the sensitivity analysis performed by
management and performed our own independent
sensitivity analysis on the key assumptions and considered
a range of alternative outcomes to determine the sensitivity
ofthevaluationmodeltochangesintheseassumptions.
As the recoverable amount determined by management
was lower than the carrying amount of the investment,
we checked the calculation of the impairment charge
recognised.
Overall, we found that the assumptions made by
managementtodeterminethediscountrate,long-term
growth rate and the cash flows used in the valuation
model were reasonable, and that the impairment charge
hadbeenaccuratelycalculated.
We assessed the adequacy of the disclosures related to
the carrying value of investments in associates and joint
ventures in the context of IFRS disclosure requirements,
including those relating to sensitivities, and agreed
disclosures in the financial statements to the model
testedandtheassumptionsappliedinthemodel.
Overall, we are satisfied that appropriate disclosure
hasbeenmade.
131
Key audit matter
Buying income
Refertonote38(PrincipalAccountingPolicies)and
note41(CriticalAccountingEstimatesandJudgements)
tothefinancialstatements.
The Group has arrangements with suppliers whereby
volume-baseddiscountsandincentives,promotional
and marketing incentives and various other rebates and
discounts are earned in connection with the purchase of
goodsforresalefromthosesuppliers.Assuch,theGroup
recognises a net deduction from cost of sales as a result
ofamountsreceivablefromsuppliers.
The individual supplier arrangements in place across the
Groupvaryinnature.
Themajorityofbuyingincomeisdrivenbyvolume-based
measuresorevent-drivenschemes,withtheremainder
beingadhocandpromotionalbuyingincome.
Buying income is material to the financial statements and
given the types of buying income arrangements, as well
as various performance criteria which differ by supplier,
weidentifiedbuyingincomeasakeyauditmatter.
The level of judgement in each category of buying income
is detailed below:
Volume-based income
Volume-basedrebatesaregenerallydrivenbyachieving
purchase volume targets set with individual suppliers for
specificproductsoverapre-setperiodoftime.Ininstances
where the rebate agreement does not fully coincide with
theperiod-end,thekeyjudgementthatwefocussedon
was the estimate of expected purchase volumes in the
periodcoveredbytherebateagreement.
Ad hoc and promotional income
The remainder of the Group’s buying income is associated
withadhocandpromotionalincome.Thenatureofthis
income and the manner in which it is recognised varies
depending on the nature of the agreement with the
individualsupplier.Theincomeisearnedastherelevant
performancecriteriaaremet.Duetothesignificant
number of transactions and individual agreements,
and the potential for manual calculations, we focussed
our effort on assessing the appropriateness of amounts
recognised.Ourfocuswasontheunderlyingagreements
associated with the income earned, and assessing
whether the income recorded was in accordance with
thoseagreements.
How our audit addressed the key audit matter
We gained an understanding of, and evaluated, the key
controls in place within the buying income process and
tested those controls in certain components of the
business.Weperformedadetailedanalyticalreviewof
buying income by type and location to identify whether
anyunusualtrendswerepresent.
On a sample basis:
• we traced supplier deductions or payments
recognised in the income statement to cash
receipts or supplier contracts;
• we selected amounts recognised in debtors and
creditors and agreed the amounts to supporting
documentation.Wherebuyingincomeamounts
were offset against outstanding amounts payable
to suppliers we assessed whether there was a
right to offset, based on the contractual terms
with suppliers;
• we assessed whether the performance criteria of
the items selected had been met and where buying
income amounts were estimated, that there was
appropriate supporting evidence in determining
those estimates;
• we assessed the appropriateness of journal entries
and adjustments associated with buying income by
tracing them to supporting documentation; and
• we assessed supplier dispute logs to determine whether
material disputes or disagreements with suppliers
existed.Wheresignificantdisputesordisagreements
existed, we understood the nature of these disputes
through discussions with management and obtained
evidence to assess whether the amounts recognised
bymanagementwerereasonable.
Overall, we found the amounts recognised in the financial
statements in respect of buying income to be supportable,
basedonavailableevidence.
We assessed the adequacy of the disclosures related
to the buying income in the context of IFRS disclosure
requirementsandconsiderthedisclosurestobeappropriate.
132
DFI Retail Group Holdings Limited Annual Report 2022
Independent Auditors’ Report
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the
financial statements as a whole, taking into account the structure of the Group, the accounting processes and controls,
andtheindustryinwhichitoperates.
The Group’s accounting processes are structured around finance functions, which are responsible for their own accounting
records and controls, which in turn, report financial information to the Group’s finance function in Hong Kong to enable it
toprepareconsolidatedfinancialstatements.
In establishing the overall approach to the Group audit, we determined the type of work that needed to be performed by
membersoftheGroupengagementteamorbycomponentauditorsfrommemberfirmswithinthePwCNetworkand
otherauditorsoperatingunderourinstruction.Wheretheworkwasperformedbycomponentauditors,wedetermined
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.TheGroupengagementteamwasinvolvedinthesignificantreportingentitiesinscopeforGroupreportingduring
theauditcyclethroughacombinationofmeetings,visitsandconferencecalls.TheGroupauditpartnerandothersenior
team members undertook two visits to Hong Kong during the audit and were involved throughout the year through
regularconferencecallsandotherformsofcommunicationtodirectandoverseetheaudit.TheGroupauditpartneralso
visited Singapore and Indonesia during the year to oversee and review the work of the component teams there, along
withregularcommunicationsthroughconferencecallsandremotereviewoftheworkofcomponentteams.
Afullscopeauditwasperformedoneightentitiesincludingsixsubsidiariesandtwoassociates,YonghuiandMaxim’s.
These entities, together with procedures performed on central functions and at the Group level (on the consolidation
andotherareasofsignificantjudgement),accountedfor92%oftheGroup’srevenue,77%oftheGroup’slossbeforetax,
and70%oftheGroup’sunderlyingprofitbeforetax.Thisgaveustheevidenceweneededforouropiniononthefinancial
statementsasawhole.
Key audit matter
IT environment
The Group is heavily reliant on its IT infrastructure and
systemsforthedailyoperationsofitsbusiness.
We focussed on IT systems as the systems across the
Group are complex and there are varying levels of
standardisation and integration between new and
legacyITsystems.Thesystemsarevitaltotheongoing
operations of the business and to the integrity of the
financialreportingprocess.
How our audit addressed the key audit matter
We updated our understanding of the IT environment,
including cybersecurity risk, through discussions with
management and carrying out work to understand the
relevant IT systems which were integral to the Group’s
controlsoverfinancialreporting.Theseproceduresallowed
us to determine which IT systems, processes and controls
torelyupon.
We tested key controls over user access to programs and
data; program development; program changes made to
ITsystems;andIToperations.
The key automated controls operating within IT systems
thatwereliedonwerealsotested.
Where we identified deficiencies which affected IT systems
or controls on which we planned to place reliance, we
tested mitigating controls or extended the scope of our
substantiveauditprocedures.
133
The impact of climate risk on our audit
In planning and executing our audit, we have considered the potential impact of climate change on the Group’s business
anditsfinancialstatements.WealsoconsideredtheGroup’sgovernanceframeworkandpreliminaryriskassessment
processasoutlinedintheTaskForceonClimate-relatedFinancialDisclosures(‘TCFD’)sectionwithinthisAnnualReport.
TheGrouphasdevelopedaplantoidentifyandaccessitsexposurestoclimate-relatedrisksandopportunities.TheGroup
alsosetoutitscommitmentstodecarboniseitsportfolioofassets,becoming‘net-zero’by2050forscope1andscope2
emissions.FurtherinformationisprovidedintheGroup’sTCFDsectionofthisAnnualReport.WhilsttheGroupiscommitted
tonetzerocarbonemissionsby2050,managementcontinuestorefinetheirplanstoachievethis.
Climate change could have a significant impact on the Group’s financial business as the operations and strategy of the
Groupareadaptedtoaddressthepotentialfinancialandnon-financialriskswhichcouldarisefromboththephysicaland
transitionalrisksassociatedwithclimatechange.ManagementhasevaluatedtheseasdisclosedintheTCFDsectionof
thisAnnualReport.
We considered the consistency of the disclosures in relation to climate change (including the TCFD section) within the
AnnualReportwiththefinancialstatementsandourknowledgeobtainedfromouraudit.Thisincludedreadingand
challenging the disclosures given in the narrative reporting within the other information to the impact disclosed within
thefinancialstatements.
Our procedures did not identify any material impact in the context of our audit of the financial statements as a whole, or
ourkeyauditmattersfortheyearended31stDecember2022.
Materiality
Thescopeofourauditwasinfluencedbyourapplicationofmateriality.Wesetcertainquantitativethresholdsfor
materiality.These,togetherwithqualitativeconsiderations,helpedustodeterminethescopeofourauditandthe
nature, timing and extent of our audit procedures on the individual financial statement line items and disclosures and
inevaluatingtheeffectofmisstatements,bothindividuallyandinaggregateonthefinancialstatementsasawhole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Overall group materiality US$22.9million
(2021:US$14.8million)
How we determined it Basedon0.25%oftotalrevenue
(2021:5%ofathree-yearaverageof
underlying profit before tax)
Rationale for benchmark applied Total revenue is a primary measure used by the shareholders in assessing the
performance of the Group when underlying profit before tax is close to breakeven
WesetanoverallGroupmaterialitylevelofUS$22.9million
(2021:US$14.8million)
.Thiswasbasedupon0.25%ofthe
total revenue
(2021:Basedon5%oftheGroup’sconsolidatedthree-yearaverageunderlyingprofitbeforetaxforthe
yearsended31stDecember2019,31stDecember2020and31stDecember2021)
.Inarrivingatthisjudgementwehad
regardtothefactthattotalrevenueisanimportantfinancialindicatoroftheGroup.
For each component in the scope of our Group audit, we allocated a materiality that is less than our overall Group
materiality.TherangeofoverallmaterialityallocatedacrosscomponentswasUS$1.5milliontoUS$21.0million.
We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected
andundetectedmisstatementsexceedsoverallmateriality.Specifically,weuseperformancematerialityindetermining
the scope of our audit and the nature and extent of our testing of account balances, classes of transactions and
disclosures,forexampleindeterminingsamplesizes.Ourperformancematerialitywas75%
(2021:75%)
of overall
materiality,amountingtoUS$17.1million
(2021:US$11.1million)
fortheGroupfinancialstatements.
134
DFI Retail Group Holdings Limited Annual Report 2022
Independent Auditors’ Report
In determining the performance materiality, we considered a number of factors – the history of misstatements, risk
assessment and aggregation risk and the effectiveness of controls – and concluded that an amount in the middle of
ournormalrangewasappropriate.
We agreed with the Audit Committee that we would report to them misstatements identified during our audit above
US$1.1million
(2021:US$740,000)
,otherthanclassificationswithintheConsolidatedProfitandLossAccountor
ConsolidatedBalanceSheet,whichwereonlyreportedaboveUS$4.7million
(2021:US$6.3million)
.Wealsoreport
misstatementsbelowthisamountthat,inourview,warrantedreportingforqualitativereasons.
Conclusions relating to going concern
Our evaluation of the Directors’ assessment of the Group’s ability to continue to adopt the going concern basis of
accounting included:
• Evaluating the inherent risks to the Group’s business models and analysed how those risks might affect the Group’s
financial resources or ability to continue operations over the going concern period;
• Assessing management’s base case and severe but plausible downside scenario models supporting the Board’s going
concern assessment, evaluating the process by which the assessments have been drawn up, ensuring that the
calculations in the model were mathematically accurate and that the overall methodology used was appropriate;
• Considering sensitivities over the level of available financial resources indicated by the Group’s financial forecasts
taking account of reasonably possible, but not unrealistic, adverse effects that could arise from potential adverse
trading conditions and impact the Group’s liquidity position over the going concern period;
• Evaluating the committed financing facilities currently available to the Group and ensuring that the models
appropriately included all contractual debt repayments and committed capital expenditures;
• Agreeing to debt agreements and associated amendments secured, the covenants attached to each facility
and considering the Group’s forecast compliance at the measurement dates included in the going concern
assessment period;
• Agreeing the cash on hand and available facilities included in the going concern assessment to our year end
auditwork.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions
that, individually or collectively, may cast significant doubt on the Group’s ability to continue as a going concern for a
periodofatleast12monthsfromwhenthefinancialstatementsareauthorisedforissue.
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting
inthepreparationofthefinancialstatementsisappropriate.
As not all future events or conditions can be predicted, this conclusion is not a guarantee as to the Group’s ability to
continueasagoingconcern.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant
sectionsofthisreport.
135
Reporting on other information
The other information comprises all of the information in the Annual Report other than the financial statements and our
auditors’reportthereon.TheDirectorsareresponsiblefortheotherinformation.Ouropiniononthefinancialstatements
doesnotcovertheotherinformationand,accordingly,wedonotexpressanauditopinionoranyformofassurancethereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial statements or our knowledge
obtainedintheaudit,orotherwiseappearstobemateriallymisstated.Ifweidentifyanapparentmaterialinconsistency
or material misstatement, we are required to perform procedures to conclude whether there is a material misstatement
ofthefinancialstatementsoramaterialmisstatementoftheotherinformation.If,basedontheworkwehaveperformed,
weconcludethatthereisamaterialmisstatementofthisotherinformation,wearerequiredtoreportthatfact.Wehave
nothingtoreportbasedontheseresponsibilities.
Responsibilities for the financial statements and the audit
Responsibilities of the Directors for the financial statements
As explained more fully in the Responsibility Statements and the Corporate Governance section, the Directors are
responsible for the preparation of the financial statements in accordance with the applicable framework and for being
satisfiedthattheygiveatrueandfairview.TheDirectorsarealsoresponsibleforsuchinternalcontrolastheydetermineis
necessary to enable the preparation of financial statements that are free from material misstatement, whether due to
fraudorerror.
In preparing the financial statements, the Directors are responsible for assessing the Group’s ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless
theDirectorseitherintendtoliquidatetheGrouportoceaseoperations,orhavenorealisticalternativebuttodoso.
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
materialmisstatement,whetherduetofraudorerror,andtoissueanauditors’reportthatincludesouropinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with
ISAs(UK)willalwaysdetectamaterialmisstatementwhenitexists.Misstatementscanarisefromfraudorerrorand
are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisionsofuserstakenonthebasisofthesefinancialstatements.
Irregularities,includingfraud,areinstancesofnon-compliancewithlawsandregulations.Wedesignproceduresinline
with our responsibilities, outlined in the Auditors’ responsibilities for the audit of the financial statements section, to detect
materialmisstatementsinrespectofirregularities,includingfraud.Theextenttowhichourproceduresarecapableof
detectingirregularities,includingfraud,isdetailedbelow.
136
DFI Retail Group Holdings Limited Annual Report 2022
Independent Auditors’ Report
BasedonourunderstandingoftheGroupandindustry,weidentifiedthattheprincipalrisksofnon-compliancewithlaws
andregulationsrelatedto,butwerenotlimitedto,theCompaniesAct1981(Bermuda),theListingRules,taxregulations,
employment regulations, health and safety regulation and regulations applicable to significant reporting component
teams,andweconsideredtheextenttowhichnon-compliancemighthaveamaterialeffectonthefinancialstatements.
We also considered those laws and regulations that have a direct impact on the financial statements such as the
CompaniesAct1981(Bermuda).
We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements
(including the risk of override of controls), and determined that the principal risks were related to posting of inappropriate
journalentriesandmanagementbiasinaccountingestimatesandjudgements.TheGroupengagementteamsharedthis
risk assessment with the component auditors so that they could include appropriate audit procedures in response to such
risksintheirwork.AuditproceduresperformedbytheGroupengagementteamand/orcomponentauditorsincluded:
• Gaining an understanding of the legal and regulatory framework applicable to the Group and the industries in which
its businesses operate, and considering the risk of any acts by the Group which may be contrary to applicable laws
and regulations, including fraud;
• Discussions with management and internal audit, including consideration of known or suspected instances of
non-compliancewithlawsandregulationandfraud;
• Understandingtheresultsofwhistleblowingproceduresandrelatedinvestigations.Wefocussedonknownand
suspectedinstancesofnon-compliancewithlawsandregulationsthatcouldgiverisetoamaterialmisstatement
intheGroupandCompanyfinancialstatements,including,butnotlimitedto,theCompaniesAct1981(Bermuda),
the Listing Rules, tax legislation, employment regulations, health and safety regulation and equivalent local laws
and regulations applicable to significant reporting component teams;
• Review of reporting component auditors’ work, including any matters reported by component auditors relating to
non-compliancewithlawsandregulationsorfraud;
• Challenging assumptions and judgements made by management in their significant accounting estimates that
involvedmakingassumptionsandconsideringfutureeventsthatareinherentlyuncertain.Inparticular,inrelation
to the impairment assessments related to the carrying value of investments in associates and joint ventures, the
impairmentassessmentsrelatedtothecarryingvalueofintangibleassets,tangibleassetsandright-of-useassets,
and recognition of buying income (see related key audit matters above);
• Wedidnotidentifyanykeyauditmattersrelatingtoirregularities,includingfraud.Asinallofourauditswealso
addressed the risk of management override of internal controls, including testing journals, and evaluated whether
therewasevidenceofbiasbytheDirectorsthatrepresentedariskofmaterialmisstatementduetofraud.
Thereareinherentlimitationsintheauditproceduresdescribedabove.Wearelesslikelytobecomeawareofinstances
ofnon-compliancewithlawsandregulationsthatarenotcloselyrelatedtoeventsandtransactionsreflectedinthe
financialstatements.Also,theriskofnotdetectingamaterialmisstatementduetofraudishigherthantheriskofnot
detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional
misrepresentations,orthroughcollusion.
Our audit testing might include testing complete populations of certain transactions and balances, possibly using data
auditingtechniques.However,ittypicallyinvolvesselectingalimitednumberofitemsfortesting,ratherthantesting
completepopulations.Wewilloftenseektotargetparticularitemsfortestingbasedontheirsizeorriskcharacteristics.
In other cases, we will use audit sampling to enable us to draw a conclusion about the population from which the sample
isselected.
137
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities.Thisdescriptionformspartofourauditors’report.
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
withSection90oftheCompaniesAct1981(Bermuda)andfornootherpurpose.Wedonot,ingivingthisopinion,
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
agreedbyourpriorconsentinwriting.
Partner responsible for the audit
Theengagementpartnerontheauditresultinginthisindependentauditors’reportisJohnWaters.
Other matter
Induecourse,asrequiredbytheFinancialConductAuthorityDisclosureGuidanceandTransparencyRule4.1.14R,these
financialstatementswillformpartoftheESEF-preparedannualfinancialreportfiledontheNationalStorageMechanism
oftheFinancialConductAuthorityinaccordancewiththeESEFRegulatoryTechnicalStandard(‘ESEFRTS’).Thisauditors’
report provides no assurance over whether the annual financial report will be prepared using the single electronic format
specifiedintheESEFRTS.
PricewaterhouseCoopers LLP
Chartered Accountants
London
2ndMarch2023
138
DFI Retail Group Holdings Limited Annual Report 2022
FIVE YEAR SUMMARY
2022 2021 2020 2019 2018
US$m US$m US$m US$m US$m
Profit and Loss *
Revenue
†
9,174.2 9,188.2 10,443.4 11,385.1 11,941.2
(Loss)/profit attributable to shareholders (114.6) 102.9 271.0 323.8 84.8
Underlying profit attributable to shareholders 28.8 104.6 275.7 320.9 358.2
Underlying earnings per share
(US¢)
2.14 7.73 20.38 23.72 26.48
Basic (loss)/earnings per share
(US¢)
(8.51) 7.61 20.03 23.93 6.27
Dividends per share
(US¢)
3.00 9.50 16.50 21.00 21.00
Balance Sheet *
Total assets 7,326.3 7,604.8 7,900.5 8,369.9 8,533.0
Total liabilities (6,384.9) (6,337.6) (6,564.6) (7,130.4) (7,371.1)
Net operating assets 941.4 1,267.2 1,335.9 1,239.5 1,161.9
Shareholders’ funds 947.1 1,267.2 1,322.3 1,209.2 1,126.4
Non-controlling interests (5.7) – 13.6 30.3 35.5
Total equity 941.4 1,267.2 1,335.9 1,239.5 1,161.9
Net debt (865.5) (843.9) (816.7) (820.8) (744.0)
Net asset value per share
(US¢)
69.98 93.67 97.75 89.39 83.27
Cash Flow *
Cash flows from operating activities 939.8 942.3 1,067.2 1,288.1 1,458.1
Cash flows from investing activities (201.0) (124.7) (86.4) (283.0) (500.9)
Cash flows before financing activities 738.8 817.6 980.8 1,005.1 957.2
Cash flow per share from operating activities
(US¢)
69.45 69.65 78.89 95.22 107.80
*
Figures in 2018 have been restated due to the change in accounting policy upon adoption of IFRS 16 ‘Leases’.
†
Figures in 2018 to 2021 have been restated to include revenue from other sources.
139
The Directors of the Company confirm to the best of their knowledge that:
a. the consolidated financial statements prepared in accordance with International Financial Reporting Standards,
including International Accounting Standards and Interpretations adopted by the International Accounting
Standards Board, give a true and fair view of the assets, liabilities, financial position and profit and losses of
the Group; and
b. the Chairman’s Statement, Group Chief Executive’s Review, Business Review, Financial Review and the Principal Risks
and Uncertainties of this Annual Report, which constitute the management report required by the Disclosure
Guidance and Transparency Rule 4.1.8, include a fair review of all information required to be disclosed under Rules
4.1.8 to 4.1.11 of the Disclosure Guidance and Transparency Rules issued by the Financial Conduct Authority in the
United Kingdom.
For and on behalf of the Board
Ian McLeod
Clem Constantine
Directors
2nd March 2023
RESPONSIBILITY STATEMENTS
140
DFI Retail Group Holdings Limited Annual Report 2022
Overview of the Group’s Governance Approach
DFI Retail Group (DFI Retail Group Holdings Limited (the ‘Company’) and its subsidiaries together known as ‘DFI Retail
Group’ or the ‘Group’) understands the value of good corporate governance in driving the long-term sustainable success
of business and attaches importance to the corporate stability that strong governance brings, as well as the opportunities
that result from it being part of the Jardine Matheson Holdings Limited (‘Jardine Matheson’) group.
The Group is committed to high standards of governance. The system of governance it has adopted has been developed,
over many years, by the members of the Jardine Matheson group, and both the Group and its stakeholders regard
as appropriate to the nature of its business and the long-term strategy it pursues in its markets, primarily China and
Southeast Asia. The Group’s governance framework is tailored to its size, ownership structure, complexity and breadth
of businesses. It enables the Company to benefit from Jardine Matheson’s strategic guidance and professional expertise
while at the same time ensuring that the independence of the Board is respected and clear operational accountability
rests with the Company’s executive management teams.
The Company also ensures that the Group retains and promotes those characteristics and values of a family-owned
business that have enabled the Group to prosper over the long-term:
• 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, as opposed to focussing on short-term profitability. This leads to
long-term growth for our shareholders and the communities where we operate.
• Credibility and trust – the credibility and trust that family ownership brings to the business are highly valued by
our partners and other stakeholders, especially in developing markets.
• Deep knowledge of the business and our markets – the involvement of many generations of the family in the
running of the Group has led to a deep understanding of how to drive successful growth by the business across its
markets, giving the Group a competitive advantage.
The Group believes that its stakeholders gain significant value from the historical governance approach the Group has
taken as a family-owned business and that it is therefore important to retain the key elements of this approach. It is also
important, without losing these benefits, to adapt to changing circumstances in our markets and, where appropriate, to
the developing expectations of stakeholders and changes in best practice and the approach taken by our peers.
Accordingly, the Company continues to focus on enhancing the Group’s approach to corporate governance more
generally, focussing on changes which benefit the Group. The Company has focussed in years 2021 and 2022 on
changing the Group’s approach to corporate governance more generally and has led a series of changes to the
governance of the Group, including the composition of the Company’s Board. These changes, which were made to the
Board in November 2021, have increased the diversity and brought greater sector expertise to the Board through the
appointment of new Independent Non-Executive Directors. The size of the Board has also generally reduced as a result
of the retirement of a number of Directors. In addition, the Company has established formal Audit, Remuneration and
Nominations Committees at the listed company level.
Independent Non-Executive Directors with a broad and diverse range of backgrounds are a valuable source of external
perspectives and are a key element of good governance and decision-making. The Company and the Group can benefit
from the expertise and experience they bring, and the Company is taking steps to increase the independence and
diversity of its Board.
Having an effective corporate governance framework supports the Board in delivering the Group’s strategy and supports
long-term sustainable growth, and ensuring it operates transparently and in accordance with the best practice.
CORPORATE GOVERNANCE
141
Group Structure
Jardine Matheson is the ultimate holding company of the Group. The structural relationship between the Jardine Matheson
group and the Group is considered a key element of the Group’s success. By coordinating objectives, establishing common
values and standards, and sharing experience, contacts and business relationships, the Jardine Matheson group companies,
including the Group, aim to optimise their opportunities across the Asian countries in which they operate.
Governance and Legal Framework
The Company is incorporated in Bermuda . The retailing business interests of DFI Retail Group are entirely in Asia. 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 Dairy Farm International Holdings Limited Consolidation and Amendment Act 1988 (as amended),
pursuant to which the Company was incorporated and the Bermuda Dairy Farm International Holdings Limited
Regulations 1993 (as amended) were implemented; and
• The Company’s Memorandum of Association and Bye-laws.
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 on the LSE means that it is bound by many of the same rules as premium-listed
companies under the UK Listing Rules, the Disclosure Guidance and Transparency Rules (the ‘DTRs’) issued by the
Financial Conduct Authority in the United Kingdom (the ‘FCA’), the UK Market Abuse Regulation (the ‘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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Corporate Governance
Governance and Legal Framework continued
Some of the rules applicable to premium-listed companies do not apply to the Company. When the shareholders approved
the Company’s move to a standard listing from a premium listing in 2014, however, the Company stated that it intended
to maintain certain governance principles as were then applicable to the Company’s premium listing. As a result, the
Company adopted several governance principles (the ‘Governance Principles’) which were 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. In addition, the Company shall observe the mandatory related party transaction rules under the DTRs,
including assessment, approval and disclosure requirements for material related party transactions, that apply to
UK standard-listed companies.
• Further, as soon as the terms of a significant transaction or a related party transaction are agreed, an
announcement will be issued by the Company, providing such details of the transaction as are necessary for
investors to evaluate the effect of the transaction on the Company.
• At each annual general meeting (‘AGM‘), the Company will seek shareholders’ approval to issue new shares on
a non-pre-emptive basis for up to 33% of the Company’s issued share capital, of which up to 5% can be issued
for cash consideration.
• The Company adheres to a set of Securities Dealing Rules which follow the provisions of MAR with respect to market
abuse and disclosure of interests in shares.
The Company is not required to comply with the UK Corporate Governance Code (the ‘Code’), which applies to all
premium-listed companies and sets out the governance principles and provisions expected to be followed by companies
subject to the Code. However, the Company does have regard to the Code in developing and implementing its approach
to corporate governance and disclosure.
143
The Management of the Group
The Board
The Board is responsible for ensuring that the Group is appropriately managed and achieves the strategic objectives
it sets, in a way that is supported by the right culture, values and behaviours throughout the Group.
The Directors have the full power to manage the Company’s business affairs, except matters reserved to be exercised
by the Company in a general meeting under Bermuda legislation or the Company’s Bye-laws. Key matters for which
the Directors are responsible include:
• Responsibility for the overall strategic aims and objectives of the Group;
• Establishing the Company’s purpose and values;
• Approval of the Group’s strategy and risk appetite to align with the Group’s purpose and values;
• Approval and oversight of the Group policy framework and approval of appropriate Group policies;
• Approval of the Annual Budget and monitoring of performance against it;
• Oversight of the Group’s operations;
• Approval of significant changes to 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 annual financial statements upon recommendation from the Audit Committee, as well as
interim management statements;
• Approval of the Annual Report and Accounts;
• Approval of dividend policy and the amount and form of interim and final dividend payments for approval by
shareholders as required;
• Any significant changes to the Company’s accounting policies or practices upon recommendation from
the Audit Committee;
• Appointment, re-appointment or removal of the external auditor, subject to shareholders’ approval, upon
recommendation from the Audit Committee;
• Approval of matters relating to AGM resolutions and shareholder documentation;
• Approval of all shareholder circulars, prospectuses and listing particulars issued by the Company; and
• Approval of material public announcements concerning matters decided by the Board.
Responsibility for certain matters, including the approval of borrowing facilities and of capital expenditure (other than
major capital expenditure which is required to be approved by the Board), has been delegated to the finance committee
established within the Hong Kong-based Group management company, DFI Retail Group Management Services Limited
(‘DFIRGMS’), with specific written terms of reference outlining its role and authorities.
The Company sees the value of regularly reviewing the effectiveness of its processes and making improvements where
appropriate.
Board Composition and Operational Management
The Board’s composition and how it operates provide stability, allowing the Company to take a long-term view as it seeks
to grow its businesses and pursue investment opportunities.
The Chairman has been appointed in accordance with the provisions of the Bye-laws of the Company, which provide that
the chairman of Jardine Matheson, or any Director nominated by him, shall be the Chairman of the Company.
The Company has a dedicated executive management team led by the Group Chief Executive. The Memorandum of
Association of the Company, however, provides for the chairman of Jardine Matheson to be, or to appoint, the Managing
Director of the Company. Reflecting this, and the Jardine Matheson group’s 78% interest in the Company’s share capital,
the Group Chief Executive and the Managing Director meet regularly. Similarly, the board of DFIRGMS and its finance
committee are chaired by the Managing Director and include DFI Retail Group executives as well as Jardine Matheson’s
deputy managing director, group finance director and group general counsel.
Number of
Directors
Number of Directors
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Corporate Governance
Board Composition and Operational Management continued
The presence of Jardine Matheson representatives on the Board and Audit Committee of the Company, as well as on the
board and finance committee of DFIRGMS, provides an added element of stability to the Company’s financial planning
and supervision, enhancing its ability to raise finance and take a long-term view of business development. In addition,
the presence of Jardine Matheson representatives on the Company’s Board, Audit, Nominations and Remuneration
Committees, as well as DFIRGMS’ finance committee, also strengthens the ability of management to work effectively
together in exploiting the full range of the Jardine Matheson group’s commercial strengths.
As at 2nd March 2023, the Company comprises nine Directors, three of whom (33%) – Dave Cheesewright, Weiwei Chen and
Christian Nothhaft – are Independent Non-Executive Directors as defined by the Code. A Non-Executive Director – Anthony
Nightingale – does not have any executive responsibilities, nor has he been an employee of the Company or the Group
within the past five years. He is sufficiently distanced from the day-to-day operations of the Company for the Company
to take the view that he is an Independent Non-Executive Director, even though he has served on the Board for over nine
years, bring the number of Independent Non-Executive Directors to four (44%). The names of all the Directors and brief
biographies appear on pages 51 and 52 of this Annual Report.
Ben Keswick has been Chairman of the Board since 16th May 2013. John Witt has held the role of Managing Director
from 15th June 2020. Ian McLeod has been Group Chief Executive since 18th September 2017. Ben Keswick previously
held the roles of Chairman and Managing Director combined from 16th May 2013 until the separation of these roles from
15th June 2020. The Board considers that there is a clear division of responsibilities among the Chairman, the Managing
Director and the Group Chief Executive in order to ensure an appropriate balance of power and authority is maintained at
all times.
Directors’ Experience
Age of Directors Capacity of Directors
60-69
50-59
70-75
Retail Sector-Related Operational Knowledge/Experience
International Business
Executive Leadership
Strategy & Business Acumen
Financial Acumen
Corporate Governance, Risk Management and/or Sustainability
Supply-Chain, Procurement and Customer-Relation Management
E-commerce Experience
Food and Beverage
Non-Executive Directors
Executive DirectorsIndependent Non-Executive Directors
Nationality of Directors
British Canadian American German
0 62 841 73 5 9
Tenure of Directors
0 62 841 73 5 90 62 841 73 5 9
5 years or below 6-10 years Over 10 years
6 1 1 1 4 2 3
Age of Director
53
1
0 1 2 43
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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. In addition, 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:
• Leading, with the Managing Director and the Group Chief Executive, the development of the culture and values of
the Group;
• Supporting the development and maintenance of relationships with existing and new key business partners,
governments and shareholders;
• Ensuring (together with the Managing Director and the Group Chief Executive) an appropriate focus on attracting
and retaining the right people and carrying out succession planning for senior management positions;
• Creating a culture of openness and transparency at Board meetings;
• Leading, with the Managing Director, the succession planning for the Group Chief Executive;
• Building an effective Board supported by a strong governance framework;
• Ensuring all Directors effectively contribute to discussions and feel comfortable in engaging in healthy debate and
constructive challenge;
• Ensuring all Directors receive accurate, timely and clear information; and
• Promoting effective communication between Executive and Non-Executive Directors (including the Independent
Non-Executive Directors).
Managing Director
The Managing Director acts as chairman of DFIRGMS and of its finance committee and is a member of the Company’s
Nominations and Remuneration Committees. In addition, he has responsibility for representing Jardine Matheson, as the
major shareholder of the Company, including:
• Providing oversight of the day to-day management by the Group Chief Executive and his leadership team of
the business;
• Carrying out ongoing reviews of the business, financial and operational performance of each business against
agreed objectives;
• Providing regular feedback to the Group Chief Executive on his/her performance and conducting an annual
performance review;
• Leading the Group Chief Executive 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 capex decisions; and
• Communicating with shareholders as appropriate.
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Corporate Governance
Group Chief Executive
The responsibility for running the Group’s business and all the executive matters affecting the Group rests with the Group
Chief Executive. The implementation of the Group’s strategy is delegated to the Company’s executive management,
with decision-making authority within designated financial parameters delegated to the DFIRGMS finance committee.
The Group Chief Executive has day-to-day operational responsibility for:
• The effective management of the Group’s businesses;
• Leading the development of the Company’s strategic direction and implementing the agreed strategy;
• 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;
• Ensuring effective communication with shareholders and key stakeholders and regularly updating institutional
investors on the business strategy and performance;
• Providing regular operational updates to the Board on all matters of significance relating to the Group’s business
or reputation;
• Overseeing the Group’s capital allocation, business planning and performance;
• Ensuring (together with the Chairman and the Managing Director) an appropriate focus on attracting and retaining
the right people and carrying out succession planning for senior management positions; and
• Fostering innovation and entrepreneurialism to drive the Group’s businesses forward.
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, 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, and ad hoc procedures are adopted to deal with urgent
matters between scheduled meetings. Board meetings are usually held in different locations around the Group’s markets.
In March 2022, as border restrictions began to ease, a hybrid Board meeting was held in Singapore. The May 2022 Board
meeting was held virtually. In-person Board meetings were held in Singapore in July 2022 and in Bangkok in December
2022. 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.
The Company’s Directors who do not serve on the board of DFIRGMS and who are based outside Asia will usually visit the
region and Bermuda to discuss the Group’s businesses, as well as to participate in the four strategic reviews that precede
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 Jardine Matheson
group, provide significant value to the ongoing review by the Company of the Group’s businesses and reinforces the Board
oversight process.
147
Board Attendance
Directors are expected to attend all Board meetings. The table below shows the attendance at the scheduled
2022 Board meetings:
Meetings eligible
to attend Attendance
Directors
Non-Executive Directors
Ben Keswick 4/4 100%
Dave Cheesewright 4/4 100%
Weiwei Chen 4/4 100%
Adam Keswick 4/4 100%
Anthony Nightingale 4/4 100%
Christian Nothhaft 4/4 100%
Executive Directors
John Witt 4/4 100%
Ian McLeod 4/4 100%
Clem Constantine 4/4 100%
Appointment and Retirement of Directors
The Board appoints each new Director, and the Nominations Committee has been established to assist the Board in such
matters. In accordance with the Company’s Bye-laws, each new Director is subject to retirement and re-election at the
first AGM 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 AGM 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 Managing Director
of the Company. John Witt, being the Managing Director, has a service contract with the Company that has a notice
period of six months.
In accordance with Bye-law 85, Clem Constantine and Adam Keswick will retire by rotation at the forthcoming AGM
and, being eligible, offer themselves for re-election. Clem Constantine has a service contract with a subsidiary of the
Company with a notice period of six months. None of the other Director proposed for re-election has a service contract
with the Company or its subsidiaries.
Directors need to obtain the Chairman’s approval before accepting additional appointments that might affect their time
to devote to the role as a Director of the Company.
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Corporate Governance
Company Secretary
All Directors have access to the advice of the Company Secretary, who is responsible for advising the Board on all
governance matters.
Committees
The Board is supported by the activities of its Committees (the Nominations, Remuneration and Audit Committees),
which ensure the right level of attention and consideration are given to specific matters. Matters considered by each of
the Committees are set out in their respective terms of reference. Copies of these documents can be obtained from the
Company’s website at www.DFIretailgroup.com.
Nominations Committee
The Board established a Nominations Committee (the ‘Nominations Committee’) in March 2021. The key responsibilities
of the Nominations Committee are to:
• Review the structure, size and composition of the Board and its committees and make recommendations to the
Board on any appointments to maintain a right balance of skills, knowledge and experience and independence, as
well as a diversity of perspectives;
• Support the Chairman to lead the process for Board appointments and nominate suitable candidates to the Board;
• Assess suitable candidates based on merit and objective criteria (giving consideration to the promotion of the
diversity of social and ethnic backgrounds, knowledge, experience and skills), taking into account their ability to
meet the required time commitments;
• Oversee the development of succession pipelines for both the Board and senior management positions to ensure
talent is identified and nurtured to meet the challenges and opportunities facing the Group; and
• Satisfy itself that any skill gaps are addressed in the reviews of Board composition and that appropriate
development opportunities are in place for Directors to keep abreast of market knowledge and industry trends to
perform their role effectively.
The Nominations Committee consists of a minimum of three members, selected by the Chairman of the Board. The
Chairman of the Board is the chairman of the Nominations Committee. The current members of the Nominations
Committee are Ben Keswick, Adam Keswick and John Witt. The Nominations Committee meets as circumstances require,
or by the circulation of Committee circulars and recommendations to the Board for approval as it deems appropriate.
It plays a key role in the process of recruiting senior executives. Candidates for appointment as Executive Directors of the
Company or other senior management positions may be sourced internally or externally, including by using the services
of specialist executive search or recruitment firms. The aim is to appoint individuals who combine international business
knowledge and experience, industry knowledge and experience if possible, and familiarity with, or adaptability to, Asian
markets. When appointing Non-Executive Directors, the Committee pays particular attention to the Asian business
experience and relationships that they can bring.
149
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 applicable law, every Director shall be indemnified and secured harmless
out of the assets of the Company against all liability and loss suffered and expenses reasonably incurred. However,
neither insurance nor indemnity arrangements 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.
There are established policies and procedures for financial planning and budgeting, information and reporting systems,
assessment of risk, 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 50% associate, Maxim’s Caterers Limited (‘MCL’), has a separate board, audit committee, risk management
and internal audit structure. The Group is represented on the board of MCL, at which reviews of strategy, operations,
budgets and significant investments are undertaken. The MCL board has delegated to the MCL group’s audit and risk
management committees and its audit department responsible for reviewing major risk areas and the effectiveness of
the internal control procedures.
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 AGM. The financial statements are required to present fairly, in
accordance with the 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 consistently and supported by prudent and reasonable judgements
and estimates, have been followed in preparing the financial statements. The financial statements have been prepared
on a going concern basis.
Substantial Shareholders
As classified 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 holding of voting rights of 5% or more attaching to the Company’s issued
ordinary share capital by Jardine Strategic Limited (‘Jardine Strategic’), which is directly interested in 1,049,589,171
ordinary shares carrying 77.54% of the voting rights. By virtue of its interest in Jardine Strategic, Jardine Matheson is
also interested in the same ordinary shares. Apart from this shareholding, the Company is not aware of any holders of
voting rights of 5% or more attaching to the Company’s issued ordinary share capital as of 2nd March 2023.
There were no contracts of significance with substantial corporate shareholders during the year under review.
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Corporate Governance
Related Party Transactions
Details of transactions with related parties entered into by the Company during the course of the year are included in
note 34 to the financial statements on pages 103 and 104.
Engagement with Shareholders and Stakeholders
The Group regularly engages with its shareholders and other stakeholders. For the full year 2022, the Group have held
two results briefings and 20 analyst and institutional shareholder meetings to provide an opportunity for questions to be
asked of senior management, discuss concerns and hear feedback where improvements could be made.
The Group has also engaged with several Sustainability Non-Governmental Organisations and government agencies to
listen, learn and understand how we can improve. The engagements provide an opportunity for us to explore and discuss
key social, environmental and economic issues facing society and where our businesses operate. These engagements
occur across all stages of the project cycle, and provide an important touch point to sense-check the issues that matter
most to society and help us better understand evolving expectations. The meetings with shareholders and stakeholders
are attended by senior management, who are ultimately responsible.
Securities Purchase Arrangements
The Directors have the power under the Companies Act and the Company’s Memorandum of Association to purchase
the Company’s shares. Any shares so purchased shall be treated as cancelled and, therefore, reduce the Company’s
issued share capital. When the Board reviews the possibility of share repurchases, it will consider the potential for
enhancing earnings or asset values per share. When purchasing such shares, the Company is subject to
the provisions of MAR.
Workforce Engagement
The Group is working hard to support the growth of the next generation of leaders within our businesses, ensuring our
colleagues can develop the skills they need.
We also aim to create an owner mindset among our staff and support this by enhancing our incentive structures to focus
less on current profits and more on value creation over a longer time horizon. This longer-term view also incentivises
experimentation and innovation.
The Group also conducts an annual Your Voice Counts survey. In 2022, over 91% of total population took part in
the survey sharing feedback. Follow-up actions include listening sessions ensuring engagement strategies are focussed
and effective.
Annual General Meeting
The 2023 AGM will be held on 4th May 2023. The full text of the resolutions and explanatory notes in respect of the
meeting are contained in the Notice of AGM, despatched at the same time with this Annual Report.
Corporate Website
A corporate website is maintained containing a wide range of information of interest to investors at www.DFIretailgroup.com.
151
Group Policies
Code of Conduct
The Group conducts business in a professional, ethical and even-handed manner. Its ethical standards are set out in
its Code of Conduct, a set of guidelines to which every employee must adhere. It is reinforced and monitored by an
annual compliance certification process and modelled on the Jardine Matheson group’s code of conduct. The Code of
Conduct requires that all Group companies comply with all laws of general application, all rules and regulations that
are industry-specific and proper standards of business conduct. The Code of Conduct prohibits the giving or receiving
of illicit payments. It requires that all Directors and employees must be fully aware of their obligations under the Code
of Conduct and establish procedures to ensure compliance at all levels within their businesses.
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 Group’s Code of Conduct.
Data Privacy
The Group is committed to being a responsible custodian of the data entrusted to it by customers, employees, business
partners and other stakeholders keeping the data secure and processing it in accordance with legal requirements
and stakeholder expectations as they continue to evolve. Appropriate protections are in place to prevent misuse and
unauthorised disclosure of personal data.
In addition, the Group’s Personal Data Protection Policy and Security Incident Response Plan underlines the Group’s
commitment to being a responsible data custodian.
Speak-Up Policy
The Group has a Speak-Up policy covering how individuals can report matters of serious concern on a named or
anonymous basis. The Audit Committee is responsible for overseeing the effectiveness of the formal procedures to
raise such matters and is required to review any reports made under those procedures referred to by the internal audit
function. In addition, the Group has a speak-up service managed by an independent third-party service provider to
supplement existing channels in the business units to assist in reporting of suspected illegal or unethical behaviour and is
intended to help foster an inclusive, safe and caring workplace. The service, which is available 24 hours in multiple local
languages, and is accessible through phone hotline or online. 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.
Once a report is lodged, it is sent to certain authorised persons at the relevant business units. These include senior
representatives from legal, compliance and Human Resource 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 protection is provided to anyone who reports a case.
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Corporate Governance
Diversity and Inclusion
The Group will continue to foster a culture of inclusivity and empowerment, where colleagues with different backgrounds
feel comfortable in being themselves, in voicing their ideas and have equal opportunities to thrive. 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.
As a multinational Group with a broad range of businesses operating across Asia, the Group believes in promoting equal
opportunities in recruiting, developing and all employees, regardless of ethnicity, gender, age, sexual orientation, disability,
background or religion, should be treated fairly and with dignity, and be valued for the contributions they make in their
role. The scale and breadth of the Group’s businesses necessitate that they seek the best people from the communities
in which they operate most suited to their needs.
All staff are encouraged and supported to develop their full potential and contribute to the sustainable growth of the
Group. Employees views and ideas are essential, and they are encouraged to express them respectfully with colleagues
at all levels within the organisation.
To build an inclusive workplace, we incorporate the Diversity and Inclusion principles by modelling the Jardine Matheson
group’s Diversity and Inclusion Policy. This includes:
• Ongoing collaboration with Jardine Matheson group to ensure a set of inclusive working arrangements and policies
to support Diversity and Inclusion.
• 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.
• 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.
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Remuneration Report
Message from the Board/Remuneration Committee
The Board is pleased to present shareholders with the 2022 Remuneration Report. This report sets out the Group’s
approach to remuneration for its executives and Directors, particularly the link between the Group’s values, strategy
and its remuneration framework, the link between performance and reward, and remuneration outcomes for
senior executives.
The Group’s Remuneration philosophy and framework for rewarding staff
The remuneration outcomes in 2022 reflect the intended operation of the remuneration framework.
At the heart of the Group’s remuneration framework is our commitment to deliver competitive remuneration for excellent
performance to attract the best and motivate and retain talented individuals, while aligning the interests of executives
and shareholders. The Company aims to ensure all remuneration is delivered in a manner that is aligned with the values
of the Company.
It does this through:
• Incentives based on financial measures and strategic objectives that reflect key goals critical to sustained
organisational success;
• Consideration of business and operational risk, as well as sustainability development goals through the design of
performance objectives;
• Incentives and policies which align the interests of executives to those of shareholders;
• Ensuring remuneration outcomes are reasonable, taking into account community and stakeholder expectations; and
• Target remuneration levels and outcomes appropriately reflect the challenge and complexity of being a
multinational Asian-based retail group with diverse retail businesses.
The Company’s policy is to offer competitive remuneration packages to its senior executives. The Company relies
on a reward framework that provides varying levels of remuneration and benefits depending on employee level. It is
recognised that, 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 the remuneration packages is designed to reflect this.
This structure of remuneration varies from senior executive to more junior level employees, but the link of remuneration
to strategic goals is consistent throughout all levels of the organisation. The nature of goals used for remuneration does
varies depending on employee level, but the Company ensures goals are relevant and measurable while aligned with
company values. Executive Directors joining from outside the Group may be offered an initial fixed-term service contract
to reflect any requirement to relocate.
Accordingly, 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.
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DFI Retail Group Holdings Limited Annual Report 2022
Corporate Governance
The Group’s Remuneration philosophy and framework for rewarding staff continued
Directors’ Remuneration
Directors’ fees, which are payable to all Directors other than the Group Chief Executive and the Chief Financial Officer,
are decided upon by shareholders in general meetings 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 total amount
provided to all Directors (including the Managing Director but exclusive of salaried Executive Directors of the Company
who are not entitled to such fees) must not exceed the sum agreed by shareholders at a general meeting. The maximum
aggregate remuneration of US$1.0 million per annum was approved by shareholders at the 2022 AGM. Executive Directors
(excluding the Managing Director, who is also the Jardine Mathseon Managing Director) are paid a basic fixed salary as
well as discretionary annual incentive bonuses by and receive certain employee benefits from the Group. Non-Executive
Directors do not receive bonuses or any other incentive payments or retirement benefits. The Non-Executive Directors are
reimbursed for expenses properly incurred in performing their duties as a Director of the Company. The schedule of fees
paid to Directors in respect of 2022 is set out in the table below. Fees are annual fees, unless otherwise stated:
USD (per annum)
Chairman / Managing Director fee: 110,000
Base Director fee: 100,000
Audit Committee fee: 35,000
Nominations Committee fee: 15,000
Director
Director Fee
US$
Audit
Committee Fee
US$
Nominations
Committee Fee
US$
Total Fees
US$
1 Ben Keswick (Chairman) 110,000 – 15,000 125,000 *
2 John Witt (Managing Director) 110,000 – 15,000 125,000 *
3 Ian McLeod – – – –
4 Clem Constantine – – – –
5 Dave Cheesewright 100,000 – – 100,000
6 Weiwei Chen 100,000 35,000 – 135,000
7 Adam Keswick 100,000 – 15,000 115,000 *
8 Anthony Nightingale 100,000 35,000 – 135,000
9 Christian Nothhaft 100,000 – – 100,000
TOTAL 720,000 70,000 45,000 835,000
* Fees surrendered to Jardine Matheson.
155
The Group’s Remuneration philosophy and framework for rewarding staff
continued
Remuneration Committee
The Board has overall responsibility for setting remuneration across the Group, ensuring it is appropriate and supports the
Group’s strategy, creating value for stakeholders. The Remuneration Committee has been established to assist the Board
in these remuneration matters.
The Board had established a Remuneration Committee (the ‘Remuneration Committee’) at the Company level in
November 2021. The key responsibilities of the Remuneration Committee are to:
• Oversee the formulation of a Group-wide reward strategy and ensure the business implements the reward strategy
in alignment with its industry-specific needs;
• Review and approve the compensation of the Group Chief Executive and leadership team of the business;
• Review the terms of and design of performance-related incentives (both short- and long-term), including the review
and approval of any changes to plan design, targets and metrics;
• Review and approve the overall compensation costs, including salary and bonus budgets, of the business; and
• Remain abreast of trends and developments in executive compensation and corporate governance related to the
Group’s industry and countries of operation.
The Remuneration Committee consists of a minimum of three members, selected by the Chairman of the Board.
The Chairman of the Board is the chairman of the Remuneration Committee. The current members of the Remuneration
Committee are Ben Keswick, John Witt and Graham Baker. In addition, the Group Chief Executive, the Group Human
Resources Director and Jardine Matheson group head of human resources will generally attend meetings of the
Remuneration Committee. The Remuneration Committee meets as circumstances require, or by the circulation of
Committee circulars and recommendations to the Board for approval as it deems appropriate.
How Remuneration framework is linked to the business strategy
The Group’s remuneration strategy is designed to support and reinforce its business and sustainability strategies.
The at-risk components of remuneration are tied to measures that reflect the successful execution of these strategies
in both the short and long term. Our strategic drivers of ‘Grow in China, Maintain Strength in Hong Kong, Revitalising
Southeast Asia, Building Capability, Driving Digital Innovation, and Own Brand Development’ are reflected in bonus
performance measures. So, the Group’s actual performance directly affects what executives are paid.
Remuneration Outcomes in 2022
For the year ended 31st December 2022, the Directors received from the Group US$8.2 million
(2021: US$8.2 million)
in
Directors’ fees and employee benefits, being:
• US$0.8 million
(2021: US$0.6 million)
in Directors’ fees; and
• US$6.7 million
(2021: US$6.8 million)
in short-term employee benefits, including salary, bonuses, accommodation
and deemed benefits in kind;
• US$0.1 million
(2021: US$0.1 million)
in post-employment benefits; and
• US$0.6 million
(2021: US$0.7 million)
in share-based payments.
The information set out in the section above headed ‘Remuneration Outcomes in 2022’ forms part of the audited
financial statements.
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DFI Retail Group Holdings Limited Annual Report 2022
Corporate Governance
Share Schemes
Share-based long-term incentive plans have also been established to provide incentives for Executive Directors and senior
managers. The scheme trustee grants share options after consultation between the Chairman and the Group Chief
Executive and other Directors as they consider appropriate. Share options are not granted to Non-Executive Directors.
In addition, in December 2018, a cash-based long-term incentive plan was implemented for senior management to align
their remuneration with shareholders’ interests by rewarding the delivery of strong EPS growth over the next five years.
Pay-outs under the plan will also be dependent on the achievement of appropriate targets linked to the health of the
business and the sustainability of earnings growth.
Directors’ Share Interests
The Directors of the Company in office on 2nd March 2023 had interests* as set out below in the Company’s ordinary
share capital. These interests include those notified to the Company regarding the Directors’ closely associated persons*.
Ian McLeod 597,514
Clem Constantine 100,000
Anthony Nightingale 34,183
*
Within the meaning of MAR
In addition, Clem Constantine held deferred share awards regarding 247,149 ordinary shares issued pursuant to the
Company’s share-based long-term incentive plans.
Audit Committee Report
Audit Committee
The Board had established an Audit Committee (the ‘Audit Committee’) at the Company level in November 2021.
The Audit Committee consists of a minimum of three members, the current members of which are Graham Baker
(Financial Expert), Weiwei Chen (Independent Non-Executive Director) and Anthony Nightingale (Chairman of the
Audit Committee). None of them is directly involved in operational management.
The Company considers that the Audit Committee has a majority of independent members. Graham Baker is also
a member of the Audit Committee with recent financial experience and expertise, as well as a deep understanding of
risk management.
The Managing Director, Group Chief Executive and Chief Financial Officer, and representatives of the internal and external
auditors, also attend the Audit Committee meetings by invitation. In addition, other individuals may attend part of
a meeting for specific agenda items as appropriate. The Audit Committee meets 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 Audit Committee’s remit includes:
• Independent oversight and assessment of financial reporting processes including related internal controls;
• Independent oversight of risk management and compliance;
• Monitoring and reviewing the effectiveness of the internal and external audit functions;
• Considering the independence and objectivity of the external auditors; and
• Reviewing and approving the level and nature of non-audit work performed by the external auditors.
157
Audit Committee
continued
Before completion and announcement of the half-year and year-end results, a review of the Company’s financial
information and of any issues raised in connection with the preparation of the results, including the adoption of 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 to the entire Board when necessary, in addition to the Group
Chief Executive, Chief Financial Officer and other senior executives.
The matters considered by the Audit Committee during 2022 included:
• Reviewing the 2021 annual financial statements and 2022 half-year financial statements, with particular focus on
the impact of COVID-19, provisioning and impairment assessments, assumptions that underpinned key valuation
models and effectiveness of financial controls;
• Reviewing the actions and judgments of management in relation to changes in accounting policies and practices
to ensure clarity of disclosures and compliance with new accounting standards;
• Receiving reports from internal audit on the status of the control environment of the Group and its business
divisions, and progress made in resolving matters identified in the reports;
• Reviewing the principal risks, evolving trends and emerging risks that affect the Group, and monitoring changes to
the risk profile, as well as the effectiveness of risk management measures and crisis management arrangements;
• Receiving updates on the cybersecurity threat landscape and the Group’s cybersecurity environment, risk
management approach, training, priorities and control effectiveness;
• Receiving reports from risk management and legal functions on key legal matters and compliance and code of
conduct issues, and the actions taken in addressing those issues and strengthening controls;
• Reviewing the annual internal audit plan and status updates;
• Reviewing the Group’s governance approach to cybersecurity management, data security and privacy management
across its businesses;
• Reviewing the biennial assessment of the effectiveness of PwC;
• Reviewing the independence, audit scope and fees of PwC, and recommending their re-appointment as the external
auditor at general meeting; and
• Conducting a review of the terms of reference of the Audit Committee.
Audit Committee Attendance
The table below shows the attendance at the scheduled 2022 Audit Committee meetings:
Members of the Audit Committee
Meetings eligible
to attend Attendance
Anthony Nightingale (Chairman) 2/2 100%
Weiwei Chen 2/2 100%
Director of DFIRGMS
Graham Baker 2/2 100%
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DFI Retail Group Holdings Limited Annual Report 2022
Corporate Governance
Auditor Independence and effectiveness
The Group auditor’s independence and objectivity are safeguarded by control measures including:
• Limiting 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 Audit Committee and providing an opportunity for
the external auditor to have in-camera sessions with the Audit 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 Audit Committee of the policy to ensure the objectivity and independence of the
external auditor.
The Board’s annual review in 2022 of the Auditor’s Independence and Effectiveness found that PwC performed their
duties effectively. The Board found the level of professional scepticism, the number and regularity of meetings with the
Audit Committee, feedback from Audit Committee members and internal stakeholders and the levels of technical skills
and experience to be effective.
Risk Management and Internal Control
The Board has overall responsibility for the Group’s risk management systems and internal control. The Board has
delegated to the Audit Committee responsibility for providing oversight in respect of risk management activities.
The Audit Committee considers the Group’s principal risks and uncertainties and potential changes to the risk profile.
It reviews the operation and effectiveness of the Group’s internal control systems (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
Jardine Matheson Group Audit and Risk Management (‘JM GARM’) is appointed to assist the Audit Committee in fulfilling
its assurance and reporting roles. JM GARM adheres to international standards for the professional practice of internal
audit. To safeguard its independence and objectivity, JM 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 is responsible for the implementation of the systems of internal control throughout the Group,
and a series of audit committees at an operational level and the internal audit function monitors the effectiveness of
the systems.
The Group has an established risk management process reviewed regularly and 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. These are reviewed regularly.
The internal audit function also monitors the approach taken by the business units to risk. The internal audit function is
independent of the operating businesses and reports its findings and recommendations for any corrective action required
to the Audit Committee.
The Company’s principal risks and uncertainties are set out on pages 161 to 166.
159
Risk Governance Structure
Internal Audit
(‘JM GARM’)
DFI Board of Directors DFI Audit Committee
DFI Management
Delegate/
Oversee
DFI Audit and Risk
Management
Monitor/
Review
External Audit (‘PwC’)
Report
The Group’s Management is responsible for:
• Identifying and assessing principal risks and uncertainties to which it is exposed;
• Implementing the most appropriate actions to mitigate and control those risks to an acceptable level;
• Providing adequate resources to minimise, offset or transfer the effects of any loss that may occur while managing
acceptable risk/benefit relationships;
• Monitoring the effectiveness of the systems of risk management and internal control;
• Reporting periodically to DFI Board of Directors via Audit Committee on identifying principal risks and uncertainties
and measures taken to, mitigate such risks; and
• Working with external and internal auditors to monitor and improve its control environment.
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DFI Retail Group Holdings Limited Annual Report 2022
Corporate Governance
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
Risk Management Framework based on ISO 31000 and COSO principles is embedded in the Group to identify, assess
and define the strategies to monitor risks. The risk registers prepared by each business unit provide the basis for the
aggregation process, which summarises the principal risks and uncertainties facing the Group as a whole.
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 were 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; and
• Treat – redesign or monitor existing controls or introduce new controls.
Risk Reporting & Monitoring • Periodic review of principal risks and uncertainties.
• Setting key risk indicators to enhance monitoring and mitigation of risks.
• Regular reporting of principal risks and uncertainties from business units to
the Group’s Board of Directors via Audit Committee and JM GARM.
161
Principal Risks and Uncertainties
The following are the principal risks and uncertainties facing the Company as required to be disclosed pursuant to
the DTRs issued by the FCA and are in addition to the matters referred to in the Chairman’s Statement, Group Chief
Executive’s Review and other parts of this Annual Report.
Economic Risk Description
Most of the Group’s businesses are exposed to the risk of negative developments
in global and regional economies and financial markets, either directly or through
the impact 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,
the cost of raw materials or finished products. Such developments might increase
operating costs, reduce revenues, lower asset values or result in some or all of the
Group’s businesses being unable to meet their strategic objectives.
Mitigation Measures
• Monitor the volatile macroeconomic environment and consider economic
factors in strategic and financial planning processes.
• Make agile adjustments to existing business plans and explore new business
streams and new markets.
• Review pricing strategies and keep conservative assumptions.
• Insurance programme covering property damage and business interruption.
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DFI Retail Group Holdings Limited Annual Report 2022
Corporate Governance
Principal Risks and Uncertainties continued
Commercial Risk Description
Risks are an integral part of normal commercial activities and where practicable
steps are taken to mitigate them. Risks can be more pronounced when businesses
are operating in volatile markets. While the Group’s regional diversification does
help to mitigate some risks, a significant portion of the Group revenues and profits
continue to be derived from our operations in Hong Kong.
A number of the Group’s businesses make significant investment decisions
regarding developments or projects, which are subject to market risks. This is
especially the case where projects are longer-term in nature and take more time
to deliver returns.
The Group’s businesses operate in areas that are highly competitive and failure to
compete effectively, whether in terms of price, product specification, technology,
property site or levels of service, failure to manage change in a timely manner or
to adapt to changing consumer behaviours, including new shopping channels and
formats, can have an adverse effect on earnings. Significant competitive pressure
may also lead to reduced margins.
It is essential for the products and services provided by the Group’s businesses
to meet appropriate quality and safety standards, and there is an associated
risk if they do not, including the risk of damage to brand equity or reputation,
which might adversely impact the ability to achieve acceptable revenues and
profit margins.
While social media presents significant opportunities for the Group’s businesses
to connect with customers and the public, it also creates a whole new set of
potential risks for companies to monitor, including damage to brand equity or
reputation, affecting the Group’s profitability.
Mitigation Measures
• Utilise market intelligence and deploy digital strategies for business-to-
consumer businesses.
• Establish customer relationship management programme and digital
commerce capabilities.
• Engage in longer-term contracts and proactively approach suppliers for
contract renewals.
• Re-engineer existing business processes.
163
Principal Risks and Uncertainties
continued
Financial and Treasury Risk Description
The Group’s activities expose it to a variety of financial risks, 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.
Mitigation Measures
• Limiting foreign exchange and interest rate risks to provide a degree of
certainty about costs.
• Management of the investment of the Group’s cash resources so as to
minimise risk, while seeking to enhance yield.
• Adopting appropriate credit guidelines to manage counterparty risk.
• When economically sensible to do so, taking borrowings 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.
• 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
Company also maintains sufficient cash and marketable securities, and
ensures the 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 40 to 44 and Note 40 to the financial
statements on pages 116 to 124.
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DFI Retail Group Holdings Limited Annual Report 2022
Corporate Governance
Principal Risks and Uncertainties continued
Concessions, Franchises and
Key Contracts Risk
Description
A number of the Group’s businesses and projects rely on concessions, franchises,
management or other key contracts. Accordingly, cancellation, expiry or
termination, or the renegotiation of any such concessions, franchises, management
or other key contracts could adversely affect the financial condition and results of
operations of certain subsidiaries, associates, and joint ventures of the Group.
Mitigation Measures
• Sustaining and strengthening relationships with franchisors.
• Monitor sales performance and compliance with franchise terms.
• Regular communication with franchisees and concessionaires, including
performance management.
Regulatory and Political Risk Description
The Group’s businesses are subject to several regulatory regimes in the territories
they operate. Changes in such regimes, in relation to matters such as foreign
ownership of assets and businesses, exchange controls, licensing, imports, planning
controls, emission regulations, tax rules and employment legislation, could have
the potential to impact the operations and profitability of the Group’s businesses.
Changes in the political environment, including political or social unrest, in the
territories where the Group operates, could adversely affect the Group’s businesses.
Mitigation Measures
• Stay connected and informed of relevant new and draft regulations.
• Engage external consultants and legal experts where necessary.
• Assessing impact on the business and taking appropriate measures.
• Raise awareness with regular updates on new regulations that may have
been implemented in other markets.
Pandemic and Natural
Disasters Risk
Description
The Group’s businesses could be impacted by a global or regional pandemic which
seriously affects economic activity or the ability of businesses to operate smoothly.
In addition, many of the territories in which the Group operates can experience
natural disasters such as earthquakes, floods, and typhoons from time to time.
Mitigation Measures
• Business Continuity Teams are in place to deal with incidents as they arise.
• Business Continuity plans are in place, tested and updated regularly.
• Insurance programmes that provide robust cover for natural disasters.
• Engage external consultants for climate risk, to assess the risk to the business
and implement solutions accordingly.
165
Principal Risks and Uncertainties
continued
Cybersecurity and
Technology Risk
Description
The Group faces increasing numbers of cyberattacks from groups targeting
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 or our suppliers’ IT systems or the unauthorised or inadvertent release of
information, resulting in brand damage, impaired competitiveness or regulatory
action. Cyberattacks may also adversely affect our ability to manage our business
operations or operate information technology and business systems, resulting in
business interruption, lost revenues, repair or other costs.
The Group is heavily reliant on its IT infrastructure and systems for the daily
operation of its business. Any major disruption to the Group’s IT systems could
significantly impact operations. The ability to anticipate and adapt to technology
advancements or threats is an additional risk that may also impact the business.
Mitigation Measures
• Continued investment in upgrading of technology and IT infrastructure.
• Defined cybersecurity programme and centralised function to provide
oversight, manage cybersecurity matters, and strengthen cyber defences
and security measures.
• Perform regular vulnerability assessment and/or penetration testing by third
parties to identify weaknesses.
• Arrange regular security awareness training and phishing testing to raise
users’ cybersecurity awareness.
• Maintain disaster recovery plans and backup for data restoration.
• Regular external and internal audit reviews.
Talent Risk Description
The competitiveness of the Group’s businesses depends on the quality of the
people that it attracts and retains. Unavailability of needed human resources
may impact the ability of the Group’s businesses to operate at capacity,
implement initiatives and pursue opportunities.
Mitigation Measures
• Competitive pay and benefits commensurate with market benchmarks.
• Proactive manpower planning and succession planning are in place.
• Enhanced employer branding, training for team members and talent
development plans.
• Promote diversity and inclusion across the Group.
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DFI Retail Group Holdings Limited Annual Report 2022
Corporate Governance
Principal Risks and Uncertainties continued
Environmental and Climate Risk Description
Environmental disasters such as earthquakes, floods and typhoons can damage
the Group’s assets and disrupt operations. Global warming-induced climate
change has increased the frequency and intensity of storms, leading to higher
insurance premiums or reduced coverage for such natural disasters.
With governments also taking a more proactive approach towards carbon taxes,
renewable energies and electric vehicles, additional investments and efforts to
address physical and transition risks of climate change are anticipated from
businesses.
With interest in sustainability surging in recent years from investors, governments
and the general public, expectations by regulators and other stakeholders for
accurate corporate sustainability reporting and commitments towards carbon
neutrality to address climate change are also growing. This brings increasing
challenges to the Group and its businesses to meet key stakeholders’ expectations.
There is potential for negative publicity and operational disruption arising from
conflict between activists and the Group’s businesses that are perceived to be
engaged in trade and activities that are environmentally unfriendly.
Mitigation Measures
• Sustainability Leadership Council established to mobilise and coordinate
sustainability efforts across the Group.
• A sustainability strategy framework, including a climate action pillar, drives
the Group’s sustainability agenda.
• 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.
• Assess emerging Environmental, Social and Governance (ESG) reporting
standards and requirements, to align Group disclosures to best market
practice.
• Conduct climate risk assessments and adaptation action plans based on
recommendations of Task Force on Climate-Related Financial Disclosures
(TCFD), including implementing measures to address physical risks posed by
climate change and identifying opportunities in global transition to a low
carbon economy.
• Formulate the appropriate risk response strategy (particularly on the Group’s
key assets and supply chain), and integrate Physical and Transitional Climate
Risk into the Group’s existing risk management approach.
Effectiveness Review 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. The internal audit function also monitors the approach
taken by the business units to manage risk. The findings of the internal audit function and recommendations for any
corrective actions required are reported to the Audit Committee and if appropriate, to Jardine Matheson Audit Committee.
167
Financial Calendar
2022 full-year results announced 2nd March 2023
Shares quoted ex-dividend 16th March 2023
Share registers closed 20th to 24th March 2023
Annual General Meeting to be held 4th May 2023
2022 final dividend payable 10th May 2023
2023 half-year results to be announced 28th July 2023*
Shares quoted ex-dividend 17th August 2023*
Share registers to be closed 21st to 25th August 2023*
2023 interim dividend payable 11th October 2023*
*
Subject to change
Dividends
Shareholders will receive their cash dividends in United States Dollars, except when elections are made for alternate
currencies in the following circumstances.
Shareholders on the Jersey Branch Register
Shareholders registered on the Jersey branch register will have the option to elect for their dividends to be paid in Sterling.
These shareholders may make new currency elections for the 2022 final dividend by notifying the United Kingdom
transfer agent in writing by 21st April 2023. The Sterling equivalent of dividends declared in United States Dollars will be
calculated by reference to a rate prevailing on 26th April 2023.
Shareholders holding their shares through CREST in the United Kingdom will receive their cash dividends in Sterling only as
calculated above.
Shareholders on the Singapore Branch Register who hold their shares through The Central Depository (Pte)
Limited (‘CDP’)
Shareholders who are on CDP’s Direct Crediting Service (‘DCS’)
Those shareholders who are on CDP’s DCS 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
Those shareholders who are not on CDP’s DCS 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
Singapore Branch Registrar
M & C Services Private Limited
112 Robinson Road #05-01
Singapore 068902
Jersey Branch Registrar
Link Market Services (Jersey) Limited
12 Castle Street
St Helier, Jersey JE2 3RT
Channel Islands
United Kingdom Transfer Agent
Link Group
10th Floor
Central Square
29 Wellington Street
Leeds LS1 4DL, United Kingdom
Press releases and other financial information can be accessed through the internet at www.DFIretailgroup.com.
SHAREHOLDER INFORMATION
168
DFI Retail Group Holdings Limited Annual Report 2022
RETAIL OUTLET SUMMARY
Note: Includes associates and joint ventures and excludes discontinued operations.
Store Network
Home Furnishings
Restaurants
Other Retailing
2022
10,663
2019
10,012
2020
9,997
2021
10,286
6,000
4,000
2,000
8,000
10,000
Stores
0
2018
9,244
Grocery Retail
Convenience Stores
Health and Beauty
2022
Food
Health
and
Beauty
Home
Furnishings Restaurants
Other
Retailing Total
Net
change
Grocery
Retail
Convenience
Stores
Hong Kong 324 1,066 303 7 806 – 2,506 38
Macau 22 49 21 1 26 – 119 3
Chinese mainland 1,074 1,591 125 – 293 – 3,083 49
Singapore 101 457 121 – 175 – 854 9
Indonesia 22 – 312 7 – – 341 18
Malaysia 91 – 557 – 5 – 653 74
Brunei – – 31 – – – 31 5
Taiwan – – – 8 – – 8 1
The Philippines 311 433 957 – – 560 2,261 82
Vietnam – – 112 – 87 – 199 31
Cambodia 79 – 13 – 36 – 128 32
Thailand – – – – 479 – 479 34
Laos
* – – – – 1 – 1 1
Total 2,024 3,596 2,552 23 1,908 560 10,663 377
Net change over 2021 68 46 172 4 107 (20) 377
* Maxim’s entered into Laos market in late 2022.
2021
Food
Health
and
Beauty
Home
Furnishings Restaurants
Other
Retailing Total
Net
change
Grocery
Retail
Convenience
Stores
Hong Kong 322 1,036 315 6 789 – 2,468 24
Macau 20 51 20 1 24 – 116 3
Chinese mainland 1,088 1,550 129 – 267 – 3,034 (106)
Singapore 101 455 119 – 170 – 845 47
Indonesia 23 – 295 5 – – 323 (108)
Malaysia 79 – 497 – 3 – 579 46
Brunei – – 26 – – – 26 2
Taiwan – – – 7 – – 7 1
The Philippines 271 458 870 – – 580 2,179 326
Vietnam – – 94 – 74 – 168 6
Cambodia 52 – 15 – 29 – 96 26
Thailand – – – – 445 – 445 22
Total 1,956 3,550 2,380 19 1,801 580 10,286 289
Net change over 2020 (338) 218 351 6 60 (8) 289
* Associates or joint ventures
Leadership Team
Ian McLeod Group Chief Executive
Choo Peng Chee Chief Executive Officer – DFI Retail North Asia
Chris Bush Chief Executive Officer – DFI Retail Southeast Asia
Clem Constantine Chief Financial Officer and Property Director
Johnny Wong Chief Executive Officer – DFI Digital
Andrew Wong Chief Executive Officer – Health and Beauty North Asia
Soren Lauridsen Chief Executive Officer – Health and Beauty Southeast Asia
Martin Lindström Chief Executive Officer – IKEA
Danni Peirce Managing Director – Guardian Singapore
Marcus Spurrell Chief Technology Officer
Charlie Wood General Counsel, Head of Audit,
QC Technical and HR Central Services
Corporate Office
11/F Devon House, Taikoo Place
979 King’s Road, Quarry Bay
Hong Kong
P.O. Box 286, G.P.O.
Tel : (852) 2299 1888
Fax : (852) 2299 4888
Website : www.DFIretailgroup.com
MANAGEMENT AND OFFICES
Brunei
Guardian Health And Beauty
(B) Sdn Bhd
Giant Hypermarket Tasik Rimba
Lot 58865 Kampong Rimba
Mukim Gadong
Bandar Seri Begawan
BE 3119
Negara Brunei Darussalam
Tel : (673) 246 0715
Cambodia
DFI Lucky Private Limited
#01, Street 55P
Sangkat Tuek Thla
Khan Sen Sok
Phnom Penh
Cambodia 120802
Tel : (855 23) 885 723
Website : www.dfilucky.com
Hong Kong and Macau
The Dairy Farm Company, Ltd
5/F Devon House
Taikoo Place
979 King’s Road
Quarry Bay
Tel : (852) 2299 3888
Fax : (852) 2299 2888
Maxim’s Caterers Ltd*
18/F Maxim’s Centre
17 Cheung Shun Street
Cheung Sha Wan
Kowloon
Tel : (852) 2523 4107
Fax : (852) 2216 7883
Website : www.maxims.com.hk
Indonesia
PT Hero Supermarket Tbk
Graha Hero
CBD Bintaro Jaya
Sektor VII B.7/A.7, Pondok Jaya
Pondok Aren, Tangerang Selatan
Banten 15220
Tel : (62 21) 8378 8000
Website : www.hero.co.id
Chinese mainland
Guangdong Sai Yi Convenience
Stores Ltd
3/F Guangdong Mechanical
Sub-Building
185 Yue Hua Road
Yue Xiu District
Guangzhou 510030
Tel : (86 20) 8364 7118
Fax : (86 20) 8364 7436
Website : www.7-11.cn
Mannings Guangdong Retail
Company Ltd
2/F Guangdong Mechanical
Main-Building
185 Yue Hua Road
Yue Xiu District
Guangzhou 510030
Tel : (86 20) 8318 1388
Fax : (86 20) 8318 2388
Website : www.mannings.com.cn
Yonghui Superstores Co., Ltd*
120 Hutou Street
Fuzhou 350002
Tel : (86 591) 8376 2200
Fax : (86 591) 8378 7308
Website : www.yonghui.com.cn
Malaysia
GCH Retail (Malaysia) Sdn Bhd
Mezzanine Floor
Giant Hypermarket Shah Alam
Stadium
Lot 2, Persiaran Sukan, Seksyen 13
40100 Shah Alam
Selangor Darul Ehsan
Tel : (603) 5544 8888
Fax : (603) 5511 0164
Website : www.giant.com.my
Guardian Health And Beauty
Sdn Bhd
Mezzanine Floor
Giant Hypermarket Shah Alam
Stadium
Lot 2, Persiaran Sukan, Seksyen 13
40100 Shah Alam
Selangor Darul Ehsan
Tel : (603) 5544 8400
Fax : (603) 5518 1131
Website : www.guardian.com.my
The Philippines
Robinsons Retail Holdings, Inc.*
43F Robinsons Equitable Tower
ADB Avenue cor Poveda St.
Ortigas Center, Pasig City
Metro Manila
Tel : (63 2) 8635 0751 to 64
Website : www.robinsonsretail
holdings.com.ph
Singapore
Cold Storage Singapore (1983)
Pte Ltd
21 Tampines North Drive 2
#03-01
Singapore 528765
Tel : (65) 6891 8000
Fax : (65) 6784 3623
Taiwan
DFI Home Furnishings Taiwan Ltd
4/F, No. 128 Section 1
Jiuzong Road
Neihu District, 114066
Taipei City
Taiwan
Tel : (886 2) 2791 8820
Fax : (886 2) 2791 8180
Website: www.ikea.com.tw
Vietnam
Pan Asia Trading And Investment
One Member Company Limited*
L2-VP-01, 346 Ben Van Don
Ward 1, District 4
Ho Chi Minh City
Tel : (84 28) 3832 8272
Fax : (84 28) 3832 8448
Website : www.guardian.com.vn
169
www.DFIretailgroup.com