Annual Report
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22
Hongkong Land Holdings Limited
Building a Better, More Sustainable Community
Contents
Corporate Overview
1
Corporate Information
2
Highlights
3
Chairman’s Statement
4
Chief Executive’s Review
7
Financial Review
1
4
Sustainability
2
0
Directors’ Profiles
2
2
Financial Statements
2
4
Independent Auditors’ Report
7
7
Five Year Summary 8
3
Responsibility Statements 8
4
Corporate Governance 8
5
Shareholder Information
1
0
6
Offices
1
0
7
Report of the Valuers
1
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9
Major Property Portfolio
1
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Front cover : Sustainability is the foundation
upon which Hongkong Land’s purpose, vision and
mission are built. Guided by our Sustainability
Framework
20
3
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which includes the four
spotlights of Climate & Economic Resilience,
Inspirational Connections, Operational Excellence,
and Vibrant Communities & Cities, we are
committed to continue engaging and collaborating
with stakeholders to advance the sustainability
agenda across the communities we serve.
is a major listed property investment, management and
development group. Founded in 1889, Hongkong Land’s business is built on excellence,
integrity and partnership.
The Group owns and manages more than 850,000 sq. m. of prime office and luxury
retail assets in key Asian cities, principally Hong Kong, Singapore, Beijing and Jakarta.
Its properties hold industry leading green building certifications and attract the world’s
foremost companies and luxury brands.
The Group’s Central Hong Kong portfolio represents some 450,000 sq. m. of prime
property. It has a further 165,000 sq. m. of prestigious office space in Singapore mainly
held through joint ventures, four retail centres on the Chinese mainland, including a luxury
retail centre at Wangfujing in Beijing, and a 50% interest in a leading office complex in
Central Jakarta. The Group also has a number of high quality residential, commercial
and mixed-use projects under development in cities across China and Southeast Asia,
including a 43% interest in a 1.1 million sq. m. mixed-use project in West Bund, Shanghai.
Its subsidiary, MCL Land, is a well-established residential developer in Singapore.
Hongkong Land 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 assets and investments are managed from Hong Kong by
Hongkong Land Limited. Hongkong Land is a member of the Jardine Matheson Group.
1
Directors
Ben Keswick Chairman
John Witt Managing Director
Robert Wong Chief Executive
Craig Beattie
Lily Jencks
(joined the Board on 28th July 2022)
Adam Keswick
Lincoln K.K. Leong
(joined the Board on 4th March 2022)
Anthony Nightingale
Christina Ong
Y.K. Pang
Prijono Sugiarto
Michael Wei Kuo Wu
(stepped down on 31st December 2022)
Company Secretary
Jonathan Lloyd
Registered Office
Corporate Information
Hongkong Land Limited
Directors
John Witt Chairman
Robert Wong Chief Executive
Craig Beattie Chief Financial Officer
Graham Baker
Matthew Bland
(joined the board on 1st April 2022)
Raymond M.J. Chow
(stepped down on 31st July 2022)
Kenneth Foo
Robert L. Garman
David Hsu
(stepped down on 1st August 2022)
Kong Kei Yeuk
(joined the board on 1st May 2022)
Ling Chang Feng
Anne O’Riordan
Y.K. Pang
John Simpkins
Yanjun Sun (Steve)
(joined the board on 1st August 2022)
Raymond Wong
Corporate Secretary
Jonathan Lloyd
2
• Underlying profit down 20% to US$776 million
• Lower residential development profits on the Chinese mainland
• Slight decline in results from Investment Properties; asset values stable
• Group financial position remains strong
• Final dividend maintained at US¢16.00 per share
Results
2022 2021 Change
US$m US$m %
Underlying profit attributable to shareholders
*
776 966 (20)
Profit/(loss) attributable to shareholders 203 (349) N/A
Shareholders’ funds 33,303 34,584 (4)
Net debt 5,817 5,104 14
US¢ US¢
%
Underlying earnings per share
*
34.44 41.49 (17)
Earnings/(loss) per share 8.99 (15.00) N/A
Dividends per share 22.00 22.00 –
US$ US$ %
Net asset value per share 14.95 15.05 (1)
*
The Group uses ‘underlying profit attributable to shareholders’ in its internal financial reporting to distinguish between ongoing business
performance and non-trading items, as more fully described in Note 27 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.
Highlights
3
Chairman’s Statement
Overview
The Group’s profitability was significantly lower in 2022,
primarily due to a lower contribution from the Development
Properties business in the second half of the year, after
a record performance in 2021. The contribution from
Investment Properties was resilient, however, with only
modest financial impacts in the retail portfolio from the
pandemic measures introduced across China during 2022.
The impact of lower average office rents in Hong Kong
was partially offset by a reduction in operating costs.
Performance
Underlying profit attributable to shareholders fell by 20%
to US$776 million.
Profit attributable to shareholders was US$203 million,
after including net non-cash losses of US$573 million
resulting primarily from lower valuations of the Group’s
investment properties. This compares to a loss of
US$349 million in 2021, which included a US$1,315 million
reduction in property valuations mainly due to lower
market rents for the Hong Kong Central Portfolio.
The net asset value per share at 31st December 2022 was
US$14.95, compared with US$15.05 at the end of 2021.
The Directors recommend a final dividend of US¢16.00
per share, providing a total dividend for the year of
US¢22.00 per share, unchanged from last year.
Group Review
Investment Properties
In Hong Kong, office leasing demand remained subdued.
Against this backdrop, the Group’s Central office portfolio
remained resilient, outperforming the broader market due
to its prime CBD location and premium offering. At the
end of 2022, physical vacancy was 4.9%, compared to
5.2% at the end of 2021 and, on a committed basis,
it was 4.7%, compared to 4.9% at the end of 2021,
well below average Central market vacancy levels.
Modestly negative rental reversions resulted in average
office rents decreasing to HK$111 per sq. ft. in 2022,
from HK$117 per sq. ft. in the prior year.
Retail market sentiment in Hong Kong was severely
affected by the fifth wave of the pandemic in the first half
of 2022. Retail trading benefited in the second half of the
year, however, as social distancing and travel restrictions
were progressively relaxed. Total retail sales nevertheless
remained below pre-pandemic levels, due to a lack
of tourists. Average retail rents in 2022 in the Central
LANDMARK retail portfolio decreased to HK$177 per sq. ft.
from HK$190 per sq. ft. in 2021, primarily due to negative
base rent reversions. Vacancy was 0.5% on both a
physical and committed basis, unchanged from the
prior year.
In Singapore, contributions from the Group’s office
portfolio increased, due to positive rental reversions
underpinned by a healthy level of occupier demand, with
average office rents increasing to S$10.6 per sq. ft. in
2022 from S$10.3 per sq. ft. in 2021. On a committed
basis, vacancy in the Group’s office portfolio remained
low at 2.2%, compared with 2.9% at the end of 2021.
In Beijing and Macau, pandemic measures negatively
impacted trading at the Group’s two luxury retail malls,
with tenant sales and footfall in 2022 both lower than the
prior year.
In Shanghai, development activities continued at the
Group’s 43%-owned prime 1.1 million sq. m. mixed-use
development on the West Bund, with modest impacts
from the covid related city-wide lockdowns. The West
Bund development, which will be completed in phases
from 2023 to 2027, remains on schedule.
The combined value of the Group’s Investment Properties
portfolio was reduced by 2% in 2022, due largely to a
modest increase in capitalisation rates for the Hong Kong
portfolio. There was no change in the capitalisation rates
for the Singapore, Beijing and Shanghai investment
properties.
4
Development Properties
As anticipated, the profit contribution from the Group’s
Development Properties business on the Chinese mainland
decreased compared to the prior year, as a result of a
significantly lower profit contribution in the second half of
the year, due to fewer planned sales completions and the
impact of pandemic-related restrictions.
The Group’s attributable interest in contracted sales in
2022 decreased to US$1,300 million from US$2,648 million
in 2021, mainly due to weak market sentiment for
residential properties. At 31st December 2022, the Group
had an attributable interest of US$2,087 million in sold
but unrecognised contracted sales, compared with
US$2,853 million at the end of 2021.
In Singapore, recognised profits in 2022 were lower than
the prior year. 2021 benefited from the construction
progress of the wholly-owned 1,404-unit Parc Esta
project, which was handed over to buyers in 2022.
The Group’s attributable interest in contracted sales
was US$615 million, compared to US$328 million in the
prior year, driven by the healthy pre-sales performance
of two new residential projects launched during the year.
The 407-unit Piccadilly Grand and Galleria and 639-unit
Copen Grand projects are 85% and 100% pre-sold or
reserved, respectively.
In the rest of Southeast Asia, there were increased
contributions from completed projects in Indonesia
and Vietnam.
Business Development
The Group continues to be disciplined in evaluating and
selecting development opportunities on the Chinese
mainland, with a focus on Tier 1 and Tier 2 cities.
During the year the Group made two acquisitions –
a primarily residential site in Shanghai and an interest
in a mixed-used commercial site in Suzhou.
The Shanghai site, located in Xuhui District and
adjacent to our mixed-used project in West Bund,
has an attributable developable area of 18,700 sq. m.
and will feature six high-rise apartment blocks with
over 460 premium units.
The joint venture project in Suzhou was secured in August
2022 and will consist of a luxury mall and hotel. The total
developable area of the site is 132,600 sq. m., and it is
expected to be completed in 2026. This development
reflects the Group’s strategy of developing luxury and
premium lifestyle retail properties on the Chinese mainland.
The Group currently has four such properties in operation,
and the site in Suzhou will be added to the pipeline of ten
further such developments.
In addition, the Group increased its investments in two
existing projects, including acquiring from KWG Property
Holdings Limited the remaining 50% interest in WE City, a
mixed-use project in Chengdu in December 2022, and
acquiring a 15% interest in Yue City, a mixed-use project
in Nanjing, from Country Garden with completion
expected in the first half of 2023.
In Singapore, the Group acquired a 49% interest in a
residential site in the Jalan Tembusu area with a total
developable area of 60,000 sq. m., which is expected to
be completed by 2025.
These land acquisitions increase the Group’s attributable
developable area under development across all projects to
4.9 million sq. m.
Financing
The Group’s financial position remains strong. Net debt
of US$5.8 billion at 31st December 2022 was up from
US$5.1 billion at the end of 2021, primarily due to lower
proceeds from residential sales. Net gearing at the end
of the year was 17%, compared with 15% at the end
of 2021. As at 31st December 2022, the Group had
committed liquidity of US$3.1 billion, with an average
tenor of debt of 5.8 years, compared to 6.5 years at the
end of 2021.
In July 2022, the Group completed a US$500 million share
buyback programme, and it subsequently announced that
an additional US$500 million would be invested through
to the end of 2023. As at 28th February 2023, the total
amount invested in the buyback programme since it was
first announced in September 2021 was US$556 million,
with US$350 million invested in 2022.
5
Chairman’s Statement
Sustainability
Hongkong Land’s growth and progress on sustainability
initiatives continues to be underpinned by its
Sustainability Framework 2030, which addresses
material topics that are linked to measurable targets.
During the year, the Group committed to setting
science-based targets that are aligned with the 1.5°C
pathway. These targets, which were validated by the
Science Based Targets initiative, has resulted in the Group
committing to a 46.2% reduction of Scope 1 and 2
greenhouse gas emissions by 2030 from 2019 levels
and a 22% reduction in carbon intensity for Scope 3
greenhouse gas emissions over the same period.
The Group’s continued commitment and strong
performance on sustainability initiatives has been
recognised in a number of ESG assessments, especially
those involving in-depth submissions. The Group was
pleased to receive the highest 5-star rating from the
Global Real Estate Sustainability Benchmark (‘GRESB’) for
its standing investments. Hongkong Land also qualified,
for the first time, as a constituent of the Dow Jones
Sustainability Asia Pacific Index, as a result of the
significant improvement in our scores in the 2022 S&P
Global Corporate Sustainability Assessment.
People
I would like to express my appreciation on behalf of the
Board to all of our staff for their continued commitment
and professionalism in providing high quality offerings
to our tenants and customers, despite market and
pandemic-related challenges.
Lord Powell of Bayswater and Percy Weatherall stepped
down from the Board in March 2022, and Michael Wu
stepped down from the Board in December 2022. We are
grateful to them for their contributions to the Group.
We were pleased to welcome Lincoln K.K. Leong and
Lily Jencks to the Board as Independent Non-Executive
Directors with effect from March and July 2022,
respectively.
Outlook
Results in 2023 will principally depend on the pace of
recovery of the property sector on the Chinese mainland.
Stable contributions are expected to continue from the
Group’s Investment Properties business, although rental
reversions for the Hong Kong office portfolio are expected
to remain negative. The extent of improvement in
performance from the Development Properties business
will depend on policy support measures implemented on
the Chinese mainland.
Ben Keswick
Chairman
2nd March 2023
66
Hongkong Land delivered a respectable result for the
year, despite challenging market conditions, although
profits were significantly lower. The contribution from
Development Properties fell as a result of pandemic
measures on the Chinese mainland and a more uncertain
global economic outlook in the second half of 2022, but
the performance of Investment Properties was resilient.
Strategy
Hongkong Land is a landlord and a developer operating
in China and Southeast Asia. The Group’s primary focus
is to develop, grow and hold for long-term investment,
a portfolio of prime commercial investment properties
across the region, whilst it also develops premium
residential and commercial properties for sale on an
opportunistic basis to enhance shareholder returns.
The Group’s Investment Properties are predominantly
commercial and located in core business districts
of key Asian gateway cities, with a concentration in
Hong Kong and Singapore. Returns principally arise
from rental income and long-term capital appreciation.
The Investment Properties segment is the largest
contributor to the Group’s earnings given its relative size
and maturity. It accounted for 83% of the Group’s gross
assets at the end of 2022 (2021: 83%) and contributed
70% of the Group’s underlying operating profit before
corporate expenses in 2022 (2021: 60%).
The Group’s Development Properties are predominantly
premium residential and mixed-use developments located
primarily in China, Singapore and Indonesia. Returns
principally arise from trading profits in respect of the
immediate sale of the residential and office components;
and rental and trading profits for certain commercial
elements of mixed-use sites that are disposed of, or
reclassified to Investment Properties, after rents have
stabilised. Development Properties accounted for 17% of
the Group’s gross assets at the end of 2022 (2021: 17%)
and 30% of the Group’s underlying operating profit before
corporate expenses in 2022 (2021: 40%).
Geographically, China generates the bulk of the Group’s
earnings. Hong Kong, which predominantly comprises
Investment Properties, accounted for 57% of the Group’s
underlying operating profit before corporate expenses
(2021: 49%), while the Chinese mainland, which
predominantly comprises Development Properties,
accounted for 23% (2021: 33%).
The Investment Properties portfolios in Hong Kong and
Singapore provide a stable stream of recurring earnings
and balance sheet strength that enables the Group
to selectively pursue new long-term investment
opportunities in key gateway cities across the region.
Earnings from the Development Properties business are
largely reinvested to replenish the Group’s land bank
where opportunities arise. The Group’s share of capital
allocated to new investments totalled US$1.0 billion in
2022 (2021: US$3.0 billion).
Hong Kong Investment Properties
In Hong Kong, the Group’s Central Portfolio consists of
12 interconnected prime commercial buildings forming
the heart of the financial district in Central, providing over
450,000 sq. m. of Grade A office and luxury retail space.
This integrated mixed-use development is positioned as
the pre-eminent office, luxury retail, restaurant, and hotel
accommodation in Hong Kong. It continues to attract both
prime office tenants and luxury retailers, in addition to
housing the acclaimed Landmark Mandarin Oriental hotel.
Chief Executive’s Review
Central Portfolio office tenant profile
by area occupied
42% Banks and other financial services
31% Legal
3% Trading
8% Accounting
5% Property
11% Others
40% Banks and other financial services
30% Legal
6% Property
8% Accounting
1% Governments
2% Trading
13% Others
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7
Chief Executive’s Review
Other Investment Properties
Outside Hong Kong, the Group has similarly established
itself as a leading provider of prime office and retail
space. In Singapore, Hongkong Land’s attributable
interests totalling 165,000 sq. m. – principally
concentrated in the Marina Bay Area – include some of
the finest Grade A office space in the market. In China,
the Group’s 43,000 sq. m. WF CENTRAL complex in
Beijing is positioned as a premium retail and lifestyle
destination, which includes a Mandarin Oriental hotel that
has established itself as one of the most exclusive hotels
in the city. In Indonesia, the Group has attributable
interests of over 100,000 sq. m. of Grade A office space
through its 50%-owned joint venture, Jakarta Land.
In Cambodia, the EXCHANGE SQUARE complex comprises
26,000 sq. m. of office and retail space in the heart of
Phnom Penh.
Our performance in these markets depends on the levels
of demand for, and supply of, prime office and luxury
retail space, both of which are influenced by global
and regional macroeconomic conditions. The Group is
committed to maintaining excellence in product quality
and service to retain and attract tenants and customers
and will continue to seek new opportunities to develop
prime investment properties in key Asian gateway cities.
Hong Kong’s positioning as one of Asia’s leading financial
and business hubs, combined with the scarcity of supply
of high-quality, well-managed space in Central and the
unique qualities of the Group’s portfolio, continue to
support low vacancy and strong rents. Despite the
challenging conditions resulting from the pandemic and
global uncertainties, Hong Kong continues to possess
unique advantages as a financial centre that are not easily
replicated. The Group remains confident that Hong Kong
will continue to thrive as the primary gateway for capital
flows in and out of the Chinese mainland and will remain
an important finance and commercial hub for decades
to come.
The Group’s 54,000 sq. m. retail portfolio is integrated
with its office buildings to create part of its distinctive and
successful mixed-use business model. Tenants include
numerous global luxury brand flagship stores, as well as
a number of leading restaurants. LANDMARK is firmly
established as the iconic luxury shopping and fine dining
destination in Hong Kong. Its success depends on the
health of the broader Hong Kong economy, as well as on
Hong Kong remaining an attractive destination for affluent
visitors from across the region. The Group is working to
ensure that it remains the clear market leader in the city
in which global luxury brands are represented.
Central Portfolio top five retail tenants
(in alphabetical order)
in 2022
Dickson Concepts
Giorgio Armani
Hermes
Kering
LVMH
Central Portfolio top five office tenants
(in alphabetical order)
in 2022
JP Morgan
KPMG
Mayer Brown
PricewaterhouseCoopers
Stock Exchange of Hong Kong
8
Development Properties
The Group has established a strong and profitable
Development Properties business focused primarily
on the premium residential market segment in China,
Singapore and Indonesia. In China, the Group has
a presence in seven key markets: Beijing, Chengdu,
Chongqing, Hangzhou, Nanjing, Shanghai and Wuhan,
which are expected to continue benefiting from the
growth of the middle class and long-term urbanisation
trends. While the capital invested in this business is
significantly lower than that invested in Investment
Properties, the earnings derived from Development
Properties enhance the Group’s diversification, overall
profits and return on capital. The Group’s attributable
interest in the developable area of its projects at the
end of 2022 totalled 10.7 million sq. m., compared
to 10.2 million sq. m. at the end of 2021. Of this,
construction of approximately 54% had been completed
at the end of 2022, compared to 48% at the end of 2021.
Annual returns from Development Properties fluctuate
due to the nature of projects and the Group’s accounting
policy of recognising profits for sold properties on
completion in a number of markets, including China.
Demand is also dependent on overall economic
conditions, which can be significantly affected by
government policies and the availability of credit.
Ongoing land acquisitions are necessary to build and
maintain a stable income stream over the longer term.
Review of Investment Properties
Profits from Investment Properties in 2022 were 2%
lower than the prior year, primarily due to negative office
rental reversions in Hong Kong. The value of the Group’s
Investment Properties portfolio at 31st December 2022
declined by 2%, mainly due to lower market rents for
the Hong Kong Central Portfolio and a modest increase
in capitalisation rates.
Hong Kong
Despite slowing demand due to global economic
headwinds and rising office vacancies across Hong Kong,
the Group’s Central office portfolio continued to
outperform the broader market. Physical vacancy was
4.9% at the year end, compared to 5.2% at the end
of 2021. On a committed basis, vacancy was 4.7%.
Vacancy for the overall Central Grade A office market
was 8.8% at the end of 2022, compared to 8.0% at the
end of 2021. Rental reversions remained negative during
the year. The Group’s average office rent in 2022 was
HK$111 per sq. ft., down from last year’s average of
HK$117 per sq. ft. Financial institutions and legal and
accounting firms occupy 81% of the Group’s total leased
office space. The weighted average lease expiry of the
office portfolio at the end of 2022 stood at 4.0 years,
compared to 4.2 years at the end of 2021.
Central Portfolio
at 31st December 2022
Office Retail
Capital value (US$m) 22,391 3,740*
Gross revenue (US$m) 745 215
*
Equivalent yield (%)
– One and Two Exchange Square 3.05
– Landmark Atrium 4.50
Average unexpired term
of leases (years) 4.0 1.8
Area subject to renewal/review
in 2023 (%) 22 45
* Includes hotel
9
Chief Executive’s Review
The Group’s luxury retail portfolio in Hong Kong was
negatively impacted by pandemic restrictions in the
first half of 2022, although sentiment and performance
improved as social and travel restrictions were progressively
relaxed towards the end of the year. During the first half
of 2022, the Group provided temporary rent relief to
support tenants through the fifth wave of the pandemic,
including turnover-only rent for F&B tenants and a full
waiver of rents for tenants subject to mandatory closure
of their businesses. Average retail rent in 2022 decreased
to HK$177 per sq. ft. from HK$190 per sq. ft. due to
negative base rental reversions, partly offset by a decline
in temporary rent relief provided to tenants. Vacancy,
on both a physical and committed basis, remained low
at 0.5%.
Over the past year, the Group continued to refine its
best-in-class services and offerings to its tenants and
customers. In March 2022, the Group launched a new
LANDMARK app to provide shoppers and loyalty members
with a more personalised and intuitive user experience.
The new platform also provides more flexibility in
co-creating content with our tenants and partners and
enables the Group to serve customers better through
a deeper understanding of their needs.
In December 2022, the Group expanded its successful
premium food hall concept in the basement level of
Jardine House by launching BaseHall 2. The venue
provides a fluid space for multi-concept dining and
the flexibility to host other events and experiences
for our tenants and customers. In addition to housing
13 unique food and beverage concepts, BaseHall 2
has an 18-seat chef’s counter to provide a platform
to incubate homegrown talents in Hong Kong.
The value of the Group’s Investment Properties portfolio in
Hong Kong at 31st December 2022, based on independent
valuations, declined by 2% to US$26,131 million, primarily
from a slight increase in capitalisation rates.
Singapore
Although the Singapore office leasing market remained
healthy in 2022, market sentiment was affected by global
economic headwinds towards the end of the year. Overall
vacancy across the entire Grade A central business district
was 5.5% at the end of 2022, compared to 8.6% at the
end of 2021. Average rent at the Group’s office portfolio
increased to S$10.6 per sq. ft. in 2022, up from S$10.3
per sq. ft. in the previous year, driven by positive rental
reversions. Physical vacancy was 7.5% at the year end,
whilst on a committed basis vacancy was 2.2% at the end
of 2022, compared to 2.9% at the end of 2021. Financial
institutions and legal and accounting firms occupy 73%
of the Group’s total leased office space. The weighted
average lease expiry of the office portfolio at 2022 year
end stood at 3.4 years (2021: 3.4 years).
14.18
15.06
15.46
2022202120202019201820172016201520142013
12.70
13.14
13.03
13.26
13.82
14.39
15.04
Central Portfolio average office effective rent (US$/sq. ft. per month)
10
To further enhance the tenant experience, the Group has
continued to leverage its popular ‘By The Bay’ mobile app
to introduce exclusive retail offerings, deliver a series of
health and wellness workshops and host community and
charitable events.
Chinese Mainland
In Beijing, footfall and tenant sales at WF CENTRAL were
negatively impacted by pandemic measures throughout
the year. Tenant repositioning initiatives, however,
remained on track with several new openings expected
in the first half of 2023.
In Shanghai, planning and development of the Group’s
prime mixed-use development on the West Bund is
proceeding on schedule. Completion is expected in
phases from 2023 to 2027.
Other Investment Properties
ONE CENTRAL Macau was negatively impacted by
pandemic measures, with lower footfall and tenant sales
than the prior year, as the border with the Chinese
mainland remained closed for most of the year. Physical
occupancy was 84%, compared to 91% at the end of the
prior year.
In Jakarta, occupancy across the office portfolio was 71%
at the end of 2022, compared to 72% at the end of 2021.
On a committed basis, occupancy was 72%. The average
net rent was US$15.0 per sq. m. in 2022, compared
to US$15.2 per sq. m. in the prior year, reflecting
a satisfactory performance in the context of a structural
surplus of city-wide office supply.
In Bangkok, planning of the Group’s 49%-owned prime
commercial joint-venture development in the central
business district, secured in late 2017, is under review
in response to the changing market conditions. This
development has a gross floor area of 290,000 sq. m.
Performance at the Group’s other investment properties
was within expectations.
Review of Development Properties
Earnings from the Group’s Development Properties
business were lower in 2022 than in 2021, primarily
due to construction delays caused by pandemic
restrictions and fewer planned sales completions
on the Chinese mainland.
Chinese Mainland
The Group’s development properties on the Chinese
mainland comprise 35 projects in seven cities, of which
14 are in Chongqing. As at 31st December 2022, the
Group’s net investment in development properties on
the Chinese mainland was US$6.5 billion, compared to
US$6.3 billion at the end of 2021.
While the Development Properties business is
predominantly focused on selling residential properties,
the Group is also developing luxury and premium lifestyle
retail properties on the Chinese mainland. It currently has
four such properties in operation, with a total attributable
net leasable area of 170,000 sq. m. In addition, a further
ten projects, with an estimated attributable net leasable
area of 323,000 sq. m., are expected to be launched from
2023 to 2027, as follows:
Luxury retail properties pipeline
Project City
Attributable net
leasable area
(sq. m.)
JL CENTRAL Nanjing 23,000
Eternal Land Chongqing 44,400
West Bund* Shanghai 51,800
Suzhou CENTRAL* Suzhou 39,400
* The West Bund luxury retail segment and Suzhou CENTRAL are
recognised under Investment Properties.
Premium lifestyle retail properties pipeline
Project City
Attributable net
leasable area
(sq. m.)
Galaxy Midtown Shanghai 8,800
WE City Chengdu 51,700
Yue City Nanjing 16,200
Central Avenue Chongqing 38,100
Hangzhou Bay Hangzhou 22,800
Dream Land Wuhan 26,700
11
Chief Executive’s Review
With tightened credit conditions and macroeconomic
headwinds on the Chinese mainland, the Group
maintained its disciplined and consistent approach to
evaluating expansion opportunities. During the year,
the Group secured two new joint venture projects:
a residential project in West Bund, Shanghai and
a commercial project in Suzhou.
Market sentiment remained weak throughout the year
due to pandemic restrictions. The Group’s share of total
contracted sales in 2022 was US$1,300 million, 51%
lower than the US$2,648 million achieved in the prior
year. The Group’s attributable interest in revenue
recognised in 2022, including its share of revenue in
joint ventures and associates, was US$1,873 million,
compared to US$2,426 million in 2021.
At 31st December 2022, the Group’s attributable interest
in sold but not yet recognised contracted sales amounted
to US$2,087 million, compared to US$2,853 million at
the end of 2021.
Development Properties pipeline
(Chinese mainland)
City
Number of
projects
Developable
area
*
(‘000 sq. m.)
Revenue from
property sales
*
(US$m)
% of
construction
completed
% of
Development
Properties
exposure on
the Chinese
mainland
2022 2021
Chongqing 14 4,890 1,113 1,480 79% 33%
Shanghai 5 397 59 259 43% 22%
Nanjing 4 433 100 450 33% 16%
Wuhan 4 642 56 2 23% 16%
Chengdu 5 1,209 27 164 63% 8%
Beijing 1 38 – – 0% 4%
Hangzhou 2 309 518 71 53% 1%
* Includes HKL’s share in joint ventures and associates
Singapore
With the relaxing of pandemic restrictions, residential
market sentiment recovered during the year,
with satisfactory sales performance at the Group’s
existing projects.
The Group completed one residential project during the
year, the wholly-owned 1,404-unit Parc Esta, which was
fully sold.
The Group’s attributable interest in contracted sales was
US$615 million in 2022, compared to US$328 million
in the prior year. The Group’s attributable interest
in revenue recognised in 2022 was US$379 million,
compared to US$631 million in the prior year.
At 31st December 2022, the Group’s attributable interest
in sold but not yet recognised contracted sales amounted
to US$589 million, compared to US$362 million at the
end of 2021.
During the year, the Group secured a 49% interest
in a residential site in the Jalan Tembusu area with
a developable area of 60,000 sq. m., which is expected
to yield a total of 638 units on completion.
Development Properties pipeline (Singapore)
Project
Developable
area
*
(‘000 sq. m.)
Revenue from
property sales
*
(US$m)
Expected
completion
% of
Development
Properties
exposure in
Southeast
Asia
2022 2021
Parc Esta 108 164 501 Completed 0%
Leedon Green 27 190 66 2023 6%
Piccadilly Grand
and Galleria
20 25 – 2025 3%
Copen Grand 34 – – 2025 4%
Tembusu Grand 29 – – 2025 30%
* Includes HKL’s share in joint ventures and associates
12
Indonesia and other Development Properties
In Indonesia, construction of the Group’s residential
projects has largely recovered with the relaxation of
pandemic restrictions.
During the year, the Group acquired a 50% interest in
a 50.4 hectare primarily residential site in the southwest
of Jakarta. The project will consist of predominantly land
houses and is expected to be completed in phases from
2025 to 2033.
In February 2022, the Group, in partnership with Astra
International, established a joint venture with LOGOS SE
Asia Pte Ltd to manage and develop modern logistics
warehouses in Indonesia, with an initial focus in the
Greater Jakarta area.
In the rest of Southeast Asia, construction activities
continue to progress well, with pre-sales performance
in line with expectations.
Development Properties pipeline
(Southeast Asia ex. Singapore)
Country
Number of
projects
Developable
area
*
(‘000 sq. m.)
Revenue from
property sales
*
(US$m)
% of
construction
completed
% of
Development
Properties
exposure in
Southeast
Asia
2022 2021
Indonesia 6 743 67 37 24% 25%
Thailand 4 263 22 32 13% 22%
Philippines 3 710 20 25 12% 7%
Vietnam 1 40 90 47 100% 3%
* Includes HKL’s share in joint ventures and associates
The Year Ahead
Looking ahead to 2023, the Group expects a steady
improvement in the operating environments across a
majority of its key markets. The Group’s Investment
Properties portfolios in Hong Kong and Singapore remain
well positioned in their respective markets, underpinned
by their high quality tenant base and low vacancies.
In the Development Properties business, the extent of
improvement in performance will depend on the pace
of recovery of the Chinese mainland property sector.
We take pride in delivering outstanding services and
products to our tenants and customers by upholding the
highest quality standards. These core values have served
as the foundation of Hongkong Land’s long-term success.
The Group intends to utilise its strong balance sheet and
disciplined investment approach to further strengthen its
market positions and achieve sustained growth.
Robert Wong
Chief Executive
2nd March 2023
13
Results
Underlying business performance
2022 2021
US$m US$m
Investment Properties 951 973
Development Properties 404 644
Corporate costs (89) (89)
Underlying operating profit 1,266 1,528
Net financing charges (228) (196)
Tax (261) (365)
Non-controlling interests (1) (1)
Underlying profit attributable
to shareholders 776 966
Non-trading items (573) (1,315)
Profit/(loss) attributable
to shareholders 203 (349)
US¢ US¢
Underlying earnings per share 34.44 41.49
Underlying business performance is summarised in the
above table, including the Group’s operating profit from
its associates and joint ventures. Given the significance
of the contribution from the Group’s joint ventures, this
provides a clearer summary of the Group’s performance
during the year.
The Group’s operating profit from Investment Properties
was US$951 million, 2% lower than the previous year,
primarily due to negative office rental reversions in
Hong Kong. The two largest operating profit contributors
within Investment Properties are the Hong Kong Central
Portfolio (82%) and Singapore (12%).
In Hong Kong, there was a 2% decrease in operating
profit in 2022. Office average net rent was down 5%
compared to 2021, at HK$111 per sq. ft. per month.
There were negative base rental reversions in the
LANDMARK retail portfolio in 2022, although the impact
of this was partially offset by a reduction in temporary
rental support provided to tenants due to the pandemic.
Operating costs were lower year-on-year helping to
reduce the impact of lower rents.
In Singapore, Investment Properties operating profit
was US$117 million, 1% higher than the previous year,
primarily due to an increase in average rent.
Operating profit at ONE CENTRAL Macau was 30% lower
than the prior year as retail sales at the mall were
significantly lower in 2022 due to pandemic measures
in place throughout much of the year.
Operating profits from Development Properties decreased
by 37% from the previous year to US$404 million,
primarily due to fewer planned sales completions and
the impact of pandemic-related restrictions on the
Chinese mainland in the second half of the year. The split
of operating profits between countries was 75% from the
Chinese mainland, 12% from Singapore, 8% from
Indonesia and 5% from Others.
In respect of revenue recognised on the Chinese mainland,
there was a 15% reduction in the number of units handed
over to buyers in 2022 compared to the prior year. The
split by city was as follows:
City Number of units handed over
2022 2021
Chengdu 118 2% 926 12%
Chongqing 4,240 67% 4,294 57%
Hangzhou 1,599 25% 395 5%
Nanjing 65 1% 1,424 19%
Shanghai 136 2% 453 6%
Wuhan 207 3% 16 1%
Total 6,365 100% 7,508
100%
In Singapore, the Group’s attributable interest in
revenue recognised was US$379 million, compared to
US$631 million in 2021, with the reduction reflecting the
different phasing and construction progress of projects
year-on-year. In other parts of Southeast Asia, operating
profits from Development Properties increased mainly
due to completion progress on projects in Indonesia
and Vietnam.
Net financing charges of US$228 million were
US$32 million higher than the prior year primarily due
to an increase in average net debt. Weighted average
borrowing costs were 3.3%, compared to 3.1% in the
prior year with the impact of rising interest rates
mitigated by a significant amount of fixed rate debt.
Financial Review
14
Cash Flows
The Group’s consolidated cash flows are summarised as follows:
2022 2021
US$m US$m
Operating activities
Operating profit, excluding non-trading items 846 943
Net interest (183) (173)
Tax paid (125) (157)
Payments for Development Properties sites (364) (1,205)
Expenditure on Development Properties projects (401) (373)
Sales proceeds from Development Properties 1,071 1,674
Dividends received from joint ventures 222 239
Others (208) (419)
858 529
Investing activities
Major renovations capex (95) (99)
Investments in and advances to associates and joint ventures (618) (397)
Development expenditure – (2)
Disposal/(acquisition) of subsidiaries and joint ventures (14) 66
(727) (432)
Financing activities
Dividends paid by the Company (504) (509)
Net drawdown of borrowings 445 76
Shares repurchase (352) (192)
Others (4) (5)
(415) (630)
Net decrease in cash and cash equivalents (284) (533)
Cash and cash equivalents at 1st January 1,476 1,990
Effect of exchange rate changes (20) 19
Cash and cash equivalents at 31st December 1,172 1,476
The Group’s tax charge decreased to US$261 million,
with an effective tax rate of 25%, lower than the prior
year 27% effective tax rate due to a smaller share of
profits coming from the Chinese mainland where tax
rates are higher than in Hong Kong.
Non-Trading Items
In 2022, the Group had net non-trading losses
US$573 million compared to US$1,315 million in 2021.
These arose principally on revaluations of the Group’s
investment properties by independent valuers (including
its share of joint ventures) at 31st December each year.
The decrease in valuations in 2022 came primarily from the
Group’s Central Portfolio in Hong Kong due to a modest
increase in capitalisation rates for office buildings and a
decrease in open market rents for retail buildings. In 2021,
the decrease was due to lower open market rents. The
Central Portfolio decreased in value by 2% in 2022 and
5% in 2021. At 31st December 2022, the value of the
Central Portfolio was US$26.1 billion.
15
Financial Review
The Group’s Development Properties business comprises
a mixture of wholly owned projects (recorded within
operating activities) and joint venture projects (recorded
within investing activities).
The net cash inflow from operating activities for the year
were US$858 million, compared with a net cash inflow
of US$529 million in the prior year. The increase of
US$329 million was principally due to a lower number
of Development Properties sites acquired during the year,
partially offset by lower sales proceeds from Development
Properties projects. Net outflows in others relates
primarily to net working capital changes.
In 2022, US$364 million was paid by the Group for
wholly owned Development Properties sites that were
committed at the end of 2021, principally two projects in
Chengdu, Artistic Bay (US$165 million) and Creative Land
Project (US$121 million). Sales proceeds received in 2022
decreased by US$603 million due to a lower number of
planned sales launches and weak market sentiment.
Net cash outflows from investing activities were
US$727 million in 2022, compared to a net cash outflow
of US$432 million in the prior year. Net investments in
the Group’s joint venture projects totalled US$618 million,
compared to US$397 million in the prior year. This
increase was primarily due to lower pre-sales proceeds
on joint venture projects. In 2022, the Group invested
US$930 million in land acquisitions with joint venture
partners, compared to US$1,011 million in the prior year.
Capital expenditure of US$95 million for major renovations
principally relates to the Group’s Central Portfolio in
Hong Kong.
Under financing activities, the Company paid dividends
of US$504 million, being the 2021 final dividend of
US¢16.00 per share and the 2022 interim dividend of
US¢6.00 per share, unchanged compared to the prior
year. The Group also spent US$352 million in the
purchase of its own shares in 2022 and had a net
drawdown of borrowings of US$445 million during
the year.
Cash and cash equivalents were US$304 million lower
at the end of 2022. Taken together with an increase in
borrowings, the Group’s net debt at 31st December 2022
increased to US$5,817 million, from US$5,104 million at
the beginning of the year.
Year-end debt summary
*
2022 2021
US$m US$m
US$ bonds/notes 2,091 2,606
HK$ bonds/notes 1,515 1,631
HK$ bank loans 1,427 430
S$ bonds/notes 220 219
S$ bank loans 391 389
RMB bank loans 1,009 973
THB bank loans 337 335
Gross debt 6,990 6,583
Cash 1,173 1,479
Net debt 5,817 5,104
* Before currency swaps
16
Capital Management
The Group actively reviews and manages its capital
structure to ensure optimal shareholder returns through
a combination of profitability, cash flows, investing
activities and balance sheet strength. The Group’s
capital management policies are set out on page 72.
New Investments
During 2022, the Group committed to invest, based on
its equity contribution, and share of project level debt,
US$1.0 billion in new projects (2021: US$3.0 billion).
The Group continues to assess new investment
opportunities on a disciplined basis, which are expected
to be funded by a combination of internal resources
and external financing from banks and the debt
capital markets.
Capital Commitments
Outstanding capital commitments as of 31st December
2022 was US$1,017 million (2021: US$1,184 million),
including the Group’s share of the capital commitments
of joint venture companies of US$942 million (2021:
US$1,067 million). The largest commitments relate to
the Group’s 49% share of a joint-venture mixed use
project in Bangkok and various development projects
on the Chinese mainland.
Share Buy-back
The Group completed a US$500 million share buyback
program in July 2022, which was followed by the
announcement of an additional US$500 million to be
invested through to the end of 2023. As at 28th February
2023, the total amount invested in the buyback
programme since it was first announced in September
2021 was US$556 million, including US$350 million
invested in 2022.
Dividends
The Board is recommending a final dividend of US¢16.00
per share for 2022, providing a total annual dividend of
US¢22.00 per share, the same as last year. The final
dividend will be payable on 10th May 2023, subject to
approval at the Annual General Meeting to be held on
4th May 2023, to shareholders on the register of members
at the close of business on 17th March 2023. No scrip
alternative is being offered in respect of the dividend.
Treasury Policy
The Group manages its treasury activities within
established risk management objectives and policies
using a variety of techniques and instruments. The main
objectives are to manage exchange, interest rate and
liquidity risks and to provide a degree of certainty in
respect of costs. The investment of the Group’s cash
balances is managed so as to minimise risk while seeking
to enhance yield. Appropriate credit guidelines are in
place to manage counterparty credit risk.
When economically sensible to do so, borrowings are
taken in local currencies to hedge foreign currency
exposures on investments. A portion of borrowings is
denominated in fixed rates. Adequate committed facilities
headroom is maintained to facilitate the Group’s capacity
to pursue new investment opportunities and to provide
some protection against market uncertainties. Overall,
the Group’s funding arrangements are designed to strike
an appropriate balance between equity and debt from
banks and capital markets, both short and long term,
to give flexibility to develop the business.
The Group’s Treasury operations are managed as cost
centres and are not permitted to undertake speculative
transactions unrelated to underlying financial exposures.
17
Financial Review
Debt profile at 31st December 2022
* After currency swaps
Interest
rate
Currency* Maturity
41% >5 years
44% 2-5 years
9% 1-2 years
6% <1 year
53% Fixed
47% Floating
72% HK$
14% RMB
9% S$
5% THB
At 31st December 2022, the Group had total committed
lines of approximately US$8.9 billion with a diversified
range of maturity dates. Of these lines, 57% were
sourced from banks with the remaining 43% from the
capital markets. At the end of 2022, the Group had
drawn US$7.0 billion of these lines leaving US$1.9 billion
of committed, but unused, facilities. Adding the Group’s
year end cash balances, the Group had overall liquidity
at 31st December 2022 of US$3.1 billion, down from
US$4.0 billion at the end of 2021.
Committed facility maturity
at 31st December 2022 (US$m)
2027
& beyond
2026
2023 2024 2025
3,231
1,496
2,532
1,293
377
Funding
The Group is well financed with strong liquidity. Net
gearing at the end of the year was 17%, compared with
15% at the end of 2021. Interest cover, calculated as the
underlying operating profits, including the Group’s share
of associates and joint ventures’ operating profits, divided
by net financing charges including the Group’s share of
associates and joint ventures’ net financing charges, was
5.5 times, down from 7.8 times in 2021. The decrease
was mainly due to lower underlying operating profits and
higher average net debt during the year.
Net debt as a percentage of equity
2018 2019 2020 2021 2022
17%
Net debt Equity
15%
9%9%
13%
Both Moody’s and Standard & Poor’s have maintained
their credit ratings of Hongkong Land Holdings Limited
at A3 and A respectively.
The average tenor of the Group’s debt was 5.8 years at
31st December 2022, down from 6.5 years at the end of
2021. On average, approximately 53% of the Group’s
borrowings were either fixed rate borrowings or covered
by interest rate hedges with major credit worthy financial
institutions and the remaining 47% were at floating rates.
The majority of the Group’s debt is denominated in Hong
Kong dollars, of which 68% was at fixed rate.
18
Gross Assets
The Group’s gross assets, including its share of joint
ventures, (excluding cash balances) is analysed below,
by activity and by location.
Gross assets by activity
Gross assets by location
83% Investment Properties
17% Development Properties
66% Hong Kong
20% Chinese mainland and Macau
14% Southeast Asia
83% Investment Properties
17% Development Properties
66% Hong Kong
20% Chinese mainland and Macau
14% Southeast Asia
Principal Risks and Uncertainties
A review of the principal risks and uncertainties facing
the Group is set out on pages 101 to 105.
Accounting Policies
The Directors continue to review the appropriateness
of the accounting policies adopted by the Group with
regard to developments in International Financial
Reporting Standards. There are no changes to the
accounting policies as described in the 2022 annual
financial statements.
Craig Beattie
Chief Financial Officer
2nd March 2023
19
Sustainability
Overview
Since its founding in 1889, Hongkong Land’s business has
been built on the principles of excellence, integrity and
partnership. As the global calls for climate action and
improvement of environmental, social and governance
(‘ESG’) performance become increasingly urgent,
Hongkong Land recognises that the real estate and
construction sectors have significant roles to play in
a global transition to a low carbon economy and is
committed to continue engaging and collaborating with
our stakeholders to advance sustainability agendas in
the communities it serves.
The Group’s continued growth and progress on delivering
positive outcomes for our business and stakeholders is
underpinned by its Sustainability Framework 2030 which
highlights key focus areas that are linked to measurable
targets. Putting this framework into practice requires the
Group to strive for continuous improvement and further
integration of ESG considerations into our operations
across the region.
ESG Disclosure
In line with the Task Force on Climate-related Financial
Disclosures (‘TCFD’) reporting requirements for standard
listed companies in the United Kingdom, the Group’s
climate-related disclosures in its Sustainability Report –
Framework 2030 and Climate Action is made available on
the same date as its Annual Report 2022.
To facilitate the holistic evaluation of its climate-related
activities, the Group publishes its TCFD disclosures
separately from its Annual Report but alongside other
information relevant to climate action including risk
management, decarbonisation targets and pathway,
as well as results of climate risk assessments and
mitigation measures.
The climate-related disclosures are consistent with the
TCFD recommendations on:
• governance – all recommended disclosures;
• strategy – all recommended disclosures;
• risk management – all recommended disclosures; and
• metrics and targets – disclosure (c).
Requirements under metrics and targets – disclosures
(a) and (b) will be addressed in the Sustainability
Performance Report 2022, which will be published
on the Group’s website in the second quarter of 2023.
The report will present relevant environmental and
social-related performance data covering the financial
year ended 31st December 2022.
Further details on the Group’s approach to sustainability
and related policies can also be found on the Group’s
website at www.hkland.com/en/sustainability.
Highlights in 2022
Decarbonisation
As part of Hongkong Land’s commitment to accelerate its
contributions on climate action, the Group announced in
February 2022 its pledge to setting science-based targets
that are aligned with the 1.5°C pathway. We are leading
the net zero transition by setting ambitious emission
reduction targets. The targets, which were validated
by the Science Based Target initiative in June 2022,
will result in the Group committing to a 46.2% reduction
of Scope 1 and 2 emissions by 2030 from 2019 levels and
a 22% reduction in carbon intensity for Scope 3 emissions
over the same period.
Green Buildings and Renewable Energy
Hongkong Land has a long history of reinvesting in
existing assets and undertaking a robust green building
certification programme. At the end of 2022, 88% of our
leasing portfolio, including those held in joint ventures,
achieved green building certification. All of our buildings
in Hong Kong and Singapore, comprising 51% of our
leasing portfolio, hold the highest possible ratings of
BEAM Plus Platinum and Green Mark Platinum
certifications respectively.
The Group’s luxury retail flagship in Beijing, WF CENTRAL,
is among the first commercial complexes in Beijing to be
powered by 100% renewable energy. The renewable
energy is generated by photovoltaic and wind power
systems from Northwest China. This project marks
a significant milestone in Hongkong Land’s commitment
to supporting the Chinese Central Government’s ambition
to achieve carbon neutrality by 2060.
20
In recognition of our efforts to adhere to the highest
standards for property management, the Group’s
Exchange Square complex in Hong Kong was awarded
the Grand Award at the Quality Property and Facility
Management Award 2022 under the Large-Scale Office
Building Management Category jointly organised by
the Hong Kong Association of Property Management
Companies and the Hong Kong Institute of Surveyors
Property and Facility Management Division.
Green Finance
In July 2022, the Group published its inaugural green
finance report to provide stakeholders updates on its
green financing transactions in accordance with its Green
Financing Framework. The report outlined the use of
proceeds for the Group’s green bonds, as well as green
elements of the relevant projects financed.
The Group had sustainability-linked loans with an
aggregate facility amount of US$2.2 billion at the end
of 2022, up from US$1.9 billion at the end of the prior
year. The facilities index against ESG targets for
continuous improvements in energy efficiency, reducing
food waste, and renewable energy generation, while
maintaining green building certifications for the Group’s
Central Portfolio.
Corporate Social Responsibility
The Hongkong Land HOME FUND, which was established
to focus on creating initiatives which benefit younger
generations and our aspiration to foster a more inclusive
society, celebrated its second anniversary in November
2022. Since its inception, the fund has committed over
US$10.5 million which benefitted over 190,000 people
across the region.
Key milestones achieved during the past year include
committing US$4.1 million in new projects focused
on youth and those most impacted by the pandemic;
increasing the number of NGO partnerships from three
to more than 80 across the region; the continued growth
of the HERE2HELP volunteering team which contributed
over 5,500 hours to serve more than 50,000 people; and
a matching gift programme for tenants and employees
in Hong Kong which raised over US$150,000 to support
causes aligned to the vision of the HOME FUND.
During the year, the Group also received a number of
prestigious awards in recognition of its efforts on specific
projects which created positive impact on the community.
For its work in collaborating with like-minded partners to
help improve the facilities of the Christian Zheng Sheng
Association, an educational establishment dedicated to
helping young people in need in Hong Kong, the Group
was proud to receive the Outstanding Collaboration
Project accolade at the Hong Kong Volunteer Award 2022,
as well as the Corporate Social Responsibility Project of
the Year at the RICS Awards 2022 – Hong Kong.
ESG Ratings
Over the past year, the Group delivered significant
improvements on ESG ratings, especially on in-depth
assessments which require active participation
by companies.
The Group’s latest ESG ratings as at 31st December 2022
are listed below.
• Global Real Estate Sustainability Benchmarks (‘GRESB’)
– the highest 5-star rating for Standing Investments
which recognises entities placed in the top 20% of
the benchmark
• Dow Jones Sustainability Indices (‘DJSI’) – a score of
70/100 and qualified as a constituent of the Dow Jones
Sustainability Asia Pacific Index, improving from 52/100
in the prior year
• Sustainalytics – a Company ESG Rating of 17.6, Low
Risk (on a scale of severity 0-40+), improving from
20.4, Medium Risk in the prior year
• Climate Disclosure Project (‘CDP’) – a Climate Change
score of ‘B’
21
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 DFI Retail Group 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 rejoined the Board as Managing Director
in June 2020, having previously served as the Chief
Financial Officer between 2010 and 2016. 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.
John is chairman of Jardine Matheson Limited, group
managing director of Jardine Matheson and managing
director of DFI Retail Group 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.
Robert Wong
*
Chief Executive
Robert Wong joined the Board as Chief Executive
in 2016. He joined the Group in 1985 and has extensive
experience in property management and development.
As a director of Hongkong Land Limited since 1996,
he had prime responsibility for the Group’s residential
property business. He is a member of both The Royal
Institution of Chartered Surveyors and The Hong Kong
Institute of Surveyors.
Craig Beattie
*
Chief Financial Officer
Craig Beattie joined the Board as Chief Financial Officer
in 2021. He has previously held a number of senior
finance positions in the Jardine Matheson group since
joining from EY in the UK in 2006, including the chief
financial officer of Mandarin Oriental from 2018 to 2021
and group treasurer of Jardine Matheson from 2016 to
2018. He is a Chartered Accountant.
Lily Jencks
Lily Jencks joined the Board in July 2022. She is an
architectural and landscape designer, with a master’s
degree from the University of Pennsylvania. She ran
the design company JencksSquared and architectural
and landscape practice Lily Jencks Studio. She is currently
the founder and director of the Jencks Foundation.
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 DFI
Retail Group 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.
* Executive Director
Directors’ Profiles
22
Lincoln K.K. Leong
Lincoln K.K. Leong joined the Board in March 2022. He is
the Chairman of the Audit Committee of the Company.
Lincoln is an independent non-executive director of
SUNeVision Holdings Ltd., Link Asset Management Limited,
as Manager of Link Real Estate Investment Trust, and
Standard Chartered Bank (Hong Kong) Limited. He was
previously the chief executive officer of MTR Corporation
Limited and a non-executive director of Jardine Strategic
Holdings Limited and Mandarin Oriental International
Limited. Lincoln is a Chartered Accountant and has
extensive experience in the accountancy and investment
banking industries.
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 DFI Retail Group, Jardine Cycle &
Carriage, Jardine Matheson, Shui On Land and Vitasoy,
and a commissioner of Astra. He is the 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.
Christina Ong
Christina Ong joined the Board in 2018. She is chairman
and senior partner of Allen & Gledhill as well as co-head
of its financial services department. She is a director
of Oversea-Chinese Banking Corporation and Singapore
Telecommunications. She is also a member of the Catalist
Advisory Panel, Civil Aviation Authority of Singapore
and the corporate governance advisory committee of
the Monetary Authority of Singapore, and a trustee of
The Stephen A. Schwarzman Scholars Trust.
Y.K. Pang
Y.K. Pang has been a Director of the Company since
2007. He was Chief Executive of the Group from 2007
to 2016. He is deputy managing director and chairman
of Hong Kong of Jardine Matheson, and chairman of
Jardine Pacific. He has held a number of senior executive
positions in the Jardine Matheson group, which he joined
in 1984. Y.K. is also deputy chairman of Jardine Matheson
Limited, and a director of Gammon, Jardine Matheson
(China), Mandarin Oriental and Greatview. He is chairman
of the Hong Kong Tourism Board and the Hong Kong
Management Association, and a member of the Council
and General Committee of the Hong Kong General
Chamber of Commerce and the Employers’ Federation
of Hong Kong.
Prijono Sugiarto
Prijono Sugiarto joined the Board in 2020. He is the
president commissioner of Astra and was the president
and group CEO from 2010 to 2020. Prijono is the
chairman of the German Indonesian Chamber of
Commerce. In 2014, he was awarded Asia Business
Leader of The Year from CNBC.
23
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$m | |
Revenue | 3 | ||||||
Net operating costs | 4 | ( ) | ( ) | ( | ( | ||
Change in fair value of investment properties | 9 | ( | ( | ( | ( | ||
Operating profit/(loss) | ( | ( | ( | ||||
Net financing charges | 5 | ||||||
– financing charges | ( | ( | ( | ( | |||
– financing income | |||||||
( | ( | ( | ( | ||||
Share of results of associates and joint ventures | 6 | ||||||
– before change in fair value of investment properties | |||||||
– change in fair value of investment properties | 9 | ( | ( | ||||
( | |||||||
Profit/(loss) before tax | ( | ( | ( | ||||
Tax | 7 | ( | ( | ( | ( | ( | |
Profit/(loss) after tax | ( | ( | ( | ||||
| Attributable to: | |||||||
Shareholders of the Company | ( | ( | ( | ||||
Non-controlling interests | ( | ( | ( | ( | |||
( | ( | ( | |||||
US¢ | US¢ | US¢ | US¢ | ||||
Earnings/(loss) per share (basic and diluted) | 8 | ( |
Consolidated Profit and Loss Account
for the year ended 31st December 2022
24
Consolidated Statement of Comprehensive Income
for the year ended 31st December 2022
2022 | 2021 | ||
Note | US$m | US$m | |
Profit/(loss) for the year | ( | ||
| Other comprehensive income/(expense) | |||
| Items that will not be reclassified to profit or loss: | |||
Remeasurements of defined benefit plans | ( | ||
Tax on items that will not be reclassified | 7 | ( | |
( | |||
| Items that may be reclassified subsequently to profit or loss: | |||
| Net exchange translation differences | |||
– net loss arising during the year | ( | ( | |
| Cash flow hedges | |||
– net gain/(loss) arising during the year | ( | ||
– transfer to profit and loss | ( | ( | |
( | |||
Tax relating to items that may be reclassified | 7 | ||
| Share of other comprehensive (expense)/income of associates | |||
and joint ventures | 11 | ( | |
( | ( | ||
Other comprehensive expense for the year, net of tax | ( | ( | |
Total comprehensive expense for the year | ( | ( | |
| Attributable to: | |||
Shareholders of the Company | ( | ( | |
Non-controlling interests | ( | ||
( | ( |
25
| Consolidated Balance Sheet | |||
| at 31st December 2022 | |||
2022 | 2021 | ||
Note | US$m | US$m | |
| Net operating assets | |||
Fixed assets | |||
Right-of-use assets | |||
Investment properties | 10 | ||
Associates and joint ventures | 11 | ||
Non-current debtors | 12 | ||
Deferred tax assets | 13 | ||
Pension assets | |||
Non-current assets | |||
Properties for sale | 14 | ||
Current debtors | 12 | ||
Current tax assets | |||
Bank balances | 15 | ||
Current assets | |||
Current creditors | 16 | ( | ( |
Current borrowings | 17 | ( | ( |
Current tax liabilities | ( | ( | |
Current liabilities | ( | ( | |
Net current assets | |||
Long-term borrowings | 17 | ( | ( |
Deferred tax liabilities | 13 | ( | ( |
Pension liabilities | ( | ||
Non-current creditors | 16 | ( | ( |
| Total equity | |||
Share capital | 18 | ||
Share premium | |||
Revenue and other reserves | |||
Shareholders’ funds | |||
Non-controlling interests | |||
Approved by the Board of Directors
Robert Wong
Craig Beattie
Directors
2nd March 2023
26
| Consolidated Statement of Changes in Equity | |||||||||
| for the year ended 31st December 2022 | |||||||||
| Attributable to | Attributable | ||||||||
| shareholders | to non- | ||||||||
| Share | Share | Revenue | Hedging | Exchange | of the | controlling | Total | ||
| capital | premium | reserves | reserves | reserves | Company | interests | equity | ||
Note | US$m | US$m | US$m | US$m | US$m | US$m | US$m | US$m | |
| 2022 | |||||||||
At 1st January | ( | ||||||||
| Total comprehensive | |||||||||
(expense)/income | ( | ( | ( | ( | |||||
Dividends paid by the Company | 19 | ( | ( | ( | |||||
Dividends paid to non-controlling | |||||||||
shareholders | ( | ( | |||||||
Unclaimed dividends forfeited | |||||||||
Repurchase of shares | ( | ( | ( | ( | ( | ||||
At 31st December | ( | ( | |||||||
| 2021 | |||||||||
At 1st January | ( | ||||||||
| Total comprehensive | |||||||||
(expense)/income | ( | ( | ( | ( | |||||
Dividends paid by the Company | 19 | ( | ( | ( | |||||
Dividends paid to non-controlling | |||||||||
shareholders | ( | ( | |||||||
Unclaimed dividends forfeited | |||||||||
Disposal of subsidiaries | ( | ( | |||||||
Repurchase of shares | ( | ( | ( | ( | |||||
At 31st December | ( |
27
| Consolidated Cash Flow Statement | |||
| for the year ended 31st December 2022 | |||
2022 | 2021 | ||
Note | US$m | US$m | |
| Operating activities | |||
Operating profit/(loss) | ( | ||
Depreciation and amortisation | 4 | ||
Change in fair value of investment properties | 10 | ||
Loss on disposal of fixed assets | 4 | ||
Gain on acquisition of subsidiaries | 4 | ( | |
Gain on disposal of subsidiaries and joint ventures | 4 | ( | |
Decrease/(increase) in properties for sale | ( | ||
Decrease in debtors | |||
(Decrease)/increase in creditors | ( | ||
Interest received | |||
Interest and other financing charges paid | ( | ( | |
Tax paid | ( | ( | |
Dividends from associates and joint ventures | |||
Cash flows from operating activities | |||
| Investing activities | |||
Major renovations expenditure | ( | ( | |
Developments capital expenditure | ( | ||
Investments in and advances to associates and joint ventures | 20 (a) | ( | ( |
Disposal of subsidiaries | |||
Disposal of joint ventures | |||
Acquisition of subsidiaries | ( | ||
Cash flows from investing activities | ( | ( | |
| Financing activities | |||
Drawdown of borrowings | 17 | ||
Repayment of borrowings | 17 | ( | ( |
Principal elements of lease payments | ( | ( | |
Repurchase of shares | ( | ( | |
Dividends paid by the Company | ( | ( | |
Dividends paid to non-controlling shareholders | ( | ( | |
Cash flows from financing activities | ( | ( | |
Net cash outflow | ( | ( | |
Cash and cash equivalents at 1st January | |||
Effect of exchange rate changes | ( | ||
Cash and cash equivalents at 31st December | 20 (b) |
28
Notes to the Financial Statements
29
Notes to the Financial Statements
30
31
Notes to the Financial Statements
32
33
Notes to the Financial Statements
34
6 Share of Results of Associates and Joint Ventures
2022 2021
US$m US$m
By business
Investment Properties 72.3 88.4
Development Properties 157.0 267.5
Underlying business performance 229.3 355.9
Non-trading items:
Change in fair value of investment properties (24.5) 80.6
204.8 436.5
Results are shown after tax and non-controlling interests in the associates and joint ventures.
The Group’s share of revenue of associates and joint ventures was US$1,502.9 million (2021: US$2,094.8 million).
35
Notes to the Financial Statements
36
37
Notes to the Financial Statements
38
39
Notes to the Financial Statements
40
41
Notes to the Financial Statements
42
43
Notes to the Financial Statements
44
45
Notes to the Financial Statements
46
47
Notes to the Financial Statements
48
49
Notes to the Financial Statements
50
51
Notes to the Financial Statements
52
53
Notes to the Financial Statements
54
25 | Summarised Balance Sheet of the Company | ||
| Included below is certain summarised balance sheet information of the Company disclosed in accordance with Bermuda law. | |||
2022 | 2021 | ||
US$m | US$m | ||
| Net operating assets | |||
| Investments at cost | |||
Unlisted shares in subsidiaries | 4,481.7 | 4,481.7 | |
Amounts due from subsidiaries | 2,462.2 | 2,209.9 | |
6,943.9 | 6,691.6 | ||
Creditors and other accruals | (31.1) | (38.4) | |
6,912.8 | 6,653.2 | ||
| Total equity | |||
Share capital (see Note 18) | 222.7 | 229.8 | |
| Revenue and other reserves | |||
Contributed surplus | 1,973.3 | 2,249.6 | |
Share premium | – | 67.4 | |
Revenue reserves | 4,716.8 | 4,106.4 | |
6,690.1 | 6,423.4 | ||
Shareholders’ funds | 6,912.8 | 6,653.2 | |
| Subsidiaries are shown at cost less amounts provided. | |||
| The contributed surplus was set up on the formation of the Company in 1989 and, under the Bye-laws of the Company, is distributable. |
55
Notes to the Financial Statements
56
26 Principal Subsidiaries, Associates and Joint Ventures continued
57
Notes to the Financial Statements
50 50 RMB 100,000,000 Property development Chinese mainland
26 Principal Subsidiaries, Associates and Joint Ventures continued
58
Attributable
interest
Issued share capital Main activities
Place of
incorporation
2022 2021
% %
26 Principal Subsidiaries, Associates and Joint Ventures continued
59
Notes to the Financial Statements
Attributable
interest
Issued share capital Main activities
Place of
incorporation
2022 2021
% %
26 Principal Subsidiaries, Associates and Joint Ventures continued
60
61
Notes to the Financial Statements
27 Principal Accounting Policies continued
62
63
Notes to the Financial Statements
27 Principal Accounting Policies continued
64
27 Principal Accounting Policies continued
65
Notes to the Financial Statements
27 Principal Accounting Policies continued
66
27 Principal Accounting Policies continued
67
Notes to the Financial Statements
68
69
Notes to the Financial Statements
70
71
Notes to the Financial Statements
72
73
Notes to the Financial Statements
74
75
Notes to the Financial Statements
76
To the members of Hongkong Land Holdings Limited
Report on the audit of the Group financial statements
Opinion
In our opinion, Hongkong Land Holdings Limited’s Group (the ‘Group’) financial statements (the ‘financial statements’):
• give a true and fair view of the state of the Group’s affairs as at 31st December 2022 and of its profit and cash flows for the year
then ended;
• have been properly prepared in accordance with International Financial Reporting Standards (IFRSs) as issued by the International
Accounting Standards Board (IASB); and
• have been prepared in accordance with the requirements of the Companies Act 1981 (Bermuda).
We have audited the financial statements, included within the Annual Report, which comprise: the Consolidated Balance Sheet as
at 31st December 2022; the Consolidated Profit and Loss Account, the Consolidated Statement of Comprehensive Income, the
Consolidated Cash Flow Statement, the Consolidated Statement of Changes in Equity for the year then ended; and the Notes to
the Financial Statements, which include a description of the significant accounting policies (‘the Principal Accounting Policies’).
Certain required disclosures have been presented in the Corporate Governance section, rather than in the Notes to
the Financial Statements. These disclosures are cross-referenced from the financial statements and are identified as audited.
Our opinion is consistent with our reporting to the Audit Committee.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (‘ISAs (UK)’) and applicable law. Our responsibilities
under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the financial statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We remained independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial
statements in the UK, which includes the Financial Reporting Council’s (‘FRC’s’) Ethical Standard, as applicable to listed entities, and
we have fulfilled our other ethical responsibilities in accordance with these requirements.
Our audit approach
Overview
Materiality
● OverallGroupmateriality:US$249million(2021:US$259million),basedon0.75%(2021:0.75%)ofthenetassets.
● SpecificGroupmateriality,appliedtobalancesandtransactionsnotrelatedtoinvestmentproperties:US$45million(2021:US$57million)
whichrepresents5%(2021:5%)ofunderlyingprofitbeforetaxoftheGroup.
Audit scope
• Fullscopeauditswereperformedonsixteensubsidiaries.Thesesubsidiaries,togetherwithproceduresperformedoncentralised
functionsandattheGrouplevel,accountedfor93%oftheGroup’srevenue,82%oftheGroup’sprofitbeforetax,80%oftheGroup’s
underlyingprofitbeforetaxand81%oftheGroup’snetassets;
• Fullscopeauditsoffivejointventureswerealsoperformed,whichaccountedforafurther9%oftheGroup’sprofitbeforetax,
7%oftheGroup’sunderlyingprofitbeforetaxand4%oftheGroup’snetassets.
Key audit matter
• Valuation of investment properties
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,forexampleinrespectofsignificantaccountingestimates
that involved making assumptions and considering future events that are inherently uncertain. As in all of our audits we also addressed
the risk of management override of internal controls, including evaluating whether there was evidence of bias by the Directors that
represented a risk of material misstatement due to fraud.
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the audit of the financial
statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud)
identified by the auditors, including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the
audit; and directing the efforts of the engagement team. These matters, and any comments we make on the results of our procedures
thereon,wereaddressedinthecontextofourauditofthefinancialstatementsasawhole,andinformingouropinionthereon,andwe
do not provide a separate opinion on these matters.
Independent Auditors’ Report
77
Independent Auditors’ Report
Our audit approach continued
Key audit matters continued
This is not a complete list of all risks identified by our audit.
The key audit matter below is consistent with last year.
Key audit matter
Valuation of investment properties
Refer to Note 30 (Critical Accounting Estimates and Judgements)
and Note 10 (Investment Properties) to the consolidated
financial statements.
The fair value of the Group’s investment properties amounted to
US$28,054.1millionat31stDecember2022,witharevaluation
lossofUS$559.3millionrecognisedasanon-tradingiteminthe
Consolidated Profit and Loss Account for the year. The Group’s
property portfolio principally consists of commercial properties.
The valuation of the Group’s investment property portfolio is
inherently subjective due to, among other factors, the individual
nature of each property, its location, prevailing market returns
andtheexpectedfuturerentalsforthatparticularproperty.
The valuations were carried out by third party valuers
(the ‘valuers’). Valuations are principally derived using the
income capitalisation method. There is inherent estimation
uncertainty and judgement in determining a property’s valuation
as the valuers make assumptions in key areas, in particular in
respect of capitalisation rates and market rents.
We focused on the valuation of investment properties due
to the significant judgements and estimates involved in
determining the valuations.
How our audit addressed the key audit matter
We understood management’s controls and processes for
determining the valuation of investment properties and assessed
the inherent risk of material misstatement by considering the
degree of estimation uncertainty and the judgement involved
in determining assumptions to be applied.
Weassessedthevaluers’qualificationsandtheirexpertise,
considering whether there were any matters that might have
affected their objectivity or may have imposed scope limitations
upon their work. We found no evidence to suggest that the
objectivity of the valuers in their performance of the valuations
was compromised.
Our work focused on the highest value properties in the portfolio,
in particular the properties located in Central, Hong Kong.
We read the valuation reports covering the majority of the
Group’s investment property portfolio to consider whether
the valuation methodology used was appropriate for each
property and suitable for use in determining the carrying value.
We performed testing, on a sample basis, of the input data
used in the valuation process to satisfy ourselves of the
accuracy of the property information supplied to the valuers
bymanagement,forexampleagreeingleasetermstotenancy
agreements and other supporting documents.
We understood and assessed the controls over data used in the
valuation of the investment property portfolio and management’s
review of the valuations.
Theauditteam,includingourvaluationexperts,attended
meetings with the valuers at which the valuations, key
assumptions and climate change risk considerations were
discussed. We compared the capitalisation rates used by the
valuerswithanestimatedrangeofexpectedrates,determined
via reference to published benchmarks and market information.
We evaluated year-on-year movements in capital values with
reference to publicly available information and rentals with
reference to prevailing market rents. We evaluated whether
the assumptions used were appropriate in light of the evidence
provided by relevant transactions during the year.
Withthesupportofourinternalvaluationexperts,wealso
questionedtheexternalvaluersastotheextenttowhichrecent
markettransactionsandexpectedrentalvalueswhichtheymade
use of in deriving their valuations took into account the impact of
climate change and related ESG considerations.
Overall, we concluded that the assumptions used in the
valuations were appropriate.
78
Our audit approach continued
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, and the industry in which it operates.
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 them to prepare consolidated
financial statements.
In establishing the overall approach to the Group audit, we determined the type of work that needed to be performed by members of
the Group engagement team or by component auditors from member firms within the PwC Network and other auditors operating under
our instruction. Where the work was performed by component auditors, we determined the level of involvement necessary for us to
have in the audit work at those components to be able to conclude whether sufficient, appropriate audit evidence had been obtained as
a basis for our opinion on the financial statements as a whole. The Group engagement team was involved in the significant reporting
entities in scope for Group reporting during the audit cycle through a combination of meetings, visits and conference calls. The Group
audit partner and other senior team members undertook two visits to Hong Kong and were involved throughout the year in regular
conference calls and other forms of communication to direct and oversee the audit. The Group audit partner visited Singapore and other
senior team members also visited Shanghai, Chongqing and Singapore during the year to oversee and review the work of component
teams in those locations, along with regular communication through conference call and remote review of the work of component teams.
Afullscopeauditofthecompletefinancialinformationwasperformedforsixteensubsidiaries.Thesesubsidiaries,togetherwith
procedures performed on centralised functions and at the Group level (on the consolidation and other areas of significant judgement),
accountedfor93%oftheGroup’srevenue,82%oftheGroup’sprofitbeforetax,80%oftheGroup’sunderlyingprofitbeforetaxand
81%oftheGroup’snetassets.Fullscopeauditsofthecompletefinancialinformationwerealsoperformedforfiveprincipaljoint
ventureswhichaccountedforafurther9%oftheGroup’sprofitbeforetax,7%oftheGroup’sunderlyingprofitbeforetaxand4%
of the Group’s net assets. This gave us the evidence we needed for our opinion on the financial statements as a whole.
The impact of climate risk on our audit
Inplanningandexecutingouraudit,wehaveconsideredthepotentialimpactofclimatechangeontheGroup’sbusinessanditsfinancial
statements. We also considered the Group’s governance framework and preliminary risk assessment process as outlined in the Task
Force on Climate-related Financial Disclosures (‘TCFD’) section within the Sustainability Report – Framework 2030 and Climate Action
(‘Sustainability Report’), which is a separate report published on the same date as the 2022 Annual Report.
TheGrouphasdevelopedaplantoidentifyandassessitsexposuretoclimate-relatedrisksandopportunities.TheGrouphasalso
committed to design, build and renovate properties according to standards set out in green building certification schemes and has set
out targets to reduce its carbon footprint by 2030. Further information is provided in the Group’s TCFD section of the Sustainability
Report. Whilst the Group is committed to reduce carbon emission by 2030, management continues to perform periodic reviews and
refine its plans to achieve these targets.
Climate change could have a significant impact on the Group’s financial business as the operations and strategy of the Group are
adapted to address the potential financial and non-financial risks which could arise from both the physical and transitional risks.
Management has evaluated these as disclosed in the TCFD section of the Sustainability Report.
We considered the area that could potentially be materially impacted by climate risk, and consequently where we focused our audit
work, to be in respect of the valuation of investment properties.
To respond to the audit risks identified in this area we tailored our audit approach to address these, in particular, we
• Gained an understanding and evaluated whether the impact of both physical and transition risks arising due to climate risk had been
appropriately included in the valuation model of investment properties; and
• Reviewedandchallengedmanagementandtheexternalvaluersonhowtheclimaterelatedriskshadbeenincorporatedintothe
valuation models.
We also considered the consistency of the disclosures in relation to climate change (including the TCFD section) within the Annual Report
with the financial statements and our knowledge obtained from our audit. This included reading and challenging the disclosures given in
the narrative reporting within the other information to the impact disclosed within the financial statements.
Ourproceduresdidnotidentifyanymaterialimpactinthecontextofourauditofthefinancialstatementsasawhole,orourkeyaudit
matter, for the year ended 31st December 2022.
79
Independent Auditors’ Report
Our audit approach continued
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality.
These,togetherwithqualitativeconsiderations,helpedustodeterminethescopeofourauditandthenature,timingandextentof
our audit procedures on the individual financial statement line items and disclosures and in evaluating the effect of misstatements,
both individually and in aggregate on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Overall Group materiality US$249million(2021:US$259million)
How we determined it 0.75%ofnetassetsoftheGroup(2021:0.75%ofnetassetsoftheGroup)
Rationale for benchmark applied A key determinant of the Group’s value is investment property. As net assets is the primary
measure used by the shareholders in assessing the performance of the Group, we set an
overall Group materiality level based on net assets.
WesetaspecificmaterialitylevelofUS$45million(2021:US$57million),foritemsnotrelatedtothecarryingvalueofinvestment
propertiesandtheirrelatedfairvaluechanges(eitherwhollyownedorheldwithinjointventures).Thiswasbasedon5%oftheGroup’s
consolidatedunderlyingprofitbeforetaxfortheyearended31stDecember2022.Inarrivingatthisjudgement,wehadregardtothe
fact that underlying profit is an important financial indicator of the Group.
For each component in the scope of our Group audit, we allocated a materiality that is less than our overall Group materiality. The
rangeofmaterialityallocatedacrosscomponentswasUS$0.4milliontoUS$18.4million(2021:US$0.8milliontoUS$55.5million).
We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected
misstatementsexceedsoverallmateriality.Specifically,weuseperformancematerialityindeterminingthescopeofourauditandthe
natureandextentofourtestingofaccountbalances,classesoftransactionsanddisclosures,forexampleindeterminingsamplesizes.
Ourperformancematerialitywas75%(2021:75%)ofoverallmateriality,amountingtoUS$186million(2021:US$194million)forthe
itemsrelatedtoinvestmentpropertiesandUS$33million(2021:US$42million)foritemsnotrelatedtocarryingvalueofinvestment
properties in the Group financial statements.
In determining the performance materiality, we considered a number of factors – the history of misstatements, risk assessment and
aggregation risk and the effectiveness of controls – and concluded that an amount in the middle of our normal range was appropriate.
We agreed with the Audit Committee that we would report to them misstatements identified during our audit in respect of investment
propertyrelateditemsaboveUS$12million(2021:US$12million)aswellasmisstatementsbelowthisamountthat,inourview,
warranted reporting for qualitative reasons. For all other account balances and transactions, we agreed with the Audit Committee that
wewouldreporttothemmisstatementsidentifiedduringourauditaboveUS$2.2million(2021:US$2.8million)aswellasmisstatements
below that amount that in our view, warranted reporting for qualitative reasons.
Conclusions relating to going concern
Our evaluation of the Directors’ assessment of the Group’s ability to continue to adopt the going concern basis of accounting included:
• Evaluating the inherent risks to the Group’s business models and analysed how those risks might affect the Group’s financial
resources or ability to continue operations over the going concern period;
• Assessing management’s base case and severe but plausible downside scenario models supporting the Board’s going concern
assessment, evaluating the process by which the assessments have been drawn up, ensuring that the calculations in the model were
mathematically accurate and that the overall methodology used was appropriate;
• Considering sensitivities over the level of available financial resources indicated by the Group’s financial forecasts taking account of
reasonably possible, but not unrealistic, adverse effects that could arise from potential adverse trading conditions and impact the
Group’s liquidity position over the going concern period;
• Evaluating the committed financing facilities currently available to the Group and ensuring that the models appropriately included all
contractualdebtrepaymentsandcommittedcapitalexpenditures;and
• Agreeing the cash on hand and available facilities included in the going concern assessment as part of our year end audit work.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually
or collectively, may cast significant doubt on the Group’s ability to continue as a going concern for a period of at least twelve months
from when the financial statements are authorised for issue.
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting in the preparation
of the financial statements is appropriate.
80
Conclusions relating to going concern continued
As not all future events or conditions can be predicted, this conclusion is not a guarantee as to the Group’s ability to continue as
a going concern.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of
this report.
Reporting on other information
The other information comprises all of the information in the Annual Report other than the financial statements and our auditors’ report
thereon. The Directors are responsible for the other information. Our opinion on the financial statements does not cover the other
informationand,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 obtained in the audit, or
otherwise appears to be materially misstated. If we identify an apparent material inconsistency or material misstatement, we are
required to perform procedures to conclude whether there is a material misstatement of the financial statements or a material
misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement
of this other information, we are required to report that fact. We have nothing to report based on these responsibilities.
Responsibilities for the financial statements and the audit
Responsibilities of the Directors for the financial statements
AsexplainedmorefullyintheResponsibilityStatementsandtheCorporateGovernancesection,theDirectorsareresponsibleforthe
preparation of the financial statements in accordance with the applicable framework and for being satisfied that they give a true and
fair view. The Directors are also responsible for such internal control as they determine is necessary to enable the preparation of
financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either
intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of
assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement
whenitexists.Misstatementscanarisefromfraudorerrorandareconsideredmaterialif,individuallyorintheaggregate,theycould
reasonablybeexpectedtoinfluencetheeconomicdecisionsofuserstakenonthebasisofthesefinancialstatements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities,outlinedabovetodetectmaterialmisstatementsinrespectofirregularities,includingfraud.Theextenttowhichour
procedures are capable of detecting irregularities, including fraud, is detailed below.
Based on our understanding of the Group and industry, we identified that the principal risks of non-compliance with laws and regulations
relatedto,butwerenotlimitedto,theCompaniesAct1981(Bermuda),theListingRules,taxregulations,employmentregulations,
health and safety regulation and equivalent local laws and regulations applicable to significant reporting component teams, and we
consideredtheextenttowhichnon-compliancemighthaveamaterialeffectonthefinancialstatements.Wealsoconsideredthoselaws
and regulations that have a direct impact on the financial statements such as the Companies Act 1981 (Bermuda).
We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of
override of controls), and determined that the principal risks were related to posting of inappropriate journal entries and management
bias in accounting estimates and judgements. The Group engagement team shared this risk assessment with the component auditors
so that they could include appropriate audit procedures in response to such risks in their work. Audit procedures performed by the
Group engagement team and/or component auditors included:
• Gaining an understanding of the legal and regulatory framework applicable to the Group and the industries in which its businesses
operate, and considering the risk of any acts by the Group which may be contrary to applicable laws and regulations, including fraud;
• Discussions with management and internal audit, including consideration of known or suspected instances of non-compliance with
laws and regulation and fraud;
81
Independent Auditors’ Report
Responsibilities for the financial statements and the audit continued
Auditors’ responsibilities for the audit of the financial statements continued
• Understanding the results of whistleblowing procedures and related investigations. We focused on known and suspected instances
of non-compliance with laws and regulations that could give rise to a material misstatement in the Group and Company financial
statements,including,butnotlimitedto,theCompaniesAct1981(Bermuda),theListingRules,taxlegislation,employment
regulation, health and safety regulation and equivalent local laws and regulations applicable to significant reporting component teams;
• Review of reporting component auditors’ work, including any matters reported by component auditors relating to non-compliance with
laws and regulations or fraud;
• Challenging assumptions and judgements made by management in their significant accounting estimates that involved making
assumptions and considering future events that are inherently uncertain. In particular, in relation to the valuation of investment
properties (see related key audit matter above); and
• We did not identify any key audit matters relating to irregularities, including fraud. As in all of our audits we also addressed the risk
of management override of internal controls, including testing journals, and evaluated whether there was evidence of bias by the
Directors that represented a risk of material misstatement due to fraud.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance
with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk
of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may
involvedeliberateconcealmentby,forexample,forgeryorintentionalmisrepresentations,orthroughcollusion.
Our audit testing might include testing complete populations of certain transactions and balances, possibly using data auditing techniques.
However, it typically involves selecting a limited number of items for testing, rather than testing complete populations. We will often
seektotargetparticularitemsfortestingbasedontheirsizeorriskcharacteristics.Inothercases,wewilluseauditsamplingtoenable
us to draw a conclusion about the population from which the sample is selected.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.
Use of this report
This report, including the opinion, has been prepared for and only for the company’s members as a body in accordance with Section 90
of the Companies Act 1981 (Bermuda), and for no other purpose. We do not, in giving this opinion, 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
underanycontractualobligationsofthecompany,savewhereexpresslyagreedbyourpriorconsentinwriting.
Partner responsible for the audit
The engagement partner on the audit resulting in this independent auditors’ report is John Waters.
Other matter
Induecourse,asrequiredbytheFinancialConductAuthorityDisclosureGuidanceandTransparencyRule4.1.14R,thesefinancial
statements will form part of the ESEF-prepared annual financial report filed on the National Storage Mechanism of the Financial Conduct
Authority in accordance with the ESEF Regulatory Technical Standard (‘ESEF RTS’). This auditors’ report provides no assurance over
whether the annual financial report will be prepared using the single electronic format specified in the ESEF RTS.
PricewaterhouseCoopers LLP
Chartered Accountants
London
2nd March 2023
82
Five Year Summary
2018 2019 2020 2021 2022
US$m US$m US$m US$m US$m
Profit/(loss) attributable to shareholders 2,457 198 (2,647) (349) 203
Underlying profit attributable to shareholders 1,036 1,076 963 966 776
Investment properties 33,712 33,191 30,083 28,600 28,054
Net debt 3,564 3,591 4,568 5,104 5,817
Shareholders’ funds 38,342 38,247 35,709 34,584 33,303
US$ US$ US$ US$ US$
Net asset value per share 16.43 16.39 15.30 15.05 14.95
Underlying earnings/dividends
per share (US¢)
Net asset value per share (US$)
DividendsUnderlying earnings
2022
34.44
22.00
41.49
22.00
2018 2019 2020 2021
41.27
22.00
44.24
22.00
46.12
22.00
2022
14.95
15.05
2018 2019 2020 2021
15.30
16.43
16.39
83
Responsibility Statements
The Directors of the Company confirm to the best of their knowledge that:
a. the consolidated financial statements prepared in accordance with International Financial Reporting Standards, including International
Accounting Standards and Interpretations 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, Chief Executive’s Review, Financial Review and 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
Robert Wong
Craig Beattie
Directors
2nd March 2023
84
Corporate Governance
Overview of the Group’s Governance Approach
The Hongkong Land Group (Hongkong Land Holdings Limited (the ‘Company’) and its subsidiaries together known as the ‘Group’)
understands the value of good corporate governance in driving the long-term sustainable success of business. It attaches importance
to the corporate stability that strong governance brings, and the opportunities that result from it being part of the Jardine Matheson
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 it 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 business. It enables the Group 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 generations 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 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 March and July 2022, have increased the diversity and brought greater sector expertise to
the Board through the appointment of two new Independent Non-Executive 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.
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 Company’s property interests are held almost 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.
85
Corporate Governance
Governance and Legal Framework continued
As a company incorporated in Bermuda , the Company is governed by:
• The Bermuda Companies Act 1981 (the ‘Companies Act’);
• The Bermuda Hongkong Land Holdings Limited Consolidation and Amendment Act 1988 (as amended), pursuant to which the Company
was incorporated and the Bermuda Hongkong Land 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. The Company is also 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. In addition, the Company and its Directors are subject to legislation and
regulations in Singapore relating, among other things, to insider dealing.
Some of the rules applicable to premium-listed companies do not apply to the Company. When the shareholders approved
the Company’s move to a standard listing from a premium listing in 2014, however, the Company stated that it intended to maintain
certain governance principles which were then-applicable to the Company’s premium listing.
As a result, the Company adopted several governance principles (the ‘Governance Principles’) based on the then-applicable requirements
for a premium listing, which go further than the standard listing requirements.
The key elements of the Governance Principles are as follows:
• When assessing a significant transaction (a larger transaction which would be classified as a class 1 transaction under the provisions
of the UK Listing Rules), the Company will engage an independent financial adviser to provide a fairness opinion on the terms of
the transaction.
• If the Company carries out a related party transaction which would require a sponsor to provide a fair and reasonable opinion under
the provisions of the UK Listing Rules, it will engage an independent financial adviser to confirm that the terms of the transaction are
fair and reasonable as far as the shareholders of the Company are concerned. 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.
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, other than matters reserved to be exercised by the
Company in the 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;
86
The Board continued
• Approval of the Group’s strategy and risk appetite to align with the Group’s purpose and values;
• Approval and oversight of the Group policy framework and approval of appropriate Group policies;
• Approval of the Annual Budget and monitoring of performance against it;
• Oversight of the Group’s operations;
• Approval of major changes to 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, Hongkong Land Limited (‘HKLL’), 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 business 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 Chief Executive. However, the Memorandum of Association of
the Company 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 53% interest in the Company’s share capital, the Chief Executive and the Managing Director meet
regularly. Similarly, the board of HKLL and its finance committee are chaired by the Managing Director. They include Hongkong Land
Group executives and Jardine Matheson’s deputy managing director, group finance director and group general counsel.
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 HKLL, 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 HKLL’s 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 11 Directors, four of whom (36%) – Christina Ong, Prijono Sugiarto, Lily Jencks
and Lincoln K.K. Leong – are Independent Non-Executive Directors as defined by the Code. In addition, 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, and 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, bringing the number of
Independent Non-Executive Directors to five (45%). The names of all the Directors and brief biographies appear on pages 22 and 23
of this Annual Report.
87
Corporate Governance
Board Composition and Operational Management continued
On 2nd March 2023, it was announced that Stuart Grant would join the Board on 3rd March 2023. With the addition of Stuart Grant,
the number of Independent Non-Executive Directors increases to six (50%) out of 12 Directors.
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.
Robert Wong has been Chief Executive since 1st August 2016. 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 Chief Executive to ensure an appropriate balance of power and
authority is maintained at all times.
Number of
Directors
International business
Executive leadership
Strategy & business acumen
Financial acumen
Corporate governance, risk management and/or sustainability
Property development
Property investment
Property management
50-59 Executive Directors
Non-Executive Directors60-59
70-75
Age of Directors Capacity of Directors
Directors’ experience
40-49
Independent Non-Executive Directors
3
2
2
4
Chinese Over 10 years
Canadian
Singaporean
6-10 years
Nationality of Directors Tenure of Directors
British
Indonesian
5 years or below
6 1 42 15 2 1
0 62 841 73 5 9 10 11
0 62 841 73 5 9 10 11 0 62 841 73 5 9 10 11
0 2 4
1
3 5
Number of Directors
88
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 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 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;
• Building an effective Board supported by a strong governance framework;
• Leading, with the Managing Director, the succession planning for the Chief Executive;
• 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 HKLL and of its finance committee, as well as being a member of the Company’s
Nominations Committee and the Remuneration Committee. 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.
Chief Executive
The responsibility for running the Group’s business and all the executive matters affecting the Group rests with the 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 HKLL finance committee. In addition, the Chief Executive has day-to-day
operational responsibility for:
• The effective management of the Group’s business;
• 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 business 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, and scrutinising the performance of management in achieving agreed goals and
objectives. In addition, Non-Executive Directors work on individual initiatives as appropriate.
89
Corporate Governance
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 Directors of the Company who do not serve on the board of HKLL and who are based outside Asia will usually visit the region
and Bermuda to discuss the Group’s business and 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 business and reinforces the Board oversight process.
Board Attendance
Directors are expected to attend all Board meetings. The table below shows the attendance at the scheduled 2022 Board meetings:
Meetings
eligible to
attend Attendance
Directors of the Company
Non-Executive Directors
Ben Keswick 4/4 100%
Lily Jencks
1
2/2 100%
Adam Keswick 4/4 100%
Lincoln K.K. Leong
2
3/3 100%
Anthony Nightingale 4/4 100%
Christina Ong 4/4 100%
Y.K. Pang 4/4 100%
Prijono Sugiarto 3/4 75%
Executive Directors
John Witt 4/4 100%
Robert Wong 4/4 100%
Craig Beattie 4/4 100%
Former Directors of the Company
Lord Powell of Bayswater
3
1/1 100%
Percy Weatherall
4
1/1 100%
Michael Wu
5
4/4 100%
1 Lily Jencks joined the Board on 28th July 2022.
2 Lincoln K.K. Leong joined the Board on 4th March 2022.
3 Lord Powell of Bayswater retired as a Director at the close of business on 3rd March 2022.
4 Percy Weatherall retired as a Director at the close of business on 3rd March 2022.
5 Michael Wu stepped down as a Director on 31st December 2022.
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
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.
Lord Powell of Bayswater and Percy Weatherall retired from the Board at the close of business on 3rd March 2022. Lincoln K.K. Leong
and Lily Jencks joined the Board on 4th March 2022 and 28th July 2022, respectively. Michael Wu stepped down as a Director on
31st December 2022.
90
Appointment and Retirement of Directors continued
In accordance with Bye-law 85, Robert Wong and Christina Ong will retire by rotation at this year’s AGM and, being eligible, offer
themselves for re-election. In accordance with Bye-law 92, Lily Jencks and Stuart Grant will also retire and, being eligible, offer
themselves for re-election. Robert Wong has a service contract with a subsidiary of the Company that has a notice period of six months.
None of the other Directors 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.
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
its respective terms of reference. Copies of these documents can be obtained from the Company’s website at www.hkland.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.
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 in place an organisational structure with defined lines of responsibility and delegation of authority. 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.
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Corporate Governance
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 1,176,616,646 ordinary shares carrying 52.89% 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.
Related Party Transactions
Details of transactions with related parties entered into by the Company during the course of the year are included in Note 24 to
the financial statements on page 54.
Engagement with Shareholders and Stakeholders
Shareholders and Investors
The Board and senior management team recognise communications with shareholders and investors to be an important component of
Hongkong Land’s commitment to strong corporate governance. The Group proactively engages with the investment community through
a number of channels to articulate its business and sustainability strategies, provide updates on its progress towards key objectives, and
to collect the community’s views and feedback, as follows:
• The Chief Executive and Chief Financial Officer are made available to address queries at the Group’s interim and annual results
presentations, followed by interactions during roadshows or post results discussions with major shareholders and investors;
• The Chief Financial Officer provides business updates to the analyst community prior to the start of black-out periods ahead of interim
and annual results announcements;
• The Chief Executive, Chief Financial Officer, and/or the Investor Relations team regularly attend one-on-one meetings with major
shareholders, bondholders and potential investors – over 50 meetings were conducted during the year;
• The publication of annual reports, results announcements and presentations, interim management statements and press releases;
• The publication of business, sustainability and other general updates via social media platforms; and
• The Group’s AGMs.
Other Stakeholders
The Group frequently engages with stakeholder groups outside of the investment community, focussing primarily on sustainability-related
issues and opportunities to collaborate on corporate social responsibility initiatives. Hongkong Land’s engagement with stakeholders
is guided by the Group’s Sustainability Framework 2030 (https://hklandblob.blob.core.windows.net/assets/sustainability/sustainability-
governance/hll_sustainabilityframework_2030_en.pdf), which was developed via consultations with stakeholders to help the Group
prioritise material topics.
These engagements, which are attended by senior management, primarily include:
• Ongoing dialogue with environmental Non-Governmental Organisations (‘NGOs’), financial institutions and government agencies on
risks from rising sea levels;
• Collaborating with other landlords via an Alliance on the sourcing and trialling of PropTech solutions to drive energy efficiency for
commercial buildings;
92
Other Stakeholders continued
• Regular communications with contractors and other developers to learn and share best practices on refining building designs and
optimising the use of carbon intensive building materials;
• Engaging with tenants to raise awareness and best practices on Diversity and Inclusion initiatives;
• Collaborating with NGOs and tenants to deliver charitable initiatives via economic contributions, community investments, and
volunteering; and
• Attending real estate sector and sustainability conferences, seminars, workshops, and events, including contributing to panel discussions.
Shareholders and other stakeholders may send their enquiries and concerns by e-mail at gpobox@hkland.com.
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.
During the year ended 31st December 2022, the Company repurchased and cancelled a total of 70,509,604 of its ordinary shares for an
aggregate cost of US$351 million. The ordinary shares, which were repurchased in the market, represented approximately 3.1% of the
Company’s issued ordinary share capital as at 1st January 2022 before repurchase.
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 conducted a staff engagement survey in December 2023 and achieved a best-in-class result.
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.hkland.com.
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 also 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 Code of Conduct and Data Breach Notification Policy underlines the Group’s commitment to being a responsible data custodian.
93
Corporate Governance
Whistleblowing Policy
The Group has a whistleblowing policy covering how employees can report matters of serious concern. The Audit Committee is
responsible for overseeing the effectiveness of the formal procedures for colleagues to raise such matters and is required to review
any reports made under those procedures referred to it by the internal audit function.
In addition, the Group has a whistleblowing service managed by an independent third-party service provider to supplement existing
whistleblowing channels to assist employees and third parties in reporting suspected illegal or unethical behaviour or other matters
of serious concern and is intended to help foster an inclusive, safe and respectful workplace. The service, which is available 24 hours
in multiple local languages, and is accessible through phone hotline or online, and as anonymous submissions, may be used by
colleagues to report a matter of concern to a manager supervisor, Human Resources, Executive Directors, Legal representative or
the Chief Financial Officer. 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 where applicable. Once a report is lodged, it is sent to
certain authorised persons at the Group level. These include senior representatives from legal, compliance and finance teams who
have experience in dealing with such matters. The authorised persons will follow up on the report and investigate where necessary.
The reporter, if they choose to, will be notified of the outcome. All reports are treated confidentially and any retaliation against
a person reporting a potential breach of the Code of Conduct in good faith will not be tolerated.
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 and developing 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 business 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; and
• Cultivating the right set of leadership behaviours through learning campaigns to ensure our people behave in a way consistent with
the principles we have put in place.
The Company keeps the composition of its Board and senior management positions under review to ensure that it adapts to the
changing business landscape. The Company is actively focussed on increasing gender diversity.
The Group has a Diversity and Equal Opportunity Policy.
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.
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The Group’s Remuneration Philosophy and Framework for Rewarding Staff continued
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;
• Best-practice governance and ensuring remuneration outcomes are reasonable, taking into account community and stakeholder
expectations; and
• Remuneration levels and outcomes appropriately reflect the challenge and complexity of being a multinational Asian-based property
group with diverse property business.
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. The remuneration packages
are designed to reflect the nature of the Group and its diverse geographic base.
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.
Directors’ Remuneration
Shareholders decide in general meetings the Directors’ fees which are payable to all Directors other than the Chief Executive and the
Chief Financial Officer, 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$1.5 million per annum was
approved by shareholders at the 2022 AGM. Executive Directors (excluding the Managing Director, who is also the Jardine Matheson
Managing Director) are paid a basic fixed salary as well as discretionary annual incentive bonuses by and receive certain employee
benefits from the Group. Non-Executive Directors do not receive bonuses or any other incentive payments or retirement benefits.
The Non-Executive Directors are reimbursed for expenses properly incurred in performing their duties as a Director of the Company.
The schedule of fees paid to Directors in respect of the financial year 2022 is set out in the table below. Fees are annual fees, unless
otherwise stated:
USD (per annum)
Chairman/Managing Director fee: 110,000
Base Director fee: 100,000
Audit Committee fee: 35,000
Nominations Committee fee: 15,000
Director
Director Fee
US$
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 Robert Wong – – – –
4 Craig Beattie – – – –
5 Lily Jencks 100,000 – – 100,000
6 Adam Keswick 100,000 – 15,000 115,000*
7 Lincoln K.K. Leong 100,000 35,000 – 135,000
8 Anthony Nightingale 100,000 – – 100,000
9 Christina Ong 100,000 – – 100,000
10 Y.K. Pang 100,000 35,000 – 135,000*
11 Prijono Sugiarto 100,000 – – 100,000
Total 920,000 70,000 45,000 1,035,000
* Fees surrendered to Jardine Matheson
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Corporate Governance
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.
In March 2022, the Remuneration Committee established by the Board within HKLL in March 2021 had been dissolved. The Board has
established a Remuneration Committee (the ‘Remuneration Committee’) at the Company level in March 2022. 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 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 as they relate 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, Y.K. Pang and Graham Baker. The Chief Executive and the Director and Head of Human Resources will generally attend
meetings of the Remuneration Committee. The Remuneration Committee meets as circumstances require, or by circulation of
Committee circular reviews and recommends 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. 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$8.6 million (2021: US$10.3 million) in Directors’
fees and employee benefits, being:
• US$1.2 million (2021: US$0.7 million) in Directors’ fees;
• US$7.3 million (2021: US$7.9 million) in short-term employee benefits, including salary, bonuses, accommodation and deemed
benefits in kind; and
• US$0.1 million (2021: US$1.7 million) in post-employment benefits.
The information set out in the section above headed ‘Remuneration Outcomes in 2022’ forms part of the audited financial statements.
Share Schemes
The Company has in place a notional share option plan under which cash bonuses are paid based on the performance of the Company’s
share price over a period. The notional plan was established to provide longer-term incentives for Executive Directors and senior
managers. Notional share options are granted after consultation between the Chairman and the Chief Executive as well as other
Directors as they consider appropriate. Notional share options are not granted to Non-Executive Directors.
Directors’ Share Interests
The Directors of the Company in office on 2nd March 2023 had interests* as set out below in the ordinary share capital of the Company.
These interests include those notified to the Company regarding the Directors’ closely associated persons*.
Robert Wong 400,000
Lincoln K.K. Leong 456,818
Anthony Nightingale 2,184
Y.K. Pang 738,000
* Within the meaning of MAR
In addition, Robert Wong and Craig Beattie held share options regarding 2,200,000 and 60,000 ordinary shares, respectively, issued
pursuant to the Company’s notional share option plan.
96
Audit Committee Report
Audit Committee
In March 2022, the Audit Committee established by the Board within HKLL (the ‘Former Audit Committee’) had been dissolved.
The Board has established an Audit Committee (the ‘Audit Committee’) at the Company level in March 2022. The Audit Committee
consists of a minimum of three members, the current members of which are Y.K. Pang, Graham Baker (Financial Expert) and
Lincoln K.K. Leong (Chairman of the Audit Committee and Independent Non-Executive Director). None of them is directly involved
in operational management of the Company. On 3rd March 2023, Stuart Grant will be appointed as an Independent Non-Executive
Director and become a member of the Audit Committee on 1st June 2023.
With the appointment of Lincoln K.K. Leong and Stuart Grant, both Independent Non-Executive Directors, to the Audit Committee
in March 2022 and June 2023, the Company is moving towards a majority of independent members in its Audit Committee.
Lincoln K.K. Leong, Stuart Grant and Graham Baker are the members of the Audit Committee with recent financial experience
and expertise. In addition, Graham Baker and Stuart Grant also have a deep understanding of risk management.
The Chairman, 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.
Before completion and announcement of the half-year and year-end results, a review of the 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 Chief Executive, the 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 judgements 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 function 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 biennial assessment of the effectiveness of PwC;
• Reviewing the Group’s governance approach to cybersecurity management, data security and privacy management across
its businesses;
• Reviewing the independence, audit scope and fees of PwC, 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.
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Corporate Governance
Former and Current Audit Committees Attendance
1 & 2
The table below shows the attendance at the scheduled 2022 Audit Committee meetings:
Members of the Former Audit Committee
Meeting
eligible to
attend Attendance
Directors of the Company
John Witt 1/1 100%
Y.K. Pang (Chairman) 1/1 100%
Directors of HKLL
Graham Baker 1/1 100%
Jeremy Parr 0/1 –
Members of the Current Audit Committee
Meeting
eligible to
attend Attendance
Directors of the Company
Lincoln K.K. Leong (Chairman) 1/1 100%
Y.K. Pang 1/1 100%
Director of HKLL
Graham Baker 1/1 100%
1 The Former Audit Committee was dissolved on 3rd March 2022.
2 The Audit Committee was established on 4th March 2022.
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.
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Risk Management and Internal Control continued
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 implementing the systems of internal control throughout the Group.
The Group has an established risk management process that is 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 HKLH Management to risk. The internal audit function is independent
of the operating business 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 101 to 105.
Risk Governance Structure
HKL Board of Directors
HKL Management
HKL Audit Committee
HKL Compliance
Internal Audit
(‘JM GARM’)
Report Monitor/
Review
Delegate/
Oversee
External Audit (‘PwC’)
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 the Group’s Board of Directors via Audit Committee and JM GARM on the principal risks and uncertainties; and
• Working with external and internal auditors to monitor and improve its control environment.
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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
100
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, Chief Executive’s Review and other parts of
this Annual Report.
Economic Risk
The Group is exposed to the risk of negative developments in global and regional economies and financial and property markets, either
directly or through the impact such developments might have on the Group’s joint venture partners, associates, bankers, suppliers,
customers or tenants. These developments could include recession, inflation, deflation and currency fluctuations, restrictions in the
availability of credit, increases in financing and construction costs and business failures, and reductions in office and retail rents, office
and retail occupancy, and sales prices of, and demand for, residential and mixed-use developments.
Such developments might increase costs of sales and operating costs, reduce revenues, increase net financing charges, or result in
reduced valuations of the Group’s investment properties or in the Group being unable to meet its 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.
Commercial Risk
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.
The Group makes significant investment decisions regarding commercial and residential development projects, and these 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 operates in regions that are highly competitive, and failure to compete effectively, whether in terms of price, tender terms,
product specification or levels of service, and failure to manage change in a timely manner, can have an adverse effect on earnings
or market share, as can construction risks in relation to new developments. 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 the 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.
The potential impact of disruption to IT systems or infrastructure, whether due to cyber-crime or other factors, could be significant.
There is also an increasing risk to our businesses from adverse social media commentary, which could influence customer and other
stakeholder behaviours and impact operations or profitability or lead to reputational damage.
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.
101
Corporate Governance
Principal Risks and Uncertainties continued
Financial and Treasury Risk
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 include i) foreign exchanges 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 risks 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 exposure 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 exposure.
The detailed steps taken by the Group to manage its exposure to financial risk are set out in the Financial Review on page 17 and
Note 29 to the financial statements on pages 68 to 74.
Regulatory and Political Risk
The Group is subject to a number of regulatory regimes in the territories it operates. Changes in such regimes, in relation to matters
such as foreign ownership of assets and businesses, exchange controls, planning controls, tax rules, climate-related regulation and
employment legislation, could have the potential to impact the operations and profitability of the Group.
Changes in the political environment, including political or social unrest, in the territories where the Group operates, could adversely
affect the Group.
Mitigation Measures
• Stay connected and informed of relevant new and draft regulations.
• Engage external consultants and legal experts where necessary.
• Raise awareness via principal’s brand conference with an annual update on new regulations that may have been implemented in
other markets.
102
Principal Risks and Uncertainties continued
Pandemic, War, Terrorism and Natural Disasters Risk
A global or regional pandemic would impact the Group’s business, affecting travel patterns, demand for the Group’s products and
services, and possibly the Group’s ability to operate effectively. The Group’s properties and/or project sites are also vulnerable to the
effects of war and terrorism, either directly through the impact of an act of war and terrorism or indirectly through generally reduced
economic activity in response to the threat of or an actual act of war and terrorism. In addition, a number of the territories in which the
Group operates can experience from time-to-time natural disasters such as typhoons, floods, earthquakes and tsunamis.
Mitigation Measures
• Flexible work arrangements and compliance with hygiene protocols.
• Supply chain stabilisation includes sourcing backup suppliers and better coordination with logistics partners.
• Insurance programmes that provide robust cover for natural disasters including property damage and business interruption.
Key Contracts Risk
Many of the Group’s businesses and projects rely on concessions, management, outsourcing or other vital contracts. Accordingly,
cancellation, expiry or termination, or the renegotiation of any such concession, management, outsourcing or other third-party key
contracts could adversely affect the financial condition and results of operations of certain subsidiaries, associates and joint ventures
of the Group.
Mitigation Measures
• Monitor materials and services providers’ performance and compliance with standards set out in contracts to ensure quality.
• Engage experts to manage the key contracts.
• Diversify suppliers/contractors portfolio to avoid over-reliance on specific suppliers/contractors for key operations.
Cybersecurity Risk
The Group’s businesses are ever more reliant on technology in their operations and face increasing numbers of cyberattacks from groups
targeting both individuals and businesses. As a result, the privacy and security of customer, tenant and corporate information are at
risk of being compromised through a breach of our or our suppliers’ IT systems or the unauthorised or accidental 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.
Mitigation Measures
• Engage external consultants to perform assessments on the business units with industry benchmarks.
• Define 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 to identify weaknesses.
• Maintain disaster recovery plans and backup for data restoration.
• Arrange regular security awareness training at least annually and phishing testing to raise users’ cybersecurity awareness.
103
Corporate Governance
Principal Risks and Uncertainties continued
Governance and Misconduct Risk
Effective management of the Group’s risks depends on the existence of an appropriate governance structure, tone from top leadership,
and functioning system of internal controls. Ethical breaches, management override of controls, employee fraud and misconduct, or
other deficiencies in governance and three lines of internal controls may result in financial loss and reputational damage for the Group.
Inadequate capability and diversity in management or the board may also lead to sub-optimal deliberations and decisions.
The Group holds minority stakes in various companies. Lack of control or significant influence over these companies may lead to losses
on the Group’s investment if the companies are mismanaged.
Mitigation Measures
• Established Groupwide mandatory code of conduct that applies to all Group businesses and new joiners.
• Maintain a robust Corporate Governance Framework which includes a whistleblowing channel.
• Compliance department reviews internal controls.
• Maintain functionally independent internal audit function that reports to the Group Audit Committee on risk management, the control
environment and significant non-compliance matters.
• Maintain Crime and General Liability insurance policies with adequate coverage.
Health and Safety Risk
The Group’s businesses engage in construction, renovation or other physical activities that may lead to serious injury or fatal incidents if
work conditions are unsafe or workers do not take due care to observe safety procedures.
Mitigation Measures
• Establish safe working environments and regular safety training for all employees and subcontractors.
• Establish contractual requirements for contractors to comply with high expected levels of safety standards.
• Incorporate site safety plans in tenders and contracts.
• Conduct occupational health and safety awareness campaigns.
• Purchase sufficient insurance coverage including employee compensation and construction of all risks.
• Establish proper contractor selection process.
• Ensure contractors follow the Group’s guidelines, requirements and local regulations.
• Conduct regular audits on operating buildings and construction sites.
• Conduct periodic drills and crisis management procedures for safety incidents.
People Risk
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.
The pandemic has accelerated corporate investments in digital projects and stimulated global consumer demand for e-commerce. This
has created heightened demand and competition across industries for various skillsets, particularly in IT and logistics. Pandemic-related
travel restrictions and a more stringent approach to issuing work visas to non-locals in some of the key markets have also disrupted the
availability of labour across borders, exacerbating labour shortages as economies rebound.
Mitigation Measures
• Ensure proactive manpower planning and succession planning are in place.
• Enhance modern employer branding, training for staff members, compensation and benefits, and talent development plan.
• Implement strategy to promote diversity and inclusion across the Group.
• Provide employee retention programmes.
• Establish employee assistance programmes.
104
Principal Risks and Uncertainties continued
Investment, Strategic Transactions and Partnerships Risk
Competition for attractive investment opportunities has increased with the rise of global investment funds and deep pools of low-cost
capital, supporting a greater appetite by investors across sectors for strategic transactions and partnerships to optimise the business
portfolio and enhance growth. As the Group’s businesses pursue projects and investments against keen competitors, they face pressure
on the terms they are willing to secure and accept prized assets and relationships.
In addition, conflicts with strategic partners may arise due to various reasons such as different corporate cultures and management styles.
Mitigation Measures
• Conduct sufficient research, due diligence and evaluation of investment opportunities and potential business partners.
• Develop clear frameworks and levels of authority for investment or partnership decisions.
• Regular performance monitoring and strategic reviews of new businesses and projects.
Environmental and Climate Risk
Global climate change has led to a trend of increased frequency and intensity of potentially damaging natural events for the Group’s
assets and operations. With interest in sustainability surging in recent years from investors, governments and other interested parties,
expectations by regulators and other stakeholders for accurate corporate sustainability reporting and commitments towards carbon
neutrality and other sustainability-related goals are also growing. This brings increasing challenges to the Group and its businesses to
meet key stakeholders’ expectations.
Mitigation Measures
In addition to being addressed under the Group’s Risk Management Framework and processes, mitigation measures are reviewed
and approved by the Group’s Sustainability Committee as part of a broader sustainability framework already in place to execute on
initiatives over the long term.
Mitigation measures in respect of environmental and climate risks:
• A commitment to the Science Based Targets initiative’s campaign to set decarbonisation targets in line with climate science, to meet
the goals of the Paris Agreement, aimed at limiting global warming to 1.5°C.
• Perform and update climate risk assessments and adaptation action plans based on the recommendations of the Task Force on
Climate-related Financial Disclosures, including implementing measures to address physical risks posed by climate change and
identifying opportunities in the global transition to a low-carbon economy.
• Consistent retrofitting of existing assets, as well as identification and deployment of emerging PropTech solutions to drive
energy efficiency.
• Increase the procurement of renewable energy, including expanding onsite renewable energy generation capacity, to reduce emissions.
• Continue implementing the Group’s robust and long-standing green building certification programme to minimise environmental
impact of existing assets.
• Establish performance-based targets on embodied carbon emissions targeting concrete, rebar and structural steel used for
new developments.
• Support the financial sector’s green transition via increased participation in the sustainable financing markets.
• Test and audit periodically the Group’s Business Continuity Plans.
• Assess emerging ESG reporting standards and requirements, and align the Group’s disclosures to best market practice.
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 findings of the internal audit function and recommendations for any corrective action
required are reported to the Audit Committee and, if appropriate, to the Jardine Matheson audit committee.
105
Shareholder Information
Financial Calendar
2022 full-year results announced 2nd March 2023
Shares quoted ex-dividend 16th March 2023
Share registers closed 20th to 24th March 2023
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
Jersey Branch Registrar
Link Market Services (Jersey) Limited, 12 Castle Street, St Helier, Jersey JE2 3RT, Channel Islands
Singapore Branch Registrar
M & C Services Private Limited, 112 Robinson Road #05-01, Singapore 068902
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.hkland.com.
106
Hongkong Land Holdings Limited
Jardine House
33-35 Reid Street
Hamilton HM 12
Bermuda
Tel +1441 292 0515
E-mail: gpobox@hkland.com
Philip A. Barnes
Hongkong Land Limited
8th Floor, One Exchange Square
Hong Kong
Tel +852 2842 8428
E-mail: gpobox@hkland.com
Robert Wong
Hongkong Land (Beijing)
Management Company Limited
11/F, Office Tower Three
Beijing APM
No. 138 Wangfujing Street
Dongcheng District
Beijing 100006
China
Tel +86 10 6520 4800
E-mail: gpobox.bj@hkland.com
Zhou Peng
Hongkong Land (Chengdu)
Investment and Development
Company Limited
16F, Block A, Weland Centre
No. 246 Dongda Road
Jinjiang District
Chengdu 610065
Sichuan Province
China
Tel +86 28 61556008
E-mail: gpobox.cd@hkland.com
Yin Ming
Hongkong Land (Chongqing)
Investment and Holding Co. Ltd.
16/F, Building B, The Ring Centre
No. 118 Hucai Road
Liangjiang New Area District
Chongqing 401122
China
Tel +86 23 6136 7777
E-mail: gpobox.cq@hkland.com
Ling Chang Feng
Offices
Hongkong Land (Hangzhou)
Shengyue Management Co. Ltd.
Unit 3001-1, Building One
Ping An Finance Centre
No. 280 Mingxin Road
Jianggan District
Hangzhou 310016
Zhejiang Province
China
Tel +86 571 87013930
E-mail: gpobox.hz@hkland.com
Shi Guangyu
Hongkong Land (Nanjing)
Puzhi Management Co., Ltd.
Unit B, 55/F, Nanjing Center
No. 1 Zhongshan South Road
Qinhuai District
Nanjing 210001
Jiangsu Province
China
Tel +86 25 8333 8388
E-mail: gpobox.nj@hkland.com
Huang Lei
Hongkong Land (Philippines)
Consultancy, Inc.
1803 The Taipan Place
F. Ortigas Jr. Road
Ortigas Center
Pasig City 1605
Philippines
Tel +63 2 737 6348
E-mail: gpobox.ph@hkland.com
Lee Chee Hoe
Hongkong Land
(Premium Investments) Limited
Unit 702, 7th Floor, EXCHANGE SQUARE
No. 19 & 20
Street 106, Village 2
Sangkat Wat Phnom
Khan Daun Penh, Phnom Penh
Cambodia
Tel +855 2399 2063
E-mail: gpobox.cambodia@hkland.com
James Padden
107
Hongkong Land (Shanghai)
Management Company Limited
No. 2599 Longteng Avenue
Xuhui District
Shanghai 200232
China
Tel +86 21 2020 0086
E-mail: gpobox.sh@hkland.com
Zhao Jun
Hongkong Land (Singapore) Pte. Ltd.
One Raffles Quay
#22-10 South Tower
Singapore 048583
Tel +65 6238 1121
E-mail: gpobox.sg@hkland.com
Robert Garman
Hongkong Land (Wuhan) Investment and
Development Company Limited
4/F, Building No. 5
Wuhan Dream Land
Jinyintan Avenue, Dong Xi Hu District
Wuhan 430048
Hubei Province
China
Tel +86 27 8289 6866
E-mail: gpobox.wh@hkland.com
Wang Yi Bin
HKL (Thai Developments) Limited
Unit B, 20th Floor, Gaysorn Tower
No. 127 Rajdamri Road
Lumpini Sub-District
Pathumwan District
Bangkok 10330
Thailand
Tel +66 2 033 0160 ext. 30168
E-mail: gpobox.thailand@hkland.com
William Bright
Beijing Yee Zhi Real Estate
Consultancy Co., Ltd.
Room 1123A, 11/F
Office Tower 3 Beijing APM
No. 138 Wangfujing Street
Dongcheng District
Beijing 100006
China
Tel +86 10 6520 4800
E-mail: gpobox.bj@hkland.com
Rick Hwang
MCL Land Limited
One Raffles Quay
#22-10 South Tower
Singapore 048583
Tel +65 6238 1121
E-mail: gpobox.mcl@hkland.com
Robert Garman
PT Hongkong Land Consultancy
and Management
Menara Astra, 39th Floor, Suite B2
Jl. Jend. Sudirman Kav. 5-6
Jakarta 10220
Indonesia
Tel +62 21 5088 9822
E-mail: gpobox.indonesia@hkland.com
Francis Yee
Offices
108
Report of the Valuers
To Hongkong Land Holdings Limited
Dear Sirs
Revaluation of Investment Properties Held under Freehold and Leasehold
Further to your instructions, we have valued in our capacity as external valuers the investment properties held under freehold and
leasehold as described in the consolidated financial statements of Hongkong Land Holdings Limited. We are of the opinion that the
market value of the investment properties held under freehold in Cambodia and leasehold in China, Hong Kong, Singapore and Vietnam
as at 31st December 2022, totalled US$28,041,700,000 (United States Dollars Twenty-Eight Billion Forty-One Million and Seven
Hundred Thousand).
Our valuations were prepared in accordance with the International Valuation Standards by the International Valuation Standards Council
and The HKIS Valuation Standards by The Hong Kong Institute of Surveyors.
We have inspected the properties without either making structural surveys or testing the services. We have been supplied with details
of tenure, tenancies and other relevant information.
In arriving at our opinion, each property was valued individually, on market value basis, calculated on the net income allowing for
reversionary potential, however no allowance has been made for expenses of realisation or for taxation which might arise in the event
of disposal.
Yours faithfully
Jones Lang LaSalle Limited
Hong Kong, 23rd January 2023
109
Major Property Portfolio
at 31st December 2022
Operational
Investment Properties
Attributable
interest Location
Lettable area of the property
Total Office Retail
% (in thousands of square metres)
Alexandra House 100 Hong Kong 35 30 5
Chater House 100 Hong Kong 43 39 4
Exchange Square 100 139
One Exchange Square Hong Kong 53 –
Two Exchange Square Hong Kong 47 –
Three Exchange Square Hong Kong 30 –
Podium Hong Kong – 5
The Forum Hong Kong 4 –
Jardine House 100 Hong Kong 63 59 4
Gloucester Tower 100 Hong Kong 42 42 –
Landmark Atrium 100 Hong Kong 25 – 25
Edinburgh Tower 100 Hong Kong 44 31 13
York House 100 Hong Kong 10 10 –
Prince’s Building 100 Hong Kong 52 38 14
WF CENTRAL 84 Beijing 42 – 42
ONE CENTRAL 49 Macau 18 – 18
One Raffles Link 100 Singapore 29 23 6
One Raffles Quay 33 123
North Tower Singapore 71 –
South Tower Singapore 52 –
Marina Bay Financial Centre 33 284
Tower 1 Singapore 56 3
Tower 2 Singapore 95 6
Tower 3 Singapore 116 8
World Trade Centre 1 50 Jakarta 40 36 4
World Trade Centre 2 50 Jakarta 60 56 4
World Trade Centre 3 50 Jakarta 70 67 3
World Trade Centre 5 50 Jakarta 15 14 1
World Trade Centre 6 50 Jakarta 19 17 2
EXCHANGE SQUARE 100 Phnom Penh 26 17 9
Gaysorn 49 Bangkok 17 5 12
63 Ly Thai To 74 Hanoi 7 6 1
110
Developable area of the property
Development Properties
Attributable
interest Location Total
Construction
completed
Under
construction/
to be
developed
% (in thousands of square metres)
Artistic Bay 100 Chengdu 99 – 99
Creative Land 100 Chengdu 84 – 84
Natural Jewel 50 Chengdu 107 – 107
WE City 100 Chengdu 921 707 214
Beryl Grove 100 Chongqing 133 129 4
Central Avenue 50 Chongqing 1,118 865 253
Century Land 100 Chongqing 208 – 208
Eternal Land 50 Chongqing 276 – 276
Harbour Tale 50 Chongqing 114 114 -
Landmark Riverside 50 Chongqing 1,252 927 325
Re City 50 Chongqing 748 – 748
River One 100 Chongqing 161 161 –
Scholar’s Mansion 50 Chongqing 318 286 32
Yorkville North 100 Chongqing 1,116 1,116 –
Hangzhou Bay 30 Hangzhou 788 304 484
Grand Mansion 100 Nanjing 93 – 93
JL CENTRAL 50 Nanjing 252 – 252
Yue City 33 Nanjing 265 54 211
Galaxy Midtown 27 Shanghai 392 74 318
West Bund 43 Shanghai 285 – 285
Xuhui Xietu Project 34 Shanghai 55 – 55
Dream Land 50 Wuhan 493 295 198
Lakeward Mansion 66 Wuhan 226 – 226
Origin Land 100 Wuhan 212 – 212
Peak View 50 Wuhan 68 – 68
Copen Grand 50 Singapore 68 – 68
Leedon Green 50 Singapore 54 – 54
Piccadilly Grand 50 Singapore 39 – 39
Tembusu Grand 49 Singapore 60 – 60
Arumaya 40 Jakarta 24 – 24
Asya 50 Jakarta 481 86 395
Avania 50 Jakarta 120 – 120
Nava Park 49 Jakarta 484 192 292
Project Lazuli 50 Jakarta 315 – 315
Lake Legend Bangna-Suvarnabhumi 49 Bangkok 179 10 169
Nonthaburi 49 Bangkok 230 23 207
111
Major Property Portfolio
9
7
12
11
9
a
1
0
8
6
1
2
3
4
5
1
One Exchange Square
2
Two Exchange Square
3
Three Exchange Square
4
The Forum
5
Jardine House
6
Chater House
7
Alexandra House
8
Gloucester Tower
9
Edinburgh Tower
9
a The Landmark
Mandarin Oriental
10
York House
1 1
Landmark Atrium
12
Prince’s Building
Hong Kong – Central District
Mass Transit Railway access
Public car park
Hongkong Land properties
Pedestrian bridges
C H AT E R R O A D
D E S V O E U X R O A D C E N T R A L
I C E H O U S E S T R E E T
Q U E E N ’ S R O A D C E N T R A L
I C E H O U S E S T R E E T
P E D D E R S T R E E T
M A N Y I U S T R E E T
L U N G W O R O A D
M A N C H E U N G S T R E E T
H A R B O U R V I E W S T R E E T
J A C K S O N R O A D
C O N N A U G H T R O A D C E N T R A L
C O N N A U G H T R O A D C E N T R A L
Q
U
E
E
N
’
S
R
O
A
D
C
E
N
T
R
A
L
DES V O E UX R O A D CE N T R AL
Stock
Exchange
10
11
9
9a
7
6
1 2
4
3
5
12
8
Statue
Square
Mandarin
Oriental
Statue
Square
General
Post Office
HSBC
Standard
Chartered
Bank
Bank of
China
Airport Express Station
Beijing, China
Macau, China
WF CENTRAL
|
Mandarin Oriental Wangfujing, Beijing ONE CENTRAL
CBD Z
3
Project
*
112
Yorkville North
|
The Ring, Chongqing Landmark Riverside
Chongqing, China
Harbour Tale Scholar’s Mansion
*
Eternal Land
|
Chongqing CENTRAL Project
*
Re City
*
Century Land
|
The Ring, Century Land Project
*
Beryl Grove
*
Hillview
*
This rendering is for illustration and reference only, subject to change and government approval.
Residential Office Retail Hotel
Development PropertiesInvestment Properties
Chengdu, China
WE City
|
The Ring, Chengdu
*
Artisan Bay
*
Artistic Bay
*
Natural Jewel
*
Creative Land
*
Central Avenue
|
The Ring, Central Avenue Project
Yorkville South River One The Pinnacle
Indonesia
Shanghai, China
Nanjing, China
Wuhan, China
Parkville
|
LCM
Yue City
|
The Ring, Nanjing Project
*
JL CENTRAL
*
Anandamaya Residences
Avania
*
River and City
World Trade Centre
Nava Park
Arumaya
*
Asya
*
Grand Mansion
*
Suzhou, China
Hudong CENTRAL Project
Hangzhou, China
The Riverside
Hangzhou Bay
|
The Ring, Hangzhou Project
Century Origin
*
Galaxy Midtown
|
The Ring Live
*
Irvine Bay
West Bund Financial Hub
*
Wuhan Dream Land
|
The Ring, Wuhan
*
Lakeward Mansion
*
Peak View
*
Origin Land
*
This rendering is for illustration and reference only, subject to change and government approval.
Residential Office Retail Hotel
Development PropertiesInvestment Properties
PhilippinesMalaysia
CambodiaThailand
Singapore
Vietnam
Marina Bay Financial Centre One Raffles Quay
One Raffles Link
|
CityLink Mall
Leedon Green
*
Parc Esta
*
Piccadilly Grand
*
Copen Grand
*
Tembusu Grand
*
6
3
Ly Thai To
The Marq
Central Mansions
British Embassy Site
EXCHANGE SQUARE
3
1
3
QUAYSIDE
Gaysorn
Lake Legend Chaengwattana
Lake Legend Bangna-Suvarnabhumi
*
Wireless Road Project
*
Mandani Bay
*
The Quinn
*
Roxas Triangle Towers The Velaris Residences
*
Wangsa Walk Mall
Hongkong Land Holdings Limited
Jardine House Hamilton Bermuda
www.hkland.com