REG - Jardine Matheson HdgJardine Strategic - Half Yearly Report <Origin Href="QuoteRef">JARD.SI</Origin> <Origin Href="QuoteRef">JSH.SI</Origin> - Part 3
29/10/2014 09:25
- Part 3: For the preceding part double click ID:nRSA0031Ob
tax (451) (438)
Deferred tax 37 51
(414) (387)
Greater China (124) (102)
Southeast Asia (280) (278)
United Kingdom (6) (4)
Rest of the world (4) (3)
(414) (387)
Tax relating to components of other comprehensive income or expense is analyzed as follows:
Remeasurements of defined benefit plans 1 1
Cash flow hedges 6 (7)
7 (6)
Tax on profits has been calculated at rates of taxation prevailing in the territories in which the Group operates.
Share of tax charge of associates and joint ventures of US$150 million and credit of US$4 million (2013: US$181 million and
US$2 million) are included in share of results of associates and joint ventures and share of other comprehensive expense of
associates and joint ventures, respectively.
6. Earnings per Share
Basic earnings per share are calculated on profit attributable to shareholders of US$818 million (2013: US$784 million)
and on the weighted average number of 369 million (2013: 376 million) shares in issue during the period.
Diluted earnings per share are calculated on profit attributable to shareholders of US$818 million (2013: US$784 million),
which is after adjusting for the effects of the conversion of dilutive potential ordinary shares of subsidiaries,
associates or joint ventures, and on the weighted average number of 370 million (2013: 368 million) shares after adjusting
for the number of shares which are deemed to be issued for no consideration under the Senior Executive Share Incentive
Schemes based on the average share price during the period.
The weighted average number of shares is arrived at as follows:
Ordinary sharesin millions
2014 2013
Weighted average number of shares in issue 682 672
Company's share of shares held by subsidiaries (313) (305)
Weighted average number of shares for basic earningsper share calculation 369 367
Adjustment for shares deemed to be issued for no consideration under the Senior Executive ShareIncentive Schemes 1 1
Weighted average number of shares for diluted earnings per share calculation 370 368
Additional basic and diluted earnings per share are also calculated based on underlying profit attributable to
shareholders. A reconciliation of earnings is set out below:
Six months ended 30th June
2014 2013
US$m Basic earnings per shareUS$ Diluted earnings per shareUS$ US$m Basic earnings per shareUS$ Diluted earnings per shareUS$
Profit attributable to shareholders 818 2.22 2.21 784 2.14 2.13
Non-trading items (note 7) (79) (31)
Underlying profit attributable to shareholders 739 2.00 2.00 753 2.05 2.04
7. Non-trading items
Non-trading items are separately identified to provide greater understanding of the Group's underlying business
performance. Items classified as non-trading items include fair value gains or losses on revaluation of investment
properties and plantations; gains and losses arising from the sale of businesses, investments and properties; impairment of
non-depreciable intangible assets and other investments; provisions for the closure of businesses; acquisition-related
costs in business combinations; and other credits and charges of a non-recurring nature that require inclusion in order to
provide additional insight into underlying business performance.
Six months ended 30th June
2014US$m 2013US$m
By business:
Jardine Motors (1) -
Jardine Lloyd Thompson (5) (4)
Hongkong Land 54 33
Dairy Farm 6 -
Mandarin Oriental - 2
Jardine Cycle & Carriage (1) -
Astra 13 -
Corporate and other interests 13 -
79 31
An analysis of non-trading items after interest, tax and non-controlling interests is set out below:
Increase in fair value of investment properties
- Hongkong Land 54 33
Reversal of asset impairment - 2
Sale of property interests 7 -
Sale of other investments 14 -
Sale of business 2 -
Restructuring of businesses (7) (4)
Fair value gain on convertible component of Zhongsheng bonds 3 -
Expenses relating to transfer of listing segment of group companies' shares (4) -
Negative goodwill on acquisition of business 11 -
Other (1) -
79 31
8. Dividends
Six months ended 30th June
2014US$m 2013US$m
Final dividend in respect of 2013 of US¢103.00(2012: US¢100.00) per share 701 671
Company's share of dividends paid on the shares held by subsidiaries (321) (304)
380 367
An interim dividend in respect of 2014 of US¢38.00 (2013: US¢37.00) per share amounting to a total of US$261 million (2013:
US$251 million) is declared by the Board. The net amount after deducting the Company's share of the dividends payable on
the shares held by subsidiaries of US$121 million (2013: US$115 million) will be accounted for as an appropriation of
revenue reserves in the year ending 31st December 2014.
9. Financial Instruments
Financial instruments by category
The fair values of financial assets and financial liabilities, together with carrying amounts at 30th June 2014 and 31st
December 2013 are as follows:
Loans and receivablesUS$m DerivativesUS$m Available-for-sale US$m Fair value through profit orlossUS$m Other financial liabilities at amortized cost US$m TotalcarryingamountUS$m FairvalueUS$m
30th June 2014
Assets
Other investments - - 1,395 - - 1,395 1,395
Debtors 8,435 185 - 22 - 8,642 8,413
Bank balances andother liquid funds 4,640 - - - - 4,640 4,640
13,075 185 1,395 22 - 14,677 14,448
Liabilities
Borrowings(excluding finance lease liabilities) - - - - (11,291) (11,291) (11,308)
Finance leaseliabilities - - - - (103) (103) (103)
Trade and otherpayables excluding non-financial liabilities - (59) - (66) (7,160) (7,285) (7,285)
- (59) - (66) (18,554) (18,679) (18,696)
31st December 2013
Assets
Other investments - - 1,146 - - 1,146 1,146
Debtors 7,350 294 - - - 7,644 7,239
Bank balances andother liquid funds 5,214 - - - - 5,214 5,214
12,564 294 1,146 - - 14,004 13,599
Liabilities
Borrowings(excluding finance lease liabilities) - - - - (11,161) (11,161) (11,075)
Finance leaseliabilities - - - - (123) (123) (123)
Trade and otherpayables excluding non-financial liabilities - (59) - (66) (6,573) (6,698) (6,698)
- (59) - (66) (17,857) (17,982) (17,896)
Fair value estimation
(i) Financial instruments that are measured at fair value
For financial instruments that are measured at fair value in the balance sheet, the corresponding fair value measurements
are disclosed by level of the following fair value measurement hierarchy:
(a) Quoted prices (unadjusted) in active markets for identical assets or liabilities ('quoted prices in active markets')
The fair value of listed securities, which are classified as available-for-sale, is based on quoted prices in active
markets at the balance sheet date. The quoted market price used for listed investments held by the Group is the current
bid price.
(b) Inputs other than quoted prices in active markets that are observable for the asset or liability, either directly or
indirectly ('observable current market transactions')
The fair values of derivative financial instruments are determined using rates quoted by the Group's bankers at the balance
sheet date. The rates for interest rate swaps and caps, cross-currency swaps, forward foreign exchange contracts and
credit default swaps are calculated by reference to market interest rates and foreign exchange rates, and for the
convertible component of convertible bonds held reference is also made to the quoted price of the underlying shares.
The fair values of unlisted investments, which are classified as available-for-sale and mainly include club and school
debentures, are determined using prices quoted by brokers at the balance sheet date.
(c) Inputs for assets or liabilities that are not based on observable market data ('unobservable inputs')
The fair value of other unlisted investments, which are classified as available-for-sale, is determined using valuation
techniques by reference to observable current market transactions (including price-to-earnings and price-to-book ratios of
listed securities of entities engaged in similar industries) or the market prices of the underlying investments with
certain degree of entity specific estimates.
There were no changes in valuation techniques during the periods.
The table below analyzes financial instruments carried at fair value at 30th June 2014 and 31st December 2013, by the
levels in the fair value measurement hierarchy:
Quotedprices in active marketsUS$m Observable current market transactionsUS$m Unobservable inputsUS$m TotalUS$m
30th June 2014
Assets
Available-for-sale financial assets
- listed securities 1,176 - - 1,176
- unlisted investments - 42 177 219
1,176 42 177 1,395
Derivatives designated at fair value
- through other comprehensive income - 185 - 185
- through profit and loss - 22 - 22
1,176 249 177 1,602
Liabilities
Contingent consideration payable - - (66) (66)
Derivatives designated at fair value
- through other comprehensive income - (59) - (59)
- (59) (66) (125)
31st December 2013
Assets
Available-for-sale financial assets
- listed securities 943 - - 943
- unlisted investments - 42 161 203
943 42 161 1,146
Derivatives designated at fair value
- through other comprehensive income - 294 - 294
943 336 161 1,440
Liabilities
Contingent consideration payable - - (66) (66)
Derivatives designated at fair value
- through other comprehensive income - (59) - (59)
- (59) (66) (125)
There were no transfers among the three categories during the periods.
Movement of financial instruments which are valued based on unobservable inputs during the six months ended 30th June 2014
and 2013 are as follows:
Available-for-sale financial assetsUS$m Contingent consideration payableUS$m
At 1st January 2014 161 66
Exchange differences 1 -
Additions 1 -
Net change in fair value during the period included in other comprehensive income 14 -
At 30th June 2014 177 66
At 1st January 2013 134 68
Exchange differences (1) -
Additions 13 -
Payment of contingent consideration - (2)
Net change in fair value during the period included in other comprehensive income 13 -
At 30th June 2013 159 66
The contingent consideration payable mainly arose from Astra's acquisition of a 60% interest in PT Duta Nurcahya in 2012
and represents the fair value of service fee payable for mining services to be provided by the vendor.
(ii) Financial instruments that are not measured at fair value
The fair values of current debtors, bank balances and other liquid funds, current creditors and current borrowings are
assumed to approximate their carrying amounts due to the short-term maturities of these assets and liabilities.
The fair values of long-term borrowings are based on market prices or are estimated using the expected future payments
discounted at market interest rates.
10. Notes to Consolidated Cash Flow Statement
(a) Purchase of subsidiaries
Six months ended 30th June
2014US$m 2013US$m
Intangible assets - 66
Tangible assets 1 90
Associates and joint ventures - 10
Current assets 3 78
Deferred tax liabilities - (7)
Pension liabilities - (5)
Current liabilities (3) (63)
Fair value of identifiable net assets acquired 1 169
Adjustment for non-controlling interests - (68)
Goodwill 3 21
Total consideration 4 122
Payment for contingent consideration - 2
Adjustment for deferred consideration 2 -
Fair value of associates and joint ventures (1) -
Payment for deferred consideration - 1
Cash and cash equivalents of subsidiaries acquired (2) (38)
Net cash outflow 3 87
For the subsidiaries acquired during the first half of 2013, the fair value of the identifiable assets and liabilities at
the acquisition dates as included in the comparative figures was provisional. The fair value was finalized between the
second half of 2013 and early 2014. As the difference between the provisional and the finalized fair value was not
material, the comparative figures have not been adjusted.
Net cash outflow for the six months ended 30th June 2013 included US$45 million and US$31 million for Astra's acquisition
of a 100% interest in PT Pelabuhan Penajam Banua Taka, a port business in Indonesia, in January 2013, and a 51% interest in
PT Pakoakuina, a producer of wheel rims for both motor cars and motorcycles, in April 2013, respectively.
None of the goodwill is expected to be deductible for tax purposes.
The Group acquired a subsidiary in January 2014. Revenue and loss after tax since acquisition in respect of the
subsidiary amounted to US$6 million and US$1 million, respectively.
(b) Purchase of associates and joint ventures for the six months ended 30th June 2014 included US$35 million for Hongkong
Land's investments in the Philippines and Indonesia, and US$57 million and US$25 million for Astra's subscription to PT
Bank Permata's rights issue and capital injection into PT Aisin, respectively.
Purchase for the six months ended 30th June 2013 included US$18 million for Dairy Farm's acquisition of a 30%
interest in Jutaria Gemiland in Malaysia and US$51 million and US$10 million for Astra's capital injection into PT
Isuzu Astra Motor Indonesia and PT TD Automotive Compressor Indonesia, respectively.
(c) Purchase of other investments for the six months ended 30th June 2014 and 2013 mainly included acquisition of
securities by Astra.
(d) Advance to associates, joint ventures and others for the six months ended 30th June 2014 and 2013 comprised Hongkong
Land's loans to its property joint ventures.
(e) Advance and repayment from associates, joint ventures and others for the six months ended 30th June 2014 and 2013
comprised advance and repayment from Hongkong Land's property joint ventures.
(f) Sale of subsidiaries
Six months ended 30th June
2014US$m 2013US$m
Intangible assets - 2
Tangible assets - 17
Other investments - 5
Current assets - 10
Current liabilities - (8)
Net assets disposed of - 26
Realization of fair value reserves - (1)
Profit on disposal - 4
Sale proceeds - 29
Sale of subsidiaries for the six months ended 30th June 2013 included US$25 million from Jardine Motors' sale of certain
dealerships in the United Kingdom.
(g) Sale of other investments for the six months ended 30th June 2014 comprised US$119 million for Jardine Strategic's
sale of Tata Power and US$19 million for Astra's sale of securities.
Sale for the six months ended 30th June 2013 comprised Astra's sale of securities.
(h) Change in interests in subsidiaries
Six months ended 30th June
2014US$m 2013US$m
Increase in attributable interests
- Jardine Cycle & Carriage 33 96
- Jardine Strategic - 182
- other 3 58
Decrease in attributable interests
- PT Astra Sedaya Finance (187) -
- PT Astra Otoparts - (284)
(151) 52
Increase in attributable interests in other subsidiaries for the six months ended 30th June 2013 included US$56 million
for Astra's acquisition of an additional 15% interest in PT Asmin Bara Bronang, increasing its controlling interest to
75%.
11. Capital Commitments and Contingent Liabilities
Total capital commitments at 30th June 2014 and 31st December 2013 amounted to US$2,356 million and US$2,164 million,
respectively.
Various Group companies are involved in litigation arising in the ordinary course of their respective businesses. Having
reviewed outstanding claims and taking into account legal advice received, the Directors are of the opinion that adequate
provisions have been made in the condensed financial statements.
12. Related Party Transactions
In the normal course of business the Group undertakes a variety of transactions with certain of its associates and joint
ventures.
The most significant of such transactions relate to the purchases of motor vehicles and spare parts from the Group's
associates and joint ventures in Indonesia including PT Toyota-Astra Motor, PT Astra Honda Motor and PT Astra Daihatsu
Motor. Total cost of motor vehicles and spare parts purchased for the six months ended 30th June 2014 amounted to US$3,799
million (2013: US$4,361 million). The Group also sells motor vehicles and spare parts to its associates and joint ventures
in Indonesia including PT Astra Honda Motor, PT Astra Daihatsu Motor and PT Tunas Ridean. Total revenue from sales of
motor vehicles and spare parts for the six months ended 30th June 2014 amounted to US$586 million (2013: US$622 million).
PT Bank Permata provides banking services to the Group. The Group's deposits with PT Bank Permata at 30th June 2014
amounted to US$443 million (2013: US$568 million).
During the second quarter of 2014, Astra completed the disposal of a 25% interest in PT Astra Sedaya Finance to PT Bank
Permata for a cash consideration of US$187 million, with the resulting gain of US$89 million recorded directly in equity.
There were no other related party transactions that might be considered to have a material effect on the financial position
or performance of the Group that were entered into or changed during the first six months of the current financial year.
Amounts of outstanding balances with associates and joint ventures are included in debtors and creditors, as appropriate.
Jardine Matheson Holdings Limited
Principal Risks and Uncertainties
The Board has overall responsibility for risk management and internal control. The following have been identified
previously as the areas of principal risk and uncertainty facing the Company, and they remain relevant in the second half
of the year.
● Economic Risk
● Commercial Risk and Financial Risk
● Concessions, Franchises and Key Contracts
● Regulatory and Political Risk
● Terrorism, Pandemic and Natural Disasters
For greater detail, please refer to page 122 of the Company's Annual Report for 2013, a copy of which is available on the
Company's website www.jardines.com.
Responsibility Statement
The Directors of the Company confirm to the best of their knowledge that:
(a) the condensed financial statements have been prepared in accordance with IAS 34; and
(b) the interim management report includes a fair review of all information required to be disclosed by the Disclosure and
Transparency Rules 4.2.7 and 4.2.8 issued by the Financial Conduct Authority in the United Kingdom.
For and on behalf of the Board
Ben Keswick
James Riley
Directors
1st August 2014
The interim dividend of US¢38.00per share will be payable on 15th October 2014 to shareholders on the register of members at the close of business on 22nd August 2014,
and will be available in cash with a scrip alternative. The ex-dividend date will be on 20th August 2014, and the share registers will be closed from 25th to 29th
August 2014, inclusive. Shareholders will receive their cash dividends in United States dollars, unless they are registered on the Jersey branch register where they will
have the option to elect for sterling. These shareholders may make new currency elections for the 2014 interim dividend by notifying the United Kingdom transfer agent in
writing by 26th September 2014. The sterling equivalent of dividends declared in United States dollars will be calculated by reference to a rate prevailing on 30th
September 2014. Shareholders holding their shares through The Central Depository (Pte) Limited ('CDP') in Singapore will receive United States dollars unless they elect,
through CDP, to receive Singapore dollars or the scrip alternative.
The Jardine Matheson Group
Founded as a trading company in China in 1832, Jardine Matheson is today a diversified business group focused principally
on Asia. Its businesses comprise a combination of cash generating activities and long-term property assets.
Jardine Matheson holds interests directly in Jardine Pacific (100%), Jardine Motors (100%) and Jardine Lloyd Thompson
(42%), while its 83%-held Group holding company, Jardine Strategic, is interested in Hongkong Land (50%), Dairy Farm (78%),
Mandarin Oriental (73%) and Jardine Cycle & Carriage (74%), which in turn has a 50% shareholding in Astra. Jardine
Strategic also has a 56% shareholding in Jardine Matheson.
These companies are leaders in the fields of engineering and construction, transport services, insurance broking, property
investment and development, retailing, restaurants, luxury hotels, motor vehicles and related activities, financial
services, heavy equipment, mining and agribusiness.
Jardine Matheson Holdings Limited is incorporated in Bermuda and has a standard listing on the London Stock Exchange as its
primary listing, with secondary listings in Bermuda and Singapore. Jardine Matheson Limited operates from Hong Kong and
provides management services to Group companies.
- end -
For further information, please contact:
Jardine Matheson Limited
James Riley (852) 2843 8229
GolinHarris
Kennes Young (852) 2501 7987
As permitted by the Disclosure and Transparency Rules of the Financial Conduct Authority in the United Kingdom, the Company
will not be posting a printed version of the Half-Yearly Results announcement to shareholders. The Half-Yearly Results
announcement will remain available on the Company's website, www.jardines.com, together with other Group announcements.
This information is provided by RNS
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