REG - Jardine StrategicJardine Matheson Hdg - Half Yearly Report <Origin Href="QuoteRef">JARD.SI</Origin> <Origin Href="QuoteRef">JSH.SI</Origin> - Part 3
29/10/2014 09:26
- Part 3: For the preceding part double click ID:nRSA0032Ob
or indefinite lived
intangible assets but there has been no impairment, (b) to require disclosure of the recoverable amount of an asset or CGU
when an impairment loss has been recognized or reversed, and (c) to require detailed disclosure of how the fair value less
costs of disposal has been measured when an impairment loss has been recognized or reversed.
Amendments to IAS 39 'Novation of Derivatives and Continuation of Hedge Accounting' provide relief from discontinuing hedge
accounting when novation of a hedging instrument to a central counterparty meets specified criteria.
IFRIC 21 'Levies' sets out the accounting for an obligation to pay a levy that is not income tax. The interpretation
clarifies that the obligating event that gives rise to a liability to pay a levy is the activity described in the relevant
legislation that triggers the payment of the levy.
There have been no changes to the accounting policies described in the 2013 annual financial statements upon the adoption
of the above amendments and interpretation to existing standards. The adoption of these amendments and interpretation do
not have any significant impact on the results or financial position of the Group.
The Group has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective.
2. Revenue
Six months ended 30th June
Gross revenue Revenue
2014US$m 2013US$m 2014US$m 2013US$m
By business:
Jardine Matheson 6,310 5,430 - -
Hongkong Land 1,069 2,039 602 912
Dairy Farm 6,312 6,033 5,299 5,102
Mandarin Oriental 518 509 341 327
Jardine Cycle & Carriage 1,731 1,565 808 701
Astra 15,196 16,205 8,694 9,702
Intersegment transactions (354) (422) (1) (3)
30,782 31,359 15,743 16,741
Gross revenue comprises revenue together with 100% of revenue from Jardine Matheson, associates and joint ventures.
3. Net Operating Costs
Six months ended 30th June
2014US$m 2013US$m
Cost of sales (11,797) (12,822)
Other operating income 265 254
Selling and distribution costs (1,648) (1,603)
Administration expenses (825) (857)
Other operating expenses (35) (12)
(14,040) (15,040)
Net operating costs included the following gains/(losses) from non-trading items:
Sale of property interests 11 1
Sale of other investments 16 -
Sale of business 10 -
Fair value gain on convertible component of Zhongsheng
bonds 4 -
Expenses relating to transfer of listing segment of group companies' shares (4) -
Other (1) -
36 1
4. Share of Results of Jardine Matheson
Six months ended 30th June
2014US$m 2013US$m
By business:
Jardine Pacific 26 24
Jardine Motors 28 11
Jardine Lloyd Thompson 26 21
Corporate and other interests 17 22
97 78
Share of results of Jardine Matheson included the following losses from non-trading items:
Restructuring of businesses (4) (2)
Expenses relating to transfer of listing segment of group
companies' shares (1) -
(5) (2)
Results are shown after tax and non-controlling interests in Jardine Matheson.
5. Share of Results of Associates and Joint Ventures
Six months ended 30th June
2014US$m 2013US$m
By business:
Hongkong Land 199 286
Dairy Farm 22 22
Mandarin Oriental 7 13
Jardine Cycle & Carriage 20 13
Astra 282 311
530 645
Share of results of associates and joint ventures included the following gains/(losses) from non-trading items:
Increase in fair value of investment properties 123 131
Reversal of asset impairment - 3
Negative goodwill on acquisition of business 38 -
161 134
Results are shown after tax and non-controlling interests in the associates and joint ventures.
6. Tax
Six months ended 30th June
2014US$m 2013US$m
Tax charged to profit and loss is analyzed as follows:
Current tax (429) (426)
Deferred tax 40 51
(389) (375)
Greater China (106) (94)
Southeast Asia (278) (278)
United Kingdom (1) (1)
Rest of the world (4) (2)
(389) (375)
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 Jardine Matheson of US$14 million and credit of US$2 million (2013: US$7 million and US$1 million)
are included in share of results of Jardine Matheson and share of other comprehensive income of Jardine Matheson,
respectively.
Share of tax charge of associates and joint ventures of US$124 million and credit of US$1 million (2013: US$158 million and
US$1 million) are included in share of results of associates and joint ventures and share of other comprehensive income of
associates and joint ventures, respectively.
7. Profit Attributable to Shareholders
Six months ended 30th June
2014US$m 2013US$m
Operating segments:
Jardine Matheson 102 80
Hongkong Land 216 260
Dairy Farm 174 177
Mandarin Oriental 34 39
Jardine Cycle & Carriage 27 18
Astra 279 314
832 888
Corporate and other interests (57) (69)
Underlying profit attributable to shareholders* 775 819
Increase in fair value of investment properties 66 40
Other non-trading items 35 1
Profit attributable to shareholders 876 860
* Underlying profit attributable to shareholders is the measure of profit adopted by the Group in accordance with IFRS 8
'Operating Segments'.
8. Earnings per Share
Basic earnings per share are calculated on profit attributable to shareholders of US$876 million (2013: US$860 million) and
on the weighted average number of 607 million (2013: 612 million) shares in issue during the period.
Diluted earnings per share are calculated on profit attributable to shareholders of US$875 million (2013: US$859 million),
which is after adjusting for the effects of the conversion of dilutive potential ordinary shares of Jardine Matheson,
subsidiaries, associates or joint ventures, and on the weighted average number of 607 million (2013: 612 million) shares in
issue during the period.
The weighted average number of shares is arrived at as follows:
Ordinary sharesin millions
2014 2013
Weighted average number of shares in issue 1,120 1,120
Company's share of shares held by Jardine Matheson (513) (508)
Weighted average number of shares for earnings pershare calculation 607 612
Additional basic and diluted earnings per share are also calculated based on underlying profit attributable to
shareholders. A reconciliation of earnings is set out below:
Six months ended 30th June
2014 2013
US$m Basic earnings per shareUS$ Diluted earnings per shareUS$ US$m Basic earnings per shareUS$ Diluted earnings per shareUS$
Profit attributable to shareholders 876 1.44 1.44 860 1.40 1.40
Non-trading items (note 9) (101) (41)
Underlying profit attributable to shareholders 775 1.28 1.28 819 1.34 1.34
9. 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 Matheson (5) (2)
Hongkong Land 65 40
Dairy Farm 8 1
Mandarin Oriental - 2
Jardine Cycle & Carriage (1) -
Astra 16 -
Corporate and other interests 18 -
101 41
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 66 40
Reversal of asset impairment - 2
Sale of property interests 8 1
Sale of other investments 16 -
Sale of business 2 -
Restructuring of businesses (4) (2)
Fair value gain on convertible component of Zhongsheng bonds 4 -
Expenses relating to transfer of listing segment of group companies' shares (4) -
Negative goodwill on acquisition of business 14 -
Other (1) -
101 41
10. Dividends
Six months ended 30th June
2014US$m 2013US$m
Final dividend in respect of 2013 of US¢18.00
(2012: US¢17.00) per share 202 190
Company's share of dividends paid on the shares
held by Jardine Matheson (93) (86)
109 104
An interim dividend in respect of 2014 of US¢8.00 (2013: US¢7.50) per share amounting to a total of US$89 million (2013:
US$84 million) is declared by the Board. The net amount after deducting the Company's share of the dividends payable on
the shares held by Jardine Matheson of US$41 million (2013: US$38 million) will be accounted for as an appropriation of
revenue reserves in the year ending 31st December 2014.
11. Financial Instruments
Financial instruments by category
The fair values of financial assets and financial liabilities, together with carrying amounts at 30th June 2014 and 31st
December 2013 are as follows:
Loans and receivableUS$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 - - 1,361 - - 1,361 1,361
Debtors 8,029 183 - 22 - 8,234 8,006
Bank balances and
other liquid funds 4,348 - - - - 4,348 4,348
12,377 183 1,361 22 - 13,943 13,715
Liabilities
Borrowings
(excluding finance
lease liabilities) - - - - (10,785) (10,785) (10,802)
Finance lease
liabilities - - - - (102) (102) (102)
Trade and other
payables excluding
non-financial
liabilities - (58) - (66) (6,051) (6,175) (6,175)
- (58) - (66) (16,938) (17,062) (17,079)
31st December 2013
Assets
Other investments - - 1,113 - - 1,113 1,113
Debtors 6,966 294 - - - 7,260 6,855
Bank balances and
other liquid funds 4,901 - - - - 4,901 4,901
11,867 294 1,113 - - 13,274 12,869
Liabilities
Borrowings
(excluding finance
lease liabilities) - - - - (10,567) (10,567) (10,480)
Finance lease
liabilities - - - - (123) (123) (123)
Trade and other
payables excluding
non-financial
liabilities - (58) - (66) (5,497) (5,621) (5,621)
- (58) - (66) (16,187) (16,311) (16,224)
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 prices 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 - 8 177 185
1,176 8 177 1,361
Derivative designated at fair value
- through other comprehensive income - 183 - 183
- through profit or loss - 22 - 22
1,176 213 177 1,566
Liabilities
Contingent consideration payable - - (66) (66)
Derivative designated at fair value
- through other comprehensive income - (58) - (58)
- (58) (66) (124)
31st December 2013
Assets
Available-for-sale financial assets
- listed securities 943 - - 943
- unlisted investments - 9 161 170
943 9 161 1,113
Derivative designated at fair value
- through other comprehensive income - 294 - 294
943 303 161 1,407
Liabilities
Contingent consideration payable - - (66) (66)
Derivative designated at fair value
- through other comprehensive income - (58) - (58)
- (58) (66) (124)
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 66
Exchange differences (1) -
Additions 13 -
Net change in fair value during the period included in
other comprehensive income 13 -
At 30th June 2013 159 66
The contingent consideration payable 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.
12. Notes to Consolidated Cash Flow Statement
(a) Purchase of subsidiaries
Six months ended 30th June
2014FairvalueUS$m 2013FairvalueUS$m
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