Interim Results - Part 2.

Jardine Matheson Hldgs Ld 1 August 2001 PART 2 ----------------------------------------------------------------------- Jardine Matheson Holdings Limited Notes ----------------------------------------------------------------------- 1. Accounting Policies and Basis of Preparation The unaudited interim condensed financial statements have been prepared in accordance with IAS 34 - Interim Financial Reporting. The Group has presented supplementary financial information prepared in accordance with IAS as modified by the revaluation of leasehold properties in addition to the IAS financial statements. Other than described below, there have been no changes to the accounting policies described in the 2000 annual financial statements. (a) Financial statements prepared in accordance with IAS In 2001, the Group adopted IAS 39 - Financial Instruments: Recognition and Measurement and IAS 40 - Investment Property. In accordance with IAS 39, non-current investments and derivatives are recognised on the balance sheet at fair value. Unrealised gains and losses arising from changes in the fair value of non-current investments are taken to reserves until realised. This is a change in accounting policy as in previous years non-current investments were stated on the balance sheet at cost less amounts provided and derivatives were recognised only to the extent of premiums paid or received on options. The effect of this change has been to increase shareholders' funds at 1st January 2001 by US$141 million. In accordance with IAS 40 and as a result of an inability to estimate reliably the element of leasehold property values attributable to the building component, leasehold land and buildings which are investment properties are carried at depreciated historical cost. Similarly leasehold interests in land in respect of other leasehold properties are carried at amortised cost. This is a change in accounting policy as in previous years the Group had reflected the fair value of leasehold properties in the financial statements and recorded fair value changes in property revaluation reserves. The effect of this change has been to decrease net profit for the six months ended 30th June 2000 by US$4 million and to increase net profit for the year ended 31st December 2000 by US$2 million, and to decrease shareholders' funds at 1st January 2000 and 2001 by US$639 million and US$1,183 million respectively. (b)Financial information prepared in accordance with IAS as modified by revaluation of leasehold properties As described above, in prior years the Group reflected the fair value of leasehold properties on its financial statements. Changes in IAS, which came into effect during 2001, no longer permit the valuation of leasehold interests in land. As a result, the Group is required to revert to accounting for leasehold land in respect of investment and other properties at amortised cost in order to comply with IAS. This treatment does not reflect the generally accepted accounting practice in the territories in which the Group has significant leasehold interests, nor how management measures the performance of the Group. Accordingly, the Group has presented supplementary financial information on pages 8 to 12 prepared in accordance with IAS as modified by the revaluation of leasehold properties. In accordance with IAS 40, changes in fair values of investment properties which were previously taken directly to property revaluation reserves are recorded in the consolidated profit and loss account. The effect of this change has been to increase net profit for the year ended 31st December 2000 by US$511 million. There is no impact on net profit for the six months ended 30th June 2000. The Group's reportable segments are set out in note 2 and are described on pages 4 to 7. 2. Revenue Prepared in accordance with IAS Six months ended 30th June 2001 2000 US$m US$m ------ ------ By business: Jardine Pacific 879 827 Jardine Motors Group 1,295 1,399 Dairy Farm 2,664 2,926 Mandarin Oriental 118 94 Other activities 2 30 ------ ------ 4,958 5,276 ------ ------ 3. Operating Profit Prepared in accordance with IAS Six months ended 30th June 2001 2000 US$m US$m ----- ----- By business: Jardine Pacific 21 89 Jardine Motors Group 43 37 Dairy Farm (6) (46) Mandarin Oriental 20 13 ----- ----- 78 93 Corporate and other interests 42 (2) ----- ----- 120 91 ----- ----- 4. Share of Results of Associates and Joint Ventures Prepared in accordance with IAS Six months ended 30th June 2001 2000 US$m US$m ----- ----- By business: Jardine Pacific 30 38 Jardine Motors Group 3 (3) Jardine Lloyd Thompson 17 19 Robert Fleming - 62 Dairy Farm 12 15 Hongkong Land 46 44 Mandarin Oriental 5 3 Cycle & Carriage 6 4 ----- ----- 119 182 Impairment of assets in Cycle & Carriage (88) - ----- ----- 31 182 ----- ----- 5. Tax Prepared in accordance with IAS Six months ended 30th June 2001 2000 US$m US$m ----- ----- Company and subsidiary undertakings 23 17 Associates and joint ventures 24 42 ----- ----- 47 59 ----- ----- Tax on profits has been calculated at rates of taxation prevailing in the territories in which the Group operates and includes United Kingdom tax of US$6 million (2000: US$5 million). 6. Earnings per Share Basic earnings per share are calculated on net profit of US$39 million (2000: US$176 million) and on the weighted average number of 392 million (2000: 609 million) shares in issue during the period. The weighted average number excludes the Company's share of the shares held by subsidiary undertakings and the shares held by the Trustee under the Senior Executive Share Incentive Schemes. Diluted earnings per share are calculated on the weighted average number of 393 million (2000: 609 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. Additional basic and diluted earnings per share reflecting the revaluation of leasehold properties are calculated on net profit of US$46 million (2000: US$180 million) as shown in the supplementary financial information. The difference between net profit as shown in the financial statements and net profit as shown in the supplementary financial information is reconciled as follows: Six months ended 30th June 2001 2000 US$m US$m ----- ----- Net profit as shown in financial statements 39 176 Amortisation of leasehold land payments 1 1 Depreciation of investment properties in Hongkong Land 5 3 Other 1 - ----- ----- Net profit as shown in supplementary financial information 46 180 ----- ----- Additional basic and diluted earnings per share are also calculated based on underlying earnings which are calculated as follows: Prepared in accordance with IAS as modified by revaluation Prepared in accordance of leasehold with IAS properties Six months ended Six months ended 30th June 30th June 2001 2000 2001 2000 US$m US$m US$m US$m ------ ------ ------ ------ Net profit 39 176 46 180 Businesses disposed of - Chubb China - (58) - (58) - Robert Fleming - (41) - (41) - Franklins 20 10 20 10 - other (9) (12) (9) (12) 11 (101) 11 (101) Impairment of assets - Astra International 65 - 65 - - other - 5 - 5 65 5 65 5 Fair value gain on conversion option component of guaranteed bonds (19) - (19) - Sale of investments (22) - (22) - Onerous leases and lease exit costs - 2 - 2 ------ ------ ------ ------ Underlying net profit 74 82 81 86 ------ ------ ------ ------ 7. Dividends Prepared in accordance with IAS Six months ended 30th June 2001 2000 US$m US$m ----- ----- Final dividend in respect of 2000 of USc18.70 (1999: USc17.20) per share 116 137 Less Company's share of dividends paid on the shares held by subsidiary undertakings (43) (33) ----- ----- 73 104 ----- ----- An interim dividend in respect of 2001 of USc7.80 (2000: USc7.80) per share amounting to a total of US$48 million (2000: US$62 million) is declared by the Board. The net amount after deducting the Company's share of the dividends payable on the shares held by subsidiary undertakings of US$18 million (2000: US$16 million) will be accounted for as an appropriation of revenue reserves in the year ending 31st December 2001. 8. Notes to Consolidated Cash Flow Statement Prepared in accordance with IAS Six months ended 30th June 2001 2000 (a) Purchase of subsidiary undertakings US$m US$m ----- ----- Tangible assets 4 102 Associates and joint ventures - 22 Other investments - 21 Current assets 17 30 Current liabilities (20) (19) Long-term borrowings - (31) ----- ----- Fair value at acquisition 1 125 Goodwill attributable to subsidiary undertakings - 45 ----- ----- Total consideration 1 170 Adjustment for deferred consideration and carrying value of associates and joint ventures (1) (8) Cash and cash equivalents of subsidiary undertakings acquired - (11) ----- ----- Net cash outflow - 151 Payment of deferred consideration 10 8 Purchase of shares in Jardine Strategic 30 138 Purchase of shares in Dairy Farm 14 2 Purchase of shares in Mandarin Oriental 13 8 ----- ----- 67 307 ----- ----- Net cash outflow in 2000 of US$151 million included Mandarin Oriental's acquisition of The Rafael Group of US$135 million. (b)Purchase of associates and joint ventures included Jardine Strategic's increased interest in Hongkong Land of US$50 million (2000: US$38 million). Prepared in accordance with IAS Six months ended 30th June 2001 2000 (c)Sale of subsidiary undertakings US$m US$m ----- ----- Tangible assets 4 19 Pension assets - 2 Current assets 381 50 Current liabilities (317) (44) Long-term borrowings - (14) Pension liabilities - (1) Outside interests (1) (7) ----- ----- Net assets disposed of 67 5 Profit on disposal 20 8 ----- ----- Sale proceeds 87 13 Adjustment for deferred consideration (1) - Cash and cash equivalents of subsidiary undertakings disposed of (254) (24) ----- ----- Net cash outflow (168) (11) Closure and related costs of Dairy Farm's Australian operation (12) - ----- ----- (180) (11) ----- ----- Net cash outflow in 2001 of US$168 million included a cash outflow of US$218 million relating to the disposal of Matheson Bank in the United Kingdom and a cash inflow of US$50 million relating to Dairy Farm's sale of Sims Trading. (d) Sale of associates and joint ventures in 2000 included Jardine Pacific's interest in Chubb China of US$70 million. (e) Sale of other investments in 2001 included Jardine Strategic's interests in Housing Development Finance Corporation of US$70 million and J.P. Morgan Chase of US$119 million. 9. Capital Commitments and Contingent Liabilities At 31st At 30th June December 2001 2000 2000 US$m US$m US$m ----- ----- ----- (a) Capital commitments 135 126 82 ----- ----- ----- (b) Contingent liabilities - guarantees in respect of facilities made available to associates and joint ventures 103 66 104 - other guarantees 5 50 5 ----- ----- ----- Various Group companies are involved in litigation arising in the ordinary course of their respective businesses. Having reviewed outstanding claims and taking into account legal advice received, the Directors are of the opinion that adequate provisions have been made in the financial statements. 10. Interim Report The Interim Report will be posted to shareholders on or about 22nd August 2001. Copies may be obtained from Jardine Matheson International Services Limited, P.O. Box HM 1068, Hamilton HM EX, Bermuda; Capita IRG Plc, Bourne House, 34 Beckenham Road, Beckenham, Kent BR3 4TU, England and M & C Services Private Limited, 138 Robinson Road No. 17-00, Hong Leong Centre, Singapore 068906. The interim dividend of USc7.80 per share will be payable on 17th October 2001 to shareholders on the register of members at the close of business on 24th August 2001, and will be available in cash with a scrip alternative. The ex- dividend date will be on 22nd August 2001, and the share registers will be closed from 27th to 31st August 2001, 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 by notifying the United Kingdom transfer agent in writing by 27th September 2001. The Sterling equivalent of dividends declared in United States Dollars will be calculated by reference to a rate prevailing ten business days prior to the payment date. 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. For further information, please contact: Jardine Matheson Limited Norman Lyle (852) 2843 8216 Matheson & Co. Limited Martin Henderson (44) 020 7816 8135 Golin/Harris Forrest Sue Gourlay (852) 2501 7936 Golin/Harris Ludgate Richard Hews (44) 020 7324 8888 This and other Group announcements can be accessed through the Internet at 'www.jardines.com'. Note to Editors The Jardine Matheson Group With its portfolio of leading businesses, the Jardine Matheson Group is a unique Asian-based conglomerate with unsurpassed experience in the region. These business interests include Jardine Pacific Group, Jardine Motors Group, Jardine Lloyd Thompson, Dairy Farm, Hongkong Land, Mandarin Oriental Hotel Group and Cycle & Carriage. These operations employ some 150,000 people in over 30 countries and are leaders in the fields of property, hotels, supermarkets, consumer marketing, engineering and construction, insurance broking and motor trading. The Group's strategy is to build its operations into market leaders across Asia Pacific, each with the support of Jardine Matheson's extensive knowledge of the region and its long-standing relationships. In 2000, some 74% of its profit was derived from the region. Through a balance of cash producing activities and investment in new businesses, the Group aims to produce sustained growth in shareholder value. Incorporated in Bermuda, Jardine Matheson has its primary share listing in London, with secondary listings in Singapore and in Bermuda. It has a sponsored American Depositary Receipt programme. Jardine Matheson Limited operates from Hong Kong and provides management services to Group companies, making available senior management and providing financial, legal, human resources and treasury support services throughout the Group.

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