1、PMS 280U PMS 186UDairy Farm International Holdings Limited ANNUAL REPORTDairy Farm International Holdings Limited ANNUAL REPORT 20092009 C O N T E N T SInternet website: 1 Corporate Information 2 Corporate Overview 3 Highlights 4 Chairmans Statement 6 Group Chief Executives Review 10 Financial Revie
2、w 12 Directors Profiles 13 Financial Statements 54 Independent Auditors Report 55 Five Year Summary 56 Responsibility Statement 57 Corporate Governance61 Principal Risks and Uncertainties 62 Shareholder Information 63 Retail Outlets Summary 64 Management and OfficesDairy Farm International Holdings
3、Limited Annual Report 20091CORPORATE INFORMATIONDIRECTORSSimon KeSwicKChairmanA J L nightingALeManaging DirectormichAeL KoKGroup Chief ExecutiveRonALd J FLotomARK gReenbeRggeoRge J hoSiR henRy KeSwicKdR geoRge c g KooR c KwoKLoRd LeAch oF FAiRFoRdhowARd mowLemJAmeS RiLeyPeRcy weAtheRALLgiLeS whiteRE
4、GISTERED OFFICEJardine House33-35 Reid StreetHamiltonBermudaDAIRY FARM MANAGEMENT SERVICES LIMITEDDIRECTORSA J L nightingALeChairmanmichAeL KoKGroup Chief ExecutivehowARd mowLemGroup Finance DirectordAto John coyLeRegional Director,East AsiacARoLine mAKRegional Director,North Asia/Chief Executive Of
5、ficer,ChinaJeFF ShAwRegional Director,South AsiamichAeL wuChairman and Managing Director,MaximsmARK gReenbeRgJAmeS RiLeygiLeS whiteCORPORATE SECRETARYn m mcnAmARADairy Farm International Holdings LimitedDairy Farm is a leading pan-Asian retailer.At 31st December 2009,the Group and its associates ope
6、rated over 5,000 outlets,employed over 76,000 people in the region,and had total annual sales exceeding US$8 billion.The Group operates supermarkets,hypermarkets,health and beauty stores,convenience stores,home furnishings stores and restaurants under well-known local brands,including:SupermarketsWe
7、llcomeinHongKong,TaiwanandVietnam,ThreeSixtyandOliversTheDelicatesseninHongKong,JasonsMarketPlaceinSingapore,TaiwanandHongKong,ColdStorageinSingapore and Malaysia,Giant in Malaysia and Indonesia,Shop N Save in Singapore,Hero in Indonesia,and Foodworld in India;HypermarketsGiantinMalaysia,Singapore,I
8、ndonesiaandBrunei;HealthandbeautystoresManningsinHongKong,MacauandChina,Guardian in Singapore,Malaysia,Indonesia and Brunei,and Health and Glow in India;Conveniencestores7-EleveninHongKong,Macau,SouthernChinaand Singapore,and Starmart in Indonesia;andHomefurnishingsstoresIKEAinHongKongandTaiwan.TheG
9、rouphasa50%interestinMaxims,HongKongsleadingrestaurant chain.Dairy Farm International Holdings Limited is incorporated in Bermuda and has its primary share listing in London,with secondary listings in Bermuda and Singapore.The Groups businesses are managed from Hong KongbyDairyFarmManagementServices
10、Limitedthroughitsregionaloffices.Dairy Farm is a member of the Jardine Matheson Group.Dairy Farm International Holdings Limited Annual Report 20092HigH-Quality,low-Cost RetailingDairy Farm aims to be a leader in all its market sectors.Our focus is retailing and we strive to offer consumers value-for
11、-money through efficient,low-cost distribution of high-quality fresh foods,and consumer and durable goods in our supermarkets,hypermarkets,health and beauty stores,convenience stores and home furnishings stores.asia FoCusWearegeographicallycommittedtoAsia.Inadditiontodevelopingourexistingoperations,
12、we aim to achieve growth by exploring new investment opportunities within the region.Multiple FoRMats,sHaRed seRviCesWeoperatemultipleformatsinmostmarketsandachieveeconomiesofscaleby supporting these with shared infrastructure for logistics,human resources,finance,procurement,and information technol
13、ogy systems.long-teRM sHaReHoldeR value CReationWeaimtomaintainfinancialstrengththroughprudentbalancesheetmanagement.Wetakealong-termviewofbusinessdevelopmentandbelievein striking a balance between investment in mature cash-flow activities and investment in new businesses.Shareholder value creation
14、is the performance yardstick for the long-term incentive programme of the Companys management.Corporate Overview“Our goal is to satisfy the appetites of Asian shoppers for wholesome food and quality consumer and durable goods at competitive prices.”Dairy Farm International Holdings Limited Annual Re
15、port 20093Highlights Underlyingearningsup14%Majormarketsperformedwell ProfitgrowthatMaxims StrongfinancialpositionwithnetcashResults2009 US$m2008 US$mChange%Sales subsidiaries7,0296,7334includingassociates8,0537,7424Underlying profit attributable to shareholders36432014Non-trading items13n/aProfit a
16、ttributable to shareholders3643339Underlying PBIT to sales6.0%5.5%USUS%Underlying earnings per share 27.0223.7714Basic earnings per share 27.0224.739Dividends per share16.0014.0014Dairy Farm International Holdings Limited Annual Report 20094Chairmans Statement24North AsiaSouth AsiaEast AsiaUS$bTotal
17、 Sales0862007 2008 200920062005AssociatesoveRviewIn a challenging year for economies throughout Asia,Dairy Farm achieved another good result in 2009 with growth in both sales and profit.The Groups core business of selling goods that meet the everyday needs of Asian customers again proved resilient.p
18、eRFoRManCeSales,including 100%of associates,increasedby4%toUS$8.1billionin2009.Underlying profit for the year of US$364millionincreasedby14%.Underlying earnings per share also rose by14%toUS27.02.Therewerenonon-trading items in 2009,while in 2008 the profit attributable to shareholders of US$333 mil
19、lion included non-trading gains of US$13 million.The adverse effects of foreign currency movements that had affected the results in the first half were largely reversed by the year end.The Group ended 2009 with net cash of US$34million,havingbeguntheyearwithnetborrowingsofUS$4million.Capital expendi
20、ture within the Groups businesses amounted to US$289 million,while asset disposals provided an inflow ofUS$47million.Thepositivecashgeneration in 2009 was more than sufficient to meet business demands and to cover the relatively modest debt servicing needs.The Board is recommending a final dividend
21、of US11.50 per share,which would bring the total ordinary dividend for 2009 to US16.00 per share,an increaseof14%.opeRationsDuring the year the Group concentrated on maintaining margins in the face of a prolonged economic downturn.The Company also continued its strategy of building leading retail bu
22、sinesses across Asia,and opportunities were taken to add new stores in existing formats.The total number of stores in operation increasedbyanet431in2009,passingthe 5,000 store milestone late in the year.In larger format stores,Dairy Farm operated94Gianthypermarketsattheyear end,comprising 51 in Mala
23、ysia,35 in Indonesia,seven in Singapore and one in Brunei.The Groups operations in North Asia produced mixed results,with overall sales increasing by 5%and profit by 1%.InHongKong,thehealthandbeauty business performed well and supermarkets were steady,but conveniencestoresstruggled.IKEAinHongKongpro
24、ducedanacceptableperformance given the disruption caused by the relocation of a key store.In Taiwan,IKEAwasabletoconsolidatetheprofitability of its operations,while Wellcomesupermarketsdidwelltoachieve further profit growth in a difficult market.A reduction in export activity in Southern China,and t
25、he resulting employment losses,had an adverse effect on sales and profit at 7-Eleven,particularly in the first half.Mannings health and beauty stores,however,proved more resilient,and expansion of the chain continued with the number of outlets across mainland China reaching 120 by the year end.Dairy
26、 Farm International Holdings Limited Annual Report 20095Chairmans Statement510152007 2008 200920062005USUnderlying EarningsPer Share0302520After a slow start,restaurant associate Maxims produced a good performance in the second half of the year as consumer sentiment improved and dining out regained
27、popularity.Earnings growth was achieved,and the recent sales momentum has continued into 2010.In December 2009,Maxims opened a food factory in Shenzhen,China to support its expansion on the Mainland.In South Asia,sales rose by 5%and profits by 32%.In Singapore,results were particularly strong as bot
28、h hypermarkets and supermarkets performed well,while government programmes to offset the impact of the economic downturn also proved effective.The Groups supermarket andhealthandbeautyjointventuresinIndia both saw a return to reasonable sales growth,although the market is still very challenging.Sale
29、s in East Asia grew by 3%and profits by 26%.The strength of the Malaysian business was again demonstrated by growth in all formats,the opening of 28 new stores,and the completion of a dry goods distribution centre.In Indonesia,profits continued to improve and 51 new stores were added across the four
30、 retail banners.Brunei achieved its first year of profit in 2009,while we continue to explore avenues to expand in Vietnam.peopleThe continued strong results that have been achieved in 2009 reflect the hard work of all Dairy Farm employees.On behalf of the Board,I thank them for their efforts and wi
31、sh them well in achieving further success in 2010.Jonathan Gould retired as a Director at the end of June 2009 and we would like to thankhimforhiscontribution.GilesWhitejoinedtheBoardon1stJuly2009.pRospeCtsDairy Farms businesses have established leading retail brand names in their markets,andenjoyst
32、rongcustomerrecognition and support.This has underpinned the Groups performance in the recent challenging economic environment,and should provide the basis for further expansion as conditions improve.Withitssecurefinancialposition,Dairy Farms prospects for the coming year remain positive.Simon KeSwi
33、cKChairman4thMarch2010Dairy Farm International Holdings Limited Annual Report 20096Group Chief Executives Review2007 2008 200920062005US$mUnderlying PATAM050100150200250300350400The outset of 2009 was a time of considerable economic uncertainty,and it is therefore pleasing to report that Dairy Farm
34、was able to complete the year with increased sales and earnings in each of its operating regions.At the year end,Dairy Farm operated 27 separate businesses in ten territories across its three regions in Asia.Apart from the improved financial results,there were other notable achievements in 2009:Wead
35、dedanet431stores,including16 Giant hypermarkets in Malaysia and Indonesia,to reach a total of 5,071 stores at the year end;InHongKong,wecompletedtherelocationofourIKEAstoreatShatin,and preparations are underway for a new store to open in mid-2010 in KowloonsMegaBoxcomplex;ManningsinHongKongreachedam
36、ilestone by opening its 300th store in December;InChina,weexpandedourManningshealth and beauty business and now operate 120 stores;In Malaysia,we completed theconstruction of a major newdistribution centre at Sepang,as well as the sale-and-leaseback of two majorshoppingcentresanchoredbyGiant hyperma
37、rkets;InBrunei,ourhypermarketbecameprofitableinjustitssecondfullyearof operation,while the health and beauty business increased its scale and profitability;Wemadegoodprogresstowardourgoal of increasing significantly the proportion of convenience stores that are operated by franchisees;Webeganamajorm
38、odernizationofour IT merchandising systems with the successful implementation of SAP Retail in Malaysia,to be followed by Indonesia in 2010;andOurrestaurantassociate,Maxims,opened a new food factory in Shenzhen,China,and increased its penetration of the important Mainland market.Regional ReviewNORTH
39、 ASIAHong KongAfter strong growth in 2008,when cost price inflation helped to boost sales,Wellcome supermarkets faced a more difficult year in 2009.Competitive conditions prevented full recovery of cost price increases,resulting in an adverse effect on gross margins.The introduction by the governmen
40、t of a selective scheme to charge for plastic bags also led to some loss of sales.A strict focus on operating costs was required to achieve an acceptable result for the year.7-Eleven convenience stores had a very challenging year as comparable store salesdeclined.Amajorcontributingfactor was the sub
41、stantial increase in tobacco duties imposed in the first half of the year,which reduced sales volume and margin.A number of initiatives are in hand to restore profitability,including Hot Shot ready-to-eat sections,which hadbeeninstalledin340storesbytheyear end.Dairy Farm International Holdings Limit
42、ed Annual Report 20097Group Chief Executives ReviewMannings health and beauty stores had an excellent year.The strength of the Mannings brand was again demonstrated by the loyalty of its customers to its traditional health and beauty offerings while promotions offering customers an economical altern
43、ative to salon-based beauty treatments proved very popular.The performance of IKEA was constrained in 2009 by the continuing renovation andpartialrelocationofthemajorShatin store,which was completed in December.The performance in the two other locations was good,with the result that overall earnings
44、 were slightly below thepreviousyearanacceptableoutcome in a challenging year for the home furnishings sector.Maxims faced difficulties early in the year as ingredient costs were at high levels and customers reduced their expenditure on dining out.The second half,however,saw a strong rebound in patr
45、onage in a generally more buoyant HongKongeconomy.Turnoverimprovedin most formats and the important mid-Autumn mooncake sales went well,with encouraging growth in the Mainland.As a result,Maxims was able to record an overall profit increase for the year of 10%.MacauBoth 7-Eleven and Mannings expande
46、d in Macau in 2009.Despite their relatively small scale,both businesses were consistently profitable,with Mannings making good gains in earnings during the year.There remains scope for moderate further expansion of these businesses.Mainland China7-Eleven suffered a decline in comparable store sales,
47、with restrictions on sale of tobacco by foreign-invested enterprises affecting both sales and earnings.A number of actions are being taken to try to improve performance,but these will take time and the business returned to an operating loss in 2009.Mannings showed more encouraging sales results,and
48、added 50 stores to reach 120 outlets by the year end.TaiwanWellcome supermarkets achieved a reasonable result for the year,managing modest increases in sales and earnings in a continuing difficult market.The smaller format stores that have been added in recent years,together with Jasons MarketPlace
49、superstores,are complementingthetraditionalWellcomesupermarket format and providing additional means of expansion despite the strong competition from other operators.IKEA continued its consolidation and made solid gains in sales and profitability in 2009,despite operating in a lacklustre local econo
50、my.The renewal of leases at theAsiaWorldandTaoyuanstoresenablesthe business to move ahead with secure occupancy in all locations.Management has made good progress on supply chain efficiencies and is now focused on raising sales levels in all stores.Dairy Farm International Holdings Limited Annual Re
51、port 20098Group Chief Executives ReviewSOUTH ASIASingaporeDespite concerns at the start of the year over consumer sentiment in Singapore,both Cold Storage and Shop N Save supermarkets achieved excellent results in 2009,producing strong growth in both sales and profit.Four stores were added during th
52、e year,to reach 95 stores at the year end.Giant hypermarkets also recorded a very pleasing performance in 2009 as strong sales growth and good cost control led to further substantial gains in earnings and market share.7-Eleven in Singapore was the Groups best-performing convenience chain,with a plea
53、sing increase in earnings,while the Guardian chain managed a slight improvement in its result despite operating in an intensely competitive segment.The Singapore governments temporary subsidy of some employment and occupancy costs in 2009 assisted all the businesses in meeting the years economic cha
54、llenges.IndiaFoodworld supermarkets managed to reduce its losses in a year that saw some market rationalization as a result of the failureofseveralcompetingchains.Withstronger sales in the later part of the year,the business is planning for further improvement in 2010.Health and Glow showed steady i
55、mprovement with its health and beauty stores achieving profitability in the final quarter.Wewillcontinuethemeasuredexpansion of this business.EAST ASIAMalaysiaThe Giant and Cold Storage hypermarket and supermarket businesses recorded pleasing expansion against a background of constrained customer sp
56、ending for a large part of the year.Sales of general merchandise items,which tend to be more discretionary in nature,were the most affected by customers response to the global economic disruption.Despite this,overall sales growth was reasonable and with stringent cost control the businesses were abl
57、e to achieve a good improvement in earnings.Guardian had an excellent year.The existing base of stores achieved good like-for-like sales increases,but licensing issues affected store expansion with only anet16outletsaddedin2009.Weanticipate stronger growth in store numbers in 2010 as Guardian contin
58、ues to establish itself as Malaysias leading pharmacy chain.IndonesiaThe results from both the Giant and Hero hypermarket and supermarket businesses improved substantially in 2009.The programme of converting selected Hero supermarkets to the Giant format,which was completed in the first half of 2009
59、,has provided benefits to both banners in terms of sales and earnings.As was the case in Malaysia,sales of general merchandise categories suffered during the year as customers became cautious with non-essential spending,but sales in grocery and fresh categories were stronger and supported an excelle
60、nt improvement in overall earnings.Expansion of store Dairy Farm International Holdings Limited Annual Report 20099numbers also accelerated with the opening of 16 new outlets.Guardian pharmacies also improved its results,benefiting from a net addition of15stores.Wearecontinuingtoinvestin this format
61、,which we believe has substantial scope for expansion.VietnamWellcome maintained its small supermarket operation while expansion plans were developed with a view to entering the hypermarket sector.Potential sites have been identified and submissions for approval are being pursued with the relevant a
62、uthorities.Whileprogressisslow,webelievethatthe market will be attractive in the medium term.tHe yeaR aHeadWewerefortunatein2009thattheAsian region was less affected than other areas by the consequences of the financial crisis.Also,our positioning as a retailer of predominantly non-discretionary ite
63、ms helped to insulate us from the effects of expenditure reductions seen in other areas of consumption.Our supermarket and health and beauty businesses,in particular,proved themselves to be largely immune to the economic difficulties affecting other sectors.In 2010,we hope for a continuation of the
64、improvement in economic sentiment,and will base our expansion plans on the strategy of building on our leading positions in the markets we serve.Our capital expenditure will support development of the Giant hypermarket business in Malaysia and Indonesia,and will also be directed to achieving substan
65、tial improvements in our supply chain and IT systems.The strength of our businesses should allow us to perform well in the coming year and beyond.Our achievements in 2009 were a result of the abilities and commitment of our work force.I would like to thank them sincerely for their efforts in achievi
66、ng another rewarding year for the Group and its shareholders.michAeL KoKGroup Chief Executive 4thMarch2010Group Chief Executives ReviewDairy Farm International Holdings Limited Annual Report 200910Financial ReviewEast Asia(59%)South Asia(11%)North Asia(30%)Total by region:US$292mStore capex by forma
67、t2009 Capital ExpenditureSupermarkets(29%)Convenience stores(9%)Hypermarkets(10%)Property(42%)Health andbeauty stores(9%)IKEA(1%)Strong profit growth in the South Asia and East Asia regions,along with a steady performance in North Asia,enabled Dairy Farm to record another good result in 2009.This fa
68、vourable performance,and the resulting positive cash flows,funded a higher level of capital expenditure during the year as well as an increase in the annual dividend,while still achieving a net cash position at the year end.peRFoRManCeSales,excluding those of associates,were US$7,029million,a4%incre
69、aseover2008.Operating profit before interest andtax(PBIT)wasUS$424million,anincrease of US$51 million over the underlying figure in 2008.This represents a ratio of PBIT to sales of 6.0%in 2009,compared to 5.5%in the previous year.After including the Groups share of results of associates,the profit a
70、ttributable to shareholders was US$364million.Thisrepresentsa14%increase over the underlying result for 2008,which had excluded a non-trading gain of US$13 million arising mainly from asset disposals.The tax charge for 2009 was US$75 million,compared to US$71 million in 2008,reflecting the Groups im
71、proved profitabilityinallmajormarkets.Earnings per share were US27.02,an increaseof14%overthepreviousyearsunderlying earnings.CasH FlowOperating cash flow remained strong with anetinflowofUS$481million,comparedto the previous years US$523 million.Workingcapitalrequirementsaccountedfor an outflow of
72、US$28 million in 2009,as general merchandise holdings increased with the expanded business.The sale and leaseback of two retail complexes in Malaysia generated an inflow of US$47million.Asaresult,theGroupended the year with net cash of US$34million,comparedtonetdebtofUS$4millionat2008yearend.Normal
73、capital expenditure was US$289 million,compared to US$257 million in 2008 and representing an increase of 12%.A further US$3 million was paid for investments injointventurecompanies.TheGroup,includingassociates,added431outletsin 2009.BalanCe sHeetTotal assets,excluding cash and bank balances,of US$2
74、,291 million were US$247millionhigherthan2008,mainly reflecting the investment in new and refurbished stores and the associated increased level of stock.Net operating assets excluding net cash were US$509 million at the end of 2009,a 51%increase over the previous year.Dairy Farm International Holdin
75、gs Limited Annual Report 200911Financial ReviewdividendThe Board is recommending a final dividend of US11.50 per share.This will bring the total dividend in respect of 2009 to US16.00 per share,an increase of14%over2008andapayoutofapproximately 60%of the years profit.FinanCingBorrowings are normally
76、 taken out in local currencies by the Groups operating subsidiaries to fund and partially hedge their local asset investments.The Group,excluding associates,had gross debt ofUS$499millionattheyearend,anincrease of US$32 million.Committed banking facilities at the year end totalled US$826 million,and
77、 had an average life to maturity of 2.3 years.Financing income decreased from US$10 million in 2008 to US$3 million in 2009,mainly reflecting the lower deposit rates available,while financing charges remainedunchangedatUS$24million.pRinCipal RisKs and unCeRtaintiesA review of the principal risks and
78、 uncertainties facing the Company is set out on page 61.FinanCial RisK ManageMentA comprehensive discussion of the Groups financial risk management policies is included in note 2 to the financial statements.The Group manages its exposure to financial risk using a variety of techniques and instrument
79、s.Themainobjectivesaretolimitexchangeand interest rate risks and to provide a degree of certainty about costs.As a matter of policy,the Group does not enter into speculative transactions in derivatives.The investment of the Groups cash resources is managed so as to minimize risk while seeking to enh
80、ance yield.Overall,the Groups funding arrangements are designed to keep an appropriate balance between equity and debt,both short and long term,to give flexibility to develop the business.At the year end,US$288 million ofgrossdebtwassubjecttofixedinterest rates,with a remaining average tenorof1.4yea
81、rs.aCCounting poliCiesThe Groups financial statements have been prepared in accordance with International Financial Reporting Standards.During 2009,the Group adopted certain new accounting standards,but these did not have a material impact on the Groups results.Details are disclosed in note 1 to the
82、 financial statements.howARd mowLemGroup Finance Director 4thMarch2010Ordinary DividendsPer ShareInterim dividendFinal dividendUS2007 2008 2009200620050246810121416Dairy Farm International Holdings Limited Annual Report 200912Directors ProfilesSimon KeswickChairmanMrSimonKeswickjoinedtheBoardandbeca
83、meChairmanin1986.Hejoinedthe Jardine Matheson group in 1962 and is also chairman of Hongkong Land and Mandarin Oriental,and a director of Jardine Lloyd Thompson,Jardine Matheson and Jardine Strategic.A J L Nightingale*Managing DirectorMrNightingalejoinedtheBoardandwas appointed as Managing Director
84、in 2006.He has served in a number of executivepositionssincejoiningtheJardine Matheson group in 1969.He is chairman of Jardine Cycle&Carriage,Jardine Matheson Limited,Jardine Motors and Jardine Pacific;and a commissioner of Astra.He is also managing director of Hongkong Land,Jardine Matheson,Jardine
85、 Strategic and Mandarin Oriental.Mr Nightingale is chairman of the Business Facilitation Advisory Committee established by the FinancialSecretaryinHongKong,avicepresident of The Real Estate Developers AssociationofHongKong,amemberof the Commission on Strategic Development,a council member of the Emp
86、loyersFederationofHongKongandaHongKongrepresentativetotheAPEC Business Advisory Council.He is also chairman of The Sailors Home and Missions to Seamen.Michael Kok*Group Chief ExecutiveMrKokjoinedtheBoardandwasappointed Group Chief Executive in 2007.HejoinedDairyFarmin1987andhas extensive experience
87、in the retail industry in Asia.As a director of Dairy Farm Management Services since 1997,he had prime responsibility for the Groups retail businesses in South and East Asia.Howard Mowlem*Group Finance DirectorMr Mowlem was appointed as Group FinanceDirectorin2001.HejoinedtheGroup in 2000 as finance
88、 director,North Asia.He previously held a number of senior financial positions in the Australian retail sector.Mr Mowlem is a Fellow of the Australia Society of CPAs.Ronald J FlotoMrFlotojoinedtheBoardin1997andwas Group Chief Executive until he retired from executive office in 2007.His extensive exp
89、erience in the retail industry included senior positions in KmartCorporationandSuperKmartinthe United States.Mark GreenbergMrGreenbergjoinedtheBoardin2006.He is group strategy director of Jardine Matheson.He had previously spent 16 years in investment banking with DresdnerKleinwortWassersteininLondo
90、n.He is also a director of Jardine Matheson Limited,Hongkong Land,Jardine Cycle&Carriage and Mandarin Oriental and a commissioner of Astra and Bank Permata.George J HoMrHojoinedtheBoardin1998.Hewaspreviously engaged in private law practice in San Francisco and is currently engaged in the broadcastin
91、g and multi-media industries.Mr Ho is also chairmanofHongKongCommercialBroadcasting Company and a non-executive director of Enoteca Company in Japan.Sir Henry KeswickSirHenryjoinedtheBoardin1988.Heis chairman of Jardine Matheson,havingfirstjoinedtheJardineMathesongroup in 1961,and is also chairman o
92、f Jardine Strategic.He is a director of Hongkong Land,Mandarin Oriental and Rothschilds Continuation.He is also vicechairmanoftheHongKongAssociation.Dr George C G KooDrKoo,aFellowoftheRoyalCollegeof Surgeons,was appointed as a Director in 1990.He is the founder and managingdirectoroftheHongKongLitho
93、tripter Centre and a member of the Political Consultative Committee of Chekiang Province of the Peoples Republic of China.He is also a director of Jardine Strategic.R C KwokMrKwokisaCharteredAccountantandhas been a Director since 1986.He joinedtheJardineMathesongroupin1964andisadirectorofJardineMath
94、eson Limited,Hongkong Land,Jardine Matheson,Jardine Strategic and Mandarin Oriental.Lord Leach of FairfordLordLeachjoinedtheBoardin1987.He is deputy chairman of Jardine Lloyd Thompson,and a director of Hongkong Land,Jardine Matheson,Jardine Strategic,Mandarin Oriental and RothschildsContinuation.Hej
95、oinedtheJardine Matheson group in 1983 after a career in banking and merchant banking.James RileyMrRileyjoinedtheBoardin2005.Heis group finance director of Jardine Matheson.A Chartered Accountant,he joinedtheJardineMathesongroupfromKleinwortBensonin1993.Hewasappointed chief financial officer of Jard
96、ine Cycle&Carriagein1994,andfrom 1999 to 2005 he was responsible for the businesses grouped under Jardine Pacific.He is also a director of Jardine Matheson Limited.Percy WeatherallMrWeatheralljoinedtheBoardin2000and was Managing Director from 2000 to 2006.He held a number of senior positionssincefir
97、stjoiningtheJardineMatheson group in 1976 until his retirement from executive office in 2006.He is also a director of Hongkong Land,Jardine Matheson,Jardine Strategic and Mandarin Oriental.He is chairman of Corney and Barrow.Giles WhiteMrWhitejoinedtheBoardinJuly2009.He is the Jardine Matheson group
98、 general counsel.He was previously Asia managing partner of Linklaters based inHongKong,priortowhichhewasthe firms head of global finance and projectsinLondon.MrWhiteisalsoadirector of Jardine Matheson Limited,Jardine Matheson and Mandarin Oriental.*Executive DirectorDairy Farm International Holding
99、s Limited Annual Report 200913Note2009US$m2008US$mSales 47,028.56,732.5Cost of sales(4,910.9)(4,713.3)Gross margin 2,117.6 2,019.2 Other operating income 117.0104.5Selling and distribution costs(1,564.8)(1,506.7)Administration and other operating expenses(246.1)(229.2)Operating profit 5423.7 387.8 F
100、inancing charges(24.3)(23.9)Financing income 3.2 9.8 Net financing charges 6(21.1)(14.1)Shareofresultsofassociatesandjointventures 735.2 30.2 Profit before tax 437.8403.9Tax 8(75.0)(70.7)Profit after tax 362.8 333.2 Attributable to:Shareholders of the Company 364.0 333.0 Minority interests(1.2)0.2 3
101、62.8 333.2 USUSEarnings per share 9-basic 27.0224.73-diluted 26.9924.71Consolidated Profit and Loss Account for the year ended 31st December 2009 Dairy Farm International Holdings Limited Annual Report 2009142009US$m2008US$mProfit for the year 362.8 333.2 Revaluation of other investments-gains arisi
102、ng during the year 0.8 2.2-transfer to profit and loss (0.2)0.8 2.0 Actuarial gains/(losses)on employee benefit plans 16.5(64.6)Net exchange translation differences-gains/(losses)arising during the year 22.0(14.3)-transfer to profit and loss (2.0)22.0(16.3)Cash flow hedges-losses arising during the
103、year(2.5)(3.0)Share of other comprehensive income of associates andjointventures3.8(4.9)Tax relating to components of other comprehensive income(2.7)11.9 Other comprehensive income for the year 37.9(74.9)Total comprehensive income for the year 400.7 258.3 Attributable to:Shareholders of the Company
104、401.1 258.8 Minority interests(0.4)(0.5)400.7 258.3 Consolidated Statement of Comprehensive Income for the year ended 31st December 2009 Dairy Farm International Holdings Limited Annual Report 200915Consolidated Balance Sheetat 31st December 2009Note2009US$m2008US$mNet operating assetsIntangible ass
105、ets11319.3304.2Tangible assets12709.7 636.9 Associatesandjointventures13145.8 128.7 Other investments143.1 2.3 Non-current debtors15113.3 105.3 Deferred tax assets1619.1 18.0 Pension assets1724.8 8.8 Non-current assets1,335.11,204.2Stocks709.9649.0Current debtors15139.9 120.6 Current tax assets1.24.
106、9Bank balances and other liquid funds 18532.8462.91,383.81,237.4Non-current assets classified as held for sale19105.2 65.2 Current assets1,489.0 1,302.6 Current creditors20(1,605.5)(1,537.9)Current borrowings21(133.8)(62.6)Current tax liabilities(63.0)(65.0)Current provisions22(3.2)(2.0)Current liab
107、ilities(1,805.5)(1,667.5)Net current liabilities(316.5)(364.9)Long-term borrowings21(365.4)(404.5)Deferred tax liabilities16(43.6)(36.6)Pension liabilities17(31.1)(27.0)Non-current creditors20(16.9)(20.7)Non-current provisions22(18.6)(17.0)Non-current liabilities(475.6)(505.8)543.0 333.5 Total equit
108、yShare capital2374.974.8Share premium and capital reserves2536.6 32.6 Revenue and other reserves429.3 223.5 Shareholders funds540.8 330.9 Minority interests272.2 2.6 543.0 333.5 Approved by the Board of DirectorsA J L nightingALemichAeL KoKDirectors4thMarch2010Dairy Farm International Holdings Limit
109、ed Annual Report 200916Attributable to shareholders of the Company Share capital US$m Share premium US$m Capital reserves US$m Revenue reserves US$m Asset revaluation reserves US$m Hedging reserves US$m Exchange reserves US$m Total US$m Attributableto minority interests US$m Total equity US$m 2009At
110、 1st January 200974.87.4 25.2 248.8 16.8 (3.6)(38.5)330.9 2.6 333.5 Total comprehensive income381.8(1.9)21.2401.1(0.4)400.7Dividends paid by the Company(195.3)(195.3)(195.3)Issue of shares0.12.52.62.6Employee share option schemes1.51.51.5Transfer1.0(1.0)At 31st December 200974.99.926.7436.315.8(5.5)
111、(17.3)540.82.2543.02008At 1st January 200874.8 7.0 23.3 140.0 17.2 (1.3)(22.9)238.1 3.0 241.1Total comprehensive income 276.7 (2.3)(15.6)258.8 (0.5)258.3 Dividends paid by the Company (168.3)(168.3)(168.3)Issue of shares0.40.40.4Employee share option schemes 1.9 1.9 1.9 Change in attributable intere
112、st 0.1 0.1 Transfer0.4(0.4)At 31st December 200874.87.4 25.2 248.8 16.8 (3.6)(38.5)330.9 2.6 333.5 Total comprehensive income included in revenue reserves comprises profit attributable to shareholders of the Company ofUS$364.0million(2008:US$333.0million),fairvaluegainsonrevaluationofotherinvestment
113、sofUS$0.7million(2008:US$1.7 million)and actuarial gains on employee benefit plans of US$17.1 million(2008:losses of US$58.0 million).Consolidated Statement of Changes in Equityfor the year ended 31st December 2009 Dairy Farm International Holdings Limited Annual Report 200917Consolidated Cash Flow
114、Statementfor the year ended 31st December 2009Note2009US$m2008US$mOperating activitiesOperating profit 5 423.7 387.8 Depreciation and amortization 29(a)143.4136.4Other non-cash items 29(b)9.2(2.5)(Increase)/decrease in working capital 29(c)(28.2)36.9 Interest received3.6 10.8 Interest and other fina
115、ncing charges paid(24.0)(23.8)Tax paid(70.9)(47.5)456.8498.1Dividendsfromassociatesandjointventures24.5 25.1 Cash flows from operating activities481.3 523.2 Investing activitiesPurchase of tangible assets(250.6)(215.6)Purchase of subsidiaries 29(d)(42.0)Store acquisitions 29(e)(2.6)Purchaseofassocia
116、tesandjointventures(2.6)(6.6)Purchase of land use rights 29(f)(30.7)(33.7)Purchase of other intangible assets(7.9)(7.9)Sale of properties 29(g)47.0Sale of other tangible assets0.6 1.0 Saleofassociatesandjointventures 29(h)20.5 Sale of other investments 1.0 Cash flows from investing activities(244.2)
117、(285.9)Financing activitiesIssue of shares2.60.4Drawdown of borrowings1,202.4 991.0 Repayment of borrowings(1,181.9)(990.3)Dividends paid by the Company 26(195.3)(168.3)Cash flows from financing activities(172.2)(167.2)Effect of exchange rate changes2.7(1.7)Net increase in cash and cash equivalents6
118、7.668.4Cash and cash equivalents at 1st January453.2384.8Cash and cash equivalents at 31st December 29(i)520.8453.2Dairy Farm International Holdings Limited Annual Report 200918Notes to the Financial Statements1.PRINCIPAL ACCOUNTING POLICIES(a)Basis of preparationThe financial statements have been p
119、repared in accordance with International Financial Reporting Standards,including International Accounting Standards and Interpretations adopted by the International Accounting Standards Board.The financial statements have been prepared under the historical cost convention except as disclosed in the
120、accounting policies below.Standards,amendments and interpretations effective in 2009 which are relevant to the Groups operationsIFRS 8Operating SegmentsIAS 1(revised 2007)Presentation of Financial StatementsIAS 23(revised 2007)Borrowing CostsAmendments to IFRS 1 and IAS 27Cost of an Investment in a
121、Subsidiary,Jointly Controlled Entity or AssociateAmendment to IFRS 2Vesting Conditions and CancellationsAmendments to IFRS 7Improving Disclosures about Financial InstrumentsImprovements to IFRSs(2008)IFRIC 13Customer Loyalty ProgrammesIFRIC 16Hedges of a Net Investment in a Foreign OperationIFRS8Ope
122、ratingSegmentssupersedesIAS14SegmentReportingandrequiresthereportingoffinancialanddescriptive information about an entitys reportable segments on the basis of internal reports that are regularly reviewed by its management.There is no change in the Groups reportable segments from 2008 as they remain
123、consistent with the internal reporting provided to management.No operating segments have been aggregated to form the reportable segments.The Group has also early adopted an amendment to IFRS 8(effective from 1st January 2010)includedinthe2009improvementproject.Theamendmentclarifiesthatameasureoftota
124、lassetsshouldbedisclosedin the financial statements only if that amount is regularly provided to management.IAS 1 Presentation of Financial Statements replaces IAS 1(as revised in 2003 and amended in 2005)and sets overall requirements for the presentation of financial statements,guidelines for their
125、 structure and minimum requirements for their content.Two new primary statements,Consolidated Statement of Comprehensive Income and Consolidated Statement of Changes in Equity have been presented in these financial statements.The former replaces the Consolidated Statement of Recognized Income and Ex
126、pense presented in the 2008 financial statements.This change in presentation has no effect on reported profit or loss,total income and expense or net assets.Amendments to IFRS 1 and IAS 27 Cost of an Investment in a Subsidiary,Jointly Controlled Entity or Associate remove thedefinitionofthecostmetho
127、dfromIAS27andallowanentitytorecognizeadividendfromasubsidiary,jointlycontrolled entity or associate in profit and loss in its separate financial statements when its right to receive the dividend is established.There is no impact on the consolidated financial statements as the changes affect only the
128、 separate financial statements of the investing entity.Amendments to IFRS 7 Improving Disclosures about Financial Instruments require the disclosure of any change in valuation technique and the reason for that change,introduce a three-level hierarchy for fair value measurement disclosures,and requir
129、e the disclosure of liquidity risk between non-derivative financial liabilities and derivative financial liabilities.IAS36(Amendment)ImpairmentofAssetsispartofthe2008improvementproject.Itprovidesthatwherefairvalueless costs to sell is calculated on the basis of discounted cash flows,disclosures equi
130、valent to those for value-in-use calculation should be made.IFRIC 13 Customer Loyalty Programmes addresses the accounting by entities that grant loyalty award credits to customers who buy goods or services.It requires the allocation of consideration receivable from the customer between the separatel
131、y identifiable components of the sale transaction using fair values.There is no significant impact on the results of the Group on adoption of this interpretation.Dairy Farm International Holdings Limited Annual Report 200919Notes to the Financial Statements(a)Basis of preparation(continued)The adopt
132、ion of the following standards,amendments and interpretations does not have a material impact on the Groups accounting policies.IAS 23(revised 2007)Borrowing Costs supersedes IAS 23(as revised in 1993)and requires the capitalization of borrowing costs relating to qualifying assets.Amendments to IFRS
133、 2 Vesting Conditions and Cancellations restrict vesting conditions to service conditions and performance conditions,and specify that a failure to meet a non-vesting condition,whether by the entity or by the counterparty,should be treated as a cancellation.IAS19(Amendment)EmployeeBenefitsispartofthe
134、2008improvementproject.Itclarifiesthedistinctionbetweencurtailments and negative past service costs under a defined benefit plan.IAS23(Amendment)Borrowingcostsispartofthe2008improvementproject.Itamendsthedefinitionofborrowingcosts such that interest expense is calculated using the effective interest
135、 method as defined in IAS 39 Financial Instruments:Recognition and Measurement.IAS 28(Amendment)Investments in Associates and consequential amendments to IAS 32 Financial Instruments:PresentationandIFRS7FinancialInstruments:Disclosuresispartofthe2008improvementproject.Itspecifiesthatfor the purposes
136、 of impairment testing,an investment in associate is treated as a single asset and any impairment loss is not allocated to specific assets included within the investment.IAS38(Amendment)IntangibleAssetsispartofthe2008improvementproject.Itclarifiesthatexpenditureonadvertising and other promotional ac
137、tivities must be recognized in the period in which the entity obtains the right to access the advertising or promotional material.IFRIC 16 Hedges of a Net Investment in a Foreign Operation addresses the nature of the hedged risk and amount of the hedged item for which a hedging relationship may be d
138、esignated in the consolidated financial statements of a parent entity.Standards and amendments early adopted by the GroupIFRS 3(revised 2008)Business CombinationsIAS 27(amended 2008)Consolidated and Separate Financial StatementsIFRS 3(revised 2008)Business Combinations and the related amendment to I
139、AS 27 Consolidated and Separate Financial Statements(both effective prospectively from 1st July 2009)provide guidance for applying the acquisition methodforbusinesscombinations.Themajorchangesfromtheexistingstandardsinclude:theimmediateexpensingof all acquisition-related costs,the inclusion in the c
140、ost of acquisition of the fair value at acquisition date of any contingent purchase consideration,the remeasurement of previously held equity interest in the acquiree at fair value in a business combination achieved in stages,and accounting for changes in a parents ownership interest in a subsidiary
141、 that do not result in the loss of control as equity transactions.The early adoption of IFRS 3(revised 2008)and the related amendment to IAS 27 has resulted in changes in the accounting policies for goodwill and change in attributable interests in subsidiaries.Until 31st December 2008,acquisition-re
142、lated costs were included in the cost of a business combination;contingent purchase consideration was recognized in goodwill as incurred;the cost of each exchange transaction in a business combination achieved in stages was compared with the fair values of the acquirees identifiable net assets to de
143、termine the amount of goodwill associated with that transaction;the difference between the cost of acquisition and the carrying amount of the proportion of minority interest acquired in respect of an increase in attributable interest in a subsidiary was recognized as goodwill or credited to profit a
144、nd loss as discount on acquisition,where appropriate;and the difference between the proceeds and the carrying amount of the proportion sold in respect of a decrease in attributable interest in a subsidiary was recognized as profit or loss on disposal.The Group continues to measure minority interest
145、in an acquiree in a business combination at the minority interests proportionate share of the acquirees identifiable net assets.Dairy Farm International Holdings Limited Annual Report 200920Notes to the Financial Statements(a)Basis of preparation(continued)Standards,amendments and interpretations ef
146、fective after 2009 which are relevant to the Groups operations and yet to be adoptedIFRS9FinancialInstruments(effectivefrom1stJanuary2013)isthefirstpartofaprojecttoreplaceIAS39.Itaddresses the classification and measurement of financial assets.The Group will apply IFRS 9 from 1st January 2013.IAS24R
147、elatedPartyDisclosures(effectivefrom1stJanuary2011)supersedesIAS24(asrevisedin2003).Itsimplifiesthe disclosure requirements for government-related entities and clarifies the definition of a related party.The Group willapplyIAS24andprovidetherequireddisclosurefrom1stJanuary2011.Amendment to IAS 32 Cl
148、assification of Right Issues(effective from 1st February 2010)clarifies that rights issues are equity instruments when they are denominated in a currency other than the issuers functional currency and are issued pro-rata to an entitys existing shareholders for a fixed amount of currency.The Group wi
149、ll apply amendment to IAS 32 from 1st January 2011.Amendment to IAS 39 Eligible Hedged Items(effective from 1st July 2009)gives additional guidance on the designation of a hedged item and how hedged accounting should be applied in particular situations.The Group will apply amendment to IAS 39 from 1
150、st January 2010,but it is not expected to have any significant impact on the results of the Group.TheimprovementstoIFRSs(2009)compriseanumberofnon-urgentbutnecessaryamendmentstoIFRSs.Withtheexception of IAS 17(Amended 2009)Leases,adoption of the other amendments is not expected to have any significa
151、nt impact on the results of the Group.IAS17(Amended)Leases(effectivefrom1stJanuary2010)ispartofthe2009improvementproject.Itspecifiesthata land lease may be classified as a finance lease when significant risks and rewards associated with the land are transferred to the lessee despite there being no t
152、ransfer of title at the end of the lease term.The Group will apply this amendment retrospectively from 1st January 2010.AmendmentstoIFRIC14PrepaymentsofaMinimumFundingRequirement(effectivefrom1stJanuary2011)requirean entity to recognize an asset for a prepayment that will reduce future minimum fundi
153、ng contributions required by theentity.TheGroupwillapplyamendmentstoIFRIC14from1stJanuary2011.IFRIC 17 Distributions of Non-cash Assets to Owners(effective from 1st July 2009)requires that a non-cash dividend payable should be recognized when the dividend is appropriately authorized and is no longer
154、 at the discretion of the entity.The dividend should be measured at the fair value of the net assets to be distributed.Any difference between the dividend paid and the carrying amount of the net assets distributed should be included in profit or loss.The Group will apply IFRIC 17 from 1st January 20
155、10.IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments(effective from 1st April 2010)provides guidance on the application of IAS 39 and IAS 32 when an entity issues its own equity instruments to extinguish all or part of a financial liability.The Group will apply IFRIC 19 from 1st J
156、anuary 2011.Theprincipaloperatingsubsidiaries,associatesandjointventureshavedifferentfunctionalcurrenciesinlinewiththeeconomic environments of the locations in which they operate.The functional currency of the Company is United States dollars.The consolidated financial statements are presented in Un
157、ited States dollars.TheGroupsreportablesegmentsaresetoutinnotes4,5and7andaredescribedonpages30and32.(b)Basis of consolidation(i)The consolidated financial statements include the financial statements of the Company,its subsidiaries,and its associatesandjointventures.Dairy Farm International Holdings
158、Limited Annual Report 200921Notes to the Financial Statements(b)Basis of consolidation(continued)(ii)Subsidiaries are entities over which the Group has the power to govern the financial and operating policies.The purchase method of accounting is used to account for the acquisition of subsidiary by t
159、he Group.The cost of an acquisition includes the fair value at the acquisition date of any contingent consideration.In a business combination achieved in stages,the Group remeasures its previously held interest in the acquiree at its acquisition-date fair value and recognizes the resulting gain or l
160、oss in profit and loss.Changes in a parents ownership interest in a subsidiary thatdonotresultinthelossofcontrolareaccountedforasequitytransactions.Whencontroloveraprevioussubsidiaryis lost,any remaining interest in the entity is remeasured at fair value and the resulting gain or loss is recognized
161、in profit and loss.All material intercompany transactions,balances and unrealized surpluses and deficits on transactions between Group companies have been eliminated.(iii)Associatesareentities,notbeingsubsidiariesorjointventures,overwhichtheGroupexercisessignificantinfluence.Jointventuresareentities
162、whichtheGroupjointlycontrolswithoneormoreotherventurers.Associatesandjointventures are included on the equity basis of accounting.(iv)Minority interests represent the proportion of the results and net assets of subsidiaries and their associates and jointventuresnotattributabletotheGroup.(v)Theresult
163、sofsubsidiaries,associatesandjointventuresareincludedorexcludedfromtheireffectivedatesofacquisitionordisposalrespectively.Theresultsofentitiesotherthansubsidiaries,associatesandjointventuresareincluded to the extent of dividends received when the right to receive such dividend is established.(c)Fore
164、ign currencies Transactions in foreign currencies are accounted for at the exchange rates ruling at the transaction dates.Assetsandliabilitiesofsubsidiaries,associatesandjointventures,togetherwithallothermonetaryassetsandliabilitiesexpressed in foreign currencies,are translated into United States do
165、llars at the rates of exchange ruling at the year end.Results expressed in foreign currencies are translated into United States dollars at the average rates of exchange ruling during the year,which approximate the exchange rates at the dates of the transactions.Exchangedifferencesarisingfromtheretra
166、nslationofthenetinvestmentinforeignsubsidiaries,associatesandjointventures,and of financial instruments which are designated as hedges of such investments,are recognized in other comprehensive income and accumulated in equity under exchange reserves.On the disposal of these investments which results
167、 in the loss of control,such exchange differences are recognized in profit and loss.Exchange differences on available-for-sale investments are recognized in other comprehensive income as part of the gains and losses arising from changes in their fair value.All other exchange differences are recogniz
168、ed in profit and loss.Goodwillandfairvalueadjustmentsarisingonacquisitionofaforeignentityafter1stJanuary2003aretreatedasassets and liabilities of the foreign entity and translated into United States dollars at the rate of exchange ruling at the year end.(d)ImpairmentAssetsthathaveindefiniteusefulliv
169、esarenotsubjecttoamortizationandaretestedforimpairmentannuallyandwheneverthereisanindicationthattheassetsmaybeimpaired.Assetsthataresubjecttoamortizationarereviewedfor impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.For the purpose of a
170、ssessing impairment,assets are grouped at the lowest level for which there is separately identifiable cash flows.Cash-generating units or groups of cash-generating units to which goodwill has been allocated are tested for impairment annually and whenever there is an indication that the units may be
171、impaired.An impairment loss is recognized for the amount by which the carrying amount of the asset exceeds its recoverable amount,which is the higher of an assets fair value less costs to sell and value in use.Dairy Farm International Holdings Limited Annual Report 200922Notes to the Financial State
172、ments(e)Intangible assets(i)Goodwill represents the excess of the cost of an acquisition over the fair value of the Groups share of the net identifiableassetsoftheacquiredsubsidiary,associateorjointventureattheeffectivedateofacquisition.Minorityinterests are measured at their proportionate share of
173、the net identifiable assets at the acquisition date.If the cost of acquisition is less than the fair value of the net assets acquired,the difference is recognized directly in profit and loss.Goodwill on acquisitions of subsidiaries is included in intangible assets.Goodwill on acquisitions of associa
174、tes and jointventuresisincludedininvestmentinassociatesandjointventures.Goodwillisallocatedtocash-generatingunitsor groups of cash-generating units for the purpose of impairment testing and is carried at cost less accumulated impairment loss.Theprofitorlossondisposalofsubsidiaries,associatesandjoint
175、venturesincludesthecarryingamountofgoodwillrelating to the entity sold.(ii)Land use rights are payments to third parties to acquire long-term interests in owner-occupied property.These payments are stated at cost and are amortized over the useful life of the lease which includes the renewal period i
176、f the lease can be renewed by the Group without significant cost.(iii)Other intangible assets are stated at cost less accumulated amortization.Amortization is calculated on the straight line basis to allocate the cost of intangible assets over their estimated useful lives.(f)Tangible fixed assets an
177、d depreciation Freehold land and buildings,and the building component of owner-occupied leasehold properties are stated at valuation.Independent valuations are performed every three years on an open market basis and,in the case of the building component of leasehold properties,on the basis of deprec
178、iated replacement cost.Depreciated replacement cost is used as the most reliable basis of allocating open market value to the building component.In the intervening yearstheDirectorsreviewthecarryingvaluesandadjustmentismadewheretherehasbeenamaterialchange.Revaluation surpluses and deficits are recog
179、nized in other comprehensive income and accumulated in equity under asset revaluation reserves except for movements on individual properties below depreciated cost which are recognized in profit and loss.Grants related to tangible fixed assets are deducted in arriving at the carrying amount of the a
180、ssets.Other tangible fixed assets are stated at cost less amounts provided for depreciation.Depreciation of tangible fixed assets is calculated on the straight line basis to allocate the cost or valuation of each asset to its residual value over its estimated useful life.The residual values and usef
181、ul lives are reviewed at each balance sheet date.The estimated useful lives are as follows:Buildings30-50 yearsLeasehold improvementsover period of the leasePlant and machinery3-20 yearsFurniture,equipment and motor vehicles3-15 yearsNo depreciation is provided on freehold land as it is deemed to ha
182、ve an indefinite life.Wherethecarryingamountofatangiblefixedassetisgreaterthanitsestimatedrecoverableamount,itiswrittendown immediately to its recoverable amount.The profit or loss on disposal of tangible fixed assets is recognized by reference to their carrying amount.(g)Investments Investments are
183、 classified by management as available for sale on initial recognition.Available-for-sale investments are shown at fair value.Gains or losses arising from changes in the fair value are recognized in other comprehensive income.On the disposal of an investment or when an investment is determined to be
184、 impaired,the cumulative gain or loss previously deferred in equity is recognized in profit and loss.Investments are classified under non-current assets unless their maturities are within twelve months after the balance sheet date.Ateachbalancesheetdate,theGroupassesseswhetherthereisobjectiveevidenc
185、ethataninvestmentisimpaired.Dairy Farm International Holdings Limited Annual Report 200923Notes to the Financial Statements(g)Investments(continued)All purchases and sales of investments are recognized on the trade date,which is the date that the Group commits to purchase or sell the investment.(h)S
186、tocks Stocks,which principally comprise goods held for resale,are stated at the lower of cost and net realizable value.Cost is determined by the first-in,first-out method.(i)Debtors Trade debtors are measured at amortized cost except where the effect of discounting would be immaterial.Provision fori
187、mpairmentisestablishedwhenthereisobjectiveevidencethattheoutstandingamountswillnotbecollected.Significant financial difficulties of the debtor,probability that the debtor will enter bankruptcy or financial reorganization,and default or delinquency in payments are considered indicators that the debto
188、r is impaired.The carrying amount of the asset is reduced through the use of an allowance account and the amount of the loss is recognizedinarrivingatoperatingprofit.Whenadebtorisuncollectible,itiswrittenoffagainsttheallowanceaccount.Subsequent recoveries of amount previously written off are credite
189、d to profit and loss.Debtors with maturities greater than twelve months after the balance sheet date are classified under non-current assets.(j)Cash and cash equivalentsFor the purposes of the cash flow statement,cash and cash equivalents comprise deposits with banks,bank and cash balances,net of ba
190、nk overdrafts.In the balance sheet,bank overdrafts are included in current borrowings.(k)ProvisionsProvisions are recognized when the Group has present legal or constructive obligations as a result of past events,it is probable that an outflow of resources embodying economic benefits will be require
191、d to settle the obligations,and a reliable estimate of the amount of the obligations can be made.(l)Deferred taxDeferred tax is provided,using the liability method,for all temporary differences arising between the tax bases of assets and liabilities and their carrying values.Provision for deferred t
192、ax is made on the revaluation of certain non-current assets and,in relation to acquisitions,on the difference between the fair value of the net assets acquired and their tax base.Deferred tax is provided on temporarydifferencesassociatedwithinvestmentsinsubsidiaries,associatesandjointventures,except
193、wheretheGroup is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.Deferred tax assets relating to the carry forward of unused tax losses are recognized to the extent that it is probable that future ta
194、xable profit will be available against which the unused tax losses can be utilized.(m)Employee benefits(i)Pension obligationsThe Group operates a number of defined benefit and defined contribution plans,the assets of which are held in trustee administered funds.Pensionaccountingcostsfordefinedbenefi
195、tplansareassessedusingtheprojectedunitcreditmethod.Underthismethod,the costs of providing pensions are charged to profit and loss spreading the regular cost over the service lives ofemployeesinaccordancewiththeadviceofqualifiedactuaries,whocarryoutafullvaluationofmajorplanseveryyear.The pension obli
196、gations are measured as the present value of the estimated future cash outflows by reference to market yields on high quality corporate bonds which have terms to maturity approximating the terms of the related liability.Plan assets are measured at fair value.Actuarial gains and losses are recognized
197、 in other comprehensive income in the year in which they occur.The Groups total contributions relating to the defined contribution plans are charged to profit and loss in the year to which they relate.Dairy Farm International Holdings Limited Annual Report 200924Notes to the Financial Statements(m)E
198、mployee benefits(continued)(ii)Share-based compensationThe Company operates a number of equity settled employee share option schemes.The fair value of the employee services received in exchange for the grant of the options in respect of options granted after 7th November 2002 is recognized as an exp
199、ense.The total amount to be expensed over the vesting period is determined by reference to the fair value of the options granted as determined on the grant date.At each balance sheet date,the entity revises its estimates of the number of options that are expected to become exercisable.The impact of
200、the revision of original estimates,if any,is recognized in profit and loss.(n)DividendsDividends proposed or declared after the balance sheet date are not recognized as a liability at the balance sheet date.(o)SalesSales consist of the net value of goods sold to customers,excluding sales taxes.This
201、does not include sales generated byassociatesandjointventures.Saleofgoodsisrecognizedwhenthesignificantrisksandrewardsofownershipofthe goods have been transferred to customers.Sales are recognized at the point of sale and are recorded at the net amount received from customers.(p)Operating leasesPaym
202、ents made under operating leases(net of any incentives received from the lessor)are charged to profit and loss onastraightlinebasisovertheperiodofthelease.Whenaleaseisterminatedbeforetheleaseperiodhasexpired,any payment required to be made to the lessor by way of penalty is recognized as an expense
203、in the year in which termination takes place.(q)Pre-operating costsPre-operating costs are expensed as they are incurred.(r)Borrowings and borrowing costsBorrowings are initially recognized at fair value,net of transaction costs incurred.In subsequent periods,borrowings are stated at amortized cost
204、using the effective interest method.Borrowingcostsrelatingtomajordevelopmentprojectsarecapitalizedduringtheconstructionperioduntiltheassetis substantially completed.Capitalized borrowing costs are included as part of the cost of the asset.All other borrowing costs are expensed as incurred.Borrowings
205、 are classified under non-current liabilities unless their maturities are within twelve months after the balance sheet date.(s)Non-current assets held for saleNon-current assets are classified as assets held for sale and stated at the lower of carrying amount and fair value less costs to sell if the
206、ir carrying amount is expected to be recovered principally through a sale transaction rather than through continuing use.(t)Derivative financial instrumentsThe Group enters into derivative financial instruments only in order to hedge underlying exposures.Derivative financial instruments are initiall
207、y recognized at fair value on the date a derivative contract is entered into and are subsequently remeasured at their fair value.The method of recognizing the resulting gain or loss is dependent on the nature of the item being hedged.The Group designates certain derivatives as a hedge of the fair va
208、lue of a recognized asset or liability(fair value hedge),or a hedge of a forecasted transaction or of the foreign currency risk on a firm commitment(cash flow hedge),or a hedge of a net investment in a foreign entity.Dairy Farm International Holdings Limited Annual Report 200925Notes to the Financia
209、l Statements(t)Derivative financial instruments(continued)Changes in the fair value of derivatives that are designated and qualified as fair value hedges and that are highly effective,are recognized in profit and loss,along with any changes in the fair value of the hedged asset or liability thatisat
210、tributabletothehedgedrisk.Whenahedginginstrumentexpiresorissold,orwhenahedgenolongermeetsthecriteriaforhedgeaccounting,thecumulativeadjustmenttothecarryingamountofahedgeditemforwhichtheeffective interest method is used is amortized to profit and loss over the residual period to maturity.Changes in t
211、he fair value of derivatives that are designated and qualified as cash flow hedges and that are highly effective,arerecognizedinothercomprehensiveincomeandaccumulatedinequityunderhedgingreserves.Wherethe forecasted transaction or firm commitment results in the recognition of a non-financial asset or
212、 of a non-financial liability,the gains and losses previously deferred in hedging reserves are transferred from hedging reserves and included in the initial measurement of the cost of the asset or liability.Otherwise,amounts deferred in hedging reserves are transferred to profit and loss in the same
213、 periods during which the hedged firm commitment or forecasted transaction affectsprofitandloss.Whenahedginginstrumentexpiresorissold,orwhenahedgenolongermeetsthecriteriafor hedge accounting,any cumulative gain or loss existing in hedging reserves at that time remains in the hedging reserves and is
214、recognized when the committed or forecasted transaction ultimately is recognized in profit and loss.Whenacommittedorforecastedtransactionisnolongerexpectedtooccur,thecumulativegainorlossthatwasreported in hedging reserves is immediately transferred to profit and loss.Certain derivative transactions,
215、while providing effective economic hedges under the Groups risk management policies,do not qualify for hedge accounting under the specific rules in IAS 39.Changes in the fair value of any derivative instruments that do not qualify for hedge accounting under IAS 39 are recognized immediately in profi
216、t and loss.Hedges of net investments in foreign entities are accounted for on a similar basis to that used for cash flow hedges.Any gain or loss on the hedging instrument relating to the effective portion of the hedge is recognized in exchange reserves;the gain or loss relating to the ineffective po
217、rtion is recognized immediately in profit and loss.The fair value of derivatives which are designated and qualified as effective hedges are classified as non-current assets or liabilities if the remaining maturities of the hedged assets or liabilities are greater than twelve months after the balance
218、 sheet date.(u)Financial guarantee contractsFinancial guarantee contracts under which the Group accepts significant risk from a third party by agreeing to compensate that party on the occurrence of a specified uncertain future event are accounted for in a manner similar to insurance contracts.Provis
219、ions are recognized when it is probable that the Group has obligations under such guarantees and an outflow of resources embodying economic benefits will be required to settle the obligations.(v)Non-trading itemsNon-trading items are separately identified to provide greater understanding of the Grou
220、ps underlying business performance.Items classified as non-trading items include 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
221、 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.(w)Earnings per shareBasic earnings per share are calculated on profit attributable to shareholders and on the weighted av
222、erage number of shares in issue during the year.The weighted average number excludes the Companys share of the shares held by the Trustee under the Senior Executive Share Incentive Schemes.For the purpose of calculating diluted earnings per share,profitattributabletoshareholdersisadjustedfortheeffec
223、tsoftheconversionofdilutivepotentialordinaryshares,andtheweightedaveragenumberofsharesisadjustedforthenumberofshareswhicharedeemedtobeissued for no consideration under the Senior Executive Share Incentive Schemes based on the average share price during the year.(x)Comparative figuresCertain comparat
224、ive figures have been reclassified to conform with the current year presentation.Dairy Farm International Holdings Limited Annual Report 200926Notes to the Financial Statements2.FINANCIAL RISK MANAGEMENT(a)Financial risk factorsThe Groups activities expose it to a variety of financial risks:market r
225、isk(including foreign exchange risk and interest rate risk),credit risk and liquidity risk.The Groups treasury function co-ordinates,under the directions of the Board of Dairy Farm International Holdings Limited,financial risk management policies and their implementation on a group-wide basis.The Gr
226、oups treasury policies are designed to manage the financial impact of fluctuations in interest rates and foreign exchange rates and to minimize the Groups financial risks.The Group uses derivative financial instruments,principally interest rate swaps,caps,forward foreign exchange contracts and forei
227、gn currency options as appropriate for hedging transactions and managing the Groups assets and liabilities in accordance with the Groups financial risk management policies.Financial derivative contracts are executed between third party banks and the Group entity that is directly exposed to the risk
228、being hedged.Certain derivative transactions,while providing effective economic hedges under the Groups risk management policies,do not qualify for hedge accounting under the specific rules in IAS 39.Changes in the fair value of any derivative instruments that do not qualify for hedge accounting und
229、er IAS 39 are recognized immediately in profit and loss.It is the Groups policy not to enter into derivative transactions for speculative purposes.The notional amounts and fair values of derivative financial instruments at 31st December 2009 are disclosed in note 30.(i)Market riskForeign exchange ri
230、skEntities within the Group are exposed to foreign exchange risk from future commercial transactions,net investments in foreign operations and net monetary assets and liabilities that are denominated in a currency that is not the entitys functional currency.Group companies are required to manage the
231、ir foreign exchange risk against their functional currency.To manage their foreign exchange risk arising from future commercial transactions,entities in the Group use forward foreign exchange contracts and foreign currency options in a consistent manner to hedge firm and anticipated foreign exchange
232、 commitments.The purpose of these hedges is to mitigate the impact of movements in foreign exchange rates on assets and liabilities and the profit and loss account of the Group.There are no significant monetary balances held by Group companies at 31st December 2009 that are denominated in a non-func
233、tional currency.Currency risks as defined by IFRS 7 arise on account of monetary assets and liabilities being denominated in a currency that is not the functional currency;differences resulting from the translation of financial statements into the Groups presentation currency are not taken into cons
234、ideration.Interest rate riskThe Group is exposed to interest rate risk through the impact of rate changes on interest bearing liabilities and assets.These exposures are managed partly by using natural hedges that arise from offsetting interest rate sensitive assets and liabilities,and partly through
235、 the use of derivative financial instruments such as interest rate swaps and caps.The Group monitors interest rate exposure on a monthly basis by currency and business unit,taking into consideration proposedfinancingandhedgingarrangements.TheGroupsguidelineistomaintain40%to60%ofitsgrossborrowingsin
236、fixed rate instruments with an average tenor of one to three years.At 31st December 2009 the Groups interest rate hedgewas60%(2008:58%),withanaveragetenorof1.4years(2008:2.0years).TheinterestrateprofileoftheGroups borrowings after taking into account hedging transactions is set out in note 21.Cash f
237、low interest rate risk is the risk that changes in market interest rates will impact cash flows arising from variable rate financial instruments.Borrowings at floating rates therefore expose the Group to cash flow interest rate risk.The Group manages this risk by entering into interest rate swaps an
238、d caps for a maturity of up to five years.Interest rate swaps have the economic effect of converting borrowings from floating rate to fixed rate,whilst caps provide protection against a rise in floating rates above a pre-determined rate.Dairy Farm International Holdings Limited Annual Report 200927N
239、otes to the Financial Statements(a)Financial risk factors(continued)At 31st December 2009,if interest rates had been 100 basis points higher/lower with all other variables held constant,the Groups profit after tax would have been US$2.8 million(2008:US$2.2 million)higher/lower,and hedging reserves w
240、ouldhavebeenUS$4.1million(2008:US$5.3million)higher/lower,asaresultoffairvaluechangestocashflowhedges.The sensitivity analysis has been determined assuming that the change in interest rates had occurred at the balance sheet date and had been applied to the exposure to interest rate risk for both der
241、ivative and non-derivative financial instruments in existence at that date.The 100 basis point increase or decrease represents managements assessment of a reasonably possible change in those interest rates which have the most impact on the Group,specifically theUnitedStatesandHongKongratesovertheper
242、ioduntilthenextannualbalancesheetdate.Changesinmarketinterest rates affect the interest income or expense of non-derivative variable-interest financial instruments,the interest payments of which are not designated as hedged items of cash flow hedges against interest rate risks.As a consequence,they
243、are included in the calculation of profit after tax sensitivities.Changes in the market interest rate of financial instruments that were designated as hedging instruments in a cash flow hedge to hedge payment fluctuations resulting from interest rate movements affect the hedging reserves and are the
244、refore taken into consideration in the equity-related sensitivity calculations.(ii)Credit riskThe Groups credit risk is primarily attributable to deposits with banks and credit exposures to derivative financial instruments with a positive fair value.The Group has credit policies in place and the exp
245、osures to these credit risks are monitored on an ongoing basis.The Group manages its deposits with banks and transactions involving derivative financial instruments by monitoring credit ratings,capital adequacy ratios,and limiting the aggregate risk to any individual counterparty.The utilization of
246、credit limits is regularly monitored.At 31st December 2009,over 99%(2008:99%)of deposits and balances with banks were made to institutions with credit ratings of no less than A-(Fitch).Similarly,transactions involving derivative financial instruments are with banks with sound credit ratings and capi
247、tal adequacy ratios.In developing countries it may be necessary to deposit money with banks that have a lower credit rating,however,the Group only enters into derivative transactions with counterparties which have credit ratings of at least investment grade.Management does not expect any counterpart
248、y to fail to meet its obligations.Salestocustomersaremadeincashorbymajorcreditcards.Themaximumexposuretocreditriskisrepresentedbythe carrying amount of each financial asset in the balance sheet after deducting any impairment allowance.The Groups exposure to credit risk arising from debtors is set ou
249、t in note 15 and totals US$253.2 million (2008:US$225.9 million).In 2009,the Group has no exposure to credit risk arising from derivative financial instruments with a positive fair value(2008:US$3.7 million)as disclosed in note 15 as a component of other debtors.The Groups exposuretocreditriskarisin
250、gfromdepositsandbalanceswithbanksissetoutinnote18andtotalsUS$468.8million(2008:US$400.6million).(iii)Liquidity riskPrudent liquidity risk management includes managing the profile of debt maturities and funding sources,maintaining sufficient cash,and ensuring the availability of funding from an adequ
251、ate amount of committed credit facilities and the ability to close out market positions.The Groups ability to fund its existing and prospective debt requirements is managed by maintaining diversified funding sources with adequate committed funding lines from high quality lenders,and by monitoring ro
252、lling short-term forecasts of the Groups cash and gross debt on the basis of expected cash flows.Inadditionlong-termcashflowsareprojectedtoassistwiththeGroupslong-termdebtfinancingplans.At 31st December 2009,total available borrowing facilities amounted to US$1,185.8 million(2008:US$997.0 million),o
253、fwhichUS$499.2million(2008:US$467.1million)wasdrawndown.Undrawncommittedfacilities,intheformofrevolving credit and term loan facilities,totalled US$381.3 million(2008:US$319.3 million).An ageing analysis of the Groups financial liabilities based on the remaining period at the balance sheet to the co
254、ntractual maturity dates is included in notes 20,21 and 30.Dairy Farm International Holdings Limited Annual Report 200928Notes to the Financial Statements(b)Capital managementTheGroupsobjectiveswhenmanagingcapitalaretosafeguardtheGroupsabilitytocontinueasagoingconcernwhilst seeking to maximize benef
255、its to shareholders and other stakeholders.Capital is equity as shown in the consolidated balance sheet plus net debt.The Group actively and regularly reviews and manages its capital structure to ensure optimal capital structure and shareholder returns,taking into consideration the future capital re
256、quirements of the Group and capital efficiency,prevailingandprojectedprofitability,projectedoperatingcashflows,projectedcapitalexpendituresandprojectedstrategicinvestmentopportunities.Inordertomaintainoradjustthecapitalstructure,theGroupmayadjusttheamount of dividends paid to shareholders,repurchase
257、 Company shares,return capital to shareholders,issue new shares or sell assets to reduce debt.The Group monitors capital on the basis of the Groups consolidated gearing ratio and consolidated interest cover.The gearing ratio is calculated as net debt divided by total equity.Net debt is calculated as
258、 total borrowings less bank balances and other liquid funds.Interest cover is calculated as underlying business performance divided by net financing charges.The Group does not have a defined gearing or interest cover benchmark or range.The ratios at 31st December 2009 and 2008 are as follows:2009200
259、8Gearing ratio(%)n/a1Interest cover(times)2229The net cash position at 31st December 2009 for the year then ended is primarily due to better operating results and proceeds from sale of properties.The decrease in interest cover is mainly due to lower interest income during the year.(c)Fair value esti
260、mationThe fair values of current debtors,bank balances and other liquid funds,current creditors and current borrowings are assumed to approximate their carrying amount due to the short-term maturities of these assets and liabilities.The fair values of long-term borrowings are based on market prices
261、or are estimated using the expected future payments discounted at market interest rates.The fair value of interest rate swaps and caps is calculated by reference to the present value of the estimated future cash flows,taking into account current interest rates as observed from the market.The fair va
262、lue of forward foreign exchange contracts is determined using forward exchange market rates of the same remaining tenor at the balance sheet date.3.CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTSEstimatesandjudgementsusedinpreparingthefinancialstatementsarecontinuallyevaluatedandarebasedonhistorical ex
263、perience and other factors,including expectations of future events that are believed to be reasonable.The resulting accounting estimates will,by definition,seldom equal the related actual results.The estimates and assumptions that have a significant effect on the carrying amounts of assets and liabi
264、lities are discussed below.(a)Acquisition of subsidiaries,associates and joint venturesTheinitialaccountingontheacquisitionofsubsidiaries,associatesandjointventuresinvolvesidentifyinganddetermining the fair values to be assigned to the identifiable assets,liabilities and contingent liabilities of th
265、e acquired entities.The fair values of land use rights and tangible assets are determined by independent valuers by reference to market prices or present value of expected net cash flows from the assets.Any changes in the assumptions used and estimates made in determining the fair values,and managem
266、ents ability to measure reliably the contingent liabilities of the acquired entity will impact the carrying amount of these assets and liabilities.Dairy Farm International Holdings Limited Annual Report 200929Notes to the Financial Statements(b)Tangible fixed assets and depreciationFreehold land and
267、 buildings,and the building component of owner-occupied leasehold properties are valued every threeyearsbyindependentvaluers.IntheinterveningyearstheGroupreviewsthecarryingvaluesandadjustmentismade where there has been a material change.In arriving at the valuation of land and buildings,assumptions
268、and economic estimates have to be made.Management determines the estimated useful lives and related depreciation charges for the Groups tangible fixed assets.Management will revise the depreciation charge where useful lives are different to those previously estimated,or it will write-off or write-do
269、wn technically obsolete or non-strategic assets that have been abandoned or sold.(c)Impairment of assetsThe Group tests annually whether goodwill and other assets that have indefinite useful lives suffered any impairment.Other assets are reviewed for impairment whenever events or changes in circumst
270、ances indicate that the carrying amount of the asset exceeds its recoverable amount.The recoverable amount of an asset or a cash-generating unit is determined based on the higher of its fair value less costs to sell and its value in use,calculated on the basis of managements assumptions and estimate
271、s.Changing the key assumptions,including the discount rates or the growth rateassumptionsinthecashflowprojections,couldmateriallyaffectthevalue-in-usecalculations.(d)Income taxesTheGroupissubjecttoincometaxesinnumerousjurisdictions.Significantjudgementisrequiredindeterminingtheworldwide provision fo
272、r income taxes.There are many transactions and calculations for which the ultimate tax determinationisuncertainduringtheordinarycourseofbusiness.Wherethefinaltaxoutcomeofthesemattersisdifferent from the amounts that were initially recorded,such differences will impact the income tax and deferred tax
273、 provisions in the period in which such determination is made.Recognition of deferred tax assets,which principally relate to tax losses,depends on the managements expectation of future taxable profit that will be available against which the tax losses can be utilized.The outcome of their actual util
274、ization may be different.(e)Pension obligationsThe present value of the pension obligations depends on a number of factors that are determined on an actuarial basis using a number of assumptions.The assumptions used in determining the net cost/income for pensions include the expected long-term rate
275、of return on the relevant plan assets and the discount rate.Any changes in these assumptions will impact the carrying amount of pension obligations.The expected return on plan assets assumption is determined on a uniform basis,taking into consideration long-term historical returns,asset allocation a
276、nd future estimates of long-term investment returns.The Group determines the appropriate discount rate at the end of each year.This is the interest rate that should be used to determine the present value of estimated future cash outflows expected to be required to settle the pension obligations.In d
277、etermining the appropriate discount rate,the Group considers the interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid,and that have terms to maturity approximating the terms of the related pension liability.Other key assumptions for p
278、ension obligations are based in part on current market conditions.(f)Non-trading itemsThe Group uses underlying business performance in its internal financial reporting to distinguish between the underlying profitsandnon-tradingitems.Theidentificationofnon-tradingitemsrequiresjudgementbymanagement.D
279、airy Farm International Holdings Limited Annual Report 200930Notes to the Financial Statements IncludingassociatesandjointventuresSubsidiaries4.SALES2009US$m2008US$m2009US$m2008US$mAnalysis by operating segment:North Asia3,666.7 3,502.8 3,666.7 3,502.8 East Asia1,957.8 1,892.9 1,957.8 1,892.9 South
280、Asia1,459.8 1,395.0 1,404.0 1,336.8 7,084.3 6,790.7 7,028.5 6,732.5 Maxims968.3950.98,052.67,741.67,028.56,732.5Analysis by format:Supermarkets/hypermarkets4,311.94,190.84,275.14,151.7Health and beauty stores1,232.8 1,077.1 1,213.8 1,058.0 Convenience stores1,282.2 1,261.8 1,282.2 1,261.8 Home furni
281、shings stores 257.4 261.0 257.4 261.0 7,084.36,790.77,028.56,732.5Restaurants968.3 950.9 8,052.67,741.67,028.5 6,732.5 Operating segments are identified on the basis of internal reports about components of the Group that are regularly reviewed by the Board for the purpose of resource allocation and
282、performance assessment.Dairy Farm operates in four operating segments:North Asia,East Asia,South Asia and Maxims.North Asia comprises Hong Kong,mainland China,Macau,Taiwan and Korea.East Asia comprises Malaysia,Indonesia,Vietnam and Brunei.South Asia comprises Singapore,India and Thailand.Maxims is
283、the Groups major associate,a leading Hong Kong restaurant chain.No operating segments have been aggregated to form the reportable segments.5.OPERATING PROFIT2009US$m2008US$mAnalysis by operating segment:North Asia208.2 205.3 East Asia140.4 111.8 South Asia101.0 79.0 449.6 396.1 Support office(25.9)(
284、23.4)423.7 372.7 Non-trading items in North Asia:Gainonsaleofassociatesandjointventures14.2Gainonsaleofotherinvestments 0.9 423.7 387.8 Analysis by format:Supermarkets/hypermarkets251.7 209.2 Health and beauty stores108.994.1Convenience stores60.8 70.2 Home furnishings stores12.3 10.1 Other15.912.54
285、49.6 396.1 Dairy Farm International Holdings Limited Annual Report 200931Notes to the Financial Statements5.OPERATING PROFIT(continued)The following items have been charged/(credited)in arriving at operating profit:2009US$m2008US$mCost of stocks recognized as expense4,901.84,704.5Impairment of intan
286、gible assets(note 11)2.5 Amortization of intangible assets(note 11)4.04.5Impairment of tangible assets(note 12)4.3 2.8 Depreciation of tangible assets(note 12)139.4 131.9 Employee benefit expensesalariesandbenefitsinkind584.8564.2shareoptionsgranted(note25)1.5 1.9 definedbenefitpensionplans(note17)1
287、0.9 6.2 definedcontributionpensionplans30.3 29.2 627.5 601.5 Operating leasesminimumleasepayments542.1 511.7 contingentrents4.7 5.0 subleases(31.6)(31.9)515.2484.8Concession and service income(81.0)(70.4)Gainonsaleofassociatesandjointventures(14.2)*Rental income(15.9)(12.5)Gain on sale of other inve
288、stments(0.9)Net foreign exchange gains(0.6)(1.8)*Loss on sale of tangible assets3.4 5.5*Included US$1.0 million realization of exchange gain upon disposal.*Included exchange gain of US$1.0 million arising on repatriation of capital from foreign subsidiaries.6.NET FINANCING CHARGES2009US$m2008US$mInt
289、erestexpensebankloansandadvances23.4 22.5 Commitment and other fees0.9 0.7 Fair value loss on remeasurement of put option 0.7 Financing charges24.3 23.9 Interest income on bank deposits(3.2)(9.8)21.114.1Dairy Farm International Holdings Limited Annual Report 200932Notes to the Financial Statements7.
290、SHARE OF RESULTS OF ASSOCIATES AND JOINT VENTURES2009US$m2008US$mAnalysis by operating segment:Maxims38.234.7South Asia(3.0)(4.5)35.2 30.2 Analysis by format:Restaurants38.234.7Supermarkets(2.9)(3.9)Health and beauty stores(0.1)(0.6)35.2 30.2 Results are shown after tax and minority interests in the
291、 associates and joint ventures.8.TAX2009US$m2008US$mTax charged to profit is analyzed as follows:Current tax71.5 70.1 Deferred tax 3.5 0.6 75.0 70.7 Geographical analysis:North Asia32.8 35.8 East Asia25.7 21.2 South Asia16.5 13.7 75.0 70.7 Reconciliation between tax expense and tax at the applicable
292、 tax rate*:Tax at applicable tax rate65.758.4Incomenotsubjecttotax(1.3)(0.9)Expenses not deductible for tax purposes4.4 7.1 Tax losses not recognized4.6 2.2 Utilization of previously unrecognized tax losses and temporary differences(0.4)Recognition of previously unrecognized tax losses and temporary
293、 differences(0.5)Under/(over)provision in prior years0.3(0.6)Change in tax rates(0.4)0.4Withholdingtax2.12.0Deferred tax liabilities written back(0.2)Other0.5 2.3 75.0 70.7 Tax relating to components of other comprehensive income is analyzed as follows:Employee benefit plans(3.2)11.5 Cash flow hedge
294、s0.6 0.7 Revaluation of other investments(0.1)(0.3)(2.7)11.9 Share of tax of associates and joint ventures of US$9.3 million(2008:US$7.7 million)is included in share of results of associates and joint ventures.*The applicable tax rate for the year was 16.3%(2008:15.6%)and represents the weighted ave
295、rage of the rates of taxation prevailing in the territories in which the Group operates.The increase in the applicable tax rate is caused by a change in the profitability of the Groups subsidiaries in respective territories.The Group has no tax payable in the United Kingdom(2008:nil).Dairy Farm Inte
296、rnational Holdings Limited Annual Report 200933Notes to the Financial Statements9.EARNINGS PER SHAREBasicearningspersharearecalculatedonprofitattributabletoshareholdersofUS$364.0million(2008:US$333.0million),andontheweightedaveragenumberof1,347.0million(2008:1,346.4million)sharesinissueduringtheyear
297、.DilutedearningspersharearecalculatedonprofitattributabletoshareholdersofUS$364.0million(2008:US$333.0million),andontheweightedaveragenumberof1,348.8million(2008:1,347.7million)sharesinissueduringtheyear.The weighted average number of shares is arrived at as follows:Ordinary shares in millions200920
298、08Weightedaveragenumberofsharesforbasicearningspersharecalculation1,347.01,346.4Adjustmentforsharesdeemedtobeissuedfornoconsideration under the Senior Executive Share Incentive Schemes1.8 1.3 Weightedaveragenumberofsharesfordilutedearningspersharecalculation1,348.81,347.7There were no non-trading it
299、ems for the year ended 31st December 2009.Additional basic and diluted earnings per share are also calculated for the year ended 31st December 2008 based on underlying profit attributable to shareholders of US$320.1 million.A reconciliation of earnings is set below:2008US$mBasic earnings per shareUS
300、Diluted earnings per shareUSProfit attributable to shareholders333.024.7324.71Non-trading items(note 10)(12.9)Underlying profit attributable to shareholders320.123.7723.7510.NON-TRADING ITEMSAn analysis of non-trading items after interest,tax and minority interests for the year ended 31st December 2
301、008 is set out below:US$mSale of 50%shareholding in CJ Olive Young12.2Sale of other investments0.712.9Dairy Farm International Holdings Limited Annual Report 200934Notes to the Financial Statements11.INTANGIBLE ASSETSGoodwillUS$mLand use rightsUS$mOtherUS$mTotalUS$m2009Cost224.5 71.5 21.0 317.0 Amor
302、tization and impairment(0.4)(4.2)(8.2)(12.8)Net book value at 1st January224.1 67.3 12.8 304.2Exchange differences9.63.20.813.6Additions30.66.236.8Amortization(0.8)(3.2)(4.0)Classified as non-current assets held for sale(31.3)(31.3)Net book value at 31st December233.769.016.6319.3Cost234.173.528.933
303、6.5Amortization and impairment(0.4)(4.5)(12.3)(17.2)233.769.016.6319.32008Cost230.4 56.6 12.2 299.2 Amortization and impairment(0.4)(3.6)(2.7)(6.7)Net book value at 1st January 230.0 53.0 9.5 292.5 Exchange differences(7.5)(2.6)(1.4)(11.5)Additions 1.6 33.7 10.7 46.0Amortization(1.0)(3.5)(4.5)Impair
304、ment (2.5)(2.5)Classified as non-current assets held for sale(15.8)(15.8)Net book value at 31st December224.1 67.3 12.8 304.2Cost224.5 71.5 21.0 317.0 Amortization and impairment(0.4)(4.2)(8.2)(12.8)224.1 67.3 12.8 304.22009US$m2008US$mAnalysis of goodwill by operating segments:North Asia41.040.9Eas
305、t Asia119.4 111.6 South Asia73.3 71.6 233.7224.1The Groups other intangible assets comprise trademarks and computer software.Additions of goodwill in 2008 mainly related to the acquisition of seven Guardian stores in Brunei for a total cash consideration of US$2.6 million(note 29(e).Impairment charg
306、e of other intangible assets in 2008 related to trademarks in PT Hero,Indonesia.Goodwill is allocated to groups of cash-generating units identified by geographical segments.Cash flow projections for impairment reviews are based on budgets prepared on the basis of assumptions reflective of the prevai
307、ling market conditions,and are discounted appropriately.Key assumptions used for value-in-use calculations include budgeted gross margins of between 23%and 50%and growth rates of up to 6%to extrapolate cash flows,which vary across the Groups business segments and geographical locations,over a five y
308、ear period,and are based on management expectations for the market development;and pre-tax discount rates of between 7%and 21%applied to the cash flow projections.The discount rates used reflect business specific risks relating to the relevant industry,business life-cycle and geographical location.O
309、n the basis of these reviews,management concluded that no impairment is required.The amortization charges are all recognized in arriving at operating profit and are included in selling and distribution costs and administration expenses.Dairy Farm International Holdings Limited Annual Report 200935No
310、tes to the Financial Statements12.TANGIBLE ASSETSFreeholdpropertiesUS$mLeasehold propertiesUS$mLeasehold improvementsUS$mPlant&machineryUS$mFurniture,equipment&motor vehiclesUS$mTotalUS$m2009Cost and valuation41.3 119.2 442.3390.4504.81,498.0Depreciation and impairment(0.5)(12.4)(288.2)(243.0)(317.0
311、)(861.1)Net book value at 1st January40.8 106.8 154.1147.4 187.8 636.9 Exchange differences0.95.41.01.812.922.0Additions21.755.451.052.670.7251.4Disposals(1.7)(1.4)(1.0)(4.1)Depreciation(0.2)(4.7)(40.7)(38.9)(54.9)(139.4)Impairment(1.2)(3.1)(4.3)Classified as non-current assets held for sale(16.6)(3
312、6.2)(52.8)Net book value at 31st December46.6126.7163.7160.3212.4709.7Cost or valuation47.2144.9465.2425.5579.71,662.5Depreciation and impairment(0.6)(18.2)(301.5)(265.2)(367.3)(952.8)46.6126.7163.7160.3212.4709.72008Cost and valuation 25.5 131.5 419.3 371.1 452.2 1,399.6 Depreciation and impairment
313、 (0.2)(11.7)(264.2)(231.8)(287.9)(795.8)Net book value at 1st January 25.3 119.8 155.1 139.3 164.3 603.8 Exchange differences(0.9)(3.1)(1.0)(1.5)(10.1)(16.6)Stores acquired 0.2 0.2 Additions 16.6 14.5 51.0 48.9 79.6 210.6 Disposals(2.0)(1.8)(2.5)(6.3)Depreciation (0.2)(4.3)(46.7)(37.7)(43.0)(131.9)I
314、mpairment (2.3)(0.5)(2.8)Classified as non-current assets held for sale(20.1)(20.1)Net book value at 31st December40.8 106.8 154.1147.4 187.8 636.9 Cost or valuation41.3 119.2 442.3390.4504.81,498.0Depreciation and impairment(0.5)(12.4)(288.2)(243.0)(317.0)(861.1)40.8 106.8 154.1147.4 187.8 636.9 Th
315、e Groups freehold properties and the building component of leasehold properties were revalued at 31st December 2008 by independent professionally qualified valuers.Management has reviewed the carrying value at 31st December 2009 and are satisfied that there were no material changes to those values.I
316、f the freehold properties and the building component of leasehold properties had been included in the financial statements at cost less depreciation,the carrying value would have been US$155.1 million(2008:US$129.4 million).Dairy Farm International Holdings Limited Annual Report 200936Notes to the F
317、inancial Statements13.ASSOCIATES AND JOINT VENTURES2009US$m2008US$mUnlisted associates143.1 126.5 Joint ventures2.7 2.2 Share of attributable net assets145.8 128.7 The Groups share of assets,liabilities,capital commitments,contingent liabilities and results of associates and joint ventures are summa
318、rized below:Non-current assets146.7 156.3 Current assets117.6 82.6 Non-current liabilities(23.9)(7.5)Current liabilities(91.6)(96.9)Total equity148.8134.5Attributable to minority interests(3.0)(5.8)Attributable net assets145.8 128.7 Sales511.6504.2Profit after tax 35.9 30.7 Capital commitments25.5 2
319、0.3 Contingent liabilitiesMovements of share of attributable net assets for the year:At 1st January128.7 120.3 Exchange differences 1.6 Share of results after tax and minority interests35.2 30.2 Share of other comprehensive income after tax and minority interests3.8(4.9)Dividends received(24.5)(25.1
320、)Capitalinjections2.6 6.6 At 31st December145.8 128.7 Analysis by operating segment:Maxims145.0127.4South Asia0.8 1.3 At 31st December145.8 128.7 14.OTHER INVESTMENTS2009US$m2008US$mMovements for the year:At 1st January2.30.4Disposals(0.3)Revaluation surplus0.8 2.2 At 31st December3.1 2.3 Other inve
321、stments are unlisted non-current available-for-sale financial assets in North Asia.The fair value is determined based on observable current market transactions.Dairy Farm International Holdings Limited Annual Report 200937Notes to the Financial Statements15.DEBTORS2009US$m2008US$mTrade debtorsthirdp
322、arties36.4 32.1 provisionforimpairment(0.6)(0.6)35.8 31.5 Other debtorsthirdparties217.6194.4associatesandjointventures 0.2 217.6194.6provisionforimpairment(0.2)(0.2)217.4194.4253.2 225.9 Non-current113.3 105.3 Current139.9 120.6 253.2 225.9 Geographical analysis:North Asia107.0 112.0 East Asia99.5
323、77.5 South Asia46.736.4253.2 225.9 Salestocustomersaremadeincashorviamajorcreditcards.TheaveragecreditperiodonsaleofgoodsandservicesvariesamongGroup businesses and is normally not more than 30 days.The maximum exposure to credit risk is represented by the carrying amount of trade debtors after deduc
324、ting the impairment allowance.An allowance for impairment of trade debtors is made based on the estimated irrecoverable amount.Significant financial difficulties of the debtor,probability that the debtor will enter bankruptcy or financial reorganization,and default or delinquency in payment are cons
325、idered indicators that the debtor is impaired.Dairy Farm International Holdings Limited Annual Report 200938Notes to the Financial Statements15.DEBTORS(continued)At 31st December 2009,trade debtors of US$0.6 million(2008:US$0.6 million)were impaired.The amount of the provision was US$0.6 million(200
326、8:US$0.6 million).The ageing analysis of these trade debtors is as follows:2009US$m2008US$mOver 90 days0.6 0.6 0.6 0.6 At 31st December 2009,trade debtors of US$2.9 million(2008:US$2.8 million)were past due but not impaired.The ageing analysis of these trade debtors is as follows:Below 30 days2.5 1.
327、9 Between 31 and 60 days0.20.4Between 61 and 90 days0.2 0.2 Over 90 days 0.3 2.9 2.8 The risk of trade debtors that are neither past due nor impaired at 31st December 2009 becoming impaired is low as most of the balances have been settled subsequent to the year end.Other debtors are further analyzed
328、 as follows:Prepayments64.0 55.6 Rental and other deposits106.7 105.1 Derivative financial instruments 3.7 Loans to employees0.2 0.2 Otheramountsduefromassociatesandjointventures 0.2 Other46.5 29.6 217.4194.4Movements on the provision for impairment are as follows:Trade debtorsOther debtors2009US$m2
329、008US$m2009US$m2008US$mAt 1st January(0.6)(1.0)(0.2)(0.1)Additional provisions(0.1)(0.1)(0.2)(0.1)Unused amounts reversed0.1 0.2 0.2Amounts written off0.3At 31st December(0.6)(0.6)(0.2)(0.2)There were no debtors pledged as security for borrowings as at 31st December 2009 and 2008.Dairy Farm Internat
330、ional Holdings Limited Annual Report 200939Notes to the Financial Statements16.DEFERRED TAX ASSETS/(LIABILITIES)AcceleratedtaxdepreciationUS$mFair valuegains/lossesUS$mEmployeebenefitsUS$m Provisions and other temporary differencesUS$mTotalUS$m2009At 1st January(23.1)(6.9)5.5 5.9 (18.6)Exchange diff
331、erences(0.9)(0.6)0.81.00.3(Charged)/credited to consolidated profit and loss(3.9)0.20.3(0.1)(3.5)Credited/(charged)to other comprenhensive income0.5(3.2)(2.7)At 31st December(27.9)(6.8)3.46.8(24.5)Deferred tax assets0.71.38.19.019.1Deferred tax liabilities(28.6)(8.1)(4.7)(2.2)(43.6)(27.9)(6.8)3.46.8
332、(24.5)2008At 1st January(19.5)(7.9)(6.3)4.4(29.3)Exchange differences 0.7 0.6 (1.0)(0.9)(0.6)(Charged)/credited to consolidated profit and loss(4.3)1.3 2.4(0.6)Credited to other comprehensive income0.4 11.5 11.9 At 31st December(23.1)(6.9)5.5 5.9 (18.6)Deferred tax assets 0.9 1.5 6.9 8.7 18.0 Deferr
333、ed tax liabilities(24.0)(8.4)(1.4)(2.8)(36.6)(23.1)(6.9)5.5 5.9 (18.6)Deferred tax balances predominantly comprise non-current items.Deferred tax assets and liabilities are netted when the taxes relate to the same taxation authority and where offsetting is allowed.Deferred tax assets of US$14.2 million(2008:US$12.7 million)arising from unused tax losses of US$60.3 million(2008:US$48.8 million)have
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