annual report - Harvey Norman Company Reports & Announcements

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NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 22. Contributed Equity (continued) Movements in ordinary shares on issue Ordinary Shares – Terms and Conditions Ordinary shares have the right to receive dividends as declared and, in the event of winding up the company, to participate in any surplus on winding up in proportion to the number of and amounts paid up on shares held. Each ordinary share entitles the holder to one vote, either in person or by proxy, at a meeting of the company. Share Options Harvey Norman Holdings Limited C O N S O L I D A T E D No. $‟000 At 1 July 2010 1,062,316,784 259,610 Issue of shares under executive share option plan - - At 1 July 2011 1,062,316,784 259,610 Issue of shares under executive share option plan - - At 30 June 2012 1,062,316,784 Options Issued on 29 November 2010 (“First Tranche of Options”) Subject to the terms and conditions of the 2010 Share Option Plan, the Company issued 1,000,000 options to subscribe for 1,000,000 fully paid ordinary shares in the Company, at an exercise price of $3.02 per option, on 29 November 2010, to each of David Matthew Ackery, Chris Mentis and John Evyn Slack-Smith ("First Tranche of Options"). The qualifying period for the 2010 EOP Allocation is the three years ending 30 June 2013. The first tranche of options were independently valued at grant date by Mercer (Australia) Pty Limited utilising the assumptions underlying the Black- Scholes methodology. These assumptions included the following: dividend yield 3.8% expected volatility 37.1% risk free rate as derived from the yield on Australian Government Bonds of the appropriate term Under this valuation methodology, the value of each option in the 2010 EOP Allocation was $0.87 per option or $2,610,000 in total. On 13 June 2012 the Company announced that options over 322,000 shares granted to each of David Matthew Ackery, Chris Mentis and John Evyn Slack-Smith, a total of 966,000 options over 966,000 shares, have lapsed and will never be exercisable. The Remuneration Committee had regard to certificates and reports from officers of the Company, other board committees and management, and own enquiries, and determined that the 2011 Non- Financial Performance Conditions had been satisfied as to 54% of the 70% weighting of those 2011 Non-Financial Performance Conditions, resulting in the forfeiture of 966,000 options in total. Refer to detailed information in the Remuneration Report for the terms and conditions of the First Tranche of Options. Options Issued on 29 November 2011 (“Second Tranche of Options”) Subject to the terms and conditions of the 2010 Share Option Plan, the Company issued 1,000,000 options to subscribe for 1,000,000 fully paid ordinary shares in the Company, at an exercise price of $2.03 per option, on 29 November 2011, to each of David Matthew Ackery, Chris Mentis and John Evyn Slack-Smith ("Second Tranche of Options"). The qualifying period for the second tranche of options is the three years ending 30 June 2014. The second tranche of options were independently valued at grant date by Mercer (Australia) Pty Limited utilising the assumptions underlying the Black-Scholes methodology. These assumptions included the following: dividend yield 4.6% expected volatility 37.0% risk free rate as derived from the yield on Australian Government Bonds of the appropriate term Under this valuation methodology, the value of each option in the Second Tranche of Options was $0.51 per option or $1,530,000 in total. Refer to detailed information in the Remuneration Report for the terms and conditions of the Second Tranche of Options. 259,610 97
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 23. Reserves 98 Nature and purpose of reserves Asset revaluation reserve Foreign currency translation reserve Available for sale reserve CONSOLIDATED $000 Cash flow hedge reserve Employee equity benefits reserve Acquisition reserve At 1 July 2010 68,980 (20,107) 1,354 (1,201) 7,392 - 56,418 Revaluation of land and buildings Tax effect of revaluation of land (604) - - - - - (604) and buildings Unrealised gains on available- (1,819) - - - - - (1,819) for-sale investments - - 973 - - - 973 Net gain on interest rate swap Tax effect of net gain on - - - 563 - - 563 interest rate swap Reverse expired or realised - - - (169) - - (169) cash flow hedge reserves Net gain on forward foreign - - - (61) - - (61) exchange contracts - - - 4 - - 4 Currency translation differences Acquisition of non-controlling - (15,827) - - - - (15,827) interests - - - - - (6,917) (6,917) Share based payment - - - - 419 - 419 Reversal of share expenses - - - - (359) - (359) At 30 June 2011 66,557 (35,934) (a) Asset revaluation reserve The asset revaluation reserve is used to record increases in the fair value of “owner occupied” land and buildings and decreases to the extent that such decreases relate to an increase on the same asset previously recognised in equity. (b) Foreign currency translation reserve The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial statements of foreign subsidiaries. (c) Available for sale reserve This reserve records fair value changes on available-for-sale investments. (d) Cash flow hedge reserve This reserve records the portion of the gain or loss on a hedging instrument in a cash flow hedge that is determined to be an effective hedge. 2,327 (864) 7,452 (6,917) Total 32,621 At 1 July 2011 66,557 (35,934) 2,327 (864) 7,452 (6,917) 32,621 Revaluation of land and buildings Tax effect of revaluation of land 9,072 - - - - - 9,072 and buildings Unrealised gains on available- (3,400) - - - - - (3,400) for-sale investments - - 1,027 - - - 1,027 Net loss on interest rate swap Tax effect of net loss on interest - - - (18,704) - - (18,704) rate swap Reverse expired or realised - - - 5,613 - - 5,613 cash flow hedge reserves Net loss on forward foreign - - - 95 - - 95 exchange contracts Tax effect of net loss on forward - - - (37) - - (37) foreign exchange contracts - - - 11 - - 11 Currency translation differences Acquisition of non-controlling - 565 - - - - 565 interests - - - - - (7,821) (7,821) Share based payment - - - - 966 - 966 Reversal of share expenses - - - - (632) - (632) At 30 June 2012 72,229 (35,369) 3,354 (13,886) 7,786 (14,738) 19,376
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2012 ANNUAL REPORT HOLDINGS LIMITED
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2 Contents Company Information 1 Co
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CHAIRMAN‟S REPORT Business Perfor
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CHAIRMAN‟S REPORT (CONTINUED) Our
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CHAIRMAN‟S REPORT (CONTINUED) Bre
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CHAIRMAN‟S REPORT (CONTINUED) Sal
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CHAIRMAN‟S REPORT (CONTINUED) Slo
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DIRECTOR‟S REPORT Your directors
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DIRECTOR‟S REPORT (CONTINUED) Com
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DIRECTOR‟S REPORT (CONTINUED) Div
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DIRECTOR‟S REPORT (CONTINUED) Rem
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DIRECTORS‟ REPORT (CONTINUED) Rem
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DIRECTORS‟ REPORT (CONTINUED) Rem
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DIRECTORS‟ REPORT (CONTINUED) Aud
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CORPORATE GOVERNANCE STATEMENT (CON
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STATEMENT OF FINANCIAL POSITION AS
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STATEMENT OF COMPREHENSIVE INCOME F
Page 47 and 48: STATEMENT OF CHANGES IN EQUITY FOR
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Page 51 and 52: OPERATING SEGMENTS (CONTINUED) Oper
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Page 57 and 58: STATEMENT OF SIGNIFICANT ACCOUNTING
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DIRECTORY OF HARVEY NORMAN, DOMAYNE
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