126_2013-08-12_10-10-45.pdf - For personal use only Appendix 4E Preliminary Final Report For the year ended 30 June 2013 JB Hi-Fi Limited ACN 093 220

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Unformatted text preview: For personal use only Appendix 4E Preliminary Final Report For the year ended 30 June 2013 JB Hi-Fi Limited ACN 093 220 136 This preliminary final report is provided to the Australian Securities Exchange (ASX) under ASX Listing Rule 4.3A. JB Hi-Fi Limited For personal use only ACN 093 220 136 Reporting period Comparative period Financial year ended 30 June 2013 Financial year ended 30 June 2012 Results for announcement to the market Revenue from ordinary activities up Percentage change % 5.77% Profit from ordinary activities after tax up 11.46% to 116,632 Net profit attributable to members of JB Hi-Fi Limited up 11.22% to 116,383 to Amount $’000 3,308,396 Dividend information Final dividend Interim dividend Amount per security 22.0¢ Franked amount per security 22.0¢ 50.0¢ 50.0¢ Record date for determining entitlements to the dividend: final dividend interim dividend 23 August 2013 21 February 2013 Dividend payment date: final dividend interim dividend 6 September 2013 8 March 2013 Net Tangible Assets Per Security 2013 $ Net tangible assets per security 2012 $ 1.47 0.91 Other information This report is based on the consolidated financial statements which have been audited by Deloitte. For a brief explanation of the figures above please refer to the Announcement on the results for the year ended 30 June 2013 and the notes to the financial statements. For personal use only JB Hi-Fi Limited ACN 093 220 136 Annual report for the financial year ended 30 June 2013 Annual report For personal use only for the financial year ended 30 June 2013 Page Governance, environmental and social statements 1 Directors' report 9 Operating and financial review 14 Remuneration report 22 Auditor's independence declaration 46 Independent auditor’s report 47 Directors' declaration 49 Statement of profit or loss 50 Statement of profit or loss and other comprehensive income 51 Balance sheet 52 Statement of changes in equity 53 Statement of cash flows 54 Notes to the financial statements 55 Additional securities exchange information 96 Corporate information 98 JB Hi-Fi Limited Governance, Environmental and Social Statements GOVERNANCE, ENVIRONMENTAL AND SOCIAL STATEMENTS For personal use only JB Hi-Fi Limited (“the Company” or “JB Hi-Fi”) recognises the importance of Governance, Environmental and Social matters to our shareholders, suppliers and customers. The Board continually reviews and monitors developments in corporate governance which are relevant to the Group (being the consolidated entity, consisting of the Company and the entities it controls). GOVERNANCE STATEMENT The directors and management of JB Hi-Fi are committed to ensuring that the Company’s business is conducted ethically and in accordance with high standards of corporate governance. The Board believes that JB Hi-Fi’s policies and practices comply in all material respects with the ASX Corporate Governance Council Principles and Recommendations (the “ASX Recommendations”). The Board believes that it has been compliant with the spirit of the principles contained in the ASX Recommendations during the 2013 financial year. In view of the size of the Board, the Board has determined not to establish a Nominations Committee. The Board has retained this responsibility. Further detail is set out in the section of this Governance Statement entitled “Nominations Committee”. THE BOARD Role The primary role of the Board is to protect and enhance long-term shareholder value. The Board is accountable to shareholders for the performance of the Company and it directs and monitors the business and affairs of the Company on behalf of shareholders. The Board’s responsibilities include the corporate governance of the Company, overseeing the business and affairs of the Company, communicating with the Company’s shareholders and the community, evaluating the performance of executives, ensuring that appropriate procedures are in place so that the Company’s business is conducted in an honest, open and ethical manner and the establishment of a formal and transparent procedure for the selection, appointment and review of Board directors. The Chief Executive Officer, who is accountable to the Board, is responsible for managing, directing and promoting the profitable operation and development of JB Hi-Fi. A copy of the Board Charter can be found on the Company’s website at via the “Corporate” and “Governance” sections. Composition / Selection and appointment of directors The Board seeks to ensure that the combination of its members provides an appropriate range of experience, skills, diversity, knowledge and perspective to enable it to carry out its obligations and responsibilities. In reviewing the Board’s composition and in assessing nominations for the appointment of non-executive directors, the Board uses its own internal resources to identify candidates for appointment as directors. External resources may also be used if suitable candidates are not identified. The Board believes that having a range of different skills, backgrounds, experience and gender ensures a diversity of viewpoints which facilitate effective governance and decision making. The Board considers that its current composition, together with that of its committees, enable it and those committees to add value to the Company and to operate effectively. The Board regularly reviews its composition. JB Hi-Fi maintains a majority of non-executive directors on its Board. The Board currently comprises seven directors, comprising five non-executive directors, including the Chairman, and two executive directors (being the Chief Executive Officer and the Chief Financial Officer). Apart from the Chief Executive Officer, directors are subject to shareholder re-election by rotation at least every three years. A copy of the procedure for the selection and appointment of directors can be found on the Company’s website at via the “Corporate” and “Governance” sections. Details of the directors as at the date of this report, including their experience, expertise and term of office are set out in the Directors’ Report. 1 JB Hi-Fi Limited Governance, Environmental and Social Statements For personal use only Independence The Board regards directors as independent directors if they: do not have a material relationship with the Company other than solely as a result of being a director; are independent of management; and do not have any business or other relationship that could compromise the independent exercise of their judgement and their ability to act in the best interests of the Company. JB Hi-Fi considers that each of the directors is independent with the exception of: Terry Smart: the Chief Executive Officer; Richard Murray: the Chief Financial Officer; and Richard Uechtritz: Richard was the Chief Executive Officer of the Company until May 2010. Richard is also a consultant to the Company. If a conflict of interest arises, the director concerned does not receive the relevant Board papers and is not present at the meeting whilst the item is considered. Directors must keep the Board advised, on an ongoing basis, of any interests that could potentially conflict with those of the Company. Directors are required to promptly disclose to the Board interests in contracts, other directorships or offices held, possible related party transactions and sales or purchases of the Company’s shares. Board meetings The Board meets regularly, dependent on business requirements. Prior to any meeting, the Directors receive all necessary Board papers. As well as holding regular Board meetings, the Board sets aside time to meet to comprehensively review business plans and the strategy of the Group. Access to information and independent advice Each director has the right of access to all relevant Company information and to the Company’s executives. Subject to prior consultation with the Chairman, each director may seek independent professional advice at the Company’s expense. Pursuant to a deed executed by each director and the Company, a director also has the right to have access to all documents which have been presented at Board meetings or made available in relation to their position as director for a term of 7 years after ceasing to be a director or such longer period as is necessary to determine relevant legal proceedings that commenced during this term. BOARD COMMITTEES Details of the Committees established by the Board are set out below. Audit and Risk Management Committee The Board has established an Audit and Risk Management Committee. The Audit and Risk Management Committee is charged primarily with assisting the Board in its: (a) oversight of the reliability and integrity of the Company’s financial management, financial reporting and disclosure, and related non-financial reporting and disclosure practices; (b) oversight of the independence, performance, appointment and removal of the external auditor; and (c) review of the Company’s policies on risk oversight and management, and in discharging its responsibility to satisfy itself that a sound system of risk management and internal control has been implemented to manage the material risks affecting the Company’s business, including compliance with all applicable laws. A copy of the Audit and Risk Management Committee Charter can be found on the Company’s website at via the “Corporate” and “Governance” sections. During the 2013 financial year, the Audit and Risk Management Committee comprised the following non-executive directors all of whom were independent with relevant financial, commercial and risk management experience, including an independent chairman who is not the chairman of the Board: Beth Laughton: Ongoing member and Chairman of Committee; James King: Ongoing member of Committee; and Gary Levin: Ongoing member of Committee. Details of the background and experience of each of the non-executive directors are outlined in the Directors' Report. 2 JB Hi-Fi Limited Governance, Environmental and Social Statements The Audit and Risk Management Committee meets regularly. Details of the meetings held and members’ attendance during the 2013 financial year are listed in the Directors’ Report. Directors who are not members of the Audit and Risk Management Committee may attend any Audit and Risk Management Committee meeting. For personal use only Remuneration Committee The Board has established a Remuneration Committee. The Remuneration Committee is charged primarily with reviewing and making recommendations to the Board regarding the remuneration and appointment of senior executive officers and non-executive directors and the policies for remuneration and compensation programs of the Company generally. A copy of the Remuneration Committee Charter can be found on the Company’s website at via the “Corporate” and “Governance” sections. During the year ended 30 June 2013, the Remuneration Committee comprised the following directors: Greg Richards: Ongoing member and Chairman of Committee; Gary Levin: Ongoing member of Committee; and James King: Ongoing member of Committee. The Remuneration Committee meets as required. Details of the meetings held and members’ attendance during the 2013 financial year are listed in the Directors’ Report. Directors who are not members of the Remuneration Committee may attend a Remuneration Committee meeting at the invitation of the Chairman when considered appropriate. Nominations Committee In view of its size, the Board has decided not to establish a Nominations Committee. The Board itself is responsible for the selection and appointment practices of the Company. The Board is charged with, in part, selecting, appointing and regularly evaluating the performance of, and planning for the succession of, the Chief Executive Officer; establishing formal and transparent procedures for the selection and appointment of new directors to the Board; regularly reviewing the succession plans in place for Board membership to ensure that an appropriate balance of skills, experience and expertise is maintained; and instituting internal procedures for evaluating Board performance and the performance of individual directors and Board Committees. A copy of the Board Charter and the Board’s policy for the appointment of directors can be found on the Company’s website at via the “Corporate” and “Governance” sections. CODE OF CONDUCT JB Hi-Fi acknowledges the need for directors, executives and employees to observe the highest ethical standards of corporate behaviour. JB Hi-Fi has adopted a Code of Conduct to provide directors, executives and employees with guidance on what the Company deems to be acceptable behaviour. The key elements of the Code are: As a company: (a) respecting every employee’s dignity, rights and freedoms; (b) providing a working environment that is safe, challenging and rewarding; (c) recognising the achievements of each of our employees; (d) respecting customers’, suppliers’ and employees’ personal and sensitive information; (e) reinforcing JB Hi-Fi’s commitment to the highest standards in business and professional ethics; and (f) obeying the law. As employees: (a) treating customers, the public and fellow employees with honesty, courtesy and respect; (b) respecting and safeguarding the property of customers, JB Hi-Fi and fellow workers; (c) maintaining confidentiality of all customers’, JB Hi-Fi’s and other parties’ information gained through our work; (d) performing our duties, as best we can, taking into account our skills, experience, qualifications and position; (e) doing our jobs in a safe, responsible and effective manner; (f) ensuring our personal business and financial interests do not conflict with our duty to JB Hi-Fi; (g) working within JB Hi-Fi’s policies and rules; and (h) obeying the law. The Company has developed appropriate policies and guidelines to assist employees in applying the Code in practice. A copy of the Code of Conduct can be found on the Company’s website at via the “Corporate” and “Governance” sections. 3 JB Hi-Fi Limited Governance, Environmental and Social Statements For personal use only DIVERSITY JB Hi-Fi recognises the importance of diversity and values the competitive advantage that is gained from a diverse workforce at all levels of the organisation. The Company has a Diversity Policy which is available on the Company’s website at via the “Corporate” and “Governance” sections. The Diversity Policy states that JB Hi-Fi appreciates that the different perspectives arising from diversity encourage an innovative, responsive, productive and competitive business and create value for our c ustomers and shareholders. JB Hi-Fi’s objective is that Board appointments, employment and advancement decisions are based on merit, qualifications and competence, and that employment opportunities shall not be influenced, affected or limited by discrimination. JB Hi-Fi believes that no barrier should therefore exist that prevents this from occurring. Gender diversity As at 30 June 2013 the proportion of women engaged by JB Hi-Fi was as follows: Board: 14% being 1 of 7 directors (2012: 14%) Senior management/executive (excluding executive directors): 5% being 1 of 20 employees (2012: 9.5%) Group: 40% being 2,798 of 6,941 employees (2012: 40%). In March 2012 the Board set measurable objectives in relation to gender diversity and adopted a strategy to achieve these objectives. These diversity objectives and progress towards achieving them are set out in the table below: Objective set in March 2012 June 2013 June 2012 To improve the percentage of female to male commissioned sales staff over each of the next 3 years 43% 41% To improve the percentage of female to male store managers over the next 3 years 11% 11% To improve the percentage of female to male regional managers over the next 3 years 0% 0% To increase the percentage of female senior managers over the next 3 years 5% 9.5% The Board has established action plans for achieving the objectives set out above and identified and designated responsibility for each objective to executives and key stakeholders. One of the challenges faced by the Group in terms of diversity is the relatively low level of turnover in positions such as regional and senior management roles. The vast majority of these positions are occupied by long serving male employees of the Group, which is why the Board believes 3 year targets are realistic in terms of achieving the desired improvements . The Board considers progress towards achieving these long term objectives is on track and in line with the targets identified for the 3 year time periods. Actions taken to date include: development of systems to enable regular reporting and assessment of progress towards the adopted gender diversity objectives; a detailed review of employee pay to consider whether any gender based disparity exists. Based upon the results of this review the Company is satisfied that there is no disparity in pay between male and female staff; further development of part time and flexible work practices, with specific focus on return to work from maternity leave; appointment of females into roles traditionally filled by male staff, such as car sound sales, hi-fi sales, inventory planners, buyers, and IT; a reorganisation of the managerial structure within stores to achieve future strategic operational goals which JB Hi-Fi believes will also, in time, result in an increase in the number of female store managers and ultimately regional managers; and ensuring that female participation in leadership development programs is at least equivalent to the proportion of female employees at that level in the organisation. 4 JB Hi-Fi Limited Governance, Environmental and Social Statements For personal use only SHAREHOLDINGS OF DIRECTORS AND EMPLOYEES Directors’ current shareholdings are detailed in the Directors’ Report and are updated by notification to the ASX as required. The Board has approved and adopted a Securities Trading Policy for dealing in securities. Subject to certain specific and limited exceptions, directors and key employees may only trade in JB Hi-Fi shares and any other JB Hi-Fi securities during designated Trading Windows. These four week Trading Windows follow the release of JB Hi-Fi’s Final Results (August/September), Interim Results (February/March) and the Annual General Meeting (October/November). Any transaction conducted by directors in shares of the Company is notified to the ASX. A copy of the Securities Trading Policy can be found on the Company’s website at via the “Corporate” and “Governance” sections. INTEGRITY OF REPORTING The Company has put in place controls designed to safeguard the Company’s interests and to ensure the integrity of its reporting. These controls aim to ensure that the Company complies with all regulatory requirements and community standards. In accordance with the Corporations Act and the ASX Recommendations, the Chief Executive Officer and Chief Financial Officer have stated in writing to the Board that, in their opinion: (a) the financial records of the consolidated entity (consisting of the Company and the entities it controlled for the financial year ended 30 June 2013) for the financial year have been properly maintained in accordance with section 286 of the Corporations Act; (b) the financial statements for the financial year and the notes required by the accounting standards give a true and fair view of the consolidated entity’s financial position and performance and comply with the accounting standards; and (c) the statements in (a) and (b) above are founded on a sound system of risk management and internal control which is operating effectively in all material respects in relation to financial reporting risks. The Company’s financial statements are subject to an annual audit by an independent, professional auditor who also reviews the Company’s half yearly financial statements. The Audit and Risk Management Committee o...
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