117_2012-08-13_9-09-28.pdf - For personal use only Appendix 4E Preliminary Final Report For the year ended 30 June 2012 JB Hi-Fi Limited ACN 093 220 136

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Unformatted text preview: For personal use only Appendix 4E Preliminary Final Report For the year ended 30 June 2012 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 2012 Financial year ended 30 June 2011 Results for announcement to the market Revenue from ordinary activities up Percentage change % 5.70% to Amount $’000 3,127,792 Profit from ordinary activities after tax down 4.61% to 104,641 Net profit attributable to members of the parent entity down 4.61% to 104,641 Dividend information Final dividend Interim dividend Amount per security 16.0¢ Franked amount per security 16.0¢ 49.0¢ 49.0¢ Record date for determining entitlements to the dividend: final dividend interim dividend 24 August 2012 23 February 2012 Dividend payment date: final dividend interim dividend 7 September 2012 9 March 2012 Net Tangible Assets Per Security 2012 $ Net tangible assets per security 2011 $ 0.91 0.57 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 2012 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 2012 Annual report For personal use only for the financial year ended 30 June 2012 Page Governance, environmental and social statements 1 Directors' report 10 Remuneration Report 18 Auditor's independence declaration 43 Independent auditor‟s report 44 Directors' declaration 46 Income statement 47 Key statistical data 47 Statement of comprehensive income 48 Balance sheet 49 Statement of changes in equity 50 Statement of cash flows 51 Notes to the financial statements 52 Additional securities exchange information 91 JB Hi-Fi Limited Governance, Environmental and Social Statements For personal use only GOVERNANCE, ENVIRONMENTAL AND SOCIAL STATEMENTS 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. As one of Australia‟s leading retailers we are committed to investing in understanding how JB Hi-Fi can continually advance our policies in this regard. The Board continually reviews and monitors developments in corporate governance. 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 2012 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 JB Hi-Fi 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 Company 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 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, the Chief Executive Officer and the Chief Financial Officer. 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 JB Hi-Fi 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 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: Mr Uechtritz was the Chief Executive Officer of the Company until May 2010. Mr Uechtritz 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. Selection and appointment of directors In considering Board membership, the directors are conscious of the need to ensure that Board members possess the diversity of skill and experience required to fulfil the Board‟s obligations. The Board considers nominations for appointment to the Board. 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. Board meetings The Board meets monthly for scheduled meetings. Dependent on business requirements, the Board holds such additional meetings as the business of the Company requires. 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 (being the consolidated entity consisting of the Company and the entities it controls). 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. 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 -2- JB Hi-Fi Limited Governance, Environmental and Social Statements duty to JB Hi-Fi; (g) working within JB Hi-Fi‟s policies and rules; and (h) obeying the law. For personal use only 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. 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 adopted a Diversity Policy in October 2011 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 customers 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 exist that prevents this from occurring. Gender diversity As at 30 June 2012 the proportion of women engaged by JB Hi-Fi was as follows: Board: 14% being 1 of 7 directors (2011: 12.5%) Senior management/executive (excluding executive directors): 9.5% being 2 of 21 employees (2011: 5%) Group: 40% being 2,663 of 6,683 employees (2011: 40%) In March 2012 the Board set measurable objectives in relation to gender diversity and adopted a strategy to achieve these objectives. The Board‟s diversity objectives are: to improve the percentage of female to male commissioned sales staff over each of the next three years; to improve the percentage of female to male store managers over the next three years; to improve the percentage of female to male regional managers over the next three years; and to increase the percentage of female senior managers over the next three years. 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 male employees of the Group which is reflective of the fact that, in the past, consumer electronics tended to attract more male than female staff. Whilst this is no longer the case, and the Group has put in place initiatives to improve the position, the timescales set out above are considered realistic in terms of achieving the desired improvements. 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. The Board considers progress towards achieving these long term objectives is on track and in line with the targets identified. 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. -3- 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 will 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 2012) 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 oversees this process on behalf of the Board. The Company‟s external audit firm was most recently appointed in 2002. The audit engagement partner is rotated every five years. Information on procedures for the selection and appointment of the external auditor, and for the rotation of external audit engagement partners can be found on the Company‟s website at via the “Corporate” and “Governance” sections. Continuous disclosure The Company seeks to provide relevant and timely information to its shareholders and is committed to fulfilling its obligations to the broader market for continuous disclosure. The Board has approved a continuous disclosure policy to ensure that the procedures for identifying and disclosing material and price sensitive information in accordance with the Corporations Act and ASX Listing Rules are clearly articulated. This policy sets out the obligations of employees in respect of that information. The Company Secretary, in consultation with the Chief Executive Officer, Chief Financial Officer and Chairman, is responsible for communication with the ASX. A copy of the Continuous Disclosure Policy can be found on the Company‟s website at via the “Corporate” and “Governance” sections. Shareholder communications The Company‟s website (“Corporate” section) currently carries the following information for shareholders: all market announcements and related information which are posted immediately after release to the ASX; details relating to the Company‟s directors and senior management; and Board and Board Committee charters and other corporate governance documents. A copy of the Company‟s Shareholder Communication Policy can be found on the Company‟s website at via the “Corporate” and “Governance” sections. -4- JB Hi-Fi Limited Governance, Environmental and Social Statements For personal use only The Company requests that the external auditor attends its Annual General Meeting and is available to answer shareholder questions about the conduct of the audit and the preparation and content of the auditor‟s report. RISK IDENTIFICATION AND MANAGEMENT The Board has delegated to the Audit and Risk Management Committee responsibility for overseeing the implementation of policies and procedures aimed at ensuring that the Company conducts its operations in a manner that manages risk to protect its people, the environment, Company assets and reputation as well as to realise opportunities. Risk identification and management is a key focus of the executive and management teams but in order to ensure there is a systematic process and regular review, the Company also has a dedicated risk management team. Management has designed and implemented a risk management and internal control system to manage the Company‟s material risks. Management has reported to the Board that: the risk management and internal control systems designed to manage the material business risks of the consolidated entity (consisting of the Company and the entities it controlled for the financial year ended 30 June 2012) are operating effectively in all material respects based on the risk management framework adopted by the consolidated entity; and subsequent to 30 June 2012, no changes or other matters have arisen that would have a material effect on the operation of the risk management and internal control systems of the consolidated entity. A copy of the Company‟s Risk Oversight and Management Policy can be found on the Company‟s website at via the “Corporate” and “Governance” sections. BOARD AND EXECUTIVE P...
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