Australia
New Zealand
Singapore
Slovenia
Ireland
Northern Ireland
Malaysia
Croatia
FROM GRASSROOTS
TO THE GAMES
HARVEY NORMAN® SUPPORTING
AUSTRALIAN ATHLETES
MADISON DE ROZARIO
PARA-ATHLETICS
JYE EDWARDS
ATHLETICS
SALLY FITZGIBBONS
SURFING
ARIARNE TITMUS
SWIMMING
CHRIS BOND
WHEELCHAIR RUGBY
JEFF DUNNE
BREAKING
MONTANA ATKINSON
PARA-SWIMMING
ANNUAL REPORT | 2024
2
Annual Report 2024 Harvey Norman Holdings Limited ACN 003 237 545
CONTENTS
Appendix 4E Results for
Announcement to the Market
3
Directors’ Report
28
Auditor’s Independence
Declaration
75
Independent Auditor’s
Report
76
Directors’ Declaration
82
Statement of Financial
Position
84
Income Statement
85
Statement of Comprehensive
Income
86
Statement of Changes in
Equity
87
Statement of Cash Flows
89
Notes to the Financial
Statements
90
Shareholder Information
159
June 2024 (FY24) Results
5
Chairman and CEO’s Report
6
Operating and Financial
Review
9
Remuneration Report
32
Sustainability Report
59
Consolidated Entity
Disclosure Statement
147
COMPANY INFO
Registered office
A1 Richmond Road,
Homebush West NSW 2140
Ph: 02 9201 6111
Fax: 02 9201 6250
Share registry
Boardroom Pty Limited
Level 8, 210 George Street,
Sydney NSW 2000
Ph: 02 9290 9600
Auditors
Ernst & Young (EY)
Securities exchange listing
Shares in Harvey Norman Holdings
Limited (HVN) are quoted on the
Australian Securities Exchange
Limited (ASX)
Solicitors
Brown Wright Stein
Company secretary
Mr. Chris Mentis
2
Annual Report 2024 Harvey Norman Holdings Limited ACN 003 237 545
KEY DATES
16 October 2024
Record Date for Determining
Entitlement to Final 2024
Dividend
13 November 2024
Payment of Final 2024 Dividend
27 November 2024 at 11 am
Annual General Meeting of
Shareholders
28 February 2025
Announcement of Half-Year
Profit to 31 December 2024 &
Announcement of Interim 2025
Dividend
3 April 2025
Record Date for Determining
Entitlement to Interim 2025
Dividend
1 May 2025
Payment of Interim 2025
Dividend
Madison de Rozario
Australian Paralympic Athlete
SUPPORTING AUSTRALIAN ATHLETES
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
3
2024 | APPENDIX 4E
RESULTS FOR ANNOUNCEMENT TO THE MARKET
EBITDA
$898.26m
$232.45m or -20.6% from $1.131bn in FY23
1H24 $221.00m (–31.8%) 2H24 $11.45m (-2.6%)
EBITDA excluding AASB16 net impact and
net property revaluations
$686.61m
$126.29m or -15.5% from $812.90m in FY23
1H24 $113.80m (–23.2%) 2H24 $12.49m (-3.9%)
EBIT
$652.67m
$215.07m or -24.8% from $867.74m in FY23
1H24 $224.42m (–39.9%) 2H24 $9.35m (+3.1%)
EBIT excluding AASB16 net impact and
net property revaluations
$592.96m
$128.63m or -17.8% from $721.59m in FY23
1H24 $116.43m (–26.1%) 2H24 $12.20m (-4.4%)
REPORTED PBT
$541.69m
$234.39m or –30.2% from $776.08m in FY23
1H24 $239.09m (–45.7%) 2H24 $4.69m (+1.9%)
PBT excluding AASB16 net impact and
net property revaluations
$540.07m
$140.17m or -20.6% from $680.23m in FY23
1H24 $126.88m (–29.5%) 2H24 $13.28m (-5.3%)
REPORTED PROFIT AFTER TAX & NCI
$352.45m
$187.07m or -34.7% from $539.52m in FY23
1H24 $165.89m (–45.3%) 2H24 $21.18m (-12.2%)
PAT excluding AASB16 net impact, net
property revaluations & NZ deferred tax adj►
$372.85m
$99.03m or -21.0% from $471.88m in FY23
1H24 $87.43m (–29.0%) 2H24 $11.60m (-6.8%)
* Comprised of Harvey Norman® overseas company-operated sales revenue and aggregated Harvey Norman®, Domayne® and Joyce Mayne® franchisee sales
revenue in Australia. Sales made by franchisees in Australia do not form part of the financial results of the consolidated entity.
Aggregated headline franchisee sales revenue $6.06bn
Company-operated sales revenue $2.80bn
Sales of products to customers $2.80bn
Revenues received from franchisees $1.08bn
Revenues and other income items $227.12m
HNHL CONSOLIDATED REVENUE
$4.11bn
$8.86bn
TOTAL SYSTEM SALES REVENUE*
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
3
DIVIDENDS PER SHARE
(FULLY-FRANKED)
22.0c
from 25.0c for FY23
Record date for determining entitlements to
the Final Dividend: 16 October 2024. Payment
of Final 2024 Dividend: 13 November 2024.
INTERIM 10.0c FINAL 12.0c
BASIC EARNINGS
PER SHARE
28.29c
from 43.30c in FY23
NET TANGIBLE
ASSETS PER SHARE**
$3.98
from $3.90 in June 2023
**Net tangible assets per share
includes right-of-use assets and
lease liabilities
NET
ASSETS
$4.54bn
1.6% from
$4.466bn in June 2023
41.9% from
$3.198bn in June 2019
► excludes $21.70m NZ deferred tax due to change in NZ tax legislation in FY24
4
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
The Harvey Norman®
Young Women’s
Leadership Academy
4
Annual Report 2024 Harvey Norman Holdings Limited ACN 003 237 545
For over 40 years, Harvey Norman® has been deeply rooted in
Greater Western Sydney, since the opening of the first Harvey
Norman® franchised complex at Parramatta Road, Auburn in
October 1982 – to today, where we oversee and manage our
integrated retail, franchise and property system across eight
countries from our global headquarters at Homebush West.
Over the decades, Harvey Norman® has consistently contributed
to the growth and prosperity of Greater Western Sydney and has
invested in the grassroots of various codes and sports, charities
and small businesses to develop the successful economic,
cultural and sporting hub that it is today.
Led by CEO, Katie Page, Western Sydney University launched a
first-of-its-kind 10-year development program with the
philanthropic donation of $7.9 million from Harvey Norman®.
Focusing on learning and mentorship opportunities for young
women in the community, the establishment of The Harvey
Norman® Young Women’s Leadership Academy, piloted
through Auburn Girls High School, a newly-created academy led
by our CEO, is supporting the next generation of aspiring female
leaders.
The Harvey Norman® Young Women’s Leadership Academy, to
be delivered by Western Sydney University and Auburn Girls
High School, provides higher education opportunities to future
female professionals and will include learning, development and
mentorship opportunities for young women, parent and
community engagement, and a research component to analyse
the program's impact.
Ms. Page said this Australian-first in corporate philanthropy was
motivated by the impact of her original Western Sydney
University scholarship donation of $300,000 back in 2015.
The key objective for student participation in this program is to
empower young women with the knowledge and skills to
develop their own agency and sense of self. The program
provides both the financial knowledge and resources to support
the students through their education into universities and
beyond.
Investment in education, particularly in the education of women,
is at the forefront of our community contribution to empower
young women with the knowledge, confidence, resilience and
leadership skills to enable Greater Western Sydney to continue
to thrive.
In the almost 10 years of scholarship
support for tertiary students at Western
Sydney University, we have witnessed
the transformative power of access to
education. What began as 13
scholarships for women from refugee
and disadvantaged backgrounds has
expanded to over 100 student
scholarships. Many of the recipients are
now graduates,” said Ms. Page.
The establishment of The Harvey
Norman Young Women’s Leadership
Academy at Auburn Girls High School is
bold. We are committing to Auburn Girls
High School for at least a decade.
Under the stewardship of the University
and Ms. Anna Tsoutsa, School Principal,
the Leadership Academy will enable
students to access leadership skills and
mentoring across their secondary
education.”
Auburn Girls High School is already an
institution that produces exemplary
graduates. We hope that with our
support their graduates will be the next
generation of female role-models and
contributors setting the standard for
leadership in their careers and
communities.”
-Katie Page
Katie Page (CEO) with the Harvey Norman®
Young Women’s Leadership Academy
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
5
Operating Cash Flows
$686.53m
$6.27m from FY23
$313.69m from FY19
Net Assets
$4.54bn
$70.44m from FY23
$1,339.14m from FY19
Total System Sales Revenue*
$8.86bn
|5-YEAR CAGR 13.0%
|5-YEAR CAGR 7.2%
*Comprised of Harvey Norman® overseas company-operated sales revenue and
aggregated Harvey Norman®, Domayne® and Joyce Mayne® franchisee sales
revenue in Australia. Sales made by franchisees in Australia do not form part of
the financial results of the consolidated entity.
PBT
[excluding AASB 16 net impact and net property revaluations]
$540.07m
Net Debt to Equity %
14.49%
Cash Conversion %
Improvement from 97.4% in FY23
[Calculated as: Operating Cash Flows (excluding interest & tax) ÷
EBITDA (excluding AASB 16 & net property revaluations)]
JUNE 2024 (FY24) RESULTS
[$m]
[$m]
[$m]
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
5
[$m]
100.4%
$140.17m from FY23: 1H24 $126.88m 2H24 $13.28m $330.79m from FY23: 1H24 $334.37m 2H24 $3.58m
6
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
Dear Stakeholders,
The 2024 financial year has seen ongoing challenges and
transformations within the discretionary retail sector in Australia,
and in the seven overseas countries in which we operate. Our
integrated retail, franchise, property and digital system,
encompassing a diversified strategy across all key categories
for the home and consumer lifestyle products, enables us to
navigate the macroeconomic headwinds that have persisted
since the end of the pandemic, and adapt to changing
consumer patterns and sentiment.
Our balance sheet is strong and resilient, with total assets of
nearly $8 billion, anchored by a $4 billion property portfolio,
predominantly situated within the large-format retail market
that has delivered rental growth and low vacancy rates over the
past two years. We have delivered a substantial 42% growth in
net assets since the beginning of the pandemic, rising to $4.54
billion as at 30 June 2024.
Our prudent financial management has resulted in ample
liquidity and a low net debt-to-equity ratio of 14.49%, ensuring
our capacity to access additional liquidity as needed. For FY24,
our operating cash flows remain robust at $686.53 million, with
a cash conversion ratio of 100.4%. Despite difficult retail
conditions and significant capital investments in expanding our
store network, relocating existing stores, and completing
extensions and refits during FY24, our substantial cash reserves
have continued to grow, positioning us well to seize
opportunities as they arise.
We are excited about the recent Generative Artificial
Intelligence (Gen-AI) product cycle and are committed to
investing in digital initiatives and the necessary technological
upgrades to our infrastructure. These investments will assist
both our franchisees and company-operated stores in
promoting Gen-AI-enabled products to mainstream consumers.
Our omni-channel strategy, bolstered by our strong brand and
extensive geographical reach, will empower franchisees and
company-operated stores to leverage the emerging AI-PC
market, which will drive sales growth as additional AI-PC
products come onto the market.
We have strong confidence in the Harvey Norman®, Domayne®,
and Joyce Mayne® brands, as well as the solid market positions
of our Australian franchisees and international company-
operated stores. We are dedicated to providing stable returns
and sustainable growth for our stakeholders, and we are
strategically positioned to capitalise on improvements in
trading conditions and potential growth from the home
renovation cycle, new home constructions, and increases in net
migration.
Chairman and CEO’s Report
6
Annual Report 2024 Harvey Norman Holdings Limited ACN 003 237 545
Reported profit before tax for FY24 was $541.69 million, down
by $234.39 million (–30.2%) from $776.08 million in FY23.
Profitability declined in 1H24 by $239.09 million (–45.7%) from
1H23 before significantly improving in the second half with a
modest increase of $4.69 million (+1.9%) in 2H24 relative to
2H23.
Excluding the effects of AASB 16 Leases and net property
revaluations, profit before tax for FY24 was $540.07 million,
down by $140.17 million (–20.6%) on FY23. 1H24 contributed
$126.88 million (–29.5%) to the decrease, whilst improved
performance in 2H24 saw a more moderate reduction of $13.28
million (–5.3%) compared to 2H23.
Total revenues of $4.11 billion across all business segments
moderated by $165.21 million (–3.9%) off a high base last year,
but was up by $689.81 million (+20.2%) on FY19, with a 5-year
CAGR of 3.7%.
Revenues received from franchisees are down by $91.63 million
(–7.8%) on the back of a reduction in aggregated franchisee
sales revenue by –5.6% to $6.06 billion in FY24. Other income
items were down by $100.87 million (–30.8%) primarily due to a
reduction in the net property revaluation increment by $116.50
million during the year from a slight softening of capitalisation
rates, which have been offset by rental growth. Company-
operated sales revenue were up by $27.29 million to $2.80
billion in FY24 due to overseas expansion and a full-year
contribution to sales for stores that had opened last year.
Operating expenses have continued to normalise, increasing by
$25.01 million (+1.5%) due to inflationary pressures and new
store openings. Global marketing expenses in the 8 countries
have remained consistent with prior year, at 4.44% of total
system sales revenue for the brands for FY24. Rising costs of
borrowing and higher utilisation of the syndicated facility have
driven up finance costs by $19.33 million (+21.1%). Total
operating expenses of the consolidated entity as a percentage
of total Harvey Norman® system sales revenue remain efficient
at 18.62% for FY24.
The consolidated entity continues to invest in each strategic
pillar of the integrated model to protect, enhance and promote
the brands, serving customers within the Harvey Norman®,
Domayne® and Joyce Mayne® branded ecosystems.
Harvey Norman® proudly supports the
Australian Olympic and Paralympic Teams
SUPPORTING AUSTRALIAN ATHLETES
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
7
We are dedicated to achieving sustainable growth for our
stakeholders through the strategic expansion of our global
store network and targeted investments in key segments. We
are on track to open 10 new stores in FY25 to advance our
expansion efforts in Malaysia.
We extend our heartfelt thanks to our franchisees, company-
operated stores and staff for their steadfast loyalty and
commitment to our long-term vision and strategy. Additionally,
we deeply value the continued support and confidence of our
shareholders in our leadership and the future direction of our
integrated business.
PBT
Excluding net impact of AASB 16 and
property revaluations.
$540.07m
$7.93bn
$4.54bn
Solid working capital and a strong
property portfolio are key
competitive advantages that
provides us with capacity to access
additional capital as required.
[5-year CAGR of 10.6%]
FY24 vs FY23
FY24 vs FY19
+1.6%
(up $70.44m)
+41.9%
(up $1.34bn)
Versatile & adaptable operating
model and organic expansion in
existing countries delivered a 41.9%
growth in net assets since FY19.
[5-year CAGR of 7.2%]
Profit After Tax &
Non-Controlling
Interests:
33.98%►
$352.45m►
$187.07m or –34.7% from FY23
$49.86m or –12.4% from FY19
Operating Cash Flows
Substantial improvement in working capital
to deliver strong operating cash flows.
$686.53m
Strong Cash Conversion
100.4%
G. HARVEY
Chairman
Sydney
30 August 2024
K.L. PAGE
Director and Chief Executive Officer
Sydney
30 August 2024
Total Assets
Very strong balance sheet underpinned by an
appreciating, resilient tangible asset base.
Net Assets
41.9% increase in net assets from pre-covid
position in June 19.
1.6% increase since June 23.
1H24 vs 1H23
2H24 vs 2H23
-29.5%
(down $126.88m)
-5.3%
(down $13.28m)
FY24 vs FY23
-20.6%
(down $140.17m)
1H24 vs 1H23
2H24 vs 2H23
+45.8%
(up $156.24m)
-44.2%
(down $149.97m)
FY24
FY23
100.4%
97.4%
FY24 vs FY23
FY24 vs FY19
+3.3%
(up $256.04m)
+65.2%
(up $3.13bn)
► Includes a large debit adjustment to deferred tax expenses of
$21.70 million in FY24 in New Zealand resulting from a legislative
change to exclude tax deductions in NZ for future building deprecia-
tion expenses. If this adjustment were excluded, PAT&NCI would be
$374.16 million, a decrease of $165.36 million or –30.7% from FY23
and an effective tax rate of 29.97%.
Effective Tax Rate:
FY24 vs FY23
FY24 vs FY19
+0.9%
(up $6.27m)
+84.1%
(up $313.69m)
[5-year CAGR of 13.0%]
The Harvey Norman® Future Flames Program
8
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
Investment in Technology, Digital Transformation and IT Infrastructure Assets
Online sales
channel
Click & collect
Store finder
Trak by
Harvey Norman®
LiveChat
Quick reserve
Our Global Footprint
We operate an integrated retail, franchise, property and
digital system across 8 countries.
196
Franchised Complexes
in Australia
2
STORES
16
STORES
5
STORES
3
STORES
34
STORES
12
STORES
196
FRANCHISED COMPLEXES
45
STORES
Australian Franchising Operations
• 196 franchised complexes in Australia comprising 556
independent franchisees
• FY24 Aggregated Franchisee Sales Revenue: $6.06 billion
• FY24 Franchising Operations PBT: $273.56 million
Overseas Company – Operated Retail
• 117 company-operated stores in 7 countries
• FY24 Overseas Company-Operated Revenue: $2.63 billion
• FY24 Overseas Retail PBT: $118.54 million
• Comprises 21.9% Total PBT (22.0% excluding property
revaluations)
• 94 franchised complexes owned (48% of total)
• 470 diverse third-party tenants (large proportion ASX-listed)
• $3.58 billion Australian investment property portfolio
(largest single owner in Australia)
• FY24 Property PBT: $160.56 million (including revaluations)
• 28 international owned retail property assets (24% of total)
• $638.89 million overseas owner-occupied and investment
property portfolio
Strategic ‘Large-format’ Retail Property Portfolio
An Integrated Retail, Franchise, Property and Digital System
A. Australia
B. New Zealand
C. Singapore
D. Slovenia
E. Ireland
F. Malaysia
G. Northern Ireland
H. Croatia
SUPPORTING AUSTRALIAN ATHLETES
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
9
Property
Segment
REVENUE
$327.53m
TOTAL EXPENSES
$166.97m
PBT RESULT
$160.56m*
Representing
29.8%
of PBT excluding
property revaluations
[or 29.6% of Total PBT]
Overseas
Company-Operated
Retail Segment
REVENUE
$2.63bn
TOTAL EXPENSES
$2.51bn
PBT RESULT
$118.54m
Representing
22.0%
of PBT excluding
property revaluations
[or 21.9% of Total PBT]
Franchising
Operations
Segment
REVENUE
$971.23m
TOTAL EXPENSES
$697.67m
PBT RESULT
$273.56m
Representing
50.7%
of PBT excluding
property revaluations
[or 50.5% of Total PBT]
Segment Analysis
An Integrated Retail, Franchise, Property and Digital System
The consolidated entity operates an integrated retail, franchise, property and digital system, comprising three main strategic pillars:
1. Franchise — 2. Retail — 3. Property complemented by a sustained investment in technology, digital transformation and IT
infrastructure assets.
FY24 vs FY23
-8.9%
(down $94.44m)
[*negatively impacted by: net revaluation increment of
$2.25m in FY24 vs net revaluation increment of
$118.75m in FY23, a reduction of ($116.50m)]
Directors’ Report Operating & Financial Review - Segment Analysis
1H24 vs 1H23
2H24 vs 2H23
-14.0%
(down $83.27m)
-2.4%
(down $11.17m)
FY24 vs FY23
+0.8%
(up $5.36m)
1H24 vs 1H23
2H24 vs 2H23
+3.2%
(up $11.30m)
-1.8%
(down $5.94m)
FY24 vs FY23
-26.7%
(down $99.80m)
1H24 vs 1H23
2H24 vs 2H23
-39.8%
(down $94.57m)
-3.9%
(down $5.23m)
FY24 vs FY23
+1.2%
(up $31.10m)
1H24 vs 1H23
2H24 vs 2H23
+0.9%
(up $12.06m)
+1.6%
(up $19.03m)
FY24 vs FY23
-22.6%
(down $95.59m)
1H24 vs 1H23
2H24 vs 2H23
-37.7%
(down $97.17m)
+1.0%
(up $1.57m)
FY24 vs FY23
+10.2%
(up $15.51m)
1H24 vs 1H23
2H24 vs 2H23
+26.2%
(up $18.70m)
-4.0%
(down $3.19m)
FY24 vs FY23
-14.8%
(down $20.51m)
1H24 vs 1H23
2H24 vs 2H23
-23.5%
(down $23.42m)
+7.4%
(up $2.90m)
FY24 vs FY23
-40.9%
(down $111.10m)
1H24 vs 1H23
2H24 vs 2H23
-62.2%
(down $115.86m)
+5.6%
(up $4.76m)
FY24 vs FY23
+2.1%
(up $51.61m)
1H24 vs 1H23
2H24 vs 2H23
+2.8%
(up $35.48m)
+1.4%
(up $16.13m)
Segment Analysis
Directors’ Report Operating and Financial Review
The Franchising Operations Segment in Australia
The Franchised Operating Model in Australia
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
10
172
18
6
556
Franchised Complexes
Franchised Complexes
Franchised Complexes
Harvey Norman Holdings Limited (HNHL) and subsidiaries of
HNHL own valuable intellectual property rights, including the
trademarks Harvey Norman®, Domayne® and Joyce Mayne®,
software and other confidential information to promote and
enhance the brands.
A subsidiary of HNHL (a franchisor) grants separate franchises to
independent franchisees to use the Harvey Norman®,
Domayne® or Joyce Mayne® trade marks in Australia and to
conduct the retail business of the franchisee at or from a store
within a particular branded complex, pursuant to the terms of a
franchise agreement. Each franchisee owns and controls the
franchisee business of that franchisee.
Each franchisee has control over the day-to-day operations of
the franchisee business and has the discretion and power to
make the decisions necessary to drive sales, control floor
margins and contain operating costs to maximise the
profitability of the franchisee business. Each franchisee pays
franchise fees to a franchisor pursuant to a franchise agreement
between that franchisee and that franchisor.
The franchising operations segment in Australia captures and
records the franchise fees received from franchisees including
franchise fees in accordance with franchise agreements, rent
and outgoings for the use of a branded complex and interest on
the financial accommodation facility that is made available to
each franchisee. The franchising operations segment also
includes the costs of operating the franchised system and
monitoring and evaluating the performance and compliance of
franchisees with their franchise agreements.
• Harvey Norman® Belconnen, ACT: 3 November 2023
• Joyce Mayne® Warrawong, NSW: 24 March 2024
• Domayne® Maitland, NSW: 28 April 2024
Completed Premium Refits during FY24
• Harvey Norman® Balgowlah, NSW
• Harvey Norman® Preston, VIC
• Harvey Norman® Erina, NSW
• Harvey Norman® Cannington, WA
Premium Refits Currently in Progress
• Harvey Norman® Penrith, NSW
• Harvey Norman® Marion, SA
Independent franchisees
carrying on their business
under Harvey Norman®,
Domayne® & Joyce Mayne®
brands.
QLD
HN
36
DM
3
JM
4
WA
HN
19
DM
1
NT
HN
2
JM
1
NSW
HN
58
DM
11
JM
1
SA
HN
12
VIC
HN
37
DM
2
TAS
HN
6
ACT
HN
2
DM
1
Franchising Operations Segment
1
SUPPORTING AUSTRALIAN ATHLETES
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
11
Franchising operations segment
1H
2H
FY
Franchising operations segment PBT
($m)
FY24
$143.08m
$130.48m
$273.56m
FY23
$237.65m
$135.71m
$373.36m
Aggregated franchisee sales revenue*
($bn)
*Sales made by franchisees in Australia do not form part of the
financial results of the consolidated entity.
FY24
$3.16bn
$2.89bn
$6.06bn
FY23
$3.51bn
$2.91bn
$6.42bn
Franchising operations margin
(%)
[calculated as franchising operations segment PBT ÷ aggregated
franchisee sales revenue]
FY24
4.52%
4.51%
4.52%
FY23
6.78%
4.66%
5.82%
The franchising operations segment PBT result was $273.56 million
for FY24, a reduction of $99.80 million or –26.7% from $373.36
million in FY23. This represents a franchising operations margin of
4.52% for FY24 a 130 basis points drop compared to a margin of
5.82% reported in FY23.
The majority of the decline can be attributed to the first half of FY24
where franchising operations profitability reduced by $94.57
million, or –39.8%, from 1H23 resulting in a franchising operations
margin of 4.52% compared to 6.78% achieved in 1H23. Profitability
improved in the second half of the FY24, mainly driven by stronger
franchisee sales performance in 4Q24, delivering a segment result
of $130.48 million for 2H24, a slight decrease of $5.23 million, or
–3.9%, from a PBT result of $135.71 million in 2H23. The margin in
2H24 was 4.51% which was only marginally down on the margin of
4.66% in 2H23.
Profitability of the franchising operations segment was negatively
impacted by a reduction in franchising operations segment
revenues by $94.44 million, or –8.9%, from $1.07 billion in FY23 to
$971.23 million in FY24. This decrease is primarily due to a
reduction in franchise fees by $105 million, or -12.2%, to $755.69
million in FY24 from $860.70 million in FY23.
There is a direct correlation between Harvey Norman®, Domayne®
and Joyce Mayne® franchisee sales revenue in Australia and
franchise fees charged in accordance with franchise agreements.
Aggregated franchisee sales decreased by $358.08 million or –5.6%
to $6.06 billion in FY24, with a direct flow-on impact in reducing
franchise fee revenues.
Households and businesses continue to face mounting cost of living
pressures, with persistent inflation causing continued uncertainty
regarding the future direction of interest rates. Dampened
consumer and business confidence has continued to tighten
household budgets, negatively impacting franchisee sales
performance in FY24. This was offset by higher rent and outgoings
received from franchisees occupying properties leased by the
consolidated entity by $11.82 million, or 4.2 %, and higher interest
to administer franchisee financial accommodation facilities.
Operating costs increased marginally by $5.36 million or 0.8%
relative to the prior year. The net impact of AASB 16 Leases was a
net gain of $1.40 million in FY24 compared to a net expense of
$23.40 million, a turnaround of $24.80 million, due to an
improvement (i.e. a reduction) in the discount rates and the higher
rental income applied in the fair value assessment of the right-of-
use assets within the leasehold investment property portfolio at 30
June 2024.
This was offset by a rise in the costs to monitor and evaluate
franchisee compliance and operational performance due to the
challenging retail climate and inflationary pressures. Higher finance
costs contributed $7.26 million of the increase due to increased
costs of borrowing and higher average utilisation of financing
facilities throughout the year. The franchisor continues to promote
and enhance the Harvey Norman®, Domayne® and Joyce Mayne®
brands in Australia and continues to assist franchisees to invest in
their customers to enhance customer loyalty and retention. This
investment is primarily in the form of bonus gift cards which has
increased by $9.54 million in FY24 compared to FY23. Overall
marketing spend has remained relatively consistent with the
previous year, and remains efficient at 5.64% of Australian
franchisee sales revenue.
The franchisor intends to capitalise on the solid foothold that
Australian franchisees have in the Gen-AI product cycle by investing
in the digital initiatives and in-store infrastructure necessary to assist
franchisees in promoting the uptake of Gen-AI enabled products by
customers. The franchisor has also continued to invest the
customer-centric strategies of franchisees to protect and enhance
the brands, and preserve customer loyalty and retention.
Franchising operations segment PBT ($m)
$273.56m
$99.80m or -26.7%
from FY23
130 bps
on FY23
Franchising operations margin (%)
4.52%
Directors’ Report Operating & Financial Review | Segment Analysis (cont.)
Franchising Operations Segment
12
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
Australian Franchisee Sales Revenue
Underpins the Franchising Operations
Segment
* Sales made by franchisees in Australia do not form part
of the financial results of the consolidated entity.
Comparable franchisee sales*
Year ended 30 June 2024
$6.03bn
1H24 vs 1H23
2H24 vs 2H23
-10.2%
(down $355.97m)
-1.0%
(down $28.65m)
FY24 vs FY23
-6.0%
(down $384.61m)
A diversified and adaptable retail strategy across all key product categories
for the home continues to be a competitive advantage for Harvey Norman®,
Domayne® and Joyce Mayne® franchisees in Australia.
Aggregated franchisee sales revenue for FY24 were $6.06 billion, a decrease
of 5.6% from $6.42 billion in FY23. The second half of FY24 outperformed the
first half, with a minimal decrease of only 0.6% compared to a 9.7% reduction
for 1H24.
Australian franchisee sales for 1H24 had decreased by 9.7% to $3.16 billion
relative to 1H23 as 1H23 was buoyed by the normalisation of retail trading
conditions following two years of COVID-related disruptions.
There was a significant improvement during 2H24 delivering aggregated
franchisee sales of $2.89 billion for the second half, a slight decrease of 0.6%
from $2.91 billion in 2H23. This is mainly due to the steady performance of
franchisees within the Electrical, Mobile & Computer Technology categories,
with aggregated sales in those key categories delivering modest sales growth
relative to 2H23.
Franchisees in Australia have a significant opportunity to benefit from the
growth in the emerging AI-PC market, and the continuing innovation of
products is expected to drive sales growth in the Home Appliances, Mobile &
Computer Technology categories throughout FY25 and beyond.
Total franchisee sales*
Year ended 30 June 2024
$6.06bn
1H24 vs 1H23
2H24 vs 2H23
-9.7%
(down $341.49m)
-0.6%
(down $16.59m)
FY24 vs FY23
-5.6%
(down $358.08m)
Franchising Operations Segment
Directors’ Report Operating & Financial Review | Segment Analysis (cont.)
SUPPORTING AUSTRALIAN ATHLETES
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
13
Overseas company-operated retail segment
Overseas Retail Segment
Comprises
22.0%
of PBT excluding property
revaluations
21.9% of Total PBT
Aggregated overseas
retail PBT result ($AUD M)
Aggregated overseas
retail revenue ($AUD M)
New overseas stores
opened in FY24
Sabah, Malaysia
Opened on
28 August 2023
Kota Kinabalu, Sabah
Kuala Lumpur, Malaysia
Opened on
9 October 2023
Damansara Heights, Kuala Lumpur
Pahang, Malaysia
Opened on
17 November 2023
Kuantan, Pahang
Tauriko, New Zealand
Opened on
11 December 2023
Tauriko, Tauranga in the North Island
Penang, Malaysia
Opened on
30 April 2024
Seberang Jaya, Penang
Johor, Malaysia
Opened on
23 June 2024
Batu Pahat, Johor
Selangor, Malaysia
Opened on
24 July 2023
Shah Alam, Selangor
Overseas Company-Operated Retail Segment
2
Directors’ Report Operating & Financial Review | Segment Analysis (cont.)
FY24 and FY23 results excluding
brand licence fees
14
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
45
Stores
New Zealand
45 Harvey Norman® Company-Operated Stores
New Zealand
New Zealand Flagship
Wairau Park, Auckland (Launched Jun 2018)
In New Zealand, the Harvey Norman® brand holds a market
leading position across key categories within the NZ home and
lifestyle market. Macroeconomic headwinds have continued to
worsen since the end of the pandemic, resulting in a decline in
sales and profitability this year. Notwithstanding the
challenging retail climate, our NZ balance sheet is strong,
underpinned by a solid asset base.
During the financial year, one new company-operated store was
opened at Tauriko (Tauranga, North Island) on 11 December
2023 and we relocated the Blenheim store to a new freehold
site in May 2024. On 30 June 2024, one store at Henderson,
Auckland was closed.
Sales in FY24 declined by NZ$68.53 million or -6.2% to
NZ$1.03 billion relative to FY23 sales of NZ$1.10 billion. When
translated to Australian dollars, the decrease was $52.42 million
or -5.2%, to $952.69 million for FY24, from $1.01 billion in
FY23, partially assisted by a 1.1% appreciation in the NZD
relative to the AUD this year. 1H24 sales declined by $22.65
million or -4.3%. 2H24 sales declined by $29.77 million or
–6.3%.
In local currency, the retail profit for FY24 was NZ$73.49 million,
a decrease of NZ$14.69 million, or –16.7%, from NZ$88.18
million in FY23. When translated to Australian dollars, the retail
result was $67.98 million for FY24, down by $12.71 million, or
-15.8%, from $80.69 million in FY23. The fall in retail profit for
FY24 was a result of a decrease in sales turnover and a
contraction in gross margin due to discounting, coupled with
higher operating costs from rising inflation and new store
openings. Operating expenses for FY24 were inclusive of
intercompany licence fees payable under the revised global
transfer pricing policy that was adopted in FY23.
Our NZ business is on track to open 2 new full format stores at
Papanui in October 2024 and Ravenswood in November 2024,
both in the Christchurch region of the South Island. The solid
balance sheet of the NZ business enables it to remain
well-positioned to capitalise on potential opportunities and
improvements in the discretionary retail environment.
Harvey Norman® Blenheim, New Zealand, relocated in May 2024
Overseas Company-Operated Retail Segment
2
Directors’ Report Operating & Financial Review | Segment Analysis (cont.)
SUPPORTING AUSTRALIAN ATHLETES
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
15
Singapore
Malaysia
12
Stores
34
Stores
Singapore &
Malaysia
FY24 and FY23 results excluding
brand licence fees.
Singapore and Malaysia
This segment is comprised of 12 Harvey Norman® stores in
Singapore, 34 Harvey Norman® stores in Malaysia and the
Space Furniture® branded lifestyle stores in Singapore and
Malaysia.
Malaysia | Sales Revenue
34 Harvey Norman® Company-Operated Stores
In Malaysia, the expansion plan continues to progress and
strengthen the Harvey Norman® brand and market presence
with the opening of 6 new company-operated stores during
FY24 located at Shah Alam, Selangor (opened 24 July 2023),
Kota Kinabalu, Sabah (opened 28 August 2023), Damansara
Heights, Kuala Lumpur (opened 9 October 2023), Kuantan,
Pahang (electrical and computers opened on 17 November
2023 and furniture and bedding on 18 March 2024), Seberang
Jaya, Penang (opened 30 April 2024) and Batu Pahat, Johor
(opened 23 June 2024). One store which was planned to open
in 2H24 will now open in 1H25.
Sales for the 34 Harvey Norman® Malaysian stores for FY24
were S$272.40 million, an increase of S$6.73 million, or 2.5%,
from S$265.67 million in FY23. When translated to Australian
dollars, sales were $308.18 million, an increase of $19.00
million, or 6.6% from $289.18 million in FY23. This was assisted
by a 3.9% appreciation in the SGD relative to the AUD this year.
Compared to pre-pandemic sales in FY19, the increase was
$111.06 million or 56.3%, delivering a 5-year CAGR of 9.4%.
The increase in sales is mainly due to the contribution of the 6
new store openings and the full 12-month’s contribution from
the 1 Utama Shopping Centre, Selangor store which opened on
22 November 2022. Comparable store sales in Malaysia
marginally reduced by -1.3% in local currency relative to prior
year. 1H24 comparable sales declined by -6.9% compared to
1H23 as retail sales across Malaysia were negatively impacted
by the state elections that took place in August 2023, in
addition to the weakened consumer sentiment caused by
inflationary pressures. On 1 March 2024, the Sales and Services
Tax rate increased in Malaysia for most taxable services, further
tightening consumer spending. Amid these challenges, 2H24
comparable sales in Malaysia increased by 4.3% relative to
2H23.
It is our present intention to open up to 10 stores in FY25, and
grow to up to 80 stores in Malaysia by the end of 2028.
Singapore | Sales Revenue
12 Harvey Norman® Company-Operated Stores
In Singapore, consumer sentiment remains subdued
throughout FY24 due to inflationary pressures, interest rate
uncertainty and the ongoing geopolitical tensions in Europe
and the Middle East. Sales for the Singaporean stores in FY24
were S$338.50 million, a decrease of S$6.03 million, or
-1.8%, from S$344.53 million in FY23. When translated to
Australian dollars, sales were $382.96 million, an increase of
$7.94 million, or 2.1%, from $375.02 million in FY23.
Compared to pre-pandemic retail sales in FY19, the increase
was $40.99 million or 12.0%, delivering a 5-year CAGR of 2.3%.
1H24 sales decreased by S$5.67 million, or -3.2% relative to
1H23 as the preceding half had a surge in sales due to an
increase in the national GST from 7% to 8%. The national GST
increased to 9% effective from 1 January 2024, however this did
not lead to a similar boost in sales in 1H24. 2H24 sales were
marginally lower compared to 2H23.
Our flagship store at Millenia Walk has continued to set a high
bar for the Harvey Norman® brand in Singapore, performing
strongly despite the challenging climate.
Retail – Singapore and Malaysia
Sales & Segment Result
Aggregated sales revenue for the Harvey Norman® and Space
Furniture® brands in Asia totalled S$625.55 million in local
currency for FY24, decreasing by S$1.38 million, or -0.2%, from
S$626.93 million in FY23. On translation to Australian dollars,
aggregated sales revenue for Asia was $707.72 million, an
increase of $25.31 million or 3.7% from $682.42 million in FY23.
Compared to pre-pandemic aggregated sales in FY19, the
increase was $152.26 million or 27.4%, a 5-year CAGR of 5.0%.
The growth in total sales in AUD have been offset by elevated
operating expenses in Asia, primarily due to rising costs in the
current retail climate and the cost of new store openings in
Malaysia.
The segment profit result of the Harvey Norman® and Space
Furniture® brands in Asia was $35.66 million for FY24, a
decrease of $4.40 million, or –11.0%, from $40.07 million in
FY23. Operating expenses for FY24 are inclusive of
intercompany brand licence fees payable under the revised
global transfer pricing policy that was adopted in FY23. If the
intercompany brand licence fees were excluded from the
results in both years, the Asian segment would have generated
a result of $47.35 million, a decrease of $4.06 million or
–7.9%, from $51.41 million FY23.
Overseas Company-Operated Retail Segment
2
Directors’ Report Operating & Financial Review | Segment Analysis (cont.)
Singapore Flagship
Millenia Walk (Launched Dec 2015)
Malaysia Flagship
Ikano, Kuala Lumpur (Launched Nov 2017)
16
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
Ireland
2
Stores
16
Stores
Northern
Ireland
Ireland &
Northern Ireland
FY24 and FY23 results excluding
brand licence fees.
Ireland
16 Harvey Norman® Company-Operated Stores
In Ireland, the retail climate continues to be challenged by high
costs of living, high interest rates and ongoing pressures within
the housing and rental markets. However the Irish economy
appears to be showing signs of improvement, evidenced by the
25bps reduction in interest rates from the European Central
Bank in June 2024, and the notable easing of inflationary
pressures. The employment market remains strong, with
unemployment rates at near historic lows. There are
expectations of improved demand and improved consumer
sentiment over the next two years.
Sales in local currency increased to €408.98 million in FY24, up
by €2.12 million or 0.5%, from €406.87 million in FY23. When
translated to Australian dollars, sales for FY24 increased by
$42.90 million, or 6.8%, to $674.78 million, from $631.88
million in FY23. This significant increase was mainly due to a
6.2% appreciation in the EUR relative to the AUD this year.
When compared to pre-pandemic sales of $351.59 million in
FY19, there has been substantial growth by $323.20 million, or
91.9%, with a 5-year CAGR of 13.9%.
Sales in 1H24 reduced by €5.42 million relative to 1H23,
however there was a significant turnaround in 2H24, with sales
increasing by €7.53 million or 4.4%. In local currency, the Irish
retail profit for FY24 was €9.94 million, an increase of €1.72
million, or 21.0%, from €8.21 million in FY23. When translated
to Australian dollars, the retail result was $16.39 million for
FY24, up by $3.64 million, or 28.5%, from $12.76 million in
FY23.
Operating expenses for FY24 included intercompany brand
licence fees payable under the revised global transfer pricing
policy that was adopted in FY23. If the intercompany brand
licence fees were excluded from the results in both years, the
Irish segment would have generated a result of $27.73 million
in FY24, an increase of $10.93 million or 65.0%, from $16.80
million in FY23.
Northern Ireland
2 Harvey Norman® Company-Operated Stores
In Northern Ireland, the re-establishment of a sitting
government in February 2024 has restored some stability and
confidence in the economy. However, the ongoing geopolitical
tensions in Europe and the Middle East, and the sustained high
inflation and cost of living pressures continue to dampen retail
sentiment.
Sales in local currency decreased by £0.98 million or -9.2% to
£9.70 million in FY24, from £10.68 million in FY23. When
translated to Australian dollars, sales for FY24 decreased by
$0.45 million, or -2.4%, to $18.64 million, from $19.09 million in
FY23, due to an appreciation of 7.5% in the GBP relative to the
AUD this year.
The Northern Ireland business incurred a loss of $4.31 million
for FY24, compared to a loss of $2.09 million for FY23, a
deterioration of $2.22 million or –106.2%.
United Kingdom Expansion Plans
In January 2024, the consolidated entity announced the
expansion of the Harvey Norman® brand in the United
Kingdom with the signing of a lease at Merry Hill, located in the
West Midlands region in England. The 57,000 sq. ft. Harvey
Norman® Merry Hill flagship store is on track to open in
October 2024.
There is an intention to open a second store in the West
Midlands, UK, during FY26 with lease negotiations currently
underway.
Overseas Company-Operated Retail Segment
2
Directors’ Report Operating & Financial Review | Segment Analysis (cont.)
Ireland Flagship
Tallaght, Dublin (Launched Jul 2017)
Northern Ireland Flagship
Boucher Rd, South Belfast (Launched Nov 2015)
SUPPORTING AUSTRALIAN ATHLETES
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
17
Croatia
Slovenia
3
Stores
5
Stores
Slovenia &
Croatia
Slovenia Flagship
Ljubljana (Launched Jun 2017)
Croatia Flagship
Zagreb (Launched Oct 2018)
FY24 and FY23 results excluding
brand licence fees.
Slovenia
5 Harvey Norman® Company-Operated Stores
In Slovenia, subdued consumer sentiment has lowered retail
foot traffic across the 5 company-operated stores, following the
persistent effects of increased inflation, high interest rates, high
energy prices, and the ongoing geopolitical tensions in Europe
and the Middle East. This was further compounded by severe
flooding in August 2023 which restricted trade across many
regions, and the cooler weather experienced in the lead-up to
summer in 2024 which had negatively impacted outdoor
seasonal sales this year.
Local currency sales declined by €7.79 million, or –14.4%,
during 1H24 but recovered during 2H24 to be flat on 2H23 with
a marginal increase of €0.24 million, or +0.6%. For FY24, total
Slovenian sales were €88.52 million, a reduction of €7.55
million or -7.9%, from €96.07 million in FY23. When translated
to Australian dollars, sales were $146.04 million for FY24, down
by $3.15 million or -2.1%, from $149.19 million in FY23. When
compared against FY19, sales were substantially above pre-
pandemic levels increasing by $30.35 million or 26.2%, a 5-year
CAGR of 4.8%.
The retail segment in Slovenia delivered an overall profit result of
$6.32 million in FY24 (inclusive of the intercompany brand
licence fee expense under the global transfer pricing policy that
was adopted in FY23), a $3.65 million decrease or -36.6%, from
$9.97 million in FY23. If the payment of the intercompany
brand licence fees were excluded from the results in both years,
the Slovenian business would have generated a result of $7.26
million, a decrease of $5.21 million or –41.8%, from $12.46
million FY23.
Croatia
3 Harvey Norman® Company-Operated Stores
In Croatia, our 3 company-operated stores have delivered
steady sales growth throughout the year, with total retail sales
of €42.06 million for FY24, an increase of €8.37 million or
24.9%, from €33.69 million in FY23. In Australian dollars, sales
were $69.40 million for FY24, increasing by $17.08 million or
32.6%, from $52.33 million in FY23. When compared to FY19,
sales were well-above pre-pandemic levels, with an increase of
$36.17 million or 108.9% from $33.23 million, a 5-year CAGR of
15.9%.
The rise in sales is mainly due to a full year’s contribution of the
third store that opened at Rijeka in April 2023. Comparable
store sales for our Zagreb flagship store and Pula store
increased by 3.4% in local currency.
Increased operating costs from the new Rijeka store and a
general rise in costs due to inflation has resulted in a loss in
Croatia of $3.50 million in FY24, compared to a loss of $2.34
million in FY23, a deterioration of $1.17 million or –49.8%.
Overseas Company-Operated Retail Segment
2
Directors’ Report Operating & Financial Review | Segment Analysis (cont.)
18
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
Directors’ Report Operating and Financial Review (continued)
Review of the Property Segment - Strategic ‘Large-Format’ Retail Property Portfolio
Premium Refit of Harvey Norman® Penrith, NSW, Australia
Property ownership is a fundamental pillar of our integrated system,
offering a significant competitive advantage. The property segment
is essential to our operating model, underpinning our balance
sheet and improving financial capabilities and operational leverage
through reliable income streams. It enhances our strategic
flexibility by providing access to additional capital, allowing us to
promptly respond and adapt to evolving business needs.
Our consolidated balance sheet is anchored by a strong freehold
property portfolio totalling $4.23 billion as at 30 June 2024. This is
comprised of tangible, freehold investment properties in Australia
of $3.58 billion, Ireland of $28.72 million and New Zealand of
$40.42 million; and freehold owner-occupied properties in New
Zealand, Singapore, Slovenia, Australia and Ireland of $581.01
million in aggregate. Our property segment assets also include
joint venture assets of $2.95 million. The freehold property
segment comprises 53.4% of our $7.93 billion total asset base.
The Australian ‘Large-Format’
Retail (LFR) Market
The stable fair values recorded by our freehold investment
properties in Australia, amid the challenging discretionary retail
conditions, validates the resilience of the large-format retail (LFR)
market in Australia, and the attractiveness of our high-quality LFR
properties and solid tenancy mix.
We have 196 Australian franchised complexes geographically
spread throughout the country, with a local Harvey Norman®,
Domayne® and Joyce Mayne® branded store located within close
proximity to customers. 94 franchised complexes (48% of total),
and their associated warehouses, are owned by the consolidated
entity, which are then leased to external parties, including Harvey
Norman®, Domayne® and Joyce Mayne® franchisees.
Our Australian freehold investment property portfolio has grown to
$3.58 billion as at 30 June 2024, rising by $138.47 million or 4.0%
during FY24. This increase is due to capital additions and
refurbishments during the current year and a modest net
revaluation increment of $7.09 million for 76 Australian freehold
investment properties that were subject to revaluation.
Throughout the pandemic and up to June 2023, we had reported
on the resilience of the LFR market in Australia, buoyed by strong
consumer household spending, the significant uptick in new
dwellings and renovations and the high levels of investor demand
for quality LFR property assets.
The LFR market continues to be supported by solid economic
fundamentals of record population growth, low unemployment,
wages growth and the wealth effect from increasing house prices.
However, during FY24, there has been evidence of a slight
softening of capitalisation rates in LFR centres due to the material
increases in the cash rate that has placed downward pressure on
capital values across all asset classes. The slight softening
capitalisation rates have been offset by rental growth in new leasing
transactions and lease renewals, in addition to solid demand from
retailers for existing sites fuelled by a lack of quality LFR supply in
the market, evidenced by record-low vacancy rates. This has meant
that fair values of the property portfolio have remained largely
stable during the year. Whilst there has been a slight softening in
LFR property values, this has been modest, and almost completely
offset by rental growth, as the LFR sector has been shielded from
some of the headwinds facing other property asset classes.
The LFR Centres within our Australian investment property portfolio
are in highly-desirable, high population growth locations,
geographically spread across most metropolitan cities and large
regional areas in Australia. Our vast LFR footprint facilitates the
ongoing consolidation and improvement of our tenancy mix. As at
30 June 2024, our LFR centres accommodate a complementary mix
of over 470 third-party tenants that are diversified across a variety of
different categories including Food, Lifestyle & Other Service
Retailers, Hardware, Medical, Chemists, Pets and Auto related
products. A large proportion of these third-party tenants are ASX-
listed and are national retailers that support the underlying value of
our properties.
Whilst there is still some uncertainty about the future direction of
interest rates, the current sentiment in the LFR market is reasonably
positive, and many are expecting a return to stability and
confidence within the retail investment market. Strong population
growth, propelled by high net migration, has created a substantial
shortfall of residential dwellings. Dwelling commencements are
anticipated to significantly ramp up, supported by government
intervention to respond to the current housing shortages and
encourage further capital and new construction and renovation
projects. The National Housing Accord has an aspirational target
to build 1.2 million new, well-located homes over the next 5 years
to 2029. The flow-on effect of new housing stock is expected to
benefit LFR tenants and LFR property values. The solid labour
market, underpinned by low unemployment and wages growth, is
expected to support LFR spending.
Furthermore, there continues to be scarcity of LFR sites and there
are minimal signs of increased LFR supply in the interim. As
demand for space from LFR tenants outweighs supply, vacancy
rates are likely to remain low, which is conducive to rental growth
which will attract investment in the sector.
Since the end of June 2019, the LFR properties of the consolidated
entity have increased by $1.08 billion or 43.3% from $2.50 billion to
$3.58 billion as at 30 June 2024. This is due to capital appreciation,
capital additions and ongoing refurbishments throughout the
pandemic and up to 30 June 2024.
Property Segment
3
SUPPORTING AUSTRALIAN ATHLETES
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
19
Overseas Property Portfolio
Globally, we have 117 company-operated stores across 7
countries. 28 of the stores located overseas (24% of total) are
owned by the consolidated entity. The aggregate value of the
overseas owner-occupied and investment property portfolio is
$638.89 million, increasing in value by $42.24 million or 7.1%
during FY24.
Capital additions and refurbishments in New Zealand
amounted to $35.51 million for FY24 primarily due to
construction costs incurred for the 2 new owned sites that are
due to open in late calendar 2024. This was offset by a net
reduction in fair values by $9.92 million due to falling property
prices following increased interest rates, rolling mortgages and
macroeconomic volatility in the New Zealand market.
There have been increases in the fair values of properties in
Slovenia and Singapore during FY24 totalling $14.48 million.
Total Property Portfolio and the
Performance of the Property
Segment
Property segment revenues have decreased to $327.53 million
for FY24, down by $95.59 million, or –22.6%, from $423.13
million in FY23. This was primarily due to a reduction in the net
property revaluation adjustments by $116.50 million, from a
net increment of $118.75 million for FY23 compared to an
increment of $2.25 million for FY24. This was offset by an
increase in rent and outgoings received from freehold
properties by $15.25 million or 5.8% due to higher market
rentals and very low vacancy rates during FY24.
Property-related operating costs have continued to normalise
throughout FY24 increasing by $15.51 million during the year,
primarily due to higher interest expenses allocated to the
property segment by $8.18 million due to rising borrowing
costs relative to the previous year. Excluding interest costs, the
increase in operating expenses is consistent with the rise in
revenues (excluding net property revaluation adjustments).
The property segment result was $160.56 million for FY24, a
decrease of $111.10 million or –40.9% from $271.66 million in
FY23. Excluding net property revaluations for both periods,
the property segment result would have been $158.31 million
for FY24 compared to $152.91 million for FY23, an increase of
$5.40 million or 3.5% mainly due to rental growth this year.
$4.23bn
at 30 Jun 24
PROPERTY
SEGMENT ASSETS
Harvey Norman® Batu Pahat, Johor, Malaysia, opened June 2024
Property Segment
3
Directors’ Report Operating & Financial Review | Segment Analysis (cont.)
FY24 vs FY23
FY24 vs FY19
+4.4%
(up $179.62m)
+41.7%
(up $1.25bn)
$327.53m
[The previous year included a net revaluation increment of
$118.75m in FY23 compared to $2.25m in FY24]
PROPERTY
SEGMENT REVENUES
1H24 vs 1H23
2H24 vs 2H23
-37.7%
(down $97.17m)
+1.0%
(up $1.57m)
FY24 vs FY23
-22.6%
(down $95.59m)
1H24 vs 1H23
2H24 vs 2H23
-62.2%
(down $115.86m)
+5.6%
(up $4.76m)
FY24 vs FY23
-40.9%
(down $111.10m)
$160.56m
[Excluding net property revaluations for both years, the property segment
result would have been $158.31 million for FY24 compared to $152.91 million
for FY23, an increase of $5.40 million or 3.5%]
PROPERTY
SEGMENT PBT
1H24 vs 1H23
2H24 vs 2H23
-104.8%
(down $112.01m)
-37.9%
(down $4.49m)
FY24 vs FY23
-98.1%
(down $116.50m)
$2.25m
[Net revaluation increment of $2.25m in FY24 vs net revaluation increment of
$118.75m in FY23, a reduction of ($116.50m) due to marginal softening of
capitalisation rates, offset by rental growth]
NET PROPERTY
REVALUATION
ADJUSTMENTS
20
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
Net Property Revaluation Adjustments in Australia
For the year ended 30 June 2024, a net revaluation increment of $7.09 million was recorded in the income statement in relation to
the freehold investment property portfolio in Australia. This marginal net revaluation increment can be attributed to a slight
softening of capitalisation rates in large-format-retail (LFR) properties which have been offset by solid rental growth. This has meant
that fair values of the freehold investment property portfolio have remained largely stable during the year.
At each balance date, the directors make an assessment of the fair value of each freehold investment property.
This assessment is informed by:
•
the information and advice contained in the last independent external valuation report for that property prepared by an
external, professionally qualified valuer who holds a recognised relevant professional qualification and has specialised
expertise in the property being valued (Independent Valuer);
•
the information and advice contained in the last internal valuation report for that property (which was informed by the
immediately preceding independent external valuation report for that property);
•
the last management review for that property; and
•
other information and professional or expert advice given or prepared by reliable and competent persons in relation to that
property.
Each freehold investment property in Australia is independently valued by an Independent Valuer at least once every 2 years on a
rotational basis.
For FY24, there were 69 independent valuations of freehold investment properties in Australia representing a total of
approximately 52.2% of the value of freehold investment properties externally valued this year, and 48.9% in terms of the number of
total freehold investment properties in Australia.
Freehold investment properties not independently externally valued as at balance date are subject to an internal valuation or a
management review, performed by persons qualified by relevant education, training or experience. Each internal valuation and
management review is informed by the last independent external valuation and reliable market evidence. For the current year, 7
freehold investment properties had been affected by the same factors as the properties which had been independently externally
valued. As a consequence, internal valuations for these 7 properties were undertaken to determine the effect of these factors.
Review of the Property Segment
The below table shows the composition of freehold property segment assets as at 30 June 2024, the number of owned property
assets and the increase/decrease in fair value recognised in each country.
Composition of freehold property
segment assets
June
2024
# of owned retail
property assets
# of owned other
property assets
Net increase/
(decrease) in fair value
(income statement)
Net increase/
(decrease)
in fair value (equity)
(1) Investment Properties (Freehold)
− Australia
$3,581.47m
94
47
$7.09m
-
− New Zealand
$40.42m
-
5
-
− Ireland
$28.72m
-
1
($1.84m)
-
Total Investment Properties (Freehold)
$3,650.61m
94
53
$5.25m
-
(2) Owner—Occupied Land & Buildings
− Australia
$11.25m
-
1
-
($2.00m)
− New Zealand
$404.46m
21
1
($2.53m)
($7.39m)
− Singapore
$32.68m
-
2
-
$7.36m
− Slovenia
$107.78m
5
1
-
$7.12m
− Ireland
$24.84m
2
-
($0.47m)
-
Total Owner-Occupied Land & Buildings
$581.00m
28
5
($3.00m)
$5.09m
(3) Joint Venture Assets
$2.95m
-
8
-
-
Total Freehold Property Segment Assets
$4,234.56m
122
66
$2.25m
$5.09m
Property Segment
3
Directors’ Report Operating & Financial Review | Segment Analysis (cont.)
SUPPORTING AUSTRALIAN ATHLETES
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
21
Leasehold Property Portfolio | AASB 16 Leases
Right-of-use Assets
Leasehold investment properties (sub-leased or licenced to external parties):
The consolidated entity has a portfolio of property leases primarily for the purposes of being sub-leased, or licenced to, Harvey
Norman®, Domayne® and Joyce Mayne® franchisees in Australia. For these properties, the consolidated entity enters into property
leasing arrangements with external landlords and then subsequently subleases these sites to franchisees pursuant to a licence,
terminable upon reasonable notice. Leasehold investment property: right-of-use asset meets the definition of an investment
property and are measured at fair value. As at 30 June 2024, there were 301 leasehold investment properties. 102 leasehold
investment properties (34% of total) were sub-leased or licenced to Harvey Norman®, Domayne® and Joyce Mayne® franchisees in
Australia for retail purposes, and 199 leasehold investment properties (66% of total) were mainly sub-leased or licenced to Harvey
Norman®, Domayne® and Joyce Mayne® franchisees for warehousing.
Right-of-use Assets
Leasehold owner-occupied properties & plant and equipment assets:
Leasehold properties occupied by the consolidated entity primarily include company-operated stores, warehouses and offices that
are leased from external landlords. Unlike the leasehold investment properties: right-of-use assets which are measured at fair value,
the leasehold owner-occupied properties and plant and equipment assets: right-of-use assets are measured at cost, less any
accumulated depreciation and impairment losses.
Composition of the Leasehold Property Portfolio:
The table below shows the composition of right-of-use assets and lease liabilities within our leasehold property portfolio as at
balance date, and the number of leased retail properties and other properties leased by the consolidated entity.
Composition of leasehold property portfolio
Right-of-use assets
June 2024
Lease liabilities
June 2024
# of leased retail
property assets
# of leased other
property assets
(1) Leases of Properties Sub-Leased to External Parties
− Australia
$744.64m
$809.36m
102
199
(2) Leases of Owner-Occupied Properties and Plant and
Equipment Assets
− Australia
$43.32m
$59.22m
-
16
− New Zealand
$111.49m
$127.99m
24
35
− Singapore & Malaysia
$237.10m
$183.61m
46
21
− Slovenia & Croatia
$23.63m
$26.03m
3
2
− Ireland & Northern Ireland
$96.38m
$128.84m
16
16
Total Leases of Owner-Occupied Properties and
Plant and Equipment Assets
$511.93m
$525.69m
89
90
Total Leasehold Property Portfolio
$1,256.57m
$1,335.05m
191
289
Financial Impact of AASB 16 Leases on the Consolidated Income Statement:
The table below shows the financial impact of AASB 16 Leases on the consolidated income statement for the year ended
30 June 2024.
Financial impact of AASB 16 leases:
Leases of owner-
occupied properties
$000
Leases of properties
Sub-leased to
external parties
$000
Total leases
$000
Property, plant and equipment: Right-of-use asset - Depreciation expense
$72,813
-
$72,813
Investment properties (leasehold): Right-of-use asset - Fair value re-measurement
-
$76,213
$76,213
Finance costs: Interest on lease liabilities
$21,123
$36,964
$58,087
Total AASB 16 Expenses Recognised
$93,936
$113,177
$207,113
Less: Lease payments made during FY24
(excluding variable lease payments and short-term, low-value leases)
($92,981)
($115,318)
($208,299)
Other adjustments
$1,861
($46)
$1,815
AASB 16 Net Decrease in PBT for FY24
$2,816
($2,187)
$629
Leasehold Property Portfolio
Directors’ Report Operating & Financial Review | Segment Analysis (cont.)
22
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
Throughout the 2024 financial year, the consolidated entity
has continued to invest in its digital strategy as a critical
pillar that underpins the effective operation of the
integrated retail, franchise and property system across 8
countries. The digital strategy focuses on enhancing the
customer experience by augmenting the various technology
platforms and infrastructure to enable Harvey Norman®,
Domayne® and Joyce Mayne® franchisees in Australia and
overseas company-operated stores to provide customers
with a seamlessly integrated, efficient and highly
personalised omnichannel experience.
Cyber security is a key priority and enhancements to the
current digital infrastructure have continued to increase
customer convenience and operational efficiency, whilst
maintaining a robust cyber security program to mitigate the
cyber risks of the business.
eCommerce Platform Upgrade
To meet the high demand of online shopping, the Australian
based online marketplace franchisee has successfully
upgraded the digital platform that will deliver a high-quality
customer experience for the years ahead. This innovative
digital platform offers several key advantages such as:
Enhanced Performance
Faster load times and enhanced scalability for superior
customer experience.
Mobile Friendly
Responsive design ensures optimal functionality across all
devices.
Flexible Architecture
Modular design facilitates easy customisation of online
services.
Improved Security
Robust encryption and secure payment gateways to support
diverse payment options for Harvey Norman® customers.
Rich Business Features
Advanced marketing, SEO (search engine optimisation) and
catalogue management tools.
Next Generation Commerce Platform-
Shopify Plus
With the upgrade to the next-generation of the eCommerce
platform- Shopify Plus, in the United Kingdom (UK), our
company-operated stores have introduced additional express
checkout capabilities. By enabling Shop Pay through Shopify
Payments, customers can now streamline their checkout
experience thus significantly enhancing convenience for their
customers.
Following a successful rollout in the UK, we are now
advancing the implementation of our next-generation cloud
commerce platform across our other company-operated
locations abroad. This initiative supports the international
markets within the Republic of Ireland, New Zealand,
Singapore and Malaysia with enhanced security, scalability,
and an improved customer experience. Furthermore, it will
provide enhanced customer insights, enabling continuous
monitoring and improvement of the customer journey to
deliver an optimal shopping experience.
Directors’ Report A ‘Customer–Centric’ Strategy
A ‘Customer-
Centric’ Strategy
Digital Initiatives
SUPPORTING AUSTRALIAN ATHLETES
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
23
Forter Fraud Solution
The Forter Fraud Solution is an AI-powered fraud prevention
solution that assists Harvey Norman® to detect and prevent
fraudulent transactions in real-time. Using advanced machine
learning algorithms, Forter analyses extensive data sets to
accurately identify and stop fraudulent activities by detecting
suspicious patterns and behaviours. Harvey Norman® opted
for Forter as the AI-driven approach to help minimise false
positives and efficiently process legitimate transactions,
thereby improving both security and the overall customer
experience.
Future of Payments—Afterpay
The successful launch of Afterpay in Australia and New
Zealand allows Harvey Norman® customers to "buy now, pay
later", over a series of instalments. This option has been
integrated into the online checkout process, as well as being
available in store. In-store use of Afterpay involves simply
informing the cashier and using the Afterpay app to complete
the purchase. An Afterpay card can be setup in most digital
wallets like Apple Pay, Google Pay and Samsung Pay to tap in
store which makes payments even easier.
Click & Collect on Microsoft Teams
Continuous Improvements
Harvey Norman® offers Click & Collect services across all
franchised complexes in Australia and company-operated
stores in 7 countries overseas. Orders placed on the Harvey
Norman®, Domayne®, and Joyce Mayne® websites are
typically prepared within one hour, ensuring efficient service
and customer care facilitated by Microsoft Teams.
Continuous enhancements to the Microsoft Teams-based
system provide timely updates on order status and pick-up
locations. Integrated notifications allow customers to notify
their arrival with a simple "On My Way" or "Arrived" button on
their device, whether picking up in-store or opting for car-side
delivery. Dedicated Click & Collect parking bays and in-store
desks further streamline this service.
Digital Initiatives
24
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
Cash and cash equivalents, net of bank overdraft, as disclosed
in the Statement of Cash Flows, increased by $51.10 million to
$253.16 million as at 30 June 2024, compared to $202.06
million as at 30 June 2023.
Cash flows from operating activities increased by $6.27 million
to $686.53 million for FY24, from $680.26 million in FY23. This
was primarily attributable to higher receipts from customers by
$37.85 million and lower income tax paid by $113.20 million,
offset by a decrease in net receipts from franchisees by $112.26
million and higher payments to suppliers and employees by
$31.49 million.
In 1H24, operating cash flows were strong, with a $156.24
million increase in cash flows from operating activities
compared to 1H23. This increase was primarily due to an
$88.88 million increase in net receipts from franchisees, driven
by lower funding requests from franchisees for their inventory
purchases in response to subdued aggregated franchisee sales
revenue which declined by 9.7% in 1H24. However, during
2H24, cash flows from operating activities decreased by
$149.97 million compared to 2H23 mainly due to a $201.15
million reduction in net receipts from franchisees as higher
funding was requested by franchisees to fund their inventory
purchases, to respond to the higher demand from their
customers. 2H24 outperformed 1H24 with a minimal decline in
aggregated franchisee sales of only 0.6% relative to 2H23.
Payments to suppliers and employees increased by $31.49
million due to higher operating costs attributable to new store
openings and a general increase in operating costs due to
inflation.
Income tax paid decreased by $113.20 million primarily due to
the higher final tax payment made in FY23 attributable to FY22
taxable profits and the higher income tax instalment rate
applied in Australia for FY23.
Receipts from customers increased by $37.85 million mainly
due to a $27.29 million increase in sales from our company-
operated stores.
Net outflows from investing activities decreased by $32.30
million during FY24 mainly due to net repayments from loans in
FY24 of $27.60 million compared to net loans granted in FY23
of $22.64 million. This was offset by an increase in payments for
the purchase of listed securities by $10.92 million and an
increase in the purchase of property, plant and equipment and
intangible assets by $4.50 million.
Net outflows from financing activities decreased by $44.83
million mainly due to a reduction in dividends paid by $105.91
million, offset by a reduction in the proceeds received from the
syndicated facility by $65 million in FY24.
Net Debt:
Net Debt to Equity Ratio
Across the consolidated entity globally, the total available facilities amounted to $1,182.27 million as at 30 June 2024 compared to
$1,185.83 million as at 30 June 2023.
As at balance date, the utilised portion was $940.12 million (Jun-23: $845.89 million), leaving $242.16 million (Jun-23: $339.94
million) accessible financing facilities available. The utilised facilities in FY24 increased by $94.23 million compared to FY23
resulting in a net debt position of $671.11 million as at 30 June 2024, compared to a net debt position of $631.61 million in the
prior year. Our net debt to equity ratio remains low at 14.49% (Jun-23:13.85%).
The consolidated entity has sufficient liquidity and the low gearing ratio and strong balance sheet gives us the capacity and ability
to access additional liquidity as required.
Strong Cash Flows
$631.61m
VS
Jun 24
$671.11m
Jun 23
FY24 vs FY23 FY24 vs FY19
0.9%
(up $6.27m)
84.1%
(up $313.69m)
Directors’ Report Operating & Financial Review | Net Debt to Equity and Cash Flows
FY24
FY23
100.4%
97.4%
Cash Conversion %*
Operating Cash Flows
$686.53m for FY24
* Calculated as Operating Cash
Flows (excluding interest & tax) ÷
EBITDA (excluding AASB 16 and net
property revaluations)
[5-year CAGR of 13.0%]
SUPPORTING AUSTRALIAN ATHLETES
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
25
Review of the Financial Position of the Consolidated Entity (Continued)
Total assets were $7.93 billion as at 30 June 2024, increasing by
$256.04 million, or 3.3%, from $7.67 billion as at 30 June 2023.
When compared to 30 June 2019, the increase in total assets
was $3.13 billion or 65.2%, delivering a 5-year CAGR of 10.6%.
The consolidated entity has ample cash reserves as at 30 June
2024 (Jun-24) of $273.47 million, an increase of $54.72 million
from $218.75 million as at 30 June 2023 (Jun-23).
The value of the freehold investment property portfolio
increased by $167.02 million, or 4.8%, to $3.65 billion as at
Jun-24 primarily due to the acquisition and refurbishment of
new freehold investment properties in Australia, and the
construction of the new freehold franchised complexes at
Macgregor (QLD) that is due to open in 1H25.
Property, plant and equipment assets increased by $54.35
million mainly due to the fit-out of 6 new company-operated
stores in Malaysia in FY24: Shah Alam, Selangor (July 2023),
Kota Kinabalu, Sabah (August 2023), Pavilion Damansara
Heights, Kuala Lumpur (October 2023), Kuantan, Pahang
(November 2023), Seberang Jaya, Penang (April 2024) and
Batu Pahat, Johor (June 2024), 1 new company-operated store
located at Tauriko, New Zealand (December 2023) and 1
company-operated store that was relocated at Blenheim, New
Zealand (May 2024). Construction costs were incurred in New
Zealand for the development of 2 company-operated stores in
NZ due to open later in calendar 2024. The fit-out of one new
franchised complex located at Belconnen (ACT) in Australia that
opened during the year and the completion of the premium
refits at Balgowlah (NSW), Erina (NSW), Preston (VIC) and
Cannington (WA) also contributed to the increase.
Inventories of company-operated stores increased by $12.47
million primarily driven by new store openings during the year.
This was offset by a reduction in total current and non-current
trade and other receivables by $56.96 million, or –5.3%, to
$1.02 billion as at Jun-24, compared to $1.08 billion as at Jun-
23. This reduction is mainly due to a decrease in receivables
from franchisees by $28.66 million, or 3.4%, to $812.34 million
as at Jun-24, compared to $841.00 million as at Jun-23.
Total liabilities increased by $185.60 million to $3.39 billion as
at Jun-24 from $3.21 billion as at Jun-23. Interest-bearing loans
and borrowings increased by $94.22 million mainly due to the
higher utilisation of the Syndicated Facility by $85 million, from
$760 million utilised as at Jun-23 to $845 million utilised as at
Jun-24. Deferred tax liabilities increased by $43.88 million,
partially attributed to the legislative change in New Zealand to
exclude tax deductions for future building depreciation
expenses resulting in the recognition of approximately $22
million in deferred tax balances.
This has resulted in an increase in net assets by $70.44 million
or 1.6% to $4.54 billion as at Jun-24 from $4.47 billion in Jun-
23. When compared to Jun-19, net assets increased by $1.339
billion or 41.9%, delivering a 5-year CAGR of 7.2%.
3.3%
up by $256.04m from $7.67bn in Jun-23
65.2%
up by $3.13bn from $4.80bn in Jun-19
Total Assets
$7.93bn
As at 30 June 2024
Jun-23 Jun-24
Total Liabilities
$3.39bn
As at 30 June 2024
5.8%
up by $185.60m from $3.21bn in Jun-23
111.8%
up by $1.79bn from $1.60bn in Jun-19
Jun-23 Jun-24
[$m]
[$m]
1.6%
up by $70.44m from $4.47bn in Jun-23
41.9%
up by $1.34bn from $3.20bn in Jun-19
Net Assets
$4.54bn
As at 30 June 2024
Composition of Total Assets of $7.93bn
Directors’ Report Operating & Financial Review | Balance Sheet Review
$558.13m
Inventory
$365.35m
Plant & equipment
$1,023.69m
Receivables
$511.93m
Property, plant &
equipment:
Right-of use assets
$216.10m
Other
$273.47m
Cash
$4,234.56m
Tangible property assets
$744.64m
Investment properties:
Leasehold right of-use- assets
26
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
Retail Trading Update:
Aggregated sales increase/(decrease) in local currencies from 1 July 2024 to 31 July
2024 vs 1 July 2023 to 31 July 2023:
1 Jul 2024 to 31 Jul 2024 vs
1 Jul 2023 to 31 Jul 2023
% increase / (decrease)
calculated in local currencies
Country
Total %
Comparable %
Australian Franchisees
$ AUD
3.5
3.3
New Zealand
$ NZD
(-9.0)
(-9.5)
Slovenia & Croatia
€ EUR
7.0
7.1
Ireland
€ EUR
(-0.3)
(-0.3)
Northern Ireland
£ GBP
(-5.7)
(-5.7)
Singapore
$ SGD
(-2.3)
(-2.3)
Malaysia
MYR
9.7
(-2.6)
In Malaysia, driven by a resilient economy, solid population
growth and recent government initiatives to encourage
consumer confidence and spending, we remain committed to
our expansion plan. We anticipate opening up to 10 new
stores during FY25, and it is still our intention to grow to 80
stores in Malaysia by the end of 2028.
In New Zealand, the full-format store at Tauriko, Tauranga in
the North Island opened on 11 December 2023. We are on
track to open 2 new full-format stores in 1H25 at Papanui in
October 2024 and Ravenswood in November 2024, both in the
Christchurch region of the South Island.
In June 2024, a decision was made to cease the proposed
expansion plans into Budapest, Hungary due to unfavourable
conditions.
In January 2024, we announced the expansion of the Harvey
Norman® brand in the United Kingdom with the signing of a
lease at Merry Hill, located in the West Midlands region in
England. We intend to open the 57,000 sq. ft. Harvey
Norman® Merry Hill flagship store in October 2024.
There is an intention to open a second store in the West
Midlands, UK, during FY26 with lease negotiations currently
underway.
In Australia, we opened 1 franchised complex at Belconnen,
ACT, on 3 November 2023 as planned, whilst 1 franchised
complex has been delayed from 2H24 to 1H25. For FY25, the
present intention is to open 2 new franchised complexes and
relocate 2 franchised complexes to new sites, both of which are
new freehold properties.
During FY24, the premium refit program has continued with
the completion of the refits at Harvey Norman® Balgowlah
(NSW), Harvey Norman® Preston (VIC), Harvey Norman® Erina
(NSW) and Harvey Norman® Cannington (WA) this year. There
are 2 premium refits currently in progress located at Penrith
(NSW) and Marion (SA), and we intend to commence a further
2 premium refits during FY25.
Outlook:
Directors’ Report Operating & Financial Review | Outlook and Retail Trading Update
SUPPORTING AUSTRALIAN ATHLETES
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
27
The Board remains optimistic about the consolidated entity’s
future trading performance and acknowledges that there are
several factors that may pose risk to the achievement of the
business strategies and future financial performance of the
consolidated entity. Every business is exposed to risks with the
potential to impair its ability to execute its strategy or achieve its
financial objectives.
There are a number of key risks, both specific to the Harvey
Norman® integrated retail, franchise, property and digital system
and external risks, for example the macroeconomic environment,
over which the consolidated entity has no control. The consolidat-
ed entity acknowledges the existence of these risks, and in the first
instance seeks to identify and understand individual risks, and then
– to the extent possible – manage and mitigate those risks.
Changes to macroeconomic conditions
and government policy:
The consolidated entity has a significant exposure to the economy
of the countries in which it operates. There are a number of
general economic conditions, including interest and exchange rate
movements, CPI inflation, geopolitical tensions, overall levels of
demand, housing market dynamics, wage growth, employment,
economic and political instability and government fiscal, trade,
monetary and regulatory policies, that can impact the level of
consumer confidence and discretionary retail spending. These
conditions may affect revenue from sales to customers and
franchise fees.
The consolidated entity seeks to reduce its exposure to these risks
through appropriate business diversification, and also by closely
monitoring both internal and external sources of information that
provide insights into any changes in demand within the economies
in which it operates. With a property portfolio of over $4 billion, the
consolidated entity is exposed to potential reductions in
commercial property values. The consolidated entity has a
selective and prudent acquisition and development strategy and
maintains high-quality complexes and a solid, dynamic,
complementary tenancy mix in order to maximise the profitability
of the property segment.
Cyber security risk:
Cyber security attacks can take many forms including:
ι. Attacks on technology infrastructure which generates revenue
and threaten to perpetually block access to data unless a
ransom is paid (Ransomware); and
ιι. Attacks to gain unauthorised access to data or records that can
be used alone or with other information to identify, contact or
locate a single person, including a customer or employee
(Personal Identifiable Information or PII).
The Company has implemented and continues to improve and
enhance, a cyber security risk management framework and
security controls to protect against any cyber security risks,
including Ransomware and PII attacks. The Company has
implemented business continuity plans and disaster recovery plans
to respond to cyber security incidents, and mitigate financial and
reputational damage from any such incidents.
Compliance by franchisees with franchise
agreements:
This risk relates to franchisees acting in breach of the terms and
conditions of their respective franchise agreements. The
consequences of non-compliance may include damage to the
brand, fines and other sanctions from regulators, and a reduction
in franchise fees received from franchisees.
The franchisor continually monitors and evaluates the financial and
operating performance of each franchisee to actively assess
compliance with executed franchise agreements. Instances of
non-compliance are promptly addressed to protect the Harvey
Norman®, Domayne® and Joyce Mayne® brands and intellectual
property of the franchisor.
Increased competition resulting in a decline
of retail margin or a loss of market share for
franchisees in Australia and company-
operated stores in overseas markets:
The integrated retail, franchise, property and digital system, and
diverse category mix assists in maintaining the consolidated entity’s
competitive position. Market consolidation and/or acquisition may
result in further competition and changes to retail margins and
market share. Franchisees in Australia and company-operated stores
in 7 overseas regions operate across a number of categories in the
Home and Lifestyle market. Diversity of category and the ability to
identify growth opportunities locally and overseas, mitigates the risk
from existing and potential competitors.
Emergence of competitors in new channels:
The Harvey Norman® Omni Channel Strategy provides customers of
franchisees with a diverse, consistent and distinctive Harvey Norman®
customer experience through a range of channels. The Harvey
Norman® Omni Channel Strategy integrates retail, online, mobile
and social channels. The online operations of franchisees in Australia
and the company-operated online operations overseas continue to
grow. The digital platform provides new opportunities for growth
and new ways to embrace and engage with customers. The Harvey
Norman® Omni Channel Strategy sets the Harvey Norman® brand
apart from other online and digital competitors. Harvey Norman®
customers have a multitude of engagement options to meet their
needs. The Harvey Norman® Omni Channel Strategy, supported by
the retail property portfolio of the consolidated entity, makes the
Harvey Norman® brand a strong competitor in the market.
Reduction in the fair value of the property
portfolio and contraction in the large-format
retail (LFR) market:
The commercial property market is cyclical in nature with real estate
values fluctuating over time. The consolidated entity is exposed to
potential reductions in property values within this sector. There are a
number of economic circumstances that may impact the value of the
property portfolio, these include the interest rate environment.
The consolidated entity has a selective and prudent acquisition and
development strategy and maintains high-quality geographically
diverse complexes and a solid, complementary tenancy mix in order
to maximise the profitability of the property portfolio.
Counterparty risks of service providers:
This risk relates to the inability of service providers and counterpar-
ties to meet their obligations and commitments, inclusive of compli-
ance, privacy and data security obligations. The consolidated entity
conducts due diligence on, and closely monitors and evaluates the
performance of, external service providers to mitigate counterparty
risk.
Summary of Key Business Risks
Directors’ Report Operating & Financial Review | Summary of Key Business Risks
28
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
Directors’ Report
Comprised of:
Board of Directors
29 - 31
Remuneration Report (Audited)
32 - 58
Sustainability Report
59 - 74
Auditor’s Independence Declaration
75
Independent Auditor’s Report
76 - 81
Directors’ Declaration
82
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
28
SUPPORTING AUSTRALIAN ATHLETES
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
29
Board of Directors
Unless otherwise indicated, all
directors (collectively termed
‘the Board’), held their position
as director throughout the
entire year and up to the date
of this report.
Gerald Harvey
Executive Chairman
In 1982, Mr. G. Harvey was the co-founder, with
Mr. I.J. Norman, of Harvey Norman®. He
became a director and chairman of Harvey
Norman Holdings Limited (the Company) in
1987, and is employed by Yoogalu Pty
Limited (Yoogalu), a controlled entity of the
Company. Mr. G. Harvey is executive
chairman, or a director, of each member of
the consolidated entity, with a particular
focus on property investments.
Kay Lesley Page
Executive Director and CEO
Ms. Page joined Harvey Norman® in 1983
and became a director of the Company in
1987. Ms. Page is employed by Yoogalu.
Since 1999, Ms. Page has overall Chief
Executive Officer responsibility for each
controlled entity of the Company in
Australia, and is a director of each member of
the consolidated entity.
Chris Mentis
B.Bus., FCA, FGIA, Grad Dip App Fin
Executive Director, CFO & Company
Secretary
Mr. Mentis joined Harvey Norman® as a
Financial Controller in 1997. Mr. Mentis
became secretary of the Company in 2006
and a director of the Company in 2007. He
is employed by Yoogalu and, since 2007,
has overall Chief Financial Officer
responsibility for, or is a director of, each
member of the consolidated entity. Mr.
Mentis is a Fellow of the Chartered
Accountants Australia & New Zealand (CA
ANZ) and a Fellow of the Governance
Institute of Australia, with extensive
experience in financial accounting.
John Evyn Slack-Smith
Executive Director and COO
Mr. Slack-Smith was a director of a Harvey
Norman® computer franchisee between
1993 and 1999 and became a director of
the Company in 2001. He is employed by
Yoogalu and has overall executive
responsibility for the operations of each
controlled entity of the consolidated entity
in Australia of which he is a director. Mr.
Slack-Smith is a Member of Council at
Barker College.
David Matthew Ackery
Executive Director
Mr. Ackery became a director of the Company
in 2005. He was employed by Yoogalu and
had overall executive responsibility for the
relationship between each controlled entity
in Australia with relevant electrical,
appliance, home entertainment and
technology franchisees. Mr. Ackery retired
as an executive director of the Company
and as an employee with effect from 30
April 2024.
Michael John Harvey
B.Com.
Non-Executive Director
Mr. M. Harvey joined Harvey Norman in
1987, having completed a Bachelor of
Commerce degree. Mr. M. Harvey gained
extensive experience as a Harvey Norman®
franchisee from 1989 to 1994. Mr. M. Harvey
became a director of the Company in 1993
and was appointed Managing Director in
July 1994. Mr. M. Harvey ceased to be an
executive director and Managing Director
on 30 June 1998.
Christopher Herbert
Brown
OAM, LL.M., FAICD, FGIA, CTA
Non-Executive Director
Mr. Brown holds the degree of Master of
Laws from the University of Sydney. Mr.
Brown is the senior partner in Brown Wright
Stein Lawyers. Brown Wright Stein Lawyers
has acted as lawyers for the consolidated
entity since 1982. Mr. Brown was appointed
a director of the Company in 1987, when it
became a listed public company. Mr. Brown
is a member of the Audit & Risk, Remuneration
and Nomination Committees. Mr. Brown is
the Chairman of each of Windgap
Foundation Limited and Sydney High School
Foundation. In 2013 he was awarded the
Medal of the Order of Australia (OAM) for
service to the community, particularly to
people with disability.
Kenneth William
Gunderson-Briggs
B.Bus., FCA, MAICD
Non-Executive Director (Independent)
Mr. Gunderson-Briggs was appointed a
director of Harvey Norman Holdings Limited
on 30 June 2003. Mr. Gunderson-Briggs is a
chartered accountant and a registered
company auditor. Mr. Gunderson-Briggs has
been involved in public practice since 1982
and a partner in a chartered accounting firm
since 1990. Mr. Gunderson -Briggs’
qualifications include a Bachelor of Business
from the University of Technology, Sydney
and he is a Fellow of the CA ANZ.
Mr. Gunderson -Briggs was appointed Chair
of the Remuneration Committee on 16
December 2015 and was appointed Chair of
the Audit & Risk Committee and Nomination
Committee on 25 November 2020.
Mr. Gunderson-Briggs was appointed as an
independent Non-Executive Director of NTAW
Holdings Limited (formerly National Tyre and
Wheel Limited), a company listed on the ASX,
from 13 December 2023.
Maurice John Craven
B.Sc., FAICD
Non-Executive Director (Independent)
Mr. Craven was appointed a director of
Harvey Norman Holdings Limited on 27
March 2019 and became a member of the
Nomination Committee of the Company on 24
June 2021. Mr. Craven holds a Bachelor of
Science degree from the University of
Melbourne and is a Fellow of the Australian
Institute of Company Directors. Mr. Craven
has been actively involved with innovation
and growth in technology empowered
industries for more than 25 years and prior
to that was a partner for 25 years with
Andersen Consulting. Mr. Craven is Chair of
Specialisterne Australia.
Luisa Catanzaro
B.Com., FCA, GAICD
Non-Executive Director (Independent)
Ms. Catanzaro was appointed a Non-
Executive Director of Harvey Norman
Holdings Limited on 25 November 2020,
became a member of the Audit & Risk
Committee on 25 November 2020, and
became a member of the Remuneration
Committee on 24 June 2021. Ms Catanzaro
has a Bachelor of Commerce from the
University of NSW, is a Fellow of the CA ANZ
and is also a Graduate of the Australian
Institute of Company Directors.
Ms Catanzaro has more than 30 years of
professional experience in senior financial
executive roles across a range of industries,
including FMCG and agriculture sectors,
and with ASX listed companies.
Ms Catanzaro is currently a Non-Executive
Director of ASX listed company, Ricegrowers
Limited, from September 2018, where Ms
Catanzaro is Chair of the Finance, Risk and
Audit Committee and a member of the
Remuneration, Nomination and
Independent Committees. Since 14 January
2019, Ms Catanzaro has been a Non-
Executive Director of Because Movement
Foundation Limited, a registered
charity. Since 20 August 2023, Ms Catanzaro
has been a Non-Executive Director of the
Museum of Contemporary Art Limited,
where Ms Catanzaro is Chair of the Finance
Committee.
Directors’ Report (continued)
30
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
Directors’ Meetings
The below table represents the number of times the Board,
Audit & Risk Committee, Remuneration Committee and
Nomination Committee met throughout the year ended 30
June 2024, and the directors’ attendance at each meeting.
In addition, the executive directors held regular meetings for
the purpose of signing various documentation.
Directors’ Relevant Interests
At the date of this report, the relevant direct and indirect
interest of each director in the ordinary shares and
performance rights instruments of the Company and related
bodies corporate are:
Company Secretary
Mr. C. Mentis is a chartered accountant and became
Company Secretary on 20 April 2006. Mr. Mentis has
extensive experience in financial accounting and has been
with the consolidated entity since 1997. Mr. Mentis is a Fellow
of the Governance Institute of Australia.
Performance Rights
At the date of this report, there were 3,016,257 performance
rights (2023: 2,570,300), being a right to acquire ordinary
shares in the Company at nil exercise price.
• On 30 November 2021, a total of 914,000 performance
rights under Tranche FY22 of the 2016 LTI Plan were
granted to the executive directors in accordance with the
terms and conditions of the LTI Plan.
• On 1 December 2022, a total of 1,106,800 performance
rights under Tranche FY23 of the 2016 LTI Plan were
granted to the executive directors in accordance with the
terms and conditions of the LTI Plan.
• On 1 December 2023, a total of 1,052,400 performance
rights under Tranche FY24 of the 2016 LTI Plan were
granted to the executive directors in accordance with the
terms and conditions of the LTI Plan.
• On 30 April 2024, a total of 56,943 performance rights under
Tranche FY23 of the 2016 LTI Plan lapsed with the retirement
of Mr. David Ackery.
On 3 January 2024, a total of 549,500 performance rights
issued on 4 December 2020 under Tranche FY21 of the 2016
LTI Plan, were exercised by the executive directors in
accordance with the terms and conditions of the LTI Plan.
CEO and CFO Certification
The CEO and CFO have provided written statements to the
Board in accordance with section 295A of the Corporations Act
2001 and have also certified to the Board in relation to the year
ended 30 June 2024, that:
• Their view provided on the Company’s financial report is
founded on a sound system of risk management and internal
compliance and control which implements the financial
policies adopted by the Board; and
• The Company’s risk management and internal compliance
and control system is operating effectively in all material
respects.
The Board agrees with the views of the ASX on this matter and
notes that due to its nature, internal control assurance from the
CEO and CFO can only be reasonable rather than absolute. This
is due to factors such as the need for judgement, the use of
testing on a sample basis, the inherent limitations in internal
control and because much of the evidence available is
persuasive rather than conclusive. CEO and CFO control assur-
ance is not, and cannot, be designed to detect all weaknesses in
control procedures. In order to mitigate this risk, internal control
questionnaires are required to be answered and completed by
the key management personnel of all significant business units,
including finance managers, in support of the written statements
of the CEO and CFO.
Committee Membership
As at the date of this report, the Company had an Audit & Risk
Committee, a Remuneration Committee and a Nomination
Committee. Members acting on the committees of the board
during the year were:
Directors’ Report (continued)
DIRECTOR
Number of
Meetings:
Attendance
Full Board
Audit & Risk
Remuneration
Nomination
G. Harvey
100%
7 [7]
n/a
n/a
n/a
K.L. Page
100%
7 [7]
n/a
n/a
n/a
J.E. Slack-
Smith
86%
6 [7]
n/a
n/a
n/a
C. Mentis
100%
7 [7]
n/a
n/a
n/a
M.J. Harvey
71%
5 [7]
n/a
n/a
n/a
C.H. Brown
91%
5 [7]
10 [10]
5 [5]
1 [1]
K.W. Gunderson
-Briggs
100%
7 [7]
10 [10]
5 [5]
1 [1]
M.J. Craven
100%
7 [7]
n/a
n/a
1 [1]
L. Catanzaro
100%
7 [7]
10 [10]
5 [5]
n/a
D.M. Ackery*
83%
5 [6]
n/a
n/a
n/a
Director
Ordinary Shares
Performance Rights
G. Harvey
415,031,937
511,600
K.L. Page
20,405,315
1,432,700
J.E. Slack-Smith
1,470,893
430,700
C. Mentis
1,450,297
430,700
M.J. Harvey
-
-
C.H. Brown
205,525,565
-
K.W. Gunderson-Briggs
10,059
-
M.J. Craven
53,426
-
L. Catanzaro
17,500
-
Total
643,964,992
2,805,700
Non-Executive Director
Audit & Risk
Remuneration
Nomination
C.H. Brown
√
√
√
K.W. Gunderson-Briggs
√
(Chair)
√
(Chair)
√
(Chair)
L. Catanzaro
√
√
n/a
M.J. Craven
n/a
n/a
√
* Mr. Ackery retired as an executive director of the Company and as an employee
with effect from 30 April 2024.
SUPPORTING AUSTRALIAN ATHLETES
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
31
Corporate Governance
The board of directors (Board) of Harvey Norman Holdings
Limited (the Company) is committed to a high standard of
corporate governance, and is responsible for establishing,
maintaining and monitoring the corporate governance
framework of the Company.
The Board has benchmarked its practices against the ASX CGC
published guidelines and the CGC corporate governance
principles and recommendations (February 2019 edition)
(Principles). The Board guides and monitors the business and
affairs of the Company on behalf of the shareholders by whom
they are elected and to whom they are accountable. The
Corporate Governance Statement summarises the corporate
governance practices of the Company, including the practices
that are in alignment with the Principles for the year ended 30
June 2024. The Corporate Governance Statement has been
approved by the Board. The full Corporate Governance
Statement and further details about corporate governance
policies adopted by the Company and the Board and
committee charters may be accessed via the Company's
website www.harveynormanholdings.com.au.
Dividends
The directors recommend a fully franked final dividend of 12.0
cents per share to be paid on 13 November 2024 to
shareholders registered on 16 October 2024 (total dividend,
fully franked, $149,520,798). The following fully franked
dividends of the Company have also been paid, declared or
recommended since the end of the preceding financial year:
The total dividend in respect of the year ended 30 June 2024 of
22.0 cents per share (2023: 25.0 cents per share) represents
77.78% (2023: 57.74%) of profit after tax and non-controlling
interests, as set out on page 85 of the financial statements.
Excluding the non-cash net property revaluation increments, the
total dividend in respect of the year ended 30 June 2024 of 22.0
cents per share represents 78.02% (2023: 68.25%) of profit after
tax and non-controlling interests, as set out on page 85 of the
financial statements. The Dividend Policy of the Company is to
pay such dividends as do not compromise the capability of the
Company to execute strategic objectives.
Indemnification of Officers
During the financial year, indemnity arrangements were
continued for officers of each member of the consolidated
entity. An indemnity agreement was entered into between the
Company and each of the directors of the Company named
earlier in this report and with each full-time executive officer,
director and secretary of all group entities. Under the
agreement, the Company has agreed to indemnify those
officers against any claim or for any expenses or costs which
may arise as a result of work performed in their respective
capacities.
No indemnity payments have been made under the Indemnity
Agreement referred to above during, or since, the end of the
financial year.
Principal Activities
The principal activities of the consolidated entity are that of an
integrated retail, franchise, property and digital system
including:
• Franchisor;
• Omni-channel retailing of furniture, bedding, computers,
communications and consumer electrical products in New
Zealand, Singapore, Malaysia, Slovenia, Ireland, Northern
Ireland and Croatia;
• Property investment;
• Lessor of premises to Harvey Norman®, Domayne® and Joyce
Mayne® franchisees and other third parties;
• Media placement; and
• Provision of consumer finance and other commercial loans and
advances.
Significant Changes in the State of Affairs
In the opinion of the directors, there were no significant changes in
the state of affairs of the consolidated entity that occurred during
the year ended 30 June 2024.
Significant Events After Balance Date
There have been no circumstances arising since balance date
which have significantly affected or may significantly affect:
• the operations;
• the results of those operations; or
• the state of affairs of the entity or consolidated entity in future
financial years.
Rounding of Amounts
The amount contained in the financial statements and the
Directors’ Report have been rounded to the nearest thousand
dollars (unless specifically stated to be otherwise) under the option
available to the Company under Australian Securities and
Investments Commission Corporations (Rounding in Financial/
Directors’ Reports) Instrument 2016/191. The Company is an
entity to which this legislative instrument applies.
Capital Management Policy
The consolidated entity’s capital management policy objectives
are to: create long-term sustainable value for shareholders;
maintain optimal returns to shareholders and benefits to other
stakeholders; source the lowest cost available capital; and prevent
the adverse outcomes that can result from short-term decision
making.
The Capital Management Policy stipulates a net debt to equity
target for the consolidated entity of less than 50%. In this report,
the calculation of the net debt to equity ratio excludes the right-of-
use assets and lease liabilities recognised under AASB 16 and the
acquisition reserve recognised in equity.
As at 30 June 2024, the consolidated entity had unused, available
financing facilities of $242.16 million out of total approved
financing facilities of $1,182.27 million. This has resulted in a net
debt to equity ratio of 14.49% as at 30 June 2024, compared to a
net debt to equity ratio of 13.85% as at 30 June 2023.
The capital structure of the consolidated entity consists of: debt,
which includes interest-bearing loans and borrowings as disclosed
in Note 17. Interest-Bearing Loans and Borrowings of this report;
cash and cash equivalents; and equity attributable to equity
holders of the parent, comprising ordinary shares, retained profits
and reserves as disclosed in Notes 22, 23 and 25 respectively.
The consolidated entity’s borrowings consist primarily of bank
debt provided by a syndicate of eighteen (18) banks (including 3
of the “Big 4” Australian Banks). Concentration risk is minimised
by staggering facility renewals and utilising a range of maturities of
up to 4 years.
Payment Date
Amount
2023 Final Fully-franked Dividend
13 November 2023
$149,520,798
2024 Interim Fully-franked Dividend
1 May 2024
$124,600,665
Directors’ Report (continued)
32
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
Table of Contents
33
1
Introduction
36
2 Remuneration principles and strategy
36
3 Remuneration governance
38
4 Remuneration mix - target
39
5 Details of the short-term incentive plan
39
6 Details of the long-term incentive plan
41
7
Performance and executive remuneration outcomes in FY24
43
8 Executive contractual arrangements
50
9 Non-Executive Director remuneration arrangements
50
10 Relationship between remuneration and the performance
51
11 Compensation of key management personnel
52
12 Additional disclosures relating to options, performance rights and shares
54
13 ‘Take-Home Pay’ for KMP Directors
56
14 Other matters for disclosure
56
15 Loans to key management personnel and their related parties
58
16 Other transactions and balances with key management personnel and their related parties
58
Letter from the Chair of the Remuneration Committee
Directors’ Report
Remuneration Report
Audited
This remuneration report for the year ended 30 June 2024 outlines the remuneration
arrangements of the consolidated entity in accordance with the requirements of the
Corporations Act 2001 (Cth), as amended, (the “Act”) and its regulations. This
information has been audited as required by section 308(3C) of the Act.
SUPPORTING AUSTRALIAN ATHLETES
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
33
Directors’ Report Remuneration Report - Audited (continued)
−
Significant digital reset for innovation
−
Store rollout and construction program ready for growth
−
Core infrastructure upgrade for protection
−
Compliance framework for safeguarding
Directors’ Report | Remuneration Report (Audited)
Letter from the Chair of the Remuneration Committee
The principal objective of the Company is to create long-term sustainable value for shareholders. The remuneration policies
support this central focus. The non-executive directors and executive key management personnel (KMP) are committed to
protecting and growing a sustainable business and creating long-term sustainable value, through a corporate governance and risk
and compliance management framework to achieve the principal objective. These remuneration policies require personal
shareholdings to be multiples of annual fixed remuneration and higher than that of peers; annual objectives that focus on business
improvements that can “turn the dial” to support higher and sustainable value; financial results that produce sustainable returns to
shareholders.
Improvements Made to the Remuneration Framework to Grow Sustainable Value
With the expected ongoing challenges and transformations within the discretionary retail sector and the difficult macroeconomic
environment, the Board made the following changes to the remuneration framework:
• Re-balanced the short-term incentive (STI) weighting to 50% (FY23: 70%) being financial KPIs and 50% (FY23: 30%) on the
traditionally less-rewarding and difficult STI non-financial conditions.
OUTCOME: Reward from the financial conditions was $1.18 million (86.49%) compared to $1.75 million on a comparable basis
to FY23, down $0.56 million or –32%, a larger decrease than the reduction in APAT of 25.6% for the year.
• The non-financial conditions now have a greater emphasis on strategic projects critical to long-term sustainable value as follows:
OUTCOME: Reward from the non-financial conditions was $1.09 million (79.54%) compared to $0.27 million on a comparable
basis to FY23, aligning with the expected growth in sustainable value from the completion of the projects.
The Committee was satisfied that the higher overall STI payment arising from the weighting re-balance and non-financial KPI
achievement will deliver expected growth in sustainable value.
Continued Settings for Achievement of Sustainable Value
• The STI financial performance condition for 100% achievement was set in excess of the analyst consensus forecasts.
• The long-term incentive (LTI) financial performance condition for achievement of Return on Net Assets (RONA) was set in excess of
the analyst consensus forecasts.
• Confirmed the reliance on critical business-as-usual safeguards and mitigations as part of the malus adjustments for the STI in
respect of:
The Retirement of Long Serving Executive Director David Ackery
The Board considered the retirement of David Ackery, with effect from 30 April 2024, as a long standing executive director and
made the following decisions in respect of the “at risk” remuneration in respect of David Ackery:
• No allowance for any reward in respect of the STI (although pro-ration was available)
• Full entitlement to any award under the FY22 performance rights grant as the retirement was 61 days short of the full measurement
period of 1,095 days. The remaining expense in respect of his entitlement to the FY22 performance rights grant has been
expensed in FY24.
• Pro-rata entitlement to any award under the FY23 performance rights grant.
• No participation in the long-term incentive approved at the 2023 AGM.
Remuneration Highlights at a Glance
• PBT results (excluding AASB 16 net impact and net property revaluations) were down from FY23 by –20.6%:
− PBT of $540.07 million, down from FY23 of $680.23 million
− PBT return on net assets of 11.94% for FY24, with a 3-year rolling average return of 18.49%
• Continuing high correlation of remuneration outcomes with Company performance detailed at Item 10. Relationship Between
Remuneration and Performance
• Risk managed in accordance with the risk management framework and risk appetite
• Independent expert continues to find that the level, mix, structure, shareholding requirements and actual “skin in the game” is, in
combination, reasonable having regard to benchmarking against peers
−
Work, health & safety governance framework
−
Cyber security global security improvement program
−
Sustainability governance
−
Tax governance policies
Directors’ Report Remuneration Report - Audited (continued)
34
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
Letter from the Chair of the Remuneration Committee (continued)
The Design of Executive Director
Remuneration for Another Year of
Uncertainty
The Remuneration Committee (Committee) continue to apply
the following settings:
•
Consensus forecasts of market analysts informed the
setting of the levels for the STI Plan, with the 100%
achievement level set above the analyst forecasts.
•
The maximum outcomes for the STI Plan remained
capped.
•
The performance conditions for the STI Plan were based
on financial outcomes as to 50% (FY23: 70%), non-financial
performance conditions as to 50% (FY23: 30%) and malus
penalty provisions up to 30% in the assessment of 100%
achievement.
•
The outcomes for the LTI Plan were subject to the achieve-
ment of RONA over a 3-year period, consistent with prior
years, with the levels set in excess of the analyst consensus
forecasts.
•
The maximum outcomes for the LTI Plan remained
capped.
CONCLUSION: High correlation of remuneration outcomes
with performance
Assessment of Conduct
Each participating executive director is subject to an over-riding non
-financial performance condition that the Company managed risk
in accordance with the risk management framework and risk
appetite of each member of the consolidated entity. The
Company recognises the critical connection between conduct
and reward.
CONCLUSION: Risk was managed in accordance with the risk
management framework and risk appetite
Benchmarking for Reasonableness
An independent remuneration expert was engaged to review
the level and reasonableness of remuneration of the executive
directors during 2024. This included analyses and comparison
of alternate peer groups, such as those used for internal analysis
and by proxy advisors in their prior assessments of executive
remuneration. The critical findings of the independent remuner-
ation expert review were as follows:
• The overall remuneration opportunity remains within a
reasonable range given executive tenure and position
responsibilities.
• The continuing significant shareholdings of the executive
directors align with long-term interests of shareholders.
• The remuneration mix is reasonable given executive director
shareholdings.
• The STI framework is reasonable.
• The remuneration should continue to be positioned around
the level that reflects the financial accountability and opera-
tional scope of the positions relative to the benchmark peer
group matched positions’ financial accountability and
operational scope. This was around the 75th percentile of
the benchmark peer group.
The conclusions reached by the Committee, informed by the
independent expert review, were that:
• The level of fixed remuneration was reasonable.
• The level of target and maximum remuneration from the
short-term incentive (STI) was reasonable.
• The level of target and maximum remuneration from the long
-term incentive (LTI) was reasonable.
CONCLUSION: The level, mix and structure remain reasonable
Remuneration Highlights at a Glance (continued)
• The entry level to the STI was increased to 80% of the 100% achievement level (up from 50% in FY23).
• STI financial targets are informed by and set above analyst consensus forecasts
• LTI financial targets are informed by and set above analyst consensus forecasts
• Placed a freeze on increases in fixed remuneration for executive directors regardless of inflation
• The remuneration outcomes remain reasonable and the remuneration framework remains sound and appropriate
Outcomes
• The STI Pool was reduced by 25% in FY24 to $3.375 million from $4.50 million in FY23 with the retirement of David Ackery.
• In consequence of the retirement of David Ackery, the STI Pool payout was 15.6% or $0.42 million less than FY23, noting that:
− The reward from the financial conditions was $1.18 million compared to $1.75 million on a comparable basis to FY23, down
$0.56 million or –32%. Adjusted profit after tax (APAT) for FY24 of $351.15 million was 25.6% lower than FY23 of $471.88 million.
− The reward from the non-financial conditions was $1.09 million compared to $0.27 million on a comparable basis to FY23, with
the completion of the strategic projects critical for long-term sustainable value.
• 3-year Return on Net Assets (RONA) of 17.18% resulted in FY22 LTI Tranche to vest at 61.8%
• The total compensation for KMP Directors was $10.03 million for FY24, $2.49 million or –19.9% lower than the previous year mainly
due to the lower expenses recognised in respect of the active LTI performance rights tranches in FY24
• The total “take-home” pay for KMP Directors was $1.57 million or –11.6% lower than the previous year mainly due to the lower STI
paid during FY24 compared to the STI paid during FY23
• The total “at risk” compensation expense for FY24 was $1.80 million or –38.3% lower than the “at risk” expense in FY23.
• Each of the executive directors increased their significant shareholdings in the Company, so that the value of each respective share-
holding at year-end exceeded the amount of their respective total fixed remuneration (TFR). There is clear alignment of executive
management with shareholders
SUPPORTING AUSTRALIAN ATHLETES
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
35
Letter from the Chair of the Remuneration Committee (continued)
Financial Settings for the 2024 STI Plan
ACTION: Financial targets informed by analyst consensus
forecasts
The minimum financial performance conditions (entry-level to
the 2024 STI Plan) was set at APAT of $324.80 million (FY23:
$415 million), the 100% achievement level at APAT of $406
million (FY23: $518 million), with a maximum over-achievement
level at APAT of $487.20 million (FY23: $575 million).
The levels were set by the Committee with reference to analyst
consensus forecasts compiled by Visible Alpha from each of
Goldman Sachs, CLSA, Macquarie, Jardin, JP Morgan,
Marquee, UBS, Barrenjoey, Jeffries, Evans & Partners and
Citi, updated in September 2023. The 100% achievement level
was set in excess of the analyst forecast.
Achievement up to the 100% target, and between the 100%
target and the over-achievement target remained on a straight-
line basis, subject to achieving the entry threshold.
It is noted that APAT excludes the after tax-effects of property
revaluation increments or decrements and the net impact of
AASB 16 Leases.
Remuneration Outcomes
The financial achievements of the consolidated entity for the
2024 financial year were reflected in the remuneration outcomes.
The outcome of the “at risk” remuneration in respect of the
2024 STI Plan and the LTI Plan were appropriate recognition of
the performance of the executive directors in dealing with the
multi-faceted challenges imposed during the year,
demonstrating resilience in management of the integrated
retail, franchise, property and digital business through
transformations in the discretionary retail sector, and the
difficult macroeconomic environment.
On behalf of the Board, I invite you to review the full report and thank you for your continued interest.
Yours sincerely,
KEN GUNDERSON-BRIGGS
Remuneration Committee Chair
Directors’ Report Remuneration Report - Audited (continued)
36
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
01
Remuneration Principles and Strategy
The remuneration report details the remuneration arrangements for key management personnel (“KMP”) who are defined as those
persons having authority and responsibility for planning, directing and controlling the major activities of the consolidated entity,
directly or indirectly, including any director (whether executive or otherwise) of the consolidated entity.
Each KMP is employed by a wholly-owned subsidiary, Yoogalu, and the remuneration details of each KMP during the 2024 financial
year are set out below. For the purposes of this report, the term "executive" includes the Chief Executive Officer (“CEO”), executive
directors and senior executives of the consolidated entity.
Key Management Personnel (KMP)
Position
Term as KMP
Executive Directors
Gerald Harvey
Executive Chairman
Full financial year
Kay Lesley Page
Executive Director & Chief Executive Officer
Full financial year
John Evyn Slack-Smith
Executive Director & Chief Operating Officer
Full financial year
David Matthew Ackery*
Executive Director
Retired 30 April 2024
Chris Mentis
Executive Director, Chief Financial Officer & Company Secretary
Full financial year
Non-Executive Directors
Christopher Herbert Brown OAM
Non-Executive Director
Full financial year
Michael John Harvey
Non-Executive Director
Full financial year
Kenneth William Gunderson-Briggs
Non-Executive Director (independent)
Full financial year
Maurice John Craven
Non-Executive Director (independent)
Full financial year
Luisa Catanzaro
Non-Executive Director (independent)
Full financial year
Senior Executives
Thomas James Scott
General Manager—Property
Full financial year
Gordon Ian Dingwall
Chief Information Officer
Full financial year
Emmanuel Hohlastos
General Manager—Home Appliances
Resigned 29 September 2023
Darren Salakas
General Manager—Technology & Entertainment
Full financial year
Christopher Coen
General Manager—Home Appliances
Appointed 1 August 2023
Benjamin Kelada
General Manager—Audio Visual
Appointed 1 August 2023
Carene Myers
General Manager—Small Appliances
Full financial year
Haydon Ian Myers
General Manager—Electrical
Appointed 1 March 2024
The executive remuneration strategy in 2024 is designed to attract, motivate and retain high performing individuals and align the
interests of executives with shareholders. The relevant factors in determining the suitability of a board member, including the
executive directors, are integrity, business savvy, an owner-oriented attitude and a deep genuine interest in the business of each
member of the consolidated entity. In applying these principles to each member of the consolidated entity:
a. Integrity requires a level of fundamental honesty, candour and frankness in dealing with colleagues, regulators and other third
parties. Integrity necessarily requires a director to bring an open mind and independent judgment to the discussion of any
matter of concern to the Board.
b. Business savvy requires a deep understanding of one or more of the sectors of retail, property, franchising and digital.
c. An owner orientation or perspective of an owner requires the individual to either have:
i. "skin in the game" by holding, controlling or benefitting from a significant parcel of shares where the financial interests of the
director are aligned with the long term beneficial interest of shareholders; or
ii. a perspective of advising owners of businesses and understanding that wealth generation is derived from the building of
business interests that create long-term sustainable value.
d. Directors with an owner orientation retain an open mind to consider diverse views but are not strictly beholden to the whims of
fashionable thinking and are able to form their own views as to what constitutes best practice in corporate governance.
e. Interest in and time to do the job means:
i. the person has an executive role, meaning that the person's career is based on job performance at the Company; or
ii. the individual has a limited number of outside interests (i.e., the person is not a professional non-executive director).
In both cases, the individual has an independence of mind and outlook.
02
Introduction
* David Matthew Ackery was appointed to the Board in 2005 as an Executive Director of the Company and was an employee of Yoogalu Pty Limited (Yoogalu), a
wholly-owned subsidiary of the Company. David Matthew Ackery retired as an Executive Director of the Company and as an employee with effect from 30 April
2024.
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
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SUPPORTING AUSTRALIAN ATHLETES
02
Objective of the consolidated entity in 2024
To be recognised as a leader in the sectors in which the consolidated entity operates and build long-term sustainable value for shareholders
Remuneration strategy
linkages to objectives of
the consolidated entity
in 2024
Align the interests of
executives with shareholders
The remuneration framework
incorporates “at risk”
components, through STI and
LTI plans
Short-term performance is assessed against a suite of financial and
non-financial measures relevant to the success of the consolidated
entity in 2024 and generating returns for shareholders
Long-term performance is
assessed against financial
performance conditions
calculated exclusively in
respect of RONA
Attract, motivate and retain
high performing individuals
Longer-term remuneration
encourages retention and
multi-year performance focus
The remuneration offering is competitive for companies of a similar
sector, size and complexity
Component
Vehicle
Purpose
Link to Performance
Fixed remuneration
Comprises base salary,
superannuation
contributions and other
benefits
To provide competitive fixed
remuneration set with
reference to role, market and
experience
Consolidated entity and individual performance are considered
during the annual remuneration review
Short-term incentive
(STI)
Paid as cash as a
performance cash
incentive (PCI), subject to
minimum shareholding
of individual Executive
Directors
Rewards executives for their
contribution to achievement
of consolidated entity
outcomes
a. There is no STI award for an executive director unless the
executive director satisfies the Participant Performance Review in
terms of the Individual Executive Director Assessment Report.
b. There is no STI award unless the Entry Level financial condition is
achieved.
c. The STI pool in respect of 100% achievement level is subject to
performance criteria as to:
i. 50% subject to financial conditions;
ii.50% subject to business critical non-financial conditions; and
iii.Malus reductions of up to 30% of the pool for non-
achievement of further non-financial performance conditions.
d. Financial achievement calculated over the 100% achievement
level is subject to financial conditions only.
e. Executive directors are to hold shares to the value equating to
the level of fixed remuneration for that executive director at the
end of the given financial year.
f.
If shares held are less than the benchmark, benefits will not be in
cash but in the form of shares.
Where Annual Profit
After Tax (APAT) is
calculated as follows:
Annual Net Profit After Tax (APAT), excluding the after-tax effect of property revaluation increments or decrements
and the after-tax effect of the net impact of AASB 16 Leases
Long-Term Incentive
(LTI)
Awards under the LTI Plan
are granted in the form of
performance rights, being a
right to acquire one ordinary
share in the Company at nil
exercise price
Rewards executives for their
contribution to the financial
performance of the
consolidated entity and the
effective utilisation of net
assets to generate wealth for
shareholders
Vesting of LTI performance rights is conditional upon achievement,
in aggregate, of minimum RONA over the 2024, 2025 and 2026
financial years of 15% (for 50% vesting) with full vesting (i.e. 100%)
achieved at 20% RONA.
If an amount of 15% RONA is achieved, 50% of the Performance
Rights will vest, with a proportionate or partial vesting of the
remaining 50% of the Performance Rights upon the achievement of
RONA in the range of 15% to 20%.
Where Return on Net
Assets (RONA) means
the fraction:
APBT (annual net profit before income tax excluding property revaluation increments or decrements
and the net impact of AASB 16 Leases)
Net Assets (excluding non-controlling interests) at the close of the preceding financial year
Applying these criteria to the current Board, the Board is satisfied that each director, including the executive directors, bring to the
Board the necessary skills and attributes specified.
The following table illustrates how the remuneration strategy of the consolidated entity in 2024 aligns with the strategic direction
and links remuneration outcomes to performance.
Remuneration Principles and Strategy (continued)
38
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
Directors’ Report Remuneration Report - Audited (continued)
03
Remuneration Committee
The Remuneration Committee is responsible for making recommendations to the Board on the remuneration arrangements for
executive directors and non-executive directors (NEDs). The Remuneration Committee assesses the appropriateness of the nature
and amount of remuneration of NEDs and executives on a periodic basis by reference to relevant employment market conditions,
with the overall objective of ensuring maximum stakeholder benefit from the retention of a high performing director and executive
team. In 2024, independent remuneration experts provided remuneration benchmark information for consideration and analysis in
respect of the level of executive director remuneration, including fixed remuneration, the short-term incentives and the long-term
incentives, and the reasonableness of the remuneration framework. The Remuneration Committee comprises three NEDs, two of
whom are independent NEDs. Further information on the Remuneration Committee’s role, responsibilities and membership is
located on the website: www.harveynormanholdings.com.au.
Remuneration Approval Process
The Board approves the remuneration arrangements of the CEO and executives and all awards made under the long-term incentive
plans of the Company, following recommendations from, and certain determinations by, the Remuneration Committee. The Board
sets the aggregate remuneration of NEDs, subject to shareholder approval of the NED remuneration cap. The Remuneration
Committee approves, having regard to the recommendations made by the CEO, the level of the STI pool for executive directors. No
Director participates in deliberations about, or decisions, in respect of the remuneration of that Director. No executive director was
present at any meeting of directors which considered any short-term incentive plan or long-term incentive plan of the Company,
and no executive director voted on those matters.
The Design of Executive Director Remuneration STI and LTI Plans
The Remuneration Committee continued to apply the following settings to the remuneration framework for the executive directors:
• Consensus forecasts of market analysts to establish the entry point, the full achievement and the over-achievement levels for the
Short-Term Incentive (STI) Plan.
• Capped maximum outcomes for the STI Plan.
• The performance conditions for the STI Plan not exclusively based on financial outcomes, with both non-financial performance
conditions and malus penalty reductions included in the assessment of achievement.
• The outcomes for the Long-Term Incentive (LTI) Plan subject to achievement over a 3-year period, and not specifically weighted
in respect of any year.
• Capped maximum outcomes for the LTI Plan.
Evaluation of Performance of Executive Directors
An appraisal of the performance of each executive director and the executive director team was undertaken following the end of the
2024 year as part of the annual Participant Performance Review by the Remuneration Committee. This year, consistent with last
year, the appraisal focused on ensuring that executive remuneration in respect of the FY24 financial result was fair and reasonable
and was in line with performance.
The appraisal considered matters in respect of performance, including:
• The actions of the executive directors in protecting the business and reacting to the changes in market demand, including across
the key functions of franchising, physical stores, on-line presence, supply chain management, logistics, marketing and
advertising, government relations and property across the eight separate countries; and
• The management of risks to the business which included employee and stakeholder welfare.
The Remuneration Committee views the outcome of the 2024 STI Plan and the LTI Plan as appropriate recognition of the
performance of the executive directors in dealing with the multi-faceted challenges imposed during the year, demonstrating
resilience in the management of the integrated retail, franchise, property and digital business.
No Unfair Benefit
Both the annual STI Plan and the ongoing LTI Plan have provisions to prevent an ‘unfair benefit’ being obtained by any participant in
respect of fraud or breach of obligation.
Remuneration Governance
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
39
SUPPORTING AUSTRALIAN ATHLETES
04
For the 2024 financial year, the executive remuneration framework comprised fixed remuneration, STI and LTI. The consolidated
entity aims to reward executives with a level and mix of remuneration appropriate to their position and responsibilities, while being
market competitive.
During FY24, a review by an independent remuneration expert was undertaken in respect of the remuneration benchmarking used
by the Company, with reference to both sector peers and comparator groups comprising companies of comparable financial size
and operations, and a reasonableness review, to ensure that the overall remuneration and the remuneration framework is
reasonable. Informed by this independent review, the policy of the Company continued to position fixed remuneration against the
level that reflects the financial accountability and operational scope of the position relative to peer group positions.
The determination of fixed remuneration of executive directors was subject to the following principles:
a. The performance of the Company, the longevity of the executive directors in their respective roles and the assessment of
opportunity costs in respect of replacement;
b. Be in line with the remuneration policies of the Company for executive directors so as to position fixed remuneration reflective
size relative to peers (i.e. 75th
of the peer group size); and
c. Target total remuneration to provide the opportunity for executive directors to earn top quartile rewards for outstanding
performance.
Remuneration levels are considered annually, with consideration of market data and the performance of each member of the
consolidated entity and individual. The remuneration mix is considered against the maximum total remuneration for each executive
director compared to the size percentile relative to the benchmark (currently the 75th
) advised by the independent
remuneration expert.
The following chart and table summarises the maximum remuneration mix of the executive directors.
The remuneration expert was commissioned to review the level and reasonableness of the remuneration set for executive directors.
The independent remuneration expert found the remuneration framework, the level of the remuneration and the remuneration mix
to be reasonable. The maximum STI opportunity for the CEO has remained at 60% of the fixed remuneration. For the other
executive directors, the maximum STI opportunity is between 85% and 94% of the fixed remuneration, which is consistent with
FY23. There is no STI opportunity for the Executive Chairman. There is no STI opportunity for David Matthew Ackery due to his
retirement, with effect on 30 April 2024. The maximum LTI opportunity for the CEO and Executive Chairman was reduced to equate
to 93% (FY23: 100%) of the fixed remuneration. For the other executive directors, the maximum LTI opportunity is between 46%
and 62% (FY23: 48% and 63%) of the fixed remuneration.
The extent to which the financial conditions and non-financial conditions have been satisfied are documented in a Performance
Report and an Internal Audit Report, for consideration by the Remuneration Committee in accordance with the terms and
conditions of the short-term and long-term incentive plans. The Performance Report is a report prepared for, and on behalf of, the
CEO addressing whether each weighted non-financial condition has been satisfied or, where relevant, the extent to which each
weighted non-financial condition has been satisfied. The Internal Audit Report is a report prepared by the Chief Internal Auditor of
Yoogalu, which is an objective appraisal of the Performance Report and documents the findings of the audit of the Performance
Report.
Remuneration Mix—Target
Details of the Short-Term Incentive (STI) Plan
Executive Directors: Maximum Remuneration for FY24
Executive Directors
Fixed Remuneration
% of Total
Maximum STI
% of Total
Maximum LTI
% of Total
Maximum Total
Remuneration
Gerald Harvey
$625,000
46%
-
-
$721,980
54%
$1,346,980
Kay Lesley Page
$2,170,000
39%
$1,305,000
24%
$2,022,300
37%
$5,497,300
John Evyn Slack-Smith
$1,320,000
43%
$1,125,000
37%
$616,896
20%
$3,061,896
Chris Mentis
$1,010,000
39%
$945,000
37%
$616,896
24%
$2,571,896
Total
$6,033,960
45%
$3,375,000
25%
$3,978,072
30%
$13,387,032
David Matthew Ackery*
$908,960
100%
-
-
-
-
$908,960
CEO
Executive Chairman
Other Executive Directors
Within Target Range
Within Target Range
Within Maximum Range
Relationship to Benchmark Peer Group
39%
24%
37%
46%
54%
39% - 43%
37%
20% - 24%
Fixed Remuneration
Maximum STI
Maximum LTI
05
* pro-rated to the date of retirement on 30 April 2024
40
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
Directors’ Report Remuneration Report - Audited (continued)
05
Who participates?
Executive Directors
How is the STI delivered?
STI awards, in the form of a cash bonus as a performance cash incentive (PCI) or equity, have been made annually to executive
directors in order to align remuneration with the achievement of a number of performance measures, targets and initiatives
covering both financial and non-financial, corporate and individual measures of performance.
Executive directors are to hold shares in the Company to the value of fixed remuneration for that executive director at the end
of the given financial year (the Benchmark Shareholding Level), with any STI paid in equity or cash subject to the following:
a. If the executive director is under the Benchmark Shareholding Level, the STI reward will be paid in equity, subject to
shareholder approval and compliance with the ASX Listing Rules, to the value that increases the holding of the executive
director to the Benchmark Shareholding Level, with any remaining balance of the STI reward paid in cash.
b. If the executive director is over the Benchmark Shareholding Level, the STI reward will be paid in cash.
The policy remains valid in the event of a new executive director, or if a present executive director wishes to sell-down.
When is the STI paid?
The payment of the 2024 STI Plan PCI to an executive director under the 2024 STI Plan is to be made on 30 August 2024, or as
soon as reasonably practicable after that date, subject to the satisfaction of 2024 STI Plan Performance Conditions and 2024
STI Plan Service Conditions.
What is the 2024 STI
opportunity?
Executive directors, excluding the Executive Chairman, have a maximum STI opportunity of between 60% to 94% of fixed
remuneration. The target STI opportunity is set at a level so as to provide sufficient incentive to executive directors to achieve
the operational targets and such that the cost to the consolidated entity is reasonable in the circumstances.
For the year ended 30 June 2024, the 100% STI Pool for the 2024 STI Plan PCI was $2,737,500 allocated as follows:
1. Kay Lesley Page $1,058,500;
2. John Evyn Slack-Smith $912,500; and
3. Chris Mentis $766,500
The maximum over-achievement pool for allocation was $637,500, with the maximum STI pool being $3,375,000. The over-
achievement pool was allocated in proportion to the 100% STI Pool.
David Ackery did not receive an STI in respect of the FY24 year due to his retirement, with effect on 30 April 2024.
What are the STI
performance
conditions for FY24?
Actual STI payments awarded to each executive director depend on the extent to which specific measures, targets, initiatives
and conditions for the 2024 financial year (STI Targets) were met. STI Targets cover financial and non-financial measures of
performance. There is no STI award for an executive director unless the executive director satisfies the Participant
Performance Review in terms of the Individual Executive Director Assessment Report. There is no STI award unless the Entry
Level financial condition is achieved.
The primary weighting of the 2024 STI Plan Performance Conditions are as follows:
a. Financial Condition as to 50% entitlement to the 100% STI Pool;
b. Non-Financial Conditions as to 50% entitlement to the 100% STI Pool;
c. Malus reductions of up to 30% for non-achievement of certain other non-financial performance conditions; and
d. Financial Condition as to the Over-Achievement Pool.
Business as usual measures are included in the malus conditions. The financial and critical non-financial measures, as well as
the malus measures, must be met for the STI conditions to be achieved.
(a) STI 50% Financial Condition
(b) STI 50% Non-Financial Conditions
The Non-Financial Conditions were assessed in respect of the following:
•
Digital innovations and Telco optimisation programs equating to 60% entitlement
of the STI subject to the non-financial conditions (i.e., 30% entitlement to the STI
pool = $0.82 million);
•
Store/complex rollout and construction programs equating to 30% entitlement of
the STI subject to the non-financial conditions (i.e., 15% entitlement to the STI
pool = $0.41 million); and
•
Compliance Framework improvements equating to 10% entitlement of the STI
subject to the non-financial conditions (i.e., 5% entitlement to the STI pool = $0.14
million).
Full achievement of the non-financial conditions will equate to 50% entitlement to the
STI pool i.e., a total of $1.37 million.
(c) Malus adjustments of up to 30% for non-achievement
The malus (financial penalty) provisions could reduce the overall achievement of the
STI award by 30%. The malus provisions were made up of the following items:
•
Work, health & safety governance framework = 10% of the 30%
•
Sustainability governance = 7.5% of the 30%
•
Cyber security global security improvement program & policies = 7.5% of the
30%
•
Tax governance and policies = 5.0% of the 30%
The malus provisions could potentially reduce the overall achievement of the STI
award by up to 30% of the 100% STI Pool i.e., a reduction of up to $0.82 million.
APAT was selected as the STI performance measure as it indicates
the level of after-tax profit adjusted for the after-tax effects of net
property revaluation adjustments and the net impact of AASB 16
Leases, and provides a basis for comparing profitability year-on-year.
The Financial Condition was calculated in respect of the year ended
30 June 2024 and was achieved at the following levels:
•
Entry Level at APAT of $324.80 million, equating to 80%
entitlement of the STI subject to the financial condition;
•
100% Level at APAT of $406.00 million, equating to 100%
entitlement of the STI subject to the financial condition (i.e., 50%
entitlement to the 100% STI pool = $1.37 million);
•
Over-Achievement Level at APAT of $487.20 million, equating to
100% entitlement of the 100% STI Pool subject to the financial
condition (i.e., 50% entitlement to the 100% STI pool = $1.37
million) and 100% entitlement to the Over-Achievement Pool
Amount of $0.64 million, resulting in a total Over-Achievement
entitlement of $2.01 million;
•
Straight-line sliding scale for achievement of the 100% level,
subject to achieving the Entry Level threshold; and
•
Straight-line sliding scale for achievement between the 100%
Level and the Over-Achievement Level.
The Financial Condition settings were determined in line with
internal expectations and consensus forecasts of external market
analysts.
Details of the Short-Term Incentive (STI) Plan (continued)
2024 STI Plan
The consolidated entity operates an annual STI program available to executive directors and awards a performance cash incentive
(PCI), or equity, subject to the achievement of clearly defined measures, targets, initiatives and conditions.
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
41
SUPPORTING AUSTRALIAN ATHLETES
05 Details of the Short-Term Incentive (STI) Plan (continued)
Details of the Long -Term Incentive (LTI) Plan
How is performance
assessed?
In respect of the 2024 STI, each participating Executive Director will be subject to an additional non-financial performance condition
in the form of a Participant Performance Review which is to:
•
Measure the extent of the proper performance and discharge of the executive responsibilities and accountabilities of that
Individual Participant Executive Director; and
•
Measure the extent of the proper performance and discharge of the duties of that Individual Participant Executive Director, as an
officer and director of the Company.
To determine whether an individual is eligible for the 2024 STI, in terms of performance, the following process is undertaken:
•
A report by the CEO in respect to which each Individual Participant Executive Director has satisfied the Participant Performance
Review in the form of an Individual Executive Director Assessment Report. In respect of the assessment of the CEO, the Chair of
the Remuneration Committee shall undertake the report and assessment in respect of the CEO.
•
An objective appraisal by the Internal Auditor of the process and conclusions reached in the Individual Executive Director
Assessment Reports, to be provided to the Remuneration Committee promptly after 30 June 2024.
Subject to a satisfactory Participant Performance Review, and after consideration of reports and performance against STI Targets,
the Remuneration Committee makes a final determination of the amount of STI to be paid to the CEO and other Executive Directors.
The extent to which the financial conditions and non-financial conditions have been satisfied will be documented in the Performance
Report and an Internal Audit Report for consideration by the Remuneration Committee in accordance with the terms and conditions
of the 2024 STI Plan.
The Remuneration Committee (acting on behalf of the Company) may at any time, in its absolute discretion, decrease the amount of
the STI which is, or may become, payable to an executive under the 2024 STI Plan by serving a written notice to the relevant
executive at any time before the payment date.
What happens if an
executive leaves?
For "Bad Leavers" (defined by the Company as resignation or termination for cause), any STI is forfeited, unless otherwise
determined by the Board. For any other reason, the Board has discretion to award STI on a pro-rated basis taking into account time
and the current level of performance against performance hurdles.
There were four (4) active tranches of the 2016 LTI Plan in the 2024 financial year. The FY21 Tranche was issued in FY21 and was
measured over 2021, 2022, and 2023. The FY22 Tranche was issued in FY22 and was measured over 2022, 2023 and 2024. The
FY23 Tranche was issued in FY23 and is measured over 2023, 2024 and 2025.
The FY24 Tranche was issued in FY24 as follows:
Tranche FY24 of
the 2016 LTI Plan
LTI grants are made annually to Executive Directors in order to align remuneration with the creation of sustainable
shareholder value over the long-term.
Who participates?
Executive Directors which have an impact on the performance of the consolidated entity against the relevant long-term
performance measures.
How is the LTI
delivered?
Shareholders at the AGM held on 24 November 2015 approved the terms and conditions of the 2016 LTI Plan that permitted the
grant of performance rights to executive directors in three separate tranches in the 2016, 2017 and 2018 financial years. At
subsequent annual general meetings of the Company, shareholders had permitted the further grant of separate tranches of
performance rights in respect of the 2019, 2020, 2021, 2022, 2023 and 2024 financial years to Executive Directors. Shareholders at
the AGM held on 29 November 2023 permitted the grant of Tranche FY24 of performance rights to Executive Directors in the 2024
financial year, subject to the terms and conditions of the 2016 LTI Plan.
What is the LTI
opportunity issued in
FY24?
A performance right is the right to acquire one ordinary share in the Company at nil exercise price. No amount is payable in
respect of the grant of a performance right. If exercised, each performance right will be converted into one ordinary share in the
Company along with additional dividend equivalent shares. Executive directors have a maximum LTI opportunity of between 46%
and 116% of fixed remuneration. A total of 1,052,400 performance rights under Tranche FY24 of the 2016 LTI Plan were granted
to executive directors on 1 December 2023. The performance rights were independently valued by Mercer Consulting (Australia)
Pty Limited at grant date, with a fair value of $3.78 per entitlement share based on a share price of $3.78 as at grant date.
The fair value was derived from a discounted cash flow technique where the value of the performance right is the face value of the
share at grant date. Subject to the satisfaction of the financial performance condition and service conditions of the 2016 LTI Plan,
the total fair value of Tranche FY24 performance rights amounted to $3,978,072 in aggregate.
Tranche FY24 of the 2016 LTI Plan
Executive
Tranche FY24
Performance Rights
G. Harvey
191,000
K.L Page
535,000
J.E. Slack-Smith
163,200
C. Mentis
163,200
Total
1,052,400
Tranche FY24
Key Dates
Grant date
1 December 2023
Vesting date
31 December 2026
First exercise date
1 January 2027
Last exercise date
31 October 2038
06
42
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
Directors’ Report Remuneration Report - Audited (continued)
06 Details of the Long -Term Incentive (LTI) Plan (continued)
Tranche FY24 of the 2016 LTI Plan
What are the
performance
conditions for
Tranche FY24 of the
2016 LTI Plan?
Performance conditions are deemed to be an essential component of all variable reward entitlements. The proposed allocation of
performance rights will be subject to service conditions and financial performance conditions. The Board (after consideration of the
recommendations of the Remuneration Committee), may, in its discretion, impose additional non-financial performance conditions
which must be satisfied as a condition of exercise of any performance rights by the Grantee.
The financial condition in respect of the achievement of Tranche FY24 of the 2016 LTI Plan is based on RONA, where Tranche FY24
RONA means the fraction: Tranche FY24 Aggregate APBT ÷ Tranche FY24 Aggregate Net Assets, expressed as a percentage.
Where:
• Tranche FY24 Financial Years means the financial years ending 30 June 2024, 2025 and 2026;
• Tranche FY24 Aggregate APBT means the aggregate amounts of the annual net profit before income tax of the
consolidated entity for each of the Tranche FY24 Financial Years, but excluding amounts accounted for in the financial
statements of the consolidated entity for increments or decrements arising from the revaluation of land or buildings and the net
impact of AASB 16 Leases;
• Tranche FY24 Aggregate Net Assets means the aggregate amounts of the net assets of the consolidated entity, excluding non-
controlling interests, as at each of 30 June 2023, 2024 and 2025 as described in the annual report of the consolidated entity in
respect of each of the Tranche FY24 Financial Years.
RONA is a key financial metric link to performance. Full vesting of the Performance Rights is conditional upon achievement of RONA
of at least 20%. If an amount of 15% is achieved, 50% of the Performance Rights will vest with a proportionate or partial vesting of the
remaining 50% of the Performance Rights upon the achievement of RONA in the range of 15% to 20%. Achievement between the
levels will be calculated on a straight-line basis.
How is performance
assessed?
Level of satisfaction of LTI Plan conditions is monitored by the Remuneration Committee, with assistance from Internal Audit, each
year, with the vesting outcomes ultimately determined at the end of the three-year performance period.
The LTI award for each of the financial years will be measured over a three-year period, with Tranche FY24 of the 2016 LTI Plan
measured over the period for financial years ending 30 June 2024, 30 June 2025 and 30 June 2026.
When does the LTI
vest?
Performance rights granted under Tranche FY24 of the 2016 LTI Plan will vest on 31 December 2026, subject to meeting the financial
performance conditions and service conditions, and will be capable of exercise between 1 January 2027 and 31 October 2038.
How are potential LTI
awards treated on
termination?
Subject to the rules of the 2016 LTI Plan at a relevant time, in general, where a participant resigns or is terminated for cause before a
performance right vests, all unvested performance rights will lapse. The Board (after consideration of the recommendations of the
Remuneration Committee of the Board), has discretion to determine the treatment of any unvested performance rights where a
participant ceases employment in “good leaver” circumstances (such as by reason of death, disability or otherwise in circumstances
approved by the Board). In the event of fraud, dishonesty or breach of obligations, the Board may make a determination, including
lapsing an award of performance rights, to ensure no unfair benefit is obtained by a participant.
How are potential LTI
awards treated if a
change of control
occurs?
In the event of a takeover, scheme of arrangement or other transaction which may result in a person becoming entitled to exercise
control over the Company, the Board has a discretion to determine whether any unvested performance rights should vest, lapse or
become subject to different performance conditions, or whether any resulting shares that are subject to a restriction period, should
become unrestricted.
Are executives
eligible for
dividends?
Dividends will not be paid on unvested Performance Rights. If vested and exercised, each vested Performance Right will convert into
one share. In addition, on exercising the vested Performance Rights, the participant will receive a Dividend Equivalent Amount in
relation to those vested and exercised Performance Rights, delivered as additional Shares which are equal in value to the amount of
dividends that would have been paid to the Participant and re-invested into Shares based on the close price on the ex-dividend date
as if the Participant had been the owner of Shares from the grant date until the date of exercise. These Performance Rights have an
independently determined fair value equal to the face value of the shares at the time of grant. The Board retains a discretion to make
a cash equivalent payment instead of an allocation of Shares.
100% Financial
Condition
Tranche FY24 RONA Achieved
Tranche FY24 % of Performance Rights
that will become exercisable
Less than 15%
NIL
15%
50%
20%
100%
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
43
SUPPORTING AUSTRALIAN ATHLETES
07
7a. Actual Remuneration Earned by Key Management Personnel (KMP) in FY24
The compensation expensed in respect of KMP in FY24 is set out in Table 1 (for directors) and Table 2 (for senior executives) on
pages 52 and 53 of this report. This provides shareholders with a view of the remuneration earned by KMP for performance in the
2024 financial year and the value of any LTIs expensed during the financial year.
The 'take-home pay' for KMP directors, representing the benefits paid to each director during the year ended 30 June 2024, or as
soon as practicable after that date, is set out in Section 13 of the Remuneration Report on page 56.
7b. Fixed Remuneration
Executive contracts of employment do not include any guaranteed base pay increases. The fixed remuneration of executive
directors is reviewed annually by the Remuneration Committee. In line with the independent review undertaken during the 2024
financial year by an independent remuneration expert, the determination of fixed remuneration of executive directors was subject to
the following principles:
a. The performance of each member of the consolidated entity, the longevity of the executive directors in their respective roles and
the assessment of opportunity costs in respect of replacement;
b. Be in line with the remuneration policies of the Company for executive directors so as to position fixed remuneration at around
the 75th percentile of the peer group; and
c. Target total remuneration to provide the opportunity for executive directors to earn top quartile rewards for outstanding
performance.
Remuneration levels are considered annually, with consideration of market data and the benchmark peer group. The process
undertaken by the Remuneration Committee consisted of a review of each member of the consolidated entity, business unit and
individual performance, relevant comparative remuneration, and external advice independent of management as to the
reasonableness of the fixed remuneration of the executive directors. Based on the latest benchmarking and independent review,
the Committee imposed a fixed remuneration freeze, and no increases were made.
7c. Actual Performance Against Short Term Incentive (STI) Measures
A combination of financial and non-financial measures are used to measure performance for STI awards. The STI 100% opportunity
pool was $2,737,500 (2023: $3,650,000). The pool for over-achievement was $637,500 (2023: $850,000). The maximum aggregate
pool for allocation was $3,375,000 (2023: $4,500,000). 50% of the 100% STI was dependent on the satisfaction of financial
performance conditions (based on APAT) and 50% was measured against the achievement of non-financial measures. The Over-
Achievement Pool was subject to the financial performance condition only. The reduction in the STI Pool for FY24 was due to the
retirement of David Ackery who did not receive an STI in this year.
Actual performance against those measures is as follows for the 2024 financial year:
•
86.49% achievement of the 50% Financial Condition (score of 43.245 out of 50) of the 100% STI pool = $1,183,821
•
0% achievement of the Over-Achievement Pool subject to the Financial Condition (score of 0 out of 20) = $0
•
79.54% achievement of the 50% Non-Financial Conditions (score of 39.77 out of 50) = $1,088,714
•
0% reduction for malus penalties of up to -30% of the STI Pool (score of 30 out of 30) = reduction of $0
The total 2024 STI Plan payable in respect of the 2024 financial year is $2,272,535 (2023: $2,692,532). This represents a total
achievement of 83.02% of the 100% Level (2023: 73.8%) or 67.3% of the maximum Over-Achievement Level (2023: 59.8%), as
shown in the tables below.
Financial Conditions of the 2024 STI Plan
ACHIEVEMENT OF 50% FINANCIAL CONDITION
Calculation of FY2024
APAT
Annual Net Profit After Tax (APAT) excluding the after-tax effects of property revaluation
increments or decrements and the net impact of AASB 16 Leases
= $351.15 million for FY24
Directors
100% Level
2024 STI PCI
% Financial
Conditions
2024 STI PCI
Financial Condition
% Financial
Condition Satisfied
2024 STI PCI
Payable
Kay Lesley Page
$1,058,500
50%
$529,250
86.49% (43.245 out of 50)
$457,744
John Evyn Slack-Smith
$912,500
50%
$456,250
86.49% (43.245 out of 50)
$394,607
Chris Mentis
$766,500
50%
$383,250
86.49% (43.245 out of 50)
$331,470
Total
$2,737,500
$1,368,750
$1,183,821
Performance and Executive Remuneration Outcomes in FY24
44
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
Directors’ Report Remuneration Report - Audited (continued)
07
Non-Financial Conditions of the 2024 STI Plan
ACHIEVEMENT OF 50% NON-FINANCIAL CONDITIONS
For 2024, 50% of the 100% opportunity pool i.e., $1,368,750 was subject to non-financial performance measures as to:
• Digital innovations equating to 60% (30% entitlement to the STI pool = $821,250)
• Store / Franchised Complex Rollout & Construction Programs to 30% (15% entitlement to the STI pool = $410,625); and
• Compliance framework improvements equating to 10% (5% entitlement to the STI pool = $136,875); and
Directors
100% Level
2024 STI PCI
% Non-Financial
Conditions
2024 STI PCI
Non-Financial
% Non-Financial
Condition Satisfied
2024 STI PCI
Payable
Kay Lesley Page
$1,058,500
50%
$529,250
79.54% (39.77 out of 50)
$420,969
John Evyn Slack-Smith
$912,500
50%
$456,250
79.54% (39.77 out of 50)
$362,905
Chris Mentis
$766,500
50%
$383,250
79.54% (39.77 out of 50)
$304,840
Total
$2,737,500
$1,368,750
$1,088,714
The Remuneration Committee had regard to certificates and reports from employees of Yoogalu, other Board committees and
management, including the Individual Director Assessment Reports and Internal Audit Reports, and noted that 79.54% of the non-
financial performance hurdles for the 2024 STI Plan were achieved, equating to a score of 39.77 points out of 50 points.
Achievement of the Non-Financial Performance Conditions for the 2024 STI Plan are set out in the following table:
ASSESSMENT OF NON-FINANCIAL CONDITIONS OF THE 2024 STI PLAN
Measure
Initiative
Primary Weighting
Achievement
Commentary
Score
Store /
Franchised
Complex
Rollout &
Construction
Programs
Open 13 new company-operated stores and franchised
complexes during FY24 and confirm the opening of 19 new
stores / complexes for FY25
Deliver active construction programs in Australian and New
Zealand for FY24 and FY25.
7.5%
7.5%
63.6%
0%
Delays in the opening of
franchised complexes and
stores overseas.
Did not achieve stringent
budget and schedule
requirements.
4.77%
0%
Compliance
Framework
Improvements
Implement a central governance, risk and compliance (GRC)
system for the SAP S/4HANA financial system located in
Australia and in overseas controlled entities.
5%
100%
Full achievement
5%
Total
50%
39.77%
Digital
Innovations
Upgrade the operational and digital platform in Australia.
Manage the risks of the digital platforms and upgrade the
digital gift card systems in overseas controlled entities
located in Ireland, Singapore, Malaysia and New Zealand.
Manage the Telco Optimisation Program to upgrade the
core infrastructure in Australia and modernise the internet
and data services.
10%
12.5%
7.5%
100%
100%
100%
Full achievement
Full achievement
Full achievement
10%
12.5%
7.5%
Performance and Executive Remuneration Outcomes in FY24 (continued)
ACHIEVEMENT OF 120% OVER-ACHIEVEMENT POOL
Directors
120% Level
2024 STI PCI
% Financial
Conditions
2024 STI PCI
Financial Condition
% Financial Condition
Satisfied
2024 STI PCI
Payable
Kay Lesley Page
$246,500
100%
$246,500
0% (0 out of 20)
-
John Evyn Slack-Smith
$212,500
100%
$212,500
0% (0 out of 20)
-
Chris Mentis
$178,500
100%
$178,500
0% (0 out of 20)
-
Total
$637,500
$637,500
-
APAT for the 2024 financial year was $351.15 million (2023: $471.88 million) resulting in 86.49% achievement of the financial
conditions for the STI 100% Pool (level required $406 million), and nil achievement of the financial conditions in respect of the Over-
Achievement Pool (level required $487.20 million).
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
45
SUPPORTING AUSTRALIAN ATHLETES
07
SUMMARY OF TOTAL ACHIEVEMENT OF 2024 STI
100% POOL AMOUNT
OVER-ACHIEVEMENT POOL
Directors
Financial
Non-Financial
Malus
Financial
TOTAL 2024 STI
Kay Lesley Page
$457,744
$420,969
-
-
$878,713
John Evyn Slack-Smith
$394,607
$362,905
-
-
$757,512
Chris Mentis
$331,470
$304,840
-
-
$636,310
Total
$1,183,821
$1,088,714
-
-
$2,272,535
Service Conditions of the 2024 STI Plan
The 2024 STI Plan Service Conditions will be deemed to be satisfied, if and only if, as at the relevant payment date (30 August
2024):
• the executive has not resigned or provided notice of resignation of employment from the Employer, except in order to retire
from the workforce;
• the Employer has not terminated the employment of the executive for cause; or
• the Board has not determined that the incentives should be revoked or lapse as a result of any breach of the law, corrupt
conduct, bribery, fraud, gross misconduct or conduct of the executive which brings the Company or the Employer into disrepute.
Shareholding Benchmark of the 2024 STI Plan
Executive directors are to hold shares in the Company to the value equating to the level of fixed remuneration for that executive
director at the end of the financial year (the Benchmark Shareholding Level). If shares held by the executive director are less than
the Benchmark Shareholding Level, the STI benefit is to be provided in the form of shares, subject to shareholder approval and
compliance with ASX Listing Rules, to the value that increases the holding of the executive director to the Benchmark Shareholding
Level. Each of the executive directors that participated in the 2024 STI Plan held shares in the Company of a value that was in excess
of the Benchmark Shareholding Level. The STI benefit under the 2024 STI Plan is to be paid in cash.
Performance and Executive Remuneration Outcomes in FY24 (continued)
Malus Reduction in Respect of 2024 STI Plan
MALUS REDUCTIONS OF UP TO 30% OF THE 2024 STI
Malus (financial penalty) provisions to reduce the overall achievement of the 100% STI pool by up to 30% i.e. $821,250, in respect of:
• Work, health & safety governance framework = 10% of the 30%
• Sustainability governance = 7.5% of the 30%
• Cyber security global security improvement program and policies = 7.5% of the 30%
• Tax governance and policies = 5% of the 30%
Directors
100% Level
2024 STI PCI
Maximum % Malus
Reductions
2024 STI PCI Malus
Reductions
% Malus Reductions
(Score)
Reduction in 2024
STI PCI Payable
Kay Lesley Page
$1,058,500
-30%
($317,550)
-0% (30 out of 30)
-
John Evyn Slack-Smith
$912,500
-30%
($273,750)
-0% (30 out of 30)
-
Chris Mentis
$766,500
-30%
($229,950)
-0% (30 out of 30)
-
Total
$2,737,500
($821,250)
-
There was no malus reduction for FY24.
46
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
Directors’ Report Remuneration Report - Audited (continued)
07
7d. Actual Performance Against Long Term Incentive (LTI) Measures for Tranche FY24 of the 2016 LTI Plan
A total of 1,052,400 performance rights were granted to executive directors on 1 December 2023. The performance rights were
independently valued by Mercer Consulting (Australia) Pty Limited at grant date, with a fair value of $3.78 per entitlement share
based on a share price of $3.78 as at grant date. Subject to the satisfaction of the financial performance condition and service
conditions of the 2016 LTI Plan, the total fair value of Tranche FY24 performance rights amounted to $3,978,072 in aggregate.
The Remuneration Committee had regard to certificates and reports from employees of Yoogalu, other Board committees and
management and Internal Audit Reports, and has estimated, based on the available evidence in respect of the 2024 financial year,
the financial performance condition for Tranche FY24 of the 2016 LTI Plan may not be achieved by the end of the vesting period
and it may not be probable for the estimated fair value of the performance rights to meet the performance condition.
The probability of nil vesting has been estimated based on the calculation of Tranche FY24 RONA for the 2024 financial year of
12.19%. The financial condition of the Tranche FY24 requires a minimum RONA of 15% to be achieved for 50% of Performance
Rights to vest. No Performance Rights will vest if the RONA is less than 15%. Therefore the 12.19% RONA for FY24 would result in a
nil vesting for year 1 of the three-year measurement period, but is available for re-measurement during the 2025 and 2026 financial
years. No amount has been recognised as remuneration to executive directors and no expense has been recognised in the income
statement in FY24 in respect of Tranche FY24.
ACHIEVEMENT OF 100% FINANCIAL CONDITION FOR TRANCHE FY24 OF 2016 LTI PLAN
Calculation of
FY24 RONA:
FY24 APBT
(net profit excluding property revaluations and the net impact of AASB 16 Leases)
FY23 Net Assets (excluding non-controlling interests)
$540.07 MILLION
$4,431.25 MILLION
= 12.19% RONA
Directors
Number of
Performance Rights
Fair Value
Per Right
Fair Value of
Performance Rights
Probability of
Vesting %
Estimated Value of
Tranche FY24 2016 LTI
Plan to Vest
Tranche FY24
LTI Plan Expense
in FY24
Gerald Harvey
191,000
$3.78
$721,980
0%
-
-
Kay Lesley Page
535,000
$3.78
$2,022,300
0%
-
-
John Evyn Slack-
Smith
163,200
$3.78
$616,896
0%
-
-
Chris Mentis
163,200
$3.78
$616,896
0%
-
-
Total
1,052,400
$3,978,072
0%
-
-
Subject to the satisfaction of the financial performance condition and service conditions of the 2016 LTI Plan, Tranche FY24 will vest
on 31 December 2026.
The exercise price for each performance right will be nil. If exercised, each performance right will be converted into one ordinary
share of the Company. Unexercised performance rights will lapse, irrespective of whether the performance rights have become
exercisable on 31 October 2038 or:
• such earlier date specified by the Board;
• the Board determines the performance rights granted to a Grantee should lapse, as a result of any fraud, gross misconduct or
conduct by that Grantee which brings the Company into disrepute; or
• the Board determines the relevant requirements in relation to performance rights granted to a Grantee, including performance
conditions and a service condition, have not and are incapable of being met.
7e. Reassessment of Tranche FY23 of the 2016 LTI Plan Performance Conditions and Expense Recognised in
FY24
In the 2023 financial year, a total of 1,106,800 performance rights were granted to executive directors on 1 December 2022 under
Tranche FY23 of the 2016 LTI Plan. The performance rights were independently valued by Mercer Consulting (Australia) Pty Limited
at a fair value of $4.32 per entitlement share, based on a share price of $4.32 as at grant date, resulting in a total fair value of
Tranche FY23 of $4,781,376. Tranche FY23 of the 2016 LTI Plan will be measured over a three-year period for financial years
ending 30 June 2023, 30 June 2024 and 30 June 2025.
In the 2023 Remuneration Report, it was reported that the financial performance condition for Tranche FY23 of the 2016 LTI Plan
may not be achieved by the end of the vesting period so it is probable nil will vest. Therefore, the estimated expense of the Tranche
FY23 performance rights has been reduced to nil with the Tranche FY23 RONA for the 2023 financial year of 15.96%.
In respect of David Ackery, the Board exercised its discretion in acknowledgement of David’s tenure and contribution as an
executive director, his status as a good leaver with the genuine intention to retire and permitted him to pro-rate the unvested
Tranche FY23 performance rights to reflect his employment period to be tested in accordance with the financial condition and vest
as calculated in accordance with the rules of the Grant. This resulted in 89,557 performance rights being retained of the 146,500
being granted, with 56,943 performance rights lapsing upon his retirement on 30 April 2024.
As at 30 June 2024, the number of unvested performance rights in respect of Tranche FY23 was 1,049,857.
Performance and Executive Remuneration Outcomes in FY24 (continued)
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
47
SUPPORTING AUSTRALIAN ATHLETES
07
REASSESSMENT OF 100% FINANCIAL CONDITION FOR TRANCHE FY23 OF 2016 LTI PLAN
Calculation of
Aggregated RONA for
Tranche FY23 Financial
Years
(FY23 and FY24)
Tranche FY23 Aggregated APBT (2023 + 2024)
Tranche FY23 Aggregated Net Assets (2022 + 2023)
$1,220.30 MILLION
$8,692.28 MILLION
= 14.04% RONA
Directors
Probability
Vesting % in
FY23
Tranche FY23
Estimated Fair
Value in FY23
Revised
Probability
Vesting in FY24
Revised Estimated
Tranche FY23 Fair
Value in FY24
Adjustment
due to
Reassessment
Tranche FY23 LTI Plan
Expense
in FY24
Kay Lesley Page
0%
-
0%
-
-
-
John Evyn Slack-Smith
0%
-
0%
-
-
-
David Matthew Ackery
0%
-
0%
-
-
-
Chris Mentis
0%
-
0%
-
-
-
Total
-
-
-
-
7f. Reassessment of Tranche FY22 of the 2016 LTI Plan Performance Conditions and Expense Recognised in
FY24
In the 2022 financial year, a total of 914,000 performance rights were granted to executive directors on 30 November 2021 under
Tranche FY22 of the 2016 LTI Plan. The performance rights were independently valued by Mercer Consulting (Australia) Pty Limited
at a fair value of $4.12 per entitlement share, based on a share price of $5.07 as at grant date, resulting in a total fair value of
Tranche FY22 of $3,765,680. Tranche FY22 of the 2016 LTI Plan was measured over a three-year period for financial years ending
30 June 2022, 30 June 2023 and 30 June 2024.
In the 2023 Remuneration Report, the probability of vesting was reassessed, and it was reported that the estimated achievement of
Tranche FY22 of the 2016 LTI Plan would have been 89% by the end of the vesting period and that 89% of the estimated fair value
of the Tranche FY22 performance rights will meet the performance condition. This reassessment was based on a 2-year aggregated
RONA, being the Tranche FY22 Aggregate APBT and Tranche FY22 Aggregate Net Assets for the 2022 and 2023 financial years.
The reassessment in 2023 resulted in a revised 2-year aggregated RONA of 19.90%.
The financial performance condition of Tranche FY22 was subject to final year of reassessment for the financial year ending 30 June
2024. A final reassessment of the Tranche FY22 Aggregate APBT and Tranche FY22 Aggregate Net Assets for the 2022, 2023 and
2024 financial years has resulted in a revised RONA for the three-year aggregated period of 17.2%. A revised aggregated RONA of
17.2% for the Tranche FY22 Financial Years has resulted in the actual achievement of 61.8% of the Tranche FY22 performance
rights. This revised achievement calculation of 61.8% is lower than the previous probability of vesting of 89% as calculated in FY23.
The cumulative expense in respect of Tranche FY22 has been reassessed in FY24 as $2,327,190. The total value of Tranche FY22
expense recognised in FY24 was $280,589, relating to the recognition of the Tranche FY22 expense on a straight-line basis for FY24
of $755,173, less an adjustment of ($524,833) due to the reduced probability of vesting from reassessment. An additional expense
of $50,249 was recognised in FY24 for the entitlement of David Ackery to Tranche FY22 as the Board exercised its discretion in
acknowledgement of David’s tenure and contribution as an executive director, his status as a good leaver with the genuine intention
to retire. David was permitted to retain the unvested Tranche FY22 performance rights in full as the retirement was 61 days short of
the full measurement period of 1,095 days.
FY24 was the final year of measurement for Tranche FY22 with the performance rights scheduled to vest on 31 December 2024.
The financial performance condition of Tranche FY23 is subject to reassessment during each of the Tranche FY23 Financial Years
being the financial years ending 30 June 2023, 2024 and 2025. A reassessment of the Tranche FY23 Aggregate APBT and Tranche
FY23 Aggregate Net Assets for the 2023 and 2024 financial years has resulted in a revised RONA for the two-year aggregated
period of 14.04%. The revised RONA of 14.04% has resulted in a probability of vesting of 0%. Full vesting of the Performance
Rights is conditional upon achievement of RONA of at least 21%. If an amount of 16% is achieved, 50% of the Performance Rights
will vest with a proportionate or partial vesting of the remaining 50% of the Performance Rights upon the achievement of RONA in
the range of 16% to 21%. Achievement between the levels will be calculated on a straight-line basis.
The cumulative expense in respect of Tranche FY23, as assessed in the 2024 financial year at a probability of vesting of 0%, was $0.
The total value of Tranche FY23 expense recognised in the 2024 financial year was $0.
Gerald Harvey
0%
-
0%
-
-
-
Performance and Executive Remuneration Outcomes in FY24 (continued)
48
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
Directors’ Report Remuneration Report - Audited (continued)
REASSESSMENT OF 100% FINANCIAL CONDITION FOR TRANCHE FY22 OF 2016 LTI PLAN
Calculation of Aggregated RONA
for Tranche FY22 Financial Years
(FY22, FY23 & FY24)
Tranche FY22 Aggregated APBT (2022 + 2023 + 2024)
Tranche FY22 Aggregated Net Assets (2021 + 2022 + 2023)
$2,157.10 MILLION
$12,557.11 MILLION
= 17.2% RONA
Directors
Probability
Vesting % in FY23
Tranche FY22
Estimated Fair
Value in FY23
Revised
Probability
Vesting in FY24
Revised Tranche
FY22 Fair Value
in FY24
Adjustment
due to
Reassessment
Tranche FY22
LTI Plan Expense
in FY24
Kay Lesley Page
89%
$1,488,721
61.8%
$1,033,741
($454,980)
$102,317
John Evyn Slack-Smith
89%
$443,683
61.8%
$308,085
($135,598)
$30,494
David Matthew Ackery
89%
$443,683
61.8%
$308,085
($135,598)
$80,743*
Chris Mentis
89%
$443,683
61.8%
$308,085
($135,598)
$30,494
Total
$3,351,456
$2,327,190
($1,024,266)
$280,589
Gerald Harvey
89%
$531,686
61.8%
$369,194
($162,492)
$36,541
ASSESSMENT OF 100% FINANCIAL CONDITION FOR TRANCHE FY21 OF 2016 LTI PLAN
Calculation of Aggregated RONA for Tranche
FY21 Financial Years
(FY21, FY22 & FY23)
Tranche FY21 Aggregated APBT (2021 + 2022 + 2023)
Tranche FY21 Aggregated Net Assets (2020 + 2021 + 2022)
$2,653.94 MILLION
$11,572.21 MILLION
= 22.93%
RONA
Directors
Actual Achievement
in FY23
Actual Tranche
FY21 Fair Value
Tranche FY21 LTI Plan
Expense in FY24
Gerald Harvey
100%
$252,175
$41,318
Kay Lesley Page
100%
$704,550
$115,439
John Evyn Slack-Smith
100%
$419,650
$68,758
David Matthew Ackery
100%
$419,650
$68,758
Chris Mentis
100%
$319,550
$52,357
Total
$2,115,575
$346,630
* includes the remaining expense in respect of the entitlement of David Ackery to the FY22 performance rights grant
7g. Vesting of Tranche FY21 of the 2016 LTI Plan Performance Conditions and Expense Recognised in FY24
In 2021, a total of 549,500 performance rights were granted to executive directors on 4 December 2020 under Tranche FY21 of
the 2016 LTI Plan. The performance rights were independently valued by Mercer Consulting (Australia) Pty Limited at a fair value
of $3.85 per share, based on a share price of $4.66 as at grant date, resulting in a total fair value of Tranche FY21 of $2,115,575.
Tranche FY21 of the 2016 LTI Plan was measured over a three-year period for financial years ending 30 June 2021, 30 June 2022
and 30 June 2023.
In the 2023 Remuneration Report, it was reported that there was 100% actual achievement of Tranche FY21 of the 2016 LTI Plan in
respect of the 2021, 2022 and 2023 financial years and that 100% of the performance rights were scheduled to vest at the end of
the vesting period at 31 December 2023, and were exercisable from 1 January 2024. On 3 January 2024, a total of 549,500
performance rights issued on 4 December 2020 under Tranche FY21 of the 2016 LTI Plan were exercised by the executive
directors in accordance with the terms and conditions of the LTI Plan.
The cumulative expense in respect of Tranche FY21 was $2,115,575 as reported in the 2023 Remuneration Report. The 2023
financial year was the final year of Tranche FY21 measurement. During the 2024 financial year, an expense of $346,630 was
recognised in respect of Tranche FY21 of the 2016 LTI Plan representing the remaining vesting period up to 31 December 2023.
Performance and Executive Remuneration Outcomes in FY24 (continued)
07
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
49
SUPPORTING AUSTRALIAN ATHLETES
07
7h. Summary of Performance and Executive Remuneration Outcomes in FY24
VALUE OF STI AND LTI DISCLOSED IN 2024 AND 2023 REMUNERATION REPORTS
Maximum Over
Achievement
Amount
Achievement
Score
Amount
Payable
Vesting
Period
2024
Remuneration
Amount
2023
Remuneration
Amount
Financial conditions (50/100)
Over-achievement pool (20/20)
Non-financial conditions (50/100)
Malus Adjustments (up to 30/100)
Total
$1,368,750
$637,500
$1,368,750
-
$3,375,000
86.49%
0%
79.54%
0%
43.245%
0%
39.77%
0%
83.02%
or 67.3%
of Over-
Achievement
Level
$1,183,821
-
$1,088,714
-
$2,272,535
1 Year
$1,183,821
-
$1,088,714
-
$2,272,535
-
-
-
-
-
Financial conditions (70/100)
Over-achievement pool (20/20)
Non-financial conditions (30/100)
Malus Adjustments (up to 30/100)
Total
$2,555,000
$850,000
$1,095,000
-
$4,500,000
91.10%
0%
33.33%
0%
63.77%
0%
10.00%
0%
73.77%
or 59.8%
of Over-
Achievement
Level
$2,327,532
-
$365,000
-
$2,692,532
1 Year
-
-
-
-
-
$2,327,532
-
$365,000
-
$2,692,532
Total Short-Term Incentive PCI
$2,272,535
$2,692,532
Financial conditions (100%)
Non-financial conditions (0%)
Total
$3,978,072
-
$3,978,072
0%
0%
-
-
-
3.1 Years
(01/12/23 to
31/12/26)
-
-
-
-
-
-
Financial conditions (100%)
Non-financial conditions (0%)
Total
$4,781,376
-
$4,781,376
0%
0%
-
-
-
3.1 Years
(01/12/22 to
31/12/25)
-
-
-
-
-
-
Financial conditions (100%)
Non-financial conditions (0%)
Total
$3,765,680
-
$3,765,680
61.8%
61.8%
$2,327,190
-
$2,327,190
3.1 Years
(30/11/21 to
31/12/24)
$280,589
-
$280,589
$1,006,324
-
$1,006,324
Financial conditions (100%)
Non-financial conditions (0%)
Total
$2,115,575
-
$2,115,575
100%
100%
$2,115,575
-
$2,115,575
3.1 Years
(04/12/20 to
31/12/23)
$346,630
-
$346,630
$687,609
-
$687,609
Financial conditions (100%)
Non-financial conditions (0%)
Total
$1,906,765
-
$1,906,765
100%
100%
$1,906,575
-
$1,906,765
3.1 Years
(02/12/19 to
31/12/22)
-
-
-
$311,565
-
$311,565
Total LTI Performance Rights
$627,219
$2,005,498
Total Value of STI and LTI
$2,899,754
$4,698,030
The total value of STI and LTI expensed in the Income Statement for the 2024 financial year and disclosed in this remuneration
report was $2.90 million compared to $4.70 million expensed in the 2023 financial year, a decrease of $1.80 million or –38.3%,
relative to the previous year.
REMUNERATION COMPONENT
2024 STI Plan
2023 STI Plan
Tranche FY24 of 2016 LTI Plan
Tranche FY23 of 2016 LTI Plan
Tranche FY22 of 2016 LTI Plan
Tranche FY21 of 2016 LTI Plan
Tranche FY20 of 2016 LTI Plan
Performance and Executive Remuneration Outcomes in FY24 (continued)
50
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
Directors’ Report Remuneration Report - Audited (continued)
08
Remuneration arrangements for executive KMPs are formalised in employment agreements. Details of these contracts are below.
Chief Executive Officer
The CEO, Ms. K.L. Page is employed under a rolling contract.
Under the terms of the present contract the CEO’s total potential employment cost is $5,497,300 comprised of:
• fixed remuneration of $2,170,000 per annum;
• maximum STI opportunity in respect of the year ended 30 June 2024 of $1,305,000 (including the over-achievement level); and
• maximum LTI opportunity in respect of the year ended 30 June 2024 of $2,022,300.
• The CEO’s termination provisions are as follows:
CEO’s Termination Provisions
Notice Period
Payment
in Lieu of Notice
Treatment of STI on Termination
Treatment of LTI on Termination
Employer initiated-termination
6 months
6 months
Pro-rated for time and performance
Board discretion
Termination for serious misconduct
None
None
Unvested awards forfeited
Unvested awards forfeited
Employee-initiated termination
6 months
6 months
Unvested awards forfeited subject to
board discretion
Unvested awards forfeited subject to
board discretion*
Minimum Shareholding Requirement
There are no minimum shareholding requirements imposed on the CEO. There is a Benchmark Shareholding Level in respect of the
2024 STI Plan to determine whether the reward is to be paid as cash or in shares. The CEO held shares in the Company at 30 June
2024 equating to a value of $85.09 million.
Other Executive KMPs
All other Executive KMPs have rolling contracts.
Termination Provisions
Notice Period
Payment
in Lieu of Notice
Treatment of STI on Termination
Treatment of LTI on Termination
Employer initiated-termination
6 months
6 months
Pro-rated for time and performance
Board discretion
Termination for serious misconduct
None
None
Unvested awards forfeited
Unvested awards forfeited
Employee-initiated termination
6 months
6 months
Unvested awards forfeited subject to
board discretion
Unvested awards forfeited subject to
board discretion*
* Subject to the rules of the 2016 LTI Plan at a relevant time.
Non-Executive Director Remuneration Arrangements
Remuneration Policy
The Board seeks to set aggregate remuneration at a level that provides each member of the consolidated entity with the ability to
attract and retain directors of the highest calibre, whilst incurring a cost that is acceptable to shareholders.
The amount of aggregate remuneration sought to be approved by shareholders and the fee structure is reviewed annually against
fees paid to NEDs of comparable companies. The Board considers published material from external sources and makes its own
enquiries when undertaking the annual review process.
The Company’s constitution and the ASX listing rules specify that the NED fee pool shall be determined from time to time by a
general meeting. At the 2020 annual general meeting (AGM) held on 25 November 2020, shareholders approved the aggregate
NED pool of $1,500,000.
Structure
The remuneration of NEDs consists of directors’ fees, including board fee and committee fees, and committee chair fees, as
appropriate. NEDs do not receive retirement benefits, nor do they participate in any incentive programs. In exceptional
circumstances associated with governance oversight work not encompassed within regular board and committee work, a NED may
receive additional fees. The structure of NED remuneration is separate and distinct from executive remuneration. The
remuneration of NEDs for the years ended 30 June 2024 and 30 June 2023 are disclosed in Table 1 on page 52 of this report.
Executive Contractual Arrangements
09
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
51
SUPPORTING AUSTRALIAN ATHLETES
Relationship between Remuneration and Performance
10
Reported PBT
return on net assets
Total remuneration expense
* For directors of the HNHL Board
Correlation
5-YEAR: 84.8%
3-YEAR: 87.0%
Reported PBT return on net assets (%) vs
Total remuneration expense*
The graphs below illustrate the performance of the consolidated entity for the past five financial years and the high level of correlation
between remuneration and performance. Correlation is a calculation of the degree of relationship between two items with 100%
being strongest and 0% being weakest. Correlation between the indicators of performance and remuneration remain strong.
YEAR ENDED 30 JUNE
Correlation
Total
remuneration
“At risk”
remuneration
5 year
89.9%
94.5%
3 year
88.8%
96.8%
Total remuneration expense* and
“At risk” remuneration vs NPAT & NCI
YEAR ENDED 30 JUNE
Total remuneration expense
* For directors of the HNHL Board
“At risk” remuneration
Correlation
Average share price
Earning per share
5 year
67.3%
94.8%
3 year
66.6%
96.8%
Dividends paid
96.3%
99.96%
Average share price, earnings per share and
dividends paid per share vs “At risk” remuneration
YEAR ENDED 30 JUNE
‘At risk’ remuneration
* For directors of the HNHL Board
Average
share price
Earnings per
share
Dividends Paid per
share
NPAT&NCI
52
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
Directors’ Report Remuneration Report - Audited (continued)
11
Table 1: Compensation of Key Management Personnel Expensed for the Year Ended 30 June 2024
Directors of Harvey Norman Holdings Limited:
SHORT-TERM BENEFITS
POST
EMPLOYMENT
LONG TERM
INCENTIVES
OTHER
In $AUD
Salary &
Fees
Performance
Cash Incentive
Other
Short Term (a)
Non-
Monetary
Benefits (a)
Super-
annuation
Performance
Rights
Long
Service
Leave (b)
Total
Remuneration
%
earned
at risk
Gerald Harvey
Executive Chairman
2024
2023
587,201
739,308
-
-
10,400
10,400
-
-
27,399
25,292
77,859
278,747
-
-
702,859
1,053,747
11.1%
26.5%
Kay Lesley Page
Executive Director/CEO
2024
2023
2,112,610
2,120,446
878,713
780,834
-
-
29,980
24,262
27,410
25,292
217,756
779,765
-
-
3,266,469
3,730,599
33.6%
41.8%
John Evyn Slack-Smith
Executive Director/COO
2024
2023
1,292,590
1,294,708
757,512
673,133
-
-
-
-
27,410
25,292
99,252
331,421
21,543
21,578
2,198,307
2,346,132
39.0%
42.8%
David Matthew Ackery
Executive Director
2024
2023
875,079
1,276,708
-
673,133
12,000
18,000
-
-
21,881
25,292
149,501
331,421
156,759
21,578
1,215,220
2,346,132
12.3%
42.8%
Chris Mentis
Executive Director/CFO
2024
2023
965,471
945,834
636,310
565,432
-
-
17,119
38,874
27,410
25,292
82,851
284,144
16,091
15,764
1,745,252
1,875,340
41.1%
45.3%
Michael John Harvey
Non-Executive Director
2024
2023
54,054
54,299
-
-
-
-
-
-
5,946
5,701
-
-
-
-
60,000
60,000
-
-
Christopher Herbert
Brown
Non-Executive Director
2024
2023
144,144
144,796
-
-
-
-
-
-
15,856
15,204
-
-
-
-
160,000
160,000
-
-
Kenneth William
Gunderson-Briggs
Non-Executive Director
2024
2023
351,805
615,856
-
-
-
-
-
-
21,627
25,292
-
-
-
-
373,432
641,148
-
-
Maurice John Craven
Non-Executive Director
2024
2023
130,631
131,222
-
-
-
-
-
-
14,369
13,778
-
-
-
-
145,000
145,000
-
-
Luisa Catanzaro
Non-Executive Director
2024
2023
144,144
144,796
-
-
-
-
-
-
15,856
15,204
-
-
-
-
160,000
160,000
-
-
Total for the 2024
Financial Year
6,657,729
2,272,535
22,400
47,099
205,164
627,219
194,393
10,026,539
28.9%
Total for the 2023
Financial Year
7,467,973
2,692,532
28,400
63,136
201,639
2,005,498
58,920
12,518,098
37.5%
The listed Parent Company, Harvey Norman Holdings Limited, does not have any employees.
a. Short-term benefits includes car allowances paid (Other Short Term) and the cost of fully-maintained motor vehicles (Non-
Monetary Benefits)
b. Table 1 includes the accrual for long service leave entitlements in respect of the years ended 30 June 2024 and 30 June 2023.
The 2024 amount for David Matthew Ackery relates to the payment of entitlements upon retirement on 30 April 2024.
Compensation of Key Management Personnel
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
53
SUPPORTING AUSTRALIAN ATHLETES
11
Table 2: Compensation of Key Management Personnel Expensed for the Year Ended 30 June 2024
Senior Executives of Harvey Norman Holdings Limited:
SHORT-TERM BENEFITS
POST
EMPLOYMENT
OTHER
In $AUD
Salary &
Fees
Performance
Cash Incentive
Other Short
Term
Non-
Monetary
Benefits
Super-
annuation
Termination
Benefits (h)
Long
Service
Leave (i)
Total
Remuneration
% earned
at risk
Thomas James Scott
GM — Property
2024
2023
691,926
669,708
-
-
-
-
-
-
27,399
25,292
-
-
11,532
11,162
730,857
706,162
-
-
Gordon Ian Dingwall
Chief Information Officer
2024
2023
565,656
547,708
-
-
-
-
-
-
27,399
25,292
-
-
9,428
9,128
602,483
582,128
-
-
Emmanuel Hohlastos (a)
GM — Home Appliances
2024
2023
110,408
441,628
-
-
-
-
-
-
6,861
25,292
42,601
-
-
7,360
159,870
474,280
-
-
Glen Gregory (d)
GM — Technology &
Entertainment
2024
2023
-
131,857
-
-
-
3,548
-
-
-
7,479
-
126,357
-
-
-
269,241
-
-
Richard Beaini (e)
GM — Audio Visual
2024
2023
-
387,725
-
-
-
-
-
-
-
25,292
-
-
-
6,462
-
419,479
-
-
Christopher Coen (f)
GM — Home Appliances
2024
2023
403,123
-
-
-
-
-
-
-
27,399
-
-
-
6,159
-
436,681
-
-
-
Carene Myers
GM — Small Appliances
2024
2023
365,582
352,527
-
-
-
-
34,492
35,198
27,399
25,292
-
6,093
5,875
433,566
418,892
-
-
Total for the 2024
Financial Year
3,145,296
-
12,007
65,410
184,852
42,601
45,000
3,495,166
-
Total for the 2023
Financial Year
2,822,804
-
3,548
60,512
152,296
126,357
43,503
3,209,020
-
Haydon Ian Myers (b)
GM — Electrical
2024
2023
233,333
-
-
-
12,007
-
-
-
13,597
-
-
-
1,296
-
260,233
-
-
-
Darren Salakas (c)
GM — Technology &
Entertainment
2024
2023
419,853
291,651
-
-
-
-
30,918
25,314
27,399
18,357
-
-
5,062
3,516
483,232
338,838
-
-
Benjamin Kelada (g)
GM — Audio Visual
2024
2023
355,415
-
-
-
-
-
-
-
27,399
-
-
-
5,430
-
388,244
-
-
-
Compensation of Key Management Personnel (continued)
a. Resigned as General Manager—Home Appliances on 29 September 2023
b. Appointed to General Manager—Electrical on 1 March 2024
c. Appointed to General Manager—Technology & Entertainment and is a new KMP effective from 10 October 2022
d. Resigned as General Manager—Technology & Entertainment on 17 October 2022
e. Ceased to be a KMP from 1 July 2023
f.
Appointed to General Manager—Home Appliances on 1 August 2023
g. Appointed to General Manager—Audio Visual on 1 August 2023
h. This amount represents the cash payment of employee leave entitlements upon resignation
i.
This amount represents the accrual for long service leave entitlements in respect of the years ended 30 June 2024 and 30 June
2023
54
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
Directors’ Report Remuneration Report - Audited (continued)
12
Options Granted to Executive Directors as Part of Remuneration:
There were no options granted to any executive director during the year ended 30 June 2024. There were no movements in option
holdings during the year ended 30 June 2024.
Options Holdings of Key Management Personnel for the Year Ended 30 June 2024:
There were no options held by any director or senior executive during the year ended 30 June 2024.
Table 3: Performance Rights Granted to Executive Directors as Part of Remuneration:
The table below discloses the number of performance rights granted to executive directors as remuneration during the year ended
30 June 2024 as well as the number of performance rights that vested, were exercised or lapsed during the year. Performance rights
do not carry any voting or dividend rights and can be exercised once the vesting conditions have been met until their expiry date.
PERFORMANCE RIGHTS
GRANTED AS REMUNERATION
DURING THE YEAR (a)
PERFORMANCE RIGHTS
VESTED DURING THE YEAR
(b)
PERFORMANCE RIGHTS
LAPSED DURING THE
YEAR
UNVESTED PERFORMANCE
RIGHTS AT 30 JUNE 2024
(c)
PERFORMANCE RIGHTS
EXERCISED DURING THE YEAR
(d)
Number
Granted
Fair Value
Granted $
Number
Vested
Fair Value
Vested $
Number
Lapsed
Fair Value
Lapsed $
Number
Unvested
Fair Value
Unvested $
Number
Exercised
Fair Value
Exercised $
Gerald Harvey
191,000
$721,980
65,500
$252,175
-
-
511,600
$2,077,972
65,500
$252,175
Kay Lesley Page
535,000
$2,022,300
183,000
$704,550
-
-
1,432,700
$5,819,164
183,000
$704,550
John Evyn Slack
Smith
163,200
$616,896
109,000
$419,650
-
-
430,700
$1,748,296
109,000
$419,650
David Matthew
Ackery
-
-
109,000
$419,650
(56,943)
($245,994)
210,557
$885,406
109,000
$419,650
Chris Mentis
163,200
$616,896
83,000
$319,550
-
-
430,700
$1,748,296
83,000
$319,550
Total
1,052,400
$3,978,072
549,500
$2,115,575
(56,943) ($245,994)
3,016,257
$12,279,134
549,500
$2,115,575
a. A total of 1,052,400 performance rights under Tranche FY24 of the 2016 LTI Plan were granted to executive directors on 1
December 2023. The performance rights were independently valued by Mercer Consulting (Australia) Pty Limited at grant date
with a fair value of $3.78 per entitlement on 1 December 2023, based on a share price of $3.78 at grant date , resulting in a total
fair value of Tranche FY24 performance rights of $3,978,072 in aggregate.
b. On 31 December 2023, 549,500 performance rights representing 100% of Tranche FY21 of the 2016 LTI Plan vested after all
financial conditions and service conditions were satisfied.
c. As at 30 June 2024, a total of 3,016,257 performance rights were outstanding, unvested and not capable of exercise comprised of:
i. 914,000 performance rights under Tranche FY22 of the 2016 LTI Plan;
ii. 1,049,857 performance rights under Tranche FY23 of the 2016 LTI Plan; and
iii. 1,052,400 performance rights under Tranche FY24 of the 2016 LTI Plan.
d. On 3 January 2024, 549,500 performance rights under Tranche FY21 of the 2016 LTI Plan were exercised, reducing the
unexercised performance rights under Tranche FY21 of the 2016 LTI Plan to nil.
Table 4: Performance Rights of Key Management Personnel for the Year Ended 30 June 2024
The table below discloses the number of performance rights granted to executive directors as remuneration during the year ended
30 June 2024 as well as the number of performance rights that vested, were exercised or lapsed during the year. Performance rights
do not carry any voting or dividend rights and can be exercised once the vesting conditions have been met until their expiry date.
VESTED DURING THE YEAR
ENDED 30 JUNE 2024
1 July 2023
Balance at beginning
of the year
Granted as
Remuneration
Performance
Rights Exercised
Performance
Rights Lapsed
30 June 2024
Balance at
end of the year
Total
Exercised
Lapsed
Gerald Harvey
386,100
191,000
(65,500)
-
511,600
65,500
65,500
-
Kay Lesley Page
1,080,700
535,000
(183,000)
-
1,432,700
183,000
183,000
-
John Evyn
Slack Smith
376,500
163,200
(109,000)
-
430,700
109,000
109,000
-
David Matthew
Ackery
376,500
-
(109,000)
(56,943)
210,557
109,000
109,000
-
Chris Mentis
350,500
163,200
(83,000)
-
430,700
83,000
83,000
-
Total
2,570,300
1,052,400
(549,500)
(56,943)
3,016,257
549,500
549,500
-
Additional Disclosures Relating to Options, Performance Rights & Shares
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
55
SUPPORTING AUSTRALIAN ATHLETES
12
Apart from the KMPs disclosed above, comprised of the executive directors, each of the non-executive directors or senior
executives did not have any performance rights during the year ended 30 June 2024.
The closing balance of the 3,016,257 performance rights in the Company as at 30 June 2024 is comprised of:
a. 914,000 performance rights under Tranche FY22 of the 2016 LTI Plan at a fair value at grant date of $4.12 to vest on 31
December 2024. The FY22 Tranche is exercisable between 1 January 2025 and 31 October 2026.
b. 1,049,857 performance rights under Tranche FY23 of the 2016 LTI Plan at a fair value at grant date of $4.32 to vest on 31
December 2025. The FY23 Tranche is exercisable between 1 January 2026 and 31 October 2037.
c. Granted as remuneration during the 2024 financial year: 1,052,400 performance rights under Tranche FY24 of the 2016 LTI Plan
at a fair value at grant date of $3.78 to vest on 31 December 2026. The FY24 Tranche is exercisable between 1 January 2027
and 31 October 2038.
Table 5: Shareholdings/Relevant Interests of Key Management Personnel for the Year Ended 30 June 2024
1 July 2023
Balance at Beginning of the Year
On Exercise of
Performance Rights (a)
Net Change Other (b)
30 June 2024
Balance at End of the Year
Gerald Harvey
414,966,437
65,500
-
415,031,937
Kay Lesley Page
20,222,315
183,000
-
20,405,315
John Evyn Slack Smith
1,361,893
109,000
-
1,470,893
David Matthew Ackery
901,471
109,000
(1,010,471)(c)
-
Chris Mentis
1,367,297
83,000
-
1,450,297
Michael John Harvey
-
-
-
-
Christopher Herbert Brown
205,525,565
-
-
205,525,565
Kenneth William
Gunderson-Briggs
10,059
-
-
10,059
Maurice John Craven
53,426
-
-
53,426
Luisa Catanzaro
-
-
17,500
17,500
KMP: Senior Executives
− Thomas James Scott
10,000
-
-
10,000
− Christopher Coen
-
-
150
150
Total
644,421,713
549,500
(981,719)
643,989,494
a. On 18 December 2023, the Company announced that 549,500 performance rights, representing 100% of the performance rights
issued in accordance with Tranche FY21 of the 2016 LTI Plan, will vest and become exercisable from 1 January 2024. A member
of the consolidated entity acquired shares in the Company via an ‘on-market trade’ at an average price of $4.05 per share for the
purposes of satisfying the entitlements of each Executive Director to the performance rights in respect of Tranche FY21 of the
2016 LTI Plan.
b. The ‘Net Change Other’ column discloses the number of shares acquired or disposed by each KMP via an ‘on-market trade’ in
accordance with the prevailing market conditions on the ASX at the time of the transaction. These trades were on no more
favourable terms and conditions than those that would be reasonably expected of an arm’s length transaction, and have been
conducted in accordance with the Company’s Share Trading Policy. This column also includes the shareholdings of those KMPs
that commenced employment during FY24.
c. This amount relates to the shareholding of David Ackery as at his retirement date of 30 April 2024 as he ceased to be an
executive director of the Company from that date.
− Carene Myers
3,000
-
-
3,000
− Haydon Ian Myers
-
11,102
11,102
− Darren Salakas
250
-
-
250
Additional Disclosures Relating to Options, Performance Rights & Shares (continued)
56
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
Directors’ Report Remuneration Report - Audited (continued)
13
14
The below table shows the ‘take-home pay’ for each KMP director, representing the benefits paid to each director during the
year ended 30 June 2024, or as soon as practicable after that date.
Total ‘take-home pay’ for the KMP directors amounted to $11.90 million for the year ended 30 June 2024. The total value of
remuneration expensed for KMP directors in respect of the 2024 financial year was $10.00 million (refer to Table 1 on page 52 of
this report). For the 2024 financial year, total ‘take-home pay’ was $1.90 million higher than the value of remuneration expensed
to the income statement mainly due to the higher STI amount paid in FY24 in respect of FY23.
In $AUD
Salary
& Fees
Other
Short
Term
Non-
Monetary
Benefits
Super-
annuation
Short-term
Performance
Cash
Incentive (a)
Exercise of
Tranche
FY21 2016
LTI Plan
(b)
FY24 Total
Take-Home
Pay
FY23 Total
Take-Home
Pay
Gerald Harvey
587,201
10,400
-
27,399
-
252,175
877,175
1,002,285
Kay Lesley Page
2,112,610
-
29,980
27,410
780,834
704,550
3,655,384
3,823,635
John Evyn Slack Smith
1,292,590
-
-
27,410
673,133
419,650
2,412,783
2,576,355
David Matthew Ackery
875,079
12,000
-
21,881
673,133
419,650
2,158,502
2,858,665
Chris Mentis
965,471
-
17,119
27,410
565,432
319,550
1,894,982
2,035,635
Michael John Harvey
54,054
-
-
5,946
-
-
60,000
60,000
Christopher Herbert
Brown
144,144
-
-
15,856
-
-
160,000
160,000
Kenneth William
Gunderson-Briggs
351,805
-
-
21,627
-
-
373,432
641,148
Maurice John Craven
130,631
-
-
14,369
-
-
145,000
145,000
Luisa Catanzaro
144,144
-
-
15,856
-
-
160,000
160,000
Total Take-Home Pay
2024 Financial Year
6,657,729
22,400
47,099
205,164
2,692,532
2,115,575
11,897,258
Total Take-Home Pay
2023 Financial Year
7,467,973
28,400
63,136
201,639
3,512,500
-
13,462,723
a. The short-term incentive of $2.69 million represented the payment of the 2023 STI Plan that was earned in respect of the
2023 financial year, and was paid to Executive Directors in September 2023.
b. The aggregate fair value of the performance rights exercised during the 2024 financial year was $2.12 million, calculated as
the fair value at grant date of $3.85 per right multiplied by 549,500 performance rights exercised for Tranche FY21.
c. The Other amount for David Ackery relates to the payment of entitlements upon retirement on 30 April 2024.
Exercise of
Tranche
FY19 &
FY20 2016
LTI Plan
-
-
-
-
-
-
-
-
-
-
-
2,189,075
Other
(c)
-
-
-
156,759
-
-
-
-
-
-
156,759
-
Result of the 2023 AGM
The previous AGM of the Company was held on 29 November 2023. A vote of 81.74% of the eligible shareholdings were cast
against Item 2. Adoption of the Remuneration Report. As such, Item 2. was not carried and the Remuneration Report in respect of
the 2023 financial year was not adopted. The eligible shareholdings that voted against the adoption of the Remuneration Report
represented 18.17% of the total shareholdings.
Therefore, in compliance with s300A of the Corporations Act (2001), the Company is required to provide an explanation of the
Board’s proposed response to any comments associated with the vote. The Company engaged with stakeholders and determined
that the vote outcomes were largely the result of comments and recommendations of proxy advisors employed by institutional
investors who voted in accordance with those recommendations. The Company has addressed the most pertinent of the proxy
advisor comments and recommendations below.
Proxy Advisor Mistakes in Fact and Errors of Judgement
The Board is aware of the mistakes in fact and errors of judgement that were contained in the reports of the various proxy advisors
circulated to shareholders prior to the 2023 AGM. The Board is also aware of the reliance of shareholders on those reports and the
influence of the mistakes and errors contained in those reports as to the voting decisions made by shareholders.
The Board is concerned that the free float of the HVN shares on market may have been misled by non-exhaustive statements by the
various proxy advisors, and as a matter of good governance wishes to bring these matters to the attention of shareholders.
The Board is of the view that information provided in respect of HVN by third party advisors to shareholders needs to be correct,
evidence based and should not be provided for the purpose of influencing voting behaviour without rigour. The Board is of the
view that there should be consequences for the provision of incorrect information and that each third party advisor that provides
incorrect information should be held to the same standard to which a company listed on the ASX (like HVN) needs to comply.
‘Take-Home Pay’ for KMP Directors
Other Matters for Disclosure
14
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
57
SUPPORTING AUSTRALIAN ATHLETES
Other Matters for Disclosure (continued)
14
INSTITUTIONAL SHAREHOLDER SERVICES (ISS)
CGI GLASS LEWIS
OWNERSHIP MATTERS (and ACSI)
BENCHMARKING
Benchmarking compares Harvey Norman at revenue
of $2.776bn and not the Harvey Norman® system
revenues of $9.193bn (Pg 5). This is wrong and
directly effects the qualitative pay for performance
analysis.
CGI provides 2 benchmark groups, one termed
“Country” with only 7 members and no matches
to the 19 members of the Harvey Norman
benchmarking group, and “Industry” with 7
members and only 4 matches.
Asserts that the overall pay levels are above
peers and investor expectations for a business
the size and sector of HVN, without reference to
any benchmarking or disclosure of peer group.
The ISS benchmarking group for Harvey Norman
had 13 members compared to 19 in the Harvey
Norman benchmarking group, one less that FY2022
with only 9 members matching.
The CGI benchmarking is less broad than ISS and
does not cover comparable financial and
business characteristics such as EBIT, net assets,
tangible assets, franchising, physical stores, on-
line, overseas operations and property
investment.
The ISS benchmarking is not broad and does not
cover comparable financial and business
characteristics such as EBIT, net assets, tangible
assets, franchising, physical stores, on-line, overseas
operations and property investment.
Advised that “the accounts would be improved
if the franchise network were voluntarily
consolidated” notwithstanding that the
financial statements fully comply with all
relevant accounting standards, are consistent
year to year, and are subject to an independent
external audit and is consistent with ASIC RG-
247 requirement of IFRS and non-IFRS financial
information. We note that equity analysts have
no problem in understanding the financial
statements. We also note that despite their
additional disclosure requirement, OM do not
consider what has been disclosed for Harvey
Norman® system revenues to assess the
appropriateness of the remuneration.
FIXED REMUNERATION
There is no mention that the fixed remuneration of
executive directors is balanced with high
shareholding as there was in the FY2022 ISS report.
CGI proffers that the CEO fixed pay stands out
amongst peers, based on the non-representative
benchmark groups used by CGI. This is incorrect.
There is no reference to the Australian Multiline
Retail Industry average in FY2023 with which the
fixed remuneration is aligned.
SHORT-TERM INCENTIVES
Commentary about the reduction in STI targets is not
balanced with the strong correlation of financial
performance with “at risk” remuneration (Pg 51).
States that the STI on-target vesting does not
align with analyst forecasts. This is incorrect. The
calculation by CGI does not adjust for the effect
of AASB16 as required. The CGI calculation only
uses 4 of the 11 stated analyst forecasts.
Questions the usefulness of the executive
shareholding policy, which sees each executive
director with excess of one years fixed remuneration
in shares but is silent as to the alignment the policy
creates with shareholders.
In any event, commentary about the on-target
vesting of STI is not balanced with the strong
correlation of financial performance with “at risk”
remuneration (See Pg 51).
LONG-TERM INCENTIVES
Questions the rigour and alignment of RONA as
the LTI performance measure, notwithstanding that
the measure has been consistently used from
FY2016, ISS voted in favour of the LTI grants at
previous AGM’s, and the strong correlation of
financial performance with “at risk” remuneration
(Pg 51).
Questions the use of a single metric for LTI
performance notwithstanding that the measure
has been consistently used from FY2016, CGI
voted in favour of the LTI grants at previous
AGM’s, and the strong correlation of financial
performance with “at risk” remuneration (see Pg
51).
Advised shareholders to vote against the
Remuneration Report because the “accounting for
the franchise network makes it difficult to rely on
the net assets disclosed for the purposes of the
return on asset number”. The accounting is the
same as it has been in previous years, including
FY2021 and FY2022, with no similar
recommendation made by OM in those years.
States that there is a provision for dividends on
unvested shares in respect of the LTI. This is
incorrect. We note ISS voted in favour of the grant
of similar performance rights at the 2022 AGM.
Return on Net Assets (RONA) has been a
consistent measure used for the LTI grants since
2016 and has been calculated in a consistent way.
OM has recommended shareholder approval of
the grant of performance rights that remain on
foot with RONA as the financial measure.
CONFLICTS OF INTEREST—UNSOLICITED FEE FOR SERVICE FOLLOW-UP TO ADVISOR RECOMMENDATIONS
The Board noted the receipt of an unsolicited offer
from ISS on 4 December 2023 to work with Harvey
Norman, for a fee, to assist in resolving the
unfavourable 2023 vote.
The Board noted the receipt of an unsolicited
offer from CGI on 4 December 2023 to
subscribe to the 2024 Glass Lewis Governance
Hub and peer reports to assist Harvey Norman
as a company with which CGI could work.
ISS did not proffer any performance measure that
could be applied, in addition to, or instead of
RONA that would be a more valid indicator.
CGI did not proffer any performance measure
that could be applied, in addition to, or instead
of RONA that would be a more valid indicator.
OM did not proffer any performance measure
that could be applied, in addition to, or instead
of RONA that would be a more valid indicator.
58
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
Directors’ Report Remuneration Report - Audited (continued)
16
CONSOLIDATED
$000
June 2024
$
June 2023
$
i. Lease of business premises from Ruzden Pty Limited
The consolidated entity leases business premises at Bundall, Queensland from Ruzden Pty Limited. Mr
G. Harvey, Ms K.L. Page, Mr M.J. Harvey and I.J. Norman Nominees Pty Limited (C.H. Brown) have an
equity interest in Ruzden Pty Limited. The lease arrangements were approved by shareholders in the
General Meeting held 25 May 1993, and in the General Meeting held 31 August 1999. The lease is
subject to normal commercial terms and conditions. Lease payments and outgoings made by the
consolidated entity to Ruzden Pty Limited were:
5,621,717
5,448,983
ii. Legal fees paid to a director-related entity
Legal fees were paid to the firm of which Mr C.H. Brown is a partner for professional services rendered
to the consolidated entity in the normal course of business.
3,643,808
3,255,548
iii. Other income derived by related entities of key management personnel
Certain franchises are operated by entities owned or controlled by relatives of key management
personnel under normal franchisee terms and conditions. Aggregated net income derived by entities
owned or controlled by relatives of key management personnel were:
989,882
1,128,455
v. Gepps Cross Home HQ
GH Gepps Cross Pty Limited, an entity associated with Gerald Harvey (“GH Entity”) and MJH Gepps Cross Pty Limited, an entity
associated with Michael Harvey (“MJH Entity”) and, M&S Gepps Cross Pty Limited, collectively have a 50% share as tenants in
common of the Gepps Cross Property. A subsidiary of Harvey Norman Holdings Limited has the remaining 50% share of the
property. A part of the property is leased to a subsidiary of Harvey Norman Holdings Limited on arm’s length commercial terms
(“G.C. Lessee”). The GH Entity is entitled to one-quarter of the lease payments and outgoings paid by the G.C. Lessee. The MJH
Entity is entitled to one-eighth of the lease payments and outgoings paid by the G.C. Lessee. The application of AASB 16 Leases
resulted in the recognition of a lease liability of $16.35 million by the G.C. Lessee as at 30 June 2024 (2023: $17.10 million). The
amount of lease payments and outgoings paid by the G.C. Lessee for FY24 was $4.29 million (FY23: $4.16 million). Each of the
above transactions were executed under terms and conditions no more favourable than those which it is reasonable to expect
would have applied if the transactions were at arm’s length.
iv. Perth City West Complex
Gerald Harvey has a 50% equity interest and a subsidiary of Harvey Norman Holdings Limited has a 50% equity interest in the Perth
City West Property. The property was subject to a lease of part of the property in favour of a subsidiary of Harvey Norman Holdings
Limited (the "P.C.W. Lessee"). Gerald Harvey is entitled to one-half of the lease payments and outgoings paid by the P.C.W.
Lessee. The amount of lease payments and outgoings paid by the P.C.W. Lessee to Gerald Harvey and the subsidiary of Harvey
Norman Holdings Limited for the year ended 30 June 2024 was $1.00 million (2023: $1.00 million). Each of the above transactions
were executed under terms and conditions no more favourable than those which it is reasonable to expect would have applied if
the transactions were at arm’s length.
Other Transactions & Balances with Key Management Personnel and their Related Parties
15
16
There were no loans granted to key management personnel and their related parties during the year ended 30 June 2024 (2023:
nil). There were no loans outstanding from key management personnel and their related parties as at 30 June 2024 (2023: nil).
15
15
Loans to Key Management Personnel and their Related Parties
14
Other Matters for Disclosure (continued)
Changes Made to the Remuneration Framework
To consider changes to the executive director remuneration for FY2024, the Board engaged an independent expert to assist the
Board to undertake an independent review of the remuneration of executive directors . Following that independent review, the
Board has taken the following action in respect of the vote against the 2023 Remuneration Report:
• Re-balanced STI award financial conditions and non-financial conditions to 50% each.
• Focused the non-financial conditions to strategic projects critical to long-term sustainable value.
• Placed a freeze on increases in fixed remuneration for executive directors regardless of inflation.
• Reduced the number of executive directors on the Board with the retirement of David Ackery during the year.
• Provided further explanation on non-executive fee components.
59
59
Harvey Norman® Holdings Limited (ACN 003 237 545)
Sustainability Report
This sustainability report updates the position of Harvey Norman® Holdings
Limited ACN 003 237 545 (Company) and each relevant controlled entity in
relation to relevant sustainability matters.
The Company has recognised the need to put in place systems, processes and
governance practices desirable or required to meet new proposed climate
reporting requirements, including the proposed Australian Sustainability
Reporting Standards (Draft ASRS). Until climate reporting requirements are
settled and mandatory, the Company remains committed to reporting on
relevant sustainability issues, in accordance with its sustainability governance
and compliance risk management framework.
Sustainability Governance
The principal objective of the Company is to create long term
sustainable value for shareholders (Principal Objective). Directors
of the Company and each relevant controlled entity consider
the interests of relevant community stakeholders when making
decisions. Each of the Company and each relevant controlled
entity has developed, and continues to improve, a corporate
governance and risk and compliance management framework
to achieve the Principal Objective and comply with obligations
and commitments (Sustainability Framework). Elements of
the Sustainability Framework include elements that are like, or
informed by, elements of the Draft ASRS, or required by current
regulatory obligations.
Sustainability has always been and remains a critical focus of the
Board and management.
The Board is responsible for oversight of the Sustainability
Framework. This responsibility includes oversight of the risk and
compliance management framework of the Company, including
controls relating to sustainability obligations and commitments.
The Sustainability Framework is designed to enable the effective
identification and management of sustainability risks and
opportunities.
A controlled entity of the Company has established an executive
sustainability committee (ESC). Members of the ESC are
employees of the controlled entity and include three executive
directors. The ESC has responsibility for the development,
implementation, and improvement of policies and procedures
to enable the Company and each relevant controlled entity to
comply with relevant sustainability obligations and commitments,
in the course of business operations.
The ESC meets regularly to assess and review the operations and
performance of the Company and each relevant controlled entity
in relation to relevant sustainability matters. The ESC reports to a
committee of the Board of the Company in respect of compliance
by the Company and relevant controlled entities with relevant
sustainability obligations and commitments.
Sustainability Working Group
A sustainability working group (SWG) has been formed by the ESC
in preparation for mandatory sustainability reporting in Australia,
the European Union, and other relevant jurisdictions.
The ESC engaged qualified independent experts to inform
decision making by the ESC in relation to measures required to
be undertaken by the Company and each relevant controlled
entity to enable compliance with the proposed mandatory
reporting obligations under the Draft ASRS and other relevant
obligations. The ESC has developed a sustainability action plan to
be implemented by the relevant SWG in each relevant jurisdiction
to ensure that the Company and each relevant controlled entity
is well positioned to manage sustainability risks and opportunities
and comply with new mandatory sustainability reporting
obligations in Australia, the European Union and other relevant
jurisdictions.
Sustainability Policy
The Company has adopted a sustainability policy to provide
strategic direction to its business operations through a
consideration of sustainability related risks and opportunities.
The sustainability policy of the Company and each relevant
controlled entity is that decisions of the Company and each
relevant controlled entity are intended to create long term
sustainable value for shareholders, with consideration of the
interests of relevant community stakeholders, informed by the
statement of values of the Company as set out below.
60
60
Harvey Norman® Holdings Limited (ACN 003 237 545)
Directors’ Report Sustainability Report
The values set out below inform and underpin everything that we
do in our communities.
Integrity
We comply with the law and develop
systems that make it easy for our
colleagues to comply with the law.
We act honestly, ethically and with
integrity. We do not mislead or
deceive people.
Humanity
We treat all people with respect.
We are tolerant of differences in
ethnicity, religion, gender, sexuality,
physical and intellectual ability.
We are patient when cultural
misunderstandings arise. We are
inclusive and collaborative. We
recognize that sometimes genuine
people make honest mistakes.
Authenticity
We are authentic. We stand up for the
things we believe in. We deliver on our
promises. We value honesty, candour
and frankness. We will act fairly.
Optimism
We are optimistic. We are passionate
about what we do. We search for
opportunity and manage risk. We
recognise that our environment is
constantly evolving. We innovate
with product and technology. We
believe we can all keep learning –
and learn from our failures as well
as our successes.
Responsibility
We are part of a wider community.
We aspire to make a positive impact
within each community that we
conduct business. We are committed
to environmental responsibility
and a sustainable future. We are
proud that we can create jobs and
opportunities for people in countries
in which we operate.
Statement of Values
Three Pillars of Sustainability
Subject to the oversight of the Executive Sustainability Committee, the Sustainability Framework informs activities across three pillars:
People, Places and Products.
61
61
Harvey Norman® Holdings Limited (ACN 003 237 545)
People
Members of the consolidated entity are
proud to employ over 6,500 employees
globally across a diverse range of industries
and occupations. In addition, independent
Harvey Norman®, Domayne® and Joyce
Mayne® Franchisee businesses employ
approximately 9,400 employees in each of
their local communities.
Globally, each member of the consolidated
entity seeks to provide their customers
with an outstanding experience, delivered
by engaged and well-trained employees
who work in a safe, diverse and inclusive
environment that is reflective of the
communities in which they operate.
Diversity & Inclusion
Each controlled entity recognises and values the
contribution of people from a range of diverse
backgrounds. That is as much about cultural factors as
it is about age, gender, life experience, socioeconomic
background, perspectives, education, and ability.
Each relevant member of the consolidated entity
globally provides opportunities to people of all
backgrounds to join the business and contribute and
grow across the range of roles and variety of industries
in which they employ, across the variety of industries
and occupations.
The consolidated entity has continued to maintain
its gender balance across both the global employee
teams and the global senior executive teams.
Globally, over 40% of Senior Executive roles in
members of the consolidated entity are held by women,
across a broad range of functional and line roles.
The consolidated entity continues its focus on actively
supporting and building a diverse pipeline of future
leaders and Senior Executive successors from the
diverse talent pool of current employees.
A Global Pipeline of Women Leaders
50%
Women
comprise
of the Managing Directors
of all global regions
40%
Women
comprise
of Senior Executives
across all global regions
44%
Women
comprise
of Employees across
all global regions
% of Women in local Regional Leadership positions
40%
Australia
44%
NZ
50%
CEE
36%
Asia
44%
Ireland & UK
62
62
Harvey Norman® Holdings Limited (ACN 003 237 545)
Directors’ Report Sustainability Report
David Ackery retired from his position as an Executive Director
of HNHL during FY24, with no replacement appointed as at the
end of FY24. The CEO, Kay Lesley Page, is an Executive Director
of the Company, and is one of only 20 women CEO’s in ASX200
companies. The breakdown of the HNHL Board and each member
of the consolidated entity as a whole by gender as at the end of
FY24 is below.
Each member of the consolidated entity is committed to the
creation of equal employment opportunities, and equal pay for
equal work (Pay Equity), regardless of an individual’s personal
attributes, including gender. Each relevant member of the
consolidated entity monitors equal opportunity and Pay Equity to
ensure the consolidated entity meets this commitment.
Controlled entities in Australia and Ireland report publicly
annually on the Gender Pay Gap (GPG) of the operations within
their respective region. Australia reports GPG information to
the Workplace Gender Equality Agency (WGEA) relating to 10
controlled entities within Australia that employ across a range
of industries and occupations ranging from manufacturing,
warehousing and logistics, retail, information technology, property
and construction, and administration. This data does not include
employees of independent Harvey Norman®, Domayne ®, or Joyce
Mayne® Franchisee businesses.
Across the consolidated entity, there were a range of initiatives
during FY24 aimed at educating and celebrating the range of
abilities, cultures and backgrounds of our global workforce.
Our global headquarters, situated in Homebush West, saw the
launch of the refreshed Diversity & Inclusion Framework and the
FY24 Diversity & Inclusion Action Plan (DIAP) - the progress of
which is shared with employees. As part of the DIAP, a number of
initiatives were undertaken in Australia including:
• Celebrating cultural events including Lunar New Year, Diwali
and Taste of Harmony on campus.
• Sharing awareness materials on the Intranet focusing on
educating employees on the significance of Ramadan and
NAIDOC week.
• Inviting employees and managers to attend a number of
sessions focussed on awareness and inclusion of individuals
with disabilities, hosted by WhatAbility.
• Investing in the partnership with Specialisterne, to build
awareness of neurodiversity via management and employee
sessions and review opportunities to improve inclusivity and
employment for neurodiverse individuals.
• Partnering with WhatAbility and Paralympics Australia to
create an eLearning module made available to employees
of the consolidated entity and each Franchisee business,
focused on engaging with people with disabilities.
• Engaging with Paralympics Australia on the creation of their
Building Employer Confidence Framework which is designed
to foster confidence among employers to hire, retain, and
support talent individuals with disabilities.
• The Employee Diversity and Inclusion Policy of each
controlled entity was reviewed and updated.
• Improvements to the collection of Diversity data were
made to better inform and provide improved insights to the
Executive Management Committee quarterly.
• Consultation and awareness initiative occurred with Managers
on the Gender Pay Gap and Pay Equity.
• Continuation of Community Partnerships (see page 64).
• Reviewing of advertisement templates, in conjunction with
external tools, to ensure they are inclusive and minimise bias.
In New Zealand, staff celebrated Diwali, Matariki (Maori New Year)
and Gumboot Friday, a campaign raising funds for mental health
support services funding, particularly for youth.
In New Zealand, Harvey Norman® also supports the Paralympics
New Zealand team, and together their teams have raised more
than $300,000 through silent auctions, staff fundraising and the
sale of branded Paralympics New Zealand merchandise in stores.
Gender & Age Balance - Senior Executives
Female
Male
Parental leave takes by gender
109
29
Staff returned to work after
parental leave
88
28
Retention rates after
parental leave
81%
97%
Parental Leave
The Company internally monitors the GPG of controlled
entities globally, and as at 30th June 2024 the median
GPG was 6.5%*.
The median GPG of independent Harvey Norman®,
Domayne ®, or Joyce Mayne® Franchisee businesses in
Australia, combined, as at 30th June 2024 was 4.8%.
* This differs from the GPG published by WGEA as the WGEA GPG does not
include the overseas controlled entities.
25 & under
26 - 35
36 - 45
46 - 55
0
10
20
30
40
Over 55
Female
Male
Age
Number of employees
Percentage
YoY Change
est. 30 June 24
Men
Women
Men
Women
Chair
100%
CEO
100%
Board
78%
22%
-2%
2%
Senior Executives*
60%
40%
–
–
All Employees
56%
44%
1%
-1%
* The holder of a Senior Executive position has primary responsibility
for the equivalent of a department, business unit, or key function.
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Gender Balance - All Employees
56%
44%
Male
Female
Gender & Age Balance - All Other Employees
25 & under
26 - 35
36 - 45
46 - 55
0
250
500
750
1000
Over 55
Female
Male
Gender & Age Balance - New Hires
25 & under
26 - 35
36 - 45
46 - 55
0
100
200
300
400
Over 55
Female
Male
Staff Engagement
Each member of the consolidated entity recognises the value of
an engaged workforce, including the benefits to productivity,
attendance, retention, and achievement of team and company
goals. In FY24, employees had the opportunity to participate in
engagement activities focussing on training, future opportunities
within the business, thoughts on culture and their working
environment, and progress on sustainability matters.
Key initiatives and progress in FY24 include:
• The Republic of Ireland controlled entity was certified by
Great Place to Work as one of Ireland’s Best Workplaces in
2024, based on the results of the Great Place to Work survey.
• Employee feedback and consultation mechanisms were
improved in a number of regions, via enhancements to
checkpoints at various stages of the employee lifecycle.
• Improvements to proactive succession planning steps in
relation to the future Store Manager talent pool
We collect feedback from our staff throughout their employment,
including through the Life @ Work survey. Feedback collected
from staff is reviewed regularly and informs our future people
strategies.
We are continuing to embed our community partnerships into
our people initiatives for FY25 and beyond, including the
planned launch of our Olympic and Paralympics Calendar which
is designed to promote the games through a number of activities
both online and at our Global Headquarters.
Training and Development
Each controlled entity offers a range of training opportunities
to employees across a range of areas. Training undertaken is
mainly role specific (particularly in customer facing roles), with
all employees being required to undertake training in WHS and
various compliance related topics. The amount of time allocated
to training activities varies by role type. There are a range of
development programs in place.
The focus applied by each member of the consolidated entity on
developing and bringing people through is evident in our internal
successor appointment rate for our Senior Executive positions, of
60% in FY24.
Health and Safety
In FY24, each member of the consolidated entity has continued to
mature in its approach to Health and Safety.
Each controlled entity globally has adopted the Health and
Safety Framework and established a Work Health and Safety
(WHS) Management Committee, which is responsible for creating
and implementing a Health and Safety Action Plan (HSAP) in its
business. These committees meet quarterly to review progress
and submit reporting relating to their HSAP progress and any
significant incidents or hazards that may have occurred in their
business. This process has demonstrated a good level of buy-
in by each relevant controlled entity of the Health and Safety
framework and sets up each region and business unit well for
future improvements.
Although there are some inconsistencies in the local compliance
requirements between countries, the Health and Safety Framework
takes a high watermark approach and has each global region
managing their HSAP’s and reporting based on the Regions where
WHS is most mature in terms of regulatory requirements – that
being Australia and New Zealand. Consequently, controlled
entities in other regions align to their practices at a level above
their peers in their local Region, which seeks to lead to better
health and safety outcomes for their employees.
The implementation of a single global software solution for
WHS is planned for FY25. Once implemented, the software will
be a major consolidation point of data from the various surveys
and information collection exercises that currently exist. In the
future, this will provide a ‘single source of truth’ solution that will
enhance the insights and real time visibility into health and safety
performance at all levels of the consolidated entity.
From FY25, the refreshed approach to Health and Safety will be
reflected in new internal campaigns and communications, under
the branding “Safe + Healthy”. This updated messaging for
Health and Safety internally seeks to promote and initiate action
orientated behaviours that focus on being safe and healthy at
work.
Data Protection and Privacy
FY24 saw the continuation of the Global Security Improvement
Program, requiring each controlled entity in each Region to revise
1250
Age
Age
Number of employees
Number of employees
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their approach to data management and storage practices
and implement improvements lowering their data management
risk profile.
Part of this program is the ongoing maintenance of the security
controls inherent in our business storage practices. Targeted
systems security updates are regularly performed and completed
in line with planning.
The comprehensive cyber security strategy includes threat protection
systems, regular security audits and employee training programs, to
ensure that our defences are resilient to external attack.
Harvey Norman® websites of controlled entities are continually
threatened by external attack. The measures in place to protect
those websites against interruption work well and as a result,
Harvey Norman® has seen minimal disruption to online activity
in FY24.
Our ongoing conservative approach to managing the privacy of
customers and staff is designed to maintain a low risk tolerance for
privacy risk and this has worked well for core systems, with no data
breaches recorded in FY24 of systems operated by members of
the consolidated entity.
Community Engagement and Sponsorship
The Company and several members of the consolidated entity have invested in the following sponsorships throughout FY24 to further
strengthen the engagement with local communities to continue to enhance and promote the Harvey Norman® brand.
The Harvey Norman® Young Women’s
Leadership Academy
Led by the CEO of Harvey Norman® Holdings Limited,
Katie Page, Western Sydney University has launched
a first-of-its-kind 10-year development program with
the philanthropic donation of $7.9 million from Harvey
Norman®. Focusing on learning and mentorship
opportunities for young women in the community,
the establishment of The Harvey Norman® Young
Women’s Leadership Academy, piloted through
Auburn Girls High School, a newly-created academy
led by our CEO, is supporting the next generation of
aspiring female leaders. The Harvey Norman® Young
Women’s Leadership Academy, to be delivered by
Western Sydney University and Auburn Girls High
School, provides higher education opportunities to
future female professionals and will include learning,
development and mentorship opportunities for young
women, parent and community engagement, and a
research component to analyse the program’s impact.
Katie Page with The Harvey Norman® Young Women’s Leadership Academy
Minerva Network
Harvey Norman® has recently joined forces with Minerva Network
as an official partner to support and elevate women athletes to be
successful on and off the field as our future leaders.
Harvey Norman® has been investing and advocating for Australian
women’s sport for over 20 years – originally with the NRL, the AFL,
motorsport, Para-sport, and more recently, surfing and basketball.
The Minerva Network facilitates connections, unlocks opportunities
and provides personal and professional development to support
over 800 professional sportswomen representing 76 sports at every
stage of their career.
Minerva mentors are leading professional women at the top of their
field, who mentor Minerva athletes on the challenges of developing
a professional career on and off the field.
Minerva’s mission is to open minds to professional sportswomen’s
challenges on and off the field, and to open doors through the
united powers of business and sport.
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Good360 Australia
Harvey Norman® continues to support Good360 providing
furniture for Australians in need, helping provide goods for
rehoused communities and families seeking refuge, assisting with
the furniture needs in domestic violence centers and residents
affected by natural disasters. During FY24, $871,523 worth of
goods were donated, supporting over 24 communities.
Alison Covington AM – Founder & Managing Director of Good360
Australia says "We can always count on Harvey Norman® when
times are challenging, and Australia has been through many
challenging times since we started our partnership in 2019.
They have helped when the floods were first happening, and
they continue to stand with communities as they rebuild. We are
thankful for a partner who understands that communities need
businesses to continue to be there in their local communities
through all these challenging times bringing hope and dignity
when it matters most"
Harvey Norman® proudly supported the inaugural EveryOne
Day where every $1 donated to Good360 sees $20 of brand-
new goods delivered to an Australian in need. Harvey Norman®
pledged and donated $250,216 which connected approximately
$5M worth of goods to people in need, improving the lives of
over 50,000 people in Australia and saving 100 tonnes of product
from waste. The national campaign to support EveryOne Day
also helped to drive awareness of the cause and contribute to the
overarching success of the October 2023 campaign.
What Ability
Harvey Norman® is proud to sponsor What Ability, an
NDIS registered disability support service that exists to
bring happiness to people living with a disability. What
Ability supports ages 5 to 65 with community-based day
programs and overnight camps across the country.
What Ability provides 1:1 support in New South Wales,
Queensland, Western Australia and Victoria, utilising
support workers across the country, some of which are
semi professional and professional athletes.
Harvey Norman® continues to support What Ability and
pave the way for an inclusive world, supporting initiatives
in the disability sector through camps, experiences, What
Ability Days, product support and corporate days out.
Representatives from the Corporate Office participated
in a ‘Day in the Life’ with What Ability, gaining insights
into the role of a support worker and seeing first-hand the
positive impact on their participants. Reflecting on the
day, Treasury & Tax Manager Evan Panopoulos said “It
was a pleasure to participate in the day. A very enriching
experience meeting such great kids and the dedicated
What Ability staff. The happiness and pride gained by the
participants is priceless.”
Women in Sport
Harvey Norman® is one of the largest corporate sponsors of Australian women’s
sport with support that spans over a dozen sports, teams, clubs and individual
athletes, from the juniors through to the elite levels. This sponsorship portfolio is
complemented by an extensive investment in broadcast sponsorships aimed at
expanding the audience and fan base of women’s sports.
During FY24, the NRL Women’s State of Origin increased to a three-game series
and the NRLW announced 2 new teams will be added to the premiership from
2025, with a total of 12 teams. Harvey Norman® celebrated the 18th Women
in League Round, highlighting how far the women’s game has come and the
pathways and opportunities now available to female players. Also, through our
sponsorship of the Sydney Flames women’s basketball team, the Future Flames
program was launched bridging the gap between grassroots to professional in
women’s basketball.
Harvey Norman® continues to support our Australian teams and Ambassadors
representing Australia at the Paris 2024 Games through our sponsorship of the
Australian Olympic Committee and Paralympics Australia. Harvey Norman®
continues to support Para sport programs in local communities, driving
awareness through education modules and amplifying story-telling and content
of our Australian athletes across various platforms.
Ariarne Titmus
Harvey Norman® Brand Ambassador &
Olympic Gold Medalist
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Montana Atkinson
Harvey Norman® Brand Ambassador & Para-swimmer
Sally Fitzgibbons
Harvey Norman®
Brand Ambassador
& World Surf
League Surfer
Zarlie Goldsworthy
GIANTS 2023
Debutant, recipient
of the Gab Trainor
Medal, the AFL’s
Rising Star Award
NRL Harvey Norman National Championships
2024 Team of the Tournament
Tess Madgen
Sydney Flames
WNBL Player,
Olympic Bronze
Medalist
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Australian Olympic Committee (AOC) &
Paralympics Australia
Paris 2024 marks the first year of Olympic competition since
Harvey Norman® broadened its relationship to sponsor both
the Australian Paralympic and Olympic Teams.
The ongoing connection with Paralympics Australia, which
pre-dates the Rio 2016 Paralympics and expanded in 2019,
offers support and encouragement to current and aspiring
Paralympians as they train hard, striving for the ultimate
honour to represent their country in Paris where we are sure
they will achieve great success.
The significance of the sponsorship of Paralympics Australia
extends far beyond the realm of sport. By championing women in
sport and advocating for equity in sponsorship, Harvey Norman®
sets a powerful example for corporate social responsibility.
Through the sponsorship of the AOC, Harvey Norman®
continues to support and foster the development, growth, and
success of both emerging and seasoned athletes, with that
support having already extended across the Gangwon 2024
Winter Youth Olympics and Paris 2024 Olympic Games.
Team Australia returned home from Paris as the most
successful Australian Olympic Team to date, having finished
fourth in the world with 53 medals, including 18 gold. The
team consisted of over 460 athletes, competing across 33
sports, including Harvey Norman ambassadors - Jeff Dunne,
the first male to represent Australia in Breaking at only 16
years old, and Ariarne Titmus who dominated in the pool to
claim two gold and two silver medals. Early 2024 also saw
Australia select its largest ever Winter Youth Olympic Games
Team with the 47-strong team achieving two silvers and a
bronze medal in Gangwon.
Ariarne Titmus
Harvey Norman® is proud to continue to support Australian swim champion Ariarne Titmus
from her journey to Tokyo 2020, her world record breaking performances at multiple
National events to her Gold Medal Success in Paris.
Since her Olympic debut, Ariarne has achieved Gold Medalist status in multiple events
with the success continuing, claiming gold in both the 400m and 800m at the 2023 World
Championship Trials and the Australian Swimming Championships. Her 400m freestyle win
was feted by media as the ‘race of the century’ with a new world record secured before
going on to shatter another world record in the women’s 200m freestyle at the Australian
Swimming Trials 2024 at the Brisbane Aquatic Centre in June. Ariarne made no secret of
her intentions to continue this success in Paris and her hard work paid off as she achieved
gold in the women’s 400m freestyle and women’s 4 x 200m freestyle and silver in the
women’s 200m freestyle and women’s 800m freestyle.
Outside of the pool, Ariarne has established herself as a skilled media performer and
swimming commentator after co-presenting the 2022 World Swimming Short Course
event for Channel 9. A keen foodie with a passion for the culinary arts, Ariarne is also a fan
of other sports, especially AFL & tennis.
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Sydney Kings and Sydney Flames Sponsorship –
Future Flames Program
Harvey Norman® launched new sponsorships with the Sydney
Kings and Sydney Flames for the 23/24 NBL and WNBL Seasons.
Both teams broke attendance records as crowds rushed to support
basketball in Greater Western Sydney and the quality of the game
shone as players from the Kings and Flames were selected for
national representative teams.
2023 also saw the first Sydney Flames Regional Tour, aiming to
grow the game and promote Women’s basketball around the
Hunter Region. The tour included a stop at the Harvey Norman®
Bennetts Green franchised complex in Newcastle for a fan signing
session, fan activity, giveaways, and a chance for young fans to
meet their idols. The Sydney Flames also held basketball clinics
at local Newcastle schools including Charlestown South Public
School and Wallsend South Public School.
Future Flames
Harvey Norman® launched the Harvey Norman® Future Flames
Program with the objective of elevating women’s basketball,
fostering community engagement and expanding pathways
through training, education, employment, and mentorship.
Established to support promising female basketball players make
the leap from grassroots to professional, by bridging the ‘gap’
between Basketball NSW programs and the Sydney Flames,
the program focuses on identifying, nurturing and empowering
promising female basketball players, specifically in the under 18 to
under 20s age group.
NRL All Stars
Harvey Norman® has been the proud naming rights sponsor of the
NRL All Stars since its inception in 2010. In 2024, The NRL Harvey
Norman® All Stars match returned to Townsville, QLD. In the week
leading up to the match the Harvey Norman® Townsville store hosted
all 80 players from all four teams, the Men’s and Women’s All Stars,
Indigenous and Maori sides. The afternoon began with an Indigenous
and Mãori Cultural performance which created a powerful atmosphere
and a great start to the event. Over 500 fans from the local community
were able to get up close and personal with their favourite players
while having their team photos signed as well as the opportunity to
have their photo taken with the official trophies.
GIANTS – AFL and AFLW Football programs
Harvey Norman® continues to be a proud partner of
the GIANTS women’s and men’s football programs,
fostering further engagement with the key demographic
of Greater Western Sydney. With shared values, the
sponsorship of the GIANTS enables Harvey Norman®
to extend its reach on a more personal level through
community and grassroots clubs to create meaningful
relationships between Western Sydney and our brand.
This year, Harvey Norman® was the presenting partner of
the GIANTS’ AFL opening round, a new initiative created
by the AFL to elevate the sport in NSW and QLD.
With our ‘Train Like a GIANT’ theme for the season,
Harvey Norman® assists in the promotion of healthy habits
and makes fitness fun for the wider community. To foster
pathways for grassroots athletes into elite opportunities,
Harvey Norman® provides opportunities for fans to train
with the GIANTS, meet with the club dietitian and receive
tips and tricks from GIANTS coaches.
The community engagement and sponsorship activities of the Company and relevant controlled entities are detailed in full on the
website. www.harveynormanholdings.com.au
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With changing weather patterns and challenges in maintaining
the resilience of these properties, the consolidated entity factors
in an increasing number of risks and mitigations for each site.
Each retail site has a responsibility to minimise the environmental
impact of their operations, whether that is through energy efficient
operations or managing waste streams generated at the site,
through to engagement with suppliers regarding products that are
available to be sold.
The staff at each franchised complex and overseas company-
operated store also play an important role as they provide
consumers with an increasing number of options in terms of
managing their end-of-life products as well as maximising their
own waste diversion from landfill.
To assist the consolidated entity to obtain advice and provide
influence in areas relevant to the Places pillar, relevant controlled
entities and/or franchisee businesses are members of the following
organisations and associations to support the commitment to
environmental and social responsibility:
• Energy Users Association of Australia
• National Retailers Association
• Australian Bedding Stewardship Council
• Consumer Electronics Association
Waste and Circular Economy
Globally, relevant members of the consolidated entity have
continued to work with suppliers and recycling / product
stewardship schemes to provide consumers with simple solutions
to recycle their old products and to divert waste from landfill.
Each region has reported the successful diversion of a portion
of their waste streams from landfill and the operation of product
stewardships schemes.
The initiatives and results for the 2024 financial year for each
region are as follows:
Places
The efficient operation,
presentation and performance of
the Company and each controlled
entity across the globe is central
to our integrated retail, franchise,
property and digital system. Our
customer-centric strategy requires
the delivery and presentation of
dynamic, immersive and engaging
retail spaces across 196 franchised
complexes throughout Australia
and 117 company-operated stores
in 7 countries overseas.
The Places in which the Harvey
Norman® brand operates is
paramount to our success and
therefore the ongoing upkeep,
maintenance and performance of
those sites, inclusive of the ongoing
premium refit program, is integral
to meeting our sustainability
objectives. The warehouses
supporting each retail site also play
an important role in minimising
any adverse environmental impact.
Initiatives including waste takeback
and other recycling programs and
the efficient planning of delivery
schedules assist in minimising their
environmental footprint.
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New Zealand
New Zealand sites have achieved a 26% waste diversion from landfill, with recycling streams including
cardboard, soft plastics, polystyrene, comingled recycling and organics. A method bin trial has been underway
throughout the year at selected sites, with the aim of increasing the landfill diversion percentages.
Singapore
Singapore sites have achieved a 36% diversion of waste from landfill, with wood, plastics and paper/cardboard
being the most prolific recycling streams. Participation in the E-waste Extended Producer Responsibility scheme
has continued and has extended to retrieving end-of-life products from customers’ homes when new appliances
are delivered and sending them onto the recycling programs.
Malaysia
Malaysian sites have maintained a diversion from landfill rate of 45%, continuing to count cardboard, plastic and
polystyrene as the most represented recycled products.
Ireland and
Northern Ireland
Ireland sites have diverted 47% of its waste from landfill, with the most frequently recycled materials being
cardboard packaging, polystyrene, paper, wood and soft plastics. The Irish business continued its participation
in the Waste Electrical and Electronic Equipment (WEEE) scheme, collecting more than 1.6 Tonnes of electrical
waste this year. Company-operated stores in Ireland have continued their participation in the Bounce Back
Recycling of mattresses, with one in every three mattresses sold in Ireland recycled under than program.
Croatia
Sites in Croatia have diverted more than 80% of their waste from landfill. Company-operated stores in Croatia
collect and recycle items such as paper, cardboard, wood, damaged goods and construction waste. Municipal
waste collections in Croatia cater for other waste streams such as e-waste and plastics.
Slovenia
Company-operated stores in Slovenia have maintained their participation in the national program which
includes recycling products such as electrical and electronic equipment, batteries and product packaging.
Australia
In Australia, non-franchised retail operations divert, on average, approximately 16% of their waste from landfill.
One such non-franchised retail operation has implemented a program to reverse its previous landfill diversion
percentage of 36%, seeking to make it 64% of their waste stream by 2025. This includes working with suppliers
to review their approach to packaging of products, to make packaging reusable, recyclable and made from
recycled materials.
From April 2024, another non-franchised retail operation has been working with Textile Recyclers Australia (TRA)
to have pre & post-consumer apparel products recycled. All pre-consumer apparel stock that is not saleable will
be sent to TRA for destruction and will be recycled. All post-consumer apparel stock collected from stores will
be shipped to TRA for offshore processing and recycling into new fibres. This will mean 100% of apparel waste
will be diverted from landfill and recycled. We estimate 2-3 pallets or approx. 500kg of waste will be recycled
each year.
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In Australia, independent franchisee businesses have continued
to provide their customers with a range of recycling options
throughout FY24.
Franchisee participation in the Computer and Television Product
Stewardship program has seen more than 400 tonnes of e-waste
recycled through franchised complexes (to mid-May 2024), with
nearly 46,000m3 of polystyrene also collected and recycled.
Franchisees have maintained a landfill diversion rate (by weight)
of 42% in FY24, with cardboard making up the majority of that
recycling.
Selected franchisee businesses offer their customers recycling
for whitegoods, mattresses and some timber-based products.
Reporting on these streams is limited as franchisees often use
smaller businesses closer to their operational location. Where
reporting is available, bedding franchisees again successfully
diverted 165 tonnes of steel, 37 tonnes of foam and 27 tonnes
of timber, recovered from mattresses that would otherwise have
gone into landfill.
Over the coming years, franchisee businesses may be required to
participate in more circular-economy schemes as governments at
all levels seek to ban various goods from landfills. The Western
Australian Government’s Waste Avoidance and Resource Recovery
(e-waste) Regulations 2024 is one example of those obligations.
These regulations may require franchisees to monitor product
movements and provide mandatory reporting to government
agencies.
Climate Change Impact and Resilience
As owners of a large freehold property portfolio in Australia
and in overseas regions, and as lessees of a significant global
leasehold property portfolio, relevant controlled entities continue
to regularly undertake and update their risk assessments in respect
of the operational and property risks that climate change may
represent in certain locations. We regularly review our business
continuity procedures to ensure we are prepared for any material
business disruption that may arise at our retail sites.
The World Economic Forum has identified extreme weather events
amongst their top 3 climate change risks in 2024 (www.weforum.
org/agenda/2024/01/climate-risks-are-finally-front-and-centre-of-
the-global-consciousness). Relevant controlled entities continue to
enhance the preparedness of the freehold and leasehold property
portfolios to respond to extreme weather events. Our response to
recent weather events has shown that franchisee businesses and
overseas company-operated stores have been able to return to
trade quickly after enduring severe weather events.
The Company and each relevant controlled entity are committed
to the ongoing revisions to the retail site location selection
process and the fit-out strategy to minimise business disruption
from future extreme weather events. We continue to undertake
scenario planning and analysis to identify and mitigate flooding,
cyclone and bushfire climate change risk.
Our climate change risk assessments also consider the impact of
product and supply-chain risks. The diverse and geographically
dispersed nature of our integrated retail, franchise, property
and digital system provides us some insulation from the material
financial impacts of climate change. However, each relevant
controlled entity continues to monitor the evolving nature of
climate change and its impact on the global economy.
Risk Description and Impact
Category
of Risk
Treatment/Mitigation Plan and Actions
Regulatory Change
- Climate Change
Risk Description:
Regulatory changes resulting in
increased reporting and emissions
reduction requirements, posing a risk
of non-compliance.
Compliance
Current Control
Continuing to map current and emerging regulatory changes for each
jurisdiction in which Harvey Norman® operates.
Reviewing and enhancing the sustainability framework to ensure
compliance with regulatory obligations.
We have either formed or are forming Working Groups on a regional
basis to ensure business readiness for reporting under the Australian
and European mandatory reporting schemes within the next two years.
Shifting market sentiment
- Climate Change
Risk Description:
In the transition to a low carbon
economy, consumer and investor
sentiment shifts towards more ethical
and sustainable products, resulting
in potential reputational risks for the
brand should Harvey Norman® fail to
respond to market signals.
Environment
Current Control
Strengthening relationships with suppliers that have increased their
focus on product lines with greater energy efficiency and use of
recycled and recyclable materials in their construction.
Considering climate change resilience as an active part of our long-
term strategy, planning and supply-chain discussions.
Enhance brand awareness and customer support by participating in
recycling schemes and programs to efficiently and sustainably dispose
of old goods and supporting suppliers with their Extended Producer
Responsibilities.
Creating disaster recovery and business continuity response and
contingency plans.
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Property risks - Climate Change
Risk Description:
Increased frequency and severity
of acute climate impacts, such
as storms, floods and bushfires,
resulting in increased risk of damage
to the consolidated entity’s freehold
and leasehold property portfolio
and/or unavailability of insurance /
rising cost of insurance premiums.
Environment
Current Control
Continuing to perform and update risk assessments across the global
freehold and leasehold property portfolio.
Performing likelihood and consequence assessments of climate
change hazards for future property investments.
Conducting regional climate change risk modelling across our global
property portfolio and implement appropriate climate change risk
mitigation strategies.
Continuing to develop environmental and social risk policies for the
Property function.
Continuing to monitor insurance availability.
Supply Chain risks - Climate
Change
Risk Description:
In the transition to a low carbon
economy, the costs of items and
materials from suppliers may
significantly increase, resulting in
reduced availability of goods and
increased costs passed through from
suppliers.
Environment
Current Control
Monitoring of unexpected or significant price increases from suppliers.
Market trend analysis of sectors most exposed to transition and
physical climate risks.
Suppliers making their own arrangements to mitigate this risk.
Impacts to business operations -
Climate Change
Risk Description:
Physical acute climate impacts
such as storms, floods, bushfires,
earthquakes and tsunamis may
disrupt trade and logistics from
suppliers to Harvey Norman®
franchised complexes and company-
operated stores.
Environment
Current Control
Continuing to develop the asset management program, including
the strategic positioning of suppliers to Harvey Norman® franchised
complexes and company-operated stores.
Awareness raising and climate capability exercises.
Continuing to monitor insurance availability.
Carbon Management
Risk Description:
Risks relating to carbon reduction
efforts across the value chain,
including interruptions and/or
increased costs within the supply
chain, increased operational
costs utilised for energy efficiency
improvements, and carbon-related
liability from imposed mandates or
regulations.
Environment
Current Control
Continuing to assess and utilise existing asset management processes
to reduce carbon footprint (for example: installing solar technologies,
energy efficiency improvements).
Energy Usage and Emissions
The Company and each relevant controlled entity have tracked
its Scope 1 and 2 emissions over the past five years. Relevant
controlled entities are continuing to enhance their information
capturing programs across their Scope 1 and Scope 2 emission
sources to develop robust systems and processes to ensure the
completeness of data sets and facilitate the effective review and
audit of the data collected.
The graph to the left demonstrates energy usage trends for
overseas company-operated stores over the past five years.
During this timeframe, energy consumption has risen by 18%,
which can be mainly attributed to new store openings.
Consumption of Electricity
- Company Owned Operations
44,000,000
46,000,000
48,000,000
50,000,000
52,000,000
54,000,000
56,000,000
58,000,000
60,000,000
2020
2021
2022
2023
2024
Kwh electricity
73
73
Harvey Norman® Holdings Limited (ACN 003 237 545)
Overseas, only the company-operated stores in Slovenia have had
a comprehensive solar program in place. The Slovenian business
has demonstrated a reduction in consumption of 12.5% from
the installation of solar arrays on their sites. There has also been
changes in the electrification of some display stands in stores,
which has added electrical load to store consumption, to better
demonstrate electrical and computer products.
Ambient Lighting
Ambient lighting accounts for approximately 30% of electricity
consumption in a typical Harvey Norman® franchised complex or
company-operated store.
As disclosed in FY23, a global review of the approach to lighting
placement and technology commenced, with a view to standardising
the grid for better lighting efficacy, light colour and life span,
compliant with the Building Code of Australia (BCA) standard.
This global ambient lighting review was finalised during FY24 and the
recommendations and implementation of the new designs, including
new LED lighting fixtures, have commenced. The rollout of the
recommendations and new designs will be completed in line with the
planned store upgrade program, including the premium refit program
of the consolidated entity. It is intended that these LED installations
will have a positive impact on energy consumption by drawing less
power than the fluorescent tubes they replace and by generating
less heat, thereby placing less strain on the air conditioning system at
the site (typically responsible for around half of all consumption at a
complex or store).
Energy usage – Australian Franchisee Businesses
and Other External Tenancies
As a large-format retail property owner of nearly 100 franchised
complexes throughout Australia, the consolidated entity has made
a range of investments in better energy efficiency at these owned
sites, as has been reported over the past few years.
Over the past five years, energy usage at franchised complexes
located at owned sites are as follows:
The decline in usage is 7% from FY20 to FY24 across all owned
retail sites in Australia.
Electric Vehicle Charging at the Global
Headquarters located at Homebush West, Australia
With the popularity of electric vehicles rising in Australia, two
electric vehicle chargers have been installed at the global
headquarters of the Company located at Homebush West in
Sydney’s western suburbs.
Drivers of electric vehicles can plug in and recharge their batteries
while at work. The chargers have proven to be very popular, with
the charging bays hosting an array of electric vehicles, from Teslas
to BYD’s and Volvos.
Products
High quality and safe products, sourced from
ethical supply-chains, is fundamental to the
success of the Harvey Norman® brands.
Consumer sentiment continues to drive
product innovation by suppliers in relation
to sustainability outcomes - in particular,
packaging and supply-chain waste, safety,
and human rights considerations.
Energy Usage at Owned Retail Sites in Australia
108,000,000
110,000,000
112,000,000
114,000,000
116,000,000
118,000,000
120,000,000
122,000,000
124,000,000
126,000,000
128,000,000
FY20
FY21
FY22
FY23
FY24
Kwh electricity
74
74
Harvey Norman® Holdings Limited (ACN 003 237 545)
Directors’ Report Sustainability Report
Engagement with Suppliers on Product
Sustainability / Safety
Throughout FY24, Harvey Norman® franchisee businesses and
company-operated stores have been presented with a range
of new products that actively called out their circular-economy
credentials. In particular, electronics products from major
international brands are being produced with a greater emphasis
on circular economy strategies, including being made with
recycled materials and being designed for recyclability. Some of
the major suppliers to franchisees and overseas company-operated
stores are members of the Circular Electronics Partnership (CEP).
CEP provides the electronics industry and its stakeholders with 40
clear actions across six pathways that follow the product lifecycle,
aiming to overcome barriers to the transition to circular economy
outcomes in that industry.
Trade in programs instigated by major tech brands have risen in
popularity, as these manufacturers pursue an extended producer
responsibility initiative. Our company-operated stores in Singapore
have participated in trade in programs with both Apple and
Samsung for their mobile phone products and with Samsung, Sony
and TPV for televisions. The New Zealand business has worked
with Nespresso to collect and return coffee capsules to Nespresso
for recycling.
Furniture and bedding products offered for sale by company-
operated stores in New Zealand and Australian franchised
complexes are subject to an external quality assurance program
that includes an assessment of the compliance of the product with
mandatory safety standards and sourcing of timbers against the
Forestry Stewardship Council standards. Some suppliers continue
to include recycled textiles as part of their product offering and
these claims are also tested by the quality assurance process.
Packaging / Supply-Chain Waste
There has been a significant change over the past 12 months
regarding the approach to packaging by major suppliers.
Packaging regulations across the globe (for example, the
European Union’s Packaging Directive) and the responsibility
placed on the producers of packaging, which eventually becomes
waste, has driven changes in design and materials used. Recent
trends have demonstrated the declining reliance on polystyrene
for product protection in favour of moulded cardboard packaging.
Single use plastics are also disappearing from the packaging of
products and packaging that can be repurposed is now more
common across product lines.
Packaging from Samsung’s Lifestyle TV’s that can be repurposed
into other usable products for consumers (source: https://
mothership.sg/2020/12/samsungs-cardboard-packaging/)
Most Harvey Norman® franchised complexes and company-
operated stores operate with recycling facilities for packaging
associated with products. Suppliers continue to make changes to
their own product packaging, targeting the removal of plastics and
expanded polystyrene from product packaging.
Sourcing activities for packaging products are guided in the
Pacific region by the Sustainable Packaging Guidelines published
by the Australian Packaging Covenant. Under these guidelines,
Australian franchised complexes and company-operated stores in
New Zealand undertake annual reviews of the packaging offered
to their consumers in-store or online. A relevant controlled entity
reports publicly under the Australian Packaging Covenant and
progress over time may be viewed in these reports.
Franchisees and company-operated stores will also continue to
work closely with suppliers and manufacturers as product safety
regulations continue to evolve.
Human Rights
Integral to the Statement of Values of the consolidated entity is
our commitment to act with integrity and behave responsibly.
A controlled entity operates a central program to comply with
reporting requirements under the Modern Slavery laws in Australia.
This program enables each controlled entity to undertake its own
due diligence activities with their suppliers.
Franchisee businesses and relevant controlled entities
acknowledge the threat of human rights issues in their supply
chains, and continue to conduct due diligence activities and seek
to have contractual obligations regarding the identification and
remediation of modern slavery issues in extended supply chains.
Suppliers are generally very cooperative with these requests and
there have been no reported instances of modern slavery within
the supply chains of suppliers during FY24.
Packaging from Samsung’s Lifestyle TV’s that can
be repurposed into other usable products
SUPPORTING AUSTRALIAN ATHLETES
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
75
G.HARVEY
Chairman
Sydney
30 August 2024
K.L. PAGE
Director and Chief Executive Officer
Sydney
30 August 2024
Auditor’s Independence Declaration to the Directors of Harvey Norman
Holdings Limited
As lead auditor for the audit of the financial report of Harvey Norman Holdings Limited for the financial year ended 30 June 2024,
I declare to the best of my knowledge and belief, there have been:
a. No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit;
b. No contraventions of any applicable code of professional conduct in relation to the audit; and
c. No non-audit services provided that contravene any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Harvey Norman Holdings Limited and the entities it controlled during the financial year.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
James Karekinian
Partner
Sydney
30 August 2024
Ernst & Young
Signed in accordance with a resolution of the directors.
Auditor Independence and Non-Audit Services
During the year, the auditors of Harvey Norman Holdings Limited, Ernst & Young, provided non–audit services to the consolidated
entity. In accordance with the recommendation from the Audit & Risk Committee of the Company, the directors are satisfied that
the provision of the non-audit services during the year is compatible with the general standard of independence for auditors
imposed by the Corporations Act 2001. Also, in accordance with the recommendation from the Audit & Risk Committee, the
directors are satisfied that the nature and scope of each type of non–audit service provided means that auditor independence was
not compromised.
Details of the amounts paid or payable to the auditor, Ernst & Young, for the provision of non–audit services during the year ended
30 June 2024 are outlined in Note 29. Remuneration of Auditors of this annual report.
The directors received the following declaration from the auditor of Harvey Norman Holdings Limited.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Ernst & Young
200 George Street
Sydney NSW 2000 Australia
GPO Box 2646 Sydney NSW 2001
Tel: +61 2 9248 5555
Fax: +61 2 9248 5959
ey.com/au
Independent auditor’s report to the members of Harvey Norman Holdings
Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of Harvey Norman Holdings Limited (the Company) and its
subsidiaries (collectively the Group), which comprises the consolidated statement of financial position
as at 30 June 2024, consolidated income statement, consolidated statement of comprehensive
income, consolidated statement of changes in equity and consolidated statement of cash flows for the
year then ended, notes to the financial statements, including material significant accounting policy
information, the consolidated entity disclosure statement and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
a.
Giving a true and fair view of the consolidated financial position of the Group as at 30 June 2024
and of its consolidated financial performance for the year ended on that date; and
b.
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial
report section of our report. We are independent of the Group in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial report of the current year. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide
a separate opinion on these matters. For each matter below, our description of how our audit
addressed the matter is provided in that context.
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the
financial report section of our report, including in relation to these matters. Accordingly, our audit
included the performance of procedures designed to respond to our assessment of the risks of
material misstatement of the financial report. The results of our audit procedures, including the
procedures performed to address the matters below, provide the basis for our audit opinion on the
accompanying financial report.
76
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1. Valuation of Freehold Investment Properties and Owner-Occupied Properties
Why significant
How our audit addressed the key audit matter
Freehold investment properties and owner-
occupied properties (collectively, “properties”)
are valued at $3,650.6 million and $581.0
million respectively, and represent 53% of the
Group’s total assets of $7,927.9 million as at
30 June 2024.
Investment properties are carried at fair value
with changes in fair value recognised in the
income statement. Note 14 to the financial
report discloses the basis upon which fair value
has been determined.
Owner-occupied properties, represented as
Land and Buildings are carried at fair value, with
fair value increments / decrements above cost
recognised in equity and increments /
decrements lower than cost recognised in the
profit and loss. Note 12 to the financial report
discloses the basis upon which fair value has
been determined.
Fair value is assessed by the Directors with
reference to external independent property
valuations, internal valuations or management
review and are based on market conditions
existing at the reporting date.
Valuation of investment properties and owner-
occupied properties was considered a key audit
matter given:
►
the value of the properties relative to total
assets of the Group;
►
the extent of judgement exercised by both
independent valuation specialists and the
Directors in determining fair value; and
►
by their nature, the use of Directors’
valuations.
Our audit procedures included the following:
►
Assessed the Group’s accounting policies
with respect to investment properties and
owner-occupied properties for compliance
with the requirements of Australian
Accounting Standards.
►
Assessed the work of those responsible for
the internal valuations and the work of the
independent valuation specialists, upon
which the Directors’ valuations are based,
by assessing their qualifications,
competence and objectivity.
►
For a sample of properties subject to
external independent property valuations,
internal valuations or management review
we:
o
Assessed the reasonableness of key
assumptions used in these valuations
with reference to external market
evidence;
o
Engaged our real estate valuation
specialists to assist with the assessment
of the valuation assumptions and
methodologies used;
o
Tested the mathematical accuracy of
both internal and external valuations;
o
Assessed the accuracy of tenancy
schedules which are used as source
data in the property valuations to
signed lease documents.
►
Evaluated the suitability of the valuation
methodology across the portfolio based on
the type of asset.
►
Assessed the adequacy of disclosures
included in Note 1, Note 12 and Note 14 to
the financial report.
77
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2. Recoverability of Receivables from Franchisees
Why significant
How our audit addressed the key audit matter
At 30 June 2024 the value of receivables due
from franchisees was $812.3 million
representing 10% of the Group’s total assets.
Note 7 to the financial report discloses the
nature of the balances receivable from
franchisees and outlines the accounting policy in
relation to receivables from franchisees.
The recoverability of receivables from
franchisees was considered a key audit matter
given the value of the balance and the
judgements exercised by the Group in making
their recoverability assessment.
Our audit procedures included the following:
►
Evaluated the Group’s assessment of the
recoverability of receivables from
franchisees.
►
Performed a range of scenario analysis
based on assumptions applied by
management in determining the
recoverability of receivables from
franchisees.
►
For a sample of franchisee receivables, we
obtained confirmation from the franchisees
acknowledging the amounts owing to the
Group at year end.
►
Reviewed a sample of General Security
Deeds between the franchisees and the
Group which provides the Group with
security over the assets of franchisees,
consisting mainly of franchisee inventory.
►
Evaluated the value of assets provided as
security by the franchisees against the
franchisee receivable balances.
►
Enquired of management and assessed any
evidence arising post year end of adverse
performance of the franchisees, which
could impact the recoverability of
receivables from franchisees.
►
Assessed the adequacy of the disclosures
included in Note 7 to the financial report.
Information other than the financial report and auditor’s report thereon
The directors are responsible for the other information. The other information comprises the
information included in the Company’s 2024 Annual Report but does not include the financial report
and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon, with the exception of the Remuneration Report
and our related assurance opinion.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
78
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of:
a.
The financial report (other than the consolidated entity disclosure statement) that gives a true and
fair view in accordance with Australian Accounting Standards and the Corporations Act 2001;
and;
b.
The consolidated entity disclosure statement that is true and correct in accordance with the
Corporations Act 2001, and
for such internal control as the directors determine is necessary to enable the preparation of:
i.
The financial report (other than the consolidated entity disclosure statement) that gives a true and
fair view and is free from material misstatement, whether due to fraud or error; and
ii.
The consolidated entity disclosure statement that is true and correct and is free of misstatement,
whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the Group’s ability to
continue as a going concern, disclosing, as applicable, matters relating to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgment and maintain professional scepticism throughout the audit. We also:
►
Identify and assess the risks of material misstatement of the financial report, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
►
Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group’s internal control.
79
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
►
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
►
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Group’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in
our auditor’s report to the related disclosures in the financial report or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up
to the date of our auditor’s report. However, future events or conditions may cause the Group to
cease to continue as a going concern.
►
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events
in a manner that achieves fair presentation.
►
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial report. We are
responsible for the direction, supervision and performance of the Group audit. We remain solely
responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, actions
taken to eliminate threats or safeguards applied.
From the matters communicated to the directors, we determine those matters that were of most
significance in the audit of the financial report of the current year and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Report on the audit of the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 33 to 58 of the directors’ report for the
year ended 30 June 2024.
In our opinion, the Remuneration Report of Harvey Norman Holdings Limited for the year ended 30
June 2024, complies with section 300A of the Corporations Act 2001.
80
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Ernst & Young
James Karekinian
Partner
Sydney
30 August 2024
81
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
82
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
Directors’ Declaration
In accordance with a resolution of the directors of Harvey Norman Holdings Limited, we state that:
In the opinion of the directors:
a. the financial statements, notes and the additional disclosures included in the Directors’ Report designated as audited, of the
Company and its subsidiaries (collectively the consolidated entity) are in accordance with the Corporations Act 2001,
including:
i. giving a true and fair view of the consolidated entity’s financial position as at 30 June 2024 and of its performance for the
year ended on that date; and
ii. complying with Accounting Standards and the Corporations Regulations 2001; and
b. the financial statements and notes also comply with International Financial Reporting Standards as issued by the International
Accounting Standards Board; and
c. there are reasonable grounds to believe that the consolidated entity will be able to pay its debts as and when they become
due and payable; and
d. the Consolidated Entity Disclosure Statement required by section 295(3A) of the Corporations Act 2001 is true and correct.
This declaration has been made after receiving the declarations required to be made to the directors by the Chief Executive Officer
and Chief Financial Officer in accordance with section 295A of the Corporations Act 2001 for the financial year ended 30 June
2024.
In the opinion of the directors, as at the date of this declaration, there are reasonable grounds to believe that the members of the
Closed Group identified in Note 36. Deed of Cross Guarantee will be able to meet any obligations or liabilities to which they are or
may become subject, by virtue of the Deed of Cross Guarantee.
On behalf of the Board.
G. HARVEY
Chairman
Sydney
30 August 2024
K.L. PAGE
Director and Chief Executive Officer
Sydney
30 August 2024
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
83
Annual Report
30 June 2024
TABLE OF CONTENTS
FINANCIAL STATEMENTS
Statement of Financial Position
84
Income Statement
85
Statement of Comprehensive Income
86
Statement of Changes in Equity
87
Statement of Cash Flows
89
NOTES TO THE FINANCIAL STATEMENTS
GENERAL INFORMATION
1
Statement of Material Accounting Policies
90
CONSOLIDATED ENTITY PERFORMANCE, ASSETS AND LIABILITIES
2
Operating Segments
93
3
Revenues
97
4
Expenses and Losses
100
5
Income Tax
100
6
Earnings Per Share
103
7
Trade and Other Receivables
104
8
Other Financial Assets
108
9
Inventories
109
10
Other Assets
109
11
Intangible Assets
109
12
Property, Plant and Equipment
110
13
Property, Plant and Equipment: Right-Of-Use Assets (ROUA)
115
14
Investment Properties: Freehold
116
15
Investment Properties (Leasehold): Right-Of-Use Assets
119
16
Trade and Other Payables
121
17
Interest-Bearing Loans and Borrowings
121
18
Financing Facilities Available
123
19
Lease Liabilities
124
20
Other Liabilities
126
21
Provisions
126
22
Contributed Equity
126
23
Retained Profits and Dividends
127
24
Non-Controlling Interests
127
25
Reserves
128
26
Cash and Cash Equivalents
130
27
Investments Accounted for Using the Equity Method
131
OTHER DISCLOSURES
28
Employee Benefits
132
29
Remuneration of Auditors
132
30
Key Management Personnel
133
31
Related Party Transactions
134
32
Commitments
134
33
Contingent Liabilities
135
34
Financial Risk Management
135
35
Derivative Financial Instruments
141
36
Deed of Cross Guarantee
144
37
Parent Entity Financial Information
145
39
Significant Events After Balance Date
146
OTHER INFORMATION
1
Consolidated Entity Disclosure Statement
147
2
Shareholder Information
159
38
Controlled Entities and Unit Trusts
146
84
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
CONSOLIDATED
Note
June 2024
$000
June 2023
$000
Current assets
− Cash and cash equivalents
26(a)
273,472
218,750
− Trade and other receivables
7
941,448
993,130
− Other financial assets
8
2,809
3,845
− Inventories
9
558,127
545,658
− Other assets
10
59,847
68,654
− Intangible assets
11
686
600
Total current assets
1,836,389
1,830,637
Non-current assets
− Trade and other receivables
7
82,245
87,527
− Investments accounted for using the equity method
27
2,946
1,904
− Other financial assets
8
77,785
62,642
− Property, plant and equipment
12
946,355
892,005
− Property, plant and equipment: Right-of-use assets
13
511,928
546,019
− Investment properties: Freehold
14
3,650,611
3,483,593
− Investment properties: Leasehold Right-of-use assets
15
744,639
705,034
− Intangible assets
11
74,057
57,387
− Deferred tax assets
5
912
5,083
Total non-current assets
6,091,478
5,841,194
Total Assets
7,927,867
7,671,831
Current liabilities
− Trade and other payables
16
378,709
352,716
− Interest-bearing loans and borrowings
17
84,334
67,103
− Lease liabilities
19
152,228
151,043
− Income tax payable
24,658
9,497
− Other liabilities
20
118,705
121,000
− Provisions
21
37,605
37,304
Total current liabilities
796,239
738,663
Non-current liabilities
− Interest-bearing loans and borrowings
17
860,251
783,258
− Lease liabilities
19
1,182,822
1,177,765
− Provisions
21
10,680
9,173
− Deferred tax liabilities
5
539,341
495,458
− Other liabilities
20
1,604
1,025
Total non-current liabilities
2,594,698
2,466,679
Total Liabilities
3,390,937
3,205,342
Net Assets
4,536,930
4,466,489
Equity
− Contributed equity
22
717,925
717,925
− Reserves
25
290,524
298,900
− Retained profits
23
3,492,755
3,414,424
Parent entity interests
4,501,204
4,431,249
− Non-controlling interests
24
35,726
35,240
Total Equity
4,536,930
4,466,489
The above Statement of Financial Position should be read in conjunction with the accompanying notes.
Statement of Financial Position As at 30 June 2024
SUPPORTING AUSTRALIAN ATHLETES
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
85
CONSOLIDATED
Note
June 2024
$000
June 2023
$000
Sales of products to customers
3
2,803,358
2,776,070
Cost of sales
(1,931,016)
(1,884,104)
Gross profit
872,342
891,966
− Revenues received from franchisees
3
1,079,515
1,171,143
− Revenues and other income items
3
227,121
327,988
− Distribution expenses
(63,942)
(58,367)
− Marketing expenses
(393,840)
(395,613)
− Occupancy expenses
4,13,15
(292,753)
(298,317)
− Administrative expenses
4
(676,012)
(671,687)
− Other expenses
(112,348)
(109,224)
− Finance costs
4,19
(110,982)
(91,656)
− Share of net profit of joint venture entities
27
12,587
9,849
Profit before income tax
541,688
776,082
− Income tax expense
5
(184,060)
(229,239)
Profit after tax
357,628
546,843
Attributable to:
− Owners of the parent
352,453
539,520
− Non-controlling interests
5,175
7,323
357,628
546,843
Earnings per share
− Basic earnings per share (cents per share)
6
28.29 cents
43.30 cents
− Diluted earnings per share (cents per share)
6
28.23 cents
43.23 cents
Dividends per share (cents per share)
23
22.0 cents
25.0 cents
The above Income Statement should be read in conjunction with the accompanying notes.
Income Statement For the year ended 30 June 2024
86
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
CONSOLIDATED
Note
June 2024
$000
June 2023
$000
Profit for the year
357,628
546,843
Items that may be reclassified subsequently to profit or loss:
− Foreign currency translation
(6,693)
30,831
− Net movement on cash flow hedges
(963)
3,684
− Income tax effect on net movement on cash flow hedges
289
(1,105)
Items that will not be reclassified subsequently to profit or loss:
− Fair value revaluation of land and buildings
5,090
(23,933)
− Income tax effect on fair value revaluation of land and buildings
(2,407)
6,011
− Net fair value losses on financial assets at fair value through other comprehensive income
(1,153)
(5,740)
Other comprehensive income for the year (net of tax)
(5,837)
9,748
Total comprehensive income for the year (net of tax)
351,791
556,591
Total comprehensive income attributable to:
− Owners of the parent
345,605
548,836
− Non-controlling interests
6,186
7,755
351,791
556,591
The above Statement of Comprehensive Income should be read in conjunction with the accompanying notes.
Statement of Comprehensive Income For the year ended 30 June 2024
SUPPORTING AUSTRALIAN ATHLETES
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
87
Attributable to equity holders of the parent
CONSOLIDATED
$000
Contributed
equity
Retained
profits
Asset
revaluation
reserve
Foreign
currency
reserve
FVOCI
reserve
Cash
flow hedge
reserve
Employee
equity
benefits
reserve
Acquisition
reserve
Non -
controlling
interests
Total
At 1 July 2023
717,925
3,414,424
227,635
57,862
14,750
2,592
12,335
(16,274)
35,240
4,466,489
Revaluation of land and
buildings
-
-
1,476
-
-
-
-
-
1,207
2,683
Currency translation
differences
-
-
-
(6,497)
-
-
-
-
(196)
(6,693)
Reverse expired or
realised cash flow
hedge reserves
-
-
-
-
-
37
-
-
-
37
Fair value of forward
foreign exchange
contracts
-
-
-
-
-
(35)
-
-
-
(35)
Fair value of interest
rate swap contract
-
-
-
-
-
(676)
-
-
-
(676)
Fair value of financial
assets at fair value
through other
comprehensive income
-
-
-
-
(1,153)
-
-
-
-
(1,153)
Other comprehensive
income
-
-
1,476
(6,497)
(1,153)
(674)
-
-
1,011
(5,837)
Profit for the year
-
352,453
-
-
-
-
-
-
5,175
357,628
Total comprehensive
income for the year
-
352,453
1,476
(6,497)
(1,153)
(674)
-
-
6,186
351,791
Cost of share based
payments
-
-
-
-
-
-
698
-
-
698
Utilisation of
employee equity
benefits reserve
-
-
-
-
-
-
(2,226)
-
-
(2,226)
Dividends paid
-
(274,122)
-
-
-
-
-
-
(5,700)
(279,822)
At 30 June 2024
717,925
3,492,755
229,111
51,365
13,597
1,918
10,807
(16,274)
35,726
4,536,930
The above Statement of Changes in Equity should be read in conjunction with the accompanying notes.
Statement of Changes in Equity For the year ended 30 June 2024
88
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
Attributable to equity holders of the parent
CONSOLIDATED
$000
Contributed
equity
Retained
profits
Asset
revaluation
reserve
Foreign
currency
reserve
FVOCI
reserve
Cash
flow hedge
reserve
Employee
equity
benefits
reserve
Acquisition
reserve
Non -
controlling
interests
Total
At 1 July 2022
717,925
3,254,936
245,448
27,572
20,490
13
10,921
(16,274)
33,093
4,294,124
Revaluation of land and
buildings
-
-
(17,813)
-
-
-
-
-
(109)
(17,922)
Currency translation
differences
-
-
-
30,290
-
-
-
-
541
30,831
Reverse expired or
realised cash flow
hedge reserves
-
-
-
-
-
(13)
-
-
-
(13)
Fair value of forward
foreign exchange
contracts
-
-
-
-
-
(37)
-
-
-
(37)
Fair value of financial
assets at fair value
through other
comprehensive income
-
-
-
-
(5,740)
-
-
-
-
(5,740)
Other comprehensive
income
-
-
(17,813)
30,290
(5,740)
2,579
-
-
432
9,748
Profit for the year
-
539,520
-
-
-
-
-
-
7,323
546,843
Total comprehensive
income for the year
-
539,520
(17,813)
30,290
(5,740)
2,579
-
-
7,755
556,591
Cost of share based
payments
-
-
-
-
-
-
3,701
-
-
3,701
Utilisation of
employee equity
benefits reserve
-
-
-
-
-
-
(2,287)
-
-
(2,287)
Dividends paid
-
(380,032)
-
-
-
-
-
-
(5,608)
(385,640)
At 30 June 2023
717,925
3,414,424
227,635
57,862
14,750
2,592
12,335
(16,274)
35,240
4,466,489
The above Statement of Changes in Equity should be read in conjunction with the accompanying notes.
Fair value of interest
rate swap contract
-
-
-
-
-
2,629
-
-
-
2,629
Statement of Changes in Equity For the year ended 30 June 2024 (continued)
SUPPORTING AUSTRALIAN ATHLETES
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
89
Cash flows from operating activities
Net receipts from franchisees
1,097,446
1,209,709
Receipts from customers
3,007,658
2,969,812
Payments to suppliers and employees
(3,158,607)
(3,127,122)
Distributions received from joint ventures
12,148
9,782
GST paid
(63,472)
(75,877)
Interest received
18,786
15,626
Interest and other costs of finance paid
(52,776)
(41,767)
Interest paid on lease liabilities
(58,087)
(50,294)
Income taxes paid
(119,501)
(232,705)
Dividends received
2,936
3,093
Net cash flows from operating activities
26(b)
686,531
680,257
Cash Flows from investing activities
Payments for purchases of property, plant and equipment and intangible assets
(192,158)
(187,660)
Payments for purchase and refurbishments of freehold investment properties
(131,199)
(137,798)
Proceeds from sale of property, plant and equipment
3,556
10,112
Payments for purchase of units in unit trusts and other investments
(200)
(5,147)
Payments for purchase of equity accounted investments
(1,300)
(1,281)
Payments for purchase of listed securities
(10,946)
(24)
Proceeds from sale of listed securities
898
-
Proceeds from sale of other investments
-
2,500
Proceeds from insurance claims
2,568
8,456
Loans repaid from / (granted to) joint venture entities, joint venture partners, related and
unrelated entities
27,597
(22,642)
Net cash flows used in investing activities
(301,184)
(333,484)
Cash flows from financing activities
Lease payments (principal component)
(150,728)
(147,537)
Proceeds from syndicated facility
85,000
150,000
Dividends paid
(274,122)
(380,032)
Proceeds from / (repayments of) other borrowings
5,603
(1,506)
Net cash flows used in financing activities
(334,247)
(379,075)
Net increase / (decrease) in cash and cash equivalents
51,100
(32,302)
Cash and cash equivalents at beginning of the year
202,056
234,358
Cash and cash equivalents at end of the year
26(a)
253,156
202,056
The above Statement of Cash Flows should be read in conjunction with the accompanying notes.
Operating activities
Investing activities
Financing activities
Statement of Cash Flows For the year ended 30 June 2024
CONSOLIDATED
Note
June 2024
$000
June 2023
$000
90
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
Annual Report Notes to the Financial Statements
01
(a) Corporate Information
Harvey Norman Holdings Limited (the “Company”) is a for profit company limited by shares incorporated in Australia and
operating in Australia, New Zealand, Ireland, Northern Ireland, Singapore, Malaysia, Slovenia and Croatia whose shares are
publicly traded on the Australian Securities Exchange (“ASX”) trading under the ASX code HVN.
(b) Basis of Preparation
The financial report has been prepared on a historical cost basis, except for freehold investment properties, leasehold
investment properties: right-of-use assets, land and buildings, derivative financial instruments and equity financial assets, which
have been measured at fair value. Certain comparative amounts have been re-presented to align with the presentation in the
current year. The financial report is presented in Australian dollars and all values are rounded to the nearest thousand dollars
($000) unless otherwise stated under the option available to the Company under Australian Securities and Investments
Commission Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191. The Company is an entity to which this
legislative instrument applies.
The consolidated financial statements of the Company and its subsidiaries (the “consolidated entity”) for the year ended 30 June
2024 were authorised for issue in accordance with a resolution of the directors on 30 August 2024.
(c) Statement of Compliance
The financial report is a general-purpose financial report, which has been prepared in accordance with the requirements of the
Corporations Act 2001, Australian Accounting Standards and Interpretations, and complies with other requirements of the law.
The financial report complies with Australian Accounting Standards, as issued by the Australian Accounting Standards Board, and
International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board. Australian
Accounting Standards and Interpretations that have recently been issued or amended but are not yet effective have not been
adopted by the consolidated entity for the annual reporting period ended 30 June 2024. For details on the impact of future
accounting standards, refer to page 92.
(d) Basis of Consolidation
The consolidated financial statements comprise the financial statements of Harvey Norman Holdings Limited and its controlled
entities. Control is achieved when the consolidated entity is exposed, or has rights, to variable returns from its involvement with the
investee and has the ability to affect those returns through its power over the investee. Specifically, the consolidated entity controls
an investee if and only if the consolidated entity has all of the following:
• Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee)
• Exposure, or rights, to variable returns from its involvement with the investee, and
• The ability to use its power over the investee to affect its returns
When the consolidated entity has less than a majority of the voting or similar rights of an investee, the consolidated entity
considers all relevant facts and circumstances in assessing whether it has power over an investee, including:
• The contractual arrangement with the other vote holders of the investee
• Rights arising from other contractual arrangements
• The consolidated entity’s voting rights and potential voting rights
The consolidated entity assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to
one or more of the three elements of control. Consolidation of a subsidiary begins when the consolidated entity obtains
control over the subsidiary and ceases when the consolidated entity loses control of the subsidiary.
All intercompany balances and transactions, including unrealised profits arising from intra-group transactions, have been
eliminated in full. Unrealised losses are eliminated unless costs cannot be recovered. Financial statements of foreign controlled
entities presented in accordance with overseas accounting principles are, for consolidation purposes, adjusted to comply with the
consolidated entity’s policy and generally accepted accounting principles in Australia.
Non-controlling interests are allocated their share of net profit after tax in the income statement and are presented within equity in
the consolidated statement of financial position, separately from the equity of the owners of the Parent. Losses are attributed to the
non-controlling interest even if that results in a deficit balance.
A change in the ownership interest of a subsidiary (without a change in control) is to be accounted for as an equity transaction.
(e) Summary of Material Accounting Policies
i.
Changes in accounting policy, disclosures, standards and interpretations
The accounting policies adopted are consistent with those of the previous financial year ended 30 June 2023, except for the
adoption of new standards mandatory for annual periods beginning on or after 1 July 2023. The consolidated entity has not early
adopted any standard, interpretation or amendment that has been issued but is not yet effective.
Statement of Material Accounting Policies
SUPPORTING AUSTRALIAN ATHLETES
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
91
01
(e) Summary of Material Accounting Policies (continued)
ii. Significant accounting judgements and estimates
In applying the consolidated entity’s accounting policies, management continually evaluates judgements, estimates and
assumptions based on experience and other factors, including expectations of future events that may have an impact on the
consolidated entity. All judgements, estimates and assumptions made are believed to be reasonable based on the most
current set of circumstances available to management. Actual results may differ from the judgements, estimates and
assumptions. Significant judgements and estimates made by management in the preparation of these financial statements are
outlined below:
• Assessment of AASB 10 Consolidated Financial Statements in respect of Harvey Norman®, Domayne® and Joyce Mayne®
Franchisees in Australia
In determining whether the consolidated entity has control over an entity (investee) and should or should not consolidate the results
of the investee, the consolidated entity assesses its exposure to / rights to variable returns from its involvement with the investee
and whether it has the ability to affect those returns through its power over the investee.
The assessment of whether Harvey Norman Holdings Limited (HNHL), or any subsidiary of HNHL, as franchisor, should
consolidate or not consolidate the results of a franchisee or business operations of that franchisee, is determined by whether the
franchisor has control over the franchisee. The assessment of whether a franchisor controls a franchisee or the business
operations of that franchisee, involves significant judgement in assessing whether the franchisor has sufficient power through its
rights under arrangements with franchisees and through the practical application of those arrangements, to direct the relevant
activities of the franchisee that most significantly affect the returns (profits or losses) of the franchisee.
At least on an annual basis, the directors of HNHL assess the requirements of control in accordance with AASB 10 Consolidated
Financial Statements. During the 2024 financial year, after considering both the legal arrangements in place between the
consolidated entity and Harvey Norman®, Domayne® and Joyce Mayne® franchisees and the practical application of those
arrangements, the directors have continued to conclude that HNHL, or any subsidiary of HNHL, does not control the business
operations of franchisees. In particular, HNHL, or any subsidiary of HNHL, does not have any existing rights that give the
consolidated entity the current ability to direct the relevant activities that most significantly affect the returns of the franchisee.
The ability to direct the relevant activities that most significantly affect the returns of the franchisee, rest with the franchisee.
HNHL, or any subsidiary of HNHL, does not have any voting rights or legal ownership or any equity interest in any franchisee
business. Each franchise business is operated by a separate legal entity which is independent of HNHL, or any subsidiary of HNHL.
The franchisee has the authority and decision-making responsibility over the day-to-day operation and administration of the
franchisee business. The franchisee has the substantive right to control the decisions regarding sales and pricing, inventory
purchasing and inventory management, staff management (hiring, termination, staff numbers, remuneration, appointment of
management) and employment of personnel including key management.
The above assessment has resulted in the conclusion that the assets, liabilities and the results of franchisees in Australia are not
consolidated by the consolidated entity because the consolidated entity does not control the business operations of Harvey
Norman®, Domayne® and Joyce Mayne® franchisees.
• Impairment of Non-Financial Assets
The consolidated entity assesses, at each reporting date, whether there is an indication that an asset may be impaired. If any
indication exists, or when annual impairment testing for an asset is required, the consolidated entity estimates the asset’s
recoverable amount. The recoverable amount of an asset or cash generating unit (CGU) is the higher of that asset or CGU’s fair
value less costs to sell and its value in use. Recoverable amount is determined for an individual asset, unless the asset does not
generate cash inflows that are largely independent of those from other assets or groups of assets, in which case, the recoverable
amount is determined for the CGU to which the asset belongs. When the carrying amount of an asset or CGU exceeds its
recoverable amount, the asset is considered impaired and is written down to its recoverable amount. An assessment is made at
each reporting date to determine whether there is any indication that previously recognised impairment losses may no longer exist
or may have decreased. If such indication exists, the consolidated entity estimates the asset’s or CGU’s recoverable amount. A
previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the asset’s
recoverable amount since the last impairment loss was recognised. The reversal is limited so that the carrying amount of the asset
does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation,
had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in the income statement.
• Recovery of Deferred Tax Assets – refer to Note 5. Income Tax
• Expected Credit Loss Assessment for Financial Assets – refer to Note 7. Trade and Other Receivables
• Valuation of Freehold Owner-Occupied Properties – refer to note 12. Property, Plant and Equipment
• Valuation of Freehold Investment Properties – refer to Note 14. Investment Properties (Freehold)
• Valuation of Investment Properties (Leasehold): Right-of-Use Assets – refer to Note 15. Investment Properties (Leasehold): Right-
of-Use Assets
• Determining the Incremental Borrowing Rate and Lease Term – refer to Note 19. Lease Liabilities
• Provision for Lease Make Good – refer to Note 21. Provisions
• Measurement of the Cost of Equity – Settled Transactions – refer to Note 25. Reserves
Statement of Material Accounting Policies (continued)
92
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
Annual Report Notes to the Financial Statements (continued)
01
(e) Summary of Material Accounting Policies (continued)
iii. Taxes
Refer to Note 5. Income Tax for accounting policy on current income tax and deferred tax.
Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except:
• when the GST incurred on a sale or purchase of assets and services is not payable or recoverable from the taxation
authority, in which case the GST is recognised as part of the revenue or expense item or as part of the cost of acquisition of the
asset as applicable; and
• when receivables and payables are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the
statement of financial position. Cash flows are included in the statement of cash flows on a gross basis. The GST component of
cash flows arising from operating, investing and financing activities, which is recoverable from, or payable to, the taxation authority,
is classified as operating cash flows.
iv. Foreign Currency Translation
The consolidated entity’s financial statements are presented in Australian dollars. Transactions in foreign currencies are initially
recorded in the functional currency at exchange rates prevailing at the date of the transaction. Monetary assets and liabilities
denominated in foreign currencies are retranslated at the exchange rate prevailing at balance date. Differences arising on
settlement or translation of monetary items are recognised in the income statement. Non-monetary items that are measured in
terms of historical cost in a foreign currency are translated using the exchange rate as at the date of the initial transaction. Non-
monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value
was determined.
(f) Future Accounting Standards
Impacts on application of amendments to AASB 112 Income Taxes International Reform — Pillar Two model rules
The Organisation for Economic Co-operation and Development (OECD)/G20 Inclusive Framework on Base Erosion and Profit
Shifting published the Pillar Two model rules designed to address the tax challenges arising from the digitalisation of the global
economy. The Australian Federal Government announced as part of the 2023 Federal Budget that it would adopt the Pillar Two
rules, including a 15% global minimum tax and a 15% domestic minimum tax to apply for years commencing on or after 1 January
2024.
Pillar Two legislation has been enacted or substantially enacted in certain jurisdictions the consolidated entity operates. The
legislation will be effective for the consolidated entity from 1 July 2024. The consolidated entity is in scope of the enacted or
substantively enacted legislation and has performed an assessment to determine the estimated impact of applying Pillar Two
Income Taxes in FY25. Based on this assessment, the consolidated entity does not expect a material impact from the application of
Pillar Two income taxes.
In the current year, the consolidated entity has applied the AASB amendment to AASB 112 Income Taxes which provides a
mandatory temporary exception from recognising or disclosing deferred taxes related to Pillar Two.
AASB 18 Presentation and Disclosures in Financial Statements
In June 2024, the AASB issued a new standard AASB 18 Presentation and Disclosure in Financial Statements, which will be effective
for the consolidated entity from 1 July 2027 and is required to be applied retrospectively. AASB 18 will replace AASB 101
Presentation of Financial Statements. The standard aims to improve how entities communicate in their financial statements, with a
focus on information about financial performance in the statement of profit or loss. The consolidated entity continues to assess the
impact of adopting AASB 18.
Other Future Australian Accounting Standards
The table below lists the Australian Accounting Standards which have recently been issued or amended but not yet effective and
have not been adopted by the consolidated entity for the year ended 30 June 2024. The consolidated entity does not expect a
material impact on the application of the below standards.
Statement of Material Accounting Policies (continued)
Reference
New Standard
Effective Date
Application Date
AASB 2020-1
Amendments to Australian Accounting Standards — Classification of
Liabilities as Current or Non-current
1 January 2024
1 July 2024
AASB 2014-10
Amendments to Australian Accounting Standards — Sale or Contribution of Assets
between an Investor and its Associate or Joint Venture
1 January 2025
1 July 2025
SUPPORTING AUSTRALIAN ATHLETES
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
93
02 Operating Segments
Franchising operations
971,232
971,232
− New Zealand (retail)
952,685
29,270
981,955
− Singapore & Malaysia (retail)
707,724
20,247
727,971
− Slovenia & Croatia (retail)
215,443
4,487
219,930
− Ireland & Northern Ireland (retail)
693,418
8,464
701,882
− Other non-franchised retail
242,385
5,097
247,482
Total retail
2,811,655
67,565
2,879,220
− Retail property
-
327,532
327,532
− Retail property under construction
-
-
-
Total property
-
327,532
327,532
Equity investments
-
9,023
9,023
Other
1,533
19,223
20,756
Intercompany eliminations
(9,830)
(87,939)
(97,769)
Total segment revenue
2,803,358
1,306,636
4,109,994
Franchising operations
-
1,065,673
1,065,673
− New Zealand (retail)
1,005,109
31,364
1,036,473
− Singapore & Malaysia (retail)
682,415
17,578
699,993
− Slovenia & Croatia (retail)
201,518
3,681
205,199
− Ireland & Northern Ireland (retail)
650,967
8,011
658,978
− Other non-franchised retail
246,877
2,228
249,105
Total retail
2,786,886
62,862
2,849,748
− Retail property
-
423,076
423,076
Total property
-
423,125
423,125
Equity investments
-
6,761
6,761
Other
3,119
18,936
22,055
Intercompany eliminations
(13,935)
(78,226)
(92,161)
Total segment revenue
2,776,070
1,499,131
4,275,201
− Retail property under construction
-
49
49
2024 Segment Revenue
CONSOLIDATED ($000)
Operating segment
30 June 2024
Sales of products
to customers
Revenues received
from franchisees and
other income items
Total revenue
by segment
2023 Segment Revenue
CONSOLIDATED ($000)
Operating segment
30 June 2023
Sales of products
to customers
Revenues received
from franchisees and
other income items
Total revenue
by segment
94
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
Annual Report Notes to the Financial Statements (continued)
02
2024 Result
CONSOLIDATED ($000)
Operating segment
30 June 2024
Segment result
before interest, tax,
depreciation &
amortisation
Interest
expense
Depreciation
expense
(excl ROU Assets)
Depreciation &
fair value
remeasurement
of ROU Assets
Impairment&
amortisation
expense
Segment result
before Tax
Franchising operations
440,978
(44,811)
(28,136)
(79,871)
(14,600)
273,560
− New Zealand (retail)
97,719
(4,726)
(12,434)
(12,201)
(376)
67,982
− Singapore & Malaysia (retail)
87,995
(7,110)
(9,638)
(35,523)
(61)
35,663
− Slovenia & Croatia (retail)
12,769
(2,823)
(3,426)
(3,495)
(207)
2,818
− Ireland & Northern Ireland (retail)
47,976
(10,680)
(8,528)
(16,188)
(501)
12,079
− Non-franchised retail
(7,744)
(3,344)
(2,307)
(1,748)
(3,080)
(18,223)
Total retail
238,715
(28,683)
(36,333)
(69,155)
(4,225)
100,319
− Retail property
205,630
(32,943)
(7,691)
-
-
164,996
− Retail property under construction
(2,489)
(1,733)
-
-
-
(4,222)
− Property development for resale
(94)
(117)
-
-
-
(211)
Total property
203,047
(34,793)
(7,691)
-
-
160,563
Equity investments
8,869
(481)
-
-
-
8,388
Other
6,863
(2,428)
(5,577)
-
-
(1,142)
Intercompany eliminations
(214)
214
-
-
-
-
Total segment result before tax
898,258
(110,982)
(77,737)
(149,026)
(18,825)
541,688
2023 Result
CONSOLIDATED ($000)
Operating segment
30 June 2023
Segment result
before interest, tax,
depreciation &
amortisation
Interest
expense
Depreciation
expense
(excl ROU Assets)
Depreciation &
fair value
remeasurement
of ROU assets
Impairment &
amortisation
expense
Segment result
before Tax
Franchising operations
561,355
(37,555)
(27,332)
(105,122)
(17,986)
373,360
− New Zealand (retail)
105,718
(4,401)
(8,801)
(11,575)
(247)
80,694
− Singapore & Malaysia (retail)
88,858
(6,274)
(7,999)
(34,473)
(47)
40,065
− Slovenia & Croatia (retail)
14,987
(1,473)
(2,776)
(2,976)
(130)
7,632
− Ireland & Northern Ireland (retail)
44,589
(9,937)
(7,870)
(15,800)
(318)
10,664
− Non-franchised retail
(2,454)
(3,085)
(2,298)
(1,718)
(556)
(10,111)
Total retail
251,698
(25,170)
(29,744)
(66,542)
(1,298)
128,944
− Retail property
309,382
(25,577)
(10,128)
-
-
273,677
− Retail property under construction
(888)
(944)
-
-
-
(1,832)
− Property development for resale
(92)
(91)
-
-
-
(183)
Total property
308,402
(26,612)
(10,128)
-
-
271,662
Equity investments
6,649
(258)
-
-
-
6,391
Other
2,799
(2,255)
(4,819)
-
-
(4,275)
Intercompany eliminations
(194)
194
-
-
-
-
Total segment result before tax
1,130,709
(91,656)
(72,023)
(171,664)
(19,284)
776,082
Operating Segments (continued)
SUPPORTING AUSTRALIAN ATHLETES
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
95
02
2023 Assets & Liabilities
CONSOLIDATED ($000)
Operating segment
30 June 2023
Segment assets
Intercompany
eliminations
Segment
assets after
eliminations
Segment
liabilities
Intercompany
eliminations
Segment
liabilities after
eliminations
Franchising operations
4,527,445
(2,563,703)
1,963,742
1,140,622
(55,703)
1,084,919
− New Zealand (retail)
354,949
-
354,949
223,638
(4,878)
218,760
− Singapore & Malaysia (retail)
525,595
-
525,595
336,205
(38,433)
297,772
− Slovenia & Croatia (retail)
103,922
(2,256)
101,666
88,405
(2,491)
85,914
− Ireland & Northern Ireland (retail)
311,667
-
311,667
317,529
(3,579)
313,950
− Non-franchised retail
197,134
(45,430)
151,704
302,673
(203,082)
99,591
Total retail
1,493,267
(47,686)
1,445,581
1,268,450
(252,463)
1,015,987
− Retail property
3,972,622
(15,620)
3,957,002
2,541,367
(2,010,223)
531,144
− Retail property under construction
86,833
-
86,833
146,916
(134,765)
12,151
− Property development for resale
12,500
-
12,500
4,139
(2,190)
1,949
Total property
4,071,955
(15,620)
4,056,335
2,692,422
(2,147,178)
545,244
Equity investments
54,312
-
54,312
5,377
-
5,377
Other
204,980
(58,202)
146,778
278,727
(229,867)
48,860
Total
10,351,959
(2,685,211)
7,666,748*
5,385,598
(2,685,211)
2,700,387*
* Segment assets for FY24 and FY23 are exclusive of deferred tax assets. Segment liabilities for FY24 and FY23 are exclusive of income tax
payable and deferred tax liabilities.
2024 Assets & Liabilities
CONSOLIDATED ($000)
Operating segment
30 June 2024
Segment assets
Intercompany
eliminations
Segment
assets after
eliminations
Segment
liabilities
Intercompany
eliminations
Segment
liabilities after
eliminations
Franchising operations
4,601,356
(2,566,171)
2,035,185
1,168,585
(24,674)
1,143,911
− New Zealand (retail)
375,492
-
375,492
225,050
(38)
225,012
− Singapore & Malaysia (retail)
519,037
-
519,037
336,916
(48,959)
287,957
− Slovenia & Croatia (retail)
108,554
-
108,554
106,037
(3,524)
102,513
− Ireland & Northern Ireland (retail)
297,400
-
297,400
284,249
(642)
283,607
− Non-franchised retail
208,394
(42,637)
165,757
333,388
(214,606)
118,782
Total retail
1,508,877
(42,637)
1,466,240
1,285,640
(267,769)
1,017,871
− Retail property
4,032,990
(21,746)
4,011,244
2,620,331
(2,022,049)
598,282
− Retail property under construction
210,817
-
210,817
244,049
(231,944)
12,105
− Property development for resale
12,500
-
12,500
4,296
(2,194)
2,102
Total property
4,256,307
(21,746)
4,234,561
2,868,676
(2,256,187)
612,489
Equity investments
69,256
-
69,256
8,519
-
8,519
Other
176,620
(54,907)
121,713
180,979
(136,831)
44,148
Total
10,612,416
(2,685,461)
7,926,955*
5,512,399
(2,685,461)
2,826,938*
Operating Segments (continued)
96
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
Annual Report Notes to the Financial Statements (continued)
02
Operating segment
Description of segment
Franchising operations
Consists of the franchisor operations of the consolidated entity, but does not include the results, assets,
liabilities or operations of any Harvey Norman®, Domayne® and Joyce Mayne® franchisees.
This segment includes any Brand Licence Fees charged by a subsidiary of Harvey Norman Holdings Limited
for access to, and use of, the Harvey Norman®, Domayne® and Joyce Mayne® brand names.
New Zealand
(retail)
Consists of the wholly-owned operations of the consolidated entity in the retail trading operations in New
Zealand under the Harvey Norman® brand name.
Singapore & Malaysia
(retail)
Consists of the controlling interest of the consolidated entity in the retail trading operations in Singapore
and Malaysia under the Harvey Norman® and Space Furniture® brand names.
Slovenia & Croatia
(retail)
Consists of the wholly-owned operations of the consolidated entity in the retail trading operations in
Slovenia and Croatia under the Harvey Norman® brand name.
Ireland & Northern Ireland
(retail)
Consists of the wholly-owned operations of the consolidated entity in the retail trading operations in Ireland
and Northern Ireland under the Harvey Norman® brand name.
Other non-franchised retail
Consists of the retail and wholesale trading operations in Australia which are wholly-owned or controlled by
the consolidated entity, and does not include the operations of any Harvey Norman®, Domayne® and Joyce
Mayne® franchisees.
Retail property
Consists of freehold land and buildings that are owned by the consolidated entity for each site that are fully
operational or are ready for operations. The revenue and results of this segment consists of rental income,
outgoings recovered and the net property revaluation increments and/or decrements recognised in the
Income Statement. This segment includes the mining camp accommodation joint ventures.
Retail property under
construction
Consists of freehold sites that are currently undergoing construction at balance date intended for retail
leasing. It also includes vacant land that has been purchased for the purposes of generating future
investment income.
Property developments for
resale
Consists of freehold land and buildings acquired by the consolidated entity, to be developed, or currently
under development, for the sole purpose of resale at a profit.
Equity investments
This segment refers to the investment in, and trading of, equity investments.
Other
This segment primarily relates to credit facilities provided to related and unrelated parties and other
unallocated income and expense items.
The consolidated entity operates predominantly in eleven (11) operating segments:
Operating Segments (continued)
An operating segment is a component of an entity that engages in business activities from which it may earn revenues and incur
expenses (including revenues and expenses relating to transactions with other components of the same entity), whose operating results
are regularly reviewed by the entity’s chief operating decision makers to make decisions about resources to be allocated to the segment
and assess its performance and for which discrete financial information is available. This includes start-up operations which are yet to
earn revenues. Management will also consider other factors in determining operating segments such as the existence of a line manager
and the level of segment information presented to the Board of Directors.
Operating segments have been identified based on the information provided to the chief operating decision makers—being the
executive management team. The consolidated entity aggregates two or more operating segments when they have similar economic
characteristics, and the segments are similar in each of the following respects:
• Nature of the products and services;
• Nature of the production processes;
• Type or class of customer for the products and services;
• Methods used to distribute the products or provide the services; and, if applicable
• Nature of the regulatory environment
Operating segments that meet the quantitative criteria as prescribed by AASB 8 Operating Segments are reported separately.
However, an operating segment that does not meet the quantitative criteria is still reported separately where information about the
segment would be useful to users of the financial statements. Information about other business activities and operating segments that
are below the quantitative criteria are combined and disclosed in a separate category as “other segments”.
MATERIAL ACCOUNTING POLICIES
SUPPORTING AUSTRALIAN ATHLETES
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
97
CONSOLIDATED
June 2024
$000
June 2023
$000
03
Revenue from contracts with customers and franchisees:
— Sales of products to customers (a)
2,803,358
2,776,070
— Services to customers (c)
38,986
36,471
— Franchise fees in accordance with franchise agreements (b)
755,693
860,695
Total revenue from contracts with customers and franchisees
3,598,037
3,673,236
Other revenue from franchisees:
— Rent and outgoings received from franchisees
295,399
283,581
— Interest to implement and administer the financial accommodation facilities
28,423
26,867
Total other revenue received from franchisees (b)
323,822
310,448
Gross revenue from other unrelated parties:
— Rent and outgoings received from external tenants
126,634
117,378
— Interest received from financial institutions and other parties
18,786
15,626
— Dividends received
2,895
3,095
Total other revenue received from unrelated parties (c)
148,315
136,099
Other income items:
— Net property revaluation increment on Australian freehold investment properties
7,091
120,197
— Property revaluation decrement for overseas controlled entities
(4,841)
(1,447)
— Net revaluation increment of equity investments to fair value
6,129
3,666
— Other income
31,441
33,002
Total other income items (c)
39,820
155,418
Disclosed in the income statement as follows:
(a) Sale of products to customers
2,803,358
2,776,070
(b) Revenue received from franchisees
1,079,515
1,171,143
(c) Revenue and other income items
227,121
327,988
Revenues
Revenue from Franchisees
The application of AASB 15 Revenue from Contracts with Customers to franchise agreements with franchisees requires the consolidated
entity to recognise revenue from franchisees based on the amount it expects to receive in exchange for the provision of franchising
operations’ activities to franchisees, pursuant to a franchise agreement.
Sale of goods
The customer obtains control over the product upon delivery and revenue is therefore recognised at the point in time the product is
delivered or handed over to the customer. Revenue is measured based on the consideration expected to be received, net of trade
rebates and discounts paid.
Revenue from services
The consolidated entity provides repair services, installation services and delivery services to customers. These services are sold either
in their own contracts with the customers or bundled together with the sale of products. The consolidated entity recognises revenue
when the service is rendered. For bundled packages, the consolidated entity accounts for individual products and services separately, if
they are distinct.
MATERIAL ACCOUNTING POLICIES
98
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
Annual Report Notes to the Financial Statements (continued)
03
TYPES OF CONTRACTS $000
Operating segment
30 June 2024
Sale of products
to customers
Services
to customers
Franchisee fees
from franchisees
Total revenue
from contracts with
customers & franchisees
Franchising operations
-
-
755,693
755,693
− New Zealand (retail)
952,685
16,210
-
968,895
− Singapore & Malaysia (retail)
707,724
9,105
-
716,829
− Slovenia & Croatia (retail)
215,443
3,752
-
219,195
− Ireland & Northern Ireland (retail)
693,418
9,331
-
702,749
− Other non-franchised retail
242,385
588
-
242,973
Total retail
2,811,655
38,986
-
2,850,641
− Retail property
-
-
-
-
Total property
-
-
-
-
Equity investments
-
-
-
-
Other
1,533
-
-
1,533
Intercompany eliminations
(9,830)
-
-
(9,830)
Total
2,803,358
38,986
755,693
3,598,037
TYPES OF CONTRACTS $000
Operating segment
30 June 2023
Sale of products
to customers
Services
to customers
Franchisee fees
from franchisees
Total revenue
from contracts with
customers & franchisees
Franchising operations
-
-
860,695
860,695
− New Zealand (retail)
1,005,109
15,821
-
1,020,930
− Singapore & Malaysia (retail)
682,415
8,083
-
690,498
− Slovenia & Croatia (retail)
201,518
3,229
-
204,747
− Ireland & Northern Ireland (retail)
650,967
8,896
-
659,863
− Other non-franchised retail
246,877
442
-
247,319
Total retail
2,786,886
36,471
-
2,823,357
− Retail property
-
-
-
-
Total property
-
-
-
-
Equity investments
-
-
-
-
Other
3,119
-
-
3,119
Intercompany eliminations
(13,935)
-
-
(13,935)
Total
2,776,070
36,471
860,695
3,673,236
Revenues (continued)
SUPPORTING AUSTRALIAN ATHLETES
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
99
03
PRIMARY GEOGRAPHICAL MARKETS $000
Operating segment
30 June 2024
Australia
New Zealand
Asia
Europe
Franchising operations
755,693
-
-
-
− New Zealand (retail)
-
968,895
-
-
− Singapore & Malaysia (retail)
-
-
716,829
-
− Slovenia & Croatia (retail)
-
-
-
219,195
− Ireland & Northern Ireland (retail)
-
-
-
702,749
− Other non-franchised retail
232,353
10,620
-
-
Total retail
232,353
979,515
716,829
921,944
− Retail property
-
-
-
-
Total property
-
-
-
-
Equity investments
-
-
-
-
Other
1,533
-
-
-
Intercompany eliminations
(126)
(9,018)
(686)
-
Total
989,453
970,497
716,143
921,944
Total revenue
from contracts with
customers & franchisees
755,693
968,895
716,829
219,195
702,749
242,973
2,850,641
-
-
-
1,533
(9,830)
3,598,037
PRIMARY GEOGRAPHICAL MARKETS $000
Operating segment
30 June 2023
Australia
New Zealand
Asia
Europe
Franchising operations
860,695
-
-
-
− New Zealand (retail)
-
1,020,930
-
-
− Singapore & Malaysia (retail)
-
-
690,498
-
− Slovenia & Croatia (retail)
-
-
-
204,747
− Ireland & Northern Ireland (retail)
-
-
-
659,863
− Other non-franchised retail
236,748
10,571
-
-
Total retail
236,748
1,031,501
690,498
864,610
− Retail property
-
-
-
-
Total property
-
-
-
-
Equity investments
-
-
-
-
Other
3,119
-
-
-
Intercompany eliminations
(3,554)
(9,242)
(1,139)
-
Total
1,097,008
1,022,259
689,359
864,610
Total revenue
from contracts with
customers & franchisees
860,695
1,020,930
690,498
204,747
659,863
247,319
2,823,357
-
-
-
3,119
(13,935)
3,673,236
Revenues (continued)
100
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
Annual Report Notes to the Financial Statements (continued)
CONSOLIDATED
June 2024
$000
June 2023
$000
04
Employee benefits expense:
— Wages and salaries
406,054
380,651
− Workers compensation
3,000
2,865
− Superannuation contributions
21,632
19,472
− Payroll tax
16,980
15,798
− Share-based payments
648
3,611
− Other employee benefits
14,682
12,556
Total employee benefits expense
462,996
434,953
Finance costs:
− Interest on lease liabilities
58,087
50,294
− Bank interest paid to financial institutions
51,436
38,053
− Other
1,459
3,309
Total finance costs
110,982
91,656
Occupancy expenses:
− Variable lease payments (including short-term and low-value leases)
39,272
36,707
− Property, plant and equipment: Right-of-use assets - Depreciation expense
72,813
69,551
− Property, plant and equipment: Right-of-use assets - Impairment expense
2,914
-
− Investment properties (leasehold): Right-of-use assets - Fair value re-measurement
76,213
102,113
− Other occupancy expenses
101,541
89,946
Total occupancy expenses
292,753
298,317
Depreciation, amortisation and impairment:
Depreciation of (excluding AASB16 depreciation in occupancy expenses above):
− Buildings
10,915
9,558
− Plant and equipment
66,822
62,465
Amortisation of:
− Computer software
15,004
17,867
− Net licence property and other intangible assets
907
1,017
− Other
-
400
Total depreciation, amortisation and impairment
93,648
91,307
Expenses and Losses
Impacts on application of amendments to AASB 112 Income Taxes International Reform — Pillar Two model rules
The Organisation for Economic Co-operation and Development (OECD)/G20 Inclusive Framework on Base Erosion and Profit
Shifting published the Pillar Two model rules designed to address the tax challenges arising from the digitalisation of the global
economy. The Australian Federal Government announced as part of the 2023 Federal Budget that it would adopt the Pillar Two
rules, including a 15% global minimum tax and a 15% domestic minimum tax to apply for years commencing on or after 1 January
2024.
Pillar Two legislation has been enacted or substantially enacted in certain jurisdictions the consolidated entity operates. The
legislation will be effective for the consolidated entity from 1 July 2024. The consolidated entity is in scope of the enacted or
substantively enacted legislation and has performed an assessment to determine the estimated impact of applying Pillar Two
Income Taxes in FY25. Based on this assessment, the consolidated entity does not expect a material impact from the application
of Pillar Two income taxes.
In the current year, the consolidated entity has applied the AASB amendment to AASB 112 Income Taxes which provides a
mandatory temporary exception from recognising or disclosing deferred taxes related to Pillar Two.
Income Tax
05
SUPPORTING AUSTRALIAN ATHLETES
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
101
CONSOLIDATED
June 2024
$000
June 2023
$000
05
Tax consolidation
Harvey Norman Holdings Limited (HNHL) and its 100% owned Australian resident subsidiaries are members of a tax consolidated
group. HNHL is the head entity of the tax consolidated group. Members of the group have entered into a tax sharing agreement which
provides for the allocation of income tax liabilities between the entities, should the head entity default on its tax payment obligations. At
the balance date, the possibility of a default is remote.
Wholly-owned companies of the tax consolidated group have entered into a tax funding agreement. The funding agreement provides
for the allocation of current and deferred taxes on a modified standalone basis in accordance with the principles as outlined in UIG
Interpretation 1052 Tax Consolidation Accounting. The allocation of taxes under the tax funding agreement is recognised as an
increase or a decrease in the inter-company accounts of the subsidiaries with the tax consolidated head entity.
MATERIAL ACCOUNTING POLICIES
Income Tax (continued)
Deferred income tax:
— Net (loss) / gain on revaluation of cash flow hedges
(289)
1,105
− Net gain / (loss) on revaluation of land and buildings
2,407
(6,011)
Total income tax expense reported in other comprehensive income
2,118
(4,906)
(c) Reconciliation between income tax expense and prima facie income tax:
Accounting profit before tax
541,688
776,082
At the Australian statutory income tax rate of 30% (2023: 30%)
162,506
232,825
Adjustments to arrive at total income tax expense recognised for the year:
− Non-allowable building depreciation due to a legislative change in New Zealand
21,704
-
− Adjustments in respect of current income tax of previous year
2,421
(461)
− Share-based payment expenses
(474)
397
− Expenditure not allowable for income tax purposes
2,671
1,826
− Income not assessable for income tax purposes
(638)
(150)
− Unrecognised tax losses
2,501
1,280
− Derecognition of unrecoverable deferred tax balances
1,527
1,355
− Difference between tax capital gain and accounting profit on revaluation of pre-CGT properties
(410)
(97)
− Non-allowable building and motor vehicle depreciation
732
1,186
− Receipt of fully franked dividends
(938)
(884)
− Sundry items
271
(108)
− Effect of different rates of tax on overseas income and exchange rate differences
(7,813)
(7,930)
Total adjustments
21,554
(3,586)
Total income tax reported in the Income Statement
184,060
229,239
Effective income tax rate (%)
33.98%
29.54%
(b) Income tax recognised in the Statement of Changes in Equity :
(a) Income tax recognised in the Income Statement:
Current income tax:
− Current income tax charge
144,817
177,632
− Adjustments in respect of current income tax of previous years
2,421
(461)
Deferred income tax:
− Relating to the origination and reversal of temporary differences
36,822
52,068
Total income tax expense reported in the income statement
184,060
229,239
102
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
Annual Report Notes to the Financial Statements (continued)
05
STATEMENT OF
FINANCIAL POSITION
DEFERRED TAX EXPENSES
IN THE INCOME STATEMENT
June 2024
$000
June 2023
$000
June 2024
$000
June 2023
$000
Deferred tax liabilities:
— Revaluations of freehold investment properties to fair value
(333,512)
(332,596)
955
35,800
− Revaluations of owner-occupied land and buildings to fair value
(40,875)
(40,829)
(709)
-
− Non-allowable building depreciation due to a legislative change in New Zealand
(21,734)
-
21,704
-
− Reversal of building depreciation expense for freehold investment properties
(176,653)
(160,219)
16,446
15,377
− Research and development
(1,695)
(1,660)
(656)
(1,313)
− Other items
(20,757)
(17,707)
(6,726)
4,572
Total Deferred tax liabilities
(595,226)
(553,011)
Deferred tax assets:
— Employee provisions
10,811
10,522
(287)
832
− Unused tax losses and tax credits
132
5,188
5,083
2,846
− Right-of-use assets and lease liabilities
31,165
31,503
470
(7,052)
− Capital losses
7,003
6,944
300
300
− Other provisions
6,211
6,310
101
868
− Provisions for lease makegood
642
590
(54)
(79)
− Provision for executive remuneration
833
1,029
195
(83)
− Revaluations of owner-occupied land and buildings to fair value
-
550
-
-
Total deferred tax assets*
56,797
62,636
Total deferred tax
(538,429)
(490,375)
36,822
52,068
* Of the total deferred tax assets of $56.80 million (2023: $62.64 million), $55.88 million (2023: $57.55 million) was offset with the deferred
tax liabilities in accordance with the deferred income tax accounting policy outlined below.
The consolidated entity has not recognised deferred tax assets relating to tax losses of $114.25 million (2023: $108.66 million) which are
available for offset against taxable profits of the companies in which the losses arose. At 30 June 2024, no deferred tax liability has been
recognised (2023: nil) in respect of the unremitted earnings of certain subsidiaries, associates or joint ventures.
(d) Deferred income tax assets and liabilities:
Deferred income tax at 30 June relates to the following:
Income Tax (continued)
Current income tax
Current income tax assets and liabilities are measured at the amount expected to the be recovered from or paid to the taxation
authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted at the reporting
date in the countries where the consolidated entity operates and generates taxable income. Current income tax relating to items
recognised directly in equity are recognised in equity, and not in the income statement.
Deferred income tax
Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and the
carrying amounts for financial reporting purposes at the reporting date. Deferred tax assets and liabilities are measured at the tax rates
that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates and tax laws that have been
enacted or substantively enacted at the reporting date. Deferred tax assets and deferred tax liabilities are offset only if a legally
enforceable right exists to set off current tax assets against current tax liabilities, and the deferred tax assets and liabilities relate to the
same taxable entity and the same taxation authority. Deferred tax items recognised outside the income statement are recognised in
correlation to the underlying transaction either in other comprehensive income or directly in equity.
Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and unused tax
losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the
carry forward of unused tax credits and unused tax losses can be utilised. The carrying amount of deferred tax assets are reviewed at
each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all, or
part of, the deferred tax asset to be utilised.
Deferred tax assets and liabilities are not recognised if temporary differences arise from the initial recognition of an asset or liability in a
transaction that is not a business combination, at the time of the transaction, affects neither the accounting profit nor taxable profit or
loss, and at the time of transaction, does not give rise to equal taxable and deductible temporary differences. Unrecognised deferred
tax assets are reassessed at each reporting date and recognised to the extent that it has become probable that future taxable profit will
allow the deferred tax asset to be recovered.
MATERIAL ACCOUNTING POLICIES
SUPPORTING AUSTRALIAN ATHLETES
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
103
06
05
Recovery of deferred tax assets
Deferred tax assets are recognised for deductible temporary differences as the consolidated entity considers that it is probable that
future taxable profit will be available to utilise those temporary differences. Deferred tax assets are recognised for unused tax losses to
the extent that it is probable that future taxable profit will be available against which the losses can be utilised. Significant judgement is
required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future
taxable profits.
Income Tax (continued)
CONSOLIDATED
June 2024
June 2023
Basic earnings per share (cents per share)
28.29c
43.30c
Diluted earnings per share (cents per share)
28.23c
43.23c
June 2024
$000
June 2023
$000
The following reflects the income and number of HVN shares used in the calculation of basic and diluted
earnings per share:
- Profit after tax
357,628
546,843
- Less: Profit after tax attributable to non-controlling interests
(5,175)
(7,323)
Profit after tax attributable to owners of the parent
352,453
539,520
NUMBER OF SHARES
June 2024
Number
June 2023
Number
Weighted average number of ordinary shares used in calculating basic earnings per share (a)
1,246,006,654
1,246,006,654
Effect of dilutive securities (b)
2,575,091
2,103,341
Adjusted weighted average number of ordinary shares used in calculating diluted earnings per share
1,248,581,745
1,248,109,995
(a) Weighted average number of ordinary shares
No new shares issued during the current year, the weighted average number of ordinary shares used in calculating basic earnings per share
for the 2024 financial year was the number of shares on issue as at 30 June 2024.
(b) Effect of dilutive securities
Performance rights pursuant to Tranche FY22, Tranche FY23 and Tranche FY24 of the 2016 LTI Plan that have been granted to Executive
Directors have been included in the calculation of dilutive earnings per share. Refer to Table 4. Performance Rights of Key Management
Personnel for the Year Ended 30 June 2024 on page 54 of this report for further information.
There have been no conversions to, calls of, or subscriptions for ordinary shares or issues of potential ordinary shares since the reporting date.
Earnings Per Share
Basic EPS is calculated as net profit attributable to members, adjusted to exclude costs of servicing equity (other than dividends),
divided by the weighted average number of ordinary shares, adjusted for any bonus elements.
Diluted EPS is calculated as net profit attributable to members, adjusted for:
• Costs of servicing equity (other than dividends);
• The after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been recognised as
expenses; and
• Other non-discretionary changes in revenues or expenses during the year that would result from the dilution of potential shares,
divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus element.
SIGNIFICANT ACCOUNTING JUDGEMENTS & ESTIMATES
MATERIAL ACCOUNTING POLICIES
104
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
Annual Report Notes to the Financial Statements (continued)
CONSOLIDATED
June 2024
$000
June 2023
$000
07
Trade and other receivables
Trade and other receivables are classified, at initial recognition, and subsequently measured at amortised cost if both of the following
conditions are met:
• The financial asset is held within a business model with the objective to hold financial assets in order to collect contractual
cashflows, and
• The contractual terms of the financial asset give rise on specific dates to cash flows that are solely payments of principal and interest
on the principal amount outstanding.
Financial assets at amortised cost are subjected to an expected credit loss assessment. Gains or losses are recognised in the income
statement when the asset is derecognised, modified or impaired. The financial assets at amortised cost of the consolidated entity
includes receivables from franchisees, trade receivables, consumer finance loans, non-trade debts receivable from related entities and
unrelated entities and finance lease receivables.
MATERIAL ACCOUNTING POLICIES
Trade and Other Receivables
Current
Receivables from franchisees
812,337
840,996
− Trade receivables (a)
104,908
107,211
− Consumer finance loans (b)
2,802
2,567
− Allowance for expected credit loss (a) (b)
(3,551)
(4,206)
Trade receivables, net
104,159
105,572
Amounts receivable in respect of finance leases (c)
3,268
3,125
Non-trade debts receivable from (d):
— Related parties (including joint ventures and joint venture partners)
500
368
— Unrelated parties
21,184
43,195
− Allowance for expected credit loss (d)
-
(126)
Non-trade debts receivable, net
21,684
43,437
Total trade and other receivables (current)
941,448
993,130
Non-current
− Trade receivables (a)
6,934
7,080
− Consumer finance loans (b)
599
549
− Allowance for expected credit loss (a) (b)
(6)
(5)
Trade receivables, net
7,527
7,624
Amounts receivable in respect of finance leases (c)
829
762
Non-trade debts receivable from (d):
— Related parties (including joint ventures and joint venture partners)
35,925
42,426
— Unrelated parties
55,042
53,793
− Allowance for expected credit loss (d)
(17,078)
(17,078)
Non-trade debts receivable, net
73,889
79,141
Total trade and other receivables (non-current)
82,245
87,527
SUPPORTING AUSTRALIAN ATHLETES
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
105
(a) Trade receivables and allowance for expected credit loss
Trade receivables are non-interest bearing and are generally on 30-day terms. An allowance has been made for estimated
unrecoverable trade receivable amounts arising from the past sale of goods and rendering of services when there is objective evidence that
an individual trade receivable is impaired. An impairment reversal of $0.17 million (2023: an impairment loss of $1.02 million) has been
recognised by the consolidated entity in the current year for trade receivables. This amount has been included in the other
expenses line item in the Income Statement.
The ageing analysis of current and non-current trade receivables is as follows:
• $77.16 million of the trade receivables balance as at 30 June 2024 (2023: $83.55 million) are neither past due nor impaired. It is
expected that these balances will be collected by the consolidated entity on, or prior to, the due date.
• $31.16 million of the trade receivables balance as at 30 June 2024 (2023: $26.56 million) are past due but not impaired as there has not
been a significant change in credit quality and the consolidated entity believes that the amounts are still considered recoverable. The
consolidated entity does not hold any collateral over these balances as at 30 June 2024 (2023: nil).
• $3.53 million of the trade receivables balance as at 30 June 2024 (2023: $4.18 million) are past due and impaired, and have been
provided for in full as at balance date.
PAST DUE BUT NOT IMPAIRED
Ageing Analysis
Neither past due or impaired
31-60 Days
61-90 Days
+90 Days
31-60 Days
61-90 Days
+90 Days
Total
2024 ($000)
77,158
15,625
5,242
10,292
5
5
3,515
111,842
2023 ($000)
83,549
13,251
5,274
8,035
85
146
3,951
114,291
PAST DUE AND IMPAIRED
Allowance for expected credit losses
The consolidated entity recognises an allowance for expected credit losses (ECLs) for financial assets measured at amortised cost. ECLs
are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the
consolidated entity expects to receive, discounted at an approximation of the original effective interest rate. The expected cash flows
will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.
For receivables from franchisees, consumer finance loans and non-trade debts receivable from related entities and unrelated entities,
the consolidated entity applies the general approach, as prescribed in AASB 9 Financial Instruments, in calculating ECLs. For trade
receivables and finance leases, the consolidated entity applies the simplified approach, as prescribed in AASB 9, in calculating ECLs.
The consolidated entity has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-
looking factors specific to the debtors and the economic environment.
Receivables from franchisees
Derni Pty Limited (Derni), a wholly-owned subsidiary of Harvey Norman Holdings Limited (HNHL), may, at the request of a
franchisee, provide financial accommodation in the form of a revolving line of credit, to that franchisee. The repayment of the
indebtedness of that franchisee to Derni is secured by a security interest over all present and after-acquired property of that franchisee,
pursuant to a General Security Deed (GSD).
The receivables from franchisees balance of $812.34 million as at 30 June 2024 (2023: $841.00 million) comprises the aggregate of the
balances due from each franchisee to Derni, and is net of any uncollectible amounts. The indebtedness of each franchisee to Derni is
reduced on a daily basis by an electronic funds transfer process. Each franchisee directs the financial institution of that franchisee to
transfer the net cash receipts in the bank account of the franchisee to Derni, in reduction of outstanding indebtedness.
Receivables from franchisees have been measured at amortised cost. The consolidated entity has performed an assessment of the
franchisee receivables and has calculated the expected credit loss by applying the general approach for provisioning for expected
credit losses prescribed by AASB 9. The expected credit loss assessment was conducted on the carrying value of franchisee receivables
as at 30 June 2024 totalling $812.34 million (2023: $841.00 million). Based on the assessment, receivables from franchisees are
current and neither past due nor impaired as at 30 June 2024.
SIGNIFICANT ACCOUNTING JUDGEMENTS & ESTIMATES
07 Trade and Other Receivables (continued)
106
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
Annual Report Notes to the Financial Statements (continued)
Reconciled to:
− Trade receivables (current)
104,908
107,211
− Trade receivables (non-current)
6,934
7,080
Total trade receivables
111,842
114,291
Movement in the allowance for expected credit loss for trade receivables were as follows:
− At 1 July
4,182
3,469
− (Reversal) / Charge for the year
(174)
1,023
− Foreign exchange translation
2
48
− Amounts written off
(485)
(358)
At 30 June
3,525
4,182
(b) Consumer finance loans and allowance for expected credit loss
The consumer finance loans are non-interest bearing and are generally on 6 to 48 months interest-free terms. The ageing analysis of current
and non-current consumer finance loans is as follows:
• $1.31 million of the consumer finance loans at 30 June 2024 (2023: $1.16 million) are neither past due nor impaired. It is expected that
these balances will be collected by the consolidated entity on, or prior to, the due date.
• If a customer has missed a repayment in a consumer finance loan, the remaining balance of the consumer finance loan is treated as past
due. $2.06 million of the consumer finance loans balance as at 30 June 2024 (2023: $1.93 million) are past due but not impaired. The
consolidated entity does not hold any collateral over these balances and believes that these amounts will be recovered.
• $0.03 million of the consumer finance loans at 30 June 2024 (2023: $0.03 million) are past due and impaired, and have been provided
for in full as at balance date.
CONSOLIDATED
June 2024
$000
June 2023
$000
07 Trade and Other Receivables (continued)
CONSOLIDATED
June 2024
$000
June 2023
$000
Reconciled to:
− Consumer finance loans (current)
2,802
2,567
− Consumer finance loans (non-current)
599
549
Total consumer finance loans
3,401
3,116
Movement in the allowance for expected credit loss for consumer finance loans were as follows:
− At 1 July
29
29
− Charge for the year
3
-
− Amounts written off
-
-
At 30 June
32
29
PAST DUE BUT NOT IMPAIRED
Ageing Analysis
Neither past due or impaired
31-60 Days
61-90 Days
+90 Days
31-60 Days
61-90 Days
+90 Days
Total
2024 ($000)
1,305
601
632
831
-
-
32
3,401
2023 ($000)
1,155
605
501
826
-
-
29
3,116
PAST DUE AND IMPAIRED
SUPPORTING AUSTRALIAN ATHLETES
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
107
CONSOLIDATED
June 2024
$000
June 2023
$000
07
PAST DUE BUT NOT IMPAIRED
Ageing Analysis
Neither past due or impaired
31-60 Days
61-90 Days
+90 Days
31-60 Days
61-90 Days
+90 Days
Total
2024 ($000)
84,763
-
-
10,810
-
-
17,078
112,651
2023 ($000)
104,804
-
-
17,774
-
-
17,204
139,782
PAST DUE AND IMPAIRED
CONSOLIDATED
June 2024
$000
June 2023
$000
Reconciled to:
− Non-trade receivables (current)
21,684
43,563
− Non-trade receivables (non-current)
90,967
96,219
Total non-trade receivables
112,651
139,782
Movement in the allowance for expected credit loss for non-trade receivables were as follows:
− At 1 July
17,204
20,794
− Reversal during the year (i)
-
(3,227)
− Utilisation of allowance for expected credit loss
(126)
(363)
At 30 June
17,078
17,204
Trade and Other Receivables (continued)
(c) Finance lease receivables and allowance for expected credit loss
Finance lease receivables are reconciled as follows:
Future finance revenue:
− Not later than one year
(120)
(120)
− Later than one year but not later than five years
(83)
(81)
4,097
3,887
Reconciled to:
− Amounts receivable in respect of finance leases (current)
3,268
3,125
− Amounts receivable in respect of finance leases (non-current)
829
762
Total finance lease receivables
4,097
3,887
The consolidated entity offers finance lease arrangements as part of the consumer finance business. Finance leases are offered in respect of
motor vehicles and livestock with lease terms not exceeding 4 years. All finance leases are at fixed rates for the term of the lease. An
expected credit loss allowance is made for estimated unrecoverable finance lease receivable amounts. No expected credit loss was
recognised in the 2024 financial year (2023: nil). The ageing analysis of current and non-current finance lease receivables is as follows:
• $1.38 million of the finance lease receivable balance as at 30 June 2024 (2023: $1.17 million) are neither past due nor impaired.
• $2.72 million of the finance lease receivable balance as at 30 June 2024 (2023: $2.72 million) are past due but not impaired. These
receivables are subject to regular monitoring to ensure that they are recoverable. As at balance date, there were no events that required
the consolidated entity to sell or re-pledge the secured leased assets.
• There was no finance lease receivable balance as at 30 June 2024 that was past due and impaired (2023: nil).
(d) Non-trade debts receivable and allowance for expected credit loss
Non-trade debts receivable are generally interest-bearing and are normally payable at call. The aggregate balance of current and non-
current non-trade debts receivable as at 30 June 2024 was $112.65 million (2023: $139.78 million) as follows:
• $84.76 million of the non-trade debts receivable balance as at 30 June 2024 (2023: $104.80 million) are neither past due nor impaired.
It is expected that these balances will be collected by the consolidated entity on, or prior to, the due date.
• $10.81 million of the non-trade debts receivable balance as at 30 June 2024 (2023: $17.77 million) are past due but not impaired.
These receivables are subject to regular monitoring and periodic impairment testing to ensure that they are recoverable.
• $17.08 million of the non-trade debts receivable balance as at 30 June 2024 (2023: $17.20 million) are past due and impaired, and have
been provided for in full as at balance date.
− Later than one year but not later than five years
912
843
Aggregate of minimum lease payments and guaranteed residual values:
− Not later than one year
3,388
3,245
108
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
Annual Report Notes to the Financial Statements (continued)
CONSOLIDATED
Current
June 2024
$000
June 2023
$000
Derivatives receivable
2,809
3,845
Total other financial assets (current)
2,809
3,845
Non-current
Equity investments at fair value through profit or loss
50,662
34,485
Equity investments at fair value through other comprehensive income
18,594
19,827
Units in unit trusts
414
414
Other non-current financial assets
8,115
7,916
Total other financial assets (non-current)
77,785
62,642
i.
Non-trade debts receivable from mining camp joint venture:
The consolidated entity has non-trade debts receivable from the mining camp joint ventures totalling $10.47 million (2023: $17.43
million) in aggregate as at 30 June 2024. No impairment reversal or loss was recognised in the current year (2023: expected credit
loss allowance reversal of $3.23 million).
Trade and Other Receivables (continued)
Other Financial Assets
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include listed shares held for trading and derivative receivables. Financial assets are
classified as held for trading if they are acquired for the purpose of selling or repurchasing in the near term. Derivatives are also
classified as held for trading unless they are designated as effective hedging instruments. Financial assets at fair value through profit or
loss are carried in the statement of financial position at fair value with net changes in fair value recognised in the income statement.
Financial assets at fair value through other comprehensive income (OCI) (equity instruments)
Upon initial recognition, the consolidated entity can elect to classify irrevocably its equity investments as equity instruments designated
at fair value through OCI when they meet the definition of equity under AASB 132 Financial Instruments: Presentation and are not held
for trading. The classification is determined on an instrument-by-instrument basis. Gains and losses on these financial assets are not
recycled to the income statement. Dividends are recognised as other income in the income statement when the right of payment has
been established. Equity instruments designated at fair value through OCI are not subject to an impairment assessment.
MATERIAL ACCOUNTING POLICIES
08
07
SUPPORTING AUSTRALIAN ATHLETES
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
109
CONSOLIDATED
June 2024
$000
June 2023
$000
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost comprises direct materials and, where applicable, direct labour
costs and those overheads that have been incurred in bringing the inventories to their present location and condition. Cost is
calculated using the weighted average cost method. Net realisable value represents the estimated selling price in the ordinary course
of business less all estimated costs of completion and all costs to be incurred in marketing, selling and distribution.
CONSOLIDATED
Current
June 2024
$000
June 2023
$000
Prepayments
47,165
61,812
Other current assets
12,682
6,842
Total other assets (current)
59,847
68,654
CONSOLIDATED
Current
June 2024
$000
June 2023
$000
Net licence property (current)
686
600
Net licence property
925
1,237
Other intangible assets
55
69
Computer software:
— At cost
260,764
226,485
— Accumulated amortisation and impairment
(187,687)
(170,404)
Net computer software
73,077
56,081
Total net intangible assets (non-current)
74,057
57,387
Reconciliation of non-current computer software is as follows:
− Opening balance
56,081
56,537
− Additions
26,096
17,462
− Disposals
(216)
(90)
− Amortisation
(15,004)
(17,867)
− Net foreign currency differences arising from foreign operations
(10)
39
Net computer software (non-current)
73,077
56,081
Non-current
− Transfer from other asset categories
6,130
-
Intangible Assets
Other Assets
MATERIAL ACCOUNTING POLICIES
10
09
11
Current
Finished goods at cost
568,277
557,254
Provision for obsolescence
(10,150)
(11,596)
Total inventories (current)
558,127
545,658
110
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
Annual Report Notes to the Financial Statements (continued)
11
Intangible assets
Intangible assets, consisting of capitalised computer software assets, capitalised development expenditure and licence property are
carried at cost less any accumulated amortisation and accumulated impairment losses. Intangible assets are amortised on a straight line
basis over their estimated useful lives, but not greater than a period of eight and a half (8.5) years.
SaaS arrangements are service contracts providing the consolidated entity with the right to access the cloud provider’s application
software over the contract period. Costs incurred to configure or customise, and the ongoing fees to obtain access to the cloud
provider's application software, are recognised as operating expenses when the services are received. Some of these costs incurred
are for the development of software code that enhances or modifies, or creates additional capability to, existing on-premise systems and
meets the definition of and recognition criteria for an intangible asset. These costs are recognised as intangible software assets and
amortised over the useful life of the software on a straight-line basis.
Intangible assets are tested for impairment where there are any indicators of impairment, either individually or at the cash generating
unit level. Useful lives are also examined on an annual basis and adjustments, where applicable, are made on a prospective basis. The
amortisation expense on intangible assets with finite lives are recognised in the income statement in the expense category consistent
with the function of the intangible asset.
An intangible asset is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain
or loss arising from the derecognition of an intangible asset is measured as the difference between the net disposal proceeds and the
carrying amount of the intangible asset, and is recognised in the income statement when the intangible asset is derecognised.
CONSOLIDATED
June 2024
$000
June 2023
$000
Land at fair value
243,905
264,814
Buildings at fair value
337,101
304,633
Land and buildings at fair value (a)
581,006
569,447
Plant and equipment:
— At cost
983,157
918,494
— Accumulated depreciation
(617,808)
(595,936)
Net plant and equipment
365,349
322,558
Total property, plant and equipment:
− Land and buildings at fair value
581,006
569,447
− Plant and equipment at cost
983,157
918,494
Total property, plant and equipment
1,564,163
1,487,941
Accumulated depreciation
(617,808)
(595,936)
Total written down amount of property, plant and equipment
946,355
892,005
Property, Plant and Equipment
Intangible Assets (continued)
MATERIAL ACCOUNTING POLICIES
12
SUPPORTING AUSTRALIAN ATHLETES
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
111
CONSOLIDATED
June 2024
$000
June 2023
$000
12 Property, Plant and Equipment (continued)
Reconciliation of the carrying amounts of property, plant & equipment were as follows:
Land at fair value:
− Opening balance
264,814
219,802
− Additions
664
37,651
− Increase / (decrease) resulting from revaluation
963
(5,340)
− Transfers (to) / from other asset categories
(20,698)
5,898
− Net foreign currency differences arising from foreign operations
(1,838)
6,803
Closing balance
243,905
264,814
Building at fair value:
− Opening balance
304,633
274,319
− Additions
53,914
46,659
− Disposals
(48)
(3,176)
− Increase / (decrease) resulting from revaluation
1,160
(18,594)
− Transfers (to) / from other asset categories
(10,226)
5,202
− Depreciation for the year
(10,862)
(8,976)
− Net foreign currency differences arising from foreign operations
(1,470)
9,199
Closing balance
337,101
304,633
Net land and buildings at fair value (a)
581,006
569,447
(a) The net book value of land and buildings (other than land and buildings classified as freehold investment properties) would have been
$287.08 million (2023: $278.84 million) if measured on a historical cost basis.
Plant and equipment at cost:
− Opening balance
918,494
836,313
− Additions
125,212
97,170
− Disposals
(51,059)
(33,163)
− Transfers (to) / from other asset categories
(6,130)
3,139
− Net foreign currency differences arising from foreign operations
(3,360)
15,035
Closing balance
983,157
918,494
Plant and equipment accumulated depreciation:
− Opening balance
595,936
551,217
− Disposals
(42,356)
(29,257)
− Transfers from other asset categories
-
1,330
− Depreciation for the year
66,822
62,465
− Net foreign currency differences arising from foreign operations
(2,594)
10,181
Closing balance
617,808
595,936
Net book value plant and equipment
365,349
322,558
Total written down amount of property, plant and equipment
946,355
892,005
112
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
Annual Report Notes to the Financial Statements (continued)
12 Property, Plant and Equipment (continued)
Freehold owner-occupied properties
Following initial recognition at cost, owner-occupied land and buildings are carried at fair value less any subsequent accumulated
depreciation and accumulated impairment losses. Depreciation is calculated on a straight-line basis over the estimated useful life of the
asset as follows:
• Land – not depreciated
• Buildings – 20 to 50 years
Any revaluation surplus is recorded in other comprehensive income and credited to the asset revaluation reserve in equity. However, to
the extent that it reverses a revaluation decrease of the same asset previously recognised in the income statement, the increase is
recognised in the income statement. Any revaluation deficit is recognised in the income statement, except to the extent that it offsets a
previous surplus of the same asset in the asset revaluation reserve. Any accumulated depreciation as at revaluation date is eliminated
against the gross carrying amount of the asset and the net amount is restated to the fair value of the asset. Valuations are performed
with sufficient regularity to ensure that the carrying amount does not differ materially from the fair value of the asset at the balance date.
Plant and equipment assets
Plant and equipment assets are recognised at historical cost less accumulated depreciation and any accumulated impairment losses.
Depreciation is calculated on a straight-line basis over the estimated useful life of the plant and equipment assets (3 to 20 years). The
residual values, useful lives and amortisation methods of plant and equipment assets are reviewed, and adjusted if appropriate, at each
financial year end.
Derecognition and disposal
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its
use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds
and the carrying amount of the item) is included in the income statement when the asset is derecognised.
Valuation of freehold owner-occupied properties
The consolidated entity values land and buildings at fair value. Fair value is determined by reference to market-based evidence, which
is the amount for which the assets could be exchanged between a knowledgeable, willing buyer and a knowledgeable, willing seller in
an arm’s length transaction as at the valuation date.
The Board of Directors make an assessment of the fair value of each freehold owner-occupied property as at balance date. This
assessment is informed by:
• the information and advice contained in the last independent external valuation report for that property prepared by an external
professionally qualified valuer who holds a recognised relevant professional qualification and has specialised expertise in the
property being valued (Independent Valuer);
• the information and advice in the last internal valuation report for that property;
• the last management review for that property; and
• other information and professional or expert advice given or prepared by reliable and competent persons in relation to that
property.
Independent External Valuations
The freehold owner-occupied property portfolio is valued by an Independent Valuer at least once every two (2) years on a rotational
basis.
Internal Valuation and Reviews
Freehold owner-occupied properties not independently externally valued as at balance date are subject to an internal valuation or a
management review, performed by persons qualified by relevant education, training or experience. The key assumptions used to
determine the fair value of freehold owner-occupied properties, and the relevant sensitivity analysis, are disclosed in Note 12(b) and
Note 12(c).
MATERIAL ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING JUDGEMENTS & ESTIMATES
SUPPORTING AUSTRALIAN ATHLETES
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
113
12
(a) Reconciliation of owner occupied properties—land and building at fair value
New Zealand
Slovenia
Singapore
Ireland
Australia
Total
Retail
$000
Warehouse
$000
Retail
$000
Warehouse
$000
Office
$000
Warehouse
$000
Retail
$000
Retail
$000
2024
$000
2023
$000
Opening balance
401,789
16,426
82,086
3,161
14,140
12,241
26,222
13,382
569,447
494,121
Additions
35,511
-
341
18,717
-
-
-
9
54,578
84,310
Transfer
(30,924)
-
-
-
-
-
-
-
(30,924)
11,100
Disposals
(48)
-
-
-
-
-
-
-
(48)
(3,176)
Fair value
adjustments
(10,475)
585
7,122
-
6,156
1,200
(464)
(2,001)
2,123
(23,934)
Depreciation for
the year
(6,652)
(137)
(2,366)
-
(51)
(995)
(521)
(140)
(10,862)
(8,976)
Net foreign
currency
differences
(1,547)
(65)
(1,234)
(49)
(16)
3
(400)
-
(3,308)
16,002
Closing balance
387,654
16,809
85,949
21,829
20,229
12,449
24,837
11,250
581,006
569,447
Class of
property
Fair value
hierarchy*
Fair value $000
30 June 2024
Valuation Technique
Key unobservable inputs
2024 Range of
unobservable inputs
2023 Range of
unobservable inputs
Retail
Level 3
509,690
(Jun-23: 523,479)
Discounted cash flow
Terminal Yield
Discount Rate
4.1% - 9.3%
6.0% - 9.5%
3.1% - 8.3%
5.5% - 8.8%
Income capitalisation
Net market rent per sqm p.a
Capitalisation Rate
$130 - $460
5.3% - 8.6%
$23 - $550
4.8% - 9.3%
Direct sale comparison
Price per sqm of lettable area
$8,758
$10,235
Warehouse
Level 3
51,087
(Jun-23: 31,828)
Discounted cash flow
Terminal Yield
Discount Rate
6.0% - 8.0%
6.9% - 8.5%
5.3% - 8.0%
6.5% - 7.5%
Direct sale comparison
Price per sqm of lettable area
$890
$816
Office
Level 3
20,229
(Jun-23: 14,140)
Discounted cash flow
Terminal Yield
Discount Rate
N/A
N/A
N/A
N/A
Income capitalisation
Net market rent per sqm p.a
Capitalisation Rate
N/A
N/A
N/A
N/A
Direct sale comparison
Price per sqm of lettable area
$20,061 - $20,599
$12,624 - $16,723
Total
581,006
(Jun-23: 569,447)
2
* Level 3 - fair value is estimated using inputs that are not based on observable market data.
(b) Fair value measurement, valuation techniques and inputs
Income Capitalisation
Net market rent per sqm p.a
Capitalisation Rate
$121 - $122
5.7% - 7.5%
$98 - $101
5.0% - 7.3%
Property, Plant and Equipment (continued)
114
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
Annual Report Notes to the Financial Statements (continued)
12
(b) Fair value measurement, valuation techniques
and inputs (continued)
The income capitalisation method of valuation was used for the
valuation of retail and warehouse properties in New Zealand. A
discounted cash flow method was undertaken in respect of the
same properties as a secondary method. There were no
material differences between the income capitalisation method
result and the discounted cash flow method result. The income
capitalisation method of valuation was used for the valuation of one
(1) retail owner-occupied property in Australia. A discounted cash
flow method was used for the same property as a secondary
method. There were no material differences between the income
capitalisation method result and the direct sale comparison method
result. The average result of income capitalisation method,
discounted cash flow method and direct sale comparison method
of valuation was used for the valuation of one (1) warehouse
property in Singapore and the direct sale comparison method was
used for the valuation of the office properties in Singapore. The
income capitalisation method of valuation was used for the
valuation of retail properties in Slovenia and one (1) retail property
in Ireland.
The table on the previous page includes the following descriptions
and definitions relating to valuation techniques and key
unobservable inputs used in determining the fair value:
Income capitalisation method
Under the income capitalisation method, a property’s fair value is
estimated using the current market rental value generated by the
property, which is divided by the appropriate market
capitalisation rate.
Discounted cash flow (“DCF”) method
Under the DCF method, a property’s fair value is estimated
using explicit assumptions about the benefits and liabilities of
ownership over the asset’s life, including terminal value. This
involves the projection of a series of cash flows and the
application of an appropriate market-derived discount rate to
establish the present value of the income stream.
Direct sale comparison method
Under the direct sale comparison method, a property’s fair
value is estimated based on comparable transactions. The unit of
comparison applied by the consolidated entity is the price per
square metre.
Net market rent
Net market rent is the estimated amount for which a
property or space within a property could lease between a
willing lessor and a willing lessee on appropriate lease terms in an
arm’s length transaction, after proper marketing and wherein the
parties have each acted knowledgeably, prudently and without
compulsion. In addition, an allowance for recoveries of lease
outgoings from tenants is made on a pro-rata basis (where
applicable).
Capitalisation rate
The rate at which net market income is capitalised to
determine the value of a property. The rate is determined by
reference to market evidence and independent external
valuations received.
Terminal yield
The terminal yield used to convert income into an
indication of the anticipated value of the property at the end of a
given period when carrying out a discounted cash flow
calculation. The yield is determined by reference to market
evidence and independent external valuations received.
Discount rate
Rate used to discount the net cash flows generated from rental
activities during the period of analysis. The rate is determined by
reference to market evidence and independent external
valuations received.
Price per square metre
Price per square metre is obtained based on recent transactions of
similar properties around the vicinity. Appropriate adjustments are
made between the comparable and the property to reflect the
differences in size, tenure, location, condition and prevailing market
conditions and all other relevant factors affecting its value.
(c) Sensitivity information
The net market rent of a property and the capitalisation rate are key
inputs of the income capitalisation valuation method. The income
capitalisation valuation method incorporates a direct
interrelationship between the net market rent of a property and its
capitalisation rate. This methodology involves assessing the total
net market income generated by the property and capitalising this
in perpetuity to derive a capital value. Significant increases (or
decreases) in rental returns and rent growth per annum in isolation
would result in a significantly higher (or lower) fair value of the
properties. There is an inverse relationship between the
capitalisation rate and the fair value of properties. Significant
increases (or decreases) in the capitalisation rate in isolation would
result in a significantly lower (or higher) fair value of the properties.
The discount rate and terminal yield are key inputs of the
discounted cash flow method. The discounted cash flow method
incorporates a direct interrelationship between the discount rate
and the terminal yield as the discount rate applied will determine
the rate in which the terminal value is discounted to present value.
Significant increases (or decreases) in the discount rate in isolation
would result in a significantly lower (or higher) fair value. Similarly,
significant increases (or decreases) in the terminal yield in isolation
would result in a significantly lower (or higher) fair value. In general,
an increase in the discount rate and a decrease in the terminal yield
could potentially offset the impact on the fair value of the
properties.
(d) Highest and best use
For all freehold owner-occupied properties that are measured at
fair value, the current use of the property is considered its highest
and best use.
Key unobservable
inputs
Impact on fair value
for significant
increase in input
Impact on fair value
for significant
decrease in input
Net market rent
Increase
Decrease
Capitalisation rate
Decrease
Increase
Terminal yield
Decrease
Increase
Discount rate
Decrease
Increase
Price per square metre
Increase
Decrease
Property, Plant and Equipment (continued)
SUPPORTING AUSTRALIAN ATHLETES
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
115
13
CONSOLIDATED
Leasehold properties: (a)
ROUA $000
Plant & equipment:
ROUA $000
Total:
ROUA $000
As at 1 July 2023
541,578
4,441
546,019
New, modified leases
41,779
980
42,759
Leases exited
(102)
-
(102)
Depreciation
(70,876)
(1,937)
(72,813)
Net foreign currency differences
(2,059)
(15)
(2,074)
As at 30 June 2024
508,459
3,469
511,928
(a) The leasehold properties relate to leases of owner-occupied properties.
Other adjustments
(1,861)
-
(1,861)
CONSOLIDATED
June 2024
$000
June 2023
$000
Australia
43,324
39,974
New Zealand
111,493
104,677
Singapore & Malaysia
237,101
255,915
Slovenia & Croatia
23,630
27,399
Ireland & Northern Ireland
96,380
118,054
Total property, plant and equipment: right-of-use assets
511,928
546,019
Property, Plant and Equipment: Right-of-Use Assets
The consolidated entity recognises right-of-use assets in respect of leases of property, plant and equipment at the commencement date
of the lease (i.e. the date the underlying asset is available for use). The initial measurement of right-of-use assets includes the amount of
lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date, less any lease
incentives received. Right-of-use assets are subsequently measured at cost, less any accumulated depreciation and impairment losses,
and adjusted for any re-measurement of lease liabilities. The right-of-use assets are depreciated on a straight-line basis over the shorter
of its estimated useful life or the lease term. Right-of-use assets are subject to an impairment assessment under AASB 136 Impairment
of Assets at each reporting date.
Property, Plant and Equipment: Right-Of-Use Assets (ROUA)
CONSOLIDATED
Leasehold properties: (a)
ROUA $000
Plant & equipment:
ROUA $000
Total:
ROUA $000
As at 1 July 2022
468,217
4,293
472,510
New, modified leases
128,700
2,033
130,733
Leases exited
(7,689)
(7)
(7,696)
Depreciation
(67,512)
(2,039)
(69,551)
Net foreign currency differences
19,862
161
20,023
As at 30 June 2023
541,578
4,441
546,019
MATERIAL ACCOUNTING POLICIES
116
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
Annual Report Notes to the Financial Statements (continued)
14 Investment Properties: Freehold
Below is a list of the top 20 freehold investment properties ranked in order of fair value as at 30 June 2024:
Property
Last
independent
valuation
date
Independent
valuation at last
valuation date
$000
Fair value
30 June
2024
$000
Cap rate
30 June
2024
%
Penrith Homemaker Centre - Harvey Norman®, Domayne®
31 Dec 2023
232,000
232,983
6.00%
Springvale Homemaker Centre - Harvey Norman®, Domayne®
30 Jun 2024
167,000
167,000
6.25%
Maroochydore Homemaker Centre - Harvey Norman®, Domayne®, Joyce Mayne®
30 Jun 2023
106,000
108,184
6.25%
Silverwater Warehouse Complex
31 Dec 2022
99,000
103,500
6.00%
Watergardens Homeplace - Harvey Norman®
30 Jun 2023
102,000
102,421
5.25%
Macgregor Homemaker Centre - Harvey Norman®
30 Jun 2024
96,000
96,000
5.75%
The Cambridge Park Centre - Harvey Norman®
31 Dec 2022
87,250
88,014
7.75%
Alexandria Complex - Harvey Norman®, Domayne®
30 Jun 2024
80,500
80,500
5.75%
Toowoomba Centre Complex - Harvey Norman®
31 Dec 2023
72,000
72,020
7.25%
Alexandria Harvey Norman Warehouse Complex
31 Dec 2023
66,500
66,545
5.25%
Taren Point Harvey Norman Commercial NSW Showrooms
30 Jun 2024
62,000
62,000
5.50%
Albury Homemaker Centre - Harvey Norman®
30 Jun 2023
59,500
59,873
7.00%
Perth City West Complex - Harvey Norman®, Domayne® (a)
30 Jun 2024
59,625
59,625
6.00%
Auburn Flagship Store Complex - Harvey Norman®
30 Jun 2023
55,500
55,844
5.75%
Rutherford (Maitland) Complex - Harvey Norman® , Domayne®
31 Dec 2022
54,500
54,897
7.00%
Maribyrnong Complex - Harvey Norman®
31 Dec 2022
54,000
54,417
6.00%
Browns Plains Homemaker Centre - Harvey Norman®
31 Dec 2022
53,000
53,597
6.75%
Auburn Complex - Harvey Norman®, Domayne®
30 Jun 2024
52,500
52,500
5.50%
Devonport Homemaker Centre - Harvey Norman®
31 Dec 2023
50,000
50,044
6.75%
Bendigo Rocklea Homemakers Centre
30 Jun 2023
46,500
46,704
6.25%
Total top 20 freehold investment properties
1,666,668*
The fair value of the top 20 freehold investment properties amounted to $1.67 billion as at 30 June 2024, representing 45.65% of the total
fair value of freehold investment properties of $3.65 billion. The fair value of the remaining 127 freehold investment properties as at 30
June 2024 totalled $ 1.98 billion, representing 54.35% of the portfolio as at balance date.
(a) Balances represent the consolidated entity’s 50% ownership interest in the investment property.
* The difference between the fair value of the freehold investment property as at 30 June 2024 and the independent valuation as at the last
valuation date mainly relates to Internal Valuations and Reviews and capital additions in respect of the freehold investment property
between the periods.
CONSOLIDATED
June 2024
$000
June 2023
$000
Opening balance at beginning of the year, at fair value
3,483,593
3,230,213
Net additions, disposals and transfers
161,723
134,630
Net increase from fair value adjustments
5,295
118,750
Closing balance at end of the year, at fair value
3,650,611
3,483,593
SUPPORTING AUSTRALIAN ATHLETES
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
117
14
Valuation of Freehold Investment Properties
Each freehold investment property, which is property held to earn
rentals and/or for capital appreciation is initially measured at cost,
including transaction costs, and subsequently valued at fair value.
Fair value is the price that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between
market participants at the measurement date. Gains and losses
arising from changes in fair value of freehold investment
properties are recognised in the income statement in the period
in which they arise. An investment property is derecognised
when the property has been disposed of. The difference
between the net disposal proceeds and the carrying amount of
the asset is recognised in the income statement in the period of
derecognition.
Each freehold investment property is the subject of a lease or
licence in favour of independent third parties, including Harvey
Norman®, Domayne® and Joyce Mayne® franchisees.
Valuation Approach
The Board of Directors make an assessment of the fair value of
each freehold investment property as at balance date. This
assessment is informed by:
• the information and advice contained in the last independent
external valuation report for that property prepared by an
external, professionally qualified valuer who holds a
recognised relevant professional qualification and has
specialised expertise in the property being valued
(Independent Valuer);
• the information and advice contained in the last internal
valuation report for that property (which was informed by the
immediately preceding independent external valuation report
for that property);
• the last management review for that property; and
• other information and professional or expert advice given or
prepared by reliable and competent persons in relation to that
property.
Independent External Valuations
The freehold investment property portfolio in Australia is valued
by an Independent Valuer at least once every two (2) years on a
rotational basis.
For the 2024 financial year, sixty-nine (69) valuations of freehold
investment properties were performed by an Independent
Valuer: thirty-three (33) at 31 December 2023 and thirty-six (36)
at 30 June 2024. This represents a total of 48.9% of the number
of freehold investment properties independently externally
valued this year, and 52.2% in terms of the fair value of the
freehold investment property portfolio in Australia subject to
independent external valuation.
Internal Valuations and Reviews
Freehold investment properties not independently externally
valued as at balance date are subject to an internal valuation or a
management review, performed by persons qualified by relevant
education, training or experience. Each internal valuation and
management review is informed by the last independent external
valuation and reliable market evidence. For the current year,
seven (7) freehold investment properties had been affected by
the same factors as the properties which had been independently
externally valued. As a consequence, internal valuations for these
seven (7) properties were undertaken to determine the effect of
these factors.
Valuation Methodologies
The fair value in respect of each freehold investment property has
been calculated primarily using the income capitalisation method
of valuation, using the current market rental value, and having
regard to, in respect of each property:
• the highest and best use of the property
• the quality of construction
• the age and condition of improvements
• recent market sales data in respect of comparable
properties
• current market rental value, being the amount that could be
exchanged between knowledgeable, willing parties in an
arm’s length transaction
• the tenure of franchisees and external tenants
• adaptive reuse of buildings
• non-reliance on turnover rent
• other specific circumstances of the property
As a secondary method, a discounted cash flow valuation or a
direct sale comparison valuation is undertaken as a check
method.
The fair value of a freehold investment property under
construction is determined using the income capitalisation
method by estimating the fair value of the property as at the
relevant completion date less the remaining costs to complete
and allowances for associated risk. As a secondary method, a
discounted cash flow valuation is undertaken. An internal
valuation or management review is performed for any property
less than 75% complete where there is an indication of a
substantial change in the risks or benefits to warrant an earlier
assessment. Normally, the direct sale comparison method of
valuation is used for properties held for future development.
Investment Properties: Freehold (continued)
MATERIAL ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING JUDGEMENTS
& ESTIMATES
118
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
Annual Report Notes to the Financial Statements (continued)
14
(a) Reconciliation of investment properties: freehold
New Zealand
Ireland
Total
Retail
$000
Warehouse
$000
Retail
$000
Retail
$000
Warehouse
$000
Office
$000
2024
$000
2023
$000
Opening balance
5,818
3,771
30,999
3,038,117
361,522
43,366
3,483,593
3,230,213
Additions
-
-
-
117,300
15,745
610
133,655
144,104
Disposals
-
-
-
(2,280)
-
-
(2,280)
(11,390)
Fair value adjustments*
-
-
(1,796)
(29,200)
37,181
(890)
5,295
118,750
Depreciation for the year
(27)
(26)
-
-
-
-
(53)
(581)
Net foreign currency differences
(24)
(15)
(484)
-
-
-
(523)
2,497
Closing balance
36,691
3,730
28,719
3,112,688
425,697
43,086
3,650,611
3,483,593
* Fair value adjustments totalling $5.30 million for the year ended 30 June 2024 are included in other income (2023: $118.75 million).
Australia
Transfers
30,924
-
-
(11,249)
11,249
-
30,924
-
Investment Properties: Freehold (continued)
Class of
property
Fair value
hierarchy*
Fair value $000
30 June 2024
Valuation Technique
Key unobservable inputs
2024 Range of
unobservable inputs
2023 Range of
unobservable inputs
Retail
Level 3
Metropolitan =
1,963,629
(Jun-23: 1,870,594)
Regional= 1,214,469
(Jun-23: 1,204,340)
Total = 3,178,098
(Jun-23: 3,074,934)
Income capitalisation
Net market rent per sqm p.a
Capitalisation Rate
- Metropolitan
- Regional
$74 - $324
4.8% - 8.8%
6.0% - 9.0%
$74 - $323
4.3% - 9.3%
5.8% - 8.8%
Discounted cash flow
Terminal Yield
Discount Rate
5.3% - 9.0%
6.3% - 9.5%
4.5% - 8.8%
5.0% - 9.0%
Direct sale comparison
Price per sqm of lettable area
$847 - $5,778
$847 - $5,778
Warehouse
Level 3
429,427
(Jun-23: 365,293)
Income capitalisation
Net market rent per sqm p.a
Capitalisation Rate
$65 - $255
4.8% - 9.0%
$65 - $255
4.8% - 9.0%
Direct sale comparison
Price per sqm of lettable area
$766 - $5,009
$766 - $5,009
Office
Level 3
43,086
(Jun-23: 43,366)
Income capitalisation
Net market rent per sqm p.a
Capitalisation Rate
$152 - $442
7.8% - 8.8%
$144 - $233
6.5% - 8.0%
Discounted cash flow
Terminal Yield
Discount Rate
8.0%
7.5%
6.5%
7.0%
Direct sale comparison
Price per sqm of lettable area
$1,600 - $4,863
$1,695 - $3,545
Total
3,650,611
(Jun-23: 3,483,593)
*Level 3 - fair value is estimated using inputs that are not based on observable market data.
The income capitalisation method of valuation was primarily used for the valuation of all Retail, Warehouse and Office investment properties
in Australia, the Retail and Warehouse investment properties in New Zealand and the Retail investment property in Ireland. A discounted
cash flow valuation or a direct sale comparison valuation was undertaken as a secondary method. There were no material differences
between the income capitalisation method result, the discounted cash flow method result and the direct sale comparison method result.
The descriptions and definitions relating to valuation techniques and key unobservable inputs used in determining the fair value of
investment properties are the same as those for freehold owner-occupied properties detailed in Note 12(b).
(b) Fair value measurement, valuation techniques and inputs
Discounted cash flow
Terminal Yield
Discount Rate
4.8% - 7.3%
6.5% - 8.0%
4.8% - 7.0%
5.5% - 7.3%
SUPPORTING AUSTRALIAN ATHLETES
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
119
15
14
Investment Properties (Leasehold): Right-Of-Use Assets
(a) Fair value measurement, valuation techniques and inputs
Class of
property
Fair value
hierarchy*
Fair value $000
30 June 2024
Valuation Technique
Key unobservable
inputs
2024 Range of
unobservable inputs
2023 Range of
unobservable inputs
Retail
Level 3
500,472
(Jun-23: 452,207)
Discounted cash flow
Discount rate
Market rental ranges:
− Gross
− Net
6.39% - 7.11%
$60 - $650 per sqm
$25 - $775 per sqm
5.99% - 6.64%
$60 - $575 per sqm
$25 - $350 per sqm
Warehouse
Level 3
244,167
(Jun-23: 252,827)
Discounted cash flow
Discount rate
Market rental ranges:
− Gross
− Net
6.39% - 7.11%
$30 - $350 per sqm
$45 - $230 per sqm
5.99% - 6.64%
$30 - $800 per sqm
$45 - $230 per sqm
Total
744,639
(Jun-23: 705,034)
* Level 3 - fair value is estimated using inputs that are not based on observable market data.
CONSOLIDATED
June 2024
$000
June 2023
$000
Opening balance at beginning of the year, at fair value
705,034
675,600
New and modified leases
124,122
133,086
Leases exited
(8,304)
(1,539)
Net decrease from fair value re-measurements
(76,213)
(102,113)
Closing balance at end of the year, at fair value
744,639
705,034
(b) Sensitivity information
Key unobservable inputs
Impact on fair value for significant increase in input
Impact on fair value for significant decrease in input
Discount rate
Decrease
Increase
Market rent ranges
Increase
Decrease
(c) Rent and outgoings received and operating expenses of leasehold investment properties
Included in rent and outgoings received from franchisees as disclosed in Note 3. Revenues is rent and outgoings received from leasehold
investment properties of $141.66 million for the year ended 30 June 2024 (2023: $135.54 million). Operating expenses, excluding interest
on lease liabilities and fair value re-measurements on leasehold investment properties: ROU Assets, recognised in the income statement in
relation to leasehold investment properties amounted to $24.54 million for the year ended 30 June 2024 (2023: $21.22 million).
Investment Properties: Freehold (continued)
(c) Sensitivity information
Key unobservable inputs
Impact on fair value for significant increase in input
Impact on fair value for significant decrease in input
Net market rent
Increase
Decrease
Capitalisation rate
Decrease
Increase
Terminal yield
Decrease
Increase
Discount rate
Decrease
Increase
Price per square metre
Increase
Decrease
(d) Rent and outgoings received and operating expenses of investment properties
Included in rent and outgoings received from franchisees and rent and outgoings received from other tenants as disclosed in Note 3.
Revenues is rent and outgoings received from investment properties of $271.14 million for the year ended 30 June 2024 (2023: $252.89
million). Operating expenses, including rates and taxes and repairs and maintenance, recognised in the income statement in relation to
investment properties amounted to $65.31 million for the year ended 30 June 2024 (2023: $61.70 million).
120
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
Annual Report Notes to the Financial Statements (continued)
15
Investment Properties (Leasehold): Right-Of-Use Assets
Subsidiaries of Harvey Norman Holdings Limited (HNHL) enter
into leases of properties in Australia (each a Leasehold
Investment Property) with third party landlords. After entry into a
lease with an external landlord, the relevant subsidiary of HNHL
grants a sub-lease or licence to a Harvey Norman®, Domayne®
and Joyce Mayne® franchisee, to occupy an area of that
Leasehold Investment Property.
The consolidated entity recognises a right-of-use asset in respect
of each subsidiary's right to use each Leasehold Investment
Property for the respective lease term (each an IP Leasehold ROU
Asset) in accordance with the requirements of AASB 16 Leases.
As each IP Leasehold ROU Asset meets the definition of
investment property under AASB 140 Investment Property, the
consolidated entity is required to measure each IP Leasehold
ROU Asset at fair value. The consolidated entity has adopted the
fair value model in AASB 140 and each IP Leasehold ROU Asset is
measured at fair value.
In respect of each lease of a Leasehold Investment Property, the
present value of the lease payments is determined and carried as
a lease liability and the fair value of the lessee's right to use the
Leasehold Investment Property over the lease term is recorded as
an IP Leasehold ROU Asset. Gains or losses arising from re-
measurement of the fair value of an IP Leasehold ROU Asset are
included in the Income Statement of the consolidated entity as a
fair value increment or decrement in the period in which they
arise.
Valuation of Investment Properties (Leasehold): Right-Of-Use
Assets
The directors make an assessment of the fair value of each IP
Leasehold ROU Asset as at balance date. Each IP Leasehold ROU
Asset is reviewed at least every 6 months. This review is
undertaken by persons qualified by relevant education, training
or experience, with the assistance of qualified management. As
part of the review, an independent, professionally qualified valuer
who holds a recognised relevant professional qualification and
has relevant specialised expertise (Leasehold Independent
Valuer) is engaged to provide independent verification of key
observable inputs.
The re-measurement of an IP Leasehold ROU Asset to fair
value comprises the following:
1. A reduction in the IP Leasehold ROU Asset to reflect the
decrease in its future value due to the usage of the asset
during the period, reflecting the passage of time and a
reduction in remaining lease tenure. This is recognised as a
fair value decrement in the Income Statement.
2. Re-measurement of the IP Leasehold ROU Asset at the
prevailing discount rate as at the reporting date. If the
discount rate at the end of the period is higher than the
discount rate at the beginning of the period, there will be a
decrease in the value of the IP Leasehold ROU Asset and a
corresponding fair value decrement is recognised in the
Income Statement. If the discount rate at the end of the period
is lower than the discount rate at the beginning of the period,
there will be an increase in the value of the IP Leasehold ROU
Asset and a corresponding fair value increment is recognised
in the Income Statement. The discount rate used is
determined using market data, information on margins
available to the consolidated entity, and other adjustments
appropriate as at the reporting date.
3. The Leasehold Independent Valuer provides independent
verification of key observable inputs including the current
market rent ranges, being the amount that could be
exchanged between knowledgeable, willing parties in an
arm’s length transaction, at each reporting date. If the current
market rent range increases, there may be an increase in the
value of the IP Leasehold ROU Asset and a corresponding fair
value increment may be recognised in the Income Statement.
If the current market rent range decreases, there may be a
decrease in the value of the IP Leasehold ROU Asset and a
corresponding fair value decrement may be recognised in the
Income Statement.
The results and recommendations of the review and the
information and professional advice provided by the
Independent Valuer are used to inform the assessment of the fair
value of each IP Leasehold ROU Asset at balance date.
Discount rate
Investment properties (leasehold): right-of-use assets are re-
measured to fair value by using the prevailing discount rate as at
the reporting date which is determined by taking into account the
following:
• External market based rates for a range of maturities as at the
reporting date;
• The lending margins available to the consolidated entity; and
• Other adjustments that may be made by market
participants over the lease term.
As at 30 June 2024, the discount rates used in re-measuring
investment properties (leasehold): right-of-use assets range from
6.39% to 7.11% (2023: 5.99% to 6.64%).
Market rent ranges
As at each balance date, the Leasehold Independent Valuer
provides market rent ranges for each leasehold investment
property, being the amount that could be exchanged between
knowledgeable, willing parties in an arm’s length transaction at
each reporting date. The market rent ranges are used to assess
whether future lease payments are representative of what market
participants would pay for a particular asset over a similar term.
Investment Properties (Leasehold): Right-Of-Use Assets (continued)
SIGNIFICANT ACCOUNTING JUDGEMENTS
& ESTIMATES
MATERIAL ACCOUNTING POLICIES
SUPPORTING AUSTRALIAN ATHLETES
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
121
CONSOLIDATED
June 2024
$000
June 2023
$000
17
16 Trade and Other Payables
CONSOLIDATED
Current secured:
June 2024
$000
June 2023
$000
Bank overdraft (a)
20,316
16,694
Commercial bills payable (b)
1,400
5,400
Other short-term borrowings (d)
58,149
40,538
Current unsecured:
Derivatives payable
63
62
Non-trade amounts owing to:
— Related parties
4,238
4,238
— Unrelated parties
168
171
Total interest-bearing loans and borrowings (current)
84,334
67,103
Non-current:
Syndicated facility agreement (c)
845,000
760,000
Other borrowings (d)
15,251
23,258
Total interest-bearing loans and borrowings (non-current)
860,251
783,258
(a) Bank Overdraft
The total bank overdraft of $20.32 million as at 30 June 2024 (2023: $16.69 million) relates to a bank overdraft due by Harvey Norman
Trading (Ireland) Limited to Bank of Ireland (“BOI”) (the “BOI Overdraft Facility”). Harvey Norman Holdings Limited has provided a
Guarantee and Indemnity in favour of BOI in support of the BOI Overdraft Facility at the request of Ireland. The BOI Overdraft Facility is
secured by this Guarantee.
(b) Commercial bills payable
The commercial bills payable form part of facilities granted by ANZ. The payment of each commercial bill is secured by the securities given
pursuant to the Syndicated Facility Agreement (as defined in Note 17(c)), and subject to annual review by ANZ. Each commercial bill has a
tenure not exceeding 180 days but is repayable on demand by ANZ, upon the occurrence of any event of default or Relevant Event (as
defined in Note 17(c)) under the Syndicated Facility Agreement, or after any annual review date.
(c) Syndicated Facility Agreement
On 2 December 2009, the Company, a subsidiary of the Company (Borrower) and certain other subsidiaries of the Company (Guarantors)
entered into a Syndicated Facility Agreement (the Facility or SFA) with certain banks (Financiers and each a Financier). This facility has been
amended from time to time. As at 30 June 2024, the SFA comprised of five (5) Tranches totalling $1,010 million. The Amending Deed (No.
8) to the Facility, dated 30 November 2021, was executed with the effect of extending the repayment date of Tranche A1 of the Facility
totalling $170 million to 4 December 2026 and Tranche B of the Facility totalling $240 million to 4 December 2025. On 30 November 2022,
the Amending Deed (No. 9) to the Facility was executed with the effect of extending the repayment date of Tranche A2 of the Facility
totalling $200 million to 30 November 2026 and the establishment of Tranche C of the Facility totalling $200 million with a repayment date
of 30 November 2025. On 10 November 2023, the Amending Deed (No 10) to the Facility was executed with the effect of the
establishment of Tranche D of the Facility totalling $200 million with a repayment date of 10 November 2027. The utilised amount of the
Facility as at 30 June 2024 was $845 million, repayable as set out below, and was classified as non-current interest-bearing loans and
borrowings.
Interest-Bearing Loans and Borrowings
Trade and other creditors
290,973
262,503
Accruals
87,736
90,213
Total trade and other payables (current)
378,709
352,716
122
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
Annual Report Notes to the Financial Statements (continued)
17 Interest-Bearing Loans and Borrowings (continued)
(c) Syndicated Facility Agreement (continued)
This Facility is secured by:
• a fixed and floating charge granted by the Company and each of the Guarantors in favour of a security trustee for the Financiers; and
• real estate mortgages granted by certain Guarantors in favour of the security trustee for the Financiers over various real properties
owned by those Guarantors.
Under the terms of the Syndicated Facility Agreement, the Facility is repayable:
• in respect of Tranche A1 totalling $170 million, on 4 December 2026 ($170 million utilised at 30 June 2024)
• in respect of Tranche A2 totalling $200 million, on 30 November 2026 ($200 million utilised at 30 June 2024)
• in respect of Tranche B totalling $240 million, on 4 December 2025 ($240 million utilised at 30 June 2024)
• in respect of Tranche C totalling $200 million, on 30 November 2025 ($200 million utilised at 30 June 2024)
• in respect of Tranche D totalling $200 million, on 10 November 2027 ($35 million utilised at 30 June 2024)
• otherwise on demand by or on behalf of the Financiers upon the occurrence of any one of a number of events (each a “Relevant Event”),
including events which are not within the control of the Company, the Borrower or the Guarantors. Each of the following is a Relevant
Event:
i. an event occurs which has or is reasonably likely to have a material adverse effect on the business, operation, property, condition
(financial or otherwise) or prospects of the Borrower or the Company and the subsidiaries of the Company;
ii. if any change in law or other event makes it illegal or impractical for a Financier to perform its obligations under the Syndicated
Facility Agreement or fund or maintain the amount committed by that Financier to the provision of the Facility, the Financier may by
notice to the Borrower, require the Borrower to repay the secured moneys in respect of the commitment of that Financier, in full on
the date which is forty (40) business days after the date of that notice.
(d) Other Short-Term Borrowings
The consolidated entity has the following short-term borrowings as at 30 June 2024:
• a short-term facility of $18.30 million in New Zealand secured by the securities pursuant to the SFA — unutilised as at 30 June 2024.
• a short-term facility with a limit of $11.12 million in Singapore secured by a corporate guarantee — unutilised as at 30 June 2024.
• a short term facility with a limit of $0.96 million in Malaysia secured by a corporate guarantee. $0.80 million was utilised as at 30 June
2024 (2023: nil).
• a total facility with a limit of $22.89 million in Ireland secured by fixed and floating charges over property. This facility was fully utilised as
at 30 June 2024, with $7.64 million classified as current borrowings (2023: $7.56 million) and $15.25 million classified as non-current
borrowings (2023: $23.26 million).
• a total facility with a limit of $62.94 million in Slovenia and Croatia, with a maturity date of 4 December 2024, is secured by the securities
pursuant to the SFA. $45.04 million was utilised as at 30 June 2024 (2023: $28.87 million).
• a total facility with a limit of $5.56 million relates to a revolving credit facility with ANZ in Singapore. $4.67 million was utilised as at 30
June 2024 (2023: $4.12 million).
(e) Defaults and Breaches
The Company has not received notice of the occurrence of any Relevant Event from any Financier. During the 2024 and 2023 financial
years, there were no defaults or breaches on any of the interest-bearing loans and borrowings referred to in this note.
Financial liabilities
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings,
payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. All financial liabilities are
recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.
After initial recognition, loans and borrowings are subsequently measured at amortised cost. Gains and losses are recognised in the
income statement when the liabilities are derecognised. A financial liability is derecognised when the obligation under the liability is
discharged or cancelled or expires.
The consolidated entity’s financial liabilities include trade and other payables, derivative payable and loans and borrowings including
bank overdrafts, commercial bills payable, Syndicated Facility Agreement, short-term borrowings, non-trade amounts owing to related
parties and unrelated parties.
MATERIAL ACCOUNTING POLICIES
SUPPORTING AUSTRALIAN ATHLETES
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
123
CONSOLIDATED
June 2024
$000
June 2023
$000
18 Financing Facilities Available
At balance date, the following financing facilities had been negotiated and were available.
Total facilities available at reporting date:
− Bank overdraft
49,101
49,471
− Other borrowings
121,773
320,957
− Commercial bank bills
1,400
5,400
− Syndicated Facility
1,010,000
810,000
Total Available Facilities
1,182,274
1,185,828
Facilities used at reporting date:
− Bank overdraft
20,316
16,694
− Other borrowings (current)
58,149
40,538
− Other borrowings (non-current)
15,251
23,258
− Commercial bank bills (current)
1,400
5,400
− Syndicated Facility (non-current)
845,000
760,000
Total Used Facilities
940,116
845,890
Facilities unused at reporting date:
− Bank overdraft
28,785
32,777
− Other borrowing
48,373
257,161
− Syndicated Facility
165,000
50,000
Total Unused Facilities
242,158
339,938
Refer to Note 17. Interest-Bearing Loans and Borrowings for details regarding the security provided by the consolidated entity over each of
the financing facilities disclosed above.
124
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
Annual Report Notes to the Financial Statements (continued)
CONSOLIDATED
June 2024
$000
June 2023
$000
19 Lease Liabilities
(a) The geographical split of lease liabilities is as follows:
Leases of owner-occupied properties and plant and equipment assets:
− Australia
59,222
54,158
− New Zealand
127,987
121,219
− Singapore & Malaysia
183,609
202,286
− Slovenia & Croatia
26,031
29,519
− Ireland & Northern Ireland
128,845
150,187
Total lease liabilities of leases of owner occupied properties and plant and equipment assets
525,694
557,369
Leases of properties sub-leased to external parties:
— Australia
809,356
771,439
Total lease liabilities of leases of properties sub-leased to external parties
809,356
771,439
Total lease liabilities
1,335,050
1,328,808
(b) The maturity profile of undiscounted lease liabilities is as follows:
Less than 1 year
209,383
200,902
1 to 2 years
200,913
190,124
2 to 5 years
528,157
506,470
Over 5 years
747,153
744,156
Total undiscounted lease liabilities
1,685,606
1,641,652
(c) Commitments for leases not yet commenced
The consolidated entity had committed to leases which had not yet commenced as at 30 June 2024. These leases are not
included in the calculation of the consolidated entity’s lease liabilities. The estimated undiscounted lease liabilities for these
leases are $27.46 million (2023: $8.30 million).
1,33
Lease liabilities at beginning of the year
1,328,808
1,204,628
New, modified and exited leases
159,801
252,935
Interest on lease liabilities
58,087
50,294
Lease payments
(208,816)
(197,831)
Net foreign currency differences
(2,830)
18,782
Lease liabilities at the end of the year
1,335,050
1,328,808
Disclosed as:
— Lease liabilities (current)
152,228
151,043
— Lease liabilities (non-current)
1,182,822
1,177,765
Total lease liabilities
1,335,050
1,328,808
SUPPORTING AUSTRALIAN ATHLETES
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
125
19
Short-term leases and lease of low-value assets
The consolidated entity applies a recognition exemption to leases
that have a lease term of 12 months or less from the
commencement date and do not contain a purchase option.
It also applies a recognition exemption to leases that are
considered of low value.
Lease liabilities
At the commencement of a lease, the consolidated entity
recognises lease liabilities measured at the present value of lease
payments to be made over the lease term. The lease payments
include fixed payments (including in-substance fixed payments)
less any lease incentives receivable and amounts expected to be
paid under residual value guarantees. In determining the lease
term, the consolidated entity considers all facts and
circumstances that create an economic incentive to exercise a
renewal option, or not to exercise a termination option. Renewal
options (or periods after termination options) are only included in
the lease term if the lease is reasonably certain to be extended (or
not terminated). Outgoings and other variable lease payments
that do not depend on an index or a rate are recognised as
incurred.
In calculating the present value of lease payments, the
consolidated entity uses the incremental borrowing rate at the
lease commencement date if the interest rate implicit in the lease
is not readily determinable. After the commencement date, the
amount of lease liabilities is increased to reflect the accretion of
interest and reduced for the lease payments made. In addition,
the carrying amount of lease liabilities is remeasured if there is a
change in the lease term, a change in the in-substance fixed lease
payments or a change in the assessment to purchase the
underlying asset.
Incremental borrowing rate
The incremental borrowing rate is derived by reference to the
rate at which a lessee would borrow to acquire the underlying
asset, repaying over a similar term to the lease term. If the
interest rate in the lease is not readily determinable, the
consolidated entity determines the incremental borrowing rate
for each lease by taking into account the following:
• external market based rate for a similar term to the lease term
at the lease commencement date;
• the lending margins available to the consolidated entity for the
respective jurisdiction at the lease commencement date; and
• other adjustments that may be made by market participants
over the lease term.
As at 30 June 2024, the incremental borrowing rates applied by
the consolidated entity were as follows:
Lease term
The lease term is determined at lease commencement or at the
effective date of lease modification, and is reviewed if a significant
change in circumstances occurs. In determining the lease term,
the consolidated entity considers all facts and circumstances that
create an economic incentive to exercise a renewal option, or not
to exercise a termination option. Renewal options (or periods
after termination options) are only included in the lease term if
the lease is reasonably certain to be extended (or not terminated).
As at 30 June 2024, the lease terms adopted by the consolidated
entity were as follows:
As at 30 June 2024, the consolidated entity have assessed that a
number of options do not meet the criteria of ‘reasonably certain’
and therefore the lease payments relating to these options have
not been included in the lease liability. The undiscounted lease
payments for these excluded options would amount to $235.71
million (2023: $109.00 million).
Location
Weighted average incremental
borrowing rate %
Australia
4.84%
New Zealand
3.87%
Singapore & Malaysia
3.70%
Slovenia & Croatia
3.98%
Ireland & Northern Ireland
4.16%
Location
Weighted average lease term
(years)
Australia
10.52
New Zealand
11.25
Singapore & Malaysia
6.13
Slovenia & Croatia
7.43
Ireland & Northern Ireland
8.91
Lease Liabilities (continued)
MATERIAL ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING JUDGEMENTS
& ESTIMATES
126
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
Annual Report Notes to the Financial Statements (continued)
CONSOLIDATED
June 2024
$000
June 2023
$000
20
CONSOLIDATED
June 2024
$000
June 2023
$000
Ordinary shares
717,925
717,925
Total contributed equity
717,925
717,925
June 2024
Number of shares
June 2024
$000
Movements in ordinary shares on issue:
— Balance at 1 July 2023
1,246,006,654
717,925
— Issue of shares
-
-
Balance at end of the year
1,246,006,654
717,925
Number of ordinary shares issued and fully paid as at 30 June 2024 was 1,246,006,654 (2023: 1,246,006,654)
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.
Contributed Equity
CONSOLIDATED
June 2024
$000
June 2023
$000
Employee entitlements
36,942
35,722
Total provisions (current)
37,605
37,304
Employee entitlements
2,758
2,700
Lease makegood
7,922
6,473
Total provisions (non-current)
10,680
9,173
Lease makegood
663
1,582
Provisions
Other Liabilities
Provision for employee entitlements
Provisions are made for benefits accruing to employees in respect of annual leave and long service leave when it is probable that
settlement will be required and they are capable of being measured reliably. Provisions that are expected to be settled within 12
months are measured at their nominal values using the remuneration rate expected to apply at the time of settlement. Provisions which
are not expected to be settled within 12 months are measured as the present value of the estimated future cash outflows to be made by
the consolidated entity in respect of services provided by employees up to reporting date. Expenses for non-accumulating sick leave
are recognised when the leave is taken and are measured at the rates paid or payable.
Provision for lease make good
Provisions are recognised for the anticipated costs of future restoration of leased premises. The provision includes future cost estimates
associated with dismantling and removing the assets and restoring the leased premises according to contractual arrangements. These
future cost estimates are discounted to their present value.
SIGNIFICANT ACCOUNTING JUDGEMENTS & ESTIMATES
MATERIAL ACCOUNTING POLICIES
22
21
Total unearned revenue (current)
118,705
121,000
Total unearned revenue (non-current)
1,604
1,025
SUPPORTING AUSTRALIAN ATHLETES
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
127
22
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in
equity as a reduction, net of tax, from the proceeds.
CONSOLIDATED
June 2024
$000
June 2023
$000
Movements in retained profits were as follows:
− Balance at beginning of the year
3,414,424
3,254,936
− Profit for the year
352,453
539,520
− Dividends paid
(274,122)
(380,032)
Balance at end of the year
3,492,755
3,414,424
Dividends declared and paid on ordinary shares:
− Final fully-franked dividend for 2023: 12.0 cents (2022: 17.5 cents)
149,521
218,051
− Interim fully-franked dividend for 2024: 10.0 cents (2023: 13.0 cents)
124,601
161,981
Total dividends paid
274,122
380,032
The final dividend of $149.52 million, fully franked, for the year ended 30 June 2023 was paid on 13 November 2023. The interim dividend
of 10.0 cents per share, totalling $124.60 million fully-franked, for the year ended 30 June 2024 was paid on 1 May 2024. The final dividend
of 12.0 cents per share totalling $149.52 million, fully franked, for the year ended 30 June 2024 will be paid on 13 November 2024 to
shareholders registered at the close of business on 16 October 2024. No provision has been made in the Statement of Financial Position for
the payment of this final dividend.
Franking account balance:
The amount of franking credits available for subsequent financial years are:
− Franking account balance as at the end of the financial year at 30%
551,485
579,814
− Franking credits that will arise from the payment of income tax payable as at the end of the financial year
17,377
2,440
− Franking credits that will be utilised in the payment of the proposed final dividend
(64,080)
(64,080)
Amount of franking credits available for future reporting years
504,782
518,174
Contributed Equity (continued)
Retained Profits and Dividends
CONSOLIDATED
June 2024
$000
June 2023
$000
Interest in:
— Ordinary shares
1,091
1,091
— Reserves
15,921
14,910
— Retained earnings
18,714
19,239
Total non-controlling interests
35,726
35,240
Non-Controlling Interests
MATERIAL ACCOUNTING POLICIES
24
23
128
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
Annual Report Notes to the Financial Statements (continued)
25
CONSOLIDATED ($000)
Asset
revaluation
reserve
Foreign
currency
translation
reserve
FVOCI
reserve
Cash flow
hedge
reserve
Employee equity
benefits
reserve
Acquisition
reserve
Total
At 1 July 2023
227,635
57,862
14,750
2,592
12,335
(16,274)
298,900
Revaluation of land & buildings
3,883
-
-
-
-
-
3,883
Tax effect of revaluation of
land and buildings
(2,407)
-
-
-
-
-
(2,407)
Currency translation
differences
-
(6,497)
-
-
-
-
(6,497)
Unrealised loss on financial
assets at fair value through
other comprehensive income
-
-
(1,153)
-
-
-
(1,153)
Reverse expired or realised
cash flow hedge reserves
-
-
-
37
-
-
37
Net loss on forward foreign
exchange contracts
-
-
-
(50)
-
-
(50)
Tax effect of net loss on
forward foreign exchange
contracts
-
-
-
15
-
-
15
Cost of share based payments
-
-
-
-
698
-
698
Utilisation of employee equity
benefits reserve
-
-
-
-
(2,226)
-
(2,226)
At 30 June 2024
229,111
51,365
13,597
1,918
10,807
(16,274)
290,524
At 1 July 2022
245,448
27,572
20,490
13
10,921
(16,274)
288,170
Revaluation of land & buildings
(23,824)
-
-
-
-
-
(23,824)
Tax effect of revaluation of
land and buildings
6,011
-
-
-
-
-
6,011
Currency translation
differences
-
30,290
-
-
-
-
30,290
Unrealised loss on financial
assets at fair value through
other comprehensive income
-
-
(5,740)
-
-
-
(5,740)
Reverse expired or realised
cash flow hedge reserves
-
-
-
(13)
-
-
(13)
Net loss on forward foreign
exchange contracts
-
-
-
(53)
-
-
(53)
Tax effect of net loss on
forward foreign exchange
contracts
-
-
-
16
-
-
16
Cost of share based payments
-
-
-
-
3,701
-
3,701
Utilisation of employee equity
benefits reserve
-
-
-
-
(2,287)
-
(2,287)
At 30 June 2023
227,635
57,862
14,750
2,592
12,335
(16,274)
298,900
CONSOLIDATED ($000)
Asset
revaluation
reserve
Foreign
currency
translation
reserve
FVOCI
reserve
Cash flow
hedge
reserve
Employee equity
benefits
reserve
Acquisition
reserve
Total
Gain on interest rate swap
contracts
-
-
-
174
-
-
174
Tax effect of net loss on
interest rate swap contracts
-
-
-
290
-
-
290
Net gain on interest rate swap
contracts
-
-
-
3,755
-
-
3,755
Tax effect of net gain on
interest rate swap contracts
-
-
-
(1,126)
-
-
(1,126)
Reclassified to income
statement
-
-
-
(1,140)
-
-
(1,140)
Reserves
SUPPORTING AUSTRALIAN ATHLETES
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
129
25 Reserves (continued)
Asset revaluation reserve
Any revaluation increment arising from revaluation of freehold owner-occupied properties is recorded in other comprehensive income
(OCI) and credited to the asset revaluation reserve in equity. However, to the extent that it reverses a revaluation decrement of the same
asset previously recognised in the income statement, the increase is recognised in the income statement. Any revaluation decrement is
recognised in the income statement, except to the extent that it offsets a previous increment of the same asset in the asset revaluation
reserve.
Foreign currency translation reserve
The functional currency of overseas subsidiaries is the currency commonly used in their respective countries. As at the reporting date,
the assets and liabilities of these overseas subsidiaries are translated into the presentation currency of the consolidated entity at the rate
of exchange prevailing at the balance date and the income statements are translated at the weighted average exchange rates for the
year. The exchange differences arising on retranslation for consolidation are recognised in OCI in the foreign currency translation
reserve.
Fair Value through Other Comprehensive Income (FVOCI) Reserve
The consolidated entity elected to classify some non-current equity investments as equity instruments designated at fair value through
other comprehensive income. The fair value changes on the non-current equity investments are recorded in OCI in the FVOCI reserve.
Cash Flow Hedge Reserve
The consolidated entity uses forward currency contracts as hedges of its exposure to foreign currency risk in forecast transactions and
firm commitments. The ineffective portion relating to foreign currency contracts is recognised as other expense in the income
statement. The effective portion of the gain or loss on the hedging instrument is recognised in OCI in the cash flow hedge reserve.
The consolidated entity uses interest rate swap contracts as hedges of its exposure to interest rate risk. The ineffective portion relating to
interest rate swap contracts is recognised in the income statement. The effective portion of the gain or loss on the hedging instrument
is recognised in OCI in the cash flow hedge reserve.
Employee equity benefits reserve
The consolidated entity provides benefits to certain employees (including Executive Directors) of the consolidated entity in the form of
share-based payment transactions, whereby employees render services in exchange for shares or rights over shares (“equity-settled
transactions”). The cost of equity-settled transactions is determined by the fair value at the date when the grant is made using an
appropriate valuation model.
That cost is recognised in employee benefits expense, together with a corresponding increase in other comprehensive income
(employee equity benefits reserve), over the period in which the service and, where applicable, the performance conditions are fulfilled
(the vesting period). The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date
reflects the extent to which the vesting period has expired and the consolidated entity’s best estimate of the number of equity
instruments that will ultimately vest. The expense or credit in the income statement for a period represents the movement in cumulative
expense recognised as at the beginning and end of that period. Further disclosure relating to equity-settled transactions is also
provided in the Remuneration Report, Note 4. Expenses and Losses and Note 28. Employee Benefits.
Acquisition Reserve
Changes in the consolidated entity’s ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity
transactions. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the
consideration paid or received shall be recognised in the acquisition reserve.
Equity-settled transactions
The consolidated entity measures the cost of equity-settled transactions with employees by reference to the fair value of the equity
instruments at the date when they are granted by using an appropriate valuation model.
MATERIAL ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING JUDGEMENTS & ESTIMATES
130
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
Annual Report Notes to the Financial Statements (continued)
CONSOLIDATED
June 2024
$000
June 2023
$000
26 Cash and Cash Equivalents
Cash and cash equivalents
Cash and cash equivalents in the statement of financial position comprise cash at bank and on hand and short-term highly liquid
deposits with a maturity of three months or less, that are readily convertible to a known amount of cash and subject to an insignificant
risk of changes in value. For the purposes of the statement of cash flows, cash and cash equivalents consist of cash and cash equivalents
as defined above, net of outstanding bank overdrafts. Bank overdrafts are included within interest-bearing loans and borrowings in
current liabilities in the statement of financial position.
MATERIAL ACCOUNTING POLICIES
(a) Reconciliation to the Statement of Cash Flows
Cash and cash equivalents comprise the following:
− Cash at bank and on hand
182,246
125,195
− Short-term money market deposits
91,226
93,555
273,472
218,750
− Bank overdraft (refer to Note 17)
(20,316)
(16,694)
Cash and cash equivalents
253,156
202,056
(b) Reconciliation of profit after income tax to net operating cash flows
Profit after tax
357,628
546,843
Adjustments for non-cash items:
Net foreign exchange gain
(46)
(147)
Allowance for expected credit loss
(171)
(2,205)
Share of net profit from joint venture entities
(12,587)
(9,849)
Depreciation of property, plant and equipment
77,737
72,023
Depreciation of right-of-use assets
72,813
69,551
Fair value re-measurement of investment properties (leasehold): right-of-use assets
76,213
102,113
Amortisation
15,911
19,284
Impairment of ROU assets
2,914
-
Gain on disposal of leasehold ROU assets and lease liabilities
(1,099)
(1,568)
Revaluation of freehold properties
(2,250)
(118,750)
Executive remuneration expenses
2,835
7,592
Profit on disposal and sale of property, plant and equipment and the revaluation of listed securities
(4,221)
(3,216)
Changes in assets and liabilities:
(Increase) / decrease in assets:
− Receivables
33,041
60,638
− Inventories
(11,023)
(22,868)
− Other assets
11,123
(7,787)
Increase / (decrease) in liabilities:
− Payables and other current liabilities
53,328
27,305
− Income tax payable
15,161
(58,330)
− Provisions
(776)
(372)
Net cash flows from operating activities
686,531
680,257
SUPPORTING AUSTRALIAN ATHLETES
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
131
27
CONSOLIDATED
June 2024
$000
June 2023
$000
Total investments accounted for using the equity method
2,946
1,904
Ownership Interest
Contribution to Profit/Loss
before tax
June 2024
%
June 2023
%
June 2024
$000
June 2023
$000
Noarlunga
Shopping complex
50%
50%
1,862
1,776
Perth City West
Shopping complex
50%
50%
2,482
2,395
Warrawong King St
Shopping complex (a)
62.5%
62.5%
1,125
1,230
Dubbo
Shopping complex
50%
50%
502
486
Gepps Cross
Shopping complex
50%
50%
3,656
3,415
Bundaberg
Land held for investment
50%
50%
-
6
QCV
Miners residential complex (b)
50%
50%
160
-
Westgate
Shopping complex in New Zealand
50%
50%
2,800
541
12,587
9,849
(a)
This joint venture has not been consolidated as the consolidated entity does not have control over operating and financing decisions
and all joint venture parties participate equally in decision making.
(b) A number of wholly-owned subsidiaries of Harvey Norman Holdings Limited (HNHL) have entered into joint ventures with an unrelated
party to provide mining camp accommodation. The respective joint ventures have been granted finance facilities as follows:
i. A finance facility from ANZ for the amount of $5.15 million plus interest and costs, with a maturity date of 31 January 2024.
On 22 January 2024, the maturity date of this finance facility from ANZ was extended to 31 January 2025.
ii. Finance facilities from Network Consumer Finance Pty Limited (“NCF”), a wholly-owned subsidiary of HNHL, for the amount of
$ 11.78 million (2023: $18.75 million) plus interest and costs, subject to bi-annual review.
Investments Accounted for Using the Equity Method
Investments in associates and joint ventures
An associate is an entity over which the consolidated entity has significant influence. Significant influence is the power to participate in
the financial and operating policy decisions of the investee, but does not control or have joint control over those policies. A joint
venture is a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the
joint venture. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the
relevant activities require unanimous consent of the parties sharing control. The considerations made in determining significant
influence or joint control are similar to those necessary to determine control over subsidiaries.
The investments in associates and joint ventures of the consolidated entity are accounted for using the equity method. Under the equity
method, the investment in an associate or joint venture is initially recognised at cost. The carrying amount of the investment is adjusted
to recognise changes in the consolidated entity’s share of net assets of the associate or joint venture since the acquisition date. After
application of the equity method, the consolidated entity determines whether it is necessary to recognise any impairment loss with
respect to its net investment in the associates and joint ventures. At each reporting date, the consolidated entity determines whether
there is objective evidence that the investment in the associate or joint venture is impaired. If there is such evidence, the consolidated
entity calculates the amount of impairment as the difference between the recoverable amount of the associate or joint venture and its
carrying value.
MATERIAL ACCOUNTING POLICIES
132
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
Annual Report Notes to the Financial Statements (continued)
CONSOLIDATED
June 2024
June 2023
28 Employee Benefits
Remuneration of Auditors
29
$
$
Fees to Ernst & Young Australia:
− Audit or review of financial reports
1,726,000
1,560,046
− Tax services
173,682
242,400
− Consulting services
85,000
187,880
Total payable to Ernst & Young Australia
2,328,682
1,990,326
Fees to overseas member firms of Ernst & Young Australia:
− Audit or review of financial reports
1,315,259
945,856
− Tax services
777,913
475,959
− Consulting services
8,452
12,269
Total payable to overseas member firms of Ernst & Young Australia
2,135,783
1,434,084
Total remuneration payable to Ernst & Young
4,464,465
3,424,410
− Other assurance services and agreed-upon procedures
344,000
-
− Other assurance services and agreed-upon procedures
34,159
-
CONSOLIDATED
June 2024
$000
June 2023
$000
The aggregate employee benefit liability was comprised of:
− Accrued wages, salaries and on-costs
19,194
23,862
− Provisions (Current—Note 21)
36,942
35,722
− Provisions (Non-current—Note 21)
2,758
2,700
Total employee benefit provisions
58,894
62,284
The consolidated entity makes contributions to complying superannuation funds for the purpose of provision of superannuation benefits for
eligible employees of the consolidated entity. The amount of contribution in respect of each eligible employee is not less than the
prescribed minimum level of superannuation support in respect of that eligible employee. The complying superannuation funds are
independent and not administered by the consolidated entity.
Performance rights
At balance date, the performance rights in the table below were outstanding and vested (or able to be exercised) by, or for the benefit of,
directors of Harvey Norman Holdings Limited. Refer to Table 4. Performance Rights of Key Management Personnel for the year ended 30
June 2024 on page 54 of this report for further information.
NUMBER OF PERFORMANCE RIGHTS
OUTSTANDING
NUMBER OF PERFORMANCE RIGHTS
VESTED
Grant date
Last Exercise Date
2024
2023
2024
2023
02/12/2019
30/06/2025
-
-
-
549,500
04/12/2020
30/06/2026
-
549,500
549,500
-
30/11/2021
31/10/2026
914,000
914,000
-
-
01/12/2022
31/10/2037
1,049,857
1,106,800
-
-
01/12/2023
31/10/2038
1,052,400
-
-
-
3,016,257
2,570,300
549,500
549,500
SUPPORTING AUSTRALIAN ATHLETES
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
133
30 Key Management Personnel
CONSOLIDATED
(b) Compensation of Key Management Personnel
June 2024
$
June 2023
$
The total remuneration paid or payable to Key Management Personnel of the consolidated entity
was as follows:
− Short-term
12,222,476
13,138,905
− Post-employment
390,016
353,935
− Long-term (share-based payments)
627,219
2,005,498
− Other—long service leave accrual
82,634
102,423
− Other—termination benefit
199,360
126,357
Total compensation to Key Management Personnel
13,521,705
15,727,118
Refer to Tables 1 and 2 on pages 52 and 53 of this report for further information.
* David Matthew Ackery was appointed to the Board in 2005 as an Executive Director of the Company and was an employee. David Matthew Ackery retired as
an Executive Director of the Company and as an employee with effect from 30 April 2024.
Directors
Title
Gerald Harvey
Executive Chairman
Kay Lesley Page
Executive Director &
Chief Executive Officer
John Evyn Slack-Smith
Executive Director &
Chief Operating Officer
Christopher Herbert
Brown OAM
Non-Executive Director
Michael John Harvey
Non-Executive Director
Kenneth William
Gunderson-Briggs
Non-Executive Director (Independent)
Maurice John Craven
Non-Executive Director (Independent)
(a) Details of Key Management Personnel
Senior Executives
Thomas James Scott
Gordon Ian Dingwall
Emmanuel Hohlastos
Glen Gregory
Richard Beaini
Carene Myers
Christopher Coen
Title
General Manager — Property
Chief Information Officer
General Manager — Home Appliances
(Resigned 29 September 2023)
General Manager — Technology & Entertainment
(Resigned 17 October 2022)
General Manager — Audio Visual
(Ceased to be a KMP from 1 July 2023)
General Manager — Small Appliances
General Manager — Home Appliances
(Appointed 1 August 2023)
Chris Mentis
Executive Director & Chief Financial Officer
& Company Secretary
Darren Salakas
General Manager — Technology & Entertainment
(KMP from 10 October 2022)
Luisa Catanzaro
Non-Executive Director (Independent)
Benjamin Kelada
General Manager — Audio Visual
(Appointed 1 August 2023)
David Matthew Ackery*
Executive Director
Haydon Ian Myers
General Manager — Electrical
(Appointed 1 March 2024)
134
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
Annual Report Notes to the Financial Statements (continued)
32
31 Related Party Transactions
(a)
Ultimate Controlling Entity
The ultimate controlling entity of the consolidated entity is Harvey Norman Holdings Limited, a company incorporated in Australia.
(b)
Transactions with Other Related Parties
i. Several controlled entities of Harvey Norman Holdings Limited operate loan accounts with other related parties, mainly
consisting of joint ventures and the other joint venture partner of the joint ventures. The amount of receivables from related
parties at 30 June 2024 were $36,424,465 (30 June 2023: $42,791,186).
ii. The consolidated entity has a payable to other related parties (excluding transactions with KMPs and their related parties) at arm’s
length terms and conditions. The amount owing to other related parties at 30 June 2024 was $4,237,364 (30 June 2023:
$4,237,364).
Refer to information provided in Section 16. Other Transactions and Balances with Key Management Personnel and their Related Parties in
this report on page 58 for further information.
Commitments
CONSOLIDATED
(a) Leases (the consolidated entity as a lessor):
June 2024
$000
June 2023
$000
Future minimum amounts receivable under non-cancellable operating leases are as follows:
− Not later than one year
133,240
127,777
− Between 1 and 2 years
86,088
87,705
− Between 2 and 3 years
65,369
66,820
− Between 3 and 4 years
41,833
44,227
− Between 4 and 5 years
25,488
27,849
− Later than five years
28,145
36,208
Minimum lease receivables
380,163
390,586
CONSOLIDATED
(b) Capital expenditure contracted but not provided is payable as follows:
June 2024
$000
June 2023
$000
Not later than one year
41,342
100,002
Later than 1 year but not later than 5 years
9,785
12,048
Total capital expenditure commitments
51,127
112,050
The consolidated entity had contractual obligations to purchase, construct and refurbish property, plant and equipment and investment
properties of $51.13 million (2023: $112.05 million). The contractual obligations relating to joint venture entities for the year ended 30 June
2024 was $6.83 million (2023: $10.46 million).
The consolidated entity as lessor
Leases in which the consolidated entity does not transfer substantially all the risks and benefits of ownership of an asset are classified as
operating leases. Initial direct costs incurred in negotiating an operating lease are added to the carrying amount of the leased asset and
recognised over the lease term on the same basis as rental income. Contingent rents are recognised as revenue in the period in which
they are earned. The consolidated entity has entered into commercial leases in respect of its freehold property portfolio and motor
vehicles. All leases in the consolidated entity’s freehold property portfolio include a clause to enable upward revision of the rental
charge on an annual basis according to prevailing market conditions.
MATERIAL ACCOUNTING POLICIES
SUPPORTING AUSTRALIAN ATHLETES
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
135
33 Contingent Liabilities
i. Guarantees
As at 30 June 2024, Harvey Norman Holdings Limited (the Company) and its wholly-owned subsidiaries have entered into the
following guarantees, however the probability of having to make a payment under these guarantees is considered remote:
a. Guarantees in the normal course of business relating to lease make-good obligations under certain operating lease
contracts (with the exclusion of those lease make-good payments that are considered to be probable and recognised as a provision
in Note 21. Provisions); and
b. Indemnities to financial institutions to support bank guarantees in respect of the performance of contracts.
ii. Australian Securities and Investment Commission (ASIC) Proceedings
ASIC commenced proceedings against Latitude Finance Australia (as first defendant) and Harvey Norman Holdings Limited (HNHL) (as
second defendant) in 2022 in respect of the promotion of interest free payment methods for customers of franchisees to purchase
goods from franchisees. The liability part of the matter was heard in the Federal Court in April and May 2024. HNHL defended the matter.
The Judge reserved his decision. No judgement has been given at the date of this report.
No provision has been made in the financial statements in respect of these contingent liabilities.
Contingent liabilities
The consolidated entity does not recognise liabilities that do not meet the recognition criteria as prescribed in AASB 137 Provisions,
Contingent Liabilities and Contingent Assets. Contingent liabilities are not recognised as liabilities if there is only a possible obligation
arising from a past event, where the existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain
future events not wholly within the control of the consolidated entity. At each reporting date, the consolidated entity assesses whether
an outflow of future economic benefits has become probable. If it becomes probable that an outflow of future economic benefits will
be required for an item previously dealt with as a contingent liability, a provision is recognised in the financial statements of the period
in which the change in probability occurs.
MATERIAL ACCOUNTING POLICIES
Financial Risk Management
(a) Financial Risk Management Objectives and
Policies
The treasury function of the consolidated entity is responsible for
the management of the following risks:
• market risk;
• credit risk; and
• liquidity risk.
The consolidated entity’s principal financial liabilities, other than
derivatives, comprise of trade and other payables and interest-
bearing loans and borrowings. The consolidated entity’s principal
financial assets, other than derivatives, include cash and cash
equivalents, trade and other receivables and equity investments at
fair value. The consolidated entity manages its exposure to key
financial risks, such as interest rate and currency risk in accordance
with the consolidated entity’s treasury policy which is approved by
the Board of Directors. The objective of the treasury policy is to
support the delivery of the consolidated entity’s financial targets
whilst protecting future financial security. The consolidated entity
enters into derivative transactions, principally forward currency
contracts, to manage the currency risks arising from the
consolidated entity’s operations and its source of finance.
The consolidated entity uses different methods to measure and
manage different types of risks to which it is exposed.
These include:
• monitoring levels of exposure to interest rate and foreign
exchange risk;
• monitoring assessments of market forecasts for interest rate and
foreign exchange;
• ageing analyses and monitoring of specific credit allowances to
manage credit risk; and
• monitoring liquidity risk through the future rolling cash flow
forecasts.
(b) Market Risk
Market risk is the risk that the fair value or future cash flows of a
financial instrument will fluctuate because of changes in market
prices. Components of market risk to which the consolidated entity
are exposed are discussed below.
i. Foreign Currency Risk Management
Foreign currency risk refers to the risk that the value of financial
instruments, recognised asset or liability will fluctuate due to
changes in foreign exchange rates. The consolidated entity
undertakes certain transactions denominated in foreign currencies,
hence exposures to exchange rate fluctuations arise.
The consolidated entity’s foreign currency exchange risk arises
primarily from:
• receivables or payables denominated in foreign currencies; and
• firm commitments or highly probable forecast transactions for
payments settled in foreign currencies.
34
136
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
Annual Report Notes to the Financial Statements (continued)
34 Financial Risk Management (continued)
CONSOLIDATED
June 2024
$000
June 2023
$000
Financial Assets:
− Cash and cash equivalents
-
22,887
− Trade and other receivables
-
1,258
− Derivatives receivable
20
89
20
24,234
Financial Liabilities:
− Trade and other payables
11,100
13,715
− Derivatives payable
63
62
11,163
13,777
Net exposure
(11,143)
10,457
ii. Interest Rate Risk Management
Interest rate risk is the risk that the fair value on future cash flows of a financial instrument will fluctuate because of changes in market interest
rates. The consolidated entity’s exposure to market interest rates relates primarily to cash and cash equivalents, non-trade debts receivables
from related entities and unrelated entities, finance lease receivables, bank overdraft, non-trade amounts owing to related parties,
Syndicated Facility, commercial bills and other borrowings.
The consolidated entity manages the interest rate exposure by adjusting the ratio of fixed interest debt to variable interest debt to a desired
level based on current market conditions. Where the actual interest rate profile on the physical debt profile differs substantially from the
desired target, the consolidated entity uses interest rate swap contracts to adjust towards the target net debt profile.
FIXED INTEREST RATE MATURING IN
AVERAGE INTEREST RATE
30 June 2024
Principal subject to
floating interest rate $000
1 year or
less $000
Over 1 to 5
years $000
More than 5
years $000
Non-interest
bearing $000
Total
$000
Floating
Fixed
Cash
129,640
91,070
-
-
52,762
273,472
0.00% - 5.60% 2.40% - 4.10%
Consumer finance
loans
-
271
-
-
3,130
3,401
-
4.25%
Finance lease
receivables
-
546
829
-
2,722
4,097
-
11.00%
Receivables from
franchisees
-
-
-
-
812,337
812,337
-
-
Trade receivables
-
-
-
-
111,842
111,842
-
-
Other financial assets
-
-
-
-
80,594
80,594
-
-
Non-trade debts
receivables & loans
81,370
9,468
18,653
209
2,951
112,651
6.35% - 11.37% 5.00% - 9.50%
Total
211,010
101,355
19,482
209
1,066,338 1,398,394
Syndicated Facility &
other borrowings
718,400
-
200,000
-
-
918,400
1.71% - 6.47%
3.72%*
Trade creditors
-
-
-
-
378,709
378,709
-
-
Other loans
4,238
-
-
-
231
4,469
1.20% - 5.29%
-
Bank overdraft
20,316
-
-
-
-
20,316
6.50% - 6.75%
-
Bills payable
1,400
-
-
-
-
1,400
4.15% - 4.35%
-
Total
744,354
-
200,000
-
378,940 1,323,294
* Refer to Note 35 Derivative Financial Instruments (c) interest rate swap contracts—cash flow hedges for further details.
(b) Market Risk (continued)
i. Foreign Currency Risk Management (continued)
The consolidated entity is exposed to foreign exchange risk from various currency exposures, primarily with respect to, USD, EUR and GBP.
The consolidated entity minimises its exposure to foreign currency risk by initially seeking contracts effectively denominated in the entity’s
functional currency where possible and economically favourable to do so. Foreign exchange risk that arises from firm commitments or
highly probable transactions is managed principally through the use of forward currency contracts. The consolidated entity hedges a
proportion of these transactions in each currency in accordance with the treasury policy.
SUPPORTING AUSTRALIAN ATHLETES
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
137
34 Financial Risk Management (continued)
FIXED INTEREST RATE MATURING IN
AVERAGE INTEREST RATE
30 June 2023
Principal subject to floating
interest rate $000
1 year or
less $000
Over 1 to 5
years $000
More than 5
years $000
Non-interest
bearing $000
Total
$000
Floating
Fixed
Cash
80,863
93,405
-
-
44,482
218,750 0.00% - 5.60% 1.50% - 4.39%
Consumer
finance loans
-
221
-
-
2,895
3,116
-
5.50%
Finance lease
receivables
-
403
762
-
2,722
3,887
-
11.00%
Receivables from
franchisees
-
-
-
-
840,996
840,996
-
-
Trade receivables
-
-
-
-
114,291
114,291
-
-
Other financial
assets
-
-
-
-
66,487
66,487
-
-
Non-trade debts
receivables &
loans
76,839
32,480
28,152
1,030
1,281
139,782 2.30% - 5.19% 5.00% - 10.0%
Total
157,702
126,509
28,914
1,030
1,073,154 1,387,309
Syndicated
Facility & other
short-term
borrowings
623,796
-
200,000
-
-
823,796 1.66% - 6.10%
3.72%*
Trade creditors
-
-
-
-
352,716
352,716
-
-
Other loans
4,238
-
-
-
233
4,471 1.20% - 5.29%
-
Bank overdraft
16,694
-
-
-
-
16,694 2.00% - 6.50%
-
Bills payable
5,400
-
-
-
-
5,400 1.19% - 3.88%
-
Total
650,128
-
200,000
-
352,949 1,203,077
* Refer to Note 35 Derivative Financial Instruments (c) interest rate swap contracts—cash flow hedges for further details.
iii. Equity Price Risk Management
The consolidated entity is exposed to equity price risk arising from equity investments. Equity investments are held for strategic rather than
trading purposes. The exposure to the risk of a general decline in equity market values is not hedged as the consolidated entity believes
such a strategy is not cost effective. The fair value of the equity investments publicly traded on the ASX was $39.04 million as at 30 June
2024 (2023: $34.49 million). The fair value of the equity investments publicly traded on the NASDAQ was $11.62 million as at 30 June 2024
(2023: nil). The fair value of the equity investments publicly traded on the NZX was $ 18.59 million as at 30 June 2024 (2023: $19.83 million).
iv. Sensitivity analysis
At the reporting date, the consolidated entity’s exposure to interest rate risk (after taking into consideration the hedge of variable interest
loans), foreign currency risk (after taking into consideration the hedge of foreign currency payables) and equity price risk are not considered
material.
(b) Market Risk (continued)
ii. Interest Rate Risk Management (continued)
138
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
Annual Report Notes to the Financial Statements (continued)
34 Financial Risk Management (continued)
(c) Credit Risk
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial
loss. Credit risk arises from the financial assets of the consolidated entity, which comprise receivables from franchisees, trade and non-trade
debts receivables, consumer finance loans and finance lease receivables, with a maximum exposure equal to the carrying amount of these
financial assets.
The consolidated entity manages the credit risk exposure by taking the following measures:
• The Franchisor constantly monitors and evaluates the financial position of each franchisee;
• Conducting appropriate due diligence on counterparties before entering into an arrangement with them. It is the consolidated entity’s
policy that all customers who wish to trade on credit terms are subject to credit verification procedures including an assessment of their
independent credit rating, financial position, past experience and industry reputation. Risk limits are set for each individual customer in
accordance with parameters set by the Board. These risk limits are regularly monitored;
• Minimising concentrations of credit risk by undertaking transactions with a large number of debtors in various countries and industries.
Trade receivable balances are monitored on an ongoing basis;
• Non-trade debts receivable are subject to regular monitoring and/or periodic impairment testing to ensure that they are recoverable;
and
• Finance lease receivables are secured by assets with a value equal to, or in excess of, the counterparties’ obligation to the consolidated
entity.
The credit risk on liquid funds and derivative financial instruments is limited because the counterparties are banks with high credit-ratings
assigned by international credit-rating agencies.
The table below represents the financial assets of the consolidated entity by geographic location displaying the concentration of credit risk
for each location as at balance date:
CONSOLIDATED
June 2024
$000
June 2023
$000
Location of credit risk:
− Australia
973,289
1,026,451
− New Zealand
26,522
31,520
− Singapore & Malaysia
15,821
16,365
− Slovenia & Croatia
3,663
2,083
− Ireland & Northern Ireland
4,398
4,238
Total
1,023,693
1,080,657
As at 30 June 2024, other than the loss allowance recognised in relation to trade and non-trade debts receivables and consumer finance
loans as disclosed in Note 7, no financial assets were impaired.
SUPPORTING AUSTRALIAN ATHLETES
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
139
34 Financial Risk Management (continued)
(d) Liquidity Risk
Liquidity risk includes the risk that, as a result of the consolidated entity’s operational liquidity requirements:
• the consolidated entity will not have sufficient funds to settle a transaction on the due date;
• the consolidated entity will be forced to sell financial assets at a value which is less than what they are worth; or
• the consolidated entity may be unable to settle or recover a financial asset at all.
To help reduce these risks, the consolidated entity:
• has readily accessible standby facilities and other funding arrangements in place; and
• maintains instruments that are tradeable in highly liquid markets.
The Board reviews this exposure on a monthly basis from a projected 12-month cash flow forecast, listing of banking facilities,
explanations of variances from the prior month reports and current funding positions of the overseas controlled entities provided by finance
personnel. The following table details the consolidated entity’s remaining contractual maturity for its financial assets and financial liabilities.
The financial assets have been disclosed based on the undiscounted contractual maturities of the financial assets including interest that will
be earned on those assets. The financial liabilities have been disclosed based on the undiscounted cash flows of the financial liabilities
based on the earliest date on which the consolidated entity can be required to pay.
30 June 2024
Less than 1 year
$000
1 to 2 years
$000
2 to 5 years
$000
Over 5 years
$000
Total
$000
Non derivative financial assets:
− Cash and cash equivalents
273,472
-
-
-
273,472
− Receivables from franchisees
812,337
-
-
-
812,337
− Trade and other receivables
129,273
12,038
68,525
1,774
211,610
− Other financial assets
-
-
-
77,785
77,785
Derivative financial assets:
− Interest rate swap contracts
2,789
-
-
-
2,789
− Forward currency contracts
20
-
-
-
20
Total financial assets
1,217,891
12,038
68,525
79,559
1,378,013
Non derivative financial liabilities:
− Trade and other payables
378,709
-
-
-
378,709
− Interest-bearing loans and borrowings
137,470
43,337
864,771
-
1,045,578
Derivative financial liabilities:
− Forward currency contracts
63
-
-
-
63
Total financial liabilities
516,242
43,337
864,771
-
1,424,350
Net maturity
701,649
(31,299)
(796,246)
79,559
(46,337)
30 June 2023
Non derivative financial assets:
− Cash and cash equivalents
218,750
-
-
-
218,750
− Receivables from franchisees
840,996
-
-
-
840,996
− Trade and other receivables
163,130
10,770
59,424
17,422
250,746
− Other financial assets
-
-
-
62,642
62,642
− Forward currency contracts
90
-
-
-
90
Total financial assets
1,226,721
10,770
59,424
80,064
1,376,979
Non derivative financial liabilities:
− Trade and other payables
352,716
-
-
-
352,716
− Interest-bearing loans and borrowings
115,769
54,035
813,761
-
983,565
Derivative financial liabilities:
− Forward currency contracts
62
-
-
-
62
Total financial liabilities
468,547
54,035
813,761
-
1,336,343
Net maturity
758,174
(43,265)
(754,337)
80,064
40,636
Derivative financial assets:
− Interest rate swap contracts
3,755
-
-
-
3,755
140
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
Annual Report Notes to the Financial Statements (continued)
34 Financial Risk Management (continued)
(e) Fair value of Financial Assets and Financial Liabilities
The fair value of financial assets and financial liabilities are determined as follows:
• The carrying amounts of cash and cash equivalents, receivables from franchisees, trade and other receivables, other financial assets,
trade and other payables and interest-bearing loans and borrowings are reasonable approximations of fair value.
• The fair value of financial assets and financial liabilities with standard terms and conditions and traded on active liquid markets are
determined with reference to quoted market prices.
• The fair value of other financial assets and financial liabilities (excluding derivative instruments) are determined in accordance with
generally accepted pricing models based on discounted cash flow analysis using prices from observable current market transactions.
• The consolidated entity enters into derivative financial instruments with various counterparties, particularly financial institutions with
investment grade credit ratings. Forward currency contracts are valued using valuation techniques which employs the use of market
observable inputs.
The consolidated entity uses various methods in estimating the fair value of financial instruments. The methods comprise:
Level 1 – the fair value is calculated using quoted prices in active markets.
Level 2 – the fair value is estimated using inputs other than quoted prices included in Level 1 that are observable for the asset or
liability, either directly (as prices) or indirectly (derived from prices).
The fair value of the financial instruments as well as the methods used to estimate the fair value are summarised in the table below.
30 June 2024
Quoted market price
(Level 1) $000
Market observable inputs
(Level 2) $000
Total
$000
Financial Assets:
− Listed investments
69,256
-
69,256
− Interest rate swap contracts
-
2,789
2,789
− Forward currency contracts
-
20
20
Total financial assets
69,256
2,809
72,065
Financial Liabilities:
− Forward currency contracts
-
63
63
Total financial liabilities
-
2,746
72,002
30 June 2023
Financial Assets:
− Listed investments
54,312
-
54,312
− Forward currency contracts
-
90
90
Total financial assets
54,312
3,845
58,157
Financial Liabilities:
− Forward currency contracts
-
62
62
Total financial liabilities
-
62
62
Quoted market price represents the fair value determined based on quoted prices on active markets as at the reporting date without any
deduction for transaction costs. The fair value of the listed equity investments are based on quoted market prices and are included in level 1.
The fair value of financial instruments that are not traded in an active market is determined using valuation techniques. Forward currency
contracts are measured using quoted forward exchange rates. Interest rate swap contracts are measured at the present value of future cash
flows estimated and discounted based on the applicable yield curves derived from quoted interest rates. These instruments are included in
level 2.
− Interest rate swap contracts
-
3,755
3,755
SUPPORTING AUSTRALIAN ATHLETES
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
141
34 Financial Risk Management (continued)
(f) Capital Risk Management Policy
The consolidated entity’s capital management policy objectives are to: create long-term sustainable value for shareholders; maintain
optimal returns to shareholders and benefits to other stakeholders; source the lowest cost available capital; and prevent the adverse
outcomes that can result from short-term decision making.
The consolidated entity is constantly adjusting the capital structure to take advantage of favourable costs of capital or high
returns on assets. As the market is constantly changing, the consolidated entity may change the amount of dividends to be paid to
shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. The capital structure of the
consolidated entity consists of debt, which includes the interest-bearing loans and borrowings disclosed in Note 17, cash and cash
equivalents disclosed in Note 26(a) and equity attributable to equity holders of the parent, comprising ordinary shares,
retained profits and reserves as disclosed in Notes 22, 23 and 25 respectively. None of the subsidiaries within the consolidated entity are
subject to externally imposed capital requirements.
Capital management is monitored through the net debt to equity ratio. The Capital Management Policy stipulates a net debt to equity
target for the consolidated entity of less than 50%. As at 30 June 2024, the consolidated entity had unused, available financing facilities of
$242.16 million out of total approved financing facilities of $1,182.27 million. The net debt to equity ratio as at 30 June 2024 was 14.49%
(30 June 2023: 13.85%).
CONSOLIDATED
June 2024
$000
June 2023
$000
Borrowings (refer to Note 17: Interest-Bearing Loans and Borrowings)
944,585
850,361
Less: Cash and Cash equivalents
(273,472)
(218,750)
Net Debt
671,113
631,611
(a) For the purpose of calculating the net debt to equity ratio, total equity excludes the negative acquisition reserve of $16.27 million
(2023: $16.27 million), the right-of-use assets in respect of property, plant and equipment leases of $511.93 million (2023: $546.02
million) and investment properties (leasehold): right-of-use assets of $744.64 million (2023: $705.03 million) and the lease liabilities
recognised under AASB 16 Leases of $1,335.05 million (2023: $1,328.81 million).
Total equity (a)
4,631,687
4,560,517
Net debt to equity ratio
14.49%
13.85%
Derivative Financial Instruments
Hedging instruments
The following table details the derivative hedging instruments as at balance date. The fair value of a hedging derivative is classified as a
non-current asset or liability if the future cash flows of the hedging derivative are only due beyond 12 months and as a current asset or
liability if the future cash flows of the hedging derivative are due in less than 12 months.
CONSOLIDATED
June 2024
$000
June 2023
$000
Current assets
Foreign currency contracts—held for trading*
20
90
Interest rate swap contracts—cash flow hedges
2,789
3,755
Current liabilities
Foreign currency contracts—held for trading*
13
9
Foreign currency contracts—cash flow hedges
50
53
* The consolidated entity has entered into forward currency contracts which are economic hedges but do not satisfy the requirements of
hedge accounting.
35
142
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
Annual Report Notes to the Financial Statements (continued)
35 Derivative Financial Instruments (continued)
(a) Forward currency contracts-held for trading
CONSOLIDATED
Average Exchange Rate
2024
2023
Currency
2024
2023
Buy $000
Sell $000
Buy $000
Sell $000
Euro (0-12 months)
61.11
62.02
1,585
-
3,898
-
US Dollar (0-12 months)
66.70
66.54
4,446
-
4,402
-
Total
6,031
-
8,300
-
These contracts are fair valued by comparing the contracted rate to the market rates at balance date. All movements in fair value are
recognised in the income statement in the period they occur. The net fair value gain on forward currency contracts during the year ended
30 June 2024 was $0.007 million for the consolidated entity (2023: net fair value gain of $0.08 million).
(b) Forward currency contracts-cash flow hedges
The consolidated entity purchases inventories from various overseas countries. As such, the consolidated entity is exposed to foreign
exchange risk from various currency exposures, primarily with respect to Euro.
In order to protect against exchange rate movements and to manage the inventory costing process, the consolidated entity has entered into
forward currency contracts to purchase Euro. These contracts are hedging highly probable forecasted purchases and they are timed to
mature when payments are scheduled to be made. The following table details the forward currency contracts outstanding as at reporting
date:
CONSOLIDATED
2024
2023
Currency
2024
2023
Buy $000
Sell $000
Buy $000
Sell $000
Euro (0-12 months)
61.36
60.06
5,126
-
3,447
-
The forward currency contracts are considered to be highly effective hedges as they are matched against forecast inventory purchases and
firm committed invoice payments for inventory purchases. During the year ended 30 June 2024, the hedges were 100% effective (2023:
100% effective), therefore the gain or loss on the contracts attributable to the hedged risk is taken directly to other comprehensive income.
When the inventory is delivered the amount recognised in other comprehensive income is adjusted to the inventory account in the
statement of financial position.
Movement in the forward currency contract cash flow hedge reserve:
Average Exchange Rate
CONSOLIDATED
June 2024
$000
June 2023
$000
Increase / (Decrease)
Opening balance
(37)
13
Reverse expired or realised cash flow hedge reserves
37
(13)
Closing balance
(35)
(37)
Loss recognised in other comprehensive income
(35)
(37)
SUPPORTING AUSTRALIAN ATHLETES
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
143
35 Derivative Financial Instruments (continued)
(c) Interest rate swap contracts-cash flow hedges
Under a interest rate swap contract, the consolidated entity agrees to exchange the difference between fixed and floating rate interest
amounts calculated on agreed notional principal amounts. Such contract enables the consolidated entity to mitigate the risk of changing
interest rates on the cash flow exposures on the issued variable rate debt held.
At 30 June 2024, the consolidated entity had an interest rate swap contract in place with a notional amount of AUD $200 million (2023: $200
million) whereby the consolidated entity receives a variable rate of interest at a rate equal to the Australian 3 month BBSY on the notional
amount and pays a fixed rate of interest rate of 3.72%. The swap is being used to hedge exposure to changes in the interest rate of its
variable rate secured loan with an interest rate equal to the Australian 3 month BBSY plus a margin. The consolidated entity has established
a hedge ratio of 1:1 for the hedging relationships as the underlying risk of the interest rate swap is identical to the hedged risk component
as the terms of the interest rate swap match the terms of the underlying variable rate loan (i.e. notional amount, maturity, payment and reset
dates) and is considered to be highly effective. The interest rate swap is settled on a net basis every quarter. During the year the hedge was
100% effective, therefore any gain or loss on the contract attributable to the hedged risk was taken directly to other comprehensive income
and reclassified to profit and loss when interest expense is recognised.
Movement in the interest rate swap contract cash flow hedge reserve:
CONSOLIDATED
June 2024
$000
June 2023
$000
Increase / (Decrease)
Opening balance
2,629
-
Reclassified to income statement
(1,140)
-
Closing balance
1,953
2,629
Gain recognised in other comprehensive income
464
2,629
144
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
Annual Report Notes to the Financial Statements (continued)
36 Deed of Cross Guarantee
Pursuant to ASIC Corporations (Wholly-owned Companies) Instrument 2016/785, relief has been granted to certain controlled entities of
Harvey Norman Holdings Limited from the Corporations Act 2001 requirements for the preparation, audit and lodgement of their financial
reports. These controlled entities have entered into a Deed of Cross Guarantee with Harvey Norman Holdings Limited (“Closed Group”).
The effect of this Deed of Cross Guarantee is that Harvey Norman Holdings Limited has guaranteed to pay any deficiency in the event of
winding up a controlled entity within the Closed Group or if the controlled entity does not meet its obligations under the terms of
overdrafts, loans, leases or other liabilities subject to the guarantee. The controlled entities within the Closed Group have also given a
similar guarantee in the event that Harvey Norman Holdings Limited is wound up or if it does not meet its obligations under the terms of
overdrafts, loans, leases or other liabilities subject to the guarantee. The parties to the Deed of Cross Guarantee include Harvey Norman
Holdings Limited and the following controlled entities:
The Statement of Financial Position and Income Statement for the Harvey Norman Holdings Limited Closed Group are as follows:
• Arisit Pty Limited
• Harvey Norman Stores (N.Z.) Pty Limited
• Contemporary Design Group Pty Limited
• Network Consumer Finance Pty Limited
• Derni Pty Limited
• Sarsha Pty Limited
• Generic Publications Pty Limited
• Yoogalu Pty Limited
• Harvey Norman Big Buys Pty Limited
CONSOLIDATED
June 2024
$000
June 2023
$000
Current assets
− Cash and cash equivalents
66,599
73,284
− Trade and other receivables
935,245
967,869
− Other financial assets
2,790
3,845
− Inventories
250,998
256,249
− Intangible assets
686
600
− Other assets
23,700
23,074
Total current assets
1,280,018
1,324,921
Non-Current assets
− Trade and other receivables
2,563,624
2,220,177
− Other financial assets
302,767
302,743
− Property, Plant & Equipment
111,104
94,590
− Property, Plant & Equipment: Right-of-use assets
184,379
169,388
− Intangible assets
71,889
56,492
Total non-current assets
3,233,763
2,843,390
Total assets
4,513,781
4,168,311
Current liabilities
− Trade and other payables
127,798
113,661
− Interest-bearing loans and borrowings
1,622
5,673
− Lease liabilities
24,847
26,361
− Income tax payable
11,630
7,001
− Provisions
31,401
30,814
− Other liabilities
78,118
86,710
Total current liabilities
275,416
270,220
Non-Current liabilities
− Interest-bearing loans and borrowings
845,000
760,000
− Lease liabilities
187,876
168,335
− Provisions
2,758
2,404
− Deferred income tax liabilities
157,957
135,761
Total non-current liabilities
1,193,591
1,066,500
Total liabilities
1,469,007
1,336,720
Net Assets
3,044,774
2,831,591
SUPPORTING AUSTRALIAN ATHLETES
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
145
CONSOLIDATED
June 2024
$000
June 2023
$000
37
36 Deed of Cross Guarantee (continued)
PARENT ENTITY
June 2024
$000
June 2023
$000
Current assets
4
18
Non-current assets
3,274,875
3,030,987
Total assets
3,274,879
3,031,005
Current liabilities
19,811
4,870
Non-current liabilities
174,676
151,699
Total liabilities
194,487
156,569
Contributed equity
717,925
717,925
Retained profits
2,362,467
2,156,511
Total Equity
3,080,392
2,874,436
Profit for the year
480,077
495,288
Total Comprehensive Income
480,077
495,288
Parent Entity Financial Information
Guarantees
The Parent Company is party to a Deed of Cross Guarantee (“Deed”) with the following controlled entities:
The effect of this Deed is that the Parent Company has guaranteed to pay any deficiency in the event of winding up one of the above
controlled entities or if they do not meet their obligations under the terms of overdrafts, loans, leases or other liabilities subject to the
guarantee. The above controlled entities have also given a similar guarantee in the event that the Parent Company is wound up or if it does
not meet its obligations under the terms of overdrafts, loans, leases or other liabilities subject to the guarantee.
• Arisit Pty Limited
• Harvey Norman Stores (N.Z.) Pty Limited
• Contemporary Design Group Pty Limited
• Network Consumer Finance Pty Limited
• Derni Pty Limited
• Sarsha Pty Limited
• Generic Publications Pty Limited
• Yoogalu Pty Limited
• Harvey Norman Big Buys Pty Limited
Equity
− Contributed equity
717,925
717,925
− Reserves
13,778
16,724
− Retained profits
2,313,798
2,097,500
− Non-controlling interests
(727)
(558)
Total equity
3,044,774
2,831,591
Income Statement
− Profit before income tax
563,402
589,994
− Income tax
(72,982)
(90,321)
Profit after tax
490,420
499,673
Retained Earnings
− Retained earnings at the beginning of the year
2,097,500
1,977,859
− Profit after tax
490,420
499,673
− Dividends provided for or paid
(274,122)
(380,032)
Retained earnings at the end of the year
2,313,798
2,097,500
146
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
Annual Report Notes to the Financial Statements (continued)
37 Parent Entity Financial Information (continued)
The listing of controlled entities and unit trusts detailed on this page is not a complete and exhaustive list of all controlled entities and unit
trusts held by Harvey Norman Holdings Limited. The financial year of all controlled entities and unit trusts are the same as that of the Parent
Company.
Controlled Entities and Unit Trusts
38
Contingent Liabilities
Refer to information provided in Note 33: Contingent Liabilities for disclosures relating to the Parent Entity.
A listing of material subsidiaries and unit trusts of Harvey Norman Holdings Limited are detailed below:
Arisit Pty Limited 1, 2
Harvey Norman Discounts No. 1 Trust
Harvey Norman Trading (Ireland) Limited 12,13
Cascade Consolidated Sdn. Bhd. 9,10
Harvey Norman No. 1 Trust
Harvey Norman Trading d.o.o. 14,15
Contemporary Design Group Pty Limited 1,2
Harvey Norman Europe d.o.o. 14
Network Consumer Finance Pty Limited 1,2
Derni Pty Limited 1,2
Harvey Norman Holdings (Ireland) Limited 12
Pertama Holdings Pte Limited 6,7,8
Elitetrax Marketing Sdn. Bhd. 10,11
Harvey Norman Limited 4
Pertama Merchandising Pte Ltd 6,9
Generic Publications Pty Limited 1,2
Harvey Norman Ossia (Asia) Pte Limited 6,7,8
Sarsha Pty Limited 1,2
Harvey Norman Big Buys Pty Limited 1,2,3
Harvey Norman Singapore Pte Limited 6,7
Yoogalu Pty Limited 1,2
Harvey Norman Croatia d.o.o. 15,16
Harvey Norman Stores (N.Z.) Pty Limited 4,5
Notes:
1. Company incorporated in Australia.
2. Company is a member of the "Closed Group" relieved under the Class Order described in Note 36.
3. Harvey Norman Big Buys Pty Limited holds 99.02% of the shares in the KEH Partnership.
4. Company incorporated in New Zealand.
5. Shares held by Harvey Norman Limited.
6. Company incorporated in Singapore.
7. Harvey Norman Singapore Pte Limited owns 100% of the shares in Bencoolen Properties Pte Limited, 60% of the shares in Harvey
Norman Ossia (Asia) Pte Limited, 100% of the shares in Space Furniture Pte Limited and 50.62% of the shares in Pertama Holdings Pte
Limited.
8. Harvey Norman Ossia (Asia) Pte Limited holds 49.38% of the shares in Pertama Holdings Pte Limited.
9. Shares held by Pertama Holdings Pte Limited.
10. Company incorporated in Malaysia.
11. Shares held by Cascade Consolidated Sdn. Bhd.
12. Company incorporated in Ireland.
13. Shares held by Harvey Norman Holdings (Ireland) Limited.
14. Company incorporated in Slovenia.
15. Harvey Norman Europe d.o.o. owns 100% of the shares in Harvey Norman Trading d.o.o. and 100% of the shares in Harvey Norman
Croatia d.o.o.
16. Company incorporated in Croatia.
There have been no circumstances arising since balance date which have significantly affected or may significantly affect:
• the operations:
• the results of those operations; or
• the state of affairs of the entity or consolidated entity in future financial years.
Significant Events After Balance Date
39
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
147
SUPPORTING AUSTRALIAN ATHLETES
Annual Report Consolidated Entity Disclosure Statement
(a) Each of the below entities is a body corporate, incorporated in Australia, with 100% share capital held by Harvey Norman Holdings
Limited, and is an Australian resident within the meaning of the Income Tax Assessment Act 1997.
A.C.N. 098 004 570 Pty Limited¹
Calardu Cannington Pty Limited¹
Calardu Mandurah Pty Limited¹
Aloku Pty Ltd
Calardu Cannonvale Pty Limited¹
Calardu Maribyrnong Pty Ltd
Anwarah Pty. Ltd.¹
Calardu Capalaba Pty Limited¹
Calardu Marion Pty Ltd
Arisit Pty Limited³
Calardu Caringbah (Taren Point) Pty Limited¹
Calardu Maroochydore Pty Limited¹
Arlenu Pty Ltd¹
Calardu Caringbah Pty Ltd¹
Calardu Maroochydore Warehouse Pty Limited¹
Arpayo Pty Ltd¹
Calardu Chatswood Pty Ltd
Calardu Marsden Park Pty Limited¹
Balwondu Pty Ltd
Calardu Crows Nest Pty Limited¹
Calardu Maryborough Pty Ltd
Barrayork Pty. Limited¹
Calardu Cubitt Pty Limited
Calardu Melton Pty Limited¹
Becto Pty Limited
Calardu Darwin Pty Limited¹
Calardu Melville Pty Ltd¹
Bellevue Hill Pty Limited
Calardu Devonport Pty Limited¹
Calardu Mentone Pty Limited¹
Bestest Pty Ltd
Calardu Dubbo Pty Limited¹
Calardu Merrifield Pty Ltd¹
Bowermans Pty Limited
Calardu Emerald Pty Limited¹
Calardu Midland Pty Limited¹
Bradiz Pty Ltd
Calardu Frankston Pty Limited¹
Calardu Milton Pty Limited
Braxpine Pty Ltd
Calardu Frankston WH Pty Limited¹
Calardu Morayfield Pty Limited¹
Caesar Mosaics Pty Limited
Calardu Fyshwick DM Pty Limited¹
Calardu Morwell Pty Limited¹
Calardu Albany Pty Limited¹
Calardu Gepps Cross Pty Limited¹
Calardu Moss Vale Pty Limited¹
Calardu Albury Pty Limited¹
Calardu Geraldton Pty Limited¹
Calardu Mount Isa Pty Limited
Calardu Alexandria DM Pty Limited¹
Calardu Gladstone Pty Limited¹
Calardu Mt Gambier Pty Limited¹
Calardu Alexandria WH Pty Limited¹
Calardu Gordon Pty Ltd
Calardu Mudgee Pty Limited¹
Calardu Alice Springs Pty Limited¹
Calardu Guildford Pty Limited
Calardu Munno Para Pty Limited¹
Calardu Armadale WA Pty Limited¹
Calardu Gympie Pty Limited¹
Calardu Noarlunga Pty Limited¹
Calardu Armidale Pty Limited¹
Calardu Hervey Bay Pty Ltd¹
Calardu Noble Park WH Pty Limited¹
Calardu Auburn Pty Ltd¹
Calardu Hobart Pty Ltd¹
Calardu Noosa Pty Ltd¹
Calardu Ballarat Pty Ltd¹
Calardu Hoppers Crossing Pty Limited¹
Calardu North Ryde No. 1 Pty Limited¹
Calardu Ballina No.1 Pty Limited¹
Calardu Horsham Pty Limited¹
Calardu North Ryde Pty Ltd¹
Calardu Ballina Pty Limited¹
Calardu Innisfail Pty Limited
Calardu Northbridge Pty Limited
Calardu Bathurst No. 1 Pty Limited¹
Calardu Ipswich Pty Limited¹
Calardu Nowra Pty Limited¹
Calardu Bathurst Pty Limited¹
Calardu Jandakot Pty Limited
Calardu Nunawading Pty Limited¹
Calardu Belrose DM Pty Limited¹
Calardu Joondalup Pty Ltd¹
Calardu Penrith Pty Limited¹
Calardu Bendigo Pty Limited¹
Calardu Kalgoorlie Oswald St Pty Ltd¹
Calardu Perth City West Pty Limited¹
Calardu Berri (SA) Pty Limited
Calardu Kalgoorlie Pty Limited¹
Calardu Pimpama Pty Limited¹
Calardu Berrimah Pty Limited¹
Calardu Karana Downs Pty Limited
Calardu Port Macquarie Pty Ltd¹
Calardu Berrimah WH Pty Limited¹
Calardu Karratha Pty Limited¹
Calardu Preston Pty Ltd¹
Calardu Brighton Pty Limited¹
Calardu Kemblawarra Pty Limited
Calardu Pty Ltd¹
Calardu Broadmeadow Pty Ltd¹
Calardu Kingaroy Pty Ltd¹
Calardu Queensland Pty Ltd¹
Calardu Broadmeadows Vic Pty Limited¹
Calardu Kotara Pty Ltd
Calardu Raine Square Pty Limited¹
Calardu Browns Plains No.1 Pty Limited¹
Calardu Lakehaven No.1 Pty Limited¹
Calardu Richmond Pty Limited¹
Calardu Browns Plains Pty Ltd¹
Calardu Launceston Pty Limited¹
Calardu Rockhampton Pty Limited¹
Calardu Bunbury (WA) Pty Ltd¹
Calardu Leopold Pty Limited¹
Calardu Rockingham Pty Ltd¹
Calardu Bundaberg Pty Limited¹
Calardu Lismore Pty Limited¹
Calardu Roselands Pty Ltd¹
Calardu Bundaberg WH Pty Limited¹
Calardu Loganholme Pty Limited¹
Calardu Rothwell Pty Limited¹
Calardu Bundall Pty Limited¹
Calardu Macgregor Pty Limited¹
Calardu Rutherford Pty Limited¹
Calardu Burnie Pty Ltd¹
Calardu Mackay No. 1 Pty Limited
Calardu Rutherford Warehouse Pty Limited¹
Calardu Cairns Pty Limited¹
Calardu Mackay No. 2 Pty Limited
Calardu Sale Pty Limited¹
Calardu Cambridge Pty Limited¹
Calardu Maitland Pty Limited¹
Calardu Silverwater Pty Limited¹
Calardu Campbelltown Pty Limited¹
Calardu Malaga Pty Limited¹
Calardu South Australia Pty Ltd
Consolidated Entity Disclosure Statement
Set out below is a list of entities that are consolidated in this set of Consolidated financial statements at the end of the financial year.
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
148
SUPPORTING AUSTRALIAN ATHLETES
Calardu Springvale Pty Ltd¹
CP Midland Pty Limited
D.M. Warrawong Franchisor Pty Limited
Calardu Surry Hills Pty Limited¹
CP Moonah Pty Limited
D.M. Warrawong Leasing Pty Limited
Calardu Swan Hill Pty Limited¹
CP Moorabbin Pty Limited
D.M. West Gosford Franchisor Pty Ltd
Calardu Taree Pty Limited¹
CP Morayfield Pty Limited
D.M. West Gosford Leasing Pty Limited
Calardu Taren Point Pty Limited¹
CP Mornington Pty Limited
Daldere Pty Ltd
Calardu Taylors Beach Pty Ltd¹
CP Mt Druitt Leasing Pty Limited
Dandolena Pty Ltd¹
Calardu Taylors Lakes Pty Limited¹
CP Mt Druitt Pty Limited
Derni Pty Ltd¹
Calardu Thebarton Pty Limited
CP O'Connor Pty Limited
Divonda Pty Ltd
Calardu Toorak Pty Limited
CP Osborne Park CL Pty Limited
DM Online Franchisor Pty Limited
Calardu Toowoomba WH Pty Limited¹
CP Osborne Park Pty Limited
DM Online Leasing Pty Limited
Calardu Townsville Pty Ltd¹
CP Richmond Pty Limited
Domain Holdings Pty Ltd
Calardu Townsville WH Pty Limited¹
CP Ringwood Pty Limited
Domayne Furnishing Pty Limited
Calardu Tweed Heads Pty Ltd¹
CP Thomastown Pty Limited
Domayne Online.com Pty Limited
Calardu Tweed Heads Traders Way Pty Limited¹
CP Victoria Park Pty Limited
Domayne Pty Limited
Calardu Vicfurn Pty Ltd¹
CP Welshpool DC Pty Limited
Dubbo JV Pty Limited
Calardu Victoria Pty Ltd¹
Cropp Pty Ltd
Durslee Pty Ltd¹
Calardu Wangaratta Pty Limited
D.M. Alexandria Franchisor Pty Limited
Edbrook Everton Park Pty Limited
Calardu Warragul Pty Limited¹
D.M. Alexandria Leasing Pty Limited
Edbrook Pty Ltd
Calardu Warrawong (Homestarters) Pty Limited¹
D.M. Alexandria Licencing Pty Limited
Energy Incentive Team Pty Limited¹
Calardu Warrawong Pty Limited¹
D.M. Auburn Franchisor Pty Limited
Farane Pty Ltd
Calardu Warrnambool Pty Ltd¹
D.M. Auburn Leasing Pty Limited
Flormonda Pty Ltd
Calardu Warwick Pty Limited¹
D.M. Belrose Franchisor Pty Limited
Furnishing Venture Pty Limited
Calardu West Gosford Pty Ltd¹
D.M. Belrose Leasing Pty Limited
Ganoru Pty Ltd
Calardu Whyalla Pty Limited¹
D.M. Bundall Franchisor Pty Limited
Generic Publications Pty Limited
Calardu Wivenhoe Pty Ltd¹
D.M. Bundall Leasing Pty Limited
Gestco Pty Ltd
Calardu Wodonga Pty Limited¹
D.M. Castle Hill Franchisor Pty Limited
H. N. Capalaba Franchisor Pty Limited
Cannonel Recovery Pty Limited¹
D.M. Castle Hill Leasing Pty Limited
H. N. Capalaba Leasing Pty Limited
Carlando Pty Ltd
D.M. Fortitude Valley Hire Franchisor Pty Limited
H. N. Cobar Franchisor Pty Limited
Charmela Pty Ltd¹
D.M. Fyshwick Franchisor Pty Limited
H. N. Cobar Leasing Pty Limited
Clambruno Pty Ltd¹
D.M. Fyshwick Leasing Pty Limited
H. N. Moree Franchisor Pty Limited
Consolidated Design Group Pty Ltd
D.M. Kotara Franchisor Pty Limited
H. N. Mt Barker Franchisor Pty Limited
Contemporary Design Group Pty Limited
D.M. Kotara Leasing Pty Limited
H. N. Mt Barker Leasing Pty Limited
CP Aspley Pty Limited
D.M. Liverpool Franchisor Pty Limited
H. N. Newcastle West Franchisor Pty Limited
CP Belmont Pty Limited
D.M. Liverpool Leasing Pty Limited
H. N. Newcastle West Leasing Pty Limited
CP Bendigo Pty Limited
D.M. Macgregor Franchisor Pty Limited
H. N. West Wyalong Franchisor Pty Limited
CP Braybrook Pty Limited
D.M. Macgregor Leasing Pty Limited
H. N. West Wyalong Leasing Pty Limited
CP Bundaberg Leasing Pty Limited
D.M. Marion Franchisor Pty Limited
H.N. Adelaide CK Franchisor Pty Limited
CP Bundaberg Pty Limited
D.M. Marion Leasing Pty Limited
H.N. Adelaide CK Leasing Pty Limited
CP Burleigh Waters Pty Limited
D.M. Maroochydore Franchisor Pty Limited
H.N. Albany Creek Franchisor Pty Limited
CP Coburg Pty Limited
D.M. Maroochydore Leasing Pty Limited
H.N. Albany Creek Leasing Pty Limited
CP Dandenong Pty Limited
D.M. North Ryde Franchisor Pty Limited
H.N. Albany Franchisor Pty Ltd
CP Joondalup Pty Limited
D.M. North Ryde Leasing Pty Limited
H.N. Albany Leasing Pty Limited
CP Loganholme Pty Limited
D.M. Osborne Park Franchisor Pty Limited
H.N. Albury Franchisor Pty Limited
CP Macgregor Pty Limited
D.M. Osborne Park Leasing Pty Limited
H.N. Albury Leasing Pty Limited
CP Mackay Pty Limited
D.M. Penrith Franchisor Pty Limited
H.N. Alexandria Franchisor Pty Limited
CP Malvern Pty Limited
D.M. Penrith Leasing Pty Limited
H.N. Alexandria Leasing Pty Limited
CP Mandurah Pty Limited
D.M. QVH Franchisor Pty Limited
H.N. Alice Springs Franchisor Pty Limited
CP Maroochydore Pty Limited
D.M. QVH Leasing Pty Limited
H.N. Alice Springs Leasing Pty Limited
CP Maryborough Leasing Pty Limited
D.M. Springvale Franchisor Pty Limited
H.N. Ararat Franchisor Pty Limited
CP Maryborough Pty Limited
D.M. Springvale Leasing Pty Limited
H.N. Ararat Leasing Pty Limited
(a) Each of the below entities is a body corporate, incorporated in Australia, with 100% share capital held by Harvey Norman Holdings
Limited, and is an Australian resident within the meaning of the Income Tax Assessment Act 1997 (continued).
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
149
SUPPORTING AUSTRALIAN ATHLETES
(a) Each of the below entities is a body corporate, incorporated in Australia, with 100% share capital held by Harvey Norman Holdings
Limited, and is an Australian resident within the meaning of the Income Tax Assessment Act 1997 (continued).
H.N. Armadale WA Franchisor Pty Limited
H.N. Broadway on the Mall Franchisor Pty Limited H.N. City West Leasing Pty Limited
H.N. Armadale WA Leasing Pty Limited
H.N. Broadway on the Mall Leasing Pty Limited
H.N. Cleveland Franchisor Pty Limited
H.N. Armidale Franchisor Pty Limited
H.N. Broken Hill Franchisor Pty Limited
H.N. Cleveland Leasing Pty Limited
H.N. Armidale Leasing Pty Limited
H.N. Broken Hill Leasing Pty Limited
H.N. Coburg Franchisor Pty Limited
H.N. Aspley Franchisor Pty Limited
H.N. Brooklyn Franchisor Pty Limited
H.N. Coburg Leasing Pty Limited
H.N. Aspley Leasing Pty Limited
H.N. Brooklyn Leasing Pty Limited
H.N. Coffs Harbour Franchisor Pty Ltd
H.N. Atherton Franchisor Pty Limited
H.N. Broome Franchisor Pty Limited
H.N. Coffs Harbour Leasing Pty Limited
H.N. Atherton Leasing Pty Limited
H.N. Broome Leasing Pty Limited
H.N. Coorparoo Franchisor Pty Limited
H.N. Auburn Franchisor Pty Limited
H.N. Browns Plains Franchisor Pty Limited
H.N. Coorparoo Leasing Pty Limited
H.N. Auburn Leasing Pty Limited
H.N. Browns Plains Leasing Pty Limited
H.N. Cranbourne Franchisor Pty Limited
H.N. Auburn Seconds World Leasing Pty Limited
H.N. Bunbury Franchisor Pty Limited
H.N. Dalby Franchisor Pty Limited
H.N. Ayr Franchisor Pty Limited
H.N. Bunbury Leasing Pty Limited
H.N. Dalby Leasing Pty Limited
H.N. Ayr Leasing Pty Limited
H.N. Bundaberg Franchisor Pty Limited
H.N. Dandenong Franchisor Pty Ltd
H.N. Bairnsdale Franchisor Pty Limited
H.N. Bundaberg Leasing Pty Limited
H.N. Dandenong Leasing Pty Limited
H.N. Bairnsdale Leasing Pty Limited
H.N. Bundall Franchisor Pty Limited
H.N. Darwin Franchisor Pty Limited
H.N. Balgowlah Franchisor Pty Ltd
H.N. Bundall Leasing Pty Limited
H.N. Darwin Leasing Pty Limited
H.N. Balgowlah Leasing Pty Limited
H.N. Burleigh Heads Franchisor Pty Limited
H.N. Deniliquin Franchisor Pty Limited
H.N. Ballarat Franchisor Pty Limited
H.N. Burleigh Heads Leasing Pty Limited
H.N. Deniliquin Leasing Pty Limited
H.N. Ballarat Leasing Pty Limited
H.N. Burleigh Waters Franchisor Pty Limited
H.N. Dubbo Franchisor Pty Limited
H.N. Ballina Franchisor Pty Limited
H.N. Burleigh Waters Leasing Pty Limited
H.N. Dubbo Leasing Pty Limited
H.N. Ballina Leasing Pty Limited
H.N. Busselton Franchisor Pty Limited
H.N. Echuca Franchisor Pty Limited
H.N. Batemans Bay Franchisor Pty Limited
H.N. Busselton Leasing Pty Limited
H.N. Echuca Leasing Pty Limited
H.N. Batemans Bay Leasing Pty Limited
H.N. Cairns Franchisor Pty Ltd
H.N. Edgewater Franchisor Pty Limited
H.N. Bathurst Franchisor Pty Limited
H.N. Cairns Leasing Pty Limited
H.N. Edgewater Leasing Pty Limited
H.N. Bathurst Leasing Pty Limited
H.N. Cambridge Park Franchisor Pty Limited
H.N. Education Franchisor Pty Limited
H.N. Belconnen Franchisor Pty Limited
H.N. Cambridge Park Leasing Pty Limited
H.N. Education Leasing Pty Limited
H.N. Belconnen Leasing Pty Limited
H.N. Campbelltown Franchisor Pty Limited
H.N. Emerald Franchisor Pty Limited
H.N. Belmont Franchisor Pty Limited
H.N. Campbelltown Leasing Pty Limited
H.N. Emerald Leasing Pty Limited
H.N. Belmont Leasing Pty Limited
H.N. Cannington W.A. Franchisor Pty Ltd
H.N. Energy IP Licensing Pty Limited
H.N. Belmont North Franchisor Pty Limited
H.N. Cannington W.A. Leasing Pty Ltd
H.N. Enfield Franchisor Pty Limited
H.N. Belmont North Leasing Pty Limited
H.N. Canonvale Franchisor Pty Limited
H.N. Enfield Leasing Pty Limited
H.N. Bendigo Franchisor Pty Limited
H.N. Canonvale Leasing Pty Limited
H.N. Everton Park Franchisor Pty Limited
H.N. Bendigo Leasing Pty Limited
H.N. Carindale Franchisor Pty Ltd
H.N. Everton Park Leasing Pty Limited
H.N. Bernoth Franchisor Pty Limited
H.N. Carindale Leasing Pty Limited
H.N. Forster Franchisor Pty Limited
H.N. Bernoth Leasing Pty Limited
H.N. Caringbah Franchisor Pty Limited
H.N. Forster Leasing Pty Limited
H.N. Bernoth Plant & Equipment Pty Limited
H.N. Caringbah Leasing Pty Limited
H.N. Fortitude Valley Franchisor Pty Limited
H.N. Blacktown Franchisor Pty Ltd
H.N. Castle Hill Franchisor Pty Limited
H.N. Fortitude Valley Leasing Pty Limited
H.N. Blacktown Leasing Pty Limited
H.N. Castle Hill Leasing Pty Limited
H.N. Frankston Franchisor Pty Limited
H.N. Bondi Junction Franchisor Pty Limited
H.N. Castle Hill Seconds World Leasing Pty
Limited
H.N. Frankston Leasing Pty Limited
H.N. Bondi Junction Leasing Pty Limited
H.N. Chadstone Franchisor Pty Limited
H.N. Fremantle Franchisor Pty Ltd
H.N. Bowen Franchisor Pty Limited
H.N. Chadstone Leasing Pty Limited
H.N. Fyshwick Franchisor Pty Limited
H.N. Bowermans Leasing Parramatta Pty Limited
H.N. Charters Towers Franchisor Pty Limited
H.N. Fyshwick Leasing Pty Limited
H.N. Braybrook Franchisor Pty Limited
H.N. Charters Towers Leasing Pty Limited
H.N. Geebung Franchisor Pty Limited
H.N. Braybrook Leasing Pty Limited
H.N. Chatswood Franchisor Pty Limited
H.N. Geebung Leasing Pty Limited
H.N. Brighton Franchisor Pty Limited
H.N. Chatswood Leasing Pty Limited
H.N. Geelong Franchisor Pty Limited
H.N. Brighton Leasing Pty Limited
H.N. Chirnside Park Franchisor Pty Limited
H.N. Geelong Leasing Pty Limited
H.N. Broadmeadow (Vic) Franchisor Pty Limited
H.N. Chirnside Park Leasing Pty Limited
H.N. Gepps Cross Franchisor Pty Limited
H.N. Broadmeadow (Vic) Leasing Pty Limited
H.N. City Cross Franchisor Pty Limited
H.N. Gepps Cross Leasing Pty Limited
H.N. Broadway (Sydney) Franchisor Pty Limited
H.N. City Cross Leasing Pty Limited
H.N. Geraldton Leasing Pty Limited
H.N. Broadway (Sydney) Leasing Pty Limited
H.N. City West Franchisor Pty Limited
H.N. Geraldton WA Franchisor Pty Ltd
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
150
SUPPORTING AUSTRALIAN ATHLETES
(a) Each of the below entities is a body corporate, incorporated in Australia, with 100% share capital held by Harvey Norman Holdings
Limited, and is an Australian resident within the meaning of the Income Tax Assessment Act 1997 (continued).
H.N. Gladstone Franchisor Pty Limited
H.N. Kingaroy Leasing Pty Limited
H.N. Moorabbin Franchisor Pty Ltd
H.N. Gladstone Leasing Pty Limited
H.N. Knox Towerpoint Franchisor Pty Limited
H.N. Moorabbin Leasing Pty Limited
H.N. Gordon Franchisor Pty Limited
H.N. Knox Towerpoint Leasing Pty Limited
H.N. Moorabbin SC Franchisor Pty Limited
H.N. Gordon Leasing Pty Limited
H.N. Lake Haven Franchisor Pty Limited
H.N. Moorabbin SC Leasing Pty Limited
H.N. Gosford Leasing Pty Limited
H.N. Lake Haven Leasing Pty Limited
H.N. Moore Park Franchisor Pty Limited
H.N. Goulburn Franchisor Pty Limited
H.N. Leichhardt Franchisor Pty Limited
H.N. Moore Park Leasing Pty Limited
H.N. Goulburn Leasing Pty Limited
H.N. Lismore Franchisor Pty Ltd
H.N. Morayfield Franchisor Pty Limited
H.N. Grafton Franchisor Pty Limited
H.N. Lismore Leasing Pty Limited
H.N. Morayfield Leasing Pty Limited
H.N. Grafton Leasing Pty Limited
H.N. Lithgow Franchisor Pty Limited
H.N. Moree Leasing Pty Limited
H.N. Great Eastern Highway Franchisor Pty
H.N. Lithgow Leasing Pty Limited
H.N. Morley Franchisor Pty Limited
H.N. Great Eastern Highway Leasing Pty Limited
H.N. Liverpool Franchisor Pty Ltd
H.N. Mornington Franchisor Pty Limited
H.N. Greensborough Franchisor Pty Limited
H.N. Liverpool Leasing Pty Limited
H.N. Mornington Leasing Pty Limited
H.N. Greensborough Leasing Pty Limited
H.N. Loganholme Franchisor Pty Limited
H.N. Morwell Franchisor Pty Limited
H.N. Griffith Franchisor Pty Limited
H.N. Loganholme Leasing Pty Limited
H.N. Morwell Leasing Pty Limited
H.N. Griffith Leasing Pty Limited
H.N. Loughran Contracting Pty Ltd
H.N. Moss Vale Franchisor Pty Limited
H.N. Gunnedah Franchisor Pty Limited
H.N. Mac 1 Leasing Pty Limited
H.N. Moss Vale Leasing Pty Limited
H.N. Gunnedah Leasing Pty Limited
H.N. Mac 1 Pty Limited
H.N. Mt Gambier Franchisor Pty Limited
H.N. Guthrie Street Franchisor Pty Limited
H.N. Macgregor Franchisor Pty Limited
H.N. Mt Gambier Leasing Pty Limited
H.N. Guthrie Street Leasing Pty Limited
H.N. Macgregor Leasing Pty Limited
H.N. Mt Gravatt Franchisor Pty Limited
H.N. Gympie Franchisor Pty Limited
H.N. Mackay Franchisor Pty Limited
H.N. Mt Gravatt Leasing Pty Limited
H.N. Gympie Leasing Pty Limited
H.N. Mackay Leasing Pty Limited
H.N. Mt Isa Franchisor Pty Limited
H.N. Hamilton Franchisor Pty Limited
H.N. Maddington Franchisor Pty Limited
H.N. Mt Isa Leasing Pty Limited
H.N. Hamilton Leasing Pty Limited
H.N. Maitland Franchisor Pty Limited
H.N. Mudgee Franchisor Pty Limited
H.N. Hervey Bay Franchisor Pty Limited
H.N. Maitland Leasing Pty Limited
H.N. Mudgee Leasing Pty Limited
H.N. Hervey Bay Leasing Pty Limited
H.N. Malaga Franchisor Pty Limited
H.N. Munno Para Franchisor Pty Limited
H.N. Hoppers Crossing Franchisor Pty Limited
H.N. Malaga Leasing Pty Limited
H.N. Munno Para Leasing Pty Limited
H.N. Hoppers Crossing Leasing Pty Limited
H.N. Mandurah Franchisor Pty Limited
H.N. Murwillumbah Franchisor Pty Limited
H.N. Hornsby Franchisor Pty Limited
H.N. Mandurah Leasing Pty Limited
H.N. Murwillumbah Leasing Pty Limited
H.N. Hornsby Leasing Pty Limited
H.N. Manjimup Franchisor Pty Limited
H.N. Muswellbrook Franchisor Pty Limited
H.N. Horsham Franchisor Pty Limited
H.N. Manjimup Leasing Pty Limited
H.N. Muswellbrook Leasing Pty Limited
H.N. Horsham Leasing Pty Limited
H.N. Maribyrnong Franchisor Pty Limited
H.N. Narre Warren Franchisor Pty Limited
H.N. Hyperdome Franchisor Pty Limited
H.N. Maribyrnong Leasing Pty Limited
H.N. Narre Warren Leasing Pty Limited
H.N. Hyperdome Leasing Pty Limited
H.N. Marion Franchisor Pty Limited
H.N. Newcastle Franchisor Pty Limited
H.N. Indooroopilly Franchisor Pty Limited
H.N. Marion Leasing Pty Limited
H.N. Newcastle Leasing Pty Limited
H.N. Indooroopilly Leasing Pty Limited
H.N. Maroochydore Franchisor Pty Limited
H.N. Noarlunga Franchisor Pty Limited
H.N. Innisfail Franchisor Pty Limited
H.N. Maroochydore Leasing Pty Limited
H.N. Noarlunga Leasing Pty Limited
H.N. Innisfail Leasing Pty Limited
H.N. Martin Place Sydney Franchisor Pty Limited
H.N. Noosa Franchisor Pty Limited
H.N. Inverell Franchisor Pty Limited
H.N. Martin Place Sydney Leasing Pty Limited
H.N. Noosa Leasing Pty Limited
H.N. Inverell Leasing Pty Limited
H.N. Mentone Franchisor Pty Limited
H.N. Norwest Franchisor Pty Limited
H.N. Ipswich Franchisor Pty Limited
H.N. Mentone Leasing Pty Limited
H.N. Nowra Franchisor Pty Limited
H.N. Ipswich Leasing Pty Limited
H.N. Midland Franchisor Pty Limited
H.N. Nowra Leasing Pty Limited
H.N. Joondalup Franchisor Pty Limited
H.N. Midland Leasing Pty Limited
H.N. Nunawading Franchisor Pty Ltd
H.N. Joondalup Leasing Pty Limited
H.N. Mildura Franchisor Pty Limited
H.N. Nunawading Leasing Pty Limited
H.N. Kalgoorlie Franchisor Pty Ltd
H.N. Mildura Leasing Pty Limited
H.N. Oakleigh CK Franchisor Pty Limited
H.N. Kalgoorlie Leasing Pty Ltd
H.N. Mile End Franchisor Pty Limited
H.N. Oakleigh CK Leasing Pty Limited
H.N. Karratha Franchisor Pty Limited
H.N. Mile End Leasing Pty Limited
H.N. O'Connor Franchisor Pty Limited
H.N. Karratha Leasing Pty Limited
H.N. Moe Franchisor Pty Limited
H.N. O'Connor Leasing Pty Limited
H.N. Kawana Waters Franchisor Pty Limited
H.N. Moe Leasing Pty Limited
H.N. Orange Franchisor Pty Limited
H.N. Kawana Waters Leasing Pty Limited
H.N. Moonah Franchisor Pty Limited
H.N. Orange Leasing Pty Limited
H.N. Kingaroy Franchisor Pty Limited
H.N. Moonah Leasing Pty Limited
H.N. Osborne Park Franchisor Pty Limited
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
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SUPPORTING AUSTRALIAN ATHLETES
40
(a) Each of the below entities is a body corporate, incorporated in Australia, with 100% share capital held by Harvey Norman Holdings
Limited, and is an Australian resident within the meaning of the Income Tax Assessment Act 1997 (continued).
H.N. Osborne Park Leasing Pty Limited
H.N. Sunshine Franchisor Pty Limited
H.N. Wiley Park Leasing Pty Ltd
H.N. Oxley Franchisor Pty Limited
H.N. Sunshine Leasing Pty Limited
H.N. Windsor Franchisor Pty Limited
H.N. Oxley Leasing Pty Limited
H.N. Swan Hill Franchisor Pty Limited
H.N. Windsor Leasing Pty Limited
H.N. Pacific Fair Franchisor Pty Limited
H.N. Swan Hill Leasing Pty Limited
H.N. Woden Franchisor Pty Ltd
H.N. Pacific Fair Leasing Pty Limited
H.N. Tamworth Franchisor Pty Ltd
H.N. Woden Leasing Pty Limited
H.N. Parkes Franchisor Pty Limited
H.N. Tamworth Leasing Pty Limited
H.N. Wonthaggi Franchisor Pty Limited
H.N. Parkes Leasing Pty Limited
H.N. Taree Franchisor Pty Limited
H.N. Wonthaggi Leasing Pty Limited
H.N. Penrith Factory Outlet Leasing Pty Limited
H.N. Taree Leasing Pty Limited
H.N. Woodville Franchisor Pty Limited
H.N. Penrith Franchisor Pty Limited
H.N. Taren Point Franchisor Pty Limited
H.N. Woodville Leasing Pty Limited
H.N. Penrith Leasing Pty Limited
H.N. Taren Point Leasing Pty Limited
H.N. Young Franchisor Pty Limited
H.N. Peppermint Grove Franchisor Pty Limited
H.N. Technology for Business Franchisor Pty
H.N. Young Leasing Pty Limited
H.N. Peppermint Grove Leasing Pty Limited
H.N. Technology for Business Leasing Pty Limited Hardly Normal Discounts Pty Ltd
H.N. Port Hedland Franchisor Pty Limited
H.N. Thomastown Franchisor Pty Limited
Hardly Normal Pty Limited
H.N. Port Hedland Leasing Pty Limited
H.N. Thomastown Leasing Pty Limited
Harvey Cellars Pty Ltd¹
H.N. Port Kennedy Franchisor Pty Limited
H.N. Toowoomba Franchisor Pty Limited
Harvey Liquor Pty Ltd
H.N. Port Kennedy Leasing Pty Limited
H.N. Toowoomba Leasing Pty Limited
Harvey Norman (ACT) Pty Ltd¹
H.N. Port Lincoln Franchisor Pty Limited
H.N. Townsville Franchisor Pty Ltd
Harvey Norman (Qld) Pty Ltd
H.N. Port Lincoln Leasing Pty Limited
H.N. Townsville Leasing Pty Limited
Harvey Norman 2007 Management Pty Limited
H.N. Port Macquarie Franchisor Pty Limited
H.N. Traralgon Franchisor Pty Limited
Harvey Norman Big Buys Pty Limited²
H.N. Port Macquarie Leasing Pty Limited
H.N. Traralgon Leasing Pty Limited
Harvey Norman Burnie Franchisor Pty Ltd¹
H.N. Port Pirie Franchisor Pty Limited
H.N. Tura Beach Franchisor Pty Limited
Harvey Norman Burnie Leasing Pty Ltd
H.N. Port Pirie Leasing Pty Limited
H.N. Tura Beach Leasing Pty Limited
Harvey Norman Commercial Your Solution
H.N. Preston Franchisor Pty Ltd
H.N. Vic/Tas Commercial Project Franchisor Pty
Harvey Norman Contracting Pty Limited
H.N. Preston Leasing Pty Limited
H.N. Vic/Tas Commercial Project Leasing Pty
Harvey Norman Corporate Air Pty Limited
H.N. Renmark Franchisor Pty Limited
H.N. Victoria Park Franchisor Pty Limited
Harvey Norman CP Pty Limited
H.N. Renmark Leasing Pty Limited
H.N. Victoria Park Leasing Pty Limited
Harvey Norman Devonport Franchisor Pty Ltd¹
H.N. Richmond Franchisor Pty Limited
H.N. Wagga Franchisor Pty Limited
Harvey Norman Devonport Leasing Pty Ltd
H.N. Richmond Leasing Pty Limited
H.N. Wagga Leasing Pty Limited
Harvey Norman Education and Training Pty
H.N. Ringwood Franchisor Pty Limited
H.N. Wangaratta Franchisor Pty Limited
Harvey Norman Export Pty Ltd
H.N. Ringwood Leasing Pty Limited
H.N. Wangaratta Leasing Pty Limited
Harvey Norman Furnishing Pty Limited
H.N. Riverwood Franchisor Pty Limited
H.N. Warragul Franchisor Pty Limited
Harvey Norman Gamezone Pty Ltd
H.N. Riverwood Leasing Pty Limited
H.N. Warragul Leasing Pty Limited
Harvey Norman Glenorchy Franchisor Pty Ltd¹
H.N. Rockhampton Franchisor Pty Limited
H.N. Warrawong Franchisor Pty Limited
Harvey Norman Global Pty Limited
H.N. Rockhampton Leasing Pty Limited
H.N. Warrawong Leasing Pty Limited
Harvey Norman Hobart Franchisor Pty Ltd¹
H.N. Rothwell Franchisor Pty Limited
H.N. Warrnambool Franchisor Pty Limited
Harvey Norman Hobart Leasing Pty Ltd
H.N. Rothwell Leasing Pty Limited
H.N. Warrnambool Leasing Pty Limited
Harvey Norman Home Cellars Pty Limited
H.N. Salamander Bay Franchisor Pty Limited
H.N. Warwick (WA) Franchisor Pty Limited
Harvey Norman Home Loans Pty Limited
H.N. Salamander Bay Leasing Pty Limited
H.N. Warwick (WA) Leasing Pty Limited
Harvey Norman Home Starters Pty Limited
H.N. Sale Franchisor Pty Limited
H.N. Warwick Franchisor Pty Ltd
Harvey Norman Homemaker Centre Pty Limited
H.N. Sale Leasing Pty Limited
H.N. Warwick Leasing Pty Ltd
Harvey Norman Launceston Franchisor Pty Ltd¹
H.N. Shepparton Franchisor Pty Limited
H.N. Watergardens Franchisor Pty Limited
Harvey Norman Launceston Leasing Pty Ltd
H.N. Shepparton Leasing Pty Limited
H.N. Watergardens Leasing Pty Limited
Harvey Norman Leasing Pty Limited
H.N. South Tweed Franchisor Pty Ltd
H.N. Waurn Ponds Franchisor Pty Limited
Harvey Norman Mortgage Service Pty Limited
H.N. South Tweed Leasing Pty Ltd
H.N. Waurn Ponds Leasing Pty Limited
Harvey Norman Net.Works Pty Ltd
H.N. Southland Franchisor Pty Limited
H.N. West Gosford Franchisor Pty Ltd
Harvey Norman OFIS Pty Limited
H.N. Southland Leasing Pty Limited
H.N. Whyalla Franchisor Pty Limited
Harvey Norman Online.com Pty Limited
H.N. Springvale Franchisor Pty Limited
H.N. Whyalla Leasing Pty Limited
Harvey Norman Rental Pty Limited
H.N. Springvale Leasing Pty Limited
H.N. Wiley Park Franchisor Pty Ltd
Harvey Norman Retailing Pty. Ltd.
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
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SUPPORTING AUSTRALIAN ATHLETES
40
(a) Each of the below entities is a body corporate, incorporated in Australia, with 100% share capital held by Harvey Norman Holdings
Limited, and is an Australian resident within the meaning of the Income Tax Assessment Act 1997 (continued).
Harvey Norman Rosney Franchisor Pty Ltd
J. M. Dubbo Leasing Pty Limited
J.M. Warrawong Franchisor Pty Limited
Harvey Norman Security Pty Limited
J. M. Wagga Wagga Franchisor Pty Limited
J.M. Warrawong Leasing Pty Limited
Harvey Norman Shopfitting Pty Ltd¹
J. M. Wagga Wagga Leasing Pty Limited
J.M. West Gosford Franchisor Pty Limited
Harvey Norman Stores (N.Z.) Pty Limited4
J. M. Wallsend Franchisor Pty Limited
J.M. West Gosford Leasing Pty Limited
Harvey Norman Stores Pty Ltd
J. M. Wallsend Leasing Pty Limited
J.M. Young Franchisor Pty Limited
Harvey Norman Superlink Pty Limited
J.M. Albury Franchisor Pty Limited
J.M. Young Leasing Pty Limited
Harvey Norman Tasmania Pty Ltd
J.M. Albury Leasing Pty Limited
Jartoso Pty Ltd
Harvey Norman Technology Pty Ltd
J.M. Alexandria Franchisor Pty Limited
JM Online Franchisor Pty Limited
Harvey Norman The Bedding Specialists Pty
Limited
J.M. Alexandria Leasing Pty Limited
JM Online Leasing Pty Limited
Harvey Norman The Computer Specialists Pty
Limited
J.M. Ballina Franchisor Pty Limited
Jondarlo Pty Ltd
Harvey Norman The Electrical Specialists Pty
Limited
J.M. Ballina Leasing Pty Limited
Joyce Mayne Furnishing Pty Limited
Harvey Norman The Furniture Specialists Pty
Limited
J.M. Campbelltown Franchisor Pty Limited
Joyce Mayne Liverpool Leasing Pty Limited
Harvey Norman Ulverstone Franchisor Pty Ltd
J.M. Campbelltown Leasing Pty Limited
Joyce Mayne Penrith Pty Ltd
Harvey Norman Victoria Pty Ltd
J.M. Caringbah Franchisor Pty Ltd
Joyce Mayne Shopping Complex Pty Limited
Havrex Pty Ltd
J.M. Caringbah Leasing Pty Limited
Kalinya Development Pty Ltd
HN Bundaberg Markets Pty Limited
J.M. Chancellor Park Franchisor Pty Limited
Kambaldu Pty Ltd¹
HN Byron No.2 Pty Limited
J.M. Chancellor Park Leasing Pty Limited
Kita Pty Ltd
HN Byron No.3 Pty Limited
J.M. Contracting Services Pty Ltd
Koodero Pty Ltd
HN Coomboona Pty Limited¹
J.M. Darwin Franchisor Pty Limited
Korinti Pty Ltd
HN Licensing Pty Limited
J.M. Darwin Leasing Pty Limited
Lamino Pty Ltd¹
HN Online Franchisor Pty Limited
J.M. Leasing Pty Ltd
Lesandu Adelaide City Pty Limited
HN Online Leasing Pty Limited
J.M. Mackay Franchisor Pty Limited
Lesandu Albany Pty Limited
HN QCV Benaraby No.1 Pty Limited¹
J.M. Mackay Leasing Pty Limited
Lesandu Albury Pty Limited
HN QCV Benaraby Pty Limited
J.M. Maitland Franchisor Pty Limited
Lesandu Alexandria (JM) Pty Limited
HN QCV Blackwater Land Pty Limited¹
J.M. Maitland Leasing Pty Limited
Lesandu Alexandria DM Pty Limited
HN QCV Bottle Tree Pty Limited
J.M. Maroochydore Franchisor Pty Limited
Lesandu Alexandria Pty Limited
HN QCV Concepts Pty Limited
J.M. Maroochydore Leasing Pty Limited
Lesandu Alice Springs Pty Limited
HN QCV Fairview Pty Limited
J.M. Marrickville Franchisor Pty Ltd
Lesandu Ararat Pty Limited
HN QCV Injune Pty Limited
J.M. McGraths Hill Franchisor Pty Limited
Lesandu Aspley Pty Limited
HN QCV LOR Pty Limited
J.M. McGraths Hill Leasing Pty Limited
Lesandu Atherton Pty Limited
HN QCV Pty Limited
J.M. Morayfield Franchisor Pty Limited
Lesandu Auburn Stone Pty Limited
HN QCV Sarina Land Pty Limited¹
J.M. Morayfield Leasing Pty Limited
Lesandu Ayr Pty Limited
HN QCV Sarina Pty Limited
J.M. Mudgee Franchisor Pty Limited
Lesandu Bairnsdale Pty Limited
HN QCV Toowoomba Land Pty Limited
J.M. Mudgee Leasing Pty Limited
Lesandu Balgowlah Pty Limited
HN QCV Toowoomba Pty Limited
J.M. Muswellbrook Franchisor Pty Limited
Lesandu Ballarat Pty Limited
HN Zagreb Investment Pty Limited
J.M. Muswellbrook Leasing Pty Limited
Lesandu Ballina JM Pty Limited
HNIC Pty Limited¹
J.M. Nowra Franchisor Pty Limited
Lesandu Batemans Bay Pty Limited
HNL Pty Limited
J.M. Nowra Leasing Pty Limited
Lesandu Bathurst Pty Limited
HNM Galaxy Pty Limited¹
J.M. Plant & Equipment Hire Pty Ltd
Lesandu Belconnen Pty Limited
HNSI Pty Limited
J.M. Rockhampton Franchisor Pty Limited
Lesandu Belmont Pty Limited
Hodberg Pty Ltd
J.M. Rockhampton Leasing Pty Limited
Lesandu Belrose DM Pty Limited
Hodvale Pty Ltd
J.M. Share Investment Pty Ltd
Lesandu Benalla Pty Limited
Home Mart Furniture Pty Limited
J.M. Toukley Franchisor Pty Limited
Lesandu Bennetts Green JM Pty Limited
Home Mart Pty Limited
J.M. Toukley Leasing Pty Limited
Lesandu Bentleigh Pty Limited
Hoxco Pty Ltd
J.M. Townsville Franchisor Pty Limited
Lesandu Berrimah JM Pty Limited
J. M. Bennetts Green Franchisor Pty Limited
J.M. Townsville Leasing Pty Limited
Lesandu Berrimah Pty Limited
J. M. Bennetts Green Leasing Pty Limited
J.M. Warners Bay Franchisor Pty Limited
Lesandu Blacktown Pty Limited
J. M. Dubbo Franchisor Pty Limited
J.M. Warners Bay Leasing Pty Limited
Lesandu Bondi Junction Pty Limited
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
153
SUPPORTING AUSTRALIAN ATHLETES
40
(a) Each of the below entities is a body corporate, incorporated in Australia, with 100% share capital held by Harvey Norman Holdings
Limited, and is an Australian resident within the meaning of the Income Tax Assessment Act 1997 (continued).
Lesandu Bowen Pty Limited
Lesandu Dandenong Pty Limited
Lesandu Manjimup Pty Limited
Lesandu Brisbane City Pty Limited
Lesandu Deniliquin Pty Limited
Lesandu Marion Pty Limited
Lesandu Brisbane Pty Limited
Lesandu Dubbo JM Pty Limited
Lesandu Maroochydore Flooring Pty Limited
Lesandu Broadbeach Pty Limited
Lesandu Dubbo Pty Limited
Lesandu Maroochydore JM Pty Limited
Lesandu Broadway Pty Limited
Lesandu Echuca Pty Limited
Lesandu Maroochydore Pty Limited
Lesandu Broken Hill Pty Limited
Lesandu Eden Pty Limited
Lesandu McGraths Hill (JM) Pty Limited
Lesandu Broome Pty Limited
Lesandu Eight Miles Plains Pty Limited
Lesandu Melbourne City DM Pty Limited
Lesandu Browns Plains No.1 Pty Limited
Lesandu Engadine Pty Limited
Lesandu Mentone Pty Limited
Lesandu Browns Plains Pty Limited
Lesandu Erina Flooring Pty Limited
Lesandu Midland Pty Limited
Lesandu Burleigh Heads Flooring Pty Limited
Lesandu Forster Pty Limited
Lesandu Mile End Pty Limited
Lesandu Burnie Pty Limited
Lesandu Fyshwick Pty Limited
Lesandu Mitchell Pty Limited
Lesandu Busselton Pty Limited
Lesandu Gepps Cross Pty Limited
Lesandu Moe Pty Limited
Lesandu Cairns Pty Limited
Lesandu Gladstone Pty Limited
Lesandu Moorabbin Pty Limited
Lesandu Cambridge Pty Limited
Lesandu Gordon Pty Limited
Lesandu Moore Park Pty Limited
Lesandu Campbelltown Pty Ltd
Lesandu Goulburn Pty Limited
Lesandu Moree Pty Limited
Lesandu Canberra Pty Limited
Lesandu Grafton Pty Limited
Lesandu Mornington Pty Limited
Lesandu Cannington Pty Limited
Lesandu Greensborough Pty Limited
Lesandu Morwell WH Pty Limited
Lesandu Cannonvale Pty Limited
Lesandu Griffith Pty Limited
Lesandu Moss Vale Pty Limited
Lesandu Capalaba Pty Limited
Lesandu Gunnedah Pty Limited
Lesandu Mt Barker Pty Limited
Lesandu Carindale Pty Limited
Lesandu Hamilton (Vic) Pty Limited
Lesandu Mt Gravatt Pty Limited
Lesandu Castle Hill DM Pty Limited
Lesandu Hamilton Pty Limited
Lesandu Mt Isa Pty Limited
Lesandu Castle Hill Pty Limited
Lesandu Helensvale Pty Ltd
Lesandu Munno Para Pty Limited
Lesandu Cessnock (JM) Pty Limited
Lesandu Hervey Bay Pty Limited
Lesandu Murwillumbah Pty Limited
Lesandu Chadstone Pty Limited
Lesandu HN Pty Limited
Lesandu Muswellbrook JM Pty Limited
Lesandu Charmhaven Pty Limited
Lesandu Hoppers Crossing Pty Limited
Lesandu Muswellbrook Pty Limited
Lesandu Charters Towers Pty Limited
Lesandu Hornsby Pty Limited
Lesandu Narrabri Pty Limited
Lesandu Chatswood Express Pty Limited
Lesandu Horsham Pty Limited
Lesandu Narre Warren Pty Limited
Lesandu Chatswood Pty Ltd
Lesandu Indooroopilly Pty Limited
Lesandu Newcastle West Pty Limited
Lesandu Chirnside Park Pty Limited
Lesandu Ingham Pty Limited
Lesandu Noarlunga Pty Limited
Lesandu Cleveland Pty Limited
Lesandu Innisfail Pty Ltd
Lesandu Noosa Pty Limited
Lesandu Cobar Pty Limited
Lesandu Inverell Pty Limited
Lesandu North Ryde DM Pty Limited
Lesandu Coffs Harbour Pty Limited
Lesandu Ipswich Pty Limited
Lesandu Notting Hill Pty Limited
Lesandu Colac Pty Limited
Lesandu Jandakot Pty Limited
Lesandu Nowra Pty Limited
Lesandu Coorparoo Pty Limited
Lesandu Joondalup Pty Limited
Lesandu Oakleigh CK Pty Limited
Lesandu CP Belmont Pty Limited
Lesandu Kalgoorlie Pty Limited
Lesandu O'Connor Pty Limited
Lesandu CP Burleigh Waters Pty Ltd
Lesandu Karratha Pty Limited
Lesandu Orange Pty Ltd
Lesandu CP Coburg Pty Limited
Lesandu Kewdale Pty Limited
Lesandu Osborne Park Pty Limited
Lesandu CP Joondalup Pty Limited
Lesandu Knox Towerpoint Pty Limited
Lesandu Oxley Pty Limited
Lesandu CP Macgregor Pty Limited
Lesandu Kotara DM Pty Limited
Lesandu Pakenham Pty Limited
Lesandu CP Macgregor WH Pty Limited
Lesandu Launceston Pty Limited
Lesandu Parramatta Pty Ltd
Lesandu CP Maryborough Pty Limited
Lesandu Laverton Pty Limited
Lesandu Penrith DM Pty Limited
Lesandu CP Moonah Pty Limited
Lesandu Light Street DM Pty Limited
Lesandu Penrith Pty Limited
Lesandu CP Mornington Pty Limited
Lesandu Lismore Pty Limited
Lesandu Peppermint Grove Pty Limited
Lesandu CP Osborne Park Pty Limited
Lesandu Lithgow Pty Limited
Lesandu Perth City West Pty Limited
Lesandu CP Richmond CL Pty Limited
Lesandu Loganholme Pty Limited
Lesandu Port Lincoln Pty Limited
Lesandu CP Richmond Pty Limited
Lesandu Mackay Pty Limited
Lesandu Port Macquarie Pty Limited
Lesandu CP Richmond WH Pty Limited
Lesandu Maitland JM Pty Limited
Lesandu Port Pirie Pty Limited
Lesandu Cranbourne Pty Limited
Lesandu Maitland Pty Limited
Lesandu Pty Ltd¹
Lesandu Crossroads Pty Limited
Lesandu Malaga Pty Limited
Lesandu Pyrmont Pty Limited
Lesandu Dalby Pty Limited
Lesandu Mandurah Pty Limited
Lesandu Quantum Pty Limited
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
154
SUPPORTING AUSTRALIAN ATHLETES
40
(a) Each of the below entities is a body corporate, incorporated in Australia, with 100% share capital held by Harvey Norman Holdings
Limited, and is an Australian resident within the meaning of the Income Tax Assessment Act 1997 (continued).
Lesandu Raymond Terrace Pty Limited
Lesandu Warners Bay JM Pty Limited
Poliform Pty Ltd
Lesandu Renmark Pty Limited
Lesandu Warragul Pty Limited
Project Wick Ballarat Pty Limited¹
Lesandu Richlands Pty Limited
Lesandu Warrawong Pty Limited
Project Wick Caringbah Pty Limited¹
Lesandu Richmond (Vic) Pty Limited
Lesandu Warrnambool Pty Limited
Project Wick Geelong Pty Limited¹
Lesandu Riverwood Pty Limited
Lesandu Warwick (WA) Pty Limited
Project Wick Hoppers Crossing Pty Limited¹
Lesandu Rockhampton Pty Limited
Lesandu Warwick Pty Limited
Project Wick Ipswich Pty Limited¹
Lesandu Rosebery DM WH Pty Ltd
Lesandu Waurn Ponds Pty Limited
Project Wick Thomastown Pty Limited ¹
Lesandu Rothwell Pty Limited
Lesandu West Gosford DM Pty Limited
Quantum Franchisor Pty Limited
Lesandu S.A. Pty Ltd
Lesandu West Wyalong Pty Limited
Quantum Leasing Pty Limited
Lesandu Salamander Bay Pty Limited
Lesandu Wiley Park Pty Limited
R. Reynolds Nominees Pty Ltd¹
Lesandu Sale Pty Limited
Lesandu Windsor Pty Limited
Sarsha Pty Ltd
Lesandu Shepparton Pty Limited
Lesandu Wollongong Pty Limited
Setto Pty Ltd
Lesandu Silverwater Pty Limited
Lesandu Wonthaggi Pty Ltd
Shakespir Pty Ltd¹
Lesandu Sippy Downs JM Pty Limited
Lesandu Woodville Pty Limited
Solaro Pty Ltd
Lesandu Southport Pty Limited
Lesandu Young JM Pty Limited
Space Furniture Pty Ltd
Lesandu Stanmore Pty Limited
Lexeri Pty Ltd
Spacepol Pty Limited
Lesandu Sunshine Pty Limited
Lightcorp Pty Limited
Steamstyle Venture Pty Limited
Lesandu Swan Hill Pty Limited
Lighting Venture International Pty Limited
Stonetess Pty Limited
Lesandu Sydenham Pty Ltd
Lighting Venture Pty Limited
Stores Securitisation Pty Limited
Lesandu Sydney City SS Pty Limited
Lodare Pty Ltd¹
Strathloro Pty Ltd
Lesandu Tamworth Pty Ltd
Loreste Pty Ltd
Stupendous Pty Ltd¹
Lesandu Taree Home Mart Pty Limited
Malvis Pty Ltd
Swaneto Pty Ltd
Lesandu Taree Pty Limited
Manutu Pty Ltd¹
Swanpark Pty. Ltd.
Lesandu Taren Point Pty Limited
Maradoni Pty Ltd¹
Tatroko Pty Ltd
Lesandu Tasmania Pty Ltd
Marinski Pty Ltd
Tessera Stones & Tiles Australia Pty Limited
Lesandu Temora Pty Limited
Murray Street Development Pty Limited¹
Tessera Stones & Tiles Pty Limited
Lesandu Thomastown Pty Limited
Mymasterpiece Pty Limited
The Byron at Byron Pty Limited
Lesandu Toukley Pty Limited
Nedcroft Pty Ltd
Tisira Pty Limited
Lesandu Townsville Pty Limited
Network Consumer Finance Pty Limited
Valecomp Recovery Pty Limited¹
Lesandu Tumut Pty Limited
Nomadale Pty Ltd
Ventama Pty Ltd
Lesandu Tura Beach Pty Limited
Norman Ross Pty Ltd
Wadins Pty Ltd¹
Lesandu Tweed Heads Flooring Pty Limited
Oldmist Pty Ltd
Wanalti Pty Ltd
Lesandu Tweed Heads Pty Ltd
Osraidi Pty Ltd
Warungi Pty Ltd¹
Lesandu Underwood Pty Limited
P & E Crows Nest Pty Limited
Waytango Pty Ltd¹
Lesandu WA Furniture Pty Limited
P & E Homewest Pty Limited
Webzone Pty Ltd
Lesandu WA Pty Ltd
P & E Leichhardt Pty Limited
Wytharra Pty Ltd
Lesandu Wagga Wagga JM Pty Limited
P & E Maddington Pty Limited
Yoogalu Pty Ltd¹
Lesandu Wagga Wagga Pty Limited
P & E Shopfitters Pty Limited
Zabella Pty Ltd
Lesandu Wallsend JM Pty Limited
Packcom Pty Limited
Zavarte Pty Ltd
Lesandu Wangaratta Pty Limited
PEM Corporate Pty Limited
Zirdano Pty Ltd
Lesandu Warana Pty Limited
Plezero Pty Ltd
Zirdanu Pty Ltd
Notes:
1. Body Corporate is a trustee of a trust within the consolidated group.
2. Body Corporate is a partner of a partnership within the consolidated group.
3. Arisit Pty Limited is incorporated in and operates in Australia and has a registered branch in New Zealand. The branch operations have tax obligations
in New Zealand under the New Zealand Income Tax Act 2007.
4. Harvey Norman Stores (N.Z.) Pty Limited is incorporated in Australia and operates in New Zealand. Harvey Norman Stores (N.Z.) Pty Limited has tax
obligations in New Zealand under the New Zealand Income Tax Act 2007.
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
155
SUPPORTING AUSTRALIAN ATHLETES
40
40
Domayne Holdings Limited
HN Glen Innes Leasing Limited
HN Queenstown Leasing Limited
Hardly Normal Limited
HN Grey Lynn Commercial Leasing Limited
HN Rangitikei Street Leasing Limited
Harvey Norman Leasing (N.Z.) Limited
HN Hamilton Central Leasing Limited
HN Rotorua Leasing Limited
Harvey Norman Limited
HN Hamilton Commercial Leasing Ltd
HN Takanini Leasing Limited
Harvey Norman Properties (N.Z.) Limited
HN Harris Road Leasing Limited
HN Tauranga Commercial Leasing Limited
HN Albany Highway Leasing Limited
HN Henderson Leasing Limited
HN Tauranga Leasing Limited
HN Allens Road Leasing Limited
HN Hornby Leasing Limited
HN Tauriko Warehouse Leasing Ltd
HN Ashburton Leasing Limited
HN Lincoln Centre Leasing Limited
HN Tory Street Leasing Limited
HN Ashburton Warehouse Leasing Limited
HN Maleme Street Leasing Limited
HN Tower Junction Leasing Limited
HN Blenheim Leasing Limited
HN Manukau Leasing Limited
HN Westgate Leasing Limited
HN Botany Leasing Limited
HN Mowbray Street Leasing Limited
HN Whakatane Leasing Limited
HN Botany Outlet Leasing Limited
HN Mt Roskill Leasing Limited
HN Whangarei Leasing Limited
HN Carbine Warehouse Leasing Ltd
HN Mt Wellington Warehouse Leasing Ltd
HN Wingate Leasing Limited
HN Christchurch Commercial Leasing Limited
HN Napier Leasing Limited
HN Wiri Leasing Limited
HN Commercial Leasing Limited
HN Napier Warehouse Leasing Limited
HN Woolston Leasing Limited
HN Commercial Queenstown Warehouse Leasing
Ltd
HN Northlink Leasing Limited
HNZ Retailing NZ Limited
HN Downing Street Leasing Limited
HN Palmerston North Warehouse Leasing Ltd
Network Consumer Finance (N.Z.) Limited
HN Dunedin Outlet Leasing Limited
HN Papanui Leasing (70091) Ltd
Norman Ross Limited
HN Edmonton Road Leasing Limited
HN Paraparaumu Leasing Limited
Stores (NZ) Limited
HN Gisborne Warehouse Leasing Ltd
HN Porirua Warehouse Leasing Limited
(b) (i) Each of the below entities is a body corporate, incorporated in New Zealand, with 100% share capital held by Harvey Norman
Holdings Limited, and is a foreign resident (New Zealand) within the meaning of the Income Tax Assessment Act 1997 .
40
40
Eastgate Retail Park Ltd
Harvey Norman Leasing (Dublin) Limited
Harvey Norman Leasing (Sligo) Limited
Eastgate Retail Park Management Ltd
Harvey Norman Leasing (Eastgate) Limited
Harvey Norman Leasing (Tralee) Limited
Harvey Norman Holdings (Ireland) Limited
Harvey Norman Leasing (Fonthill) Limited
Harvey Norman Leasing (Waterford) Limited
Harvey Norman Leasing (Blanchardstown) Limited
Harvey Norman Leasing (Galway) Limited
Harvey Norman Tallaght Limited
Harvey Norman Leasing (Carrickmines) Limited
Harvey Norman Leasing (Limerick) Limited
Harvey Norman Trading (Ireland) Limited5
Harvey Norman Leasing (Castlebar) Limited
Harvey Norman Leasing (Naas) Limited
Network Consumer Finance (Ireland) Limited
Harvey Norman Leasing (Cork) Limited
Harvey Norman Leasing (NI) Limited6
Harvey Norman Leasing (Drogheda) Limited
Harvey Norman Leasing (Rathfarnham) Limited
(b) (ii) Each of the below entities is a body corporate, incorporated in Ireland, with 100% share capital held by Harvey Norman Holdings
Limited, and is a foreign resident (Ireland) within the meaning of the Income Tax Assessment Act 1997 .
Notes:
5. Harvey Norman Trading (Ireland) Limited is incorporated in and operates in Ireland and has a registered branch in Northern Ireland. The branch
operations have tax obligations in the United Kingdom under the United Kingdom Finance Act 1998.
6. Harvey Norman Leasing (NI) Limited is incorporated in and operates in Ireland and has a registered branch in Northern Ireland. The branch operations
have tax obligations in the United Kingdom under the United Kingdom Finance Act 1998.
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
156
SUPPORTING AUSTRALIAN ATHLETES
(b) (iii) Each of the below entities is a body corporate,
incorporated in Singapore, with 100% share capital held by
Harvey Norman Holdings Limited, and is a foreign resident
(Singapore) within the meaning of the Income Tax Assessment Act
1997 .
Bencoolen Properties Pte Ltd
Harvey Norman Singapore Pte Ltd
Space Furniture Pte Ltd
(b) (vi) Each of the below entities is a body corporate,
incorporated in Slovenia, with 100% share capital held by Harvey
Norman Holdings Limited, and is a foreign resident (Slovenia)
within the meaning of the Income Tax Assessment Act 1997 .
(b) (vii) Each of the below entities is a body corporate,
incorporated in Croatia, with 100% share capital held by Harvey
Norman Holdings Limited, and is a foreign resident (Croatia)
within the meaning of the Income Tax Assessment Act 1997 .
(b) (viii) Each of the below entities is a body corporate,
incorporated in Hungary, with 100% share capital held by Harvey
Norman Holdings Limited, and is a foreign resident (Hungary)
within the meaning of the Income Tax Assessment Act 1997 .
Harvey Norman CEI d.o.o.
Harvey Norman Europe d.o.o.
Harvey Norman Trading d.o.o.
Harvey Norman Croatia d.o.o.
Harvey Norman Hungary KFT
(b) (iv) Each of the below entities is a body corporate,
incorporated in United Kingdom, with 100% share capital held by
Harvey Norman Holdings Limited, and is a foreign resident
(United Kingdom) within the meaning of the Income Tax
Assessment Act 1997 .
Harvey Norman Holdings (UK) Limited
Harvey Norman Trading (UK) Limited
Harvey Norman Leasing (UK) Limited
(b) (v) Each of the below entities is a body corporate,
incorporated in Malaysia, with 100% share capital held by Harvey
Norman Holdings Limited, and is a foreign resident (Malaysia)
within the meaning of the Income Tax Assessment Act 1997 .
Space Furniture Collection Sdn.Bhd
Entity Name
Entity Type
Place of Incorporation
% of Share Capital held
by Harvey Norman
Holdings Limited
Australian or Foreign
resident
Cascade Consolidated Sdn.Bhd.
Body Corporate
Malaysia
80.25%
Foreign- Malaysia
Eastern Audio (Pte) Ltd
Body Corporate
Singapore
80.25%
Foreign- Singapore
E-Creations (M) Sdn. Bhd.
Body Corporate
Malaysia
80.25%
Foreign- Malaysia
Elitetrax Marketing Sdn. Bhd.
Body Corporate
Malaysia
80.25%
Foreign- Malaysia
Harvey Norman Ossia (Asia) Pte Ltd
Body Corporate
Singapore
60.00%
Foreign- Singapore
KEH Partnership
Partnership
N/A
N/A
Australian
KEH Partnership Pty Limited
Body Corporate and an agent of a
partnership within the consolidated
group
Australia
99.02%
Australian
Pertama Holdings Pte Ltd
Body Corporate
Singapore
80.25%
Foreign- Singapore
Pertama Merchandising Pte Ltd
Body Corporate
Singapore
80.25%
Foreign- Singapore
40
(c) (i) Entities included in the consolidated group but not listed above.
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
157
SUPPORTING AUSTRALIAN ATHLETES
(d) Each of the below entities is a trust and is an Australian resident within the meaning of the Income Tax Assessment Act 1997 .
A.C.N. 098 004 570 No. 2 Trust
Calardu Bundaberg Trust
Calardu Maroochydore Warehouse Trust
ABSC Online Trust
Calardu Bundaberg WH Trust
Calardu Marsden Park Trust
Anwarah No. 2 Trust
Calardu Bundall Trust
Calardu Melton Trust
Australian Business Skills Centre Trust
Calardu Burnie Trust
Calardu Melville Trust
Barrayork Trust
Calardu Cairns Trust
Calardu Mentone Trust
Calardu A.C.T. Trust
Calardu Cambridge Trust
Calardu Merrifield Trust
Calardu A.C.T. No. 2 Trust
Calardu Campbelltown Trust
Calardu Midland Trust
Calardu A.C.T. No. 3 Trust
Calardu Cannington Trust
Calardu Morayfield Trust
Calardu Adderley Street Trust
Calardu Cannonvale Trust
Calardu Moree Trust
Calardu Albany Trust
Calardu Capalaba Trust
Calardu Morwell Trust
Calardu Albury Trust
Calardu Caringbah (Taren Point) Trust
Calardu Moss Vale Trust
Calardu Alexandria DM Trust
Calardu Caringbah Trust
Calardu Mt. Gambier Trust
Calardu Alexandria WH Trust
Calardu Crows Nest Trust
Calardu Mudgee Trust
Calardu Alice Springs No. 1 Trust
Calardu Darwin Trust
Calardu Munno Para Trust
Calardu Alice Springs Trust
Calardu Devonport Trust
Calardu No. 1 Trust
Calardu Armadale WA Trust
Calardu Dubbo Trust
Calardu No. 2 Trust
Calardu Armidale Trust
Calardu Emerald Trust
Calardu No. 3 Trust
Calardu Aspley Trust
Calardu Frankston Trust
Calardu Noarlunga Trust
Calardu Auburn No. 1 Trust
Calardu Frankston WH Trust
Calardu Noble Park WH Trust
Calardu Auburn No. 2 Trust
Calardu Fyshwick DM Trust
Calardu Noosa Trust
Calardu Auburn No. 3 Trust
Calardu Gepps Cross No. 2 Trust
Calardu North Ryde No. 1 Trust
Calardu Auburn No. 4 Trust
Calardu Gepps Cross No. 3 Trust
Calardu North Ryde No. 2 Trust
Calardu Auburn No. 5 Trust
Calardu Gepps Cross Trust
Calardu North Ryde No. 3 Trust
Calardu Auburn No. 6 Trust
Calardu Geraldton Trust
Calardu North Ryde Trust
Calardu Auburn No. 7 Trust
Calardu Gladstone Trust
Calardu Nowra Trust
Calardu Auburn No. 8 Trust
Calardu Gympie Trust
Calardu Nowra WH Trust
Calardu Auburn No. 9 Trust
Calardu Hervey Bay Trust
Calardu Nunawading
Calardu Auburn No. 10 Trust
Calardu Hobart Trust
Calardu Oxley Trust
Calardu Ballarat Trust
Calardu Hoppers Crossing Trust
Calardu Penrith No. 2 Trust
Calardu Ballina No. 1 Trust
Calardu Horsham Trust
Calardu Penrith No. 1 Trust
Calardu Ballina No. 2 Trust
Calardu Ipswich Trust
Calardu Penrith Trust
Calardu Ballina Trust
Calardu Joondalup Trust
Calardu Perth City West No. 1 Trust
Calardu Bathurst No. 1 Trust
Calardu Kalgoorlie Oswald St Trust
Calardu Perth City West Trust
Calardu Bathurst Trust
Calardu Kalgoorlie Trust
Calardu Pimpama Trust
Calardu Beaufort Street Trust
Calardu Karratha Trust
Calardu Port Macquarie Trust
Calardu Belrose DM Trust
Calardu Kawana Waters Trust
Calardu Preston Trust
Calardu Bendigo Trust
Calardu Kingaroy Trust
Calardu Raine Square Trust
Calardu Bennetts Green Trust
Calardu Lakehaven Trust
Calardu Richmond Trust
Calardu Bennetts Green Warehouse Trust
Calardu Lakehaven No. 1 Trust
Calardu Rockhampton No. 2 Trust
Calardu Berrimah Trust
Calardu Launceston Trust
Calardu Rockhampton Trust
Calardu Berrimah WH Trust
Calardu Leopold Trust
Calardu Rockingham Trust
Calardu Brighton Trust
Calardu Lismore Trust
Calardu Rosebery Trust
Calardu Broadmeadow No. 1 Trust
Calardu Loganholme Trust
Calardu Roselands Trust
Calardu Broadmeadow No. 2 Trust
Calardu Macgregor Trust
Calardu Rothwell Trust
Calardu Broadmeadows VIC Trust
Calardu Mackay Trust
Calardu Rutherford Trust
Calardu Brookvale Trust
Calardu Maitland Trust
Calardu Rutherford Warehouse Trust
Calardu Browns Plains No. 1 Trust
Calardu Malaga Trust
Calardu Sale Trust
Calardu Browns Plains Trust
Calardu Mandurah Trust
Calardu Silverwater Trust
Calardu Bunbury Trust
Calardu Marion Trust
Calardu Springvale Trust
Calardu Bundaberg No. 1 Trust
Calardu Maroochydore Trust
Calardu Stapylton Trust
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
158
SUPPORTING AUSTRALIAN ATHLETES
(d) Each of the below entities is a trust and is an Australian resident within the meaning of the Income Tax Assessment Act
1997 (continued).
Calardu Surry Hills Trust
Calardu Wivenhoe Trust
Lamino Investments No. 5 Trust
Calardu Swan Hill Trust
Calardu Wodonga Trust
Lamino Investments No. 6 Trust
Calardu Sylvania Trust
Cannonel Recovery Trust
Lesandu Albury Trust
Calardu Taree Trust
CBG Trust
Lesandu Campbelltown Trust
Calardu Taren Point Trust
Charmela No. 1 Trust
Lesandu Fairfield Trust
Calardu Taylors Beach Trust
Energy Incentive Team Trust
Lesandu Gordon Trust
Calardu Taylors Lake Trust
Geraldton WA No. 1 Trust
Lesandu Miranda Trust
Calardu Thomastown Trust
Geraldton WA No. 2 Trust
Lesandu No. 1 Trust
Calardu Toowoomba No. 1 Trust
H.N. Cards Trust
Lesandu Penrith Trust
Calardu Toowoomba No. 2 Trust
Harvey Norman Burnie Franchisor Unit Trust
Lodare No. 1 Trust
Calardu Toowoomba Trust
Harvey Norman Devonport Franchisor Unit Trust
Lodare No. 2 Trust
Calardu Toowoomba WH Trust
Harvey Norman Discounts No. 1 Trust
Murray Street Development Trust
Calardu Townsville Trust
Harvey Norman Glenorchy Franchisor Unit Trust
Oslek Developments Trust
Calardu Townsville WH No. 2 Trust
Harvey Norman Hobart Franchisor Unit Trust
Project Wick Ballarat Trust
Calardu Trust
Harvey Norman Launceston Franchisor Unit Trust Project Wick Caringbah Trust
Calardu Tweed Heads No. 1 Trust
Harvey Norman Lighting Asset Trust
Project Wick Geelong Trust
Calardu Tweed Heads Traders Way Trust
Harvey Norman Lighting No. 1 Trust
Project Wick Hoppers Crossing Trust
Calardu Tweed Heads Trust
Harvey Norman No. 1 Trust
Project Wick Ipswich Trust
Calardu Warragul Trust
Harvey Norman Shopfitting Trust
Project Wick Thomastown Trust
Calardu Warrawong (Homestarters) No. 1 Trust
Harvey Norman Tasmania Agent Unit Trust
QCV Benaraby No. 1 Trust
Calardu Warrawong (Homestarters) Trust
HN Coomboona Trust
Torcarsa No. 2 Trust
Calardu Warrawong No. 1 Trust
HN QCV Blackwater Land Trust
Warehouse No. 7 Trust
Calardu Warrawong No. 2 Trust
HN QCV Sarina Land Trust
Yoogalu Albury Trust
Calardu Warrawong Trust
HNM Galaxy Unit Trust
Yoogalu Gordon Trust
Calardu Warrnambool Trust
HVN D&O Indemnity Trust
Yoogalu Lismore Trust
Calardu Warwick Trust
Lamino Investments No. 1 Trust
Yoogalu Newcastle Trust
Calardu West Gosford No. 1 Trust
Lamino Investments No. 2 Trust
Calardu West Gosford Trust
Lamino Investments No. 3 Trust
Calardu Whyalla Trust
Lamino Investments No. 4 Trust
SUPPORTING AUSTRALIAN ATHLETES
Annual Report 2024 Harvey Norman Holdings Limited (ACN 003 237 545)
159
Twenty largest shareholders as at 28 August 2024
Shareholder Information
Voting rights
All ordinary shares issued by Harvey Norman Holdings Limited carry one vote per share.
Distribution of shareholdings as at 28 August 2024
Number of
Ordinary Shares
Shareholder
Percentage of
Ordinary Shares
415,031,937
Mr. Gerald Harvey
33.309%
205,525,565
Mr. Christopher Herbert Brown
16.495%
144,327,469
HSBC Custody Nominees Limited
11.583%
77,122,956
Citicorp Nominees (Australia) Limited
6.190%
72,034,309
J P Morgan Nominees Australia Limited
5.781%
58,592,289
Ms. Margaret Lynette Harvey
4.702%
20,405,315
Ms. Kay Lesley Page
1.638%
20,063,673
Enbeear Pty Limited
1.610%
16,506,556
BNP Paribas Nominees Pty Limited
1.325%
11,323,750
National Nominees Limited
0.909%
8,070,000
BKI Investment Company Limited
0.648%
4,213,182
Argo Investments Limited
0.338%
3,730,118
Peter & Lyndy White Foundation Pty Ltd
0.299%
3,335,180
Ms. Jacqueline Galbraith
0.268%
2,033,309
Omnilab Media Investments Pty Ltd
0.163%
1,470,893
Mr. John Evyn Slack-Smith
0.118%
1,450,297
Mr. Chris Mentis
0.116%
1,252,641
Mr. Arthur Brew
0.101%
1,143,295
Eastcote Pty Ltd
0.092%
1,061,450
Mr. Graeme Harvey
0.085%
1,068,694,184
85.770%
Size of holding
Ordinary Shareholders
1 – 1,000
13,018
1,001 – 5,000
12,189
5,001 – 10,000
3,801
10,001 – 100,000
3,414
100,001 and over
175
32,597
Number of shareholders with less than a marketable parcel
1,048