Concise Annual Report 2001 (2975k PDF)

DAVID JONES LIMITED CONCISE ANNUAL REPORT 2001 ABN 75 000 074 573
davidjones.com.au
DAVID JONES LIMITED
CONCISE ANNUAL REPORT 2001
ABN 75 000 074 573
JOHN A SIMMONDS
Company Secretary
DAVID JONES LIMITED ACN 000 074 573
CONTENTS
SHAREHOLDER CALENDAR 2002
OFFICES AND OFFICERS
EARLY FEBRUARY
PRINCIPAL REGISTERED OFFICE
Announcement of sales for the
26 weeks ended 26 January 2002
86-108 Castlereagh Street, Sydney NSW 2000
Telephone
(02) 9266 5544
Facsimile
(02) 9261 5717 – Corporate
(02) 9267 3895 – General Retail
Telephone number for all stores
133 DJS (133 357)
Website
davidjones.com.au
MID-MARCH
1
The Power
of the Brand…2-3
Strategy Overview…4-15
2
Message from the
Chairman…16-17
CEO’s Review…18-19
Board of
Directors…20-21
Senior
Management…22-23
Corporate
Philosophy…24-25
3
Announcement of half-yearly profit
results and details of interim dividend
Financial
Results…31-48
APRIL
Scheduled payment of interim dividend
Independent
Audit Report…49
MAY
Announcement of sales for the
39 weeks ended 27 April 2002
Shareholder
Information…50-51
AUGUST
Store Locations…52
Announcement of sales for the
52 weeks ended 27 July 2002
Calendar and
Contacts…IBC
MID-SEPTEMBER
Announcement of preliminary profit
results and details of final dividend
Corporate
Governance…26-28
OCTOBER
Executive Summary
of Financials…29-30
Scheduled payment of final dividend
NOVEMBER
Announcement of sales for the
13 weeks ended 26 October 2002
The 2001 concise annual report includes financial
statements which have been derived from
David Jones Limited 2001 financial report. These
financial statements included in the concise annual
report do not provide as full an understanding of
David Jones Limited’s performance, financial
position, financing and investing activities as
provided by the 2001 financial report.
Further financial information can be obtained
from the 2001 financial report which is available,
free of charge, on request from the Share
Registry by calling 1800 652 207. Alternatively,
both the concise annual report and the full
financial report can be accessed from the “For
Investors” section at the David Jones website
davidjones.com.au
PHOTO FRONT COVER, NEW ESCALATOR VOIDS,
MARKET STREET, SYDNEY
LATE NOVEMBER/EARLY DECEMBER
2002 Annual General Meeting
Designed and produced by Enterprise Horniak & Canny
Annual General Meeting
The Annual General Meeting will be held on
Monday 26 November 2001 at 10.00 a.m. at
the Wesley Conference Centre, 220 Pitt
Street, Sydney, New South Wales. The Notice
of Meeting and Proxy Form are separate
items accompanying this 2001 concise
annual report.
The concise annual report, the full financial report and the Notice
of Meeting and general shareholder information can be accessed
on our website under “For Investors”. Announcements made to
ASX during the year are put on the website.
COMPANY SECRETARY
John A. Simmonds
FCIS ASIA
SHARE REGISTRY
Computershare Investor Services Pty. Limited
Level 3, 60 Carrington Street, Sydney NSW 2000
GPO Box 7045, Sydney NSW 1115
Telephone
1800 652 207 Toll Free
Facsimile
(02) 8234 5435
Website
computershare.com
Shareholders can access from the David Jones website under
“For Investors” information and services relevant to their holding,
including dividend payment history details.
Anyone can visit the Share Registry website to access a range
of information about David Jones Limited including the closing
price of David Jones Limited shares, graphs showing market
prices over a requested period and graphs showing volumes
traded over a requested period.
Shareholders can register their email address through
the Share Registry website to receive shareholder
communications electronically.
STOCK EXCHANGE
The Company is listed on the Australian Stock Exchange.
The home exchange is Sydney.
1
ANNUAL REPORT 2001
THE POWER OF THE
DAVID JONES BRAND IS
BEING HARNESSED TO DRIVE
THE COMPANY FORWARD
2
“First and foremost, we are the managers of
one of Australia’s most valued brands. The
power of the David Jones brand is being
harnessed to drive the company forward. We
remain completely focused on continuing to
improve our business, our relationship with
our customers and the value of our company.”
Peter Wilkinson – CEO David Jones Limited
PRESENCE
Market Penetration: We will increase our selling space significantly over
the next three years, and will also dramatically improve the efficiency
of our stores. We are improving selling space ratios across our
portfolio, including our city stores, to help drive enhanced sales and
profit results from our stores group.
DELIVERY
New Ways to Service our Customers:We are continually improving our levels
of service, enhancing our range of products and brands, and developing
new ways to interact with our customers. There can be no sitting still in
this business; we must continue to evolve and improve our offer.
LEVERAGE
Diversification: How can we leverage the strength of our brand and the
knowledge we have of our core customers to develop new products and
services that will help grow our business? Foodchain by David Jones is
the first step…
3
THE POWER OF
THE BRAND
4
Brand Presence: We are improving both the efficiency and
ambience of our stores. We are seeking the perfect marriage
of an environment that stimulates our customers, ensures
they feel at home and therefore encourages them to shop,
while simultaneously providing a better model by which to run
our stores. It is a simple equation – increased sales in a more
efficient environment equals an improved store profit
contribution. We will increase our selling space significantly
over the next three years. The results from the stores
completed so far have been impressive.
5
PRESENCE
6
“Increased sales from a more efficient store environment leads to
improved profit contribution.”
Our Stores Program
We have embarked on a large-scale capital
works program designed to ensure we have
the most efficient stores network possible,
while providing shopping environments that
match our brand positioning. By 2004/2005,
this $275 million program will increase our
selling floorspace by over 20%.
The targeted outcomes of our stores
program are to:
meet our financial performance targets
increase sales revenue
improve the appeal of our stores to
our customers
improve the selling space ratios of
the store (make more space available
for selling)
ensure the right merchandise mix is
in place to maximise profit and sales
opportunities
reduce running costs by improving
store logistics.
We want to make one point clear – our
stores program is about much more
than maintenance or visual appeal.
Improvements in supply chain management
and store design are allowing us to reclaim
space currently being used for other nonselling purposes such as stock handling.
This means we can respond to customer
demand and present a more complete
offering by introducing new categories of
merchandise. Increased selling space
combined with greater store efficiency drives
profit contribution.
Case Study – Adelaide CBD
In our Adelaide city store, while we
decreased its overall size by 32%, we only
decreased the selling space by 2%. The new
store design provides an improved customer
flow around the shop floor. Enhanced lighting
and fixtures showcase the expanded range
of products and brands available as well as
improving the ability of our customers to see
and reach the product.
The Adelaide store was awarded “Store of
the Year” at the 2000 International Store
Design Competition held in the United
States. This is the first time an Australian
7
OUR STORES PROGRAM IS ABOUT MUCH MORE THAN VISUAL APPEAL
retailer has won the overall award and in
doing so, we were placed ahead of 200
world-renowned retailers.
Since the Adelaide store opened in August
2000, customer feedback has been
extremely positive. Sales and contribution
to group profit have been consistently
above expectations.
Budgeting for Refurbishments
The team at David Jones has spent a
considerable amount of time establishing
what level of capital spend is genuinely
needed in order to produce the required
results in terms of financial return.
The spend will vary from store to store.
Our city stores are the lynchpins of our
brand positioning. These stores because
of their size and location require more
capital than our suburban stores.
The refurbished stores demonstrate the
progression of the David Jones brand.
They closely match the key requirements
our customers desire in a shopping
environment – a comfortable, stylish
environment which allows ample freedom
of movement, has good lighting and
well displayed stock which can be
accessed easily.
The Best Product Presentation
Our
merchandising,
stores
and
development teams are working closely
together to deliver a store environment
that provides both functionality as well as
visual appeal.
The world’s top brands are highly
protective of the way in which their
products are displayed and sold. The right
selling environment is imperative. Our
refurbishment program will allow us to
continue to attract and secure some
of the world’s most exclusive and
leading brands.
8
Brand Delivery: A department store is an evolving business.
We are constantly striving to enhance our product range, find
better ways to serve and interact with our existing customers,
as well as attract new customers to David Jones. Part of our
management philosophy is we must constantly refresh our
product range to ensure we have the best possible offering.
We continue to search for new mediums, including the
Internet, through which to communicate and develop our
customer relationships.
9
DELIVERY
10
PHOTO BOTTOM RIGHT, FROM LEFT TO RIGHT, PETER MORRISSEY, COLETTE GARNSEY, DAVID BUSH, MARK KEIGHERY
“We are constantly striving to enhance our product range, find
better ways to serve and interact with our existing customers
as well as attract new customers to David Jones.”
Over the past four years, the David Jones
team has reinvigorated this icon brand.
We have completely updated our product
selection, considerably increased service
standards and improved the way in which
we communicate with our customers.
Brands and Products
David Jones continues to introduce well
known Australian and international brands
including the leading Italian furniture maker
Natuzzi, apparel and accessories brand
Burberry and the Sisley range of cosmetics
and fragrances. This year Ella Bache
became exclusive to David Jones as a
department store.
Key alliances have also been developed with
leading Australian designers Peter Morrissey
and Mark Keighery. A series of Peter
Morrissey concept stores is being developed
and will appear in stores towards the end
of the year. The high profile Marc’s brands –
Baby Doll, Diesel, and Marc’s Men’s and
Women’s are also being introduced to
David Jones.
We are being increasingly acknowledged
by our suppliers as a true brand-building
partner. We respect the work being
done by our supplier partners on the
positioning of their brands and seek to
develop mutually successful outcomes in
terms of how we sell, display and
communicate their products.
We have developed strategies to allow us to
build a stable of brands, which are either
exclusive to David Jones as a department
store, or totally exclusive to David Jones in
Australia. We are dedicated to continuing to
present the best brands in the world to
our customers in a comfortable, stylish
environment with knowledgeable sales
assistants in order to enhance their
shopping experience.
Our Service Standards
David Jones instituted the Five Star
Customer Service Program in 1997. The
program is designed to provide continual
training for our staff based around five
service non-negotiables. Our research tells
us we have a significant service level
11
VISIT US AT DAVID JONES ONLINE – davidjones.com.au
advantage over our major competitor –
a crucial edge we intend maintaining.
Service is about much more than simply
putting staff on the floor. We aim to ensure
our people are knowledgeable about
the products they are selling so they can
help customers make the right decision.
It is also important for our staff to make
our customers feel special and valued at
all times.
This takes a long-term commitment to
training and the provision of the best sales
environment possible. We talk with our
customers continually to understand what
they value in a store environment and how
we can make their shopping experience
more pleasurable and productive.
David Jones Online (davidjones.com.au)
Our Online business provides an additional
way for customers to interact with
David Jones. Over time the online and
stores parts of the David Jones business
will operate seamlessly. We believe that the
online business will be an increasingly
important competitive tool going forward
David Jones Online was launched in
October 2000. There are now eight key
categories available on our site – Beauty,
Women, Men, Children, Homewares,
Leisure, Gifts and Christmas Hampers.
We conducted a phased introduction
of categories containing products that
relate well to an online environment.
Our knowledge of the department store
market and our customers has meant that
we have very low levels of product return
relative to the market.
Gift solutions and promotional leverage
opportunities are strengths for the online
business. Customers appreciate having
the ability to look for gift or product
suggestions, browse, select an item and
where necessary have it wrapped
and delivered throughout Australia. Online
customers can register to receive
information from us by email. Many
existing online customers are receiving
information in this way.
We hope you will take the opportunity to
visit us at davidjones.com.au soon.
12
Brand Leverage: At David Jones we have developed a high
level of understanding about the wants and needs of our
core customers. We have examined how we can leverage
the strength of our brand and our customer relationships to
grow the David Jones business. Foodchain by David Jones is
the first step…
13
LEVERAGE
FOODCHAIN BY DAVID JONES PARRAMATTA, NSW
14
“How can we enhance the great relationships we have built with
our customers to grow the David Jones business? Foodchain by
David Jones is the first step.”
David Jones continually works towards the
development of long-term relationships with
its customers. We regularly research our
customer base to benchmark our
performance and establish how we may
serve customers in new and improved ways.
Foodchain by David Jones
The way Australians shop for groceries has
changed dramatically in recent years.
Changes in lifestyle, such as an increase in
the number of working women and the
number of part time and casual workers,
have led to changes in the way we shop for
food. We are shopping more often; in fact,
60% of people are shopping twice a week or
more. There has been a marked return to
“just in time” shopping.1
1
Source: AC Nielsen “The Way We Shop” 2000
In researching the typical David Jones’
customer, we found that by 4pm almost
90% did not know what they would be
having for dinner that evening.
Convenience, inspiration, accessibility,
quality and value are what our customers are
looking for when shopping for food and they
have told us that traditional supermarkets are
not addressing their needs.
Unlike the traditional David Jones food halls
run as part of the department stores group,
Foodchain is a separate business. The range
includes fresh fruit and vegetables, bread,
meat, seafood, wine and delicatessen items
focused on providing a one stop convenient
cost-effective meal solutions format.
Three aspects are critical to the Foodchain
offer – location, access and quality produce.
Stores are located in areas where there is
a critical mass of our core customers.
Proximity to major transport hubs, parking
and easy accessibility are important
considerations, for this reason our
stores will tend to be in small shopping
developments or in strips. Produce is
sourced locally to ensure optimum quality
and freshness.
Service is another key factor in the
Foodchain stores. Our customers told us
they wanted staff on hand who really knew
food well and could give them advice
on selection and preparation. Many of our
staff have run their own food businesses,
15
FOODCHAIN IS AN INVESTMENT IN THE FUTURE GROWTH OF DAVID JONES
including restaurants, and they are
passionate about the food business.
Restaurant trained chefs oversee the
production of the take-home meals, side
dishes and salads and assist customers
with their selections. More than 30 meals,
selected on the basis of seasonality and
produce availability, are on offer at any trip to
Foodchain. The menu changes constantly.
Approximately 10% of a typical Foodchain
store consists of a range of around
4,000 convenience grocery items at
competitive prices. Another 6% consists
of a top quality liquor offer to assist in
completing your meal. There is also a small
coffee shop.
Performance to Date
The first three Foodchain stores are now
open at Brighton and Hawthorn in
Melbourne and Parramatta in Sydney.
Several more stores are due to open in 2002.
Our plan is to open 40 stores over five years
(2001-2006) at which point Foodchain is
forecast to contribute significantly to both
sales revenue and profit.
Foodchain is an investment in the future
growth of David Jones. While it is a niche
offering targeting less than 1% of the
A$55 billion food and grocery industry, it
will provide important exposure to a
different part of the retail sector.
BRIGHTON, VICTORIA
HAWTHORN, VICTORIA
PARRAMATTA, NSW
16
MESSAGE FROM THE
CHAIRMAN
RECENT EVENTS
As I sit here writing my report, news of the horrendous events in
the United States of 11 September has just broken. It is truly
astonishing that such a thing could happen.
To our customers, business colleagues, employees and
shareholders who have been affected by this tragedy, who
knew people killed or injured, the team at David Jones offer
our condolences.
THE PAST YEAR
David Jones, along with most of the non-food retail sector, was put
to the test this year by the toughest retail trading environment in
more than a decade. One-off economic events including the
“tech-wreck”, the introduction of the Goods and Services Tax (GST),
the Olympic Games, petrol price and currency fluctuations
contributed to a sudden and severe downturn in consumer
discretionary spending.
Some retailers tried to combat the softer trading environment by
implementing short-term initiatives such as continuous severe
discounting. While mindful of the competitive pressures, we
remained committed to our well-established strategy, focusing on
our longer-term vision for the business.
The strength of our strategy, and our focus on its application,
allowed us to navigate the challenging conditions during the year
better than many of our competitors. We continued to build on
our solid foundations for future growth. There is still much we can
do to strengthen our business and improve operational
efficiencies moving forward.
The Board and management team would like to thank our many
loyal shareholders and customers, and reiterate our commitment
to growing the business and driving increased shareholder value.
OUR PERFORMANCE
The extensive work done during our rebuilding phase (1997-2000)
meant we entered the financial year in sound operational shape.
This differentiated us from many of our competitors.
Net profit after tax was $28.0 million, a decrease of $7.8 million or
21.7 per cent over the corresponding period. The results of both
periods were impacted by significant items. The result reflected
the impact of the challenging trading conditions, the writing-off of
costs associated with the development phase for David Jones
Online, and the operating costs associated with setting up the
two new businesses.
Having completed the establishment phase for the Online
business, the path to profitability is now clear. The operating
loss will be halved in the 2001/02 financial year. Costs will
continue to be managed downward with the business
expected to be close to breakeven in FY2003. David Jones Online
remains an important strategic component of our overall offering
going forward.
Our focused branding and retail strategy and strong relationship
with our core customer group assisted us in increasing our market
share and maintaining our position as Australia’s premier
department store. Annual sales for our core business increased
to $1,535m – a solid relative result in tough trading conditions.
Our key categories of women’s apparel and cosmetics
outperformed the market.
In complex periods it makes sense to look through the cycle to
the fundamentals to judge how well any business is navigating
the environment. We have continued to gain market share,
controlled our margins and stock levels well and are making good
progress on costs.
We have maintained our dividend at eight cents per share for
the year.
OUR STRATEGY
Our business strategy is designed to harness the power of the
David Jones brand and is broken down into three key areas:
Brand Presence – our stores program
Brand Delivery – continuing to evolve our product selection,
service and communication
Brand Leverage – finding new ways to serve our customers.
I’d like to share with you our achievements in these areas during
the year.
Brand Presence
Our stores program is an investment in the future of our business.
Over the long term, it will enhance our ability to derive profits from
our core business.
Our stores program is about much more than simple
housekeeping. We are adding significantly to our total selling
space over the next three years and simultaneously dramatically
improving the efficiency of our stores layout.
By November 2001, we will have completed phase one of the
major refurbishment of our flagship Elizabeth and Market Street
stores. This year we have replaced the old infrastructure including
escalators. The work has gone smoothly. In fact the most
common question asked has been “When are you starting?” This
is a testament to the skills of our development team.
The new Hay Street Mall store in Perth will be completed towards
the end of 2002. It will be double the size of the original.
In February 2002, we will rebrand the Aherns stores in Perth to
David Jones.
Our Adelaide CBD store won the prestigious International Store
Design Competition during the year, beating around 200 of the
world’s best retailers. We are the first Australian retailer to win the
overall award in this competition. Response to the store has been
exceptional and it continues to trade above expectations.
Brand Delivery
Our successful merchandising strategy has seen us continue
to introduce new brands into our offering. We are dedicated to
providing the right offering to our customers; one they respond
to enthusiastically and which drives sales and profits.
David Jones has enhanced its leading reputation amongst
suppliers as a strong brand building partner. Our philosophy of
partnership demonstrates our understanding of the work that goes
into positioning, building, maintaining and protecting a brand.
We have built a considerable service level advantage over our
major competition. Our well established service program remains
our platform for instilling a well executed service ethic in our team.
Exceptional service is about more than simply putting staff on the
floor. Our service program is designed to provide our team with
the knowledge, skills and understanding of our customer needs
which ensure that our customers feel highly valued.
Brand Leverage
Foodchain by David Jones was launched in November 2000,
providing us with important exposure to another part of the
retail sector. Three stores have opened, two in Melbourne and
one in Sydney. Customer reaction to each store has been
enthusiastic and revenues are building strongly.
The Foodchain business is still in its infancy. However, our
experience to date indicates that the offer is one which our
targeted demographic likes and responds to very well.
Establishing a new business takes focus and patience. Our plan
remains to open 40 stores over five years (2001-2006).
MOVING FORWARD
In today’s highly competitive and rapidly evolving retail
environment, we remain committed to driving our business 17
forward and improving shareholder value. There is a genuine
desire and drive exhibited by both the Board and management
team to improve performance, and continue to grow this
magnificent brand.
CORPORATE GOVERNANCE
It has been a turbulent year for corporate Australia generally and
I understand many of our shareholders have concerns about what
is happening in the broader market. At David Jones, we remain
committed to the highest possible standards of Corporate
Governance. Our Disclosure Policy articulates our desire to
ensure the market is kept well informed about the progress of our
Company. A copy of this policy is available on our website.
On pages 24 and 25 of this report we outline some of our
corporate philosophies. We believe it is important to provide you
with an understanding of the thinking behind key aspects of the
way we run our business such as our attitude to environmental
issues, our people policies, our code of ethics and the way we
manage risk. I hope you find this informative.
THANKYOU
Our CEO, Peter Wilkinson, is one of Australia’s leading and most
experienced retailers. He has built one of Australia’s best retail
management teams over the last four years and importantly
developed best practice people development, and succession
planning policies.
Through the year we were able to make several changes and new
appointments at senior executive level utilising only internal
candidates. This is a testament to the strength of the team.
On behalf of the Board, I want to thank Peter, the management
team and the David Jones staff for their efforts over the past year.
Your collective dedication has, as always, been impressive.
Richard Warburton
CHAIRMAN
18
CEO’S REVIEW
KEY OPERATIONAL ISSUES 2000/2001
Rapid compression of the retail sales environment
Launch of two new businesses
Commencement of our major capital investment (stores)
program
Launch of our three year cost management program
Integration of the Aherns business in Western Australia
THE SALES ENVIRONMENT
The speed with which the sales environment changed at the end
of calendar 2000 was dramatic. Given the number of anomalous
economic events which occurred during the year, many in the
retail industry were wondering whether the sudden fall in
consumer spending was yet another one-off or the beginning of a
longer trend.
What do you do when the pendulum swings this rapidly? For us,
the answer was to remain focused on our long-term vision by
maintaining our market positioning, carefully monitoring the
market and putting in place considered tactical responses to the
changed conditions.
The Merchandising and Stores teams collaborated closely to find
additional ways to drive revenue without compromising our
market position.
The marketing program was fine-tuned to ensure we achieved
maximum exposure for our marketing dollar. We further targeted
campaigns and refined offers in conjunction with suppliers
while maximising the public relations leverage of our premium
market positioning.
Well-established stock management practices held our inventory
at acceptable levels. End of year stock levels for our department
stores business were only 1% higher than the previous year.
Aged stock levels remained around our 5% benchmark.
Selling General & Administration costs as a percentage of sales
increased in the first half. This increase reflected the effect of the
sudden compression of the sales environment along with the
inclusion of a full year of operating costs for the Aherns business
and two new stores at Chadstone and Southland in Melbourne.
Significant inroads were made with our core business costs
during the second half to bring them in line with the reduced
sales base.
I would like to particularly thank our suppliers who have worked
alongside us during the past 12 months to help our business
navigate the challenging trading conditions.
NEW BUSINESSES AND CAPITAL EXPENDITURE
In Financial Year 2000/2001 we embarked on a significant
stores improvement program and launched two new businesses
– David Jones Online and Foodchain by David Jones.
Our capital expenditure program is about putting in place the
building blocks for strong future revenue and profit performance.
While the program is aggressive, we believe it is a strategic
imperative for our business and a key platform to drive future
shareholder value.
Our Stores Program
Our stores program is designed to support the achievement of
your long-term vision for our business. Further information
about our stores program can be found on pages 6 and 7 of
this report.
The innovative sale and leaseback of our city stores in Sydney and
Melbourne was completed in December 2000. This deal provides
the capital to undertake the refurbishments of these highly
successful flagship stores.
Key milestones include:
A new 14,000 square metre store opened at Hornsby
in late September.
The completion of the first phase of the Elizabeth and
Market Street major refurbishment in November 2001.
We are creating 17% more selling space in this flagship
store. The project will be completed in 2004.
Commencement of construction on our new city store
in Perth which will double the size of our former store.
The opening is scheduled for late 2002.
Foodchain by David Jones
This niche meal solutions based business is an exciting
opportunity for our Company. It provides exposure to a different
part of the retail sector. Foodchain is covered in more detail on
pages 13, 14 and 15 of this report.
There are now 3 stores open 3 more will open in the next
12 months. Customer reaction has been enthusiastic and
revenues are building strongly. Our plan is to open 40 stores over
five years (2001-2006) at which point Foodchain is forecast to
contribute significantly to both sales revenue and profit.
David Jones Online (davidjones.com.au)
Revenue for the David Jones Online business is building steadily
and is in line with expectations. The business is making strong
progress on all key strategic indicators including unique visitors,
conversion rate, average order size, and service standards. The
online business will be an increasingly important competitive tool
going forward.
Over time the online and bricks and mortar parts of the
department store business will operate seamlessly. Costs will
continue to be reduced through greater leveraging of the core
business. Good progress is being made in this regard.
SETTLEMENT OF CONTINGENT LIABILITIES
In 1997, David Jones sold five stores to Harris Scarfe. Contingent
liabilities existed in respect to two stores at Macarthur Square
(Sydney), and Elizabeth City Centre (Adelaide).
David Jones reopened the Macarthur Square store on
13 September. Since 1997, the owners of the centre have
completed a major refurbishment which has considerably
improved performance. The trade area is growing significantly
faster than both the Sydney and Australian averages in terms
of the key David Jones’ shopper segments. To date, the
Macarthur Square store has exceeded our expectations. It is
expected to be profit neutral for the group in the 2001/2002
financial year.
A payment of $2.8 million was made in September to extinguish
the contingent liability and release David Jones from any future
liability in respect of the guarantee associated with the assignment
of a lease at the Elizabeth City Centre. The Elizabeth trade area
does not have sufficient demographic density to support a David
Jones store.
We acted to protect the integrity of the David Jones brand, its
custom and business and to remove any uncertainty regarding
contingent liabilities. There are no further contingent liabilities for
David Jones in relation to Harris Scarfe.
THE “SECURING OUR FUTURE” COSTS PROGRAM
Launched in 2000, the Securing our Future Program identifies
sustainable ways of reducing our cost base by redesigning and
improving cross-functional business processes.
During financial year 2000/2001, $14 million of annualised costs
savings were achieved primarily in the area of stores expenses.
We are targeting an additional $10 million of savings over the next
two financial years.
AHERNS
David Jones acquired the Aherns chain in Western Australia in
early 1999 to support our aim of increasing market penetration.
Aherns has been undergoing a gradual transition as we phase-in
the David Jones range, stores management and marketing
approach. Research shows the people of Perth are looking
forward to the launch of the David Jones brand which will occur
in February 2002. Customer reaction to the first stage of our
City store refurbishment has been extremely positive.
19
TRAINING AND SUCCESSION PLANNING
Over the past four years our team has put significant time and
effort into establishing a robust human resources strategy. We
have been able to make several senior management level
appointments during the year utilising only internal candidates
which reflects the quality of the work that has been undertaken.
In May 2001, we announced the following changes: Stephen
Goddard, formerly Operations Director, became Chief Financial
Officer; Julie Coates, formerly Human Resources Director,
became Operations Director; Teresa Gallo, formerly General
Manager Organisation Development, became Human Resources
Director and Lawrie Turner, formerly General Manager Information
Technology, became Chief Information Officer. All are making
significant contributions in their respective areas.
KEY OPERATIONAL ISSUES FOR THE COMING YEAR
Our priorities for 2001/2002 are:
The path to profitability of our new businesses
We are progressing both our new businesses along the
path to profitability. Both are being managed carefully to
establish strong foundations.
General improvements in the cost base of the business
We are committed to identifying additional ways to
strategically reduce the costs of doing business
while protecting our high standards and market positioning.
Management of the capital expenditure program
Significant focus is being applied our capital expenditure
program. We are investing approximately $100 million per
annum over the next few years.
Continue to manage the current trading conditions
and remain well positioned for upside
Some positive signs emerged in August when we
commenced the summer trading season, however, taking
into account the variation which is still being exhibited in
sales patterns and the repercussions of the events in the
United States, we believe it is too early to confidently call
any trend.
The David Jones business is sufficiently flexible to continue
to deal with changeable market conditions. We have a well
established management team in place who have a clear
vision of the market position of our business.
Peter Wilkinson
CHIEF EXECUTIVE OFFICER
20
BOARD OF DIRECTORS
LOUIS PETER WILKINSON Chief Executive, age 57,
resident Sydney, joined David Jones Limited in March 1997.
Prior to becoming Chief Executive of David Jones, joined Just
Jeans as Managing Director in January 1996. Prior to that was
Merchandise and Marketing Director of Myer Stores Limited,
Managing Director of Myer Grace Bros. and held the post of
Chief Operating Officer and a Director of Coles Myer Limited from
1988 until 1996.
RICHARD WARBURTON Appointed Director on 6 October
1995, Chairman and Non-Executive Director, Chairman
Remuneration and Nominations Committee, age 60, resident
Sydney, Chairman of Goldfields Limited, Commonwealth
Government Board of Taxation, Caltex Australia Limited and
HIH Claims Support Limited, Board Member of Reserve Bank
of Australia, Director of Southcorp Limited, Nufarm Limited,
Tabcorp Holdings Limited, O’Connell Street Associates Pty.
Limited and Note Printing Australia Limited.
KATIE LAHEY BA (Hons) MBA Appointed Director on
6 October 1995, Non-Executive Director, Member
Remuneration and Nominations Committee, age 51, resident
Sydney, CEO of the Business Council of Australia, Board Member
of Hills Motorway Limited, Australia Post, Marsh Australia
Advisory Board, Sydney Symphony Orchestra Council and
Garvan Research Foundation Board.
GEOFFREY HEELEY BEc FCPA Appointed Director on
6 October 1995, Non-Executive Director, Chairman Audit
Committee, age 67, resident Melbourne. Director of AXA Asia
Pacific Holdings Limited, The National Mutual Life Association of
Australasia Limited (a subsidiary of AXA Asia Pacific Holdings
Limited) and The Jack Brockhoff Foundation Limited.
21
ROBERT SAVAGE Appointed Director on 25 October 1999,
Non-Executive Director, Member Remuneration and
Nominations Committee, age 59, resident Sydney, Director of
Handeni Pty. Limited, Smorgon Steel Limited, Perpetual Trustee
Australia Limited and IBA Technologies Ltd. Member of the
Advisory Board of Sydney University Faculty of Business and
Economics. Previous to his appointment, he was Chairman and
Managing Director of IBM Australia.
JOHN COATES AO LLB Appointed Director on 6 October
1995, Non-Executive Director, Member Remuneration and
Nominations Committee, age 51, resident Sydney, Chairman
of Accord Pacific Holdings Limited, President of the Australian
Olympic Committee, Member of the International Olympic
Committee, Vice President of International Council of Arbitration
for Sport, Council Member of International Rowing Federation,
Deputy Chairman of Kengfu Properties Pte. Limited, Director of
Roseville College Foundation Ltd., Partner of Kemp Strang
Lawyers and Non Executive Chairman of Burson Marsteller
Australian Operations.
ELIZABETH NOSWORTHY BA LLB LLM Appointed Director
on 6 October 1995, Non-Executive Director, Member Audit
Committee, age 55, resident Brisbane, Chairman of Stanwell
Corporation Limited, Director of Telstra Corporation Limited,
Queensland Treasury Corporation, GPT Management Limited, RP
Data Limited, The Foundation for Development Cooperation
Limited and City of Brisbane Arts and Environment Ltd. Member
of Council of Australian National University.
REG CLAIRS AO Appointed Director on 22 February 1999,
Non-Executive Director, Member Audit Committee, age 63,
resident Brisbane, Director of Commonwealth Bank of Australia
and Woolstock Australia Limited. Chairman of Prime Minister’s
Supermarket to Asia Board. Councillor National Australia Day
Council. Previous to his appointment, he was Chief Executive
Officer of Woolworths Limited.
22
PETER WILKINSON
Chief Executive Officer
STEPHEN GODDARD
Chief Financial Officer
JULIE COATES
Operations Director
SENIOR MANAGEMENT
TERESA GALLO
Human Resources
Director
LAWRIE TURNER
Chief Information
Officer
MARK McINNES
Merchandise Director
DON GROVER
Stores Director
David Jones Management Committee
The management committee is currently comprised of
10 members all of whom are pictured on these pages.
The role of the management committee is primarily to
implement group policy, manage the corporate processes,
review strategy and resources.
FELICITY HERRON
General Manager
Securing our
Future Program
COLETTE GARNSEY
General Manager
Womenswear,
Childrenswear, Shoes
and Accessories
PATRICK ROBINSON
General Manager
Home and Food
23
PETER WILKINSON
Chief Executive Officer
LAWRIE TURNER
Chief Information
Officer
FELICITY HERRON
General Manager
Securing our
Future Program
STEPHEN GODDARD
Chief Financial Officer
JULIE COATES
Operations Director
DON GROVER
Stores Director
MARK McINNES
Merchandise and
Marketing Director
TERESA GALLO
Human Resources
Director
BARRY BENNETT
General Manager
Risk Management
JOHN BOLAS
General Manager
Property and Projects
NATALIE CATZEL
General Manager
Retail
JILL CAMPBELL
General Manager
Corporate Affairs
ROSS DALE
General Manager
Logistics
CATE DANIELS
General Manager
Retail
DAVID BUSH
General Manager
Menswear and Aged
Inventory
PAULA
BAUCHINGER
General Manager
Planning and
Recruitment
PETER HELSON
General Manager
Credit
JENNI DESLANDES
General Manager
e-commerce
TOM HALL
General Manager
Retail
JOHN McRAE
General Manager
Accounting and
Taxation
SHANE TREMBLE
General Manager
Foodchain
ROBERT HEATON
General Manager
Visual Merchandise
JOHN SIMMONDS
Company Secretary
VINCE RANDAZZO
General Manager
Retail
RICHARD TAYLOR
General Manager
Strategic Planning
JOHN SAMARTZIS
General Manager
Retail
LINDA THOMAS
Treasurer
RAY STAFFORD
General Manager
Retail Administration
FRANK DALBON
General Manager
Merchandise
Administration
DAMIAN EALES
General Manager
Aherns and
Merchandise Projects
COLETTE GARNSEY
General Manager
Womenswear,
Childrenswear, Shoes
and Accessories
SAMANTHA
PARKER
General Manager
Marketing
PATRICK ROBINSON
General Manager
Home and Food
GAVIN SKEWS
General Manager
Merchandise Planning
STEPHEN WHITTAM
General Manager
Supply Chain and
Merchandise Systems
PAUL ZAHRA
General Manager
Cosmetics
PETER FARRELL
General Manager
Remuneration
TO BE CONFIRMED
General Manager
Organisation
Development
24
CORPORATE PHILOSOPHY
The David Jones Corporate Philosophy
At David Jones, we remain committed to the highest possible
standards of Corporate Governance and disclosure. Our
Disclosure Policy articulates our desire to ensure the market is
kept well informed about our progress. A copy of this policy is
available on our website (davidjones.com.au).
We believe it is important to provide you with an understanding of
some of the key aspects of the way we run our business such
as our attitude to environmental issues, our people policies,
our code of ethics and the way we manage risk. We hope you find
this informative.
OUR PEOPLE
In retail, people make the business. Almost 90 percent of
David Jones staff work in our stores. They are a critical
component of our relationship with our customers.
Our people are top of mind in everything we do. An over-riding
corporate objective is to build a performance-oriented culture. One
which provides the foundation for our high standards of delivery
and the capacity to respond rapidly to market opportunities.
Our aim is for David Jones to become an employer of first choice.
We want to be a great place to work, a place where key
behaviours such as a personal orientation towards – achieving
goals, innovation, and teamwork are encouraged and rewarded.
These behaviours are embodied in the David Jones competencies
that form the foundation of our people decisions. The
competencies form the selection criteria for positions, are an
integral part of the performance management process, determine
employee development needs and are critical elements in
succession planning and remuneration strategy.
Our orientation and induction program ensures a common point
of entry to the group for all employees. New team members are
introduced to the business, the brand, customer service
standards and the Code of Ethics at induction sessions.
People development programs including leadership development
are the cornerstone of our human resources strategy. These
programs are tailored to the requirements of the various parts of
the business. For instance, we have introduced a Trainee Buyer
Development program. The program includes training sessions,
work experience, coaching and project work and is designed to
ensure we are continuing to build this important capability internally.
Substantial focus is placed on organisational development,
training and succession planning. Our focus is on attracting and
retaining the best people. Our succession planning program
identifies talent throughout the organisation. We have been able
to make several senior management level appointments during
the year utilising only internal candidates which reflects the quality
of the work that has been undertaken.
OUR CODE OF ETHICS
One of the key elements in the success of David Jones is the
good name we enjoy in all the markets in which we operate. This
reputation is based on a tradition of fairness, honesty and integrity
in our dealings with our customers, suppliers and staff, as well as
our local community.
At David Jones we believe that we should:
Adhere to Ethical Standards in everything that we do.
Respect property and the ownership of that property
Not tolerate harassment or discrimination
Understand and recognise that anyone using their position
to favour a third party has a conflict of interest.
Compete vigorously but do so fairly
Not deal in inside information
The Company’s Code of Ethics is covered in a specific booklet
(“The Importance of being Honest”). All of our people also have
access to an ethics hotline.
THE ENVIRONMENT
At David Jones, conserving and enhancing the environment forms
an important part of the things we do and the decisions we make.
Each employee has a responsibility to ensure that the way
we conduct our business meets all relevant government and
David Jones requirements, whichever is more stringent.
We are developing processes and tools which will assist us to
achieve our objectives. We aim to continually improve our
compliance with our environmental principles. We are working
towards achieving the principles outlined below:
Compliance
Meet all applicable environmental laws, regulations and
requirements in a cost effective manner.
Systems and Planning
Utilise our environmental management system to:
establish goals
25
set standards
incorporate environmental considerations into business
planning.
There are dedicated procedures in place to ensure that all risks
are identified, analysed and assessed so that appropriate time
and resources can be applied to managing them.
Education and Communication
Develop a program for our employees on ways to effectively
achieve the objectives of the Policy through:
induction training
ongoing education and training
OUTWORKER CODE OF PRACTICE
David Jones is a signatory to the ARA/TCFUA Homeworker Code
of Practice. We support the principle behind the work being
undertaken to eradicate the use of under age and below award
payment labour in the clothing industry. We continue to work
closely with the Australian Retailers Association and its members
regarding this issue.
Commitment and Accountability
Encourage every employee to be committed to and responsible for
meeting our environmental objectives. Managers are accountable
for implementing the Policy in their areas of responsibility.
Review Performance
Measure and evaluate our performance in achieving the aims of
our Policy on a regular basis.
Suppliers and Contractors
Ensure that our contractors and suppliers understand our
commitment to the environment and require them to apply
similar standards.
Environmental Impacts
Foster the sustainable use of natural resources by promoting
pollution prevention, waste minimisation, recycling and reuse of
materials where practicable.
RISK MANAGEMENT
David Jones has a dedicated Risk Management team that is
responsible for conducting regular assessments of the various
risks that could affect our business such as financial,
environmental, and procedural risks. To provide rigor to their
assessment an “Enterprise Wide Risk Management Program”
was developed. A component of this program is the identification
of key business risks using a business process model.
Each process is reviewed in accordance with risk identification
and risk assessment.
Management allocates a priority level to process improvement
based on the determination of the level of risk. Internal and
external audits form part of our assurance activities. They are
based on the determined level of risk. This procedure ensures that
the appropriate amount of focus and resourcing is provided.
Since 1999 our supplier terms and conditions have required our
vendors to “warrant that all labour engaged in the manufacture
of goods has been engaged and remunerated in accordance with
applicable laws, industrial awards and agreements”, or in the case
of imported goods, “in conditions at least as favourable as
Australian award conditions applicable to the relevant tasks.”
In March 2001 we communicated in writing with every supplier of
apparel to the group reminding them of their obligations and
reiterated our support for the principal behind the work being
done regarding outworkers. We further advised suppliers of David
Jones branded merchandise that we would be making random
visits to their manufacturing sites to observe conditions.
If it is brought to our attention that any of our suppliers are not
abiding by the specified trading terms and conditions we would
request immediate action be taken and should that not occur we
would not hesitate to cease dealing with that supplier.
AWARDS RECEIVED IN 2000/01
In August Corporate Governance International (‘CGI’) announced
that David Jones had received their highest rating for governance.
The governance ratings take into account designated elements of
best practice which are provided a weighting based on CGI’s
assessment of the Australian market over the past 7 years.
In September David Jones was awarded the “Grand Prix for Best
Overall Investor Relations” for a non-ASX 100 company at the
second annual “Investor Relations Magazine” awards in Sydney.
The organisers surveyed 178 portfolio managers and analysts to
gauge their opinions on the level, accuracy and clarity of
disclosure to the market.
26
CORPORATE GOVERNANCE
This statement outlines the main Corporate Governance practices that were in place throughout
the financial year unless otherwise stated.
BOARD OF DIRECTORS AND ITS COMMITTEES
The Directors are responsible for protecting the rights
and interests of shareholders and are accountable to them for
the overall management of the Company. The Board’s
responsibilities include:
setting strategies, directions and establishing goals
for management;
the monitoring of performance against these goals and
objectives;
ensuring there are adequate internal controls and ethical
standards of behaviour;
evaluating performance and determining the remuneration
of the Chief Executive Officer and Senior Executives;
ensuring the significant risks facing the Consolidated Entity
have been identified and the appropriate and adequate
control monitoring and reporting mechanisms are in place;
and
ensuring there are policies and procedures for recruitment,
training, remuneration and succession planning.
To assist in the execution of responsibilities, the Board has in
place two Board Committees comprising an Audit Committee
and a Remuneration and Nominations Committee. Following the
sale and leaseback of the Sydney and Melbourne CBD stores,
the need for a separate committee to deal with property matters
was no longer considered necessary and the Property Committee
was disbanded. Property matters are dealt with by the full Board.
COMPOSITION OF THE BOARD
The names of the Directors of the Company in office at the date
of this statement are set out in the Directors’ Report on page 32.
The Board comprises eight Directors, of whom one is an
Executive Director. The Non-Executive Directors are genuinely
independent to ensure that the Company is run in its own best
interests and, accordingly, in the best interests of shareholders.
No independent Director:
is a substantial shareholder;
has been employed as an Executive of the Company;
is a principal of a professional adviser;
is associated with a significant supplier or customer;
has a significant contractual relationship with the Company;
and
has any business relationship which could materially
interfere with the Director’s ability to act in the best interests
of the Company.
PERFORMANCE EVALUATION OF THE BOARD
The Board has in place a process to review its own performance.
To assist in this process an independent adviser is used.
The process adopts a methodology that:
identifies key issues to improve effectiveness by way of a
survey and interviews;
presents findings and recommends solutions; and
develops an action plan to resolve issues.
From time to time, your Board conducts a detailed assessment
of its performance based on individual views of outcomes in
key performance areas and collective resolution of issues.
Senior management are invited to comment, ensuring a
common commitment to issues and accountabilities. The next
assessment is scheduled to be conducted during the 2001/2002
financial year.
DIRECTORS’ FEES
The maximum aggregate amount of fees that can be paid to
Non-Executive Directors is determined by shareholders from time
to time at annual general meetings of the Company in
accordance with the Constitution. This amount is currently
$700,000 pa plus compulsory superannuation guarantee
contributions. The aggregate fees paid to Non-Executive
Directors during the financial year was $552,256.
The scale of fees currently being paid since 1 February 2001,
including fees for attendance at Board Committee meetings,
is as follows:
Chairman
$162,000 pa
Audit Committee Chairman
$76,000 pa
Non-Executive Directors
$65,000 pa
plus compulsory superannuation guarantee contributions.
DIRECTORS’ RETIREMENT ALLOWANCES
A retirement allowance for Non-Executive Directors was approved
by shareholders at the 1999 Annual General Meeting. NonExecutive Directors who have served for at least three years are
paid a retirement allowance on their ceasing to hold office as a
Director of the Company. The amount of the allowance is based
on their length of service as a Non-Executive Director and the
average annual payments from the Company by way of Directors’
Fees (including Committee fees but excluding superannuation
guarantee payments) over the three years prior to the date they
cease to be a Non-Executive Director. The multiple of average
annual fees ranges from 1.125 times at three years service, to
3 times at eight years’ service and 5 times at 15 years and above.
REMUNERATION AND NOMINATIONS COMMITTEE
The Remuneration and Nominations Committee comprises
Richard Warburton (Chairman), Katie Lahey, John Coates and
Robert Savage. The Chief Executive Officer and the Human
Resources Director attend the Remuneration and Nominations
Committee as required to discuss Senior Executives’ performance
and remuneration.
The role of the Remuneration and Nominations Committee
is documented in a Charter which has been approved by
the Board of Directors. The Committee reviews and makes
recommendations to the Board on remuneration packages and
policies applicable to the Chief Executive Officer, Senior
Executives and Directors themselves. The Committee formulates
policies and criteria for the appointment of Directors to the Board,
and provides the Board with recommendations for appointments
to the Board.
This role also includes responsibility for recommendations to the
Board on share and option schemes, incentive performance
packages, superannuation entitlements, retirement and
termination entitlements, fringe benefits policies and professional
indemnity and liability insurance policies.
Remuneration levels are competitively set to attract the most
qualified and experienced directors and senior executives. The
Remuneration and Nominations Committee obtains independent
advice on the appropriateness of remuneration packages.
AUDIT COMMITTEE
The Audit Committee comprises Geoffrey Heeley (Chairman),
Reg Clairs and Elizabeth Nosworthy. The internal auditors,
external auditors, the Chief Executive Officer and Chief Financial
Officer attend Audit Committee meetings at the discretion of
the Committee.
The role of the Audit Committee is documented in an Audit
Charter which has been approved by the Board of Directors.
In accordance with this Charter, the Committee comprises three
Non-Executive Directors.
The Audit Committee considers any matters relating to the
financial affairs of the David Jones Group and the Group’s internal
and external audit that it determines to be desirable. In addition,
the Audit Committee examines any other matters referred to it by
the Board.
It gives the Board of Directors additional assurance regarding the
quality and reliability of financial information prepared for use by
the Board in determining policies for inclusion in financial reports.
The responsibilities of the Audit Committee include:
reviewing the financial reports and financial statements;
monitoring the activities of the internal audit function;
reviewing internal and external audit reports to ensure
that where major deficiencies or breakdowns in controls or
procedures have been identified appropriate and prompt
remedial action is taken by management;
liaising with the external auditors and satisfying itself that
the annual statutory audit and half-year review are
conducted in an effective manner;
monitoring the establishment of an appropriate internal
control framework and considering enhancements;
monitoring the procedures in place to ensure compliance 27
with the Corporations Act 2001 and Stock Exchange
Listing Rules; and
monitoring the independence of the external auditor.
The Audit Committee reviews the performance of the external
auditors on an annual basis and meets regularly with them during
the year.
INTERNAL CONTROL FRAMEWORK
The Board acknowledges that it is responsible for the overall internal
control framework, but recognises that no cost-effective internal
control system will preclude all errors and irregularities. To assist in
discharging this responsibility, the Board has instigated an internal
control framework designed to safeguard the Company’s assets and
interests and to ensure the integrity of reporting. The internal control
framework can be summarised as follows:
financial reporting – there is a comprehensive budgeting
system with an annual budget approved by the Directors.
Monthly actual results are reported against budget and
revised forecasts for the year are prepared regularly;
functional speciality reporting – the Consolidated Entity has
identified a number of key areas which are subject to
regular reporting to the Board, such as Treasury and
Derivatives trading, Environmental, Legal, Trade Practices,
Insurance and Occupational Health and Safety matters;
investment appraisal – the Consolidated Entity has clearly
defined guidelines for capital expenditure. These include
annual budgets, detailed appraisal and review procedures
and levels of authority; and
the internal audit function, which has been outsourced,
provides assistance to the Board in reviewing compliance with
internal controls.
CORPORATE DISCLOSURE
Procedures and practices are in place to ensure compliance with
the continuous disclosure requirements of the Australian Stock
Exchange Listing Rules. Continuous disclosure involves the timely
announcement of information to keep the market informed of
material events and developments as they occur.
Once the Board becomes aware of information concerning the
Company that would be likely to have a material effect on the
price or value of the Company’s securities, the Board ensures that
the information is released to the Company Announcements
office of the Australian Stock Exchange (“ASX”). The Board has
appointed a committee comprising the Chief Executive Officer,
Chief Financial Officer and the General Manager – Corporate
Affairs to continually monitor compliance and to ensure
appropriate communications with the ASX through the office of
the Company Secretary.
The Company Secretary must ensure that information for release
to the market is not released to any other person until the
Company has given the information to the ASX and has received
an acknowledgement that the ASX has released the information
to the market.
SHAREHOLDER COMMUNICATIONS
The Board aims to keep shareholders informed of all major
28 developments affecting the Company’s activities and its state of
affairs through distribution of the concise annual report and
through announcements to the Australian Stock Exchange and
releases to the media. All such announcements and releases are
placed on our website davidjones.com.au and are also readily
available to shareholders by contacting the Share Registry
on 1800 652 207.
ETHICAL STANDARDS
The Consolidated Entity has an ethical standards manual –
“The Importance of Being Honest” – which sets out the standards
in accordance with which each Director, Executive and employee
of the Consolidated Entity is expected to act. The requirement
to comply with these ethical standards is emphasised to
all employees.
All Directors, Executives and employees are expected to act
with the utmost integrity and objectivity, in their dealings with each
other, competitors, suppliers, customers and the community,
striving at all times to enhance the reputation and performance
of the Consolidated Entity. Every employee has a nominated
supervisor to whom they may refer any issues arising from
their employment.
DIRECTORS’ AND OFFICERS’ DEALINGS IN
COMPANY SHARES
The Company has issued strict guidelines in the dealing
of David Jones securities or non David Jones securities where
Directors and Officers of David Jones, and their associates,
have gained sensitive information from their association with
David Jones Limited.
The Company requires:
1.
Directors to discuss a proposed trade in David Jones shares
with the Chairman prior to any trade.
2.
Officers should discuss a proposed trade in David Jones
shares with the Company Secretary or, in his absence, the
Chief Executive prior to any trade.
3.
Unless there are unusual circumstances, trades in
David Jones shares are limited to the following periods:
a) within one month after the release of the David Jones
half-year and annual results to the Australian
Stock Exchange;
b) from the lodgement of the David Jones printed annual
report with the Australian Stock Exchange up to one
month after the holding of the David Jones Annual
General Meeting; and
c) the rights trading period when David Jones has issued a
prospectus for those rights.
4.
In any event, Directors and Officers are prohibited from
trading in David Jones shares in the following circumstances:
a) if the Director or Officer is in possession of pricesensitive information:
b) in the two months preceding the lodgement of David
Jones half-year and annual results to the Australian
Stock Exchange; and
c)
where a Director or Officer would be trading for a
short-term gain.
5.
Directors and Officers are prohibited from dealing in the
securities of outside companies about which they may gain
price-sensitive information by virtue of their position as a
Director or Officer of David Jones.
6.
Directors and Officers should not directly communicate
price-sensitive information or cause that information to be
communicated to another person if they know or should
know that the other person would be likely to buy or sell
David Jones shares or to communicate information to
another party.
BUSINESS RISKS
The Consolidated Entity has developed a risk identification
and analysis process, which is designed to produce a risk profile
for the corporation. This profile identifies key business
risks, determines responsibilities and risk mitigation activities for
each key business risk. The process also incorporates an
evaluation methodology, which prioritises risk categories and risk
mitigation activities.
The risk profile is also used by both internal and external audit to
allocate assurance resources to those business risks which are
key to the operation of the entity.
The program is designed to provide an enterprise wide risk
management methodology which incorporates risk identification,
analysis, assessment, treatment and monitoring/review of a wide
range of risk and compliance issues including external
environment, process risk and decision making risks.
In relation to environmental planning, the entity continues to
monitor and review management practices and controls, which
have been implemented to mitigate risks identified through its
environmental action plan.
29
EXECUTIVE SUMMARY
NET PROFIT WAS
$28.0 MILLION
A DECREASE OF
$7.8 MILLION
OR 21.7%.
BOTH THE 99/00
AND THE 00/01
RESULTS WERE
IMPACTED BY
SIGNIFICANT ITEMS
AS NOTED IN THE
ADJACENT TABLE.
ON A TAX
ADJUSTED BASIS,
GROUP SALES
FOR THE FULL YEAR
INCREASED BY
5.8% TO $1,547.5M
(2000: $1,463.3M).
THE DECREASE
IN PROPERTY
INCOME LARGELY
REFLECTS THE
EFFECT OF THE
SALE AND
LEASEBACK.
2001
2000
$M
$M
SALES
EARNINGS BEFORE INTEREST AND TAX
1,547.5
1,528.1**
Contributions from
– Retail
– Credit
47.9
10.6
58.3
10.2
– Property
58.5
4.8
68.5
17.4
63.3
85.9
8.9
(14.4)
(11.5)
(2.8)
–
3.2
(18.3)
Earnings Before Interest and Tax
Less
– Interest Expense
43.5
70.8
11.7
12.2
OPERATING PROFIT BEFORE INCOME TAX
31.8
58.6
3.8
22.8
28.0
35.8
SIGNIFICANT ITEMS
–
–
–
–
–
Sale of Assets
New Businesses (Foodchain & Online)
Write-off of David Jones Online web development costs
Settlement of contingent liability (Elizabeth, S.A)*
GST introduction expenses
LESS
– Income Tax
OPERATING PROFIT AFTER INCOME TAX
*Refers to the former John Martins store assigned to Harris Scarfe at Elizabeth City Centre, Adelaide, South Australia.
** This figure is not tax adjusted for wholesale sales tax. Adjusted figure is $1,463.3m
COMPARABLE EBIT
The core business Earnings before Interest and Tax (‘EBIT’) slightly exceeded the forecast range of
$68-$71.5m communicated to the market on 18 July 2001. Comparable EBIT* has decreased 14.6%
over the corresponding period.
Core Business EBIT (retail + credit + property + asset sales)
Less Asset Sales
Less Property Income
Comparable EBIT*
2001
2000
$ 72.2
$ 8.9
$ 4.8
$ 58.5
$89.1
$ 3.2
$17.4
$68.5
*Comparable EBIT was calculated to assist with year on year comparison in order to clarify changes in asset sales levels and therefore
property income year on year. It is calculated by deducting asset sales and property income from Core Business EBIT.
30
EXECUTIVE SUMMARY
13.01%
1,535.0
WA
SA
6%
1,463.3
9%
12.64%
QLD
11%
NSW
58%
VIC
16%
1,290.2
12.08%
1999
GEOGRAPHIC SPLIT OF SALES REVENUE
2000
2001
MARKET SHARE
2000/2001
David Jones percentage market share of the
$13 billion ABS Department Store sector.
Geographic split of sales for the Department
Store business.
OUR DEPARTMENT STORE
BUSINESS
Despite the changed conditions during financial
year 2000/2001, our core business performance
relative to the market remained solid and the
Group continued to gain market share. The
women’s apparel and cosmetics categories
remained strong performers.
1999
DEPARTMENT STORE BUSINESS FOR THE PAST 3 YEARS
All sales figures are tax adjusted for wholesale
sales tax (WST). The sales figure for 2000 of $1,463.3
unadjusted is $1,528.1m. The total sales for the group
for 2001 inclusive of new businesses were $1,547.5m.
THE DAVID JONES CARD BUSINESS
COSTS
Significant inroads were made with our
core business cost program during the
second half.
Growth in costs as a percentage of sales in
the first half reflected the effect of
– The sudden change in trading conditions,
– the inclusion of a full year of costs for
Aherns and 2 new stores at Chadstone
and Southland in Melbourne.
Despite the reduction in like for like sales,
our costs as a percentage of sales for the
second half 2001 were lower than the
comparable half for the previous year.
2001
TOTAL SALES –
2000
The David Jones credit card continued to
perform well.
EBIT of $10.6m represents a slight increase
over the previous year; a reflection of the
changed trading conditions and the costs of
combating short term competitive activity, in
particular, increased interest free periods.
Sales on the David Jones card comprised
40.1% of total sales for the Group
(2000: 39.3%).
Our David Jones card activation programs
continued to be highly successful with
62,169 new accounts opened during
the year.
DIVIDEND
The Directors declared a final dividend of 4 cents
per share, payable on 2 November 2001. The
dividend is fully franked. The dividend for the year
was therefore 8 cents per share, which is the same
as the previous year.
DAVID JONES LIMITED CONCISE ANNUAL REPORT 2001
RESULTS
Directors’ report…32
Five year financial
statistics…38
Statement of financial
performance…39
Discussion and
analysis on statement
of financial performance…40
Statement of
financial position…42
Notes to the concise financial
statements…46
Discussion and analysis
on statement of financial
position…43
Declaration by Directors…48
Independent audit report…49
Statement of cash flows…44
Additional shareholder
information…50
Discussion and analysis on
statement of cash flows…45
Store locations…52
Calendar and contacts…IBC
32
DAVID JONES LIMITED AND ITS CONTROLLED ENTITIES
DIRECTORS’ REPORT
THE BOARD OF DIRECTORS OF DAVID JONES LIMITED (THE COMPANY) SUBMITS ITS REPORT IN RESPECT OF THE 52 WEEKS
ENDED 28 JULY 2001
DIRECTORS
The Directors of the Company at any time during or since the end of the financial year are:
Richard Warburton (Chairman)
Reg Clairs AO
John Coates AO
Geoffrey Heeley
Katie Lahey
Elizabeth Nosworthy
Robert Savage
Peter Wilkinson
Details of qualifications, age, experience and special responsibilities are shown on pages 20 and 21.
DIRECTORS’ MEETINGS
The number of Directors’ meetings (including meetings of committees of Directors) and number of meetings attended by each of the
Directors of the Company during the financial year were:
DIRECTOR
DIRECTORS’
AUDIT
REMUNERATION
MEETINGS
COMMITTEE
AND NOMINATIONS
MEETINGS
Richard Warburton
Reg Clairs AO
John Coates AO
Geoffrey Heeley
Katie Lahey
Elizabeth Nosworthy
Robert Savage
Peter Wilkinson (Executive Director)
A
B
10
10
9
10
10
10
10
10
10
10
10
10
10
10
10
10
A
COMMITTEE MEETINGS
B
5
5
5
5
5
5
A
B
3
3
3
3
3
3
3
3
A = Number of meetings attended. B = Reflects the number of meetings held during the time the Director held office during the period.
During the year, Directors made various inspection visits to many of the Company stores in Sydney, Melbourne, Adelaide, Perth
and Brisbane.
Following the sale and leaseback of the Sydney and Melbourne CBD stores, the need for a separate committee to deal with property
matters was no longer considered necessary and the Property Committee was disbanded. Property matters are dealt with by the
full Board.
PRINCIPAL ACTIVITIES
The principal activity of the Company and its controlled entities (Consolidated Entity) during the course of the financial year was
the operation of department stores.
DAVID JONES CONCISE ANNUAL REPORT 2001
33
DAVID JONES LIMITED AND ITS CONTROLLED ENTITIES
DIRECTORS’ REPORT
CONTINUED
CONSOLIDATED RESULTS
The consolidated net profit of the Consolidated Entity for the year was $28.044 million after deducting income tax expense of
$3.754 million.
REVIEW OF OPERATIONS
A detailed review of operations is shown on pages 1 to 19.
DIVIDENDS
Dividends paid or declared by the Company since the end of the previous financial year were:
As proposed and provided for in last year’s financial report a final ordinary dividend of 4 cents per share franked to 100% with Class C
(34%) franking credits amounting to $15,749,000 in respect of the 52 weeks ended 29 July 2000 was paid on 20 October 2000.
In respect of the current financial year:
an interim ordinary franked dividend of 4 cents per share franked to 100% with Class C (34%) franking credits amounting
to $15,750,000 was paid on 17 April 2001; and
a final ordinary dividend declared of 4 cents per share franked to 100% with Class C (30%) franking credits amounting
to $15,749,000 will be paid on 2 November 2001.
Total dividend provided for in respect of the 52 weeks ended 28 July 2001 was $31,499,000.
STATE OF AFFAIRS
Significant changes in the state of affairs of the Consolidated Entity during the financial year were as follows:
the property sale and leaseback of the Sydney and Melbourne CBD stores was successfully completed in December 2000.
This deal provides the funds to undertake the refurbishment of these flagship stores. Under the arrangement, the landlord will fund
the costs of infrastructure improvements as well as provide a disruption allowance for both sites. David Jones will fund the costs
of fixtures, fittings and other store design works not related to infrastructure;
the opening of the new store at Adelaide Central Plaza; and
the launch of two new businesses – David Jones Online and Foodchain by David Jones.
EVENTS SUBSEQUENT TO BALANCE DATE
Other than items disclosed below, there has not arisen in the interval between the end of the financial year and the date of this report any
item, transaction or event of a material and unusual nature likely, in the opinion of the Directors of the Company, to affect significantly the
operations of the Consolidated Entity, the results of those operations, or the state of affairs of the Consolidated Entity, in subsequent
financial years.
Subsequent to balance date, David Jones resolved to settle two matters associated with contingent liabilities for lease obligations which
arose during the year following the appointment of an administrator to Harris Scarfe Limited. This was in respect to two store leases
assigned by David Jones and its controlled entity, John Martin Retailers Limited, to Harris Scarfe Limited in 1997, relating to properties
in Campbelltown, NSW and Elizabeth, SA respectively. There are no remaining contingent liabilities relating to Harris Scarfe Limited.
In respect to Campbelltown, NSW, David Jones has resumed the lease under terms varied with the lessor and has
re-established a David Jones store at Campbelltown. This obligation is now disclosed as a lease commitment.
DAVID JONES CONCISE ANNUAL REPORT 2001
34
DAVID JONES LIMITED AND ITS CONTROLLED ENTITIES
DIRECTORS’ REPORT
CONTINUED
In respect to Elizabeth, SA, David Jones has paid the lessor the sum of $2.8 million which released David Jones Limited and its controlled
entity, John Martin Retailers Limited, from any future liability in respect of the lease. This sum has been expensed in the Statement of
Financial Performance.
LIKELY DEVELOPMENTS
Information as to likely developments in the operations of the Consolidated Entity and the expected results of those operations
in subsequent financial years has not been included in this report because the Directors believe, on reasonable grounds, that to include
such information would be likely to result in unreasonable prejudice to the Consolidated Entity.
DIRECTORS’ INTERESTS
The relevant interest of each Director in the share capital of the companies within the Consolidated Entity, as notified by the Directors to
the Australian Stock Exchange in accordance with Section 205G (1) of the Corporations Act 2001, at the date of this report is as follows:
DIRECTORS
Richard Warburton
Reg Clairs AO
John Coates AO
Geoffrey Heeley
Katie Lahey
Elizabeth Nosworthy
Robert Savage
Peter Wilkinson
ORDINARY SHARES IN
OPTIONS IN
DAVID JONES LIMITED
DAVID JONES LIMITED
92,084*
112,240
31,216
50,000
8,712
21,320
22,240
5,000
–
–
–
–
–
–
–
6,000,000
* Of which 82,292 non-beneficially held.
DIRECTORS’ AND EXECUTIVES’ REMUNERATION
The Remuneration and Nominations Committee is responsible for recommending to the Board remuneration policies and salaries
applicable to the Board Members and Senior Executives of the Company.
The Remuneration Policy aims to provide remuneration which is fair and equitable in terms of external competitiveness and to link reward
to the achievements of the organisation and the individual. The policy relates individual remuneration to individual and company
performance, the remuneration budget, the individual’s position in the relevant salary market and the need for the organisation to retain
and motivate the individual.
To give effect to this policy the Company subscribes to a number of surveys which measure the remuneration levels in the various labour
markets in which it competes.
For Management the Company utilises a formal performance measurement system, the results of which contribute to the determination
of any salary adjustment the individual may receive. Executive Directors and Senior Executives may receive bonuses based on the
achievement of specific goals related to the performance of the Consolidated Entity for the previous year.
DAVID JONES CONCISE ANNUAL REPORT 2001
35
DAVID JONES LIMITED AND ITS CONTROLLED ENTITIES
DIRECTORS’ REPORT
CONTINUED
Details of the nature and amount of each element of the emolument of each Director and each of the five named Officers of the Company
receiving the highest emolument are shown below.
NON-EXECUTIVE
DIRECTORS
Richard Warburton
Reg Clairs AO
John Coates AO
Geoffrey Heeley
Katie Lahey
Elizabeth Nosworthy
Robert Savage
DIRECTORS’
COMMITTEE
FEES
FEES
$
$
124,603
49,001
49,001
49,001
49,001
49,001
49,001
31,300
13,500
13,500
25,000
13,500
13,500
13,500
TOTAL
SUPERANNUATION
TOTAL
CONTRIBUTION
$
165,750*
62,501
62,501
74,001
62,501
62,501
62,501
$
$
12,472
5,000
5,000
5,920
5,000
5,000
5,000
178,222
67,501
67,501
79,921
67,501
67,501
67,501
552,256#
* Including parking expenses of $9,847 during store refurbishment.
#
The maximum amount allowed to be paid to Directors under the Company’s Constitution is $700,000 per annum, in aggregate, plus compulsory
superannuation contributions.
EMPLOYMENT
COST*
$
OTHER
BONUS
+
TOTAL
ALLOWANCES #
$
$
$
370,175
1,304,447
143,360
128,385
70,400
111,090
42,120
666,640
601,019
523,166
494,048
373,697
EXECUTIVE DIRECTORS**
Peter Wilkinson
934,272
OTHER OFFICERS
Stephen Goddard
Mark McInnes
Brian Hill##
Donald Grover
Colette Garnsey
503,855
456,314
452,766
382,958
331,577
19,425
16,320
* “Employment Cost” includes salary, benefits, superannuation contributions, motor vehicles and fringe benefits tax.
** Executive Directors do not receive Directors’ fees.
#
Represents relocation assistance.
##
Ceased employment on 26 July 2001.
+
This bonus paid in September 2000 in respect of the 1999/2000 year is based on performance hurdles achieved for that year.
DAVID JONES CONCISE ANNUAL REPORT 2001
36
DAVID JONES LIMITED AND ITS CONTROLLED ENTITIES
DIRECTORS’ REPORT
CONTINUED
DIRECTORS’ AND EXECUTIVES’ REMUNERATION
OPTIONS
During the financial year the Company granted options over unissued ordinary shares to the following Executive Director and to the five
most highly remunerated Officers, as part of their remuneration.
NUMBER OF
EXERCISE PRICE
OPTIONS GRANTED
$
EXPIRY DATE
1,500,000
1.3280
16 January 2006
400,000
400,000
400,000
400,000
150,000
1.3280
1.3280
1.3280
1.3280
1.3280
16
16
16
16
16
DIRECTOR
Peter Wilkinson
OFFICERS
Stephen Goddard
Mark McInnes
Brian Hill*
Donald Grover
Colette Garnsey
January
January
January
January
January
2006
2006
2006
2006
2006
* Options lapsed on cessation of employment on 26 July 2001.
All options were granted during the year. No options have been exercised during or since the end of the financial year.
At the date of this report unissued ordinary shares under option are:
EXPIRY DATE
31
17
16
16
March 2002
December 2003
December 2004
January 2006
NUMBER OF OPTIONS
EXERCISE PRICE $
3,000,000
3,250,000
5,590,000
6,115,000
1.4500
1.5700
1.4047
1.3280
17,955,000
Peter Wilkinson and each of the above Senior Executives were issued options over ordinary shares during the year. Using the
Black-Scholes option pricing model, each option issued on 16 December 1999, 1 February 2000 and 16 January 2001 would have
a value of $0.45, $0.44 and $0.46 respectively at the date of grant. This pricing model does not take account of the performance
hurdles which must be satisfied before the options can be exercised and which therefore reduce the value. At the date of this report
the performance hurdles have not been met.
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
INDEMNIFICATION
The Company has indemnified the following current Directors of the Company, Richard Warburton, Reg Clairs, John Coates,
Geoffrey Heeley, Katie Lahey, Elizabeth Nosworthy, Robert Savage and Peter Wilkinson against all liabilities to another person (other than
the Company or a related body corporate) that may arise from their position as Directors of the Company and its controlled entities, except
where the liability arises out of conduct involving a lack of good faith or indemnification is otherwise not permitted under the Corporations
Act 2001. The indemnity stipulates that the Company will meet the full amount of any such liabilities, including costs and expenses.
DAVID JONES CONCISE ANNUAL REPORT 2001
37
DAVID JONES LIMITED AND ITS CONTROLLED ENTITIES
DIRECTORS’ REPORT
CONTINUED
The Company has also indemnified the current Directors of its controlled entities for all liabilities to another person (other than the
Company or a related body corporate) that may arise from their position, except where the liability arises out of conduct involving a lack of
good faith or indemnification is otherwise not permitted under the Corporations Act 2001. The indemnity stipulates that the Company will
meet the full amount of any such liabilities, including costs and expenses.
INSURANCE PREMIUMS
Since the end of the previous financial year the Company has paid insurance premiums in respect of Directors’ and Officers’ liability
insurance contracts, for current Officers, including Executive Officers of the Company and Directors, Executive Officers and Secretaries
of its controlled entities. The insurance premiums relate to:
costs and expenses incurred by the relevant Officer in defending proceedings; and
other liabilities that may arise from their position, with the exception of conduct involving a wilful breach of duty or improper use
of information or position to gain a personal advantage.
DEEDS OF INSURANCE AND INDEMNITY
The Company has entered into deeds of access, insurance and indemnity with all the Directors of the Company.
The principal provisions of the deeds relate to:
the granting of certain indemnities in favour of the Directors in respect of liability which they incur as an Officer of the Company
or related body corporate;
the provision of access to board papers; and
an undertaking to maintain, and to the extent permitted by law pay the premiums on, an insurance policy which insures Directors
against liability incurred as an Officer of the Company or a related body corporate (except liability arising out of a wilful breach of
duty or breach of certain provisions of the Corporations Act 2001) during their term of office and for seven years after they cease
to be a Director.
ENVIRONMENT
The Consolidated Entity has developed a risk mapping process to consider all aspects of business risks. Environmental matters are
a major part of that process. All significant environmental risks have been reviewed and the Consolidated Entity has no legal obligation
to take corrective action in respect of any environmental matter.
The Company holds all environmental licences necessary to operate. To the best of the knowledge and belief of Directors, the Company
is not in breach of any environmental legislation in any State or Territory.
ROUNDING OFF
The Company is of a kind referred to in ASIC Class Order 98/100 dated 10 July 1998 and in accordance with that Class Order amounts
in this report and the accompanying financial report have been rounded off to the nearest one thousand dollars unless otherwise indicated.
Signed in accordance with a resolution of the Directors
R.F.E. Warburton
3 October 2001
DAVID JONES CONCISE ANNUAL REPORT 2001
38
DAVID JONES LIMITED AND ITS CONTROLLED ENTITIES
FIVE YEAR FINANCIAL STATISTICS
2001
2000
$’000
$’000
1998
1997
$’000
1999*
$’000
$’000
SALES AND PROFIT
Sales
– Continuing business
– Total sales
Gross profit
– % of sales
Retail contribution
Property contribution (refer (ii))
Credit contribution (refer (iii))
Foodchain and David Jones Online
Sale of property
GST costs
Store closure/restructuring
Earnings before interest and tax (EBIT) (refer (i))
Operating profit after income tax
1,547,481
1,547,481
566,627
36.6%
45,099
4,809
10,601
(25,890)
8,886
–
–
43,505
28,044
1,528,135
1,528,135
539,977
35.3%
58,101
17,447
10,217
–
3,200
(18,369)
–
70,596
35,808
1,355,034
1,355,034
470,470
34.7%
43,283
16,827
6,970
–
–
–
–
67,080
40,956
1,306,862
1,376,805
472,078
34.3%
33,926
21,311
6,875
–
–
–
(4,403)
57,709
32,560
1,278,164
1,437,270
493,104
34.3%
31,675
21,359
3,193
–
–
–
(36,989)
19,238
7,083
–
287,298
100,593
266,989
32,663
–
283,188
106,712
420,611
34,034
–
245,954
120,976
343,564
10,658
221,439
224,324
76,765
354,875
16,906
219,045
246,296
42,421
399,420
34,083
BALANCE SHEET
Credit card receivables
Inventory
Other current assets
Property, plant and equipment (Note (ii))
Other non-current assets
TOTAL ASSETS
687,543
844,545
721,152
894,309
941,265
Creditors (refer (iv))
Provisions
Borrowings
166,331
53,154
61,781
177,602
66,268
190,943
194,299
55,771
65,689
123,889
40,307
255,000
133,990
77,721
260,474
TOTAL LIABILITIES
281,266
434,813
315,759
419,196
472,185
NET ASSETS
406,277
409,732
405,393
475,113
469,080
2.8%
7.1¢
8.0¢
15.2%
6.9%
5.8%
9.1¢
8.0¢
46.6%
8.7%
5.0%
10.4¢
8.0¢
35.7%
8.6%
4.5%
8.3¢
7.0¢
55.5%
6.9%
3.9%
1.8¢
7.0¢
55.5%
1.5%
RATIOS
EBIT to sales (%)
Basic earnings per share (cents)
Dividend per share (cents)
Debt to equity (%) (refer (v))
Return on average shareholder equity (%)
NOTES:
(i) EBIT restated to treat abnormals as ordinary activities (1997-2000).
(ii) Sale and leaseback of Sydney and Melbourne CBD stores (2001).
(iii) Credit card receivables were securitised in July 1999. To assist comparison, the contributions in 1999, 1998 and 1997 have been restated to reflect
net of securitised interest expense.
(iv) Includes $79.2 million accrual for reduction of capital (1999).
(v) Includes (iv) above as debt for calculation of debt to equity ratio (1999).
(vi) In 1999, the Company implemented a capital restructure to enhance shareholder value. This included the securitisation of the credit portfolio and
a 20 cents per share return of capital.
* 53 week year.
DAVID JONES CONCISE ANNUAL REPORT 2001
39
DAVID JONES LIMITED AND ITS CONTROLLED ENTITIES
STATEMENT OF FINANCIAL PERFORMANCE
FOR THE 52 WEEKS ENDED 28 JULY 2001 AND 52 WEEKS ENDED 29 JULY 2000
CONSOLIDATED
Sales of goods
Cost of sales
Gross profit
Other revenues
Employee expenses
Occupancy
Depreciation and amortisation
Advertising and visual expenses
Borrowing costs
Book value of property, plant and equipment sold
Other expense from ordinary activities
Profit from ordinary activities before income tax expense
Income tax expense relating to ordinary activities
CONSOLIDATED
2001
2000
$’000
$’000
1,547,481
(980,854)
1,528,135
(988,158)
566,627
253,010
(276,740)
(127,306)
(58,315)
(35,857)
(11,707)
(195,091)
(82,823)
539,977
116,475
(259,431)
(101,357)
(37,930)
(34,489)
(12,258)
(71,533)
(80,868)
31,798
(3,754)
58,586
(22,778)
28,044
35,808
28,044
35,808
7.1 cents
7.1 cents
9.1 cents
9.1 cents
NET PROFIT FROM ORDINARY ACTIVITIES AFTER RELATED INCOME TAX
EXPENSE ATTRIBUTABLE TO MEMBERS OF THE PARENT ENTITY
TOTAL CHANGES IN EQUITY OTHER THAN THOSE RESULTING
FROM TRANSACTIONS WITH OWNERS AS OWNERS
Basic earnings per share
Diluted earnings per share
The consolidated statement of financial performance is to be read in conjunction with the accompanying notes and discussion and analysis.
DAVID JONES CONCISE ANNUAL REPORT 2001
40
DAVID JONES LIMITED AND ITS CONTROLLED ENTITIES
DISCUSSION AND ANALYSIS
ON STATEMENT OF FINANCIAL PERFORMANCE
FOR THE 52 WEEKS ENDED 28 JULY 2001 AND 52 WEEKS ENDED 29 JULY 2000
This discussion and analysis is provided to assist readers in understanding the concise financial report. It should be read in conjunction
with the review of operations on pages 1 to 19.
REVENUE
The Consolidated Entity’s total revenue for 2001 increased by 9.5% to $1,800.5 million.
Revenue comprises:
Retail sales
Other revenue
2001
2000
$M
$M
1,547.5
253.0
1,528.2
116.4
1,800.5
1,644.6
Despite the changed conditions during financial year 2000/2001, our core business performance relative to the market remained solid
and the Group continued to gain market share. The women’s apparel and cosmetics categories remained strong performers.
The increase in other revenue is in the main the proceeds from the sale of Sydney and Melbourne CBD properties of $202 million.
PROFIT
The operating profit comprises:
2001
2000
$M
$M
Gross profit – core business
Less selling, general and administration expenses
563.3
515.4
540.0
481.9
Retail contribution – core business
Property contribution
Credit Card contribution
New businesses – Foodchain and David Jones Online
Write off of David Jones Online website development costs
Sale of property
Lease settlement
GST expenses
47.9
4.8
10.6
(14.4)
(11.5)
8.9
(2.8)
–
58.1
17.4
10.2
–
–
3.2
–
(18.3)
Total earnings before interest and tax
Less interest
43.5
11.7
70.6
12.0
Profit before income tax
31.8
58.6
DAVID JONES CONCISE ANNUAL REPORT 2001
41
DAVID JONES LIMITED AND ITS CONTROLLED ENTITIES
DISCUSSION AND ANALYSIS
ON STATEMENT OF FINANCIAL PERFORMANCE (CONTINUED)
FOR THE 52 WEEKS ENDED 28 JULY 2001 AND 52 WEEKS ENDED 29 JULY 2000
GROSS PROFIT
Gross profit for the core retail business increased $23.3 million or 4.3% due to an increased number of stores on a slightly lower
margin percentage.
SELLING, GENERAL AND ADMINISTRATION EXPENSES
Selling, general and administration expenses (SG&A) in the core business increased $33.5 million or 7% during the year to $515.4 million.
SG&A as a percentage of core business retail sales increased to 33.6% in 2001 due to lower sales volume.
CREDIT CARD EARNINGS
Credit card earnings increased by $0.4 million to $10.6 million. Card usage increased from 39% to 40% of total sales. The increase
in David Jones credit card sales as a percentage of total credit sales has been driven by several initiatives, including the Shareholder
Rewards Program and strong new account promotion.
DAVID JONES ONLINE
This new business incurred an operating loss. In addition, the Group has written off website development costs of $11.5 million for the
online business. These costs consist largely of those incurred in the development of proprietary software related to online retail trading.
FOODCHAIN BY DAVID JONES
David Jones has also incurred operating losses establishing a new retail food business. It opened three Foodchain stores since
November last year at Brighton and Hawthorn in Melbourne and Parramatta in Sydney. The Parramatta store opened in early August.
Customer reaction to each store has been enthusiastic and revenues continue to build strongly.
The Group plans to open three more stores in 2001/2002 and to focus on consolidating our performance through improved efficiencies.
INCOME TAX
The Group income tax expense is lower due to lower profitability and non-assessable gain on the property sale.
DAVID JONES CONCISE ANNUAL REPORT 2001
42
DAVID JONES LIMITED AND ITS CONTROLLED ENTITIES
STATEMENT OF FINANCIAL POSITION
AS AT 28 JULY 2001 AND 29 JULY 2000
CONSOLIDATED
CONSOLIDATED
2001
2000
$’000
$’000
Cash assets
Receivables
Inventories
Prepayments
11,550
79,139
287,298
9,904
13,065
85,132
283,188
8,515
TOTAL CURRENT ASSETS
387,891
389,900
Property, plant and equipment
Intangibles
Deferred tax assets
Other assets
266,989
15,924
14,917
1,822
420,611
17,710
14,360
1,964
TOTAL NON-CURRENT ASSETS
299,652
454,645
TOTAL ASSETS
687,543
844,545
Payables
Interest bearing liabilities
Tax liabilities
Other provisions
166,331
359
7,718
33,982
177,602
2,266
18,380
35,409
TOTAL CURRENT LIABILITIES
208,390
233,657
Interest bearing liabilities
Deferred tax liabilities
Other provisions
61,422
288
11,166
188,677
1,678
10,801
TOTAL NON-CURRENT LIABILITIES
72,876
201,156
TOTAL LIABILITIES
281,266
434,813
NET ASSETS
406,277
409,732
Equity
Contributed equity
Reserves
Retained profits
315,013
–
91,264
315,013
19,902
74,817
TOTAL EQUITY
406,277
409,732
CURRENT ASSETS
NON-CURRENT ASSETS
CURRENT LIABILITIES
NON-CURRENT LIABILITIES
The consolidated statement of financial position is to be read in conjunction with the accompanying notes and discussion and analysis.
DAVID JONES CONCISE ANNUAL REPORT 2001
43
DAVID JONES LIMITED AND ITS CONTROLLED ENTITIES
DISCUSSION AND ANALYSIS
ON STATEMENT OF FINANCIAL POSITION
AS AT 28 JULY 2001 AND 29 JULY 2000
The major movements are:
Receivables are $6 million lower this year compared to last year which included a Wholesale Sales Tax refund.
Inventories increased by $4.1 million and aged stock levels are around 5% of total merchandise.
Property, plant and equipment decreased by $153.6 million. The reduction relates to the Sydney and Melbourne CBD stores
which were sold for $202 million. Additions of $91.4 million were due to new stores in Adelaide and Hornsby, the new Foodchain
stores and the refurbishment of Perth store.
Intangibles reduced by $1.8 million due to the amortisation of goodwill for Aherns.
Payables decreased by $11.3 million, due to lower trade creditors.
Tax liabilities decreased by $10.7 million due to lower profitability and non-assessable gain on the property sale and leaseback.
Borrowings decreased by $129.2 million due in the main to the proceeds from sale and leaseback of the Sydney and Melbourne
CBD stores.
Debt to equity ratio at year end was 15.2% compared to 46.6% last year, reflecting the reduced borrowings following the property
sale and leaseback.
DAVID JONES CONCISE ANNUAL REPORT 2001
44
DAVID JONES LIMITED AND ITS CONTROLLED ENTITIES
STATEMENT OF CASH FLOWS
FOR THE 52 WEEKS ENDED 28 JULY 2001 AND 52 WEEKS ENDED 29 JULY 2000
CONSOLIDATED
CONSOLIDATED
2001
2000
$M
$M
CASH FLOWS FROM OPERATING ACTIVITIES
Cash receipts in the course of operations
Cash payments in the course of operations
Interest received: others
Interest paid and other costs of finance: others
Income taxes paid
1,590,732
(1,500,745)
260
(11,707)
(26,363)
1,565,601
(1,442,817)
249
(12,258)
(19,353)
52,177
91,422
Payments for purchases of property, plant and equipment
Proceeds from disposal of a controlled entity
Proceeds from sale of property, plant and equipment
Repayment of Employee Share Plan loans on forfeited shares
Repayment of Employee Share Plan loans from dividend payments
Payments for purchase of controlled entities and businesses
Deferred expenses
(97,719)
–
204,024
708
94
–
(138)
(141,408)
25,000
49,705
268
106
(35,983)
(1,964)
NET CASH USED IN INVESTING ACTIVITIES
106,969
(104,276)
Proceeds from borrowings
Repayment of borrowings
Dividends paid
Return of capital
–
(129,162)
(31,499)
–
124,835
–
(31,440)
(79,236)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
(160,661)
14,159
CASH AT BEGINNING OF THE FINANCIAL YEAR
(1,515)
13,065
1,305
11,760
CASH AT END OF THE FINANCIAL YEAR
11,550
13,065
NET CASH PROVIDED BY OPERATING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
CASH FLOWS FROM FINANCING ACTIVITIES
NET INCREASE/(DECREASE) IN CASH HELD
The consolidated statement of cash flows is to be read in conjunction with the accompanying notes and discussion and analysis.
DAVID JONES CONCISE ANNUAL REPORT 2001
45
DAVID JONES LIMITED AND ITS CONTROLLED ENTITIES
DISCUSSION AND ANALYSIS
ON STATEMENT OF CASH FLOWS
FOR THE 52 WEEKS ENDED 28 JULY 2001 AND 52 WEEKS ENDED 29 JULY 2000
Cash flow from operations decreased from $91.4 million last year to $52.2 million this year, in the main due to decreased profitability.
Cash flow from investing activities includes $202 million of proceeds from the sale and leaseback of Sydney and Melbourne
CBD properties.
The proceeds from the sale of properties were used to repay borrowings of $129.2 million compared to an increase in borrowings
of $124.8 million in the previous year.
Capital expenditure of $97.7 million comprised the following major categories compared with the previous year.
Stores
Information technology
Property development
Other
2001
2000
$M
$M
53.1
14.2
9.7
20.7
88.0
13.6
34.7
5.1
97.7
141.4
DAVID JONES CONCISE ANNUAL REPORT 2001
46
DAVID JONES LIMITED AND ITS CONTROLLED ENTITIES
NOTES TO THE CONCISE FINANCIAL STATEMENTS
1.
BASIS OF PREPARATION OF CONCISE FINANCIAL REPORT
The concise financial report has been derived from the full 2001 financial statements as presented in the David Jones Limited
Annual Report, which comply with the Corporations Act 2001, Australian Accounting Standards and Urgent Issues Group
consensus views. This concise financial report has been prepared in accordance with Accounting Standard AASB 1039, “Concise
Financial Reports”, and the relevant provisions of the Corporations Act 2001. A full description of the accounting policies adopted
by David Jones Limited is provided in the full 2001 financial report. The accounting policies are consistent with those of the previous
financial year.
Where necessary, comparative information has been reclassified to achieve consistency in disclosure with current financial year
amounts and other disclosures.
CHANGE IN ACCOUNTING POLICIES
In accordance with the requirements of AASB 1041 “Revaluation of Non-current Assets” (revised 2001), land and buildings
previously carried at valuation were reverted to a cost basis of measurement. For the purpose of transitioning to a cost basis,
the existing revalued carrying amounts at 29 July 2000 were deemed to be cost. This change in policy had no impact on the
financial position or financial performance of the Consolidated Entity as presented in this financial report.
2.
3.
CONSOLIDATED
CONSOLIDATED
2001
2000
$M
$M
Sales revenue
Other revenue
1,547,481
253,010
1,528,135
116,475
TOTAL REVENUE
1,800,491
1,644,610
8,886
(14,386)
(11,504)
(2,800)
–
3,200
–
–
–
(18,369)
(19,804)
(15,169)
15,750
15,720
15,749
15,749
31,499
31,469
8,550
24,778
OPERATING REVENUE
SIGNIFICANT ITEMS
Profit on sale of land and buildings
Operating loss new businesses (Foodchain and David Jones Online)
Write-off of David Jones Online website development costs
Settlement of contingent liability on lease
GST implementation costs
4.
DIVIDENDS
(i) An interim ordinary dividend of 4 cents per share franked to 100% with
Class C 34% franking credits was paid on 17 April 2001 (2000: 4 cents franked to 100%)
(ii) A final ordinary dividend of 4 cents per share, franked to 100% with Class C 30%
(2000: 34%) franking credits, has been declared by the Directors and is payable
on 2 November 2001. (2000: 4 cents franked to 100%)
DIVIDEND FRANKING ACCOUNT
The amount of retained profits and reserves at year end that could be distributed
as dividends and be fully franked at 30% (2000: 34%) out of existing franking credits
or out of franking credits which would arise from the payment of income tax from
current provision after deducting franking credits applicable to the declared dividends
DAVID JONES CONCISE ANNUAL REPORT 2001
47
DAVID JONES LIMITED AND ITS CONTROLLED ENTITIES
NOTES TO THE CONCISE FINANCIAL STATEMENTS
CONTINUED
5.
CONSOLIDATED
CONSOLIDATED
2001
2000
$M
$M
7.1 cents
7.1 cents
9.1 cents
9.1 cents
393,714,680
393,073,219
EARNINGS PER SHARE
Basic earnings per share
Diluted earnings per share
Weighted average number of ordinary shares used in the calculation of basic
and diluted earnings per share (number)
OPTIONS
Options to purchase ordinary shares not exercised at 28 July 2001 (29 July 2000) have not been included in the determination
of diluted earnings per share. Based on conditions existing at report date, the options would not be potential ordinary shares.
6.
SEGMENT REPORTING
The consolidated entity operates within one industry segment – retailing.
The consolidated entity operates within one geographical segment – Australia.
7.
EVENTS SUBSEQUENT TO BALANCE DATE
Other than items disclosed below, there has not arisen in the interval between the end of the financial year and the date of this
report any item, transaction or event of a material and unusual nature likely, in the opinion of the Directors of the Company,
to affect significantly the operations of the Consolidated Entity, the results of those operations, or the state of affairs of the
Consolidated Entity, in subsequent financial years.
Subsequent to balance date, David Jones resolved to settle two matters associated with contingent liabilities for lease obligations
which arose during the year following the appointment of an administrator to Harris Scarfe Limited. This was in respect to two
store leases assigned by David Jones and its controlled entity, John Martin Retailers Limited, to Harris Scarfe Limited in 1997,
relating to properties in Campbelltown, NSW and Elizabeth, SA respectively. There are no remaining contingent liabilities relating to
Harris Scarfe Limited.
In respect to Campbelltown, NSW, David Jones has resumed the lease under terms varied with the lessor and has re-established
a David Jones store at Campbelltown. This obligation is now disclosed as a lease commitment.
In respect to Elizabeth, SA, David Jones has paid the lessor the sum of $2.8 million which released David Jones Limited and its
controlled entity, John Martin Retailers Limited, from any future liability in respect of the lease. This sum has been expensed in
the Statement of Financial Performance.
DAVID JONES CONCISE ANNUAL REPORT 2001
48
DAVID JONES LIMITED AND ITS CONTROLLED ENTITIES
DECLARATION BY DIRECTORS
In the opinion of the Directors of David Jones Limited the accompanying concise financial report of the Consolidated Entity,
comprising David Jones Limited and its controlled entities, for the 52 weeks ended 28 July 2001 set out on pages 39 to 47:
(a) has been derived from and is consistent with the full financial report for the financial year; and
(b) complies with Accounting Standard AASB 1039 “Concise Financial Reports”; Urgent Issues Group Consensus Views;
and the Corporations Act 2001.
Signed in accordance with a resolution of the Directors:
R.F.E. Warburton
Director
Perth
3 October 2001
DAVID JONES CONCISE ANNUAL REPORT 2001
49
DAVID JONES LIMITED AND ITS CONTROLLED ENTITIES
INDEPENDENT AUDIT REPORT
TO THE MEMBERS OF DAVID JONES LIMITED
SCOPE
We have audited the concise financial report of David Jones Limited for the 52 weeks ended 28 July 2001, as set out on
pages 39 to 48 in order to express an opinion on it to the members of the Company. The Company’s Directors are responsible for the
concise financial report.
Our audit has been conducted in accordance with Australian Auditing Standards to provide reasonable assurance whether the concise
financial report is free of material misstatement. We have also performed an independent audit of the full financial report of David Jones
Limited for the 52 weeks ended 28 July 2001. Our audit report on the full financial report was signed on 3 October 2001 and was not
subject to any qualification.
Our procedures in respect of the audit of the concise financial report included testing that the information in the concise financial report
is consistent with the full financial report and examination, on a test basis, of evidence supporting the amounts, discussion and analysis,
and other disclosures which were not directly derived from the full financial report. These procedures have been undertaken to form an
opinion whether, in all material respects, the concise financial report is presented fairly in accordance with Accounting Standard AASB
1039 “Concise Financial Reports”.
The audit opinion expressed in this report has been formed on the above basis.
AUDIT OPINION
In our opinion, the concise financial report of David Jones Limited complies with Accounting Standard AASB 1039
“Concise Financial Reports”.
Arthur Andersen
Chartered Accountants
Christopher D. George
Partner
Sydney
3 October 2001
Liability limited by the Accountants Scheme, approved under the Professional Standards Act 1994 (NSW).
DAVID JONES CONCISE ANNUAL REPORT 2001
50
DAVID JONES LIMITED AND ITS CONTROLLED ENTITIES
ADDITIONAL SHAREHOLDER INFORMATION
AS AT 13 SEPTEMBER 2001
CURRENT INFORMATION REGARDING THE FOLLOWING IS AVAILABLE ON OUR WEBSITE – THE WEBSITE IS UPDATED REGULARLY
20 LARGEST SHAREHOLDERS
SHAREHOLDER
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Westpac Custodian Nominees Limited
National Nominees Limited
Chase Manhattan Nominees Limited
Queensland Investment Corporation
Citicorp Nominees Pty. Limited
AMP Life Limited
MLC Limited
HSBC Custody Nominees (Australia) Limited
Argo Investments Limited
ANZ Nominees Limited
Gwynvill Securities Pty. Ltd.
Commonwealth Custodial Services Limited (No. 11 Account)
Commonwealth Custodial Services Limited (No. 2 Account)
David Jones Employee Share Plan Pty. Limited
Transport Accident Commission
Commonwealth Custodial Services Limited (No. 100 Account)
David Jones Share Plans Pty. Limited (Exempt Account)
Commonwealth Custodial Services Limited
Fortis Clearing Nominees Pty. Limited (SGAEL Custodian A/C.)
Fortis Clearing Nominees Pty. Limited (Settlement A/C.)
The 20 largest shareholders hold 21.50% of the ordinary shares of the Company.
SHAREHOLDINGS
SUBSTANTIAL SHAREHOLDER NOTICES RECEIVED UP TO 13 SEPTEMBER 2001
There are currently no substantial shareholders.
DAVID JONES CONCISE ANNUAL REPORT 2001
NUMBER OF SHARES
%
24,953,832
12,992,250
11,677,435
6,986,529
6,240,103
3,118,642
2,665,346
2,657,380
2,513,503
1,929,800
1,330,700
1,184,200
1,005,771
914,000
882,727
865,539
792,735
733,658
643,384
596,511
6.34
3.30
2.97
1.77
1.58
0.79
0.68
0.67
0.64
0.49
0.34
0.30
0.26
0.23
0.22
0.22
0.20
0.19
0.16
0.15
84,684,045
21.50
51
DAVID JONES LIMITED AND ITS CONTROLLED ENTITIES
ADDITIONAL SHAREHOLDER INFORMATION
CONTINUED
CURRENT INFORMATION REGARDING THE FOLLOWING IS AVAILABLE ON OUR WEBSITE – THE WEBSITE IS UPDATED REGULARLY
CLASS OF SHARES AND VOTING RIGHTS
At 13 September 2001 there were 78,537 holders of the ordinary shares of the Company. The voting rights attaching to the ordinary
shares set out in clause 5.8 of the Company’s Constitution are on a show of hands, every member present has one vote; and on a poll,
every member present has one vote for each fully paid share held by the member and in respect of which the member is entitled to vote.
DISTRIBUTION OF SHAREHOLDERS
CATEGORY
ORDINARY
ORDINARY
AS AT 13 SEPTEMBER
AS AT 13 SEPTEMBER
2001
2000
9,665
9,685
1,001 – 5,000
58,419
46,841
5,001 – 10,000
6,732
5,059
10,001 – 100,000
3,584
2,469
100,001 and over
137
148
78,537
64,202
1 – 1000
The number of shareholders holding less than a marketable parcel at 13 September 2001 was 2,486 (at 1 September 2000 was 2,310).
OPTIONS (AS AT 13 SEPTEMBER 2001)
3,000,000
3,250,000
5,590,000
6,115,000
executive
executive
executive
executive
options
options
options
options
expiring
expiring
expiring
expiring
31
17
16
16
March 2002 exercisable at $1.45* – unlisted
December 2003 exercisable at $1.57* – unlisted
December 2004 exercisable at $1.4047 – unlisted
January 2006 exercisable at $1.3280 – unlisted
1 holder
38 holders
49 holders
56 holders
* Adjusted following capital return of 20 cents per share paid to shareholders on 10 August 1999.
DIVIDENDS
CENTS PER SHARE
Interim
Final
Interim
Final
Interim
Final
Interim
Final
Interim
Final
fully franked
fully franked
unfranked
fully franked
unfranked
fully franked
fully franked
fully franked
fully franked
fully franked
4
3
4
3
4
4
4
4
4
4
DATE PAID
9 July
23 October
16 April
21 October
12 April
22 October
13 April
20 October
17 April
2 November
1997
1997
1998
1998
1999
1999
2000
2000
2001
2001
SHAREHOLDER REWARDS SCHEME
Shareholders who own a minimum of 2,000 shares are entitled to participate in the Shareholder Rewards Scheme, whereby discounts
are provided on a range of merchandise. Discount is only available on purchases made with the David Jones Shareholder Credit Card.
An annual membership fee of $50 is applied to new shareholders who purchase shares and enrol in the scheme after 1 October 2001.
The fee is not applied to members enrolled in the scheme prior to this date.
DAVID JONES CONCISE ANNUAL REPORT 2001
52
DAVID JONES LOCATIONS
QUEENSLAND
6 STORES AND 1 DAVID JONES
WAREHOUSE STORE
NEW SOUTH WALES AND ACT
18 STORES AND 1 DAVID JONES
WAREHOUSE STORE
SYDNEY AND SUBURBAN
VICTORIA
4 STORES
MELBOURNE AND SUBURBAN
SOUTH AUSTRALIA
3 STORES
ADELAIDE AND SUBURBAN
WESTERN AUSTRALIA
5 AHERNS STORES
FOODCHAIN BY DAVID JONES
3 FOODCHAIN STORES
TOTAL
Queen Street, Brisbane
Carindale, Brisbane
Mt Gravatt, Brisbane
Toombul, Brisbane
Toowong, Brisbane
Robina, Gold Coast
Harbour Town, Gold Coast – David Jones Warehouse
Hunter Street, Newcastle
Kotara, Newcastle
Tuggerah
Crown Street, Wollongong
Canberra Centre, ACT
Woden Plaza, ACT
Elizabeth Street, Sydney
Market Street, Sydney
Brookvale
Bankstown
Bondi Junction
Macarthur Square (opened 13 September 2001)
Castle Hill
Chatswood
Hornsby (opened 26 September 2001)
Miranda
Pagewood
Parramatta
Birkenhead Point – David Jones Warehouse
Bourke Street, Melbourne
Chadstone
Glen Waverley
Southland
Rundle Mall, Adelaide
Marion
West Lakes
Hay Street, Perth
Booragoon
Karrinyup
Claremont
Rockingham
Dendy Centre, 26 Church St, Brighton, Victoria 3186
Glenferrie Markets, 674-680 Glenferrie Rd, Hawthorn, Victoria 3122
Lower Ground Floor, 330-342 Church St, Parramatta, NSW 2150
31 David Jones Stores
2 David Jones Warehouse Stores
5 Aherns Stores
3 Foodchain by David Jones Stores
JOHN A SIMMONDS
Company Secretary
DAVID JONES LIMITED ACN 000 074 573
CONTENTS
SHAREHOLDER CALENDAR 2002
OFFICES AND OFFICERS
EARLY FEBRUARY
PRINCIPAL REGISTERED OFFICE
Announcement of sales for the
26 weeks ended 26 January 2002
86-108 Castlereagh Street, Sydney NSW 2000
Telephone
(02) 9266 5544
Facsimile
(02) 9261 5717 – Corporate
(02) 9267 3895 – General Retail
Telephone number for all stores
133 DJS (133 357)
Website
davidjones.com.au
MID-MARCH
1
The Power
of the Brand…2-3
Strategy Overview…4-15
2
Message from the
Chairman…16-17
CEO’s Review…18-19
Board of
Directors…20-21
Senior
Management…22-23
Corporate
Philosophy…24-25
3
Announcement of half-yearly profit
results and details of interim dividend
Financial
Results…31-48
APRIL
Scheduled payment of interim dividend
Independent
Audit Report…49
MAY
Announcement of sales for the
39 weeks ended 27 April 2002
Shareholder
Information…50-51
AUGUST
Store Locations…52
Announcement of sales for the
52 weeks ended 27 July 2002
Calendar and
Contacts…IBC
MID-SEPTEMBER
Announcement of preliminary profit
results and details of final dividend
Corporate
Governance…26-28
OCTOBER
Executive Summary
of Financials…29-30
Scheduled payment of final dividend
NOVEMBER
Announcement of sales for the
13 weeks ended 26 October 2002
The 2001 concise annual report includes financial
statements which have been derived from
David Jones Limited 2001 financial report. These
financial statements included in the concise annual
report do not provide as full an understanding of
David Jones Limited’s performance, financial
position, financing and investing activities as
provided by the 2001 financial report.
Further financial information can be obtained
from the 2001 financial report which is available,
free of charge, on request from the Share
Registry by calling 1800 652 207. Alternatively,
both the concise annual report and the full
financial report can be accessed from the “For
Investors” section at the David Jones website
davidjones.com.au
PHOTO FRONT COVER, NEW ESCALATOR VOIDS,
MARKET STREET, SYDNEY
LATE NOVEMBER/EARLY DECEMBER
2002 Annual General Meeting
Designed and produced by Enterprise Horniak & Canny
Annual General Meeting
The Annual General Meeting will be held on
Monday 26 November 2001 at 10.00 a.m. at
the Wesley Conference Centre, 220 Pitt
Street, Sydney, New South Wales. The Notice
of Meeting and Proxy Form are separate
items accompanying this 2001 concise
annual report.
The concise annual report, the full financial report and the Notice
of Meeting and general shareholder information can be accessed
on our website under “For Investors”. Announcements made to
ASX during the year are put on the website.
COMPANY SECRETARY
John A. Simmonds
FCIS ASIA
SHARE REGISTRY
Computershare Investor Services Pty. Limited
Level 3, 60 Carrington Street, Sydney NSW 2000
GPO Box 7045, Sydney NSW 1115
Telephone
1800 652 207 Toll Free
Facsimile
(02) 8234 5435
Website
computershare.com
Shareholders can access from the David Jones website under
“For Investors” information and services relevant to their holding,
including dividend payment history details.
Anyone can visit the Share Registry website to access a range
of information about David Jones Limited including the closing
price of David Jones Limited shares, graphs showing market
prices over a requested period and graphs showing volumes
traded over a requested period.
Shareholders can register their email address through
the Share Registry website to receive shareholder
communications electronically.
STOCK EXCHANGE
The Company is listed on the Australian Stock Exchange.
The home exchange is Sydney.
DAVID JONES LIMITED CONCISE ANNUAL REPORT 2001 ABN 75 000 074 573
davidjones.com.au
DAVID JONES LIMITED
CONCISE ANNUAL REPORT 2001
ABN 75 000 074 573