briscoe group ltd

Financial HighlightsAudited

yearended

31 January2003$000

Audited52 weeks

ended27 January

2002$000

Audited52 weeks

ended28 January

2001$000

Audited51 weeks

ended30 January

2000$000

Unaudited53 weeks

ended9 February

1999$000

Operating Revenue 297,628 254,266 221,123 190,949 173,149Profit After Income Tax 23,564 17,506 12,490 9,111 2,540

Financial Statistics

Shareholders’ Funds 80,354 69,390 13,409 23,539 14,428

Total Assets 111,785 107,216 71,009 56,242 44,548EBIT 33,330 25,640 19,076 13,562 4,951(Earnings Before Interest and Income Tax)EBIT Per Share* 15.9c 14.8c 11.2c 8.0c 2.9cEarnings Per Share* 11.2c 10.1c 7.3c 5.4c 1.5cOperating Cashflow PerShare*

4.5c 15.2c 8.2c 10.1c 1.7c

Free Cashflow Per Share* (4.2c) 12.0c 5.9c 9.4c 1.0c(Operating Cashflow net of Investing Cashflow)

Net Tangible Assets PerShare*

38.3c 40.0c 7.9c 13.8c 8.5c

Shareholders’ Funds to TotalAssets

71.88% 64.72% 18.88% 41.85% 32.39%

*Based on the number of shares on issue at the end of each year, adjusted to take account of the 1,700,000:1 share splitundertaken by the company on 16th November 2001.

Group Stock Turn(i.e. Annual cost of sales divided by average end of month stock levels)

2003 2002 2001 2000 1999

Briscoe Group 4.5 4.6 4.1 4.5 4.1

Total Store Area (m2) 2003 2002 2001 2000 1999Briscoes Homeware 56,382 54,809 54,809 52,337 52,337Rebel Sport 23,111 20,610 20,610 17,638 15,866

Briscoe Group 79,493 75,419 75,419 69,975 68,203

Briscoe Group Ltd.

http://www.briscoegroup.co.nz/content.asp?cont=annual (1 of 25) [2/4/2004 3:21:54 PM]

Gross Profit Margins 2003 2002 2001 2000 1999

Briscoe Group 31.4% 31.6% 30.9% 31.5% 30.8%

Store Numbers 2003 2002 2001 2000 1999Briscoes Homeware 28 28 28 27 27Rebel Sport 12 11 11 9 8

Briscoe Group 40 39 39 36 35

Directors Report

We are pleased to present the Directors� Report on the financial and operational performance of Briscoe Group Limited in theyear ended 31 January 2003. This was the Group�s first full year of operation following the listing of its shares on the NewZealand Exchange Limited in December 2001. The Group performed satisfactorily, with strong growth in revenue andearnings accompanied by continued progress in development of the retail chains.

Financial PerformanceTotal operating revenue increased by 17% from $254.3 million to $297.6 million.The success of the Group�s marketing and promotion programmes, its efficient internal performance and cost control enabledthe Group to lift earnings at a rate significantly exceeding the increase in revenue.Audited net profit rose by 34.6% from $17.5 million to $23.6 million, and earnings per share were 11.2 cents compared with10.1 cents in the previous year.Gross profit increased by 16% from $80 million to $92.8 million, equating to a gross profit margin of 31.43% compared with31.59% for the 2002 year. Despite poor weather conditions through the last quarter, Briscoes Homeware improved its grossmargin. Margins were reduced in Rebel Sport in the pre and post Christmas period to avoid accumulation of inventory inseasonal goods due to a late-starting summer season. Earnings before interest and taxation (EBIT) rose by 30% from $25.6million to $33.3 million. EBIT as a percentage of sales increasedfrom 10.12% to 11.28%.The results compared favourably with those projected in the prospectus issued prior to the Company�s listing in December2001. The prospectus projections for the 2003 year were $266 million for operating revenue, $17.7 million for net profit and$25 million for EBIT. The latest results also highlighted the continued growth of the Group, as net profit has now increased byalmost 90% in the past two years.The 2003 results were for a 369-day period to 31 January 2003, reflecting a move to month-end closing dates for financialreporting periods.

DividendIn keeping with the results and the Group�s dividend policy, the Directors have resolved to pay a final dividend of 4 cents pershare. The dividend is fully imputed, and when added to the interim payment of 2.75 cents per share gives a total dividend forthe year of 6.75 cps. The Group�s policy is to pay 60% of tax-paid earnings as dividend. In addition to the final dividend, asupplementary dividend of 0.7059 cents per share was declared and will be paid to nonresident shareholders.The final dividend will be paid on 9 May 2003, and will be payable to those shareholders on the registeron 17 April 2003.

Review of OperationsThe Group�s increase in sales was at a substantially higher level than the growth in New Zealand retail sales reported inofficial industry statistics. On a same-store basis, sales growth for the year was 15.5% for the Group. Briscoes Homeware andRebel Sport returned same store sales growth of 17.7% and 10.6% respectively.The Group maintained a disciplined approach to cost control, and improved internal processes in areas of cash processing andthe recording of inventories and fixed assets.Inventories of $46.6 million at year-end (last year $34.0 million) were slightly higher than optimal levels after allowing forincreased business and increased product ranging. Surplus seasonal stocks have largely been cleared since balance date.Additionally, new monitoring and reporting procedures have been put into place in selected categories.Cash and bank balances at the end of the year were $32.0 million, down from $54.1 million at 27 January 2002. Thisreduction was primarily a reflection of the Group�s property investments and inventory levels, as well as the one-off impact ofsubstantial levels of creditor payments made between 27 January 2002and 31 January 2002.These factors reduced the net cash inflows from operating activities to $9.5 million, from $26.3 million in the previous year.With the reduction in inventory since year-end and the passing of the one-off items, the Board is confident that net cashinflows from operating activities will be at a substantially higher level for the current year.

Briscoe Group Ltd.


Briscoes HomewareBriscoes Homeware expanded market share, sales and margins through a combination of organic growth, store refurbishmentand store relocations. Sales increased by $30 million to $206.4 million.The new store format has met with high customer approval and consequently strong sales growth in the outlets concerned. Therise in the value of the New Zealand dollar enabled some margin expansion, although this was constrained by strongcompetition in the retail environment.

Rebel SportRebel Sport continued to increase its market share and lifted sales by $11 million to $89 million. Margins were not as high asexpected during the pre and post Christmas period as the Company took action to offset the effect of the late summer start onsales of sporting equipment and apparel. The reduction in margins lifted sales for the quarter by 19% and increased marketshare, whilst clearing inventory in time for the new reporting period.

Development ProgrammeGood progress has continued to be made in the implementation of the Group�s development and expansion plan, and inperformance improvements within the Briscoes Homeware and Rebel Sport operations.The reformatting of Briscoes Homeware stores continued, with nine stores converted to the new format by the end of the yearand a further four under way. This programme continues to be very successful in improving performance, with sales gainsranging from 20% to 40% at the refurbished stores.The Briscoes Homeware store relocation programme also continued, with the Porirua and Hamilton stores moving to largerpremises. A new Rebel Sport store was opened in Invercargill during the third quarter, taking the total number to 12. Thesechanges increased total store area by 2.9% to 56,382 sq. m. for Briscoes Homeware and by 12.1% to 23,111 sq. m. for RebelSport.Approximately $18 million was invested in upgrading and reformatting existing stores and in strategic purchases of propertyin Invercargill, Nelson, Hastings and Wellington.

MarketingBriscoes Homeware and Rebel Sport are strategically positioned as specialty retail chains offering quality branded products atthe best available prices. The marketing programmes are multi-faceted, including Group brands, product brands, productranges, pricing, promotional advertising, supplier rebate schemes and customer service. Advertising in the latest year includeda mix of television commercials, in-store presentations and home-delivered catalogues.Briscoes Homeware�s appeal to mass middle-market New Zealanders has a strong emphasis on offering well-recognisedbrands combined with largely European design elements. It focuses on three broad product categories - household linens andsoft furnishings, small electrical appliances, and table-top products such as glassware, dinnerware and cutlery.Rebel Sport has become New Zealand�s largest retailer of most leading brands of sports and leisure goods since its launch in1996. It offers a wide range of sporting apparel and goods produced under a number of high-profile brands.

PeopleRecognising the considerable recent growth in the Group, the Board decided to restructure and strengthen its top managementteam by creating several new positions and making some key external appointments.The first of these moves was the promotion of Executive Director Alaister Wall to the new position of Deputy ManagingDirector with specific operational responsibilities.There were also two new key appointments, to the roles of Chief Financial Officer and Human Resources Manager.Mr Geoff Scowcroft was appointed Chief Financial Officer in October 2002, with responsibility for finance, informationtechnology and administrationand reporting directly to the Managing Director.Mr Scowcroft was previously Financial Controller for Woolworths (New Zealand) Ltd and brings tothe Briscoe Group valuable system and financial experience within the retail sector.Ms Lynda Webb, an experienced Human Resources Manager and former Employment Relations consultant for the Employersand Manufacturers Association (Northern), was appointed Human Resources Manager in March 2003.Effective from 1 February, 2003, as part of a strategic shift in operational roles, Mr David Drees, General Manager ofBriscoes Homeware since 1999, was appointed to the equivalent role at Rebel Sport and Mr Peter Burilin, General Manager ofRebel Sport since 1998, became General Manager of Briscoes Homeware. These changes were made in the interests ofutilising their individual contributions and initiatives right across the Group, creating new opportunities and challenges forboth of these fine managers and generally improving the Group�s management succession.The Board wishes to express its sincere thanks for the efforts of all employees and their contribution to the success of theGroup during the year.

Future DevelopmentsThe Group will continue to expand at a measured pace, and on the basis of a thorough understanding of its customers. At least

Briscoe Group Ltd.


three new Rebel Sport stores will be opened during the current year - in Nelson, Hastings and Lower Hutt. This will bring thestore numbers for Rebel Sport to a minimum of 15. At the date of this report, negotiations are at an advanced stage to securesites for additional Rebel Sport stores in Rotorua, Whangarei and Tauranga.A new Briscoes Homeware store will be opened in Lower Hutt during the current year, bringing the Briscoes Homeware chainto 29 stores.The reformatting of Briscoes Homeware stores will be completed during the current year. A new in-store look to Rebel Sportwill be commenced, with changes to older stores, the introduction of a new advertising campaign and the continuing review ofmerchandise and product ranging.The Group remains committed to expansion through establishment or acquisition of compatible retail businesses where this iscommercially appropriate.The selection of opportunities to consider and pursue will continue to involve assessments of:" the likely relevance of a concept to the New Zealand market;" the likely ease of integration into the Briscoe Group;" the potential to utilise existing Group concepts and systems;" the potential for conflict (or cannibalisation) with existing Group businesses; and" the potential to make significant contributions to the Group�s financial performance and shareholder wealth.

OutlookThe New Zealand retail market can be affected by a range of factors, including economic growth, employment, interest ratesand the value of the New Zealand currency. However, at this stage it does not appear that overall conditions for retailing willchange markedly during the year now in progress.The Directors are confident that Briscoe Group will continue to grow sales, market share and profitability during 2003/04.Trading levels in both Briscoes Homeware and Rebel Sport during the first two months have been satisfactorily ahead of thosefor the same period of last year.

For and on behalf of the Board

Rosanne MeoCHAIRMAN

Rod DukeGROUP MANAGING DIRECTOR

Statements of Financial Performance

For the Year Ended 31 January 2003

Group Parent2003 2002 2003 2002

Notes $000 $000 $000 $000

Operating revenue 1 297,628 254,266 16,081 761Operating expenses 2 (262,678) (228,050) (2,888) (697)

Profit before income tax 34,950 26,216 13,193 64Income tax 13 (11,386) (8,710) (199) (37)

Net profit attributable to parent shareholders 23,564 17,506 12,994 27

Statements of Movements in Equity

For the Year Ended 31 January 2003Group Parent

2003 2002 2003 2002Notes $000 $000 $000 $000

Net profit for the year 3 23,564 17,506 12,994 27

Total recognised revenues and expenses 23,564 17,506 12,994 27

Briscoe Group Ltd.


Contributions from owners 4 – 38,475 – 38,475Dividends paid 3 (12,600) – (12,600) –

Movements in equity for the year 10,964 55,981 394 38,502

Equity at the beginning of year 69,390 13,409 39,491 989

Equity at end of year 80,354 69,390 39,885 39,491

Statements of Financial Position

As at 31 January 2003Group Parent

2003 2002 2003 2002Notes $000 $000 $000 $000

EquityShare capital 4 38,475 38,475 38,475 38,475Reserves 370 370 – –Retained earnings 3 41,509 30,545 1,410 1,016

Total equity 80,354 69,390 39,885 39,491

LiabilitiesNon-current liabilitiesOptional convertible notes 14 2,150 2,150 2,150 2,150

Total non-current liabilities 2,150 2,150 2,150 2,150

Current liabilitiesPayables and accruals 15 29,752 34,541 1,098 161Provision for taxation (471) 383 93 1Due to related parties 9 – 752 – 752

Total current liabilities 29,281 35,676 1,191 914

Total liabilities 31,431 37,826 3,341 3,064

Total equity and liabilities 111,785 107,216 43,226 42,555

AssetsNon-current assetsInvestments in subsidiaries 6 – – 2,783 2,791Property, plant and equipment 10 26,031 11,308 – –Deferred tax 12 1,495 1,678 60 –Briscoe Share Plan Trustee Ltd 5 80 80 80 80Employee loan - Optional convertible notes 14 2,368 2,171 2,368 2,171Prepayments and other assets – 100 – 100

Total non-current assets 29,974 15,337 5,291 5,142

Current assetsCash and bank balances 31,980 54,114 14,764 –Accounts receivable 2,371 3,184 9 –Inventories 46,611 33,984 – –Prepayments and other assets 849 597 – 60Due from related parties 9 – – 23,162 37,353

Total current assets 81,811 91,879 37,935 37,413

Briscoe Group Ltd.


Total assets 111,785 107,216 43,226 42,555

Statements of Cash Flows

For the Year Ended 31 January 2003Group Parent

2003 2002 2003 2002Notes $000 $000 $000 $000

Operating activities Cash was provided from Receipts from customers 295,987 253,287 – –Dividends received – – 12,600 –Management fees received – – 2,815 –Interest received 2,187 540 609 –Net GST received – – 1 –

298,174 253,827 16,025 –

Cash was applied to Payments to suppliers (219,462) (166,393) – –Payments to employees (20,500) (17,371) (1,598) –Other operating expenses (34,697) (32,905) (412) –Interest paid (167) (223) (69) –Income tax paid (12,068) (8,462) (165) –Net GST paid (1,763) (2,161) – –

(288,657) (227,515) (2,244) –

Net cash inflows from operating activities 9,517 26,312 13,781 –

Investment activities Cash was provided from Proceeds from sale of fixed assets 53 25 – –Advances and loans repaid 44 55 44 –

97 80 44 –

Cash was applied to Deposits on new stores – (100) – –Purchase of property, plant and equipment (18,396) (5,421) – –

(18,396) (5,521) – –

Net cash (outflows to)/inflows from investment activities (18,299) (5,441) 44 –

Financing activitiesCash was provided fromProceeds from issue of shares – 38,396 – 38,396Advance from subsidiary – – 14,291 –

– 38,396 14,291 38,396

Cash was applied toRepayment of advance from related party (752) (22,234) (752) (22,234)Advances to subsidiary – – – (16,162)Dividends paid (12,600) – (12,600) –

Briscoe Group Ltd.


(13,352) (22,234) (13,352) (38,396)

Net cash (outflows to)/inflows from financing activities (13,352) 16,162 939 –

Net (decrease)/increase in cash held (22,134) 37,033 14,764 –Cash at beginning of year 54,114 17,081 – –

Cash at end of year 31,980 54,114 14,764 –

Composition of cash

Cash and bank balances 31,980 54,114 14,764 –

31,980 54,114 14,764 – Reconciliation with operating surplusReported surplus after tax 23,564 17,506 12,994 27

Items not involving cash flowsDepreciation expense 3,599 3,601 – –Bad debts written off & movement in doubtful debts 177 48 – –Other non cash items – – 8 (27)

3,776 3,649 8 (27)

Impact of changes in working capital itemsDecrease (increase) in accounts receivable 636 (150) – –Decrease (increase) in inventory (12,626) 5,302 – –Decrease (increase) in prepayments and other assets (393) (159) (190) –Increase (decrease) in trade creditors (4,816) 1,863 58 –Increase (decrease) in other creditors and accruals 1,378 235 497 –Increase (decrease) in GST payable (1,297) (2,351) (5) –Increase (decrease) in accrued compensation (36) 194 387 –Increase (decrease) in tax provision (861) 561 92 –Increase (decrease) in deferred tax 172 (313) (60) –

(17,843) 5,182 779 –

Items classified as investing activitiesLoss/(surplus) on disposal of assets 20 (25) – –

20 (25) – –

Net cash flow from operating activities 9,517 26,312 13,781 –

Statement of Accounting Policies


Entities reportingThe financial statements for the Parent are for Briscoe Group Limited as a separate legal entity.The consolidated financial statements for the Group are for the economic entity comprising Briscoe Group Limited and itssubsidiaries.

Statutory baseBriscoe Group Limited is a company registered under the Companies Act 1993 and is an issuer in terms of the Securities Act1978.The financial statements have been prepared in accordance with the requirements of the Financial Reporting Act 1993 and theCompanies Act 1993.

Measurement base

Briscoe Group Ltd.


The financial statements have been prepared on the historical cost basis, as modified by the revaluation of certain assets asidentified in specific accounting policies below.

Accounting policiesThe financial statements are prepared in accordance with New Zealand generally accepted accounting practice. Theaccounting policies that materially affect the measurement of financial performance, financial position and cash flows are setout below.

Group financial statementsThe Group financial statements consolidate the financial statements of subsidiaries, using the purchase method, and includethe results of associates using the equity method.Subsidiaries are entities that are controlled, either directly or indirectly, by the Parent.All material transactions between subsidiaries or between the Parent and subsidiaries are eliminated on consolidation.

Operating revenuesSales revenue represents revenue from the sale of the Group�s products and services, net of returns, trade allowances, dutiesand taxes paid. Dividend incomeis recognised in the period the dividend is declared. Interest and rental income is accounted for as earned.

Income TaxThe tax expense recognised for the year is based on the accounting surplus, adjusted for permanent differences betweenaccounting and tax rules.The impact of all timing differences between accounting and taxable income is recognised as a deferred tax liability or asset.This is the comprehensive basis for the calculation of deferred tax under the liabilities method.A deferred tax asset, or the effect of losses carried forward that exceed the deferred tax liability, is recognised in the financialstatements only where there is virtual certainty that the benefit of the timing differences, or losses, will be utilised.

Goods and Services Tax (GST)The statement of financial performance and statement of cash flows have been prepared so that all components are statedexclusive of GST. All items in the statement of financial position are stated net of GST, with the exception of receivables andpayables, which include GST invoiced.

InventoriesInventories are goods held for resale and are valued at the lower of cost, using the FIFO basis, and net realisable value. Costcomprises invoiced value plus an allowance for freight, insurance and customs duty.

Property, plant and equipment and depreciationFixed assets are stated at cost less accumulated depreciation. Depreciation is charged on a straight line basis to expense thecost of the assets to their residual values over their estimated useful lives by applying the following rates:

Category Value Depreciation basis

Equipment & leaseholdimprovements 2-15 years straight lineBuildings 25 years straight line

ReceivablesReceivables are carried at anticipated realisable value. An estimate is made for doubtful receivables based on a review of alloutstanding amounts at year end. Bad debts are written off during the year in which they are identified.

Leased assetsOperating leases under which all the risks and benefits of ownership are effectively retained by the lessor are classified asoperating leases. Operating lease payments are recognised as an expense in the periods the amounts are payable.

InvestmentsInvestments in subsidiaries are stated at cost in the statement of financial position of the Parent.

ImpairmentAnnually, the directors assess the carrying value of each asset. Where the estimated recoverable amount of the asset is lessthan its carrying amount, the asset is written down. The impairment loss is recognised in the statement of financialperformance.

Advertising and promotion costsAdvertising and promotion costs are expensed when incurred.

Briscoe Group Ltd.


Foreign currenciesTransactions denominated in foreign currencies during the year have been translated to New Zealand dollars at the rates ofexchange ruling at the date of the transaction, except when forward currency contracts have been taken out to cover short termforward currency commitments. Where short term forward currency contracts have been taken out, the transaction istranslated at the rate contained in the contract. Amounts receivable and payable in foreign currencies at year end have beentranslated to New Zealand dollars at rates of exchange approximating those ruling at that date.Gains and losses arising from exchange fluctuations are taken to the statement of financial performance in the period in whichthey occur.

Financial instruments

RecognisedFinancial instruments carried on the statement of financial position include cash and bank balances, investments, receivables,trade creditors and borrowings. The particular recognition methods adopted are disclosed in the individual policy statementsassociated with each item.Financial instruments that are designated as hedges of specific items are recognised on the same basis as the underlyinghedged items.Financial instruments that do not constitute hedges are stated at market value and any resultant gain or loss is recognised inthe statement of financial performance.

UnrecognisedForward exchange contracts entered into as hedges of foreign exchange assets and liabilities are valued at exchange ratesprevailing at year end. Any unrealised gains or losses are offset against foreign exchange gains and losses on the related assetor liability.The Franchise Agreement provides for payment of cash at a future date. These are not recognised in the financial statementsas they are paid annually in advance during the year to which they relate.

Statement of cash flowsThe following are the definitions of the terms used in the statement of cash flows:

i Operating activities include all transactions and other events that are not investing or financing activities.ii Investing activities are those activities relating to the acquisition, holding and disposal of property, plant and equipment

and of investments. Investments can include securities not falling within the definition of cash.iii Financing activities are those activities that result in changes in the size and composition of the capital structure. This

includes both equity and debt not falling within the definition of cash. Dividends paid in relation to the capital structureare included in financing activities.

iv Cash is considered to be cash on hand and the current accounts in banks, net of bank overdrafts.

Changes in accounting policiesThere have been no significant changes in accounting policies during the current year. Accounting policies have been appliedon a basis consistent with the prior year.

Notes to the Financial Statements


1. Operating revenue

Group Parent2003 2002 2003 2002$000 $000 $000 $000

Sales revenue 295,424 253,420 – –Dividends received from subsidiaries – – 12,600 –Interest received 2,045 759 666 45Rental received 159 87 – –Management fees received – – 2,815 716

Total operating revenue 297,628 254,266 16,081 761

Briscoe Group Ltd.


2. Operating expenses

Group Parent2003 2002 2003 2002$000 $000 $000 $000

Operating expenses include:

Depreciation – buildings 104 76 – –Depreciation – equipment and leasehold improvements 3,495 3,525 – –

Total depreciation 3,599 3,601 – –

Loss/(surplus) on sale of property, plant and equipment 20 (25) – –Bad debts written off 93 48 – –Increase in estimated doubtful debts 84 – – –Interest expense - Optional convertible notes 321 39 321 39Interest expense - other 104 144 – –Directors’ fees 105 105 – –Rental expense 11,516 11,246 – –

Amounts paid to AuditorStatutory audit fees 50 50 50 –

Compliance audit fees 13 – 13 –Taxation compliance services 50 206 50 –Accounting advice and assistance 97 103 97 –Due diligence assistance – 212 – –

3. Retained earnings

Group Parent2003 2002 2003 2002$000 $000 $000 $000

Balance at beginning of year 30,545 13,039 1,016 989Net profit for the year 23,564 17,506 12,994 27Dividends paid and provided (12,600) – (12,600) –

Balance at end of year 41,509 30,545 1,410 1,016

4. Share capital

Group Parent2003 2002 2003 2002$000 $000 $000 $000

Issued and Paid up Capital

Balance at beginning of year 38,475 – 38,475 –Share issue made during year – 38,395 – 38,395Shares issued to employee share plan – 80 – 80

Balance at end of year 38,475 38,475 38,475 38,475

Share issue details and rights

Briscoe Group Ltd.


As at 31 January 2003 there were 210,000,000 shares issued and fully paid (2002: 210,000,000 shares issued andfully paid).All ordinary shares rank equally with one vote attached to each share.

5. Employee share ownership plan

The planIn 2002 79,500 ordinary shares were issued, at a price of $1.00 per share, to the Trustee of the Briscoe Group Limited ShareScheme, being Briscoe Share Plan Trustee Limited.Under the Briscoe Group Limited Share Scheme ("the Scheme") 79,500 shares have been issued to identified employees toenable them to participate in the success of the Group. Initially the Trustee will hold Employee Shares for a period of threeyears and during this time the shares are unable to be traded. The Trustee will exercise all rights (including voting rights) andwill receive all entitlements in respect of the Employee Shares. The purchase price of the shares acquired under the Scheme isfunded by a loan made by the Company to each respective employee. If the respective employee remains employed for threeyears after the acquisition date of the Employee Shares, the amount to be repaid under the loan will be met by a special bonuspayment from the Company (or a subsidiary).Mr R Duke and Mr A Wall (being Group Managing Director and a Trustee of the majority shareholder and Deputy ManagingDirector respectively of Briscoe Group Limited) are Directors of the Trustee (Briscoe Share Plan Trustee Limited). As such,they have non-beneficial control of the shares in the Scheme allocated to employees for the initial three year period and if theshares have voting rights they are entitled to exercise that voting power. The directors of the Trustee are appointed by theCompany�s Board of Directors.The only financial commitment of the scheme is an advance from Briscoe Group Limited of $79,500 (2002: $79,500) which isinterest free and payable on demand.

6. Investments

Controlled entities consolidated comprise:Name Principal activity 2003 2002

Briscoes (New Zealand) Limited Retail 100% 100%

The Sports Authority Limited (trading as Rebel Sport) Retail 100% 100%

All subsidiary entities have a balance date of 31 January 2003.

7. Earnings per shareGroup

2003 2002

Number of ordinary shares on issue (year end) 210,000,000 210,000,000

Number of ordinary shares on issue (weighted average) 210,000,000 173,333,333*

Net profit per share (based on weighted average number of shares on issue) 11.2c 10.1c

* Based on the average number of shares on issue (adjusted to take account of the 1,700,000:1 share split undertaken by theCompany on 16 November 2001).

8. CommitmentsThe following amounts have been committed to by the Group but not recognised in the financial statements.

Group Parent2003 2002 2003 2002$000 $000 $000 $000

Operating leases

Non cancelable operating lease commitments:Within one year 10,516 9,828 – –One to two years 9,975 9,556 – –Two to five years 19,291 22,524 – –Beyond five years 2,270 5,010 – –

42,052 46,918 – –

Briscoe Group Ltd.


At year end the Group had capital commitments in relation to buildings and refurbishment projects totalling $2,359,000(2002: $1,000,000). There are no other capital commitments or contingent liabilities for the Parent or Group at year end.The Group had outstanding commitments under letters of credit at year end amounting to $9,661,127 (2002: $7,330,273)payable in US and NZ dollars.The Group has a franchise agreement with Rebel Sport Australia for the rights to the "REBEL SPORT" name and trademarkin the New Zealand territory. Last year the original agreement was amended and as a result the Group had a fixed annualcommitment for a period of three years ending 31 March 2003, with an option to extend the agreement for a further two years.The Group has exercised the option.

9. Related party information

GeneralThe R A Duke Trust is a 75% shareholder of Briscoe Group Limited. The subsidiaries identified in Note 6 are deemed to berelated parties.

Related party transactions and balancesDuring the year the Company advanced and repaid loans to its subsidiaries. In presenting the financial statements of theGroup, the effect of transactions and balances between fellow subsidiaries and those with the Parent have been eliminated. Alltransactions with related parties are in the normal course of business and provided on commercial terms.

All employees and directors are able to take advantage of discounted purchasing of product sold by the Group in the ordinarycourse of business.

No amounts owed by related parties have been written off or forgiven during the year.

The Group and Parent undertook transactions with Directors and the majority shareholder as detailed below.The R A Duke Trust, of which Mr R Duke is a Trustee, received dividends of $9,450,741 duringthe year (2002: nil).

●

The Tunusa Trust, of which Mr A Wall is a Trustee, received dividends of $72,000 during the year (2002: Nil).●

During the year the Group repaid advances fromthe R A Duke Trust amounting to $752,275 (2002: $22,246,228). At year end, the balance of this advance account wasnil (2002: $752,275).

●

The R A Duke Trust as owner of the premises at Panmure, Auckland, received rental payments of $743,174 (2002:$388,579) from the Group, under an agreement to lease those premises to Briscoes (NZ) Limited and The SportsAuthority Limited.

●

The Non Executive Directors received directors� fees and dividends in relation to their personally held shares asfollows:

●

2003 2002Directors’ Directors’

fees Dividends Other fees Dividends Other$000 $000 $000 $000 $000 $000

Non Executive DirectorMr S Johnstone 35 60 – 35 – 50*Ms R Meo 70 6 – 70 – –Mr G Harvey – 315 – – – –

105 381 – 105 – 50

* For investment banking services provided

10. Property, plant and equipment

2003 2002Book Book

Cost Acc depn value Cost Acc depn Value$000 $000 $000 $000 $000 $000

Briscoe Group Ltd.


Group

Buildings 3,921 (645) 3,276 1,811 (541) 1,270

Land 4,545 – 4,545 332 – 332

Equipment & leaseholdimprovements 35,584 (23,131) 12,453 29,603 (19,897) 9,706

Capital work in progress 5,757 – 5,757 – – –

49,807 (23,776) 26,031 31,746 (20,438) 11,308

During the year properties at Invercargill and Wellington were purchased for a total of $5,557,956.

Valuation informationThe most recent government valuations in respect of the land and buildings, other than those purchased during the year, are asfollows:

Property Value Date of valuation

36 Taylors Road, St Lukes $2,600,000 1 September 200214/16-18 Taylors Road, St Lukes $576,000 1 September 200276 Yarrow Street, Invercargill $114,000 1 September 200293 Leet Street, Invercargill $48,000 1 September 2002

The directors believe that the carrying values are reasonable approximations of the fair value of the assets.Capital work in progress relates to projects underway for the development of new Rebel Sport stores at Nelson and Hastings.The holding company, Briscoes Group Limited, has no fixed assets.

11. Imputation balances

Group Parent2003 2002 2003 2002$000 $000 $000 $000

BalancesImputation credit account 29,652 17,198 555 389

Movements

Imputation credit accountBalance at beginning of year 17,198 8,739 389 369Tax payments, net of refunds 12,454 8,458 166 20Credits attached to dividends received 6,206 – 6,206 –Distributed and disposed (6,206) – (6,206) –Transfers of tax to other taxpayers – 1 – –

Balance at end of year 29,652 17,198 555 389

12. Deferred tax asset

Group Parent2003 2002 2003 2002$000 $000 $000 $000

Non-currentBalance at beginning of year 1,678 1,365 – –Prior year adjustment (49) 259 2 –On surplus for year (134) 54 58 –

Balance at end of year 1,495 1,678 60 –

Briscoe Group Ltd.


13. Income tax

Group Parent2003 2002 2003 2002$000 $000 $000 $000

Operating surplus before tax 34,950 26,216 13,193 64

Permanent differences

Non-deductible expenditure 157 13 – –Non-assessable income (52) – (12,600) –

105 13 (12,600) –

Surplus subject to tax 35,055 26,229 593 64

Tax at 33% 11,568 8,656 196 21

Under/(over) estimation in prior years (182) 54 3 16Imputation credits on dividends – – – –

Income tax recognised in the statement of financialperformance 11,386 8,710 199 37

ComprisingCurrent income tax expense 11,203 9,023 259 37Decrease (increase) deferred tax asset 183 (313) (60) –

11,386 8,710 199 37

14. Optional Convertible NotesOn 16 November 2001, Briscoe Group Limited established an Optional Convertible Note Scheme ("OCN Scheme") as avehicle for executive employees to benefit from positive changes in the market value of the Company�s shares. Under theOCN Scheme, 2,150,000 convertible notes having an aggregate purchase price of $2,493,570 (having been issued at apremium of 15.98 cents) were issued to 18 key employees and 1 former employee. The maximum number of shares intowhich all issued convertible notes will convert is 2,150,000.The issue of notes includes the issue of:

220,000 notes to an executive Director of the Company (Alaister Wall); and●

100,000 notes to a former employee of the Company (Rex Briscoe).●

The purchase price of the notes held by each noteholder was funded by a loan from the Companyto each noteholder as approved by the Directors and Shareholders of the Company. The loan must be repaid in full no laterthan the earlier of (i) three years from the date of the loan; or (ii) the date of conversion or redemption of the note. In claimingrepayment of theloan, the Company can only have recourse to any amounts recoverable under the notes held by the noteholder, or any cash orthe proceeds of sale of any shares received by the noteholder on redemption or conversion of the note. The loan bears interestat 7.95% payable quarterly in arrears. In turn the notes bear interest at 14.86% payable quarterly in arrears, and are nottransferable.The notes are non-voting. The holder of each note is entitled to elect to have the note converted into one share of theCompany three years after the note�s issue. The noteholder�s election to convert has to be made subject to the Company�spower to defer conversion if it is not satisfied that the loan together with interest thereon will be repaid in the period 30 daysprior to the third anniversary of the note�s issue, and can only be made if the person is an employee of the Company (or itssubsidiaries) at the time of the election, unless this requirement has been waived by the Company.The number of shares into which the note converts can be adjusted by the Board to take into account any changes to theCompany�s share capital (for example, share splits, re-classifications, bonus issues, rights issues, buy backs oramalgamations) that occur prior to the note�s conversion.If the employee does not elect to convert a note to ordinary shares, or if his or her employment terminates prior to the time he

Briscoe Group Ltd.


or she can elect to convert the note, the note is automatically redeemed for cash on the third anniversary of its issue. The cashprice paid per note on redemption is $1.00.No other options to subscribe for securities of the Company or any of its subsidiaries have been granted.

The convertible notes are presented in the Group�s statement of financial position as follows:Group Parent

2003 2002 2003 2002$000 $000 $000 $000

Face value of notes issued 2,493 2,493 2,493 2,493Value of conversion rights (343) (343) (343) (343)

Total subscription 2,150 2,150 2,150 2,150

15. Payables and accruals

Group Parent2003 2002 2003 2002$000 $000 $000 $000

Current

Accounts payable 24,455 29,289 58 4Income received in advance 140 – 140 –Accrued expenses 1,888 895 448 63Holiday pay 888 906 69 –Employee entitlements 1,091 864 301 7Goods and services tax (GST) payable 1,290 2,587 82 87

29,752 34,541 1,098 161

16. Financial instruments

The Group is subject to a number of financial risks, which arise as a result of its debt portfolio and investment activities.To manage and limit the effects of those financial risks, the Group has approved policy guidelines and authorised the use ofvarious financial instruments. The policies approved, and financial instruments being utilised at balance date, are outlinedbelow.

Currency risk

PoliciesDuring the normal course of business the Group imports inventory. As a result of these transactions exposures to fluctuationsin foreign currency exchange rates arise. The currencies in which the Group primarily deals are the Australian Dollar, UnitedStates Dollar, Great Britain Pound and the Euro.It is the Group’s policy to enter into foreign exchange forward contracts from time to time to manage the exposure tofluctuations in currency rates.The Group has a commitment under a franchise agreement (refer Note 8) requiring annual payments in Australian dollars. Aforward exchange contract has been entered into to reduce the foreign currency exposure of this commitment.

Recognised balancesThe balances denominated in a foreign currency and recognised at balance date consisted of:

Group Parent2003 2002 2003 2002$000 $000 $000 $000

USD Bank accounts – 283 – –

Briscoe Group Ltd.


Unrecognised balancesThe notional or principal contract amounts of foreign exchange instrumentsoutstanding at balance date were:

Group Parent2003 2002 2003 2002$000 $000 $000 $000

Forward foreign exchange contracts 2,928 – – –

The cash settlement requirements of the forward exchange contracts approximate the notional amounts shown above.

Interest rate riskAt 31 January 2003 the only interest bearing non-current liabilities held by the Group were the Optional Convertible Notestotalling $2,150,000 (2002: $2,150,000).

PoliciesIn the event that borrowings are required it is Group policy to utilise the commercial bills facility.

Re-pricing analysisThe following tables identify the periods in which interest rates are subject to review on interest bearing financial assets andliabilities, and provides the current weighted average interest rate of each item.Trade receivables, trade creditors and sundry receivables and creditors have not been included in the table as they are notinterest rate sensitive. Forward rate agreements are also excluded from the re-pricing analysis as these contracts mature withinone year. The Group has no current liabilities that are interest rate sensitive (2002: nil). The only assets held by the Groupsubject to interest rate fluctuations are the Group�s bank account and the OCN loan (refer note 14), which had the followingeffective interest rates:

Group2003 2002

Effective Effectiveinterest interest

rates $000 rates $000

CurrentBank 5.55% 31,980 4.48% 54,114

Non-currentOCN Loan (refer note 14) 7.95% 2,150 7.95% 2,150

Interest rate sensitive liabilities owed by the Group were structured as follows:

Non-currentOCN loan (refer note 14) 14.86% 2,150 14.86% 2,150

The holding company, Briscoe Group Limited, has no financial instruments other than the optional convertible notes andrelated OCN loan above, and the commercial bill facility which was not utilised at year end.

Credit riskThe Group incurs credit risk from transactions with trade receivables and financial institutions in the normal course of itsbusiness including in the current year the purchase of promissory notes.The Group has a credit policy which restricts the exposure to individual trade receivables and the Board of Directors reviewsexposure to trade receivables on a regular basis. The Group does not have any significant concentrations of credit risk.Amounts owed by trade receivables are unsecured.The Group does not require any collateral or security to support transactions with financial institutions. The counterpartiesused for banking and finance activities are financial institutions with high credit ratings.

Fair values

Briscoe Group Ltd.


Methods and assumptionsThe following methods and assumptions were used to estimate the fair value of each class of financial instrument:Cash at bank, bank overdraft, term deposits, loans issued, receivables and trade creditorsThe carrying value of these items is equivalent to their fair value.Promissory notesBased on discounted cash flows using the borrowing rate the Directors would expect to be available to the Group as thediscount rate.InvestmentsThe carrying values of unlisted shares are based on the net asset backing of the Company.BorrowingsBased on discounted cash flows using the borrowing rate the Directors expect would be available to the Group for debt ofsimilar maturity at balance date.Foreign currency forward exchange contractsBased on the difference between the forward exchange rate and the exchange rate as at the year end.Unrecognised contractual commitmentsBased on the sum of the discounted future cashflows adjusted for the exchange rate prevailing at the year end.

Fair value summary Group 2003 2002

Carrying value Fair value Carrying value Fair value$000 $000 $000 $000

Recognised – LiabilitiesOptional convertible notes 2,150 1,899 2,150 1,815

Recognised – AssetsEmployee OCN loan 2,368 2,092 2,171 1,833Promissory notes 12,000 11,835 – –

Future Liability Fair value Future Liability Fair value$000 $000 $000 $000

UnrecognisedContractual commitment arising fromFranchiseAgreement – 3,199 – 1,603Commitments outstanding underLetters of Credit

9,661 9,446 7,330 7,260

Forward exchange contract – (13) – –

The holding company, Briscoe Group Limited, has no financial instruments other than the optional convertible notes, OCNloans, commercial bill facility and promissory notes.

17. Trading periodThe trading period is 28 January 2002 to 31 January 2003. Prior year comparative figures are for 29 January 2001 to 27January 2002.

18. Segmental reportingThe Group operates wholly within the retail sector in New Zealand.

19. Events occurring after balance dateOn 20 March 2003 the directors resolved to provide for a final dividend to be paid in respect of the year ended 31 January2003. The dividend will be paid at a value of 4.00 cents per share on issue as at 17 April 2003, with full imputation creditsattached. The dividend has been calculated on the basis of 60% of the six month result to31 January 2003.

Briscoe Group Ltd.


Statements of Financial Performance

Comparison against Prospectus Projection


Projection Actual2003 2003$000 $000

Operating revenue 266,000 297,628

EBIT 25,000 33,330

Profit before income tax 26,487 34,950

Income tax (8,741) (11,386)Profit after income tax 17,746 23,564

Operating revenue was higher than projected due to higher than assumed growth, especially from reformatted stores.●

EBIT increase over projection was due to higher sales revenue and gross profit, and greater cost savings.●

Statements of Financial Position


As at 31 January 2003Projection Actual

2003 2003$000 $000

EQUITYTotal equity 68,916 80,354

Optional convertible notes 2,459 2,150

Total non-current liabilities 2,459 2,150

Total current liabilities 45,946 29,281

TOTAL EQUITY & LIABILITIES 117,321 111,785

Property, plant and equipment 8,144 26,031Other non-current assets 4,354 3,943

Total non-current assets 12,498 29,974

Cash and bank balances 65,487 31,980Other current assets 39,336 49,831

Total current assets 104,823 81,811

TOTAL ASSETS 117,321 111,785

Briscoe Group Ltd.


Projected equity included a proposed dividend, which was not provided for at year end. Additionally, profit after tax isgreater than projection.

●

The lower than projected current liabilities reflects a provision for dividends included in the projection which has notbeen taken up at year end and also the impact of moving to a month end closing date.

●

Non-current assets include strategic purchases of land & buildings at Invercargill, Wellington, Nelson and Hastings,not included in projection.

●

Lower than projected cash & bank balances reflect the increase in fixed and current assets and also the impact ofmoving to a month end closing date.

●

Other current assets include higher than projected stock levels due to increased ranging, store relocations and oneadditional Rebel Sport store.

●

Statements of Cash Flows


For the Year Ended 31 January 2003Projection Actual

2003 2003$000 $000

Net cash inflow from operating activities 23,834 9,517Net cash (outflow) from investing activities (1,884) (18,299)Net cash (outflow) from financing activities (9,560) (13,352)

Net (decrease)/increase in cash held 12,390 (22,134)

Cash flows from operating activities were less than projection due to the impact of moving to a month end closing dateand higher than projected stock levels.

●

The higher outflow of cash for investing activities relates to strategic purchase of land and buildings.●

The higher outflow of financing activities reflects higher than projected dividend payments.●

Auditors� Report to the Shareholders ofBriscoe Group Limited

We have audited the financial statements on pages 8 to 33. The financial statements provide information about the pastfinancial performance and cash flows of the Company and Group for the year ended 31 January 2003 and their financialposition as at that date. This information is stated in accordance with the accounting policies set out on pages 14 to 16.

Directors� ResponsibilitiesThe Company�s Directors are responsible for the preparation and presentation of the financial statements which give a trueand fair view of the financial position of the Company and Group as at 31 January 2003 and their financial performance andcash flows for the year ended on that date.

Auditors� ResponsibilitiesWe are responsible for expressing an independent opinion on the financial statements presented by the Directors and reportingour opinion to you.

Basis of OpinionAn audit includes examining, on a test basis, evidence relevant to the amounts and disclosures in the financial statements. Italso includes assessing:

(a) the significant estimates and judgements made by the Directors in the preparation of the financial statements; and

(b) whether the accounting policies are appropriate to the circumstances of the Company and Group, consistently appliedand adequately disclosed.

Briscoe Group Ltd.


We conducted our audit in accordance with generally accepted auditing standards in New Zealand. We planned and performedour audit so as to obtain all the information and explanations which we considered necessary to provide us with sufficientevidence to give reasonable assurance that the financial statements are free from material misstatements, whether caused byfraud or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in thefinancial statements.

We have no relationship with or interests in the Company or any of its subsidiaries other than in our capacity as auditors,accounting and tax advisers.

Unqualified OpinionWe have obtained all the information and explanations we have required.

In our opinion:

(a) proper accounting records have been kept by the Company as far as appears from our examination of those records; and

(b) the financial statements on pages 8 to 33:

(i) comply with generally accepted accounting practice in New Zealand; and

(ii) give a true and fair view of the financial position of the Company and Group as at 31 January 2003 and their financialperformance and cash flows for the year ended on that date.

Our audit was completed on 20 March 2003 and our unqualified opinion is expressed as at that date.

Chartered AccountantsAuckland

Corporate Governance

Role of the BoardThe business and affairs of the Group are managed by, or are under the direction of, the Board. The Board is elected byshareholders to supervise the management of the Group and shareholders� interests. Day to day management is delegated tothe Group Managing Director.The principal trading subsidiaries, Briscoes Homeware and Rebel Sport, each have their own management teams.

Board MembershipThe Board currently has five members, three of whom are non-executive members.In accordance with the provisions of the Company�s constitution, Stuart Johnstone and Alaister Wall retire by rotation and,being eligible, offer themselves for re-election as directors.A list of the Directors is on page 37 of this report.

Board RemunerationShareholders are asked to approve fees each year. Fees were established to be in line with New Zealand based organisations ofa similar scope and size.

Indemnification and Insurance of Officers and DirectorsThe Parent Company indemnifies all Directors named in this report, and current Executives of the Group against all liabilitieswhich arise out of their normal duties as Director or Executive Officer, unless liability relates to conduct involving lack ofgood faith. To manage this risk, the Group has indemnity insurance. The total cost of this insurance for the period 1stFebruary 2003 to 31st January 2004 is $26,000 (1st October 2001 to 31st January 2003: $21,682).

Committee StructureThe Board has established Human Resource and Audit committees which are chaired by chairman Rosanne Meo andnon-executive director Stuart Johnstone respectively.

Risk AssessmentThe Board is responsible for ensuring the key business and financial risks are identified and appropriate controls and

Briscoe Group Ltd.


procedures are in place to effectively manage those risks.

General Disclosures

Board of Directors

Rosanne Meo: Chairman (Non-Executive)Chairman of AMP New Zealand Ltd, Deputy Chair of Baycorp Advantage Limited, and a Director of Ports of Auckland andOverland Footwear Limited. Member of the Bancorp Advisory Board and a Trustee of the Liggins Institute.

Rod Duke: Group Managing Director and Deputy ChairmanGroup Managing Director since 1991.

Alaister Wall: Deputy Managing DirectorExecutive of Group for the past 20 years.

Stuart Johnstone: Director (Non-Executive)Investment Banker and Company Director. Chairmanof GDC Communications Limited.

Gerald Harvey: Director (Non-Executive)Executive Chairman of Harvey Norman Holdings Limited, a retail company listed on the Australian Stock Exchange.

Subsidiary CompaniesRod Duke and Alaister Wall are directors of the following subsidiaries: Briscoes (NZ) Limited, The Sports Authority Limitedtrading as Rebel Sport.

Financial StatementsThe financial statements for the Parent and Group for the year ended 31st January 2003 are shown on pages 8 to 33 in thisreport.

Changes in Accounting PoliciesThere were no significant changes in accounting policies during the year.

Principal Activities of the GroupBriscoe Group Limited is a non-trading holding company, but provides management services to its subsidiaries.The principal trading subsidiaries are Briscoes Homeware, a specialist homeware retailer selling leading branded products andRebel Sport, New Zealand�s largest retailer of most leading brands of sporting goods. The subsidiaries are 100% owned byBriscoe Group Limited. There were no changes in company structure during the year.

Review of Operations

A. Results for the Year Ended 31 January 2003

Group Parent$000 $000

Operating Revenue 297,628 16,081Profit Before Income Tax 34,950 13,193Income Tax (11,386) (199)Profit After Income Tax 23,564 12,994

B. DividendsSubsequent to balance date the Directors have declared a final dividend of 4.00 cents per share payable 9th May 2003. Nonresident shareholders of the Group will also receive a supplementary dividend of 0.7059 cents per share. Dividends are fullyimputed to New Zealand resident shareholders.

Events Subsequent to Balance DateThere have been no events subsequent to balance date that have significantly or may significantly affect the operations or stateof affairs of the Company or Group.

Directors

Briscoe Group Ltd.


A. Remuneration and all other benefits (Dollars in thousands)

Non Executive DirectorsRPO’L Meo 70SH Johnstone 35G Harvey nil

Executive DirectorsRA Duke (Managing Director) 400AJ Wall (Deputy Managing Director) 303

Executive Directors do not receive Directors� Fees. Executive remuneration includes salary, performance bonuses andcontributions to superannuation.

B. Shareholdings

Beneficially Held As at 3 April 2003

G Harvey 5,250,000SH Johnstone 1,000,000AJ Wall 500,000RPO’L Meo 100,000

Non-Beneficially Held As at 3 April 2003

RA Duke 157,500,000AJ Wall 1,230,000SH Johnstone 5,000

C. Interests in contractsDuring the year the following Directors have declared pursuant to section 140 (1) of the Companies Act 1993 that they beregarded as having an interest in the following transactions:

Payment of rental of $743,174 (2002: $388,579) on two retail properties of which the RA Duke Trust is the owner.●

D. Interests in Optional Convertible NotesOptional convertible notes plan (refer to note 14 of the Financial Statements). Options outstanding as at balance date are asfollows:

Date Issued 16 November 2001

AJ Wall 220,000

E. Directors� InsuranceAs provided by the Group�s Constitution and in accordance with Section 162 of the Companies Act 1993 the Group hasarranged Directors� and Officers� Liability Insurance which ensures Directors will incur no monetary loss as a result of actionsundertaken by them as Directors provided they act within the law.

F. Directors� and Officers� use of Company InformationDuring the period the Board received no notices pursuant to Section 145 of the Companies Act 1993 relating to use ofCompany information.

State of AffairsThe Directors are of the opinion that the state of affairs of the Group is satisfactory. Details of the period under review areincluded in the Directors� Report and the audited Financial Statements.

Employee RemunerationThe number of employees within the Group (other than Directors) receiving remuneration and benefits above $100,000 areindicated in the following table:

Number of Employees

Briscoe Group Ltd.


$100,000 – 109,999 1$110,000 – 119,999 1$130,000 – 139,999 1$140,000 – 149,999 1$150,000 – 159,999 2$250,000 – 259,999 1$260,000 – 269,999 1

Remuneration to AuditorsThe fee for the audit of the Group and subsidiaries paid to PricewaterhouseCoopers was $50,000. Fees paid to the auditors forother services provided amounted to $160,000 (2002: $521,000) and included amounts relating to taxation advice and otheraccounting services.

Shareholders Information

Holding Range at 3 April 2003

No. Investors Total Holdings %

1-1,000 1,552 1,229,039 0.581,001-5,000 2,419 7,093,435 3.385,001-10,000 553 4,674,919 2.2310,001-100,000 348 9,452,120 4.50100,001 and over 21 187,550,487 89.31

4,893 210,000,000 100%

Substantial Security HoldersThe following information is given pursuant to section 26 of the Securities Market Act 1988.The persons who, according to the records of the company maintained pursuant to section 25 of the Securities Market Act1988, are substantial security holders of the Company as at 3 April 2003 are as follows:

Substantial Security Holders No. of shares Percentage

R A Duke, A J Wall and D N Dassas Trustees of the R A Duke Trust

157,500,000 75%

Top 20 Holder List

Rank Holder’s Name Total %

1 Rodney Adrian Duke, Alaister John Wall and Dinesh Dass as Trustees of theRA Duke Trustestablished for the benefit of the RA Duke family

157,500,000 75.00

2 New Zealand Central Securities 13,287,805 6.333 Gerald Harvey 5,250,000 2.504 Harvey Norman Properties (NZ) Ltd 5,250,000 2.505 Alaister John Wall, Beverley Ann Wall and Thomas Barry Maguire as Trustees of the Tunusa Trust

established for the benefit of the family of AJ and BA Wall .1,230,000 0.59

6 Rodney Adrian Duke, Patricia Huang and Chia-Yin Chou as Trustees of the Hualien Trustestablished for the benefit of the family of Patricia Huang .

1,025,000 0.49

7 Stuart Hamilton Johnstone 1,000,000 0.488 Alaister John Wall 500,000 0.249 Tappenden Holdings Ltd 378,000 0.1810 Keith Arthur William Brunt 350,000 0.1711 First NZ Capital Custodians 284,245 0.1412 Michael Gordon Vyle, Warren Douglas Bygrave and Anthony Edwin Vyle 250,000 0.1213 Advertising Works Limited 201,833 0.1014 Michael Alan Westrup 199,559 0.0915 Custodial Services Limited 144,950 0.07

Briscoe Group Ltd.


16 Custodial Services Limited 125,200 0.0617 Forbar Custodians Limited 121,800 0.0618 Leveraged Equities Custodians Limited 118,195 0.0619 Chun-Mei Chiang 117,700 0.0620 Forbar Custodians Limited 113,700 0.05

Notice of Meeting

Notice is given that the Annual Meeting of Shareholders of Briscoe Group Limited will be held at the Ellerslie ConventionCentre (Ellerslie Race Course) 80-100 Ascot Avenue, Greenlane, on Friday 30th May 2003 at 10.00am. Shareholders areinvited to join the Directors for morning tea at 9.30am prior to the meeting.

Agenda

Ordinary Business

Annual ReportTo receive and consider the Annual Report, the financial statements and the Auditors� Report for the financial year ended 31stJanuary 2003.

To Elect DirectorsDirectors retiring by rotation are:Stuart JohnstoneAlaister WallEach, being eligible, offer themselves for re-election.

AuditorsTo record the reappointment of PricewaterhouseCoopers as Auditors of the Company pursuant to section 200(1) of theCompanies Act 1993, and authorise the Directors to fix the remuneration of the Auditors for the ensuing year.

Directors� FeesTo approve Directors� Fees of $105,000 for the ensuing year. (Unchanged from last year).

Other Business

To consider any other matter which may properly be brought before the meeting.

ProxiesAny shareholder of the Company entitled to attend and vote at the Annual Meeting may appoint a proxy to attend andvote in the place of that shareholder. A proxy need not be a shareholder of the Company.

1.

A Proxy granted by a company must be executed by a duly authorised officer or attorney of that company.2.

Enclosed with this Notice of Meeting is a proxy form. To be valid, the proxy form must be returned duly completed toBK Registries Limited, PO Box 384, Ashburton, no later than 9.30am on 28th May 2003.

3.

Directory

AuditorsPricewaterhouseCoopers

BankersANZ Banking Group (New Zealand) Limited

Postal AddressPO Box 884Auckland Mail CentreAuckland

Registered Office

Briscoe Group Ltd.


36 Taylors RoadMorningsideAucklandTelephone (09) 815 3737Facsimile (09) 815 3738

Share RegistrarsBK Registries LimitedNational Bank Chambers138 Tancred StreetPO Box 384AshburtonTelephone (03) 308 8887

Briscoe Group Ltd.


briscoe group ltd

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