Chairman’s Report (continued)  Sales Subsequent to the Year Ended 30 June 2003 Net Profit Attributable to Members  Property Portfolio Sales for the months of July and August 2003 by Harvey Norman franchisees from the franchised “Harvey Norman”  complexes, Harvey Norman stores in New Zealand, Slovenia and Ireland (and excluding Pertama Holdings Limited,  Singapore and Rebel Sport Limited) totalled $590.4 million compared to $487.8 million for the corresponding period  last year. This represents an increase of 21.0% relative to the prior year. Like for like sales for the same period  increased by 12.7%. Net profit attributable to members after tax and outside equity interests increased from $128.28 million for the twelve  months ended 30 June 2002, to $151.05 million for the twelve months ended 30 June 2003, an increase of 17.8%.  The main factors contributing to the increase were: The increase in net profit attributable to members has resulted in a rise in earnings per share from 12.33 cents per  share in 30 June 2002 to 14.31 cents per share as at 30 June 2003. This represents an increase of 16.1% on the  prior year. During the year, the Directors have analysed and revalued the Group Property Portfolio resulting in an increase of  $39.62 million in the asset revaluation reserve.  The Group Property Portfolio at 30 June 2003 including joint venture property interests (consolidated with property held by Pertama Holdings Limited, Singapore and Rebel Sport Limited) was valued at $771.71 million compared to $659.93 million at 30 June 2002. The property portfolio excluding property held by Pertama Holdings Limited, Singapore and Rebel Sport Limited at 30 June 2003 was $767.13 million compared to $654.50 million for the prior year ended 30 June 2002.  As indicated in the Segment Information note (see page 28), the yield from property investments was 10.4% and the asset return was 4.6%. When accumulated revaluations to 30 June 2003 are excluded the yield was 14.0% and the asset return was 6.1%.  As at the date of this report, the adjacent table depicts the number of Harvey Norman complexes and Harvey Norman stores where land and buildings are either owned or leased by subsidiaries of Harvey Norman Holdings Limited in Australia, New Zealand, Slovenia and Ireland.  4  HARVEY NORMAN HOLDINGS LIMITED AND ITS CONTROLLED ENTITIES – ANNUAL REPORT 2003  gross profit margin from sales by company owned stores and controlled entities increased for the twelve months  ended 30 June 2003 due to improved trading in the Harvey Norman New Zealand owned stores, Pertama  Holdings Limited in Singapore and Rebel Sport Limited in Australia;  as detailed in Note 2 (page 34), gross revenue received from the franchised “Harvey Norman” complexes  (excluding rent and interest received) increased $30.3 million or 13.3% to $256.6 million, for the twelve months  ended 30 June 2003 (2002: $226.4 million) assisted by opening nine new Harvey Norman stores and complexes  in Australia during the year and improved trading conditions experienced by Harvey Norman franchisees;  expenses as a percentage of total sales have decreased for the twelve months ended 30 June 2003.  Property Portfolio 36.5 40.8 47.5 513.8 619.1 724.2 0 100 200 300 400 500 600 700 800 2001 2002 2003 $ million Joint Ventures Net Land & Buildings OWNED LEASED  TOTAL AUSTRALIA 61 94 155 NEW ZEALAND  10  4  14  SLOVENIA 1 0 1 IRELAND 0 2 2 TOTAL 72 100 172