In recognising the need for the highest standards of  corporate behaviour and accountability, the directors  of Harvey Norman Holdings Limited support and have  adhered to the principles of corporate governance. The company’s Statement of Corporate Governance  Practices follows the Directors’ Report.  Effective 1 July 2002, for the purposes of income  taxation, Harvey Norman Holdings Limited and its  100% owned subsidiaries have formed a tax consolidated group. Members of the group are in the  process of entering into a tax sharing arrangement in  order to allocate income tax expense to the wholly  owned subsidiaries on a pro-rata basis. In addition  the agreement provides for the allocation of income  tax liabilities between the entities should the head  entity default on its tax payment obligations. An indemnity agreement was entered into between  Harvey Norman Holdings Limited and each of the  directors of the company named earlier in this report  and with each full-time executive officer, director and  secretary of all group entities. Under the agreement,  the company has agreed to indemnify those officers  against any claim or for any expenses or costs which  may arise as a result of work performed in their  respective capacities. This indemnity is limited to  $10,000,000.  During the financial year, insurance and indemnity  arrangements were continued for officers of the  consolidated entity.  Harvey Norman Holdings Limited paid an insurance  premium of $69,300 in respect of a contract insuring  each of the directors of the company named earlier in  this report and each full-time executive officer, director  and secretary of the Australian group entities, against  all liabilities and expenses arising as result of work  performed in their respective capacities, to the extent  permitted by law.  The parent entity is a company of the kind specified in  Australian Securities and Investments Commission  class order 98/0100. In accordance with the class  order, amounts in the financial statements and the  Directors’ Report have been rounded to the nearest  thousand dollars unless specifically stated to be  otherwise.  Rounding of Amounts  Tax Consolidation Corporate Governance Indemnification of Officers  This report has been made in accordance with a resolution of directors.  HARVEY NORMAN HOLDINGS LIMITED AND ITS CONTROLLED ENTITIES – ANNUAL REPORT 2003  11  K.L. PAGE Director R.J. SKIPPEN Director . Chai Sydney  26 September 2003 Directors’ Report (continued) 