Tourism Holdings Limited ANNUAL REPORT 2012 Annual Report 2012 Holdings Limited

Creating Momentum . annual report 2012

1 2012 Key Points

3 Key Financials

5 Chairman’s Report

7 Chief Executive Officer’s Report

Contents 13 Executive Crew

17 Corporate Governance

19 Board of Directors

21 Environmental Sustainability

23 Design Thinking and thl - A Case Study

27 Income Statement

28 Statement of Comprehensive Income

29 Statement of Changes in Equity

30 Statement of Financial Position

31 Statement of Cash Flows

32 Reconciliation of Surplus after Taxation with Cash Flows from Operating Activities

33 Notes to the Financial Statements

66 Auditors’ Report

67 Statutory Information

71 Directory

Mighty Cars & Campers 1 2012 Key points tourism holdings limited. annual report 2012 2

Reported Net Profit After Tax (NPAT) at $4.3m, up 117% from last year’s loss of $27.3m which included a non-cash goodwill impairment of $26.1m

Operating Earnings Before Interest & Taxation (EBIT) at $16.3m, up 329% “ Creating positive momentum in on last year’s $3.8m earnings, strategic positioning Net debt reduced $3m to $96m at 30 June 2012

and operational performance Road Bear, thl’s USA motorhome business contributes $5.7m EBIT in its ” first full year within the group

Rugby World Cup contribution of approximately $4.5m EBIT for rentals

Formation of the RV Manufacturing Group Limited Partnership in February 2012 to consolidate thl’s motorhome manufacturing in Albany with KEA Manufacturing

Acquisition of the KEA Australia licence, brand and forward book in Australia in June 2012

Post balance date thl announced the proposed merger of its New Zealand rentals business with United Campervans and KEA Campers in a $69.5m transaction

Mighty brand and Jackpot Campervan launched 3 Key financials tourism holdings limited. annual report 2012 4

$ Millions 30 June 2012 30 June 2011 30 June 2010

Sales of Services 156 145 141

Sales of Goods 44 41 41

Total Revenue 200 186 182

Gross Profit 158 148 148

Impairment of Goodwill (non cash) - (26) -

Other expenses (142) (144) (138)

EBIT 16 (22) 10

EBITDA 61 47 49

Net profit after tax (NPAT) 4 (27) 5

Operating cash flow 22 (49) 34

Total equity 156 155 182

Total funds employed 295 320 266

Capital expenditure 83 129 59

Return on average equity 2.6% (12.3%) 2.8%

Basic earnings per share 4.4 (27.9) 5.1

Dividends per share 2 2 2

Debt/Debt + Equity ratio 43% 44% 20% (Excluding Intangible Assets)

Road Bear RV Rentals & Sales 5 Chairman’s Report · Keith Smith tourism holdings limited. annual report 2012 6

Operating revenue excluding fleet sales was up8% Board and Management Focus We are pleased to have continued the at $156m with Rentals New Zealand up 5% at $49m The company is determined to position the “ due to the Rugby World Cup. business for the expected on-going decline from positive momentum Rentals Australia operating revenue was down the core visitor markets for thl. We are pleased 3% at $70m, primarily due to discounting in with the significant improvement in underlying ” the market. EBIT in Australia improved by 48% earnings, especially since it has been delivered to $4.0m. against the background of serious and on-going economic uncertainty. In Road Bear USA, operating revenue was at $16m representing the first full year versus 6 months last Over the past twelve months thl has continued financial year. As discussed we were very pleased to reduce costs, restructure the manufacturing with the EBIT result of $5.7m. business for future success and grow revenue and returns from the USA acquisition. The Tourism businesses revenue was down 2% including a positive one off GST adjustment from Moving forward the board are ensuring a prior period of $0.9m. EBIT was down slightly management are clearly focussed on maintaining To the Shareholders at $3.8m. the improvements to date and addressing the issues within the New Zealand business. The On behalf of the directors, I present the Annual Report and Financial Statements for the year ending With the formation of RVMG, Ci Munro is now proposed merger with United Campervans and treated as a discontinued business. 30 June 2012. KEA Campers is a platform for change within The RVMG result included a number of one off New Zealand. costs associated with the creation of the joint Reducing costs and finding new ways to leverage venture and move of the main manufacturing the infrastructure for the New Zealand rentals We are pleased to have continued the positive In short the board believe the EBIT result of $16.3m business to Albany in . business is critical. momentum as we progress the company towards is a positive result delivered in a market that a profit path that reflects a return on funds continues to decline. Dividend Outlook employed that is expected not only from you as The board has declared a fully-imputed final As part of the merger announcement we have shareholders of the company but also from the Post Year End Event - dividend of 2 cents per share. This takes the provided a forecast for FY2013 and FY2014. These board of directors and management. New Zealand Rentals Merger Opportunity calendar year dividend to 4 cents per share. The forecasts have been prepared based on the current There has been sufficient discussion on the You will have seen the recent communications record date for the dividend is 19 October 2012 outlook and understanding of today’s uncertainty in the world and the CEO commentary regarding the proposed merger of the thl’s New and the payment date is 26 October 2012. economic environment. will expand on how we see that affecting thl. Zealand rentals business with United Campervans Corporate Governance We are clearly taking further steps to reposition and KEA Campers. Crew There were no changes to the composition of the We have crew based all over the world today and the company. I would like to reiterate my comments in the board during the year. A new diversity policy for they operate in a true multi-national environment. Chairman’s letter sent to you on 3rd September 2012. We are very pleased with the first full year result the board is currently under review. They are committed, engaged and the fast from our USA business “Road Bear”. There is This merger is highly value accretive for thl Within the merger proposal in New Zealand rentals changing environment has grown their capabilities. always understandable scepticism when New shareholders and the logical, strategic response we will see Kay Howe join the board of thl. Kay The board are grateful for their support and Zealand companies expand offshore to an area to the challenging realities of the current market has extensive experience in the industry and is dedication. They continue to give their all and the such as the USA. We have been deliberate in our where tourism numbers from key markets in the expected to be a strong contributor to the board board and management are appreciative of their approach and appropriately cautious regarding United Kingdom and Europe are declining. any expansion opportunities. of thl from many perspectives. During the next 12 contribution. We have a presentation on the transaction months a review of the board will be undertaken. The 2012 financial year also saw thl benefit from available on the company website which has also During the year the company remained in the Rugby World Cup in New Zealand. The event been released to the NZSX.(www.thlonline.com) delivered on expectations and provided the compliance with all banking covenants and we were pleased with the support from the banks to desired platform for growth into markets with new Summary of Results opportunities such as France. extend the term facility another two years at the Group full-year Earnings Before Interest and Tax recent renewal. You will see in the review of the year that cost (EBIT) for the year to 30 June 2012 rose 173% reductions have been achieved in both New to $16.3m from last year’s loss of $22.3m. This There were no other issues of note from a Zealand and Australia. Ensuring we are matching result was in line with forecasts given in February governance perspective. fleet size to demand is also imperative especially when we released the results for the half-year to in the New Zealand market. December 2011. Net Profit After Tax (NPAT) rose to $4.3m from a $27.3m loss in 2011. Excluding the At the start of the second half of the financial FY2011 non-cash goodwill write-down the NPAT year we announced the formation of a new result improved by $5.5m. manufacturing joint venture, RV Manufacturing Group LP (RVMG) with KEA Manufacturing. This It is important to remember that the FY2011 joint venture has meant the closure of the main thl result included a non-cash goodwill write-down Annual Meeting of $26.1m. manufacturing site in Hamilton. The Annual Shareholders’ Meeting will be held We are confident that this move has protected Overall sales revenue was up 8% at $200m. The at 2pm on Tuesday, 27th November 2012, at us from the 2013 downsides of lower production revenue increase was primarily due to a full year the Heritage Hotel in Auckland. The Notice of volumes and created a lower operating cost of revenue from the acquisition of Road Bear USA Meeting and explanatory notes will be forwarded Keith Smith business with greater capacity to adapt quickly to acquired 31st December 2010. to shareholders separately to this report. Chairman changing volumes and demand. 7 chief executive officer’s Report · Grant Webster tourism holdings limited. annual report 2012 8

The result was driven by tight control of International Visitor Arrival Growth “ costs, operational improvements, the USA New Zealand (Holiday) Australia (All) Country Year Ended Year Ended % Country Year Ended Year Ended % and Rugby World Cup June 2012 June 2011 Change June 2012 June 2011 Change ” Australia 1,175,296 1,111,192 5.8% New Zealand 1,191,300 1,183,000 0.7% United Kingdom 214,448 220,043 -2.5% United Kingdom 597,000 632,400 -5.6% USA 182,816 188,150 -2.8% China 583,200 499,700 16.7% China 175,488 131,648 33.3% USA 464,300 465,700 -0.3% Germany 62,992 65,237 -3.4% India 152,300 144,500 5.4% Market Conditions France 37,136 24,355 52.5% Germany 151,700 159,200 -4.7% The broad macro-economic factors for tourism India 29,648 29,332 1.1% France 95,700 94,600 1.2% worldwide are still of concern especially as our primary market opportunities are centred in Netherlands 22,448 23,543 -4.7% Netherlands 46,600 48,800 -4.5% Europe and the United Kingdom. In addition Switzerland 15,840 15,597 1.6% Switzerland 41,600 44,000 -5.5% From a CEO perspective to the domestic economic challenges, these Denmark 8,304 9,657 -14.0% Denmark 22,200 22,500 -1.3% markets face the additional challenges presented We have a keen focus on design, by a weak currency. South East Asia 287,632 287,904 -0.1% South East Asia 898,700 888,400 1.2% customer experience and marketing Other market opportunities such as China and Other 423,678 394,645 7.4% Other 1,736,100 1,724,200 0.7% and see the intergration between East and South East Asia are appealing to many Total Arrivals 2,635,726 2,501,303 5.4% Total Arrivals 5,980,700 5,907,000 1.2% these disciplines as critical to the tourism operators, but they do not yet have future success of the business. strong traditions for self-managed itineraries that are the focus of thl’s operations. United States (Tourist) The operating market most susceptible to the current conditions is New Zealand. Country 5 Months to 5 Months to % New Zealand still holds a strong positive May 2012 May 2011 Change reputation internationally; however, this needs to be balanced against the price expectations United Kingdom 1,422,000 1,425,000 -0.2% of the customer when comparing alternative Germany 716,000 640,000 11.9% Visitor arrival growth sources: destinations. New Zealand operates with a France 576,000 548,000 5.1% very small market share of global tourism and Ministry of Tourism it is critical the value equation for New Zealand China 524,000 366,000 43.2% www.tourismresearch.govt.nz remains strong relative to the alternative I believe we have created significant momentum Australia 403,000 380,000 6.1% Tourism Australia as a business. countries and prices on offer. www.tourism.australia.com Netherlands 219,000 213,000 2.8% The result for the year to 30 June 2012 was The New Zealand cost base has been reducing ITA Office of Travel and Tourism Industries USA 178,000 173,000 2.9% driven by tight control of costs, operational over the last three years and the cost of building Sweden www.tinet.ita.doc.gov improvements, the first full-year contribution our product has continued to decrease. However Switzerland 169,000 156,000 8.3% from our USA motorhome business and a pickup these changes have not been significant enough Other 6,724,000 6,100,000 10.2% in motorhome rental activity during the 2011 to offset the degree of decline in both visitation Rugby World Cup. numbers and spend. Indeed, we expect the New Total Arrivals 10,931,000 10,001,000 9.3% Zealand market will continue to see declines As mentioned by the Chairman the proposed from our core market segments over the merger of our New Zealand rentals business coming year. with United Campervans and KEA Campers was announced post the Annual Results release. Elsewhere the picture is more positive. The following graph indicates where the increased profitability for FY2012 was derived. The proposal is clearly targeted at addressing The USA is benefitting from a lower currency the underlying issues that exist within the New and also has the promotional power of the new Zealand rentals business. I will comment more marketing campaign, “BRAND USA” which has 20 (0.6)m a significant marketing budget. The outlook 1.4m 16.3m on those issues within this report. 16 3.5m 0.1m remains positive for the USA to continue to ) The proposed merger in New Zealand will create regain market share that was lost throughout the m 5.4m 12 an opportunity for thl to take the best of the last decade. three businesses and design a New Zealand 8 2.2m organisation that can compete effectively and The Australian market holds some uncertainty with strong competition for both the international EBIT (NZ$ 4.3m profitably in this economic environment. and domestic tourist from the USA. We have 4 I look forward to discussing the opportunity with adjusted our fleet expectations to reflect the shareholders at the special meeting on the 19th declines in the market and will manage fleet size FY11 EBIT Group Road Bear Rentals NZ Waitomo Rentals AU Ci Munro / FY12 EBIT October 2012. to demand. Actual Support cost USA incl RWC other Actual savings Full year 9 chief executive officer’s Report · Grant Webster tourism holdings limited. annual report 2012 10

Operational Commentary the cost base for greater benefit and to improve Rentals New Zealand the return on funds employed. The New Zealand rentals business achieved EBIT Rentals Australia of $5.5m up $3.5m or 175% on the prior year. As Operating Revenue (excluding fleet sales) mentioned, the increase in demand due to the fell 3% to $70m from $72m in 2011 due to the Rugby World Cup contributed around $4.5m to difficult tourism trading environment in Australia this result. and aggressive price competition over the Operating Revenue (excluding fleet sales) was financial year. up 5% for the year at $49m compared to $46m However, EBIT improved 48% or $1.3m to $4.0m in 2011. The second half of the financial year from $2.7m. This reflected a lower cost base was disappointing. Revenue was weaker than following a reduction in fleet and sales mix expected and demand was soft across all brands appropriate to the current market conditions. especially during the winter months. Cost reduction initiatives in Australia are Costs have been well controlled with the progressing well. The combined cost of all fleet significant cost areas of repairs, maintenance, repairs (including insurance write-offs) and relocations, and labour collectively down $1.8m relocations have reduced by 19% or A$2.8m or 8% on the prior year. Pleasingly, the customer compared to 2011. proposition has continued to improve with key customer metrics continuing to excel. In addition to these cost savings the right sizing of the fleet has commenced. The vehicle sales Vehicle sales of 274 units were up on the prior margin in the Australian business was A$1.6m year by 42 vehicles. However, due to the mix of down A$1.3m on the A$2.9m achieved in 2011. vehicles sold, revenue was down by $0.8m at Depreciation for the year was down by A$0.3m. $7.7m. The vehicle sales margin was $1.5m, down As indicated at the half year this is an area of on- slightly from the $1.8m in 2011. going focus and is expected to provide further The New Zealand rentals market in our view benefits in the coming year. will continue to be flat or declining due to the In the last month of the financial year thl challenges facing our key customer markets. The acquired the KEA brand and licence in Australia. on-going decline over the past few years requires The previous owners of the brand went into a more aggressive approach to addressing the liquidation. As part of the brand acquisition cost base that we operate. thl leased a proportion of the fleet which was In 2012 the Wellington branch was closed and required to meet the forward bookings of the a new Queenstown site was opened which KEA customers. has consolidated three sites to create more Moving forward thl will be building KEA designed presence and ensure operational cost savings. fleet for the rental and vehicle sale market in line More recently we have announced the closure with demand for that product. An assessment on of the Auckland Central City branch and the the exact fleet size required will be determined outsourcing of our car business through a third over the coming months. party supplier to leverage their fleet and facilities. Build costs for vehicles have continued to reduce. We expect further EBIT improvement in the Australian business for FY2013. A key focus for board and management is to continue to find ways to either reduce or leverage

Operational Review Year ended 30 June 2012 Year ended 30 June 2011

Turnover Divisional Net Operating Turnover Divisional Net Operating ($million) EBIT Assets Cash Flow ($million) EBIT Assets Cash Flow ($million) ($million) ($million) ($million) ($million) ($million)

Rentals New Zealand 56.6 5.5 81.2 8.3 54.9 2.0 71.5 (1.6) Rentals Australia 87.5 4.0 92.5 16.5 93.4 2.7 109.4 (27.6) Rentals USA 34.4 5.7 29.6 0.6 15.4 0.3 27.1 (21.0) Tourism Group 21.5 3.8 29.6 4.2 21.9 3.9 30.4 4.5 Group Support Services - (2.7) 9.5 (4.7) - (5.1) 5.2 (4.6) thl owned entities 200.0 16.3 242.4 24.9 185.6 3.8 243.6 (50.3) RVMG - Joint Venture - (2.0) 9.2 (3.3) - - - - Impairment of Goodwill (26.1) 185.6 (22.3) 243.6 (50.3) Total continuing businesses 200.0 14.3 251.6 21.6 Maui Motorhomes and Car Rentals Discontinued 9.6 (0.3) - 0.2 10.2 0.5 11.3 0.8 Group Total 209.6 14.0 251.6 21.8 195.8 (21.8) 254.9 (49.5) 11 chief executive officer’s Report · Grant Webster tourism holdings limited. annual report 2012 12

Road Bear RV Rentals & Sales – USA The proposed merger in New Zealand will The USA-based Road Bear made its first full-year “ contribution to the business and posted EBIT of create an opportunity to design an organisation $5.7m which is largely generated during the USA high season from June to September. As such, there are no full year comparisons for 2011. that can compete effectively and profitably in Revenue from rentals for FY2012 was $16.1m and this economic environment revenue from fleet sales was $18.3m. The fleet sale margin was positive at $1.2m and included ” 359 vehicle sales for the full year. This result was ahead of our expectations when Tourism Businesses thl expects capital expenditure on new fleet for the year to 30 June 2013 will be circa $74m with we acquired the business in December 2010 and Neither the Waitomo Group nor Kiwi Experience fleet sales plus the sale of the Hamilton building is an endorsement of thl’s strategy to expand into received any discernible increase in custom at $60m giving a net capital spend of $14m Kiwi Experience the USA market. Moreover, we believe this result during the 2011 Rugby World Cup. is sustainable into the future. which will enable further debt reduction. This is Revenue at the tourism businesses fell 2% to another step in improving the return on assets. Costs within the business have been held well $21.5m from $21.9m and EBIT for the year was thl has proven over time that debt capacity is within forecasts. Road Bear bought 439 new down slightly at $3.8m from $3.9m in 2011. This not the key issue for the company; the focus is vehicles during the year for the 2012 calendar result includes a one off gain of $0.9 million from clearly on creating greater earnings from the high season. The on-going provision of quality a GST refund from a prior year, which had been fleet employed. vehicles with a young age proposition has proven in dispute. appealing to the Road Bear customer base and Design | Customer Experience | Marketing has been maintained throughout this period of The Kiwi Experience business has had another fleet growth. difficult year with extreme pricing and demand We have, as a company, a keen focus on design, pressure in the market. The traditional UK customer experience and marketing and see the The second half of the financial year is the low backpacker has been in decline. We have intergration between these disciplines critical to season for Road Bear and the results during this conducted a review of the Kiwi business from the success of our business. period were in line with expectations. a cost perspective and will be reducing costs Within the annual report we have a feature on the The 2012 northern hemisphere high season (which further over the coming year. design process we used to create the new Mighty impacts the FY2013 year) has begun positively The Legendary Black Water Rafting Co. has an brand and its hero product the JACKPOT. and revenue growth is in line with fleet growth. exciting new adventure product preparing for We will continue to grow the fleet in a controlled The insights garnered from the process used and launch in a few months which is expected to the conversion of those insights into reality has manner in line with increased vehicle sales. To add to the profit performance of the business. assist growth for the coming financial year a new been very well received by our trade customers at the launch in June this year. site will be opened in Florida. Financial Position / Capital Expenditure We will continue with these philosophies into thl Manufacturing As a result of fleet rationalisation and cost savings the future to assist us in creating sustainable operating cash flow was a positive $22m. Our vehicle manufacturing operation Ci Munro competitive advantages. posted an EBIT loss for the year of $0.3m from thl’s total fleet now stands at 3,648 down 3% a profit of $0.5m in the prior year. This loss was or 125 from the prior year’s 3,773. Vehicle sales thl crew accumulated over the eight months of the across all operating subsidiaries were broadly financial year prior to its merger in February with The last word should belong to the crew and in line with expectations on both volume again with reducing resources the company has KEA Manufacturing to create RV Manufacturing and margin. Group LP (RVMG). Ci Munro is now treated as a completed a number of positive change projects discontinued business. thl holds a 50% stake in Total net debt for the year reduced by $3m to over the last year. RVMG and it is treated as an equity investment. $96m despite growth in the USA fleet size. The coming year will be no different and with RVMG posted a Net Profit Before Tax (NPBT) Gearing (net debt to net debt plus equity) was 42% your support as shareholders the crew are ready loss of $4.0m of which thl’s share was $2.0m. down 1% on last year. Total capital expenditure to learn from everything we have completed to This included all the moving costs, a stock write- for the year was $83m. date and ensure amongst other objectives the down, redundancies and cessation of motorhome proposed New Zealand Rentals merger delivers Our Hamilton building which became surplus to manufacturing for a period to ensure the move to our expectations. requirements following the creation of RVMG, was completed in an appropriate manner to set is expected to be sold within the coming year. the business for the future. At this point in time the expectation is that sale The joint venture has adopted a deliberate and proceeds will be used to reduce debt. It was considered approach throughout the integration bought in 2010 and has a book value of $7.3m. phase to ensure quality and processes have been Net fleet capital expenditure, ie fleet additions maintained for both KEA and production. The thl less sales for the year (including Road Bear of first units have been produced at the Albany thl $4.8m) was $27m, down from $84m spent in the facility and is very pleased with the quality. thl 2011 financial year. New fleet spend was $70m thl expects RVMG to add a small positive NPBT which was lower than the prior year’s $124m which Grant Webster contribution to thl in FY2013. included the initial Road Bear fleet. Chief Executive Officer 13 thl Executive crew tourism holdings limited. annual report 2012 14

Joining thl in 2005 as Chief Operating Officer – Attractions division, Grant was appointed to the role of Chief Executive Officer in December Kate joined thl in 1991 in the Sales and Marketing team as Account 2008. Appointed Chairman, RV Manufacturing Group joint venture in Manager for North America. She left in 1996 and held several part-time 2012. Grant’s background includes senior executive roles across the and contract marketing roles whilst raising a family before re-joining the tourism, hospitality, gaming and retail industries where he held director company again in 2003 as Sales & Marketing Manager for New Zealand. Grant Webster Kate Meldrum and general management roles within the retail sector before moving Kate commenced her current role as General Manager Marketing & Chief Executive Officer General Manager into tourism. Prior to joining thl Grant was a General Manager at Customer Experience in November 2009 with overall responsibility for Marketing & Customer Experience SKYCITY Auckland. Grant holds a Bachelor of Commerce degree from the positioning, development and promotion of the thl brands both Victoria University and has completed executive studies at the Insead domestically and internationally. Kate holds a Post Graduate Diploma in Advanced Management Programme in Fontainebleau, and Monash Business from Auckland University. University, Melbourne Australia.

Ian leads the finance function forthl , including reporting to the Board Joining thl in March 2012 Andrew is responsible for thl’s Australian of Directors, external reporting, internal and external auditing, Operations. Having commenced his career in the United Kingdom as a investor relations and banking relationships. He also fulfils the New Panel Beater Andrew has extensive industry knowledge, operational Zealand Stock Exchange requirements of thl as a listed entity. Prior Ian Lewington Andrew Rickett and executive management experience. Andrew has owned a rentals to joining thl in 1999, Ian spent 13 years in financial management roles Chief Financial Officer General Manager business, held the roles of Director Southwest, City Manager for Fletcher Challenge. Ian holds a Master of Commerce (Hons) Australian Operations Hertz UK, and most recently Strategic Development Manager, Europcar degree from Auckland University and is a member of the New Australia / New Zealand based in Melbourne. Andrew is a member of Zealand Institute of Chartered Accountants and New Zealand ‘The Institute of the Motor Industry’. Institute of Directors.

Quinton heads up the information technology functions, project Following the acquisition of Los Angeles based RV rentals company, management, procurement, property and human resources. He is Road Bear, Daniel joined thl 31st December 2010. A Swiss and US Quinton Hall also responsible for the Waitomo Group and Kiwi Experience. Daniel Schneider citizen, Daniel has 19 years experience in the USA rental RV industry Chief Information Officer Quinton joined thl in September 2006 from NZ Lotteries and has a CEO & President with expertise in sales, operations, product design and business background in risk management, project management and Road Bear RV Rentals & Sales general management/ownership. Daniel holds a Bachelor degree in technology delivery supporting strategic initiatives. Automotive Engineering from Biel Switzerland.

Mike leads the New Zealand Rentals Operation including Motek Vehicle Sales having rejoined thl in September 2010. Prior to this, Sue joined thl with a focus on international sales and marketing before Mike had two years as Chief Executive of Auckland Aquarium Limited, holding operational roles in both Australia and New Zealand including running Village Roadshow’s New Zealand attractions business. Mike General Manager roles at thl Rentals New Zealand and The EX Group. was previously with thl as General Manager of Fullers Bay of Islands Sue now heads up the global sales team, with crew located in Australia, Mike Horne Sue Sullivan with general responsibility for the Northland region. Previous Germany and the UK representing all the thl brands. Sue is responsible General Manager General Manager experience included senior management roles within the Hospitality for maintaining relationships with key industry bodies in New Zealand New Zealand Rentals Operations Sales and Events sector both here and in Australia, and more recent and Australia and sits on the board of the Tourism Industry Association interest in areas of Conservation and Sustainability, having served on and the New Zealand Backpacker, Youth and Adventure Tourism the Northland Department of Conservation Board in 2006 and 2007. Association. Sue holds a MBA from Massey University in Auckland. Mike holds a Bachelor of Business Studies from Massey University. 15 tourism holdings limited. annual report 2012 16

Creating unforgettable holidays

Kea Campers Australia 17 Corporate Governance tourism holdings limited. annual report 2012 18

Tourism Holdings Limited (“thl”) operates under a set of corporate governance principles designed to ensure that thl is effectively managed. thl’s corporate governance principles do not materially differ from the NZX Corporate Motek Governance Best Practice Code.

ROLE OF THE BOARD BOARD COMPOSITION AUDIT & RISK COMMITTEE The composition of the Remuneration & Nomination Committee as at 30 June 2012 is The Board is committed to managing thl in an The Board of Directors currently comprises The Audit & Risk Committee is comprised solely John Bongard (Chairman), Keith Smith and ethical and professional manner, and in the best six directors, all of whom are non-executive of non-executive directors of the Board and shall Deepak Gupta. Also in attendance by invitation interests of the company and its shareholders. directors. include not less than three independent non- are Graeme Bowker, Rick Christie, Graeme Wong Specific responsibilities of the Board, as set out executive directors. The policy for appointment and retirement of and Grant Webster (Chief Executive Officer). in the Board Charter adopted by , include thl directors is contained within thl’s constitution. At The Committee meets a minimum of three times the following: each annual meeting, one-third of the directors each year. The Audit and Risk Committee has INDEPENDENT PROFESSIONAL ADVICE • Oversight of thl, including its control and shall retire by rotation. A retiring director is oversight of, and assists the Board to fulfil its With the approval of the Chairman, each Director accountability procedures and systems; eligible for re-election. John Bongard and Rick responsibilities in the areas of Financial Reporting, has the right to seek independent legal and other Christie retire by rotation at the 2012 Annual Audit Functions, and Risk Management professional advice at the Company’s expense • Appointment, performance, and removal of Meeting and, being eligible, offer themselves and Control. concerning any aspect of the Company’s the Chief Executive Officer; for re-election. The composition of the Audit & Risk Committee operation or undertakings in order to fulfil their • Confirmation of the appointment and removal The New Zealand Stock Exchange has determined as at 30 June 2012 is Rick Christie (Chairman), duties and responsibilities as Directors. of the senior executive group (being the direct that a component of good corporate governance Keith Smith, Graeme Wong, John Bongard and SHARE TRADING PROTOCOL reports to the Chief Executive Officer); is the identification of independent directors. Graeme Bowker. Also in attendance by invitation As at 30 June 2012, being the balance date, the are Deepak Gupta, Grant Webster (Chief thl has in place a formal securities trading policy • Setting the remuneration of the Chief following directors are independent within the Executive Officer) and Ian Lewington (Chief and guidelines which applies to all Directors, Executive Officer and Chief Financial Officer meaning of the NZX listing rules: Financial Officer). officers and employees of thl and its subsidiaries and approval of the remuneration of the who intend to trade in thl listed securities. (Chairman) senior executive group; Keith Smith REMUNERATION & NOMINATION COMMITTEE All individuals defined as “restricted persons” Rick Christie (Chair Audit & Risk Committee) The Remuneration & Nomination Committee under that policy, being the Directors, Chief • Approval of the corporate strategy and John Bongard (Chair Remuneration is comprised of at least three non-executive Executive Officer and all persons reporting objectives and oversight of the adequacy of & Nomination Committee) directors of the Board, a majority of whom must directly to the Chief Executive Officer, must notify thl’s resources required to achieve the Graeme Bowker be independent directors. thl and obtain approval from the Board before strategic objectives; Graeme Wong The Committee meets a minimum of two times trading in thl’s shares. Trading is permitted, • Approval of and monitoring of actual results Deepak Gupta is not independent within the each year. The Remuneration & Nomination provided the restricted person is not in meaning of the NZX against the annual business plan and budget Committee supports the Board on matters possession of any material information, in two listing rules. (including the capital expenditure plan); relating to human resources and remuneration. prescribed periods during the year commencing It assesses the role and responsibilities, from the date on which the annual result and half • Review and ratification ofthl ’s risk CORPORATE GOVERNANCE FRAMEWORK composition, training and membership yearly results are announced and concluding 60 management framework, internal compliance The Board is committed to continued requirements and remuneration for the Board, days later. A restricted person may, provided and control, codes of conduct, and development of thl’s corporate governance including recommendations for the appointment they are not in possession of any material legal compliance; practices. The Board continues to review and and removal of directors. information, also trade in a class of securities for develop its corporate governance policies • roval and monitoring of the progress 60 days following release of a prospectus for a App and monitor developments to keep abreast of pital expenditures, capital management general public offer of that class of securities. of ca corporate governance best practice. initiatives, and acquisitions and divestments; and thl’s corporate governance framework includes TABLE OF BOARD ATTENDANCES Board Audit & Risk Renumeration the constitution of thl, the Board Charter, a (FY2012 - July 11 - June 12) Meetings Committee & Nomination • Approval of the annual and half-year Code of Ethics, and various policies including a Meetings Committee Meetings financial statements. Delegated Authority Policy, Market Disclosure Policy and Securities Trading Policy. Total number of meetings held 14 3 5 The Board has two standing committees Keith Smith 14 3 5 described as follows. The performance of the John Bongard 11 3 5 standing committees is reviewed annually against Graeme Bowker 14 2 5* written charters. Rick Christie 14 3 4* thl’s corporate governance policies and charters Deepak Gupta 12 2* 4 are available on its website at www.thlonline.com Graeme Wong 14 3 4* * Attending at the invitation of the relevant committee. 19 board of directors tourism holdings limited. annual report 2012 20

Non Executive Director appointed in 1998. Appointed Chairman of thl in January 2001. Keith has a long-standing leadership record as a director and advisor to companies in a diverse range of industries, including the energy sector, rural services, printing, media, meat by-products, Keith Smith, Chairman tannery processing. tourism and exporting. Currently Chairman of Goodman (NZ) Limited, (Auckland) Deputy Chairman of Limited and Director of Mighty River Power Limited. Keith was previously a senior partner in the national accounting practice BDO and is a past President of the New Zealand Institute of Chartered Accountants.

Non Executive Director appointed in early 1998, Chairman of thl Audit & Risk Committee. Currently Chairman of EBOS Group Limited, Science Media Centre and the National e-Science Rick Christie Infrastructure Company. Director of Acurity Health Group Limited, NZ Pork Industry Board, (Wellington) Southport Limited and Solnet Solutions Limited. Previous Chairman of AgResearch Limited. Accredited Fellow of the NZ Institute of Directors and Companion of the Royal Society of New Zealand.

Non Executive Director appointed in May 2010. Chairman of thl Remuneration & Nomination Committee. Formerly Managing Director of Fisher & Paykel Appliances Limited (2001) and then Managing Director and Chief Executive Officer in 2004 through to his retirement in 2009. John Bongard, onzm Director of Netball New Zealand, Limited, Narta International Pty Limited and (Auckland) PSCTH, Thailand. John is also actively involved in The Rising Foundation focused on assisting South Auckland youth. Recognised for his services to business John was appointed an Officer of the New Zealand Order of Merit in 2010.

Non Executive Director appointed in February 2003. Currently a Director of Silverstripe Australia Graeme Bowker Pty Limited and Equestrian Australia. Formerly the Victorian Managing Partner for Deloitte (Melbourne) Touche Tohmatsu and prior to this, Country Managing Partner in New Zealand.

Non Executive Director appointed in October 2007. Was proposed for appointment by the Sterling Grace funds, and is not an independent director. Joined Trustees Executors Limited in 2004 and was appointed Executive Director in November 2005. Has worked at senior Deepak Gupta | Graeme Bowker | Keith Smith | Rick Christie | Graeme Wong | John Bongard Deepak Gupta management level for major institutional investors such as Investment Management, (Wellington) Royal and Sun Alliance and AMP, in private equity investment and general funds management; and has been a director of a number of companies as an investor representative. Director of Centuria Capital Limited (ASX listed) and various private companies.

Non Executive Director appointed in November 2007. Background in stock broking, capital markets and investment. Founded and became Executive Chairman of Southern Capital Limited which listed on the NZX and evolved into Hirequip New Zealand Limited. The business was sold Graeme Wong to private equity interests in 2006. Previous directorships include New Zealand Farming Systems (Wellington) Uruguay Limited, Sealord Group Limited, Tasman Agriculture Limited, Magnum Corporation Limited, and At Work Insurance; alternate director of . Currently Chairman of Areograph Limited and Harbour Asset Management Limited. Director of AMP Office NZ Limited and member of the Management and Trust Boards of Samuel Marsden Collegiate School. 21 Environmental Sustainability tourism holdings limited. annual report 2012 22

thl is committed to managing and developing its business in a sustainable manner and to minimising the environmental impact of its activities. To become a sustainable business thl focuses on balancing three main principles: cost effectiveness, environmental responsibility and social responsibility. thl Environment & Our Community This year, in Australia, continued its support of the Leave No Trace programme, maintained their Eco Tourism Accreditation and are endorsed with the Australian Government’s T-QUAL tick – Australia’s national symbol of quality. thl have To become a sustainable committed to continue to create and maintain dump points throughout Australia in partnership with CMCA following the acquisition of the KEA Rental and Vehicle business thl focuses on Sales brands in Australia. Similar to the Leave No Trace philosophy in Australia, in New Zealand thl has been a member of the Responsible Camping Forum balancing three main principles: since its inception. The forum is committed to educating visitors to New Zealand about Kaitiakitanga (guardianship). Cost Effectiveness, In New Zealand, the thl rentals business achieved the Qualmark Enviro-Gold Award for its Maui and Britz brands and Silver for its value brand. The Waitomo Cave brands Environmental Responsibility also achieved the Qualmark Enviro-Gold Award and Kiwi Experience gained the Qualmark Enviro-Silver Award. and Social Responsibility As design grows as a core competency for thl, new design projects are driving sustainability innovation. This was comprehensively illustrated by the design of the Visitor Centre opened in 2011. This year design incorporating sustainability philosophies was demonstrated in the development of the new campervan vehicle fleets, notably the “Mighty Jackpot”. This project saw sustainability innovation addressed by use of recycled and fully recyclable material in 95% of the build. Within its Tourism Operations, thl’s management of the Glowworm Caves is founded upon the sustainable use and the protection of the caves and its natural environment. Management of the caves is controlled by an environmental management plan developed in conjunction with an Environmental Advisory Group (EAG). The EAG consist of some of New Zealand’s top cave scientists, each representing a different discipline of cave science and/or management. Their role is to discuss and advise on the best methods for protecting and managing the caves. thl continues to support a number of local community projects through the year and has formed key partnerships with The Foundation for Youth Development (FYD) and Oxfam Trailwalker. 23 design thinking and thl - a case study tourism holdings limited. annual report 2012 24

“ The thl design studio is engaging with customers more than ever in order to uncover insights and understand their needs, resulting in innovations and intellectual property that further enhances our ability to create unforgettable holidays for our customers ”

This design thinking philosophy is well Once the design team had uncovered the big idea, demonstrated in the Mighty Jackpot we set about rapid prototyping the experience, design process. sketching and building full scale models in which we could experience the design, discard the things The thl Design team spoke to users of campervans that didn’t work and further refine those that and people-movers about what they loved and did. After many iterations we settled on a series hated about their holiday experiences. We of innovations that challenge the conventional observed them interacting with these vehicles, approach to motorhome design and finally address then we tried them out ourselves. Lots of times. those unmet needs of our customers. We uncovered a few things that if we could Now that the functionality had been finalised, we improve, would make a world of difference to their set about ensuring other important issues such motorhome experience. as aesthetics, materiality and sustainability were addressed. Textures, colours and finishes were We learnt that 3 things are really important to our influenced by memories of camping and a strong customers once they have rented the campervan. alignment with the Mighty brand values. 1. The sleep experience - that’s how easy it is to We researched and selected new materials that make the bed up, how comfortable the sleep is would improve both maintenance and longevity and how quickly they can get the bed out of the issues whilst driving down build cost. way again to do other things like eat, get dressed or socialise. Sustainability is also being addressed by innovative use of recycled and fully recyclable material in 2. Activities of daily living – we are talking about 95% of the build. This world leading innovation things like dining in comfort, preparing food, further demonstrates our Ecosure commitment to surfing the Net, getting changed, accessing sustainable practices and behaviours. and finding your stuff or just plain socialising – especially when it’s not great weather outside! The result is the Mighty Jackpot, a small van based motorhome that will surprise and delight 3. Privacy and security are really important. Our our customers with its innovative usability and the customers want to be able to function inside this best sleeping, dining and socialising experience in little space, without compromising their sense of its class. security. That means not having to sleep under a tent extension for example. It also means The Intellectual Property has been captured and having really good curtains that block prying design registrations are now either in place or eyes. The ability to hide and lock away your pending globally. possessions, whilst having easy access makes the entire van experience that much better.

Most campervans of this size try to do everything, and as a result everything is a compromise. We decided to identify the three modes most important to our customers – sleeping, eating and “ We uncovered a few daily living activities and design the van to do each things that would make of these things independently very well. Ed Burak a world of difference to a User Experience Design Manager campervan experience Finally, the transition between these modes must ” not be the equivalent of playing Tetris. In other words it needs to fast, seamless and easy. 25 tourism holdings limited. annual report 2012 26

Financial Statements

Britz Campervans, 4WD and Car Hire 27 Income statement Statement of comprehensive income 28 For the year ended 30 June 2012 For the year ended 30 June 2012

Notes Group Parent Notes Group Parent

2012 2011 2012 2011 2012 2011 2012 2011 $000’s $000’s $000’s $000’s $000’s $000’s $000’s $000’s

Continuing operations: Sales of services 156,412 145,019 70,355 67,584 Profit / (Loss) for the year 4,317 (27,344) 288 (4,258) Sales of rental assets 2 43,550 40,575 7,601 8,481 Total revenue 199,962 185,594 77,956 76,065 Foreign currency translation movement 23 (620) 3,515 - - Cost of sales 4 (41,588) (37,784) (6,686) (7,921) Cash flow hedges net of tax 24 (850) (370) (850) (370)

158,374 147,810 71,270 68,144 Other comprehensive income / (loss) Gross Profit (1,470) 3,145 (850) (370) for year net of tax Other operating (expenses) / income 3 (111) (96) - 988 Administrative expenses 4 (22,225) (20,098) (10,190) (10,143) 2,847 (24,199) (562) (4,628) Impairment of goodwill 17 - (26,138) - (4,452) Total comprehensive income / (loss) for year Other operating expenses 4 (119,728) (123,760) (55,614) (56,456)

Operating profit / (loss) before financing costs 16,310 (22,282) 5,466 (1,919)

Finance income 6 1,275 846 1,179 703 Finance expenses 7 (8,268) (6,985) (3,542) (3,056)

Net finance costs (6,993) (6,139) (2,363) (2,353)

Share of loss from Joint Venture 38 (1,973) - (1,973) -

Profit / (loss) before tax 7,344 (28,421) 1,130 (4,272)

Income tax (expense) / benefit 8 (2,814) 739 (629) (324)

Profit / (loss) for the year from continuing operations 4,530 (27,682) 501 (4,596)

Discontinued operations: (Loss) / profit for the year from discontinued operations (213) 338 (213) 338 (net of tax) 11

Profit / (loss) for the year 4,317 (27,344) 288 (4,258)

Earnings per share for profit / (loss) attributable to the equity holders of the Company during the year

Continuing operations Basic earnings per share (in cents) 9 4.6 (28.2) Diluted earnings per share (in cents) 9 4.3 (27.0)

Discontinued operations Basic earnings per share (in cents) 9 (0.2) 0.3 Diluted earnings per share (in cents) 9 (0.2) 0.3

Total Basic earnings per share (in cents) 9 4.4 (27.9) Diluted earnings per share (in cents) 9 4.1 (26.7) 29 Statement of changes in equity Statement of financial position 30 For the year ended 30 June 2012 As at 30 June 2012

Cash Flow Notes Group Parent Share Retained Other Total Notes Hedge Group Capital Earnings Reserves Equity Reserve 2012 2011 2012 2011 $000’s $000’s $000’s $000’s $000’s $000’s $000’s $000’s $000’s

Opening Balance as at 1 July 2010 143,798 32,543 (695) 5,426 181,072 Assets Comprehensive Income Property, plant and equipment 15 205,115 220,524 91,189 95,471 Net Loss for the Year Ended 30 June 2011 25 - (27,344) - - (27,344) Intangible assets 17 23,665 23,510 9,071 8,399 Other Compehensive Income Investments in Subsidiaries 21 - - 38,484 38,484 Cash Flow Hedge Reserve (net of tax) - - (370) - (370) 24 Advance to Joint Venture 38 9,232 - 9,232 - Foreign Currency Translation Reserve 23 - - - 3,515 3,515 Advances to subsidiary companies 35 - - 29,598 31,784 Total Comprehensive Income - (27,344) (370) 3,515 (24,199) 238,012 244,034 177,574 174,138 Transactions with Owners Total non current assets Dividends on Ordinary Shares 25 - (2,172) - - (2,172) Cash and cash equivalents 22 4,083 3,685 393 1,269 Employee Share Option Reserve 23 - - - 178 178 Total Transactions with Owners - (2,172) - 178 (1,994) Trade and other receivables 18 17,512 30,705 5,404 14,639 Inventories 19 26,205 38,646 9,844 24,960 Opening Balance as at 1 July 2011 143,798 3,027 (1,065) 9,119 154,879 Assets held for sale 20 8,419 1,314 8,419 1,314

Comprehensive Income Taxation receivable 856 1,343 97 805 Net Profit for the Year Ended 30 June 2012 25 - 4,317 - - 4,317 Total current assets 57,075 75,693 24,157 42,987 Other Compehensive Income Cash Flow Hedge Reserve (net of tax) 24 - - (850) - (850) Total assets 295,087 319,727 201,731 217,125 Foreign Currency Translation Reserve 23 - - - (620) (620) Total Comprehensive Income - 4,317 (850) (620) 2,847 Equity Transactions with Owners Issued capital 26 143,798 143,798 143,798 143,798 Dividends on Ordinary Shares 25 - (1,866) - - (1,866) Other reserves 23 8,664 9,119 1,154 989 Employee Share Option Reserve 23 - - - 165 165 Cash flow hedge reserve 24 (1,915) (1,065) (1,915) (1,065) Total Transactions with Owners - (1,866) - 165 (1,701) Retained earnings 25 5,478 3,027 3,924 5,502 Closing Balance as at 30 June 2012 143,798 5,478 (1,915) 8,664 156,025 Total equity 156,025 154,879 146,961 149,224

Cash Flow Liabilities Share Retained Other Total Hedge Parent Capital Earnings Reserves Equity Interest bearing loans and borrowings 30 75,932 87,094 42,800 33,800 Reserve Derivative financial instruments 14 2,567 1,419 2,567 1,419 $000’s $000’s $000’s $000’s $000’s Deferred income tax liability 31 4,528 3,890 950 977 Opening Balance as at 1 July 2010 143,798 11,932 (695) 811 155,846 Total non current liabilities 83,027 92,403 46,317 36,196 Comprehensive Income Net Loss for the Year Ended 30 June 2011 25 - (4,258) - - (4,258) Interest bearing loans and borrowings 30 23,693 15,457 - - Other Compehensive Income Trade and other payables 28 19,794 31,156 6,260 15,749 Cash Flow Hedge Reserve (net of tax) 23 - - (370) - (370) Other liabilities and charges 29 167 344 167 344 Total Comprehensive Income - (4,258) (370) - (4,628) Derivative financial instruments 14 93 60 93 60 Transactions with Owners Taxation Payable 326 187 - - Dividends on Ordinary Shares 25 - (2,172) - - (2,172) Revenue in advance 9,540 22,190 744 13,628 Employee Share Option Reserve 23 - - - 178 178 Total Transactions with Owners - (2,172) - 178 (1,994) Employee benefits 2,422 3,051 1,189 1,924 Total current liabilities 56,035 72,445 8,453 31,705 Opening Balance as at 1 July 2011 143,798 5,502 (1,065) 989 149,224 Total liabilities 139,062 164,848 54,770 67,901 Comprehensive Income Net Profit for the Year Ended 30 June 2012 - 288 - - 288 25 Total equity and liabilities 295,087 319,727 201,731 217,125 Other Compehensive Income Cash Flow Hedge Reserve (net of tax) 24 - - (850) - (850) Total Comprehensive Income - 288 (850) - (562) For and on behalf of the board who authorise the issue of the Financial Report on 27 August 2012 Transactions with Owners Dividends on Ordinary Shares 25 - (1,866) - - (1,866) Employee Share Option Reserve 23 - - - 165 165 Total Transactions with Owners - (1,866) - 165 (1,701)

Closing Balance as at 30 June 2012 143,798 3,924 (1,915) 1,154 146,961 K R Smith J H Bongard Chairman 27 August 2012 31 Statement of cash flows Reconciliation of surplus after taxation with cash flows from operating activities 32 For the year ended 30 June 2012 For the year ended 30 June 2012

Notes Group Parent Notes Group Parent

2012 2011 2012 2011 2012 2011 2012 2011 $000’s $000’s $000’s $000’s $000’s $000’s $000’s $000’s

Operating Activities CASH WAS PROVIDED FROM: Profit / (loss) after tax 4,317 (27,344) 288 (4,258) Receipts from customers 208,412 195,560 83,033 98,931 PLUS / (LESS) NON-CASH ITEMS: Interest received 1,275 845 1,179 702 Depreciation 15 42,841 41,103 16,020 15,293 Dividends received - 1 - 1 Amortisation of fixed term intangibles 17 1,546 2,018 1,008 1,512 Taxation received 1,166 511 661 - Impairment of goodwill 17 - 26,138 - 4,452 210,853 196,917 84,873 99,634 (Reversal of impairment) / impairment of assets 15 204 1,727 (175) (1,119) CASH WAS APPLIED TO: Amortisation of executive share scheme 23 165 178 165 178 Suppliers and employees 178,656 239,383 78,369 96,856 Movement in deferred taxation 31 638 (621) (27) 313 Interest 8,268 6,985 3,542 3,056 Increase / (decrease) in provision for doubtful debts 18 177 67 274 (5) Taxation 2,145 - - - Share of loss from Joint Venture 38 1,973 - 1,973 - 189,069 246,368 81,911 99,912 47,544 70,610 19,238 20,624 Net cash flows from operating activities 21,784 (49,451) 2,962 (278) PLUS / (LESS) ITEMS CLASSIFIED AS INVESTING ACTIVITIES: Net gain on sale of property, plant and equipment 3 (111) (112) - (124) Investing Activities Net gain on sale of investments and intangibles recognised - - - 1,094 CASH WAS PROVIDED FROM: Movement in rental assets Sale of property, plant & equipment 323 1,292 88 155 Rental assets transferred to inventory 47,311 40,927 10,893 4,730 Advances from Subsidiaries - - 2,186 - Purchase of rental assets (70,372) (124,131) (23,485) (24,865) Sale of subsidiary - Tourism Transport Fiji Limited - - - 956 (23,172) (83,316) (12,592) (19,165) Sale of Intangibles 34 60 34 60 357 1,352 2,308 1,171 TRADING CASHFLOW 28,689 (40,050) 6,934 (2,799) CASH WAS APPLIED TO: Purchase of property, plant & equipment 15 10,678 4,717 8,206 1,126 PLUS / (LESS) MOVEMENTS IN WORKING CAPITAL: Purchase of Intangibles 17 1,780 274 1,757 151 Increase / (decrease) in accounts payable (10,996) 7,383 (6,425) 4,661 Advance to Joint Venture 38 3,317 - 3,317 - Increase / (decrease) in revenue received in advance (12,650) 14,647 (12,884) 11,859 Advances to subsidiaries - - - 7,750 Increase / (decrease) in provision for taxation 626 (351) 708 - Purchase of subsidiary - US Rentals (net of cash acquired) 37 - 3,264 - 6,630 Increase / (decrease) in employee benefits (629) 341 (735) 247 15,775 8,255 13,280 15,657 Decrease / (increase) in accounts receivable 11,203 (14,841) 7,148 (6,971) Net cash (used in) / from investing activities (15,418) (6,903) (10,972) (14,486) Decrease / (increase) in inventories 5,541 (16,580) 8,216 (7,275)

Financing Activities (6,905) (9,401) (3,972) 2,521 CASH WAS PROVIDED FROM: Proceeds from borrowings - 57,642 9,000 16,800 Net cash flows from operating activities 21,784 (49,451) 2,962 (278) - 57,642 9,000 16,800 NZ IAS 16 Property, Plant and Equipment (‘NZ IAS-16’) requires the cash flows associated with the sale and purchase of rental assets to be classified as an operating activity. Below are the details of the sale of rental assets: CASH WAS APPLIED TO: Repayment of borrowings 2,926 - - - Dividends paid to parent shareholders 10 1,866 2,172 1,866 2,172 Proceeds from sale of rental assets 43,550 40,575 7,601 8,481 4,792 2,172 1,866 2,172 Book value of assets sold (38,581) (33,544) (5,908) (6,611) Net cash flows (used in) / provided from financing activities (4,792) 55,470 7,134 14,628 Gain on sale 4,969 7,031 1,693 1,870

Net increase in cash balances 1,574 (884) (876) (136) Net cash flows from operating activities prior to adoption of Opening cash brought forward 3,685 8,435 1,269 1,405 NZ IAS 16 resulting in the sale and purchase of rental assets 48,606 34,105 18,846 16,106 being classified as an operating activity Foreign currency translation adjustment (1,176) (3,866) - - Closing cash carried forward 22 4,083 3,685 393 1,269 33 Notes to the financial statements Notes to the financial statements 34 For the year ended 30 June 2012 For the year ended 30 June 2012

1.Statement of Accounting Policies initially at their fair values at the acquisition date, irrespective as equities classified as available for sale are included in the expected to benefit from the business combination in which of the extent of any minority interest. The excess of the cost fair value reserve in equity. the goodwill arose. The Group allocates goodwill to each Basis of Presentation of acquisition over the fair value of the Group’s share of the business segment in each country in which it operates. identifiable net assets acquired is recorded as goodwill. If Tourism Holdings Limited (the ‘Parent’) and its subsidiaries Group companies Brands the cost of acquisition is less than the fair value of the net (together ‘the Group’) primary operations are the The results and financial position of all the group entities Brands acquired in a business combination are recognised at assets of the subsidiary acquired, the difference is recognised manufacture, rental and sale of motor homes and campervans (none of which has the currency of a hyperinflationary fair value at the acquisition date. Brands are deemed to have directly in the income statement and other tourism related activities. The Parent is domiciled in economy) that have a functional currency different from the an indefinite life as the Group has determined that there is New Zealand. The registered office is Level 1, 83 Beach Road, Inter-company transactions, balances and unrealised gains presentation currency are translated into the presentation no foreseeable limit to the period over which the brands are Auckland 1010, New Zealand. on transactions between group companies are eliminated. currency as follows: expected to generate net cash in-flows for the entity. Brands Unrealised losses are also eliminated but considered an The Parent is a company registered under the Companies are tested annually for impairment and are carried at cost less impairment indicator of the asset transferred. Accounting i. assets and liabilities for each balance sheet presented are Act 1993 and is an issuer in terms of the Securities Act 1978. any accumulated impairment losses. policies of subsidiaries have been changed where necessary translated at the closing rate at the date of that The financial statements have been prepared in accordance to ensure consistency with the policies adopted by the Group. balance sheet; Trademarks and licences with the Companies Act 1993 and the Financial Reporting Act Trademarks and licences are shown at historical cost less 1993. Tourism Holdings is a profit oriented company. ii. income and expenses for each income statement are Associates translated at the month end exchange rates; and amortisation over the term of the particular licence. Summary of significant accounting policies Associates are all entities over which the Group has significant iii. all resulting exchange differences are recognised as a Computer software influence but not control, generally accompanying a The principal accounting policies applied in the preparation separate component of equity. Acquired computer software licences are capitalised on shareholding of between 20% and 50% of the voting rights. of these consolidated financial statements are set out below. the basis of the costs incurred to acquire and bring to use Investments in associates are accounted for using the equity Goodwill and fair value adjustments arising on the acquisition These policies have been consistently applied to all the the specific software. These costs are amortised over their method of accounting and are initially recognised at cost. of a foreign entity are treated as assets and liabilities of the years presented. estimated useful lives (three to five years). The Group’s share of its associates’ post-acquisition profits or foreign entity and translated at the closing rate. losses is recognised in the income statement. Costs associated with developing or maintaining computer Property, plant and equipment software programmes are recognised as an expense Basis of preparation Joint ventures Land and buildings comprise mainly branches, retail outlets as incurred. Costs that are directly associated with the The financial statements have been prepared in accordance production of identifiable and unique software products Joint ventures are all entities over which the Group has and offices. Land and buildings are shown at historical cost, with the Financial Reporting Act 1993 which requires controlled by the Group, and that will probably generate significant influence but not control, generally accompanying less subsequent accumulated depreciation for buildings. All compliance with New Zealand Generally Accepted economic benefits exceeding costs beyond one year, are a shareholding of 50% of the voting rights. Investments in joint other property, plant and equipment are stated at historical Accounting Practice (NZ GAAP). The consolidated financial recognised as intangible assets. Direct costs include the ventures that are jointly controlled entities are accounted for cost less accumulated depreciation. Land is not depreciated. statements comply with New Zealand equivalents to software development employee costs and an appropriate using the equity method of accounting in the Group financial Historical cost includes expenditure that is directly attributable International Financial Reporting Standards (NZ IFRSs) and portion of relevant overheads. statements and are initially recognised at cost. The Group’s to the acquisition of the items. other applicable Financial Reporting Standards (NZ FRS). share of its joint ventures’ post-acquisition profits or losses Subsequent costs are included in the asset’s carrying amount Computer software development costs recognised as assets These financial statements comply with International Financial is recognised in the income statement. Investment in a joint or recognised as a separate asset, as appropriate, only when are amortised over their estimated useful lives (three to Reporting Standards. venture is carried at cost less any impairment in the Parent it is probable that future economic benefits associated with five years). The consolidated financial statements have been prepared financial statements. the item will flow to the Group and the cost of the item can under the historical cost convention, as modified by the be measured reliably. All other repairs and maintenance are Impairment of non-financial assets revaluation of certain assets and liabilities as identified in Segment reporting charged to the income statement during the financial period Assets that have an indefinite useful life are not subject to specific accounting policies below. Operating segments are reported in a manner consistent in which they are incurred. amortisation and are tested annually for impairment. Assets The preparation of financial statements in conformity with NZ with the internal reporting provided to the chief operating Depreciation on assets is calculated using the straight-line that are subject to amortisation are reviewed for impairment IFRS requires the use of certain critical accounting estimates. decision-maker. The chief operating decision-maker, method to allocate their cost or revalued amounts to their whenever events or changes in circumstances indicate that It also requires management to exercise its judgement in the who is responsible for allocating resources and assessing residual values over their estimated useful lives as follows: the carrying amount may not be recoverable. An impairment process of applying the Group’s accounting policies. The performance of the operating segments, has been identified loss is recognised for the amount by which the asset’s carrying areas involving a higher degree of judgement or complexity, as the executive management team together with the Board Motorhomes 3 - 6 years amount exceeds its recoverable amount. The recoverable or areas where assumptions and estimates are significant to of Directors who together make strategic decisions. Buildings & leasehold improvements 10 - 40 years amount is the higher of an asset’s fair value less costs to sell the consolidated financial statements, are disclosed in the Vehicles & Coaches 5 - 20 years and value in use. For the purpose of assessing impairment, note. Tourism Holdings Limited and any other party do not Foreign currency translation Other Plant & Equipment 3 - 5 years assets are grouped at the lowest levels for which there are have the power to alter the financial statements after they separately identifiable cash flows (cash-generating units). Functional and presentation currency Items included in have been issued. Non-financial assets other than goodwill that suffered the financial statements of each of the Group’s entities The assets’ residual values and useful lives are reviewed, impairment are reviewed for possible reversal of the are measured using the currency of the primary economic and adjusted if appropriate, at each balance sheet date. An impairment at each reporting date. Consolidation environment in which the entity operates (‘the functional asset’s carrying amount is written down immediately to its Subsidiaries currency’). The consolidated financial statements are recoverable amount if the asset’s carrying amount is greater The Group’s accounting policy for the consolidation of presented in New Zealand dollars, rounded to the nearest than its estimated recoverable amount. Non current assets (or disposal groups) held for sale subsidiaries is as follows: thousand, which is the Company’s functional and Gains and losses on disposals are determined by comparing Non-current assets (or disposal groups) are classified as assets Subsidiaries are all entities over which the Group has the presentation currency. proceeds with carrying amount. These are included in the held for sale when their carrying amount is to be recovered power to govern the financial and operating policies generally income statement. principally through a sale transaction and a sale is considered accompanying a shareholding of more than one half of Transaction and balances highly probable. They are stated at the lower of carrying amount and fair value less costs to sell if their carrying amount the voting rights. The existence and effect of potential Foreign currency transactions are translated into the functional Intangible assets is to be recovered principally through a sale transaction rather voting rights that are currently exercisable or convertible currency using the exchange rates prevailing at the dates of Goodwill than through continuing use. are considered when assessing whether the Group controls the transactions. Foreign exchange gains and losses resulting Goodwill represents the excess of the cost of an acquisition another entity. Subsidiaries are fully consolidated from the from the settlement of such transactions and from the over the fair value of the Group’s share of the net identifiable date on which control is transferred to the Group. They are translation at year-end exchange rates of monetary assets and assets of the acquired subsidiary at the date of acquisition. Financial Assets de-consolidated from the date that control ceases. liabilities denominated in foreign currencies are recognised Goodwill on acquisition of subsidiaries is included in Loans and receivables and derivatives held for trading The purchase method of accounting is used to account for in the income statement, except when deferred in equity as ‘intangible assets’. Separately recognised goodwill is tested recognised on trade date are non-derivative financial assets the acquisition of subsidiaries by the Group. The cost of an qualifying cash flow hedges. annually for impairment and carried at cost less accumulated with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except acquisition is measured as the fair value of the assets given, Translation differences on non-monetary financial assets and impairment losses. Impairment losses on goodwill are not for maturities greater than 12 months after the balance sheet equity instruments issued and liabilities incurred or assumed liabilities are reported as part of the fair value gain or loss. reversed. Gains and losses on the disposal of an entity date. These are classified as non-current assets. Loans and at the date of exchange. Costs associated with the acquisition Translation differences on non-monetary financial assets and include the carrying amount of goodwill relating to the receivables include trade and other receivables and cash and are expensed immediately in the Income Statement. liabilities such as equities held at fair value are recognised in entity sold. equivalents in the balance sheet. Identifiable assets acquired and liabilities and contingent the income statement as part of the fair value gain or loss. Goodwill is allocated to cash-generating units for the purpose liabilities assumed in a business combination are measured Translation differences on non-monetary financial assets such of impairment testing. The allocation is made to those cash- generating units or groups of cash-generating units that are 35 Notes to the financial statements Notes to the financial statements 36 For the year ended 30 June 2012 For the year ended 30 June 2012

Offsetting Financial Instruments Fair value hedge discounted at the effective interest rate. The amount of the recognition of an asset and liability in a transaction that is not Financial assets and liabilities are offset and the net amount Changes in the fair value of derivatives that are designated provision is recognised in the income statement within ‘other a business combination, and at the time of the transaction, reported in the balance sheet when there is a legally and qualify as fair value hedges are recorded in the income operating expenses’. affects neither accounting profit nor taxable profit. enforceable right to offset the recognised amounts and there statement, together with any changes in the fair value of Deferred tax is recognised on taxable temporary differences is an intention to settle on a net basis, or realise the asset and the hedged asset or liability that are attributable to the Cash and cash equivalents arising on investments in subsidiaries and associates, except settle the liability simultaneously. hedged risk. The gain or loss relating to the effective Cash and cash equivalents includes cash in hand, deposits where the company can control the reversal of the temporary portion of interest rate swaps hedging fixed rate borrowings held at call with banks, other short-term highly liquid difference and it is probable that the temporary difference will Impairment of Financial Assets is recognised in the income statement within ‘finance investments with original maturities of three months or less, not be reversed in the foreseeable future. costs’. The gain or loss relating to the ineffective portion is and bank overdrafts. Bank overdrafts are shown within current Assets carried at amortised cost Deferred tax is calculated at the tax rates that are expected recognised in the income statement within ‘other (losses)/ liabilities on the balance sheet. to apply in the period when the liability is settled or the The Group assesses at the end of each reporting period gains - net’. Changes in the fair value of the hedged fixed rate asset is realised, using tax rates that have been enacted or whether there is objective evidence that a financial asset or borrowings attributable to interest rate risk are recognised in Share capital substantially enacted by balance date. group of financial assets is impaired. A financial asset or a the income statement within ‘finance costs’. Ordinary shares are classified as equity. Current tax and deferred tax is charged or credited to the group of financial assets is impaired and impairment losses If the hedge no longer meets the criteria for hedge Incremental costs directly attributable to the issue of new Income Statement, except when it relates to items charged or are incurred only if there is objective evidence of impairment accounting, the adjustment to the carrying amount of a shares or options are shown in equity as a deduction, net of credited directly to equity, in which case the tax is dealt with as a result of one or more events that occurred after the initial hedged item for which the effective interest method is used is tax, from the proceeds. in equity. recognition of the asset (a ‘loss event’) and that loss event amortised to profit or loss over the period to maturity. (or events) has an impact on the estimated future cash flows Trade payables Employee benefits of the financial asset or group of financial assets that can be Cash flow hedge reliably estimated. Trade payables are obligations to pay for goods or services Share scheme The effective portion of changes in the fair value of derivatives that have been acquired in the ordinary course of business The Group recognises a liability and an expense for payments The amount of the loss is measured as the difference that are designated and qualify as cash flow hedges are from suppliers. Accounts payable are classified as current based on a formula that takes into consideration the share between the asset’s carrying amount and the present value recognised in equity. The gain or loss relating to the liabilities if payment is due within one year or less (or in the price. The Group recognises a provision where contractually of estimated future cash flows (excluding future credit losses ineffective portion is recognised immediately in the income normal operating cycle of the business if longer). If not, they obliged or where there is a past practice that has created a that have not been incurred) discounted at the financial statement within ‘other (losses)/gains - net’. asset’s original effective interest rate. The asset’s carrying are presented as non-current liabilities. constructive obligation. Amounts accumulated in equity are recycled in the income amount of the asset is reduced and the amount of the loss Trade payables are recognised initially at fair value and Short term employee benefits statement in the periods when the hedged item affects profit is recognised in the income statement. If a loan or held-to- subsequently measured at amortised cost using the effective or loss (for instance when the forecast sale that is hedged Employee entitlements to salaries and wages and annual maturity investment has a variable interest rate, the discount interest method. takes place). The gain or loss relating to the effective portion leave, to be settled within 12 months of the reporting date rate for measuring any impairment loss is the current effective of interest rate swaps hedging variable rate borrowings represent present obligations resulting from employee’s interest rate determined under the contract. As a practical is recognised in the income statement within ‘finance Borrowings services provided up to the reporting date, calculated at expedient, the Group may measure impairment on the basis costs’. The gain or loss relating to the effective portion of Borrowings are recognised initially at fair value, net of undiscounted amounts based on remuneration rates that the of an instrument’s fair value using an observable market price. forward foreign exchange contracts hedging export sales is transaction costs incurred. Borrowings are subsequently Group expects to pay. If, in a subsequent period, the amount of the impairment loss recognised in the income statement within ‘sales’. However, stated at amortised cost; any difference between the decreases and the decrease can be related objectively to an when the forecast transaction that is hedged results in the proceeds (net of transaction costs) and the redemption value Provisions event occurring after the impairment was recognised (such as recognition of a non-financial asset (for example, inventory) is recognised in the income statement over the period of the Provisions are recognised when: the Group has a present an improvement in the debtor’s credit rating), the reversal of or a non-financial liability, the gains and losses previously borrowings using the effective interest method. legal or constructive obligation as a result of past events; it the previously recognised impairment loss is recognised in the deferred in equity are transferred from equity and included in Borrowings are classified as current liabilities unless the Group is more likely than not that an outflow of resources will be income statement. the initial measurement of the cost of the asset or liability. has an unconditional right to defer settlement of the liability required to settle the obligations; and the amount has been When a hedging instrument expires or is sold, or when a for at least 12 months after the balance sheet date. reliability estimated. Restructuring provisions comprise Derivative financial instruments and hedging activities hedge no longer meets the criteria for hedge accounting, Borrowing costs are recognised as an expense in the period lease termination penalties and employee termination Derivatives are initially recognised at fair value on the date any cumulative gain or loss existing in equity at that time in which they are incurred, except for borrowing costs directly payments. Warranty provisions relate to repairs of third a derivative contract is entered into and are subsequently remains in equity and is recognised when the forecast attributable to the acquisition, construction or production of a party motorhomes. Provisions are not recognised for future remeasured at their fair value. The method of recognising transaction is ultimately recognised in the income statement. qualifying asset which are capitalised. operating losses. the resulting gain or loss depends on whether the derivative When a forecast transaction is no longer expected to occur, Qualifying assets are those assets that necessarily take an Where there are a number of similar obligations, the is designated as a hedging instrument, and if so, the nature the cumulative gain or loss that was reported in equity is extended period of time (6 months or more) to get ready for likelihood that an outflow will be required in settlement is of the item being hedged. The Group designates certain immediately transferred to the income statement. their intended use. determined by considering the class of obligations as a whole. derivatives as either: (1) hedges of the fair value of recognised A provision is recognised even if the likelihood of an outflow assets or liabilities or a firm commitment (fair value hedge); (2) Inventories with respect to any one item included in the same class of hedges of a particular risk associated with a recognised asset Current and deferred income tax Inventories are stated at the lower of cost and net realisable obligations may be small. or liability or a highly probable forecast transaction (cash Income tax expenses in relation to the surplus or deficit for value. Cost is determined using the first-in, first-out (FIFO) flow hedge). the period comprises current tax and deferred tax. Provisions are measured at the present value of the method. The cost of finished goods and work in progress expenditures expected to be required to settle the obligation The Group documents at the inception of the transaction comprises design costs, raw materials, direct labour, other Current tax is the amount of income tax payable based on using a pre-tax rate that reflects current market assessments the relationship between hedging instruments and hedged direct costs and related production overheads (based on the taxable profit for the current year, plus any adjustments of the time value of money and the risks specific to the items, as well as its risk management objectives and strategy normal operating capacity). It excludes borrowing costs. Net to income tax payable in respect of prior years. Current tax is obligation. The increase in the provision due to passage of for undertaking various hedge transactions. The Group also realisable value is the estimated selling price in the ordinary calculated using rates that have been enacted or substantially time is recognised as interest expense. documents its assessment, both at hedge inception and on course of business, less applicable variable selling expenses. enacted by balance date. an ongoing basis, of whether the derivatives that are used in Deferred tax is the amount of income tax payable or Revenue recognition hedging transactions are highly effective in offsetting changes Trade receivables recovered in future periods in respect of temporary in fair value or cash flows of hedged items. Revenue comprises the fair value of the consideration Trade receivables are recognised initially at fair value and differences and unused tax losses. Temporary differences received or receivable for the sale of goods and services in the The fair values of various derivative instruments used for subsequently measured at amortised cost using the effective are differences between the carrying amount of assets and ordinary course of the Group’s activities. Revenue is shown, hedging purposes are disclosed in the notes. Movements on interest method, less provision for impairment. A provision for liabilities in the financial statements and the corresponding net of goods & services tax, rebates and discounts and after the hedging reserve in shareholders’ equity are shown in the impairment of trade receivables is established when there is tax bases used in the computation of taxable profit. eliminated sales within the Group. Revenue is recognised notes. The full fair value of hedging derivatives is classified as objective evidence that the Group will not be able to collect Deferred tax liabilities are generally recognised for all taxable as follows: a non-current asset or liability if the remaining maturity of the all amounts due according to the original terms of receivables. temporary differences. Deferred tax assets are recognised i) Sales of services hedged item is more than 12 months, and as a current asset Significant financial difficulties of the debtor, probability that to the extent that it is probable that taxable profits will be Sales of services are recognised in the accounting period or liability if the remaining maturity of the hedged item is less the debtor will enter bankruptcy or financial reorganisation, available against which the deductible temporary differences in which the services are rendered, by reference to than 12 months. Trading derivatives are classified as a current and default or delinquency in payments are considered or tax losses can be utilised. completion ofthe specific transaction assessed on asset or liability. indicators that the trade receivable is impaired. The amount Deferred tax is not recognised if the temporary difference the basis of the actual service provided as a proportion of of the provision is the difference between the asset’s carrying arises from the initial recognition of goodwill or from the initial the total services to be provided. amount and the present value of estimated future cash flows, 37 Notes to the financial statements Notes to the financial statements 38 For the year ended 30 June 2012 For the year ended 30 June 2012

ii) Sales of goods ii) Income taxes Issued standards and amendments effective for 2013 financial statements that are left after the control provisions of Sales of goods are recognised when a group entity sells a The Group is subject to income taxes in three and beyond. NZ IAS 27 have been included in the new NZ IFRS 10. product to the customer. Retail sales are usually in cash or jurisdictions. Significant judgement is equiredr in The standard has an effective date of 1 January 2013. ‘Financial statement presentation’ by credit card. Sales of motorhomes are recognised determining the worldwide provision for income taxes. Amendment to NZ IAS 1, regarding other comprehensive income. The main change (revised 2011), ‘Associates and joint ventures’ when the transfer of risks and rewards takes place, There are many transactions and calculations for which NZ IAS 28 resulting from these amendments is a requirement for entities NZ IAS 28 (revised 2011) includes the requirements for joint typically on delivery, and are invoiced at that time. the ultimate tax determination is uncertain during the to group items presented in ‘other comprehensive income’ ventures, as well as associates, to be equity accounted ordinary course of business. The Group recognises (OCI) on the basis of whether they are potentially reclassifiable following the issue of NZ IFRS 11. The standard has an liabilities for anticipated tax audit issues based on Leases to profit or loss subsequently (reclassification adjustments). effective date of 1 January 2013. estimates of whether additional taxes will be due. Where Leases in which a significant portion of the risks and rewards The amendments do not address which items are presented the final tax outcome of these matters is different from Management is still determining the likely impact of of ownership are retained by the lessor are classified as in OCI. the amounts that were initially recorded, such differences these standards. operating leases. Payments made under operating leases (net The standard has an effective date of 1 July 2012. will impact the income tax and deferred tax provisions in of any incentives received from the lessor) are charged to the Other interpretations and amendments are unlikely to have an the period in which such determination is made. ‘Financial instruments’ NZ IFRS 9 is the first income statement on a straight-line basis over the period of NZ IFRS 9, impact on the Group’s financial statements and have therefore standard issued as part of a wider project to replace NZ IAS the lease. iii) Revenue recognition not been analysed in detail. The Group uses the percentage-of-completion method in 39. NZ IFRS 9 retains but simplifies the mixed measurement The Group leases certain vehicles, property, plant and model and establishes two primary measurement categories equipment (i.e. is the Lessee). Leases of vehicles, property, accounting for its sales of services. Use of the percentage-ofcompletion method requires the Group to for financial assets: amortised cost and fair value. The basis of plant and equipment where the Group has substantially all the classification depends on the entity’s business model and the risks and rewards of ownership are classified as finance leases. estimate the services performed to date as a proportion of the total services to be performed. contractual cash flow characteristics of the financial asset. The Finance leases are capitalised at the lease’s commencement guidance in NZ IAS 39 on impairment of financial assets and at the lower of the fair value of the leased property and the iv) Fleet impairment provisions hedge accounting continues to apply. With regard to financial present value of the minimum lease payments. Each lease The Group has estimated the impairment charge on the liabilities, the recognition and measurement guidance is payment is allocated between the liability and finance charges fleet based on the difference between the current unchanged from NZ IAS 39. An additional presentational so as to achieve a constant rate on the finance balance carrying value of the fleet and their ecoverabler amounts. requirement has been added for liabilities designated at fair outstanding. The corresponding rental obligations, net of value through profit and loss (FVTPL). The standard has an finance charges, are included in other long-term payables. Changes in accounting policy effective date of 1 January 2015. The interest element of the finance cost is charged to the Issued standards and amendments effective for 2012 , ‘Consolidated financial statements’ The objective income statement over the lease period so as to produce a financial statements. NZ IFRS 10 constant periodic rate of interest on the remaining balance of of NZ IFRS 10 is to establish principles for the presentation ‘Related party disclosures’ (revised 2009). Amends the liability for each period. The vehicles, property, plant and NZ IAS 24, and preparation of consolidated financial statements when the definition of a related party and modifies certain related- equipment acquired under finance leases is depreciated over an entity controls one or more other entity (an entity that party disclosure requirements for government-related entities. the shorter of the useful life of the assets or the lease term. controls one or more other entities) to present consolidated The standard has an effective date of 1 January 2011. financial statements. Defines the principle of control, and establishes controls as the basis for consolidation. Set out Dividend distribution NZ IFRS 7, ‘Financial instruments’ emphasises the interaction how to apply the principle of control to identify whether an Dividend distribution to the Company’s shareholders is between quantitative and qualitative disclosures about the nature and extent of risks associated with financial investor controls an investee and therefore must consolidate recognised as a liability in the Group’s financial statements the investee. Sets out the accounting requirements for in the period in which the dividends are approved by the instruments. The standard has an effective date of 1 January 2011. Applied retrospectively. the preparation of consolidated financial statements. The Company’s directors. standard has an effective date of 1 January 2013. NZ IAS 1, ‘Presentation of financial statements’ clarifies that Fair value estimation an entity will present an analysis of other comprehensive NZ IFRS 11, ‘Joint arrangements’ NZ IFRS 11 is a more realistic reflection of joint arrangements by focusing on the The fair value of financial instruments traded in active markets income for each component of equity, either in the rights and obligations of the arrangement rather than its is based on quoted market prices at the balance sheet date. statement of changes in equity or in the notes to the financial legal form. There are two types of joint arrangement: joint The quoted market price used for financial assets held by the statements. The standard has an effective date of 1 January operations and joint ventures. Joint operations arise where a Group is the current bid price. 2011. Applied retrospectively. joint operator has rights to the assets and obligations relating The nominal value less impaired provision of trade receivables Amendments to NZ IFRS 7, ‘Financial instruments: to the arrangement and hence accounts for its interest in and payables are assumed to approximate their fair values. Disclosures’ on derecognition. This amendment will promote assets, liabilities, revenue and expenses. Joint ventures arise The fair value of financial liabilities for disclosure purposes is transparency in the reporting of transfer transactions and where the joint operator has rights to the net assets of the estimated by discounting the future contractual cash flows at improve users’ understanding of the risk exposures relating arrangement and hence equity accounts for its interest. the current market interest rate that is available to the Group to transfers of financial assets and the effect of those risks Proportional consolidation of joint ventures is no longer for similar financial instruments. on an entity’s financial position, particularly those involving allowed. The standard has an effective date of 1 January 2013. securitisation of financial assets. The standard has an effective ‘Disclosures of interests in other entities’ NZ Critical accounting estimates and judgements date of 1 July 2011. NZ IFRS 12, IFRS 12 includes the disclosure requirements for all forms Estimates and judgements are continually evaluated and are NZ FRS 44 New Zealand Additional Disclosures and of interests in other entities, including joint arrangements, based on historical experience and other factors, including Harmonisation Amendments (effective 1 July 2011). NZ FRS associates, special purpose vehicles and other off balance expectations of future events that are believed to be 44 sets out New Zealand specific disclosures for entities sheet vehicles. The standard has an effective date of reasonable under the circumstances. that apply NZ IFRSs. These disclosures have been relocated 1 January 2013. The Group makes estimates and assumptions concerning the from NZ IFRSs to clarify that these disclosures are additional future. The resulting accounting estimates will, by definition, to those required by IFRSs. Adoption of the new rules have NZ IFRS 13, ‘Fair value measurement’ NZ IFRS 13 aims to seldom equal the related actual results. The estimates and not affected any of the amounts recognised in the financial improve consistency and reduce complexity by providing a assumptions that have a significant risk of causing a material statements, but have simplified some of the Group’s current precise definition of fair value and a single source of fair value adjustment to the carrying amounts of assets and liabilities disclosures. The Harmonisation Amendments amended measurement and disclosure requirements for use across NZ within the next financial year are discussed below. various NZ IFRSs for the purpose of harmonising with the IFRSs. The requirements, which are largely aligned between source IFRSs and Australian Accounting Standards. NZ IFRSs and US GAAP, do not extend the use of fair value i) Estimated impairment of goodwill accounting but provide guidance on how it should be applied The Group tests annually whether goodwill has suffered There was no change to measurement and disclosures in the where its use is already required or permitted by other any impairment, in accordance with the accounting financial statements as result of these changes during the year. standards within NZ IFRSs or US GAAP. The standard has an policy stated in the notes. The recoverable amounts of effective date of 1 January 2013. cash-generating units have been determined based on value-in-use calculations (refer to note 17). These NZ IAS 27 (revised 2011), ‘Separate financial statements’ NZ calculations require the use of estimates. IAS 27 (revised 2011) includes the provisions on separate 39 Notes to the financial statements Notes to the financial statements 40 For the year ended 30 June 2012 For the year ended 30 June 2012

Group Parent Group Parent

2. Sales of goods 2012 2011 2012 2011 6. Finance income 2012 2011 2012 2011 $000’s $000’s $000’s $000’s $000’s $000’s $000’s $000’s

Interest income 1,275 845 1,179 702 Sales of rental assets 43,550 40,575 7,601 8,481 Dividend income - 1 - 1 Sales of other goods 9,636 10,160 10,813 17,978 1,275 846 1,179 703 53,186 50,735 18,414 26,459 Group Parent Sales of rental assets 43,550 40,575 7,601 8,481 Book value of rental assets sold 38,581 33,544 5,908 6,611 7. Finance costs 2012 2011 2012 2011 $000’s $000’s $000’s $000’s Gain on sale of rental assets 4,969 7,031 1,693 1,870

Interest expense Group Parent - Bank borrowings 6,777 3,970 3,542 3,056 3. Other operating income / (expenses) 2012 2011 2012 2011 - Other loans 392 262 - - $000’s $000’s $000’s $000’s - Capitalised lease obligations 1,099 2,753 - - 8,268 6,985 3,542 3,056 Net loss on disposal of fixed assets (111) (112) - (124) Net gain on disposal of businesses (note 11) - - - 1,094 Group Parent (111) (112) - 970 8. Income tax expense 2012 2011 2012 2011 $000’s $000’s $000’s $000’s Group Parent

4. Profit before tax includes the following specific expenses. 2012 2011 2012 2011 Current tax 1,423 (1,940) 1,449 7 $000’s $000’s $000’s $000’s Deferred tax (note 31) 1,308 1,346 (903) 462 2,731 (594) 546 469 Audit fees - PricewaterhouseCoopers 212 200 184 190 Other assurance fees - PricewaterhouseCoopers - 10 - 10 Continuing Businesses 2,814 (594) 629 469 Internal audit fees - Ernst & Young 63 197 63 197 Discontinued Businesses (note 11) (83) - (83) - Bad debts written off directly to the Income Statement (note 18) - 111 - 33 2,731 (594) 546 469 Movement in provision for impairment of receivables (note 18) 177 67 274 (5) The tax on the Group’s profit before tax differs from the theoretical amount that would arise using the weighted average tax rate Donations 10 29 10 22 applicable to profits of the consolidated companies as follows: Directors’ Fees 403 403 403 403 Group Parent Depreciation 42,841 41,103 16,020 15,293 Amortisation of intangible assets 1,546 2,018 1,008 1,512 2012 2011 2012 2011 $000’s $000’s $000’s $000’s Employee benefit expense (note 5) 40,262 41,937 24,564 27,321 Rental and operating lease costs 5,504 7,342 1,925 4,174 Raw materials and consumables 7,717 6,344 8,894 14,243 Inventories written off 62 69 62 69 Profit / (loss) before tax - Continuing Operations 7,344 (27,938) 1,130 (3,789) Repairs and maintenance including damage repairs 17,214 24,440 4,871 7,941 Profit before tax - Discontinued Operations (296) (296) Net foreign exchange losses/(gains) (2) (71) 22 (43) 7,048 (27,938) 834 (3,789) Ineffectiveness of cash flow hedges losses/(gains) (note 7) - (70) - (70) Impairment / (reversal) of fleet assets (note 15) 204 1,727 (175) (1,118) Tax calculated at domestic rates applicable to profits in the respective countries 2,512 (8,382) 234 (1,137) Expenses not deductible for tax purposes 260 237 340 (100) Group Parent Goodwill impairment - 7,841 - 1,336 5. Employee benefit expense 2012 2011 2012 2011 Change in tax rate from 30% to 28% - 189 - 189 $000’s $000’s $000’s $000’s Deferred Tax impact of NZ Governments’ change - 76 - 67 to building depreciation rates Investment allowance - (819) - - Wages and salaries 36,941 38,976 23,158 25,612 Income recognised in equity (47) 113 - - Redundancy costs - 53 - 37 Prior year tax adjustment 6 151 (28) 114 Shared based payment costs 165 178 165 178 Income Tax Expense / (Benefit) 2,731 (594) 546 469 Other employee benefits 3,156 2,730 1,241 1,494 Total employee remuneration 40,262 41,937 24,564 27,321 The weighted average applicable tax rate was 39% (2011: 2% credit).

The weighted average tax rate is higher in 2012 due to increased profits from the US Road Bear operation which is taxed at a blended rate of 40.75% which compares to 30% in Australia and 28% in New Zealand. The weighted average tax rate for the 2011 year was a result of the goodwill impairment write off that is non-deductible for tax, non-deductible expenditure related to the acquisition of the US Road Bear business less the final investment allowance tax incentive on depreciating asset investment in Australia plus various adjustments to deferred tax due to the change in the NZ company tax rate from 30% to 28%. 41 Notes to the financial statements Notes to the financial statements 42 For the year ended 30 June 2012 For the year ended 30 June 2012

9. Earnings per share The major classes of assets and liabilities of the discontinued operations sold were as follows:

Group Parent Basic Basic earnings per share is calculated by dividing the profit or loss attributable to equity holders of the Parent Assets sold $000’s $000’s by the weighted average number of ordinary shares in issue during the year (note 26) Property, plant and equipment 2,085 2,085 2012 2011 Accounts receivable 1,813 1,813 $000’s $000’s Inventories 6,900 6,900 Total assets disposed 10,798 10,798 Profit / (loss) attributable to the equity holders of the Parent from continuing operations 4,530 (27,682) Liabilities directly associated with assets sold (Loss) / profit attributable to the equity holders of the Parent from discontinued operations (213) 338 Accruals, GST and deposits 2,910 2,910 Profit / (loss) attributable to the equity holders of the Parent 4,317 (27,344) Net assets disposed 7,888 7,888 Weighted average number of ordinary shares on issue 98,180,723 98,180,723

ii) Tourism Transport Fiji and Great Sights Fiji Basic earnings per share (in cents) from continuing operations 4.6 (28.2) Basic earnings per share (in cents) from discontinued operations (0.2) 0.3 The assets and liabilities related to the Fiji businesses operating as Tourism Transport Fiji and Great Sights Fiji were disposed of and sold as at 30 September 2010. Tourism Transport Fiji and Great Sights Fiji’s assets and liabilities Basic earnings per share (in cents) 4.4 (27.9) were disposal groups and not discontinued operations as they did not represent a major line of the business.

Tourism Transport Fiji and Great Sights Fiji’s assets and liabilities were transferred at their book value and there was Diluted no gain or loss recognised in the Group on disposal. The Parent recognised a gain of $1,094k on disposal of the Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume Fiji businesses. conversion of all dilutive potential ordinary shares. The major classes of assets and liabilities of the disposal groups sold were as follows: 98,180,723 98,180,723 Weighted average number of ordinary shares on issue 30 September 2010 Redeemable shares if exercised (See note 27) 6,470,000 4,220,000 Consolidated Tourism Transport Total Shares 104,650,723 102,400,723 Fiji and Great Sights Fiji

Assets sold NZ$000’s FJD$000’s Diluted earnings per share (in cents) from continuing operations 4.3 (27.0) Property, plant and Equipment 1,151 1,662 Diluted earnings per share (in cents) from discontinued operations (0.2) 0.3 Cash and cash equivalents 211 305 Diluted earnings per share (in cents) 4.1 (26.7) Inventories 48 70 Trade and other receivables 270 390 10. Dividends Amounts owing by related company 373 538 Total assets disposed 2,053 2,965 The dividends paid in 2012 and 2011 were $ 1,866,000 (2 cents per share) and $ 2,172,000 (2 cents per share) respectively.

Liabilities directly associated with assets sold 11. Discontinued Operations and Disposal Groups Deferred Income Tax 161 233 i) Motek Manufacturing Division / Ci Munro Trade and other payables 215 310 Provision for income tax 107 155 Certain assets and liabilities of the Motek Manufacturing Division (renamed from Ci Munro Manufacturing) were disposed of and sold on 1 March 2012 at their book value to RV Manufacturing Group LP (RVMG). Refer to note 38. In February 2012 the Group entered into Total liabilities directly associated with assets disposed 483 698 a series of agreements to form RVMG a 50/50 joint venture manufacturing business with Kea Manufacturing (New Zealand) Limited. Net assets disposed 1,570 2,267 Accordingly the Group ceased manufacturing in its own right and the results of Ci Munro are presented as discontinued operations. The comparative financial information has been restated to reflect the presentation in the current year Net assets disposed excluding related party amount due 1,197 1,729 as discontinued operations. There was no gain or loss on disposal.

There were no other discontinued operations in the year to 30 June 2012.

An analysis of the result of discontinued operations, and the result recognised is as follows:

Group Parent

2012 2011 2012 2011 $000’s $000’s $000’s $000’s

Revenue 9,636 10,160 10,813 17,978 Expenses (9,932) (9,677) (11,109) (17,495) Loss before tax of discontinued operations (296) 483 (296) 483 Tax 83 (145) 83 (145) Loss after tax of discontinued operations (213) 338 (213) 338

Operating cash flows 1,696 (136) 1,696 (136) Investing cash flows (255) (338) (255) (338) Financing cash flows - - - -

Total cash flows 1,441 (474) 1,441 (474) 43 Notes to the financial statements Notes to the financial statements 44 For the year ended 30 June 2012 For the year ended 30 June 2012

12. Financial Instruments Exchange Rate Sensitivity The following tables show the impact of a 5 cent movement up or down in the New Zealand dollar vs the Australian dollar and Financial Instruments by Category 2012 2011 United States dollar and the impact that this exchange translation change has on reported net profit after tax and group equity. The reason for using a 5 cent change is based on prior year movements. Loans and Derivatives TOTAL Loans and Derivatives TOTAL Receivables used Receivables used Group Parent for Hedging for Hedging $000’s $000’s $000’s $000’s $000’s $000’s 2012 2011 2012 2011 $000’s $000’s $000’s $000’s Group Post tax impact on reported profit of : Assets A 5 cent increase in the NZ dollar vs the AU dollar (30) (35) - - Trade and other receivables 14,255 - 14,255 27,333 - 27,333 A 5 cent increase in the NZ dollar vs the US dollar (172) 5 - - Derivative financial instruments ------A 5 cent decrease in the NZ dollar vs the AU dollar 34 40 - - Advance to Joint Venture 9,232 - 9,232 - - - A 5 cent decrease in the NZ dollar vs the US dollar 195 (5) - - Cash and cash equivalents 4,083 - 4,083 3,685 - 3,685 Group Parent

Parent 2012 2011 2012 2011 $000’s $000’s $000’s $000’s Assets Impact on equity of : Trade and other receivables 3,444 - 3,444 12,683 - 12,683 Cash and cash equivalents 393 - 393 1,269 - 1,269 A 5 cent increase in the NZ dollar vs the AU dollar (2,122) (2,331) - - Advances to subsidiary companies 29,598 - 29,598 31,784 - 31,784 A 5 cent increase in the NZ dollar vs the US dollar (356) (21) - - Advance to Joint Venture 9,232 9,232 - - - A 5 cent decrease in the NZ dollar vs the AU dollar 2,408 2,649 - - Derivative financial instruments ------A 5 cent decrease in the NZ dollar vs the US dollar 403 23 - -

2012 2011 Interest Rate Risk Measured at Derivatives TOTAL Measured at Derivatives TOTAL amortised for amortised for The Group and Parent’s interest rate risk primarily arises from long-term borrowings, cash and cash equivalents, advances to cost Hedging cost Hedging subsidiaries and the joint venture. Borrowings issued at variable rates expose the Group and Parent to cashflow interest rate risk. $000’s $000’s $000’s $000’s $000’s $000’s Borrowings issued at fixed rates expose the Group and Parent to fair value interest rate risk. Group The Group and Parent manages its cash-flow interest rate risk by using floating to fixed interest rate derivative contracts. Such interest rate derivative contracts have the economic effect of converting borrowings from floating rates to fixed rates. Generally Liabilities the Group and Parent raises long term borrowings at floating rates that are lower than those available if the Group and Parent Interest bearing loans and borrowings 99,625 - 99,625 102,551 - 102,551 borrowed at fixed rates directly. Derivative financial instruments - 2,660 2,660 - 1,479 1,479 Under the interest rate derivative contracts, the Group and Parent agrees with other parties to exchange, at specified intervals Trade and other payables 19,794 - 19,794 31,156 - 31,156 (mainly quarterly), the difference between fixed contract rates and floating rate interest amounts calculated by reference to the agreed notional principal amounts. Parent The Group and Parent maintains cash on overnight deposit in interest bearing bank accounts. Liabilities Interest bearing loans and borrowings 42,800 - 42,800 33,800 - 33,800 Derivative financial instruments - 2,660 2,660 - 1,479 1,479 Trade and other payables 6,260 - 6,260 15,749 - 15,749

13. Financial Risk Management

In the normal course of business the Group is exposed to a variety of financial risks including foreign currency, interest rate, credit and liquidity risks. To manage this risk the Group’s treasury activities are performed by a central treasury function and are governed by Group policies approved by the Board of Directors. Details of the significant accounting policies and methods adopted, including criteria for recognition and the basis of measurement are disclosed in the Statement of Accounting Policies (note 1).

The Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s financial performance. The Group does not enter into derivative financial instruments for trading or speculative purposes.

Currency Risk The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the Australian dollar and the United States dollar. Foreign exchange risk arises when future commercial transactions are in currencies other than local currency and on recognised assets or liabilities and net investments in foreign operations. Foreign exchange exposures on future commercial transactions incurred by operations in currencies other than their local currency are managed by using forward currency contracts managed by the central Treasury function. The Group has investments in foreign operations, whose net assets are exposed to foreign currency translation risk. This is managed primarily through borrowings denominated in the relevant foreign currencies. The Parent makes purchases in foreign currency and is exposed to foreign currency risk. This is managed by utilisation of forward currency contracts from time to time. 45 Notes to the financial statements Notes to the financial statements 46 For the year ended 30 June 2012 For the year ended 30 June 2012

The following tables set out the interest rate repricing profile and weighted average interest rate Interest Rate Sensitivity of the interest bearing financial assets and liabilities. At year end the floating bank borrowings and cash deposits were subject to interest rate sensitivity risk. The remaining borrowings As at 30 June 2012 Effective Floating Fixed up Fixed up Fixed up Fixed TOTAL are fixed using interest rate derivative contracts. If the Group’s and Parent’s floating borrowings and deposits year end balances Interest to 1 year 1-2 years 2-5 years > 5 years remained the same throughout the year and interest rates moved by 1.0% then the impact on profitability is as follows: Group Rate $000’s $000’s $000’s $000’s $000’s $000’s Assets Group Parent Advance to Joint Venture 7.91% 9,232 - - - - 9,232 2012 2011 2012 2011 Cash and cash equivalents 2.5% 4,083 - - - - 4,083 Pre tax impact of: $000’s $000’s $000’s $000’s 13,315 - - - - 13,315 An increase in interest rates of 1% (280) (154) (64) 86 Liabilities A decrease in interest rates of 1% 280 154 64 (86) Bank Borrowings 5.5% 17,689 50,393 - - - 68,082 Other Loans 6.0% - 1,534 3,990 - - 5,524 At year end the value of interest rate derivative contracts used as cash flow hedges were subject to interest rate risk in relation to the Capitalised Lease obligations 7.1% - 22,159 3,860 - - 26,019 value recognised in equity. If interest rates moved by 1.0% across the yield curve then the impact on the fair value of the swaps 17,689 74,086 7,850 - - 99,625 is shown in the following table. A movement of 1% or 100bps is considered by management as a reasonable estimate of a possible shift in interest rates for the Interest Rate Derivative Contracts 5.40% - 7,526 - 18,445 10,000 35,971 year based on historic movements.

The effective interest rate of group borrowings is 6.82% including the impact of the interest rate swaps and line fees on facilities. Group Parent

As at 30 June 2012 Effective Floating Fixed up Fixed up Fixed up Fixed TOTAL Post tax impact on equity of a 1% move in 2012 2011 2012 2011 Interest to 1 year 1-2 years 2-5 years > 5 years interest rates $000’s $000’s $000’s $000’s Parent Rate $000’s $000’s $000’s $000’s $000’s $000’s An increase in interest rates of 1% across the yield curve 887 763 887 931 Assets Advance to Joint Venture 7.91% 9,232 - - - - 9,232 A decrease in interest rates of 1% across the yield curve (887) (777) (887) (945) Advances to subsidiary companies 5.66% 29,598 - - - - 29,598 Cash and cash equivalents 2.5% 393 - - - - 393 Credit Risk 39,223 - - - - 39,223 The Parent and Group has a concentration of credit risk in respect of the advance to the joint venture. The Group has no other significant concentrations of credit risk. Policies are in place to ensure that wholesale sales of products are made to customers with Liabilities Bank Borrowings 6.2% 16,300 26,500 - - - 42,800 an appropriate credit history. Sales to retail customers are made in cash or via major credit cards. Derivative contract counterparties and cash on deposit are limited to high credit rated quality financial institutions. 16,300 26,500 - - - 42,800 Interest Rate Derivative Contracts 5.40% - 7,526 - 18,445 10,000 35,971 The Group considers its maximum exposure to credit risk as follows.

As at 30 June 2011 Effective Floating Fixed up Fixed up Fixed up Fixed TOTAL Group Parent Interest to 1 year 1-2 years 2-5 years > 5 years Rate 2012 2011 2012 2011 Group $000’s $000’s $000’s $000’s $000’s $000’s $000’s $000’s $000’s $000’s

Assets Cash and cash equivalents 2.5% 3,685 - - - - 3,685 Bank balances 4,083 3,685 393 1,269 3,685 - - - - 3,685 Advances to joint venture 9,232 - 9,232 - Liabilities Trade receivables (net of impairment provision) 13,322 21,819 2,594 7,231 Bank Borrowings 5.5% 9,800 50,440 - - - 60,240 Taxation receivable 856 1,343 97 805 Other Loans 6.0% - 2,086 1,489 3,873 - 7,448 Prepayments and other receivables 4,190 8,886 2,810 7,408 Capitalised Lease obligations 7.2% - 13,371 21,492 - 34,863 31,683 35,733 15,126 16,713 9,800 65,897 22,981 3,873 - 102,551 Trade Receivable Analysis Interest Rate Derivative Contracts 5.82% - 10,000 5,111 13,030 13,000 41,141 Debtors past due 5,815 8,710 2,562 3,311 Impairment Provision (561) (384) (408) (134) The effective interest rate of group borrowings is 8.59% including the impact of the interest Debtors past due not impaired 5,254 8,326 2,154 3,177 rate swaps and line fees on facilities. Debtors current 8,068 13,493 440 4,054 Total Trade Debtors (note 18) As at 30 June 2011 Effective Floating Fixed up Fixed up Fixed up Fixed TOTAL 13,322 21,819 2,594 7,231 Interest to 1 year 1-2 years 2-5 years > 5 years Parent Rate $000’s $000’s $000’s $000’s $000’s $000’s The Group has numerous credit terms for various customers. The terms vary from cash, monthly and greater depending on the Assets service and goods provided and the customer relationship. Collateral is not normally required. All trade receivables are individually reviewed regularly for impairment as part of normal operating procedures and where appropriate provision is made. Trade Advances to subsidiary companies 5.92% 31,784 - - - - 31,784 receivables less than three months overdue are not considered impaired. Overdue amounts that have not been provided for relate Cash and cash equivalents 2.5% 1,269 - - - - 1,269 to customers that have a reliable trading credit history and no recent history of default. 33,053 - - - - 33,053 Other receivables relate to normal business practice. Liabilities Bank Borrowings 6.2% 9,800 24,000 - - - 33,800 9,800 24,000 - - - 33,800 Interest Rate Derivative Contracts 5.82% - 10,000 5,111 13,030 13,000 41,141 47 Notes to the financial statements Notes to the financial statements 48 For the year ended 30 June 2012 For the year ended 30 June 2012

Liquidity Risk Seasonality Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of funding through Due to the seasonal nature of the businesses the risk profile at year end is not representative of all risks faced during the year an adequate amount of credit facilities and the ability to close out market positions. Due to the dynamic nature of the underlying Seasonality causes fluctuations in the size of borrowings and debtors. businesses, Group Treasury aims to maintain flexibility in funding by keeping credit lines available. The table below analyses the Group’s financial liabilities into relevant maturity groupings based on the remaining period at the Fair Values reporting date to the contractual maturity date. The amounts disclosed are the contractual undiscounted cash flows. The carrying amount of financial assets and financial liabilities recorded in the financial statements approximates their fair values. Estimation of Fair Values Up to Between Between Greater TOTAL Carrying The fair values of financial assets and financial liabilities are determined as follows: As at 30 June 2012 1 year 1-2 years 2-5 years than value 5 years • The fair value of financial assets and liabilities with standard terms and conditions and traded on active liquid markets are $000’s $000’s $000’s $000’s $000’s $000’s determined with reference to quoted market prices. Group • The fair value of other financial assets and liabilities are calculated using market-quoted rates based on discounted cash flow analysis. Liabilities • The fair value of derivative financial instruments are calculated using quoted prices. Where such prices are not available, Trade and other payables 19,794 - - - 19,794 19,794 use is made of discounted cash flow analysis using the applicable yield curve or available forward price data for the duration Bank Borrowings - - 68,082 - 68,082 68,082 of the instruments. Vendor Loans 1,821 4,110 - - 5,931 5,524 Interest rate forward price curve Published market swap rates Capitalised Lease obligations 23,148 3,970 - - 27,118 26,019 Foreign exchange forward prices Published spot foreign exchange rates and interest rate Interest rate derivative contracts * 864 775 1,704 149 3,492 2,660 differentials 45,627 8,855 69,786 149 124,417 122,079 Discount rate for valuing interest rate derivatives The discount rates used to value interest rate derivatives arepublished market interest rates as applicable to the Parent remaining life of the instrument Liabilities Discount rate for valuing forward foreign The discount rates used to value interest rate derivatives Trade and Other Payables 6,260 - - - 6,260 6,260 exchange contracts arepublished market interest rates as applicable to the Bank Borrowings - - 42,800 - 42,800 42,800 remaining life of the instrument Interest rate derivative contracts * 864 775 1,704 149 3,492 2,660 The selection of variables requires significant judgement and therefore there is a range of reasonably possible assumptions 7,124 775 44,504 149 52,552 51,720 in respect of these variables that could be used in estimating the fair value of these derivatives. Maximum use is made of observable market data when selecting variables and developing assumptions for the valuation techniques. See earlier in this * The amounts expected to be payable in relation to the interest rate swaps have been estimated using forward interest rates note for sensitivity analysis. applicable at the reporting date. Effective 1 July 2009 the Group adopted the amendment to NZ IFRS 7 for financial instruments that are measured in the Up to Between Between Greater TOTAL Carrying statement of financial position at fair value. This requires disclosure of fair value measurements by level of the following fair value 1 year 1-2 years 2-5 years than value measurement hierarchy: As at 30 June 2011 5 years • Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1) $000’s $000’s $000’s $000’s $000’s $000’s • Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as Group prices) or indirectly (that is, derived from prices) (level 2) Liabilities • Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3). Trade and other payables 31,156 - - - 31,156 31,156 The Group and Parent only have derivative contracts that are classified as level 2 in the fair value measurement hierarchy. Bank Borrowings - 19,500 40,740 - 60,240 60,240 The fair values are disclosed in note 14. Vendor Loans 2,470 1,766 3,989 - 8,225 7,448 Capitalised Lease obligations 15,407 22,209 - - 37,616 34,863 14. Derivative Financial Instruments Interest rate derivative contracts * 839 698 1,655 513 3,705 1,479 49,872 44,173 46,384 513 140,942 135,186 Group 2012 2011 Parent Liabilities $000’s $000’s $000’s $000’s Assets Liabilities Assets Liabilities Trade and Other Payables 15,749 - - - 15,749 15,749 Bank Borrowings - 19,500 14,300 - 33,800 33,800 Interest rate derivative contracts - cash flow hedges - 2,660 - 1,479 Interest rate derivative contracts * 839 698 1,655 513 3,705 1,479 Total - 2,660 - 1,479 16,588 20,198 15,955 513 53,254 51,028 Less: non-current portion * The amounts expected to be payable in relation to the interest rate swaps have been estimated using forward interest rates applicable at the reporting date. Interest rate derivative contracts - cash flow hedges - 2,567 - 1,419 - 2,567 - 1,419 Capital Risk Management Current portion - 93 - 60 The Group’s objectives when managing capital are to safeguard the group’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and maintain an optimal capital structure to reduce the cost of capital. The Group considers capital to be share capital and interest bearing debt. To maintain or alter the capital structure Hedging derivates are classified as a non-current asset or liability if the remaining maturity of the hedged item is more than 12 the Group has the ability to review the amount of dividends paid to shareholders, return capital to shareholders, issue new months and as a current asset or liability, if the maturity of the hedged item is less than 12 months shares, reduce or increase debt or sell assets.

There are a number of externally imposed bank covenants required as part of seasonal and term debt facilities. These covenants The ineffective portion recognised in the profit or loss that arises from cash flow hedges in 2012 amount to $Nil are calculated monthly and reported to banks quarterly. (2011: $70,000 gain). The most significant covenants relating to capital management are Net Interest Bearing Debt to EBITDA ratio and an equity to total assets ratio (net of intangible assets). Interest rate swaps There have been no breaches or events of review for the current or prior period. The notional principal amounts of the outstanding interest rate swap contracts at 30 June 2012 were $40,971,000 (2011: $46,141,000 ).

At 30 June 2012, the fixed interest rates vary from 3.65% to 6.69% (2011: 5.06% to 6.69%). 49 Notes to the financial statements Notes to the financial statements 50 For the year ended 30 June 2012 For the year ended 30 June 2012

15. Property, plant and equipment Motorhomes Coaches Land Other Capital Total and motor and plant & work in Motorhomes Coaches Land Other Capital Total Year ended 30 June 2012 vehicles buildings equipment progress and motor and plant & work in $000’s $000’s $000’s $000’s $000’s $000’s vehicles buildings equipment progress Opening net book amount 72,618 1,427 14,553 5,801 1,072 95,471 $000’s $000’s $000’s $000’s $000’s $000’s Group Reversal of impairment of assets 175 - - - - 175 Transfer to assets held for sale - - (7,105) - - (7,105) Year ended 30 June 2011 Additions 22,280 1,205 7,846 1,760 318 33,409 Opening net book amount 133,463 4,235 5,585 6,002 23,913 173,198 Transferred to intangibles - - - (1,718) - (1,718) Exchange differences 3,749 - - - - 3,749 Transferred to inventory (10,416) (477) - - - (10,893) Transfer to assets held for sale - - Disposals - - (249) (1,881) - (2,130) Impairment of assets (1,727) - - - - (1,727) Depreciation charge (13,293) (711) (1,149) (867) - (16,020) Additions 133,761 197 11,369 3,076 (19,555) 128,848 Closing net book amount 71,364 1,444 13,896 3,095 1,390 91,189 Transferred to intangibles - - - (222) - (222) As at 30 June 2012 Transferred to inventory (40,269) (667) 9 - - (40,927) Disposals - (1,091) (82) (119) - (1,292) Cost 130,879 6,563 28,063 19,314 1,390 186,209 Accumulated depreciation and Depreciation charge (36,829) (1,139) (1,445) (1,690) - (41,103) (59,515) (5,119) (14,167) (16,219) - (95,020) impairment Closing net book amount 192,148 1,535 15,436 7,047 4,358 220,524 Net book amount 71,364 1,444 13,896 3,095 1,390 91,189 As at 30 June 2011 Cost 300,173 7,563 24,280 23,548 4,358 359,922 Accumulated depreciation and impairment (108,025) (6,028) (8,844) (16,501) - (139,398) An impairment charge was booked in the year ended 30 June 2011 against certain motorhomes which were affected by various build issues in the 2007 and 2008 years by Ci Munro and reflects the recoverable amount of assets in their current condition. Net book amount 192,148 1,535 15,436 7,047 4,358 220,524 During the year ended 30 June 2012 units have been repaired and the impairment charge reversed as the units have been completed. An impairment provision remains at the 30 June 2012 for units yet to be repaired. These are expected to be Year ended 30 June 2012 completed in the period to 31 December 2012.

Opening net book amount 192,148 1,535 15,436 7,047 4,358 220,524 Depreciation expense of $42,841k (2011: $ 41,103k) has been charged in other operating expenses Exchange differences 556 - - - - 556 Capital Work in Progress of $5,689k (2011: $4,358k) has been included in the above closing net book amount. Reversal of impairment of assets 2,494 - - - - 2,494 Lease rentals amounting to $5,504k (2011: $ 7,342k ) relating to the lease of equipment, and Transfer to assets held for sale - - (7,105) - - (7,105) property are included in the income statement. Additions 69,161 1,211 8,945 2,148 1,331 82,796 Transferred to intangibles - - - (1,744) - (1,744) Transferred to inventory (45,671) (1,640) - - - (47,311) 16. Leased Assets in Property, Plant & Equipment Disposals - - (249) (2,005) - (2,254) Depreciation charge (39,414) (774) (1,383) (1,270) - (42,841) 2012 2011 179,274 332 15,644 4,176 5,689 205,115 Closing net book amount $000’s $000’s As at 30 June 2012 Motorhomes include the following amounts where the Group is a lessee under a finance lease: Cost 323,663 7,134 32,976 23,691 5,689 393,153 Accumulated depreciation (144,389) (6,802) (17,332) (19,515) - (188,038) and impairment Cost 38,746 41,311 Net book amount 179,274 332 15,644 4,176 5,689 205,115 Accumulated depreciation (9,212) (7,012) Net book amount 29,534 34,299 Parent

Year ended 30 June 2011 Finance leases are taken out under a non-renewable contract with a 50% balloon on the final payment. Opening net book amount 62,036 2,980 5,188 5,254 13,205 88,663 Reversal of impairment of assets 1,119 - - - - 1,119 Additions 25,240 191 10,663 2,030 (12,133) 25,991 Transferred to intangibles - - - (124) - (124) Transferred to inventory (4,072) (667) 9 - - (4,730) Disposals - - (82) (73) - (155) Depreciation charge (11,705) (1,077) (1,225) (1,286) - (15,293) Closing net book amount 72,618 1,427 14,553 5,801 1,072 95,471

As at 30 June 2011 Cost 119,016 5,834 20,217 17,553 1,072 163,692 Accumulated depreciation (46,398) (4,407) (5,664) (11,752) - (68,221) and impairment Net book amount 72,618 1,427 14,553 5,801 1,072 95,471 51 Notes to the financial statements Notes to the financial statements 52 For the year ended 30 June 2012 For the year ended 30 June 2012

17. Intangible assets Brand Value Goodwill Trademarks Other Total Amortisation of fixed term licences is calculated using the straight line method over the life of the various licences. Acquired & Licences Intangibles Tourism Holdings Limited has leased the Waitomo Glowworm Caves until 2027. The other caves have licences to operate with terms expiring in 2033 and 2039. $000’s $000’s $000’s $000’s $000’s Group Software development costs recognised as intangible assets are amortised over their estimated useful lives of three to five years. Year ended 30 June 2011 NZ IAS 38 Intangible Assets prohibits amortisation of an intangible asset with an indefinite useful life. Instead such assets are tested Opening net book amount - 28,227 12,489 3,764 44,480 for impairment under NZ IAS 36 Impairment of Assets by comparing the recoverable amount with the carrying amount annually, and Exchange differences - 1,150 - - 1,150 whenever there is an indication that the intangible asset may be impaired. Additions - 5,822 - 274 6,096 Goodwill is considered to have an indefinite useful life. Based on an analysis of all the relevant factors, there is no foreseeable limit Disposal - - - (60) (60) to the period over which the asset is expected to generate net cash flows for the entity Impairment of goodwill - (26,138) - - (26,138) The brand value acquired relates to the Road Bear brand of Rentals US. Amortisation charge - - (623) (1,395) (2,018) The table below details the cash generating units goodwill is attributable to. Closing net book amount - 9,061 11,866 2,583 23,510 2012 As at 30 June 2011 Cost - 55,359 22,591 11,714 89,664 Rentals Tourism Group Total Accumulated amortisation and impairment - (46,298) (10,725) (9,131) (66,154) $000’s $000’s $000’s Net book amount - 9,061 11,866 2,583 23,510 New Zealand - 3,001 3,001 United States of America 5,340 - 5,340 Year ended 30 June 2012 5,340 3,001 8,341 Opening net book amount - 9,061 11,866 2,583 23,510 Exchange differences - - - (2) (2) 2011 Additions - - - 1,780 1,780 Rentals Tourism Group Total Transfers 720 (720) - - - $000’s $000’s $000’s Disposal - - (14) (63) (77) New Zealand - 3,001 3,001 Impairment of goodwill - - - - - United States of America 6,060 - 6,060 Amortisation charge - - (616) (930) (1,546) 6,060 3,001 9,061 Closing net book amount 720 8,341 11,236 3,368 23,665 The recoverable amount of a cash generating unit is determined on value-in-use calculations. These calculations use free cash flow As at 30 June 2012 projections based on financial budgets approved by management covering a five year period plus a terminal value calculation. These annual free cash flows are then discounted by a country specific pre-tax discount rate to arrive at a net present value Cost 720 54,639 22,577 13,429 91,365 (or enterprise value) which is compared to the carrying book value. Accumulated amortisation and impairment - (46,298) (11,341) (10,061) (67,700) In addition, carrying values are also tested using alternative valuation metrics, in particular EBIT multiples for similar industry groupings. Net book amount 720 8,341 11,236 3,368 23,665 Key assumptions used for value-in-use calculations:

Parent 2012 2011 Year ended 30 June 2011 Rentals Tourism Group Rentals Tourism Group Opening net book amount - 7,453 3,355 3,464 14,272 United States United States New Zealand New Zealand Additions - - - 151 151 of America of America Disposal - - - (60) (60) Growth rate (1) 2% - 10%p.a. 0% - 2%p.a. 0% - 20%p.a. 0% - 5%p.a. Impairment of goodwill - (4,452) - - (4,452) Terminal Growth rate 2.0% 2.0% 2.0% 2.0% Amortisation charge - - (145) (1,367) (1,512) Discount rate (2) 15.2% 15.7% 16.7% 15.7% Closing net book amount - 3,001 3,210 2,188 8,399

As at 30 June 2011 (1) Weighted average passenger or visitor growth rates used to extrapolate cash flows. Cost - 13,057 4,121 10,433 27,611 (2) Pre-tax discount rate applied to the cash flow projections Accumulated amortisation and impairment - (10,056) (911) (8,245) (19,212) The divisional models used by Tourism Holdings Limited to generate the free cash flow projections incorporate the expected - 3,001 3,210 2,188 8,399 Net book amount growth rates from markets the businesses operate in which are compared to Tourism Forecasting Council (NZ) and United States Department of Commerce Office of Travel and Tourism Industries forecasts for reasonableness. Capital expenditure and disposal Year ended 30 June 2012 proceeds are projected forward based on current build or purchase costs, realisable sale values and expected fleet rotation by vehicle type (for the rentals operations). Costs and revenues are inflated by an expected inflation rate of 3% unless additional Opening net book amount - 3,001 3,210 2,188 8,399 specific information is known. Additions - - - 1,757 1,757 The 2011 Rentals New Zealand and Rentals Australia goodwill was fully impaired. Disposal - - (14) (63) (77) If the following changes in key assumptions are made with other variables held constant the recoverable amount of goodwill Impairment of goodwill - - - - - in the Tourism Group would be equal to the carrying amount at 30 June 2012. Amortisation charge - - (139) (869) (1,008) - passenger growth rate per annum - 0.5% Closing net book amount - 3,001 3,057 3,013 9,071 - terminal growth rate - 25.0% - discount rate 23% As at 30 June 2012

Cost - 13,057 4,107 12,127 29,291 Accumulated amortisation and impairment - (10,056) (1,050) (9,114) (20,220) Net book amount - 3,001 3,057 3,013 9,071 53 Notes to the financial statements Notes to the financial statements 54 For the year ended 30 June 2012 For the year ended 30 June 2012

18. Trade and other receivables 21. Investments Group Parent Group Parent 2012 2011 2012 2011 $000’s $000’s $000’s $000’s 2012 2011 2012 2011 $000’s $000’s $000’s $000’s Subsidiary companies shares - - 38,484 38,484 Trade receivables 13,883 22,203 3,002 7,365 Less provision for impairment of receivables (561) (384) (408) (134) The principal activities of the Parent company and trading subsidiaries are motorhome rental and manufacturing and attractions. All subsidiaries are 100% owned and have 30 June balance dates except JJ Motorcars Inc which has a 31 December Trade receivables - net 13,322 21,819 2,594 7,231 balance date to facilitate US tax legislation compliance. Material subsidiary companies included in the Group Financial Prepayments 3,257 3,372 1,960 1,956 Statements at 30 June 2012 are: Other receivables 933 5,514 850 5,452 Country of incorporation: Total Trade and other receivables 17,512 30,705 5,404 14,639 thl Group Australia Pty Limited Australia Tourism Holdings Australia Pty Limited Australia Provision for impairment of receivables Waitomo Caves Limited New Zealand Opening Balance 384 317 134 139 JJ Motorcars Inc United States of America Increase / (Decrease) in provision for impairment of receivables 177 67 274 (5) Closing Balance 561 384 408 134 22. Cash and cash equivalents Group Parent

2012 2011 2012 2011 Trade debtors written off directly to operating expenses (note 4) - 111 - 33 $000’s $000’s $000’s $000’s

There is no concentration of credit risk with respect to trade receivables, as the Group has a large number of customers, Cash at bank and in hand 4,083 3,685 393 1,269 internationally dispersed. 4,083 3,685 393 1,269 The Group has recognised an increase in the provision of $177k (2011: $67k increase ) for the impairment of its trade receivables which has been included in other operating expenses. The Group has written off to other operating expenses $Nil (2011: $111k) of balances of receivables during the year ended 30 June 2012. 23. Other Reserves Group Parent 2012 2011 2012 2011 Note $000’s $000’s $000’s $000’s 19. Inventories Group Parent 2012 2011 2012 2011 Foreign Currency Translation Reserve $000’s $000’s $000’s $000’s Balance at beginning of year 8,130 4,615 - - Currency translation differences (620) 3,515 - - Raw materials 1,512 6,026 371 6,026 7,510 8,130 - - Work in progress 3,137 13,908 - 13,908 Employee Share Option Reserve Rental assets for sale 18,569 14,214 7,706 2,972 Balance at beginning of year 989 811 989 811 Finished goods 2,987 4,718 1,767 2,274 Transfer to share capital Provision for obsolescence - (220) - (220) Fair value movements charged to the income 165 178 165 178 statement 26,205 38,646 9,844 24,960 1,154 989 1,154 989

Total Other Reserves 8,664 9,119 1,154 989 20. Assets held for sale Group Parent 2012 2011 2012 2011 Foreign Currency Translation Reserve: $000’s $000’s $000’s $000’s Exchange differences arising on the translation of foreign operations are taken to the foreign currency translation reserve. When any net investment is disposed of the related component of the reserve is recognised in profit and loss as part of the Land and buildings 8,419 1,314 8,419 1,314 gain or loss on disposal. 8,419 1,314 8,419 1,314 Employee Share Option Reserve: The employee share option reserve is used to recognise the accumulated value of options granted which have been recognised in the Income Statement. As a result of the Group entering into the joint venture RVMG, the property held at 32 Kaimiro St Hamilton is held for sale at 30 June 2012. The two properties at 155 Beach Road Auckland and 32 Kaimiro St Hamilton are surplus to requirements for the operation of the business and are being actively marketed and are available for sale at 30 June 2012. The assets held for sale 24. Cash Flow Hedge reserve Group Parent are held in Group Support Services. 2012 2011 2012 2011 $000’s $000’s $000’s $000’s

Balance at beginning of year (1,065) (695) (1,065) (695) Fair value gains/(losses) (1,181) (494) (1,181) (494) Tax on fair value gains/(losses) 331 124 331 124 (1,915) (1,065) (1,915) (1,065)

The cash flow hedge reserve is used to record gains or losses on hedging instruments that are recognised directly in equity. Amounts are recognised in profit and loss when the associated hedged transaction affects profit and loss. 55 Notes to the financial statements Notes to the financial statements 56 For the year ended 30 June 2012 For the year ended 30 June 2012

25. Retained Earnings Group Parent Movements in the number of redeemable shares outstanding and their related weighted average exercise prices are as follows:

2012 2011 2012 2011 $000’s $000’s $000’s $000’s 2012 2011 Average Redeemable Average Redeemable Balance at beginning of year 3,027 32,543 5,502 11,932 Exercise Shares Exercise Shares Profit/(loss) for the year 4,317 (27,344) 288 (4,258) Price Price Dividends on ordinary shares (1,866) (2,172) (1,866) (2,172) At 1 July 1.13 4,220,000 1.03 4,420,000 5,478 3,027 3,924 5,502 Granted 0.62 2,650,000 0.95 200,000 Forfeited (0.62) (400,000) (1.05) (400,000) The opening balance as at 1 July 2010 of retained earnings for the Group have been restated due to the identification of a journal recorded Exercised on the initial adoption of NZ IFRS on 1 July 2006 to recognise revenue in advance that was not reversed in the Group accounts in the 2007 year. Expired The impact of the restatement is to reduce the Group’s Retained Earnings opening balance as at 1 July 2010 by $1,143k and to increase At 30 June 0.98 6,470,000 1.13 4,220,000 the Group’s revenue in advance as at 1 July 2010 by $1,143k. Consequently the impact of this adjustment to the Group’s opening retained earnings as at 1 July 2010 is reflected in the comparative balance sheet at 30 June 2011 resulting in a reduction to retained earnings as at 30 Out of the 6,470,000 redeemable shares outstanding at year end (2011 4,220,000) 2,486,667 redeemable shares were convertable June 2011 by $1,143k and an increase in revenue in advance as at 30 June 2011 by $1,143k. (2011: 1,513,333), nil redeemable shares were converted to ordinary shares in the year to June 2012 which resulted in nil ordinary The adjustment has no impact on the reported profit of the Group or the Parent for the years ended 30 June 2011 and 2012. shares being issued (2011: Nil) at a weighted average price of $nil per share (2011: Nil). Redeemable shares outstanding at year end have the following expiry dates and exercise prices

Parent & Group Redeemable Shares 26. Share Capital 2012 2011 2012 2011 $000’s $000’s Expiry Date Exercise Price

Ordinary shares September 2013 1.90 1,020,000 1,020,000 Opening balance 143,798 143,798 October 2014 2.34 200,000 200,000 Closing balance 143,798 143,798 June 2015 0.55 1,500,000 1,700,000 October 2015 0.82 200,000 200,000 The total authorised number of ordinary shares is 98,180,723 shares (2011: 98,180,723). The shares have no par value. May 2016 1.09 800,000 900,000 All ordinary shares are issued and fully paid. All ordinary shares rank equally with one vote attached to each fully paid ordinary share. December 2016 0.92 200,000 200,000 There are 6,470,000 redeemable ordinary shares on issue (2011: 4,220,000). If these convert to ordinary shares per the terms outlined in note September 2017 0.73 900,000 27, total shares on issue will be 104,650,723. (2011: 102,400,723). March 2018 0.77 1,650,000 In September 2011 1,000,000 redeemable shares were issued, in January 2012 400,000 redeemable shares were cancelled and in March 2012 6,470,000 4,220,000 1,650,000 redeemable shares were issued.

The redeemable shares are valued at $1,028k (2011: $812k) which is being amortised over the life of the share trading rights. 27. Share based Payments The 2012 expense of $165k (2011: $178k) will accumulate in the executive share scheme reserve. In September 2006 a long term share scheme incentive was introduced for the Chief Executive and other senior executives. 2.52 million redeemable shares were issued at the then current share price of $1.90 and they have been paid up to 1 cent. In arriving at the value of the share trading rights under the Binomial Option Pricing Model the following inputs have been used: Two additional senior executives were added to the incentive scheme in November 2007 and an additional 0.4 million redeemable shares were issued at the then current share price of $2.34 and were paid up to 1 cent. The shares are held in trust for the executives and will be able to be paid up by them after a minimum of three years 2012 2011 2010 2009 2008 2007 at a rate of one third of the shares each year.

As a result of executives leaving the business 1.6 million redeemable shares issued under the 2006 scheme were forfeited during the year to $0.60 and $0.90 and Issue Price $0.75 $0.49 $2.34 $1.90 30 June 2010 and 0.1m redeemable shares were forfeited during the year to 30 June 2011. $0.64 $0.70 In the 2009 financial year a new long term share incentive scheme was introduced for the Chief Executive and other senior executives. $0.73 and $1.09 and Exercise Price of the share transfer rights $0.92 $0.55 $2.33 $1.89 This was based on the 2006 scheme but added in a cost of equity adjustment of 13.25% per annum for two years. $0.77 $0.82 The shares are held in trust for the executives and will be able to be paid up by them after a minimum of two years plus at a rate of one third of the shares each year. plus plus plus (Note price is issue price less 1 cent paid up) 13.25% and The cost of equity adjustment was updated to 12.50% for the 2012 incentive scheme issue. 13.25%pa 13.25%pa 13.25%pa In June 2009 1.9 million redeemable shares were issued to the Chief Executive and five senior executives, 12.50%pa they were issued at the then current share price of 49 cents and were paid up to 1 cent. Forecast dividend yield over the life of the 3% and 6% 3.0% 3.0% 3.0% 6.32% 6.32% In October 2009 0.2 million redeemable shares were issued to a new executive at the then current share price of 0.70 cents and were paid up transfer rights to 1 cent. Risk free rate of interest over the exercise period 4.68% and 4.14%- 6.01%- 6.01%- 5.15% 5.15% In May 2010 1.0 million redeemable shares were issued to the Chief Executive and six senior executives they were issued at the then current of the share transfer rights 3.89% 4.63% 6.15% 6.15% share price of 90 cents and were paid up to 1 cent. Volatility of Tourism Holdings Limited share price 35% and As a result of an executive leaving the business 0.3 million redeemable shares issued under the 2009 scheme were forfeited during the year 35% 35% 25% 25% 25% returns mid point 28% to 30 June 2011. In December 2010 0.2 million redeemable shares were issued to a new executive at the then current share price of 0.75 cents and were paid up to 1 cent. In September 2011 1.0 million redeemable shares were issued to the Chief Executive and six senior executives at the then current share price of 0.60 cents and were paid up to 1 cent. In March 2012 1.65 million redeemable shares were issued to the Chief Executive and five senior executives at the then current share price of 0.64 cents and were paid up to 1 cent. As a result of an executive leaving the business 0.4 million redeemable shares issued under the 2009 scheme were forfeited during the year to 30 June 2012. The shares carry no entitlement to dividend other than the amount to which they are paid up. The charge to the profit and loss and increase in the employee share option reserve represents the share trading rights of the redeemable shares when issued amortised over the life of the scheme. 57 Notes to the financial statements Notes to the financial statements 58 For the year ended 30 June 2012 For the year ended 30 June 2012

Group Parent Capitalised finance lease liabilities - minimum lease payments: 2012 2011 $000’s $000’s 28. Trade and other payables 2012 2011 2012 2011 $000’s $000’s $000’s $000’s No later than 1 year 23,148 15,407 Trade payables 4,625 12,313 1,033 7,829 Later than 1 year and no later than 5 years 3,970 22,209 Accrued expenses and other payables 15,169 18,843 5,227 7,920 27,118 37,616 19,794 31,156 6,260 15,749 Future finance charges on finance leases (1,099) (2,753) Present value of finance lease liabilities 26,019 34,863

29. Provisions for other liabilities and charges Group Parent An Australian subsidiary has commercial hire purchase loans secured over its campervan fleet. These loans are repayable over a 2012 2011 2012 2011 $000’s $000’s $000’s $000’s one to two year periods. Interest rates applicable at 30 June 2012 on the bank term loans and the Australian capitalised lease obligations ranged from 2.85% to 7.38%p.a. (2011: 2.85% to 7.38%p.a.). Warranty provision 167 344 167 344 Other - - - - The Group has other loans repayable to the vendors of JJ Motorcars Inc (trading as Road Bear) that Tourism Holdings Limited acquired on 31 December 2010. These loans are repayable over a 3 year period from that date at a fixed interest rate of 6%. These 167 344 167 344 loans are secured by way of liens over specific Road Bear motorhome fleet. The guaranteeing group consisting of Tourism Holdings Limited and all New Zealand, Australian and United States 100% owned The provision relates to warranties provided in respect of repairs to third party motorhomes which are expected to be settled subsidiaries had, at balance date, a working capital and a three year multi-option facility with Westpac Banking Corporation, within 12 months. Westpac New Zealand Limited and ANZ Banking Group (New Zealand) Limited and has provided a composite first ranking debenture over the assets and undertakings of the Group in New Zealand and in Australia. Provision for other liabilities and charges The facilities are split into Term Facilities and Working Capital Facilities with annual review and subject to covenant compliance

Opening Balance 344 272 344 272 extended annually. The renewal of the facilities occurred on 29 June 2012. (Decrease) / increase in provision for (177) 72 (177) 72 other liabilities and charges Current expiry dates are: Working Capital Facilities 6th October 2014 Closing Balance 167 344 167 344 Term Facilities 6th October 2015

The facilities cannot be called for repayment by the banks at a date earlier than the facilities expiry date above unless there is a breach of the bank covenants. There have been no breaches of bank covenants during the current or prior period. 30. Borrowings Group Parent The carrying amounts of the Group’s borrowings are denominated in the following currencies: 2012 2011 2012 2011 $000’s $000’s $000’s $000’s 2012 2011 Non current NZ$000’s NZ$000’s Bank borrowings 68,082 60,240 42,800 33,800 Other Loans 3,990 5,362 - - New Zealand dollar 42,800 33,800 Capitalised lease obligations 3,860 21,492 - - Australian dollar 36,879 47,004 75,932 87,094 42,800 33,800 United States American dollar 19,946 21,747 Current 99,625 102,551 Other Loans 1,534 2,086 - - Capitalised lease obligations 22,159 13,371 - - 2012 2011 23,693 15,457 - - $000’s $000’s The Group has the following undrawn borrowing facilities: Total borrowings 99,625 102,551 42,800 33,800 Floating rate: Maturity of non current portion - Expiring within one year - - Bank loans - Expiring beyond one year 16,700 24,304 One to two years - 19,500 - 19,500 Fixed rate: Two to five years 68,082 40,740 42,800 14,300 - Expiring within one year - - 68,082 60,240 42,800 33,800 16,700 24,304 Other Loans One to two years 3,990 1,489 - - Two to five years - 3,873 - - No borrowing costs were capitalised in 2012 (2011 nil). 3,990 5,362 - -

Capitalised finance lease obligations One to two years 3,860 21,492 - - Two to five years - - - - 3,860 21,492 - - 59 Notes to the financial statements Notes to the financial statements 60 For the year ended 30 June 2012 For the year ended 30 June 2012

31. Deferred income tax 32. Imputation Credit Account Group Parent 2012 2011 2012 2011 Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against $000’s $000’s $000’s $000’s current liabilities and when the deferred income tax relate to the same fiscal authority.

Opening balance 6,053 7,260 5,363 6,563 The offset amounts are as follows: Group Parent Plus: Income tax paid Prior period adjustment - (464) - (457) 2012 2011 2012 2011 $000’s $000’s $000’s $000’s Deferred tax liabilities: 6,053 6,796 5,363 6,106 - Deferred tax liability to be met after more than 12 months 2,397 1,971 236 (846) Less: Credits attached to dividends (745) (743) (745) (743) - Deferred tax liability to be met within 12 months 2,131 1,919 714 1,823 Refunds received (662) - (662) - 4,528 3,890 950 977 Refunds receivable (97) - (97) - Closing balance - imputation credits available for use in 4,549 6,053 3,859 5,363 subsequent periods The deferred tax provision was reduced due to the reduction in the company tax rate in New Zealand from 30% to 28% effective from 2011. In addition deferred tax was increased due to providing for deferred tax on buildings as a flow on from the impact of NZ IAS 12 post the New Zealand Governments’ budget changes to building depreciation deductibility announced in May 2010 effective from 2011. 33. Contingencies The Group has contingent liabilities in respect of bank and other guarantees and other matters arising in the ordinary course of business. It is not anticipated that any material liabilities will arise from contingent liabilities. The gross movement on the deferred income tax account Group Parent is as follows: 2012 2011 2012 2011 Group Parent $000’s $000’s $000’s $000’s 2012 2011 2012 2011 $000’s $000’s $000’s $000’s Beginning of the year 3,890 4,511 977 664 Income statement charge 1,323 710 (888) 92 Guarantees given in relation to borrowings of - - 51,301 61,303 Deferred Tax on Acquisition - 314 - - subsidiary companies Prior Period Adjustment (15) 61 (15) 114 Performance and Guarantee bonds 702 702 702 702 Deferred Tax impact of NZ Governments’ - 67 - 67 702 702 52,003 62,005 budget changes to building depreciation rates Impact of change in tax rate - 194 - 189 Tourism Holdings Limited has a contingent liability of up to $702k in respect of the sale of a business in a prior year. Tourism Tax losses (339) (1,811) 1,207 7 Holdings Limited considers that the likelihood of making a payment under this obligation is low. Tax charged to equity (331) (156) (331) (156) End of the year 4,528 3,890 950 977 34. Commitments

Comprised of: Capital commitments Future tax benefit (5,236) (4,481) (1,927) (2,797) Capital expenditure contracted for at balance date but not yet incurred is as follows: Deferred tax liability 9,764 8,371 2,877 3,774 4,528 3,890 950 977 Group Parent

2012 2011 2012 2011 $000’s $000’s $000’s $000’s The balance comprises temporary differences Group Parent attributable to: 2012 2011 2012 2011 Property, plant and equipment 17,039 30,122 7,286 24,054 $000’s $000’s $000’s $000’s 17,039 30,122 7,286 24,054

Operating lease commitments - where a group company is the lessee Amounts recognised in income statement The Group leases various retail outlets, branches and offices under non-cancellable operating lease agreements. The leases Provisions (1,420) (2,514) (1,352) (1,552) have varying terms, escalation clauses and renewal rights. Property, plant and equipment 11,265 9,925 4,974 4,832 The Group also has short term leases for the fleet. There are no renewal requirements or Tax losses (5,236) (4,481) (1,927) (2,797) options to purchase in respect of the car rental fleet. Deferred Tax impact of NZ Governments’ - 908 - 908 The future aggregate minimum lease payments under non-cancellable operating leases are as follows: budget changes to building depreciation rates Other 664 466 - - Group Parent

2012 2011 2012 2011 Amounts recognised directly in equity $000’s $000’s $000’s $000’s Cash flow hedge reserve (745) (414) (745) (414) Net deferred tax liability 4,528 3,890 950 977 Within one year 6,449 5,678 1,968 2,451 One to five years 16,189 16,677 4,503 6,209 Deferred income tax assets are recognised for tax loss carry-forwards to the extent that the realisation of the related Beyond five years 19,112 9,902 11,706 4,799 tax benefit through the future taxable profits is probable. 41,750 32,257 18,177 13,459 61 Notes to the financial statements Notes to the financial statements 62 For the year ended 30 June 2012 For the year ended 30 June 2012

35. Related party transactions 2012 2011 $000’s $000’s All members of the Group are considered to be related parties of Tourism Holdings Limited including subsidiaries. ix) Loans from directors, key management or related parties

Loans from key management personnel 3,682 4,171 The following transactions were carried out with related parties: 2012 2011 $000’s $000’s Loan provided as part of the acquisition of JJ Motorcars Inc in the USA trading as Road Bear to fund fleet. The loan is repayable over 3 years at a fixed interest rate of 6%pa and is secured by way of liens over specific Road Bear i) Sales of goods and services motorhome fleet. Subsidiaries - - 2012 2011 ii) Purchases of goods and services $000’s $000’s Subsidiaries - - x) RVMG LP

Purchase of motorhomes from joint venture 2,145 - 2012 2011 $000’s $000’s Interest charged to joint venture 203 - iii) Bad debt write off of a subsidiary receivable Advance to joint venture 9,232 -

thl Oz Pty Limited 276 289 The amount outstanding is payable on demand at an interest rate of 7.91%.

2012 2011 2012 2011 $000’s $000’s $000’s $000’s iv) Key management compensation xi) Costs invoiced to a shareholder for partial takeover Sterling Grace Private Equity Limited 383 - Salaries and other short term employee benefits 2,614 2,222 Amount unpaid at balance date 252 - Share based payments benefits 165 178 Executive management do not receive any directors’ fees as directors of subsidiary companies. 2012 2011 $000’s $000’s 2012 2011 xii) Related party purchases $000’s $000’s v) Year end balances arising from sales/purchases of goods/services During the period 1 October 2011 to 21 March 2012 thl Australia purchased 1,352 - Advances to subsidiaries motorhomes and caravans from a related party Jayco Australia at ‘arms length’ thl Oz Pty Limited 11,422 11,391 on commercial terms and at market prices. Jayco is now no longer a related party. thl Group Australia Pty Limited and its subsidiaries 9,350 11,502 Waitomo Caves Limited 8,616 9,104 Waitomo Caves Holdings Limited 210 214 36. Events after the reporting period 29,598 32,211 A fully imputed dividend was declared after balance date at 2 cents per share payable on 26 October 2012. Advances from subsidiaries Newmans Holidays (UK) Limited - 427 Net advances to subsidiaries 29,598 31,784

Interest is charged at market rates on trading accounts between the Parent and Australian subsidiaries and all advances are repayable on demand. 2012 2011 $000’s $000’s Interest charged on the balances with related parties

thl Oz Pty Limited (Previously Oz Experience Pty Limited) 276 289 Tourism Holdings Australia Pty Limited 453 397 729 686

The effective interest rates on loans to related parties were as follows: 2012 2011

Loans to related parties 5.66% 5.92%

vi) Lease costs from subsidiaries 2012 2011 $000’s $000’s The Parent incurred lease costs as follows:

Waitomo Caves Limited 478 478

2012 2011 $000’s $000’s vii) Sales to subsidiaries

thl Group Australia Pty Limited and its subsidiaries 1,177 7,818

viii) Loans to directors and key management of the Company There were no loans during the current or previous year by the Group to Directors or key management.

63 Notes to the financial statements Notes to the financial statements 64 For the year ended 30 June 2012 For the year ended 30 June 2012

37. Business Combinations 38. Joint Venture - RV Manufacturing Group LP (RVMG)

On the 1 March 2012 the Group formed a 50% joint venture limited partnership business with Kea Manufacturing (New Zealand) No businesses were acquired during the year ended 30 June 2012 excluding a Joint Venture entered into on 1 March 2012. Limited, RVMG. The principal activity of RVMG is manufacturing of vehicles. RVMG operates in New Zealand. On the 31 December 2010, the group acquired 100% of the share capital of JJ Motorcars Inc, which trades as Road Bear RV, a motor home rental company based in the United States of America. As a result of this acquisition the group is expected to expand on these operations in the future in the USA. The following amounts represent the Group’s 50% share of the sales and results, and assets and liabilities of RVMG: The goodwill of USD$5m paid for the acquisition is attributable to the acquired operations that are already in place as a going concern rather than having to set up the operations from the beginning. $000’s $000’s The goodwill is expected to be deducted for income tax purposes over 15 years. Group Parent The following table summarises the consideration paid for Road Bear RV and the amounts of the assets and liabilities assumed recognised at the acquisition date. Income 5,603 5,603 Expenses (7,576) (7,576) Consideration Loss before income tax (1,973) (1,973) NZ$000’s USD$000’s As at 31 December 2010 Assets Cash 12,081 9,450 Non Current Assets 1,414 1,414 Vendor Loans 8,949 7,000 Current Assets 7,316 7,316 21,030 16,450 8,730 8,730

Total consideration transferred 21,030 16,450 Liabilities Non Current Liabilities 7,219 7,219 Current Liabilities 3,234 3,234 Acquisition-related costs (included in expenses in the statement of NZ$000’s comprehensive income for the period ended 30 June 2011) 10,453 10,453 937 Net Assets (1,723) (1,723)

Recognised amounts of identifiable assets acquired and liabilities assumed There are no contingent liabilities relating to the Group’s interest in RVMG, and no contingent liabilities in the venture itself. The Group’s total share of the contractual property lease commitment is $242k. Acquiree’s carrying value and finalised fair value The following table sets out the Parent’s and Group’s interest in RVMG:

NZ$000’s USD$000’s Group Parent $000’s $000’s Cash and cash equivalents 3,366 2,633 Other current assets 153 120 Investment in RVMG 250 250 Plant and equipment 119 93 Net assets contributed by way of advance 7,638 7,638 RV rental units 12,107 9,470 Cash advances 3,317 3,317 Revenue in advance and deposits held (224) (175) Total advances 10,955 10,955 Net deferred tax liability (313) (245) 15,208 11,896 Total identifiable net assets Share of loss before tax for the period: Brand 720 543 Recognised against the investment balance (250) (250) Goodwill 5,102 4,011 Recognised against the advances (1,723) (1,723) Total assets acquired 21,030 16,450 (1,973) (1,973) Net interest in RVMG at 30 June 2012 9,232 9,232

The fair value of the plant and equipment and RV rental units has been arrived at by taking the net book value of the assets held at 31 December 2010. The advances are payable on demand but directors do not expect repayment in the next 12 months. Interest is payable at a rate of 7.9% per annum. Deferred tax has been provided in relation to the fair value of the RV rental units. In the Parent, the share of loss recognised represents the impairment of the investment and the advances. No revenue or profits from the acquisition of Road Bear RV were recognised in the consolidated statement of comprehensive The impairment is recognised based on the Parent’s share of net assets in the joint venture. income for the period ended 31 December 2010. Earnings for the period from July 2010 to December 2010 are not stated as prior to thl ownership the business operated under a different tax classification whereby all income was attributable to the shareholder owners therefore comparatives are not meaningful. Revenue for the period January 2011 to June 2011 amounted to NZ$15,354k (US$12,454k) and the net loss after tax amounted to NZ$125k (US$68k) for the period.

In the year ended 30 June 2012 the provisional fair values allocated at the time of acquisition were finalised. This resulted in an amount of NZ$720k being identified as attributable to the acquired “Road Bear RV” brand. The amount was reclassified from goodwill in the year ended 30 June 2012. 651 Notes2012 Key to points the financial statements tourism holdings limited.Auditors’ annual report Report 2012 662 For the year ended 30 June 2012

39. Segment Note The chief operating decision maker (‘CODM’) has been identified as the executive team together with the Board of Directors. The CODM review the group’s internal reporting in order to assess performance and allocate resources. Management has determined the operating segments based on these reports. The CODM assess the performance of the operating segments based on a measure of operating profit (earnings before interest and tax). The measurement basis excludes the effects of operational expenditure or gains such as loss / gain on Independent Auditors’ Report disposal or impairments of property, plant and equipment, fair value changes in foreign currency financial assets / liabilities and costs of major to the shareholders of Tourism Holdings Limited business acquisitions. Interest income and expenditure are not included in the result for each operating segment that is reviewed by the CODM. As at 30 June 2012 the CODM considers the business from both a geographical and service / product perspective, the CODM considers the performance of business based on the rentals division in Australia, United States of America and New Zealand, as well as the Tourism Group Report on the Financial Statements segment in New Zealand. Group support costs are reported separately. We have audited the financial statements of Tourism Holdings Limited (“the Company”) on pages 27 to 65, which comprise the statements of financial position as at 30 June 2012, the income statements, statements of comprehensive income New Zealand Australia United States Group Discontinued Total and statements of changes in equity and statements of cash flows for the year then ended, and the notes to the financial 2012 Rentals Tourism Rentals Rentals Support statements that include a summary of significant accounting policies and other explanatory information for both the Services Group Company and the Group. The Group comprises the Company and the entities it controlled at 30 June 2012 or from time to $000’s $000’s $000’s $000’s $000’s $000’s $000’s time during the financial year. Sales of services 48,939 21,450 69,904 16,072 47 - 156,412 Sales of goods 7,601 - 17,638 18,311 - 9,636 53,186 Directors’ Responsibility for the Financial Statements The Directors are responsible for the preparation of these financialat $4.3m, statements up 117% in accordance from last with year’s generally loss accepted of Revenue from External customers 56,540 21,450 87,542 34,383 47 9,636 209,598 Reported Net Profit After Tax (NPAT) accounting$27.3m practice which in New included Zealand and a thatnon-cash give a true goodwill and fair view impairment of the matters of to $26.1m which they relate and for such Depreciation (14,129) (1,092) (23,028) (3,789) (392) (411) (42,841) internal controls as the Directors determine are necessary to enable the preparation of financial statements that are free Other Operating Costs (36,937) (16,514) (60,468) (24,910) (2,393) (9,521) (150,743) from material misstatement, whether due to fraud or error. Operating Profit / (Loss) Before Interest and Tax 5,474 3,844 4,046 5,684 (2,738) (296) 16,014 Interest Income 96 - 1,179 - 1,275 Auditors’ Responsibility at $16.3m, up 329% Interest Expense - - (3,827) (899) (3,542) - (8,268) Our responsibilityOperating is to expressEarnings an opinion Before on Interestthese financial & Taxation statements (EBIT) based on our audit. We conducted our audit Joint Venture Net Profit / (Loss) before tax - - - - (1,973) - (1,973) in accordanceon last with year’s International $3.8m Standards on Auditing (New Zealand) and International Standards on Auditing. These Operating Profit Creating / (Loss) before Tax positive 5,474 3,844 momentum 315 4,785 (7,074) in (296) 7,048 standards require that we comply with relevant ethical requirements and plan and perform the audit to obtain reasonable Taxation (1,533) (1,299) (278) (1,947) 2,243 83 (2,731) assurance about whether the financial statements are free from material misstatement. Operating“ Profit / (Loss) - After Interest and Tax 3,941 2,545 37 2,838 (4,831) (213) 4,317 An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial net debt reduced $3m to $96m at 30 June 2012 statements. The procedures selected depend on the auditors’ judgement, including the assessment of the risks of material Capital Expenditureearnings, strategic 24,531 390 25,372 positioning 24,041 8,462 - 82,796 misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditors Non Current Assets 75,685 29,555 88,102 32,647 2,791 - 228,780 consider the internal controls relevant to the Company and the Group’s preparation of financial statements that give Advance to Jointand Venture operational - -performance - - 9,232 - 9,232 a true andRoad fair view Bear of the, thl matters’s USA to motorhomewhich they relate, business in order to contributes design audit procedures $5.7m EBIT that arein itsappropriate in the Total Non Current Assets 75,685 29,555 88,102 32,647 12,023 - 238,012 circumstances,first fullbut notyear for thewithin purpose the ofgroup expressing an opinion on the effectiveness of the Company and the Group’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness Total Assets 88,747 31,544 116,253 37,231 21,312 - 295,087 ” of accounting estimates, as well as evaluating the overall presentation of the financial statements. Net Assets 81,230 29,642 92,464 29,618 18,613 - 251,567 We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Inter-segment transactions are entered into under normal commercial terms and conditions that would also be available to unrelated third Other thanRugby in our Worldcapacity asCup auditors contribution we have no ofrelationship approximately with, or interests $4.5m in, EBIT Tourism for Holdings New Zealand Limited or rentalsany of parties. The CODM does not distinguish between revenue from internal or external customers when measuring the performance of segments. its subsidiaries. All revenue is reported to the executive team on a basis consistent with that used in the income statement. Opinion New Zealand Australia United States Group Discontinued Total In our opinion,Formation the financial of the statements RV Manufacturing on pages 27 to 65:Group Limited Partnership in February 2012 2011 Rentals Tourism Rentals Rentals Support Group Services (i)to complyconsolidate with generally thl’s acceptedmotorhome accounting manufacturing practice in New in Zealand; Albany and with KEA Manufacturing $000’s $000’s $000’s $000’s $000’s $000’s $000’s (ii) comply with International Financial Reporting Standards; and Sales of services 46,385 21,864 72,224 4,468 78 - 145,019 (iii) give a true and fair view of the financial position of the Company and the Group as at 30 June 2012, and their Sales of goods 8,481 - 21,208 10,886 - 10,160 50,735 Acquisitionfinancial performance of the KEA and cashAustralia flows for licence, the year then brand ended. and forward book in Australia Revenue from External customers 54,866 21,864 93,432 15,354 78 10,160 195,754 Report onin OJunether Legal2012 and Regulatory Requirements Depreciation (13,278) (1,199) (23,873) (1,851) (462) (440) (41,103) We also report in accordance with Sections 16(1)(d) and 16(1)(e) of the Financial Reporting Act 1993. In relation to our audit Other Operating Costs (39,568) (16,735) (66,893) (13,225) (4,654) (9,237) (150,312) of the financial statements for the year ended 30 June 2012: Operating Profit / (Loss) Before Interest and Tax 2,020 3,930 2,666 278 (5,038) 483 4,339 (i)Post we hbalanceave obtained date all thethl information announced and explanationsthe proposed that we merger have required; of its Newand Zealand rentals Less Impairment of Goodwill (4,452) - (21,686) - - - (26,138) (ii) in our opinion, proper accounting records have been kept by the Company as far as appears from an (2,432) 3,930 (19,020) 278 (5,038) 483 (21,799) business with United Campervans and KEA Campers in a $69.5m transaction Operating Profit / (Loss) after Impairment of Goodwill examination of those records. Interest Income 8 1 142 - 695 - 846 Interest Expense - - (3,129) (511) (3,345) - (6,985) Restriction on Distribution or Use Operating Profit / (Loss) after Impairment and before Tax (2,424) 3,931 (22,007) (233) (7,688) 483 (27,938) This reportMighty is made brand solely to and the Company’sJackpot shareholders,Campervan as launched a body, in accordance with Section 205(1) of the Companies Taxation (600) (1,123) (1,088) 107 3,443 (145) 594 Act 1993. Our audit work has been undertaken so that we might state to the Company’s shareholders those matters which Operating Profit / (Loss) - After Interest and Tax (3,024) 2,808 (23,095) (126) (4,245) 338 (27,344) we are required to state to them in an auditors’ report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s shareholders, as a body, for Capital Expenditure 25,036 2,180 66,084 35,020 173 355 128,848 our audit work, for this report or for the opinions we have formed. Non Current Assets 76,584 31,014 101,628 29,359 3,713 1,736 244,034

Total Assets 92,188 32,597 134,037 32,090 5,934 22,881 319,727 Net Assets 71,504 30,438 109,405 27,101 5,231 11,270 254,949

Segment assets consist primarily of property, plant and equipment, intangible assets, inventories, receivables and operating cash. They exclude future income tax benefit, deferred taxation, investments and derivatives designated as hedges of borrowings as they are not allocated to segments. Net segment assets are total assets less segment non interest bearing liabilities and cash on hand. Chartered Accountants In 2012, impairment provisions against the carrying value of motorhomes of $2,319k were reversed in the Australian Rentals segment and $175k Auckland were reversed in the New Zealand Rentals segment. 27 August 2012 This did not impact on profit. In the prior year impairment charges of $2,846k were recognised in the Australian Rentals segment and impairment charges of $1,119k were reversed in the New Zealand Rentals segment. Refer to note 15 for further details. PricewaterhouseCoopers, 188 Quay Street, Private Bag 92162, Auckland 1142, New Zealand Assets held for sale are recognised in Group Support Services. T: +64 9 355 8000, F: +64 9 355 8001, pwc.co.nz 67 Statutory information Statutory information 68 For the year ended 30 June 2012 For the year ended 30 June 2012

The ordinary shares of Tourism Holdings Limited are listed on the New Zealand Stock Exchange. Directors’ Shareholdings (at June 30, 2012) As at 10th August 2012, the total number of voting securities on issue was 98,180,723. Beneficially owned, held Beneficially owned, held solely or as a joint holder by associated persons (including family interests) Spread Of Shareholders 2012 2011 2012 2011 Number of Number of % of total Size of holdings Holders shares held issued shares J Bongard 50,000 50,000 - - 1 - 1000 838 572,606 0.6% G W Bowker 15,000 15,000 - - 1001 - 5000 2,154 6,025,898 6.1% R G M Christie - 11,250 - - 5001 - 10000 733 5,732,984 5.8% D Gupta - - - - 10001 - 50000 615 12,685,547 12.9% K R Smith - - 88,859 88,859 50001 - 100000 71 5,310,209 5.4% G Wong 100,000 100,000 - - 100001 and Over 47 67,853,479 69.1% 165,000 176,250 88,859 88,859 4,458 98,180,723 100.0% Directors’ Share Dealings

The shareholding of New Zealand Central Securities Depository Limited (NZCSD) has been reallocated to the applicable Details of the Directors’ acquisitions and disposals of relevant interests in the ordinary equity members of NZCSD. securities issued by the Parent company are as follows:

Director Beneficial No of Shares Acquired Substantial Security Holders Number of shares in which a Owner (Disposed of) relevant interest was held. R G M Christie (11,250) Sterling Grace Capital Management LP 18,794,290 19.1% Utilico Investments Limited 8,727,311 8.9% Accident Compensation Corporation 7,701,321 7.8% General Notice of Directors’ Interests Tower Asset Management Limited 7,232,971 7.4% J Bongard, ONZM Director of: Netball New Zealand, Meridian Energy Limited and Narta International Pty Limited and PSCTH, Thailand. Current holding reflects the latest notices received. G W Bowker Director of: Silverstripe Australia Pty Limited, Equestrian Australia. R G M Christie Chairman of: EBOS Group Limited, the Science Media Centre and the National e-Science Infrastructure Twenty Largest Shareholders (As at 10th August 2012) Company. Director of: Acurity Health Group Limited, NZ Pork Industry Board, Southport Limited and Solnet 1 FORSYTH BARR CUSTODIANS LIMITED 13,981,969 14.2% Solutions Limited. 2 JPMORGAN CHASE BANK 9,677,542 9.9% D Gupta Director of: Centuria Capital Limited, Trustees Executors Limited. 3 CUSTODY AND INVESTMENT NOMINEES LIMITED 7,797,244 7.9% K R Smith Chairman of: Goodman (NZ) Limited. Deputy Chairman of: The Warehouse Group Limited. 4 ACCIDENT COMPENSATION CORPORATION 7,601,321 7.7% Director of: Mighty River Power Limited and PGG Wrightson Limited (retired 2 November 2011). 5 FORSYTH BARR CUSTODIANS LIMITED 5,142,206 5.2% 6 TEA CUSTODIANS LIMITED 4,883,607 5.0% G Wong Chairman of: Areograph Limited and Harbour Asset Management Limited. Director of: AMP Office NZ Limited, New Zealand Farming Systems Uruguay Limited (retired 24 7 KEVIN GLEN DOUGLAS + MICHELLE MCKENNEY DOUGLAS 2,791,889 2.8% November 2011) 8 CITIBANK NOMINEES (NZ) LIMITED 1,385,833 1.4%

9 KEVIN DOUGLAS + MICHELLE DOUGLAS 1,190,943 1.2% NZX waiver 10 JAMES DOUGLAS JR + JEAN ANN DOUGLAS 1,190,939 1.2% thl obtained a waiver from NZX Markets Supervision (“NZXMS”) on 13 October 2011 from NZSX Listing Rule (“Rule”) 9.2.1 (relating to material transactions with related parties). The waiver relates to transactions between and Jayco Corporation Pty Limited (“Jayco”). At 11 MOON CHUL CHOI + KEUM SOOK CHOI 1,110,000 1.1% thl the time of the application for the waiver, Mr Gerard Thomas Ryan held a relevant interest in 11.40% of the shares in thl, and was also the 12 FORSYTH BARR CUSTODIANS LIMITED 829,146 0.8% majority shareholder of Jayco (other entities associated with Mr Ryan were also shareholders in Jayco). Accordingly, both Mr Ryan and Jayco were ‘Related Parties’ of thl under Rule 9.2.3. On 19 March 2012 Mr Ryan ceased to hold a relevant interest in shares in thl but, under Rule 13 PUBLIC TRUST 729,729 0.7% 9.2.3, both Mr Ryan and Jayco will continue to be a ‘Related Party’ of thl’s until 19 September 2012. JA HONG KOO + PYUNG KEUM KOO 666,500 0.7% 14 The waiver relates to purchases by thl of new campervans and caravans from Jayco, and the sale of used campervans by thl to Jayco 15 LEVERAGED EQUITIES FINANCE LIMITED 637,186 0.6% (such campervans being surplus to thl’s requirements, or retired from thl’s rental fleet) (“Transactions”). The value of the Transactions (cumulatively) entered into between thl and Jayco in the financial year ending 30 June 2012 was expected to exceed 10% ofthl ’s average ROBERT DONALD SPARY 542,038 0.6% 16 market capitalisation. Accordingly, a waiver was sought from Rule 9.2.2 in respect of the Transactions. The waiver was sought from, and 17 HSBC NOMINEES (NEW ZEALAND) LIMITED 484,817 0.5% granted by, NZXMS on the grounds that all negotiations and transactions between thl and Jayco would be on arm’s length and commercial terms and would not be affected by virtue of thl and Jayco being ‘Related Parties’ for the purposes of the Rules. Under the waiver, the 18 NATIONAL NOMINEES NEW ZEALAND LIMITED 395,453 0.4% directors thl are required to certify on a six-monthly basis (in respect of the immediately preceding six months) that: 19 FNZ CUSTODIANS LIMITED 376,346 0.4% • the terms of the Transactions entered into with Jayco during the period have been negotiated and entered into on an arm’s length and commercial basis and were considered independently of Mr Ryan’s shareholding interest; and 20 FORSYTH BARR CUSTODIANS LIMITED 370,927 0.4% • entry into the Transactions with Jayco during the period was in the best interests of thl and fair to its shareholders not 61,785,635 62.9% associated with Mr Ryan. The directors gave the first required certificate on 28 March 2012 in respect of the Transactions entered into in the six months prior to that date. The shareholding of New Zealand Central Securities Depository Limited (NZCSD) has been reallocated to the applicable members of NZCSD. Details of the Transactions with Jayco entered into in the period between 13 October 2011 and 30 June 2012 are as follows: NZ$1,352k of motorhomes were purchased from Jayco during the period. 69 Statutory information tourism holdings limited. annual report 2012 70 For the year ended 30 June 2012

Directors’ Loans There were no loans by the Group to Directors.

Directors’ Insurance The Group has arranged insurance cover and provided deeds of indemnity for Directors’ and Officers’ liability.

Directors’ Remuneration Directors’ Remuneration received, or due and receivable during the year is as follows:

2012 Other 2011 Other Director’s Fees Remuneration Director’s Fees Remuneration

Directors of Tourism Holdings Limited J Bongard 61,000 - 61,000 - G Bowker 66,600 - 66,600 - The Legendary Black Water Rafting Co. R G M Christie 62,000 - 62,000 - D Gupta 56,000 - 56,000 - K R Smith 101,000 - 101,000 - G Wong 56,000 - 56,000 - 402,600 - 402,600 -

The number of employees or former employees (not including Directors) whose remuneration (including severance pay) was within the specified bands is as follows:

Consolidated Parent Company

2012 2011 2012 2011 NZ$000’s NZ$000’s NZ$000’s NZ$000’s NZ$000 100 - 109 1 6 1 3 110 - 119 6 4 3 4 120 - 129 5 4 3 1 130 - 139 5 12 2 5 140 - 149 2 1 - - 150 - 159 3 2 1 - 160 - 169 1 - - - 170 - 179 1 3 - 2 180 - 189 2 2 - - 190 - 199 5 1 1 - 200 - 209 - 2 - - 210 - 219 2 1 2 1 220 - 229 - - - - 230 - 239 - - - - 240 - 249 - - - - 250 - 259 1 - - - 260 - 269 - - - - 270 - 279 - - - - 280 - 289 - 1 - 1 290 - 299 1 - 1 - 300 - 309 1 - - - 310 - 319 - - - - 320 - 329 1 - 1 - 330 - 339 - - - - 340 - 349 - 1 - - 350 - 359 - 1 - 1 360 - 369 - - - - 370 - 379 - - - - 380 - 389 - - - - 390 - 399 - - - - 400 - 409 - - - - 410 - 419 - - - - 420 - 429 - 1 - 1 430 - 439 - - - - 440 - 449 - - - - 460 - 470 1 - 1 - 600 - 609 - 1 - 1

Auditors In accordance with S196 of the Companies Act 1993, PricewaterhouseCoopers are appointed as our auditors. Auditors’ remuneration is detailed in Note 1 of the financial statements. 71 directory tourism holdings limited. annual report 2012 72

Directors: Keith Smith, Chairman non Executive Director Rick Christie Non Executive Director John Bongard, ONZM Non Executive Director Graeme Bowker Non Executive Director Deepak Gupta Non Executive Director Graeme Wong Non Executive Director

Solicitors: Minter Ellison Rudd Watts, Auckland

Bankers: Westpac, New Zealand Limited, Wespac Banking Corporation

Executives: Grant Webster Chief Executive Officer Ian Lewington Chief Financial Officer Quinton Hall Chief Information Officer Mike Horne General Manager New Zealand Rentals Operations Kate Meldrum General Manager Marketing and Customer Experience Andrew Rickett General Manager Australian Operations Daniel Schneider CEO & President Road Bear RV Rentals & Sales Sue Sullivan General Manager Sales

Auditors: PricewaterhouseCoopers, Auckland

Share Registrar: Link Market Service PO Box 384, Ashburton Tel: +64 3 308 8887 Fax: +64 3 308 1311

Rentals Tourism operations Overseas Associated companies representation offices New Zealand Waitomo Group RV Manufacturing Group LP 36 Richard Pearse Drive, 39 Waitomo Caves Road Germany 169 Bush Road, Albany 0632 Mangere, Private Bag 92 133, Private Bag 501 Tel: +49 89 7257 9550 New Zealand Auckand 1142, New Zealand Otorohanga 3940, New Zealand United Kingdom Action Motor Bodies Tel: +64 9 255 3910 Tel: +64 7 878 8227 Fax: +64 9 255 0629 Fax: +64 7 878 8858 Tel: +44 20 7193 3518 32 Kaimiro Street, Te Rapa Hamilton 3241, New Zealand Australia www.waitomo.com Group support services Tel: +64 7 850 2410 Central West Business Park, www.blackwaterrafting.co.nz www.ruakuri.co.nz The Beach House, Level 1 www.actionmotorbodies.co.nz Building 2, 9 Ashley Street, 83 Beach Road, Auckland City Braybrook VIC 3019 PO Box 4194, Kiwi Experience PO Box 4293, Shortland Street Footscray West D.C Footscray 85 Beach Road Auckland 1140, New Zealand West VIC 3012, Australia Auckland 1010 Tel: +64 9 336 4299 Tel: +61 3 8398 8800 New Zealand Fax: +64 9 309 9269 Fax: +61 3 9687 4522 : +64 9 336 4286 Tel www.thlonline.com Australia United States of America Fax: +64 9 366 1374 Road Bear RV Rentals & Sales www.kiwiexperience.com 28404 Roadside Drive Agoura Hills, CA 91301 Tel: +1 818 865 2925 Fax: +1 818 991 2744 www.roadbearrv.com www.keacampers.com.au www.maui-rentals.com www.britz.com www.mightycampers.com Group Support services

New Zealand The Beach House, Level 1 83 Beach Road, Auckland City PO Box 4293, Shortland Street Auckland 1140, New Zealand Tel: +64 9 336 4299 Fax: +64 9 309 9269 website: www.thlonline.com