annual report - Pumpkin Patch investor relations

PUMPKIN PATCH LIMITED & SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS 31 JULY 2010
PUMPKIN PATCH LIMITED & SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS 31 JULY 2010
25 FINANCIAL RISK MANAGEMENT continued
(F) CAPITAL RISK MANAGEMENT
The main objective of capital risk management is to ensure the Group operates as a going
concern, meets debts as they fall due, maintains the best possible capital structure, and
reduces the cost of capital. Group capital is regarded as equity as shown in the balance
sheet. This quantifies capital as reference to the balance sheet. To maintain or alter the
capital structure the Board has the ability to review the size of the dividends paid to
shareholders, return capital or issue new shares, reduce or increase debt or sell assets.
There are a number of external bank covenants in place relating to debt facilities. These
covenants are calculated monthly and reported to the bank quarterly. The principal
convenants relating to capital management are the earnings before interest and taxation
(EBIT) fixed cover charge ratio and the cashflow gearing ratio. There have been no
breaches of these covenants for the current or prior period.
27 CONTINGENCIES
As at 31 July 2010 the parent entity and Group had no contingent liabilities or assets
(2009:$Nil).
28 EVENTS OCCURRING AFTER THE BALANCE SHEET DATE
- On 16 August 2010, the approved reorganisation plan for Pumpkin Patch LLC was
effected resulting in notice being given to all outstanding creditors. Pumpkin Patch LLC
exited from Chapter 11 status on this date.
- On 21 September 2010 the Directors resolved to provide for a final dividend to be paid
in respect of the year ended 31 July 2010. The dividend will be paid at a rate of 5.0
cents per share (2009: 4.50 cents per share) on issue as at 7 October 2010, with full
imputation credits attached.
26 COMMITMENTS
The Group has commitments for future capital expenditure at 31 July 2010 of $2.8 million
(2009: $0.5 million).
The Group leases various retail outlets under non-cancellable operating lease agreements.
The leases reflect normal commercial arrangements with varying terms, escalation clauses
and renewal rights.
Consolidated at Parent at
31 July
2010
31 July
2009
31 July
2010
31 July
2009
$Õ000 $Õ000 $Õ000 $Õ000
Commitments for minimum lease payments in relation to non-cancellable operating leases
are payable as follows:
Within one year 49,961 57,397 2,775 2,795
Later than one year but not later
than five years 110,526 117,347 10,843 11,293
Later than five years 36,532 40,959 17,415 20,794
197,019 215,703 31,033 34,882
20
years
young
97