annual report 2005 - Pumpkin Patch investor relations
annual report 2005 - Pumpkin Patch investor relations
annual report 2005 - Pumpkin Patch investor relations
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<strong>annual</strong> <strong>report</strong> <strong>2005</strong>
The <strong>annual</strong> meeting of shareholders will be held on Tuesday 22nd November<br />
<strong>2005</strong> at 1pm at the Ellerslie Convention Centre, Auckland.<br />
The Notice of Meeting is enclosed with this Annual Report.<br />
The Directors are pleased to present the Annual Report of <strong>Pumpkin</strong> <strong>Patch</strong> Limited<br />
for the year ended 31st July <strong>2005</strong><br />
For and on behalf of the Directors,<br />
Maurice Prendergast<br />
Greg Muir<br />
13 September <strong>2005</strong>
contents<br />
performance highlights 1<br />
financial highlights 2 - 3<br />
chairman’s letter 5<br />
managing director’s <strong>report</strong> 6 - 9<br />
directors & senior management 10 - 13<br />
corporate governance 15 - 17<br />
general disclosures 19 - 21<br />
group financial statements 23 - 49<br />
auditors’ <strong>report</strong> 50<br />
shareholder information 52 - 53<br />
corporate directory<br />
inside back cover
Group operating revenue of $280.4m; up 27% on 2004<br />
Net profit after tax (1) of $25.4m; up 64% on 2004<br />
Opening of the first company owned store in the United States<br />
performance highlights<br />
Group EBIT (1) of $37.5m; up 64% on 2004<br />
22 <strong>Pumpkin</strong> <strong>Patch</strong> stores opened across Australia (11), United Kingdom (7) and New Zealand (4)<br />
Sales growth across all major wholesale markets<br />
Dividend for the year of 8.00 cents per share<br />
(1) Before one off United States retail market development costs; compared to 2004 before costs of restructuring pre-listing employee share schemes.<br />
1
financial highlights<br />
Year ended 31 July<br />
<strong>2005</strong><br />
NZ$000<br />
2004<br />
NZ$000<br />
Change<br />
Trading Results<br />
Group operating revenue 280,378 220,292 +27.3%<br />
Earnings before interest and tax (1) 37,509 22,928 +63.6%<br />
Net cash flow from operating activities 24,600 14,956 +64.5%<br />
Financial Position at Year End<br />
Total equity 82,257 63,537<br />
Total assets 111,339 101,053<br />
Net debt - 4,656<br />
Shareholders funds to total assets 73.9% 62.8%<br />
Current ratio 2.5:1 2.0:1<br />
Capital expenditure 13,577 7,990<br />
Number of Stores<br />
Australia 75 64<br />
New Zealand 45 41<br />
United Kingdom 16 9<br />
United States 1 -<br />
Total 137 114<br />
(1) Before one off United States retail market development costs; compared to 2004 before costs of restructuring pre-listing employee share schemes.<br />
2
Store Numbers<br />
Sales Composition<br />
140<br />
137<br />
$280,000<br />
$260,000<br />
120<br />
100<br />
114<br />
$240,000<br />
$220,000<br />
$200,000<br />
80<br />
71<br />
84<br />
NZ$ ’000<br />
$180,000<br />
$160,000<br />
$140,000<br />
60<br />
56<br />
$120,000<br />
40<br />
40<br />
$100,000<br />
$80,000<br />
27<br />
$60,000<br />
20<br />
0<br />
1<br />
1992<br />
1<br />
1993<br />
2<br />
1994<br />
4<br />
1995<br />
8<br />
1996<br />
11<br />
1997<br />
14<br />
1998<br />
1999<br />
2000 2001 2002 2003 2004 <strong>2005</strong><br />
$40,000<br />
$20,000<br />
0<br />
2001 2002 2003 2004 <strong>2005</strong><br />
New Zealand Australia UK US Retail NZ Retail Aust Retail UK Other<br />
3
id culture
chairman’s letter<br />
Dear Shareholders<br />
On behalf of the Board I am pleased to <strong>report</strong> that <strong>Pumpkin</strong> <strong>Patch</strong> Limited has again generated a very strong result for<br />
its shareholders. Net profit after tax (before one-off costs of developing the United States retail operation) was $25.4m.<br />
Earnings before interest and tax (before one-off costs of developing the United States retail operation) of $37.5m was<br />
64% ahead of the 2004 year (before costs of restructuring pre-listing employee share schemes).<br />
The improved performance was due to solid sales growth in all markets – particularly our home markets of<br />
New Zealand and Australia, allied with ongoing focus on margin management. It also reflects our developing<br />
international wholesale business. We now have operations in 10 countries with active business development teams<br />
located in New Zealand and Europe targeting a number of new markets for 2006 and 2007.<br />
We have had a very active store opening programme in <strong>2005</strong> – with 23 stores opened across 4 countries. Of<br />
particular note is our first store in the United States. Located at the Glendale Galleria in Los Angeles, California this<br />
store is the culmination of 12 months work testing the viability of stand alone stores (given we already have a significant<br />
wholesale business in the US). We extend a very warm welcome to all our new US based team and look forward to<br />
their contribution over coming years.<br />
Your company continues to maintain excellent financial health – recording positive net cash flow of $4.6m after the<br />
significant store roll-out programme and the growth in the wholesale sector – allied to a very strong balance sheet<br />
with nil debt, giving us plenty of scope to pursue our international growth agenda.<br />
We look forward to paying a fully imputed dividend of 4.25cps on 18 October <strong>2005</strong> bringing the total amount paid<br />
for <strong>2005</strong> to 8.00cps which is in line with our stated policy of distributing approximately 50% of net profit after tax.<br />
The Directors look forward to welcoming shareholders to our second AGM to be held at the Ellerslie Convention Centre<br />
on Tuesday 22 November <strong>2005</strong> at 1pm. At the meeting Chrissy Conyngham and Sally Synnott will resign by rotation<br />
and being eligible will offer themselves for re-election. We will also be seeking shareholder approval for the <strong>2005</strong><br />
executive director share option plan (details of which are included in the enclosed Notice of Meeting).<br />
And finally a huge thank you to Maurice and all the fabulous team at “the <strong>Patch</strong>”.<br />
This is a truly outstanding result – one that reflects the developing<br />
maturity of the business as an Australasian company growing a great<br />
brand in markets across the world.<br />
Greg Muir<br />
5
id culture<br />
managing director’s <strong>report</strong><br />
our year<br />
<strong>2005</strong> was an exciting year for <strong>Pumpkin</strong> <strong>Patch</strong> with continued sales and earnings growth in all areas of our business.<br />
We have continued to use the strength of the <strong>Pumpkin</strong> <strong>Patch</strong> brand to drive improved performance in existing markets<br />
while identifying new markets which will be fruitful in future years.<br />
our results<br />
Group operating revenue increased 27.3%. Sales growth was seen in all segments especially Australia,<br />
the United Kingdom, and our wholesale accounts.<br />
$300,000<br />
$250,000<br />
27%<br />
NZ$ ’000<br />
$200,000<br />
$150,000<br />
17%<br />
11%<br />
14%<br />
$100,000<br />
$50,000<br />
0<br />
2001 2002 2003 2004 <strong>2005</strong><br />
<strong>Pumpkin</strong> <strong>Patch</strong> was able to develop its core Australasian market increasing revenue and enhancing margins. Net Profit<br />
After Tax (before non-recurring items) was $25.4m up 63.5% on the 2004 financial year. Since 2001 we have had a<br />
compound average growth rate in EBIT of 52.1%. We continue to benefit from economies of scale and<br />
new store openings.<br />
Australia retail<br />
<strong>2005</strong><br />
$000<br />
2004<br />
$000<br />
Turnover AUD 141,387 120,400 17.4%<br />
Turnover NZD 157,496 138,449 13.8%<br />
EBIT 29,021 22,935 26.5%<br />
18.4% 16.6%<br />
Stores<br />
<strong>Pumpkin</strong> <strong>Patch</strong> 74 64<br />
6<br />
Urban Angel 1 -<br />
75 64
The highlight in Australia was our strong sales growth up 17.4% (in AUD) on 2004. This reflects the full<br />
sales impact of 10 new stores in 2004 and part trading of the 11 stores opening in <strong>2005</strong>. The full<br />
effect of the new <strong>2005</strong> stores will not be seen until 2006. Our focus as always was to increase the<br />
performance of existing stores while ensuring that the standards for our new stores were in keeping with our<br />
high service expectations. This strategy paid off with strong improvements in earnings while reducing inventory holdings<br />
and seeing the benefit of the economies of scale in an expanding store network.<br />
Despite a less than favourable Australian dollar exchange rate we managed to increase our EBIT $6.1m to a creditable<br />
18.4% of sales.<br />
Australia continues to offer opportunities to open stores in areas that currently have no or little <strong>Pumpkin</strong> <strong>Patch</strong> presence.<br />
We have identified possible store locations that could continue to be opened at the current rate of 8 to 10 stores<br />
per year for the next 3 years.<br />
We continue to be confident as market leader in fashion childrenswear that we have brand integrity and a range that<br />
will weather most economic environments.<br />
New Zealand retail<br />
<strong>2005</strong><br />
$000<br />
2004<br />
$000<br />
Turnover NZD 57,844 45,763 26.4%<br />
EBIT 10,591 9,150 15.7%<br />
18.3% 20.0%<br />
Stores<br />
<strong>Pumpkin</strong> <strong>Patch</strong> 31 27<br />
Urban Angel 14 14<br />
45 41<br />
New Zealand sales grew 26.4% to $57.8m. This resulted mainly from the effect of a full years trading from 14 Urban<br />
Angel stores (the re-branded HBK stores purchased in May 2004) and new store openings. Excluding the Urban Angel<br />
stores, turnover from <strong>Pumpkin</strong> <strong>Patch</strong> stores was up 15.8% on 2004.<br />
Earnings increased 15.7% on 2004 to $10.6m. The reduction in earnings as a percentage of sales<br />
to18.3% reflected the full years trading of the Urban Angel stores which trade at a lower earnings<br />
percentage than <strong>Pumpkin</strong> <strong>Patch</strong> stores. The re-branding of the old format HBK stores to the new<br />
format Urban Angel stores was completed in the year, the full benefits of this will not be<br />
seen until late in the 2006/2007 years.<br />
During the year 4 stores were opened, taking total store numbers to 45.<br />
We are expecting to open 1 new <strong>Pumpkin</strong> <strong>Patch</strong> and 2 new outlet stores<br />
in the 2006 financial year.<br />
7
id culture<br />
United Kingdom retail<br />
<strong>2005</strong><br />
$000<br />
2004<br />
$000<br />
Turnover GBP 9,994 6,999 42.8%<br />
Turnover NZD 26,408 19,537 35.2%<br />
EBIT (283) (1,333) 78.8%<br />
(1.1%) (6.8%)<br />
Stores 16 9<br />
The 42.8% growth in GBP sales came from new stores opened in the year and the continued growth in turnover at the<br />
more established stores created by the increase in customer awareness of the <strong>Pumpkin</strong> <strong>Patch</strong> brand. Considering the soft<br />
nature of the United Kingdom retail environment we are very happy with this sales result.<br />
During the year 7 new stores were opened, taking the total number of stores to 16. The full trading impact of these<br />
new stores will not be seen until the 2006 and 2007 years.<br />
The trading loss for the year of $0.3m, was an improvement on the $1.3m loss in 2004.<br />
The opening of the 7 new stores this year has significantly reduced the impact of<br />
improved trading at the more established stores. The stores that have been open for more<br />
than 24 months are generating acceptable earnings as a percentage<br />
of sales. As we increase store numbers off a relatively low number of existing stores,<br />
the impact of the improved trading results from more established stores will continue to<br />
be understated.<br />
Overall the result, especially that from the more established stores, reinforces our<br />
confidence in this market and the future of the <strong>Pumpkin</strong> <strong>Patch</strong> brand in it. We plan<br />
to open 6 new stores in the 2006 financial year.<br />
wholesale and direct<br />
<strong>2005</strong><br />
$000<br />
2004<br />
$000<br />
Turnover NZD 38,225 16,002 138.9%<br />
EBIT 9,626 2,127 352.6%<br />
25.2% 13.3%<br />
The <strong>relations</strong>hips developed with wholesale customers over the last three to<br />
four years resulted in increased wholesale orders in <strong>2005</strong>. Turnover increased<br />
across all major wholesale markets, especially the Middle East,<br />
the United States and Ireland.<br />
8<br />
The very nature of the wholesale business, especially the time it takes to<br />
convert a new <strong>relations</strong>hip into confirmed wholesale orders, will give us some<br />
fluctuations in sales growth each year.
Direct (mail order and internet) turnover also increased this year as effort was concentrated on better utilising<br />
our large Australasian customer database to generate sales.<br />
We are currently expanding our Wholesale and Direct business in the UK, however, these are not expected<br />
to generate earnings in the 2006 financial year.<br />
As a percentage of sales, earnings increased 11.9% to 25.2%, reflecting the highly fixed nature of overheads<br />
associated with the Wholesale and Direct operations.<br />
United States retail<br />
Late in July <strong>2005</strong> our first United States retail store opened in Los Angeles. It is too early to make any comment<br />
regarding levels of trading, although feedback from customers to date has been as expected, very favourable.<br />
Prior to confirming the entry into this new retail market we undertook a series of detailed investigations into the<br />
viability of the market and developed an appropriate strategy of entry to it. The investigation and development<br />
process had a one-off after tax cost in the <strong>2005</strong> year of approximately $0.8m.<br />
Leases on 3 additional stores have been confirmed; 2 in Los Angeles and 1 in the San Francisco Bay Area.<br />
We expect the 3 stores will be open in the 2006 financial year.<br />
This exploratory market entry strategy is similar to that employed five years ago when <strong>Pumpkin</strong> <strong>Patch</strong> entered<br />
the United Kingdom retail market.<br />
We are confident that this staged approach will result in long term benefits for shareholders.<br />
outlook<br />
We continue to look for strong growth in all of our markets. Consumer awareness of the <strong>Pumpkin</strong> <strong>Patch</strong> brand<br />
continues to develop in new markets. Australia in particular still offers our greatest near term opportunity.<br />
I am confident that the Company’s long term strategy will continue to add<br />
value for all shareholders.<br />
Finally, I would again like to acknowledge the entire team. Their dedication and<br />
enthusiasm for <strong>Pumpkin</strong> <strong>Patch</strong> continues to be our inspiration, giving us continued ability<br />
to grow the brand in our existing and new markets around the world.<br />
Maurice Prendergast<br />
9
ur team spirit!<br />
directors<br />
Greg Muir<br />
Executive Chairman, BA, MBA<br />
Greg Muir was appointed Executive Chairman in February 2004.<br />
Prior to joining <strong>Pumpkin</strong> <strong>Patch</strong> he was Chief Executive Officer of<br />
The Warehouse Group Ltd, and held senior management roles with<br />
TNT Australia Pty Ltd, Enerco New Zealand Ltd and Lion Nathan Ltd.<br />
Greg is currently a director of Vector Limited and NGC Holdings Ltd.<br />
Maurice Prendergast<br />
Managing Director<br />
Maurice Prendergast has been Managing Director<br />
of <strong>Pumpkin</strong> <strong>Patch</strong> since 1993. Maurice has held<br />
executive positions in accounting, distribution and<br />
property development in both New Zealand and<br />
Australian companies.<br />
Chrissy Conyngham<br />
Design and Marketing Director<br />
Chrissy Conyngham joined <strong>Pumpkin</strong> <strong>Patch</strong> as Design<br />
Director in 1993. Chrissy leads the design and<br />
marketing teams and is responsible for bringing<br />
together comprehensive ranges, product sourcing and<br />
brand promotion. Chrissy has 18 years of experience<br />
in the fashion industry.<br />
10
Jane Freeman<br />
Independent Non-Executive Director, BCom<br />
Chairman of the Remuneration and Nomination Committee and member of the Audit,<br />
Compliance and Risk Management Committee<br />
Jane has held senior marketing and management positions at Telecom’s e-solutions, BankDirect,<br />
Clear Communications and ASB Bank Ltd. Jane is currently a director of Air New Zealand Ltd, Sheffield<br />
Consulting Ltd, St George New Zealand Bank Ltd, Delegats Group Ltd and Albert Street Dental Ltd.<br />
David Jackson<br />
Independent Non-Executive Director, MCom (Hons), FCA<br />
Chairman of the Audit, Compliance and Risk Management Committee and member of the<br />
Remuneration and Nomination Committee<br />
David was appointed as a Director of <strong>Pumpkin</strong> <strong>Patch</strong> in March 2004 and was a Senior Audit Partner<br />
with and former Chairman of Ernst & Young. David is currently a director of<br />
CanWest MediaWorks (NZ) Ltd and The New Zealand Refining Company Ltd,<br />
and a member of the Securities Commission.<br />
Sally Synnott<br />
Non-Executive Director<br />
Member of the Remuneration and Nomination Committee and the Audit, Compliance and<br />
Risk Management Committee<br />
Sally Synnott founded <strong>Pumpkin</strong> <strong>Patch</strong> in 1990 and held an executive role within<br />
the Company until 1993. Since then Sally has undertaken specialist assignments for the company<br />
and has been a non-executive Director.
ur team spirit!<br />
senior management team<br />
12<br />
Lyn Bryant<br />
General Manager<br />
– Operations<br />
Lyn joined <strong>Pumpkin</strong> <strong>Patch</strong> in<br />
1994 as Customer Service<br />
Supervisor.<br />
Lyn was appointed Customer<br />
Service Manager in 1996,<br />
Distribution Centre Manager<br />
in 1999 and General<br />
Manager – Operations in<br />
2003.<br />
Carina Hull<br />
General Manager<br />
– Development<br />
Carina rejoined<br />
<strong>Pumpkin</strong> <strong>Patch</strong> in June <strong>2005</strong><br />
after having previously<br />
worked for the business as<br />
both Global HR Manager<br />
and as a private consultant<br />
since 2002.<br />
Carina is responsible for<br />
the development of the<br />
Company’s most important<br />
asset, its people.<br />
She has 13 years<br />
experience in senior<br />
HR management roles<br />
with a number of global<br />
multinationals.<br />
Kay Gillard<br />
General Manager<br />
– Retail<br />
Kay joined <strong>Pumpkin</strong> <strong>Patch</strong><br />
in 1996 as Operations<br />
Manager to head the retail<br />
initiative into Australia.<br />
In 1997 Kay was<br />
appointed General<br />
Manager, Australia and<br />
in 1999 was appointed<br />
General Manager – Retail<br />
for the global<br />
retail operation.
Kate Tattersfield<br />
Zarina Thesing<br />
Bruce Walkley<br />
Matthew Washington<br />
General Manager<br />
– Marketing<br />
BA<br />
Kate joined <strong>Pumpkin</strong> <strong>Patch</strong><br />
in 1998 as Creative<br />
Director and became<br />
Marketing Manager in<br />
2001. Kate has over<br />
13 years experience in<br />
the marketing and graphic<br />
design industries in both<br />
corporate and freelance<br />
capacities.<br />
General Manager<br />
– Information Technology<br />
BCom<br />
Zarina joined <strong>Pumpkin</strong><br />
<strong>Patch</strong> in 2000 as an IT<br />
Development Manager and<br />
was appointed as General<br />
Manager – IT in 2002.<br />
Zarina had been involved<br />
and gained extensive<br />
experience in the IT industry<br />
for 9 years prior to joining<br />
<strong>Pumpkin</strong> <strong>Patch</strong>.<br />
General Manager – Direct<br />
BCom<br />
Bruce joined <strong>Pumpkin</strong> <strong>Patch</strong><br />
in 1993 as Finance Director<br />
and in 2000 was appointed<br />
General Manager –<br />
United Kingdom.<br />
In <strong>2005</strong> he was appointed<br />
General Manager – Direct<br />
with responsibility for the<br />
direct operation (mail order<br />
and internet sales).<br />
Chief Financial Officer<br />
BCom, CA<br />
Matthew joined <strong>Pumpkin</strong><br />
<strong>Patch</strong> in 2000 as Group<br />
Financial Controller.<br />
Matthew has over 17<br />
years of accounting and<br />
commercial experience in<br />
a variety of industry areas.<br />
13
corporate governance<br />
The Board of Directors has the responsibility of ensuring the Company is properly managed to protect and enhance<br />
shareholders’ interests. The Directors take this responsibility seriously and to this end, the Board has in place what it<br />
believes to be appropriate corporate governance policies and practices.<br />
The Board has undertaken to regularly review the corporate governance policies to ensure the Company’s<br />
responsibilities and obligations are met.<br />
committees<br />
The Board has an Audit, Compliance and Risk Management Committee and a Remuneration and Nomination Committee.<br />
Each committee has a charter setting out its objectives, composition and responsibilities. These charters are available on<br />
the Company’s corporate and <strong>investor</strong> <strong>relations</strong> website www.pumpkinpatch.biz<br />
Audit, Compliance and Risk Management Committee<br />
The Committee provides assistance to the Board in fulfilling their oversight responsibility to the shareholders, potential<br />
shareholders, the investment community, and others relating to the Company’s financial statements and the financial<br />
<strong>report</strong>ing process, the systems of internal accounting and financial controls, the internal audit function, the <strong>annual</strong><br />
independent audit of the Company’s financial statements, and the legal compliance and ethics programs as established<br />
by management and the Board.<br />
The Committee comprises a minimum of three non-executive Directors, the majority of which must be independent<br />
directors. The current members of the Committee are David Jackson (Chair), Jane Freeman, and Sally Synnott.<br />
Remuneration and Nomination Committee<br />
The Committee provides assistance to the Board to ensure that the Company adopts remuneration policies that attract,<br />
retain and motivate high calibre executives and directors so as to encourage enhanced performance by the Company,<br />
motivate directors and management to pursue the long-term growth and success of the Company within an appropriate<br />
control framework, and demonstrate a clear <strong>relations</strong>hip between key executive performance and remuneration.<br />
The Committee comprises a minimum of three non-executive Directors, the majority of which must be independent<br />
directors. The current members of the Committee are Jane Freeman (Chair), David Jackson, and Sally Synnott.<br />
15
Board and Committee meetings held during the year:<br />
Board Meetings<br />
Chrissy Conyngham 8<br />
Audit,<br />
Compliance<br />
and Risk<br />
Management<br />
Committee<br />
Remuneration<br />
and Nomination<br />
Committee<br />
Jane Freeman 9 3 2<br />
David Jackson 9 3 2<br />
Greg Muir 9<br />
Maurice Prendergast 8<br />
Sally Synnott 8 1 2<br />
Total Meetings Held 9 3 2<br />
independent directors<br />
The Company considers that two of the current six Directors are independent directors, namely Jane Freeman and David<br />
Jackson. The remaining four directors are deemed not to be independent due to disqualifying <strong>relations</strong>hips as defined in<br />
NZX Listing Rules; Chrissy Conyngham, Greg Muir, and Maurice Prendergast due to being executives in the Company,<br />
and Sally Synnott due to having a beneficial interest in securities held by a substantial security holder.<br />
The Company notes that it has a minimum of two independent Directors as required by the NZX Listing Rules.<br />
Having reviewed the composition of the Board, the Company considers the Directors hold an appropriate mix of skills,<br />
expertise, and independence.<br />
share trading by directors and officers<br />
The Company has formal procedures that directors and officers are to follow when trading in <strong>Pumpkin</strong> <strong>Patch</strong> Limited<br />
shares. Directors and officers must notify and obtain the consent of the Remuneration and Nominations Committee prior<br />
to trading. All trading must be conducted within two trading window periods. These periods commence from the date<br />
on which the <strong>annual</strong> and half year results are announced and run for four weeks.<br />
A copy of this policy is available on the Company’s website www.pumpkinpatch.biz<br />
continuous disclosure policy<br />
The Board has adopted a Market Disclosure Policy to provide a framework to assist the Company to meet its obligations under<br />
the NZX continuous disclosure rules. A copy of this policy is available on the Company’s website www.pumpkinpatch.biz<br />
In the period 1 August 2004 to 31 July <strong>2005</strong> the Company made the following disclosures to the market:<br />
- 24 September 2004: release of the audited result for the full year ended 31 July 2004<br />
- 20 December 2004: provided the market with guidance on the Company’s expected result for the year ended 31 July <strong>2005</strong><br />
- 17 February <strong>2005</strong>: release of the unaudited result for the half year ended 31 January <strong>2005</strong><br />
- 8 April <strong>2005</strong>: announcement of the Company’s intention to enter the USA retail market<br />
The Company believes it has met its obligations under the NZX continuous disclosure rules.<br />
16
external auditor independence<br />
To ensure the independence of the Company’s external auditor is maintained the Board has agreed the external auditor<br />
should not provide any services not permitted under IFAC (International Federation of Accountants) auditor independence<br />
regulations. The Audit, Compliance and Risk Management Committee review services provided by the external auditor<br />
to ensure the Company complies with this policy.<br />
risk management<br />
The Company has a number of risk management policies that are designed to:<br />
• safeguard the assets and reputation of the Company<br />
• protect the interests of shareholders, and<br />
• enhance the Company’s performance.<br />
The Board has ultimate responsibility for internal control and compliance across the Company.<br />
17
general disclosures<br />
directors’ remuneration<br />
Directors’ remuneration and other benefits received, or due and receivable during the year was as follows:<br />
$000<br />
Non Executive Directors<br />
Jane Freeman (1) 60<br />
David Jackson (1) 60<br />
Sally Synnott 50<br />
Executive Directors<br />
Chrissy Conyngham 542<br />
Greg Muir 546<br />
Maurice Prendergast 680<br />
Executive Director remuneration may include salary, bonus payments, provision of a motor vehicle, and other benefits received in their capacity as<br />
employees. Executive Directors do not receive Directors’ fees.<br />
(1) Includes fees of $10,000 for, in the case of Jane Freeman, holding the position of Chair of the Remuneration and Nominations Committee, and for David<br />
Jackson, holding the position of Chair of the Audit, Compliance and Risk Management Committee.<br />
In addition to the above remuneration, Executive Directors were each issued share options during the period, the value<br />
of which were independently assessed using a binominal option pricing model at the time of granting. The number of<br />
options issued and their independently assessed values were: Chrissy Conyngham 290,000 options, $170,520; Greg<br />
Muir 150,000 options, $91,350; Maurice Prendergast 150,000 options, $91,350. Refer to note 4 in the Financial<br />
Statements for full details of the option scheme.<br />
Prior to listing in 2004 the Company restructured all pre-listing employee share schemes.<br />
The effect of the restructuring was:<br />
• the Company provided loans to pay for any shares under the schemes not already purchased by the employee<br />
in cash.<br />
• the Company prior to listing in 2004 paid Executive Directors grossed up bonuses to substantially discharge<br />
the amount of the loans.<br />
• A portion of each Executive Directors’ shares issued under the schemes are held by a trustee as security for the<br />
payment of the loans owing to the Company. These shares are to be progressively released over three years. As<br />
at 31 July <strong>2005</strong> the trustee holds security over shares relating to Chrissy Conyngham 380,000 shares (2004:<br />
570,000 shares), Greg Muir 341,333 shares, (2004: 512,000 shares), and Maurice Prendergast 1,000,000<br />
shares (2004: 1,500,000 shares).<br />
• Should an Executive Director’s employment cease they are required to forfeit to the Company any remaining shares<br />
held as security.<br />
• As at 31 July <strong>2005</strong> a portion of the loans to Executive Directors remain outstanding. The outstanding balances were:<br />
Chrissy Conyngham $76,346 (2004: $76,346), Greg Muir $68,776 (2004: $68,776), and Maurice Prendergast<br />
$137,015 (2004: $137,015). These loans are repayable by 9 June 2007 and are interest free.<br />
19
directors shareholdings<br />
31 July <strong>2005</strong> 31 July 2004<br />
Chrissy Conyngham<br />
Beneficially owned 1,500,000 1,500,000<br />
Options to acquire ordinary shares (1) 580,000 290,000<br />
Jane Freeman<br />
Beneficially owned 27,000 8,000<br />
David Jackson<br />
Beneficially owned 31,200 31,200<br />
Greg Muir<br />
Beneficially owned 2,311,100 2,311,100<br />
Options to acquire ordinary shares (1) 440,000 290,000<br />
Maurice Prendergast<br />
Beneficially owned 13,400,000 13,400,000<br />
Options to acquire ordinary shares (1) 440,000 290,000<br />
Not beneficially owned (2) 4,492,170 5,800,847<br />
Sally Synnott<br />
Beneficially owned 11,600,000 11,600,000<br />
Not beneficially owned (2) 4,492,170 5,800,847<br />
(1) The Executive Directors hold options under the 2004 and <strong>2005</strong> Employee Share Option Plans (refer note 4 of the Financial Statements). The 2004 options<br />
have an exercise period of between 9 June 2007 and 9 June 2009, and the <strong>2005</strong> options of between 9 June 2008 and 9 June 2010.<br />
(2) Maurice Prendergast and Sally Synnott are Directors of <strong>Pumpkin</strong> <strong>Patch</strong> Nominees Limited which acts as Trustee for the DF7 Scheme and holds shares on<br />
behalf of certain employees who held shares in pre-listing employee share ownership schemes that were restructured prior to listing (refer to note 4 and 6 of the<br />
Financial Statements).<br />
share dealings by directors<br />
The Board has received a disclosure from the Director named below of an acquisition of a relevant interest in the<br />
Company during the period 1 August 2004 and 31 July <strong>2005</strong>.<br />
Particulars of the disclosure are:<br />
- Jane Freeman acquired a joint interest in 19,000 ordinary shares on 6 October 2004 at $2.11 per share.<br />
20
disclosure of interests by directors<br />
The Directors named below have made a general disclosure of interest to the Board and entered the interest in the<br />
Company’s interest register.<br />
Chrissy Conyngham Shareholder in: <strong>Pumpkin</strong> <strong>Patch</strong> Limited<br />
Jane Freeman Director of: Air New Zealand Limited<br />
Jane Freeman Consulting Limited<br />
Shareholder in:<br />
<strong>Pumpkin</strong> <strong>Patch</strong> Limited<br />
David Jackson Director of: CanWest MediaWorks (NZ) Limited<br />
Shareholder in:<br />
<strong>Pumpkin</strong> <strong>Patch</strong> Limited<br />
Greg Muir Director of: NGC Holdings Limited<br />
Vector Limited<br />
Beneficial shareholder in:<br />
<strong>Pumpkin</strong> <strong>Patch</strong> Limited<br />
Maurice Prendergast Director of: Sports Resources Limited<br />
Espies Shopfitters Limited<br />
Beneficial shareholder in:<br />
<strong>Pumpkin</strong> <strong>Patch</strong> Limited<br />
Espies Shopfitters Limited<br />
Sally Synnott Director of and shareholder in: Eager Beaver Toys Limited<br />
Beneficial shareholder in:<br />
<strong>Pumpkin</strong> <strong>Patch</strong> Limited<br />
The Dickens Street Partnership<br />
remuneration of employees<br />
The number of employees (not including directors) whose remuneration exceeded $100,000 is disclosed in the<br />
following table. Remuneration may include salary, performance related bonus payments, provision of a motor vehicle,<br />
and other miscellaneous employment related benefits.<br />
$000 <strong>2005</strong> 2004 $000 <strong>2005</strong> 2004<br />
100 - 110 6 3 190 - 200 2 1<br />
110 - 120 1 3 200 - 210 1 -<br />
120 - 130 1 4 210 - 220 1 -<br />
130 - 140 4 2 220 - 230 1 -<br />
140 - 150 1 - 240 - 250 - 1<br />
150 - 160 1 - 250 - 260 1 -<br />
160 - 170 1 - 260 - 270 1 -<br />
170 - 180 1 4 280 - 290 - 1<br />
180 - 190 2 2 320 - 330 1 -<br />
Australian and United Kingdom remuneration has been converted into New Zealand dollars at $0.8988 and<br />
$0.3896 respectively. 21
<strong>Pumpkin</strong> <strong>Patch</strong> Limited & Subsidiaries<br />
group financial statements<br />
for the 12 months ended 31 July <strong>2005</strong><br />
contents<br />
statements of financial performance 24<br />
statements of movements in equity 24<br />
statements of financial position 25<br />
statements of cashflows 26<br />
statements of accounting policies 27 - 30<br />
notes to the financial statement 31 - 49<br />
auditors’ <strong>report</strong> 50<br />
The Board of Directors is pleased to present the financial statements of <strong>Pumpkin</strong> <strong>Patch</strong> Limited & Subsidiaries,<br />
incorporating the financial statements and auditors’ <strong>report</strong>, for the 12 months ended 31 July <strong>2005</strong>.<br />
The financial statements presented on pages 24 to 49 are signed for and on behalf of the Board,<br />
and were authorised for issue on the date below.<br />
Managing Director<br />
Executive Chairman<br />
13 September <strong>2005</strong><br />
23
<strong>Pumpkin</strong> <strong>Patch</strong> Limited & Subsidiary statements of financial performance<br />
for the 12 months ended 31 July <strong>2005</strong><br />
Group<br />
Parent<br />
Notes<br />
12 months<br />
31 July <strong>2005</strong><br />
$000<br />
12 months<br />
31 July 2004<br />
$000<br />
12 months<br />
31 July <strong>2005</strong><br />
$000<br />
12 months<br />
31 July 2004<br />
$000<br />
Operating revenue 280,378 220,292 41,093 32,266<br />
Operating profit (loss) before income tax 2 35,809 11,321 7,267 (1,430)<br />
Income tax expense (benefit) 3 11,210 3,241 782 (2,074)<br />
Net profit attributable to the<br />
shareholders of the parent company<br />
24,599 8,080 6,485 644<br />
<strong>Pumpkin</strong> <strong>Patch</strong> Limited & Subsidiaries statements of movements in equity<br />
for the 12 months ended 31 July <strong>2005</strong><br />
Group<br />
Parent<br />
Notes<br />
12 months<br />
31 July <strong>2005</strong><br />
$000<br />
12 months<br />
31 July 2004<br />
$000<br />
12 months<br />
31 July <strong>2005</strong><br />
$000<br />
12 months<br />
31 July 2004<br />
$000<br />
Equity at beginning of period 63,537 20,330 53,787 16,142<br />
Net profit for period 24,599 8,080 6,485 644<br />
Shares issued during the period 4 - 107,995 - 109,869<br />
Shares repurchased during the period 4 - (61,284) - (61,284)<br />
Movement in treasury stock 4 474 - - -<br />
Dividends paid (6,353) (9,627) (6,353) (9,627)<br />
Issue costs on share capital issue - (1,957) - (1,957)<br />
Equity at end of period 82,257 63,537 53,919 53,787<br />
24
<strong>Pumpkin</strong> <strong>Patch</strong> Limited & Subsidiaries statements of financial position<br />
as at 31 July <strong>2005</strong><br />
Group<br />
Parent<br />
Notes<br />
31 July <strong>2005</strong><br />
$000<br />
31 July 2004<br />
$000<br />
31 July <strong>2005</strong><br />
$000<br />
31 July 2004<br />
$000<br />
Equity<br />
Share capital 4 56,134 55,660 57,535 57,535<br />
Retained earnings 7 26,123 7,877 (3,616) (3,748)<br />
Total Equity 82,257 63,537 53,919 53,787<br />
Equity Represented by:<br />
Current Assets<br />
Cash and bank balances 73 - 36 1<br />
Trade debtors 10,724 1,774 30 -<br />
Amounts owed from subsidiaries - - 41,485 38,355<br />
Advances to employee share scheme and employees 6 1,214 1,357 1,214 1,357<br />
Other receivables and prepayments 2,885 1,843 2,178 2,090<br />
Inventories 10 57,174 58,777 - -<br />
Income tax receivable 3 - - 512 2,131<br />
Total Current Assets 72,070 63,751 45,455 43,934<br />
Current Liabilities<br />
Bank overdraft - 4,541 - -<br />
Trade creditors 8,884 11,238 853 660<br />
Income tax payable 3 2,753 2,276 - -<br />
Amounts owed to subsidiaries - - 3,542 2,697<br />
Accruals and provisions 9 14,085 13,780 3,184 2,782<br />
Total Current Liabilities 25,722 31,835 7,579 6,139<br />
Net Working Capital 46,348 31,916 37,876 37,795<br />
Non Current Assets<br />
Property plant and equipment 11 35,181 30,112 4,668 4,538<br />
Intangible assets 18 238 210 - -<br />
Advances to employee share scheme and employees 6 1,810 2,995 1,810 2,995<br />
Investments in subsidiaries 12 - - 10,188 10,188<br />
Investments 4 4 4 4<br />
Deferred taxation 13 2,036 3,635 1,077 1,505<br />
Total Non Current Assets 39,269 36,956 17,747 19,230<br />
Non Current Liabilities<br />
Accruals and provisions 9 3,360 5,335 1,704 3,238<br />
Total Non Current Liabilities 3,360 5,335 1,704 3,238<br />
Net Assets 82,257 63,537 53,919 53,787<br />
25
<strong>Pumpkin</strong> <strong>Patch</strong> Limited & Subsidiaries statements of cashflows<br />
for the 12 months ended 31 July <strong>2005</strong><br />
Group<br />
Parent<br />
12 months<br />
12 months<br />
12 months<br />
12 months<br />
31 July <strong>2005</strong><br />
31 July 2004<br />
31 July <strong>2005</strong><br />
31 July 2004<br />
Notes<br />
$000<br />
$000<br />
$000<br />
$000<br />
Cash Flow From Operating Activities<br />
CASH WAS PROVIDED FROM:<br />
Receipts from customers 273,366 220,347 38,434 26,942<br />
Interest received 29 153 150 112<br />
Net GST received 277 - 45 -<br />
Dividends received - - 6,358 5,273<br />
CASH WAS APPLIED TO:<br />
Payment to suppliers and employees (239,388) (200,022) (36,605) (54,837)<br />
Net GST paid - (13) - (95)<br />
Income tax paid (9,108) (2,617) (421) (1,440)<br />
Interest paid (576) (2,777) (263) (198)<br />
Net Cash Flow from Operating Activities 20 24,600 15,071 7,698 (24,243)<br />
Cash Flow From Investing Activities<br />
CASH WAS PROVIDED FROM:<br />
Proceeds from sale of property plant and equipment 35 104 - 16<br />
CASH WAS APPLIED TO:<br />
Purchase of property plant and equipment (13,577) (7,990) (1,310) (858)<br />
Purchase of trade marks (91) (53) - -<br />
Net Cash Used in Investing Activities (13,633) (7,939) (1,310) (842)<br />
Cash Flow From Financing Activities<br />
CASH WAS PROVIDED FROM:<br />
Issue of shares prior to listing - 1,000 - 1,000<br />
101,284<br />
Issue of shares upon float - 101,284 -<br />
CASH WAS APPLIED TO:<br />
Repayment of loans (term debt) - (36,637) - (4,290)<br />
Purchase of shares - (61,284) - (61,284)<br />
Costs of share issue - (1,957) - (1,957)<br />
Dividends paid (6,353) (9,627) (6,353) (9,627)<br />
Net Cash Used in Financing Activities (6,353) (7,221) (6,353) 25,126<br />
Net Increase / (Decrease) In Cash Held 4,614 (89) 35 41<br />
Add opening cash brought forward (4,541) (4,452) 1 (40)<br />
Effect of exchange rate changes on cash - - - -<br />
Ending Cash Carried Forward 73 (4,541) 36 1<br />
26<br />
Proceeds from short term borrowings have been netted against payments of short term borrowings.<br />
These borrowings are covered by an arranged finance facility.
<strong>Pumpkin</strong> <strong>Patch</strong> Limited & Subsidiaries statements of accounting policies<br />
for the 12 months ended 31 July <strong>2005</strong><br />
entities <strong>report</strong>ing<br />
The financial statements for the “Parent” are for <strong>Pumpkin</strong> <strong>Patch</strong> Limited as a separate legal entity. The consolidated<br />
financial statements for the “Group” are for the economic entity comprising <strong>Pumpkin</strong> <strong>Patch</strong> Limited and its subsidiaries.<br />
statutory base<br />
<strong>Pumpkin</strong> <strong>Patch</strong> Limited is a company registered under the Companies Act 1993 and is an issuer in terms of the<br />
Securities Act 1978.<br />
The financial statements are those of <strong>Pumpkin</strong> <strong>Patch</strong> Limited and its subsidiaries and are prepared and presented in<br />
accordance with the Companies Act 1993 and the Financial Reporting Act 1993.<br />
measurement base<br />
The financial statements have been prepared on the historical cost basis.<br />
To ensure consistency with the current period, comparative figures have been restated where appropriate.<br />
accounting policies<br />
The financial statements are prepared in accordance with New Zealand generally accepted accounting practice. The<br />
accounting policies that materially affect the measurement of financial performance, financial position and cash flows<br />
are set out below.<br />
group financial statements<br />
The Group financial statements consolidate the financial statements of subsidiaries, using the purchase method.<br />
Subsidiaries are entities that are controlled, either directly or indirectly, by the Parent.<br />
All material transactions between subsidiaries or between the Parent and subsidiaries are eliminated on consolidation.<br />
The results of subsidiaries acquired or disposed of during the year are included in the consolidated statement of<br />
financial performance from the date of acquisition or up to the date of disposal.<br />
operating revenues<br />
goods and services<br />
Revenue comprises the amounts received and receivable for goods and services supplied to customers in the<br />
ordinary course of business.<br />
investment income<br />
Dividend income is recognised in the period the dividend is declared. Interest and rental income are accounted<br />
for as earned.<br />
income tax<br />
The income tax expense recognised for the year is based on the accounting surplus, adjusted for permanent differences<br />
between accounting and tax rules.<br />
The impact of all timing differences between accounting and taxable income is recognised as a deferred tax liability or<br />
asset. This is the comprehensive basis for the calculation of deferred tax under the liability method. A deferred tax asset,<br />
or the effect of losses carried forward that exceed the deferred tax liability, is recognised in the financial statements only<br />
where there is virtual certainty that the benefit of the timing differences, or losses, will be utilised.<br />
goods and services tax (GST)<br />
The statement of financial performance and statement of cash flows have been prepared so that all components are<br />
stated exclusive of GST. All items in the statement of financial position are stated net of GST, with the exception of<br />
receivables and payables, which include GST invoiced.<br />
27
<strong>Pumpkin</strong> <strong>Patch</strong> Limited & Subsidiaries statements of accounting policies<br />
for the 12 months ended 31 July <strong>2005</strong><br />
foreign currencies<br />
transactions<br />
Transactions denominated in a foreign currency are converted to New Zealand dollars at the exchange rates in effect<br />
at the date of the transaction, except when forward currency contracts have been taken out to cover short-term forward<br />
currency commitments. Where short-term forward currency contracts have been taken out, the transaction is translated<br />
at the rate contained in the contract.<br />
Monetary assets and liabilities arising from trading transactions, such as inventory, trade debtors, cash and trade<br />
creditors, or overseas borrowings are translated at closing rates from the following currencies as at the financial<br />
period end:<br />
31 July<br />
<strong>2005</strong><br />
31 July<br />
2004<br />
Australian Dollar 0.8988 0.9076<br />
US Dollar 0.6842 0.6424<br />
British Pound 0.3896 0.3494<br />
Gains and losses due to currency fluctuations on these items are included in the statement of financial performance.<br />
foreign operations<br />
The results of integrated foreign operations are translated in the same way as if the underlying transactions had<br />
been entered into by the <strong>report</strong>ing entity.<br />
Exchange differences arising from the translation of integrated foreign operation are recognised in the statement<br />
of financial performance.<br />
share schemes and employee ownership plans<br />
The company operates employee share ownership plans for certain employees. The initial purchase of shares by the<br />
scheme is funded by advances from the company, the advances being recognised as assets in the statement of financial<br />
position. Where shares are issued in lieu of bonus, the expense is recognised in the statement of financial performance.<br />
The company operates share schemes for certain executive employees. No compensation expense is recognised in the<br />
statement of financial performance.<br />
deferred landlord contributions<br />
Landlord contributions to fit-out costs are capitalised as deferred contributions and amortised to the statement of financial<br />
performance over the lesser of the minimum period of the lease or the useful life of the asset.<br />
property, plant and equipment<br />
The cost of purchased property, plant and equipment is the value of the consideration given to acquire the assets<br />
and the value of other directly attributable costs which have been incurred in bringing the assets to the location and<br />
condition necessary for their intended service.<br />
The cost of assets constructed by the Group includes the cost of all materials used in construction, direct labour on the<br />
project and financing costs that are directly attributable to the project. Costs cease to be capitalised as soon as the<br />
asset is ready for productive use.<br />
28
<strong>Pumpkin</strong> <strong>Patch</strong> Limited & Subsidiaries statements of accounting policies<br />
for the 12 months ended 31 July <strong>2005</strong><br />
depreciation<br />
Depreciation on property, plant and equipment, other than freehold land, has been calculated on a straight line basis so<br />
as to expense the cost of the assets to their residual values over their useful lives as follows:<br />
Shop Fit Out<br />
Office Equipment<br />
Point of Sale Equipment<br />
Computer Equipment & Software<br />
Motor Vehicles<br />
Plant and Machinery<br />
Furniture and Fittings<br />
Leasehold Improvements<br />
3 – 10 years<br />
3 – 10 years<br />
3 years<br />
3 – 5 years<br />
4 – 5 years<br />
2 – 14 years<br />
3 – 10 years<br />
6 – 7 years<br />
leased assets<br />
Operating lease payments are representative of the pattern of benefits derived from the leased assets and<br />
accordingly are charged to the statements of financial performance in the periods in which they are incurred.<br />
Landlord contributions to fit-out costs are recognised in the statements of financial performance over the minimum<br />
period of the lease, as a reduction in operating lease costs.<br />
investments<br />
Investments in subsidiaries are stated at the lower of cost or net realisable value. Other investments are stated at the<br />
lower of cost or net realisable value.<br />
intangibles<br />
The excess of cost over the fair value of the net assets of the subsidiary entities is recognised as goodwill and is amortised<br />
to the statements of financial performance on a straight line basis over the shorter of its estimated life or five years.<br />
Other intangibles comprise of the cost of registering trademarks. These are amortised over their anticipated useful lives<br />
which range between 5 and 10 years.<br />
inventories<br />
Raw materials and finished goods are stated at the lower of average weighted cost and net realisable value.<br />
Cost is determined on a first in, first out basis.<br />
accounts receivable<br />
Accounts receivable are carried at estimated realisable value after providing against debts where collection is doubtful.<br />
impairment<br />
Annually, the directors assess the carrying value of each asset. Where the estimated recoverable amount of the asset<br />
is less than its carrying amount, the asset is written down. The impairment loss is recognised in the statements of<br />
financial performance.<br />
employee entitlements<br />
Employee entitlements to salaries and wages, <strong>annual</strong> leave, long service leave and other benefits are recognised<br />
when they accrue to employees.<br />
The liability for employee entitlements is carried at the present value of the estimated future cash outflows.<br />
29
<strong>Pumpkin</strong> <strong>Patch</strong> Limited & Subsidiaries statements of accounting policies<br />
for the 12 months ended 31 July <strong>2005</strong><br />
financial instruments<br />
recognised<br />
Financial instruments carried on the statements of financial position include cash and bank balances, investments,<br />
receivables, trade creditors and borrowings. The particular recognition methods adopted are disclosed in the individual<br />
policy statements associated with each item.<br />
Forward exchange contracts entered into as hedges of foreign exchange assets and liabilities are valued at exchange<br />
rates prevailing at period end. Any unrealised gains or losses are offset against foreign exchange gains and losses<br />
on the related asset or liability. Premiums paid on currency options are amortised over the period to maturity.<br />
unrecognised<br />
Financial instruments with off-balance sheet risk, have been entered into for the primary purpose of reducing<br />
exposure to fluctuations in foreign exchange rates and interest rates. While financial instruments are subject to risk that<br />
market rates may change subsequent to acquisition, such changes would generally be offset by opposite effects on the<br />
items hedged.<br />
Financial instruments purchased with the intention to be held for the long term or until maturity are recorded<br />
at original cost, adjusted for amortisation of premiums and discounts to maturity.<br />
statements of cashflows<br />
The following are the definitions of the terms used in the statements of cashflows:<br />
i)<br />
ii)<br />
Cash is considered to be cash on hand and current accounts in the bank, net of bank overdrafts.<br />
Investing activities are those activities relating to the acquisition, holding and disposal of property, plant and<br />
equipment and of investments. Investments can include securities not falling within the definition of cash.<br />
iii) Financing activities are those activities which result in changes in the size and composition of the capital structure of<br />
the Group. This includes both equity and debt not falling within the definition of cash. Dividends paid in relation to<br />
the capital structure are included in financing activities.<br />
iv)<br />
Operating activities include all transactions and other events that are not investing or financing activities.<br />
changes in accounting policies<br />
There were no changes to accounting policies during the period.<br />
30
<strong>Pumpkin</strong> <strong>Patch</strong> Limited & Subsidiaries notes to and forming part of the financial statements<br />
for the 12 months ended 31 July <strong>2005</strong><br />
1. segment information<br />
New Zealand Retail Australia Retail United Kingdom Retail<br />
12 months<br />
31 July <strong>2005</strong><br />
$000<br />
12 months<br />
31 July 2004<br />
$000<br />
12 months<br />
31 July <strong>2005</strong><br />
$000<br />
12 months<br />
31 July 2004<br />
$000<br />
12 months<br />
31 July <strong>2005</strong><br />
$000<br />
12 months<br />
31 July 2004<br />
$000<br />
Assets<br />
Segment 16,850 19,836 41,069 44,491 27,797 17,861<br />
Unallocated and Other<br />
Consolidated 16,850 19,836 41,069 44,491 27,797 17,861<br />
Revenue<br />
Segment 57,844 45,763 157,496 138,449 26,408 19,537<br />
Unallocated and Other<br />
Consolidated 57,844 45,763 157,496 138,449 26,408 19,537<br />
Result<br />
Segment 10,591 9,150 29,021 22,935 (283) (1,333)<br />
Interest Expense<br />
Unallocated and Other - - - - -<br />
Consolidated 10,591 9,150 29,021 22,935 (283) (1,333)<br />
United States Retail Other Total<br />
12 months<br />
31 July <strong>2005</strong><br />
$000<br />
12 months<br />
31 July 2004<br />
$000<br />
12 months<br />
31 July <strong>2005</strong><br />
$000<br />
12 months<br />
31 July 2004<br />
$000<br />
12 months<br />
31 July <strong>2005</strong><br />
$000<br />
12 months<br />
31 July 2004<br />
$000<br />
Assets<br />
Segment 1,798 - 14,101 6,185 101,615 88,373<br />
Unallocated and Other 9,724 12,334<br />
Consolidated 1,798 - 14,101 6,185 111,339 100,707<br />
Revenue<br />
Segment 15 - 38,225 16,002 279,988 219,751<br />
Unallocated and Other 390 541<br />
Consolidated 15 - 38,225 16,002 280,378 220,292<br />
Result<br />
Segment (1,152) - 9,626 2,127 47,803 32,879<br />
Interest Expense (548) (2,624)<br />
Unallocated and Other - - (11,446) (18,934)<br />
Consolidated (1,152) - 9,626 2,127 35,809 11,321<br />
“Other” represents wholesale, mail order and internet sales. The result is that of the Group before income tax.<br />
The Group operates in one industry being the retailing and wholesaling of children’s clothing. Intersegment sales are on an arms length basis.<br />
31
<strong>Pumpkin</strong> <strong>Patch</strong> Limited & Subsidiaries notes to and forming part of the financial statements<br />
for the 12 months ended 31 July <strong>2005</strong><br />
2. operating profit before income tax<br />
The operating profit before taxation is stated after charging/(crediting):<br />
Group<br />
Parent<br />
12 months<br />
31 July <strong>2005</strong><br />
$000<br />
12 months<br />
31 July 2004<br />
$000<br />
12 months<br />
31 July <strong>2005</strong><br />
$000<br />
12 months<br />
31 July 2004<br />
$000<br />
Depreciation:<br />
Leasehold improvements 280 286 57 51<br />
Computer equipment 733 740 580 483<br />
Shop fitouts 5,777 4,765 - -<br />
POS equipment 226 147 - -<br />
Plant and machinery 508 487 422 394<br />
Office equipment 102 96 38 42<br />
Motor vehicles - 14 - -<br />
Furniture and fittings 847 893 82 70<br />
Total Depreciation 8,473 7,428 1,179 1,040<br />
Foreign currency (gains)/losses 2,670 1,849 209 (44)<br />
Rental and operating lease costs 31,417 24,343 1,913 1,792<br />
Bad debts written off 75 77 - -<br />
Interest expense 576 2,777 263 198<br />
Gain on sale of property plant and equipment (7) (11) - (15)<br />
Dividends received - - (6,358) (5,273)<br />
Interest received (28) (153) (150) (112)<br />
Amortisation expense 63 51 - -<br />
Directors’ fees 170 176 170 176<br />
Donations 192 88 3 31<br />
Audit fees (PricewaterhouseCoopers)<br />
Statutory audit 128 125 110 125<br />
Half year audit - 80 - 80<br />
Other services 20 - - -<br />
In 2004 fees amounting to $246,250 were also paid to PricewaterhouseCoopers for services provided to the Group relating directly to the share issue.<br />
These costs were capitalised to share capital. Refer to note 4.<br />
32
<strong>Pumpkin</strong> <strong>Patch</strong> Limited & Subsidiaries notes to and forming part of the financial statements<br />
for the 12 months ended 31 July <strong>2005</strong><br />
3. taxation<br />
The income tax expense has been calculated as follows:<br />
Group<br />
Parent<br />
12 months<br />
31 July <strong>2005</strong><br />
$000<br />
12 months<br />
31 July 2004<br />
$000<br />
12 months<br />
31 July <strong>2005</strong><br />
$000<br />
12 months<br />
31 July 2004<br />
$000<br />
Operating profit/(loss) for the period before tax: 35,809 11,321 7,267 (1,430)<br />
Income tax on the operating profit/(loss) for the period at 33% 11,817 3,736 2,398 (472)<br />
Plus/(Less):<br />
Prior period adjustment 150 (155) 489 59<br />
Tax effect of permanent differences (782) (340) (2,105) (1,661)<br />
Foreign tax credits not utilised 25 - - -<br />
11,210 3,241 782 (2,074)<br />
The Income Tax Expense is represented by:<br />
Current taxation 9,541 6,588 (85) (795)<br />
Prior period adjustment 150 (155) 489 59<br />
Deferred taxation 1,494 (3,192) 378 (1,338)<br />
Foreign tax credits not utilised 25 - - -<br />
11,210 3,241 782 (2,074)<br />
Income Tax Payable/(Receivable)<br />
Opening Balance 2,276 (1,537) (2,131) 45<br />
Current taxation 9,541 6,588 (85) (795)<br />
Withholding tax paid (881) (722) (1) (25)<br />
Income tax paid (8,012) (2,763) (111) (21)<br />
Income tax refunded 95 2,100 - 2<br />
Income tax transferred - - - (160)<br />
Prior period adjustment 19 (154) 2,126 59<br />
Foreign <strong>investor</strong> tax credit (310) (1,236) (310) (1,236)<br />
Foreign tax credits not utilised 25 - - -<br />
Closing Balance 2,753 2,276 (512) (2,131)<br />
The group has estimated losses of $3,028,954 (2004: $4,638,114) available to carry forward arising from <strong>Pumpkin</strong> <strong>Patch</strong> Limited (UK).<br />
33
<strong>Pumpkin</strong> <strong>Patch</strong> Limited & Subsidiaries notes to and forming part of the financial statements<br />
for the 12 months ended 31 July <strong>2005</strong><br />
4. share capital<br />
Group<br />
Parent<br />
31 July <strong>2005</strong><br />
$000<br />
31 July 2004<br />
$000<br />
31 July <strong>2005</strong><br />
$000<br />
31 July 2004<br />
$000<br />
Issued and paid up capital brought forward: 57,535 10,907 57,535 10,907<br />
Share issue pre-listing - 1,000 - 1,000<br />
Share issue under pre-listing employee share schemes - 5,710 - 5,710<br />
Share issue under DF7 Scheme pre-listing - 1,875 - 1,875<br />
Share issue on listing - 101,284 - 101,284<br />
Share repurchase on listing - (61,284) - (61,284)<br />
Share issue costs - (1,957)* - (1,957)*<br />
Issued and paid up capital carried forward 57,535 57,535 57,535 57,535<br />
Shares held as treasury stock (1,401) (1,875) - -<br />
Balance at the end of the period 56,134 55,660 57,535 57,535<br />
As at 31 July <strong>2005</strong> there were 166,513,000 shares on issue (2004: 166,513,000). All ordinary shares are fully paid and rank equally with one vote<br />
attaching to each share.<br />
Prior to listing in 2004 all B Class and C Class shares were converted to ordinary shares (formerly A Class shares) as part of the restructuring of pre-listing<br />
employee share schemes.<br />
* Fees amounting to $246,250 were paid to PricewaterhouseCoopers for services provided to the Group relating directly to the share issue in 2004.<br />
ordinary shares (formerly A class shares)<br />
31 July <strong>2005</strong> 31 July 2004<br />
Opening balance 166,513,000 1,132,800<br />
Conversion of B Class shares pre-listing - 70,861<br />
Conversion of C Class shares pre-listing - 110,358<br />
Issue of ordinary shares prior to listing - 11,111<br />
Ordinary shares prior to 100:1 share split in 2004 166,513,000 1,325,130<br />
Ordinary shares after 100:1 share split in 2004 166,513,000 132,513,000<br />
Issue of ordinary shares to DF7 Scheme pre-listing - 2,000,000<br />
Issue of ordinary shares on listing - 81,027,200<br />
Repurchase of ordinary shares on listing - (49,027,200)<br />
Closing balance 166,513,000 166,513,000<br />
34
<strong>Pumpkin</strong> <strong>Patch</strong> Limited & Subsidiaries notes to and forming part of the financial statements<br />
for the 12 months ended 31 July <strong>2005</strong><br />
B class shares<br />
31 July <strong>2005</strong> 31 July 2004<br />
Opening balance - 68,700<br />
Issue of B Class shares under pre-listing employee ownership plans - 2,161<br />
Conversion to ordinary shares pre-listing - (70,861)<br />
Closing balance - -<br />
C class shares<br />
31 July <strong>2005</strong> 31 July 2004<br />
Opening balance - 47,350<br />
Issue of C Class shares under pre-listing employee ownership plans - 63,008<br />
Conversion to ordinary shares pre-listing - (110,358)<br />
31 July <strong>2005</strong> 31 July 2004<br />
Total shares on issue 166,513,00 166,513,000<br />
employee share ownership scheme – DF7 scheme<br />
Prior to listing in 2004 the Company established an employee share ownership scheme under DF7 of the Income Tax<br />
Act 1994. Under the Scheme the Company issued 2,000,000 shares (1.2% of total ordinary shares) to the Scheme’s<br />
trustee, <strong>Pumpkin</strong> <strong>Patch</strong> Nominees Limited, to be held on behalf of employees who elect to participate in the Scheme.<br />
During the period 522,690 shares were offered to New Zealand employees under the DF7 Scheme at $0.94 per<br />
share, being 25% less than the final listing price of $1.25. The value of shares offered was limited to a maximum of<br />
$2,340 per employee. The qualifying period between grant and vesting dates is 3 years. Dividends paid during the<br />
qualifying period on shares allocated to employees are paid to the employees. Voting rights on shares not allocated<br />
under the Scheme are exercisable by the trustees.<br />
The shares are allocated under the condition that should the employee leave the Company before the qualifying period<br />
ends, their shares will be repurchased by the Scheme at the lesser of market value and the price at which the shares<br />
were originally allocated to the employees, subject to the repayment of the original loan. Any such shares are reallocated<br />
to other employees by the Scheme. During the period 17,423 shares were repurchased by the Scheme as a<br />
result of employees ceasing employment with the Company.<br />
The Company, prior to listing, gave the Trustee an interest free loan to enable it to purchase the shares issued to it for<br />
this Scheme. The Company has agreed that the Trustee is, in turn, entitled to novate a portion of that loan to individual<br />
employees to assist them to purchase shares under the Scheme. As at 31 July <strong>2005</strong> the balance of this loan outstanding<br />
was $1,740,326 (2004: $1,875,000).<br />
The Company intends to implement similar schemes for its employees in the United Kingdom and in Australia in 2006.<br />
The Company believes the 1,494,733 shares held by the Trustee but unallocated as at 31 July <strong>2005</strong> will be sufficient<br />
to provide for the estimated number of United Kingdom and Australian employees likely to elect to join the schemes.<br />
35
<strong>Pumpkin</strong> <strong>Patch</strong> Limited & Subsidiaries notes to and forming part of the financial statements<br />
for the 12 months ended 31 July <strong>2005</strong><br />
employee share option plan<br />
Prior to listing in 2004 the Company established a Share Option Plan for selected senior employees, including<br />
Executive Directors, under the following terms:<br />
• One option entitles the employee to purchase one ordinary share in the Company<br />
• The exercise price of the 2004 options issued was the price per share paid by <strong>investor</strong>s upon initial listing on<br />
9 June 2004, being $1.25. In the case of the <strong>2005</strong> options the exercise price of $2.75 was the volume weighted<br />
average selling price of the Company’s shares traded on the New Zealand Stock Exchange during the 10 working<br />
days prior to issue date, being 9 June <strong>2005</strong>.<br />
• Options can only be exercised:<br />
- in the exercise period commencing three years after issue date and ending 5 years after issue date or in other<br />
extraordinary circumstances, for example if a person or group of associated persons acquire an interest in at least<br />
50% of the total voting rights in the Company, and<br />
- if, on the day of exercise, the market price of the ordinary shares is equal to or greater than the benchmark price.<br />
• The benchmark price is calculated by taking the exercise price and adjusting for the required weighted average cost<br />
of capital, as determined by independent advisors, and expected <strong>annual</strong> dividends over the period from the issue<br />
date to the commencement of the exercise period.<br />
• Options will lapse if not exercised within the exercise period.<br />
In the current period 2,427,000 (2004: 2,274,000) options were granted under the Share Option Plan<br />
Options:<br />
Number Issued<br />
Exercise<br />
Price<br />
Exercise<br />
Period Starts<br />
Exercise<br />
Period Ends<br />
Options issued in June 2004 2,274,000 $1.25<br />
Opening balance 2,274,000<br />
Options issued in June <strong>2005</strong> 2,427,000 $2.75<br />
Closing balance 4,701,000<br />
9 June<br />
2007<br />
9 June<br />
2008<br />
9 June<br />
2009<br />
9 June<br />
2010<br />
Under the Scheme Executive Directors were issued with the following options: Chrissy Conyngham 290,000, Greg Muir 150,000, and Maurice Prendergast<br />
150,000.<br />
The value of these options was independently assessed using a binominal option pricing model and was at the time of issue: Chrissy Conyngham $176,610;<br />
Greg Muir $91,350; Maurice Prendergast $91,350, and $1,118,733 for all other employees. No compensation expense is recognised in the statements of<br />
financial performance.<br />
5. treasury stock<br />
1,494,733 shares (2004: 2,000,000) have been issued under the DF7 Scheme but at balance date have not been<br />
allocated to employees. The shares are held in trust by <strong>Pumpkin</strong> <strong>Patch</strong> Nominees Limited. The terms of the Trust Deed<br />
between the Company and the Trustee gives the Company the right to appoint trustees and to benefit from any surplus<br />
funds held by the Trust.<br />
Therefore the Company has consolidated the DF7 Scheme as an in substance subsidiary and as such has recognised<br />
unallocated DF7 Scheme shares as Treasury Stock.<br />
36<br />
The value of balance of Treasury Stock as at 31 July <strong>2005</strong> is $1,401,312 (2004: $1,875,000).
<strong>Pumpkin</strong> <strong>Patch</strong> Limited & Subsidiaries notes to and forming part of the financial statements<br />
for the 12 months ended 31 July <strong>2005</strong><br />
6. pre-listing employee share ownership schemes<br />
In the period from 1999 to prior to listing in June 2004 the Company established a number of employee share<br />
ownership schemes which allowed employees (including Executive Directors) to purchase shares in the Company. These<br />
share purchases were funded by interest free loans from the Company.<br />
Prior to listing and the allotment of shares under the share offer in June 2004 the Company restructured all pre-listing<br />
employee share ownership schemes.<br />
The effect of the restructuring was:<br />
• All shares allocated under these schemes were fully paid. In 2004 the Company provided additional interest free<br />
loans of $5,710,750 to employees to pay for any shares under the schemes not already purchased in cash<br />
• The Company committed to pay grossed up bonuses to employees, in some cases over a three year period and in<br />
some cases prior to listing, to fully or substantially discharge the amount of the loans.<br />
• The total net tax cost of restructuring the pre-listing employee share ownership schemes of $7,431,490 was fully<br />
provided for prior to listing in 2004. This consisted $7,220,411 for the provision of bonuses to employees,<br />
including Executive Directors, to fully or substantially discharge their loans and $211,079 for the discharge of a loan<br />
outstanding from the pre-listing <strong>Pumpkin</strong> <strong>Patch</strong> Employee Share Scheme Trust.<br />
• Approximately one third of each employees shares issued under the schemes were held by a Trustee as security for<br />
the payment of the loans owing to the Company and are to be released to employees progressively over three years<br />
from 2004 to 2007 as their loans are progressively discharged. During <strong>2005</strong> security over 1,266,316 shares was<br />
released to employees.<br />
• Should an employee’s employment cease they are required to forfeit to the Company any remaining shares held as<br />
security. During <strong>2005</strong> employees ceasing employment forfeited 24,978 shares to the Company. These shares are<br />
held by the Trustee for use in satisfying its obligations under other existing employee share schemes.<br />
• Employees retain full voting and dividend rights attached to their shares while held as security.<br />
• As at 31 July <strong>2005</strong> the Trustee holds 2,479,389 shares as security (2004: 3,800,847).<br />
37
<strong>Pumpkin</strong> <strong>Patch</strong> Limited & Subsidiaries notes to and forming part of the financial statements<br />
for the 12 months ended 31 July <strong>2005</strong><br />
Group<br />
Parent<br />
31 July <strong>2005</strong><br />
$000<br />
31 July 2004<br />
$000<br />
31 July <strong>2005</strong><br />
$000<br />
31 July 2004<br />
$000<br />
Pre-listing Employee Share Ownership Scheme Loans<br />
Opening balance 4,352 1,647 4,352 1,647<br />
Loans relating to issue of shares under pre-listing employee share<br />
schemes prior to restructuring<br />
- 74 - 74<br />
Loans established upon the pre-listing restructuring of the<br />
employee share schemes<br />
- 5,711 - 5,711<br />
Discharge of loan to pre-listing employee share scheme trust prior<br />
to listing<br />
- (211) - (211)<br />
Loans discharged by application of net bonuses paid prior to<br />
listing<br />
- (2,869) - (2,869)<br />
Loans discharged by application of net bonuses paid (1,223) - (1,223) -<br />
Loans forfeited due to staff leaving (105) - (105) -<br />
Closing balance 3,024 4,352 3,024 4,352<br />
Current portion 1,214 1,357 1,214 1,357<br />
Term portion 1,810 2,995 1,810 2,995<br />
3,024 4,352 3,024 4,352<br />
Provision for Pre-listing Employee Share Scheme Restructuring<br />
Bonuses<br />
Opening balance 4,070 - 4,070 -<br />
Provision of bonuses prior to listing - 7,220 - 7,220<br />
Application of provision to bonuses paid (1,327) (3,150) (1,327) (3,150)<br />
Provision released due to staff leaving (105) - (105) -<br />
Closing balance 2,638 4,070 2,638 4,070<br />
Current portion 1,319 1,357 1,319 1,357<br />
Term portion 1,319 2,713 1,319 2,713<br />
2,638 4,070 2,638 4,070<br />
7. retained earnings<br />
Group<br />
Parent<br />
12 months<br />
31 July <strong>2005</strong><br />
$000<br />
12 months<br />
31 July 2004<br />
$000<br />
12 months<br />
31 July <strong>2005</strong><br />
$000<br />
12 months<br />
31 July 2004<br />
$000<br />
Opening balance 7,877 9,423 (3,748) 5,235<br />
Surplus for the period 24,599 8,081 6,485 644<br />
Dividends paid (6,353) (9,627) (6,353) (9,627)<br />
Closing balance 26,123 7,877 (3,616) (3,748)<br />
38<br />
The dividends were fully imputed. Supplementary dividends of $423,100 (2004 : $1,236,424) were paid to<br />
shareholders not tax resident in New Zealand for which the Group received a foreign <strong>investor</strong> tax credit entitlement.
<strong>Pumpkin</strong> <strong>Patch</strong> Limited & Subsidiaries notes to and forming part of the financial statements<br />
for the 12 months ended 31 July <strong>2005</strong><br />
8. imputation credit account<br />
Parent<br />
31 July <strong>2005</strong><br />
$000<br />
Parent<br />
31 July 2004<br />
$000<br />
Opening balance 38 743<br />
Plus income tax paid 111 18<br />
Imputation credits attached to dividends received 3,132 2,597<br />
Less imputation credits attached to dividends paid to shareholders (2,766) (3,505)<br />
Transfer from group companies - 160<br />
Withholding tax credits - 25<br />
Use of money interest - 3<br />
Tax refund - (3)<br />
Closing balance 515 38<br />
9. accruals and provisions<br />
Group<br />
Parent<br />
Notes<br />
31 July <strong>2005</strong><br />
$000<br />
31 July 2004<br />
$000<br />
31 July <strong>2005</strong><br />
$000<br />
31 July 2004<br />
$000<br />
Current<br />
Sundry accruals 8,885 9,238 1,559 1,678<br />
Provision for pre-listing ESOP restructuring bonuses 6 1,319 1,357 1,319 1,357<br />
Employee entitlements 2,144 1,634 969 789<br />
GST payable 523 239 (803) (1,182)<br />
Deferred landlord contributions 1,214 1,312 140 140<br />
14,085 13,780 3,184 2,782<br />
Non Current<br />
Deferred landlord contributions 2,041 2,622 385 525<br />
Provision for pre-listing ESOP restructuring bonuses 6 1,319 2,713 1,319 2,713<br />
3,360 5,335 1,704 3,238<br />
17,445 19,115 4,888 6,020<br />
39
<strong>Pumpkin</strong> <strong>Patch</strong> Limited & Subsidiaries notes to and forming part of the financial statements<br />
for the 12 months ended 31 July <strong>2005</strong><br />
10 inventories<br />
Group<br />
Parent<br />
31 July <strong>2005</strong><br />
$000<br />
31 July 2004<br />
$000<br />
31 July <strong>2005</strong><br />
$000<br />
31 July 2004<br />
$000<br />
Inventories comprise:<br />
Finished goods 45,762 36,663 - -<br />
Stock in transit 9,157 18,763 - -<br />
Raw materials 2,255 3,351 - -<br />
57,174 58,777 - -<br />
11 property plant and equipment - group<br />
31 July <strong>2005</strong> 31 July 2004<br />
Cost<br />
$000<br />
Acc Depn<br />
$000<br />
Book Value<br />
$000<br />
Cost<br />
$000<br />
Acc Depn<br />
$000<br />
Book Value<br />
$000<br />
Leasehold improvements 1,951 967 984 1,864 744 1,120<br />
Computer equipment 6,824 5,647 1,177 6,031 4,913 1,118<br />
Shop fit out 48,298 23,292 25,006 36,859 17,534 19,325<br />
Point of sale equipment 1,325 1,000 325 1,138 774 364<br />
Plant and machinery 4,691 3,263 1,428 4,172 2,824 1,348<br />
Office equipment 976 560 416 828 458 370<br />
Motor vehicles 42 36 6 110 76 34<br />
Furniture and fittings 7,399 3,524 3,875 7,107 2,638 4,469<br />
Land 1,964 - 1,964 1,964 - 1,964<br />
Total 73,470 38,289 35,181 60,073 29,961 30,112<br />
property plant and equipment - parent company<br />
31 July <strong>2005</strong> 31 July 2004<br />
Cost<br />
$000<br />
Acc Depn<br />
$000<br />
Book Value<br />
$000<br />
Cost<br />
$000<br />
Acc Depn<br />
$000<br />
Book Value<br />
$000<br />
Computer equipment 4,465 3,582 883 3,869 3,002 867<br />
Plant and machinery 3,886 2,748 1,138 3,318 2,326 992<br />
Office equipment 431 279 152 401 241 160<br />
Motor vehicles 28 28 - 52 52 -<br />
Furniture and fittings 1,106 575 531 990 435 555<br />
Land 1,964 -- 1,964 1,964 - 1,964<br />
40<br />
Total 11,880 7,212 4,668 10,594 6,056 4,538
<strong>Pumpkin</strong> <strong>Patch</strong> Limited & Subsidiaries notes to and forming part of the financial statements<br />
for the 12 months ended 31 July <strong>2005</strong><br />
Property Valuation<br />
The Directors, having taken into consideration purchase offers, independent and government valuations and other known<br />
factors, have assessed the fair value of freehold land to be $3.05million.<br />
12. investments in subsidiaries<br />
The Group’s investments in subsidiaries are as follows:<br />
Interest held by the group<br />
<strong>2005</strong> 2004<br />
Audited By<br />
Torquay Enterprises Limited 100% 100% PricewaterhouseCoopers<br />
<strong>Pumpkin</strong> <strong>Patch</strong> Originals Limited 100% 100% PricewaterhouseCoopers<br />
<strong>Pumpkin</strong> <strong>Patch</strong> (Australia) Pty Limited 100% 100% PricewaterhouseCoopers<br />
<strong>Pumpkin</strong> <strong>Patch</strong> Limited (UK) 100% 100% PricewaterhouseCoopers<br />
<strong>Pumpkin</strong> <strong>Patch</strong> LLC 100% - PricewaterhouseCoopers<br />
<strong>Patch</strong> Kids Limited 100% - PricewaterhouseCoopers<br />
The Catalogue Studio Pty Limited 100% 100% PricewaterhouseCoopers<br />
All subsidiary entities have a balance date of 31 July. <strong>Pumpkin</strong> <strong>Patch</strong> (Australia) Pty Limited and The Catalogue Studio<br />
Pty Limited are incorporated in Australia. <strong>Pumpkin</strong> <strong>Patch</strong> Limited (UK) is incorporated in the United Kingdom. <strong>Pumpkin</strong><br />
<strong>Patch</strong> LLC is incorporated in the United States of America. All other subsidiary entities are incorporated in New<br />
Zealand.<br />
The principal activities of the subsidiaries are:<br />
Torquay Enterprises Limited<br />
<strong>Pumpkin</strong> <strong>Patch</strong> Originals Limited<br />
<strong>Pumpkin</strong> <strong>Patch</strong> (Australia) Pty Limited<br />
<strong>Pumpkin</strong> <strong>Patch</strong> Limited (UK)<br />
<strong>Pumpkin</strong> <strong>Patch</strong> LLC<br />
<strong>Patch</strong> Kids Limited<br />
The Catalogue Studio Pty Limited<br />
Investment Company<br />
Clothing Retailer and Wholesaler<br />
Limited Holding/Administration Functions<br />
Clothing Retailer and Wholesaler<br />
Clothing Retailer<br />
Non trading<br />
Non trading<br />
13. deferred taxation<br />
Group<br />
Parent<br />
31 July <strong>2005</strong><br />
$000<br />
31 July 2004<br />
$000<br />
31 July <strong>2005</strong><br />
$000<br />
31 July 2004<br />
$000<br />
Deferred taxation opening 3,635 446 1,505 167<br />
Prior year adjustment (105) (3) (49) -<br />
On surplus for the period (1,494) 3,192 (379) 1,338<br />
Deferred taxation closing 2,036 3,635 1,077 1,505<br />
41
<strong>Pumpkin</strong> <strong>Patch</strong> Limited & Subsidiaries notes to and forming part of the financial statements<br />
for the 12 months ended 31 July <strong>2005</strong><br />
14. contingent liabilities<br />
Group and Parent Company<br />
The Company has guaranteed, together with subsidiary companies, the indebtedness of <strong>Pumpkin</strong> <strong>Patch</strong> Limited and<br />
subsidiaries at 31 July <strong>2005</strong>, together with, in all cases, interest thereon under a deed of guarantee dated 18 April<br />
1996. The deed with the ANZ National Bank Limited provides for the issue of securities in respect of indebtedness<br />
from time to time of <strong>Pumpkin</strong> <strong>Patch</strong> Limited and/or any guaranteeing subsidiary. At 31 July <strong>2005</strong> the total indebtedness<br />
guaranteed by the deed amounted to $5,200,156 (2004: $8,165,004).<br />
Other guarantees held by the ANZ National Bank Limited include rent guarantees to certain landlords amounting to<br />
$1,607,021 (2004: $1,468,352), rent guarantees provided to the landlords of a subsidiary, <strong>Pumpkin</strong> <strong>Patch</strong> Limited<br />
(UK), amounting to $1,447,787 (2004: $1,216, 646), and a guarantee of $75,000 (2004: $75,000) to the NZX.<br />
The amount of outstanding liabilities under Letters of Credit at 31 July <strong>2005</strong> amounted to $144,652 (2004: Nil).<br />
15. capital expenditure commitments<br />
The Group has commitments for future capital expenditure at 31 July <strong>2005</strong> amounting to $3,642,084<br />
(2004: $1,830,000).<br />
16. operating lease obligations<br />
Obligations payable after balance date on non-cancellable operating leases as follows:<br />
Group<br />
Parent<br />
31 July <strong>2005</strong><br />
$000<br />
31 July 2004<br />
$000<br />
31 July <strong>2005</strong><br />
$000<br />
31 July 2004<br />
$000<br />
Not later than one year 25,362 25,851 1,940 1,622<br />
Later than one year and not later than two years 19,717 18,789 1,831 1,518<br />
Later than two years and not later than five years 33,394 28,916 4,750 4,555<br />
Later than five years 10,790 10,071 4,822 6,050<br />
89,263 83,627 13,343 13,745<br />
17. related party transactions<br />
The parent company has entered into certain transactions in the form of recharging of expenses and overheads with its<br />
subsidiaries. Details of the identity of subsidiaries are disclosed in Note 12 - Investments in subsidiaries.<br />
The Group has paid rent of $54,853 (2004: $8,042) to The Dickens Street Partnership which is 66% owned by The<br />
Opito Family Trust, a shareholder in <strong>Pumpkin</strong> <strong>Patch</strong> Limited. These payments were made on normal commercial terms<br />
and there are no outstanding balances at period end.<br />
The Group has made purchases of shop fixtures and fittings from Espies Shopfitters Limited of $3,677,690 (2004:<br />
$2,984,717). Espies Shopfitters Limited is 48.75% beneficially owned by Kezza Family Trust, a shareholder of <strong>Pumpkin</strong><br />
<strong>Patch</strong> Limited. Kezza Family Trust is associated with Maurice Prendergast, a Director in <strong>Pumpkin</strong> <strong>Patch</strong> Limited. These<br />
were made on normal commercial terms. At period end $129,775 was outstanding (2004: $321,626).<br />
42
<strong>Pumpkin</strong> <strong>Patch</strong> Limited & Subsidiaries notes to and forming part of the financial statements<br />
for the 12 months ended 31 July <strong>2005</strong><br />
18. intangible assets<br />
Group<br />
Parent<br />
31 July <strong>2005</strong><br />
$000<br />
31 July 2004<br />
$000<br />
31 July <strong>2005</strong><br />
$000<br />
31 July 2004<br />
$000<br />
Patents and Trademarks<br />
Patents and trademarks at beginning of period 210 207 - -<br />
Acquisitions 91 54 - -<br />
Current period amortisation (63) (51) - -<br />
Patents and trademarks at end of period 238 210 - -<br />
Total intangible assets 238 210 - -<br />
19. financial instruments<br />
(a) Currency and Interest Rate Risk<br />
Nature of activities and management policies with respect to financial instruments:<br />
1. Currency<br />
The Group undertakes transactions denominated in foreign currencies from time to time and resulting from these<br />
activities, exposures in foreign currency arise. It is the Group’s policy to hedge foreign currency risks as they arise<br />
except for foreign currency risks authorised by the Board. To manage these exposures, the Group uses forward foreign<br />
exchange contracts and foreign currency options.<br />
The notional principal or contract amounts of foreign exchange instruments outstanding at balance date are:<br />
<strong>2005</strong><br />
$000<br />
2004<br />
$000<br />
Forward foreign exchange contracts - buy 62,168 50,946<br />
Forward foreign exchange contracts – sell 19,794 38,914<br />
Forward options - buy 72,865 4,839<br />
Forward options - sell 16,199 -<br />
Total 171,026 94,699<br />
The cash settlement requirements of the forward foreign exchange contracts and options approximates the notional<br />
amount shown above.<br />
2. Interest Rate<br />
The Group utilises as required long-term fixed rate borrowings which are used to fund on-going activities. Management<br />
monitors the levels of interest rates on an on-going basis and periodically will lock in fixed rates on the next floating<br />
reset, when they are of the view that interest rates may increase.<br />
43
<strong>Pumpkin</strong> <strong>Patch</strong> Limited & Subsidiaries notes to and forming part of the financial statements<br />
for the 12 months ended 31 July <strong>2005</strong><br />
3. Repricing Analysis<br />
Trade debtors, other debtors, trade creditors, other creditors and dividends payable have not been included in the<br />
table below as they are not interest rate sensitive.<br />
Group Repricing Maturities <strong>2005</strong><br />
Effective<br />
Interest Rates<br />
< 6 Months<br />
$000<br />
6-12 Months<br />
$000<br />
1-2 Years<br />
$000<br />
2-5 Years<br />
$000<br />
> 5 Years<br />
$000<br />
Total $000<br />
Liabilities<br />
Bank overdraft - - - - - - -<br />
Total Liabilities - - - - - -<br />
Repricing Gap - - - - - -<br />
Group Repricing Maturities 2004<br />
Effective<br />
Interest Rates<br />
< 6 Months<br />
$000<br />
6-12 Months<br />
$000<br />
1-2 Years<br />
$000<br />
2-5 Years<br />
$000<br />
> 5 Years<br />
$000<br />
Total $000<br />
Liabilities<br />
Bank overdraft 8.35% 4,656 - - - - 4,656<br />
Short & long term<br />
borrowings<br />
- - - - -<br />
Term liabilities - - - - -<br />
Total Liabilities 4,656 - - - - 4,656<br />
Repricing Gap 4,656 - - - - 4,656<br />
Parent Company Repricing Maturities <strong>2005</strong><br />
Effective<br />
Interest Rates<br />
< 6 Months<br />
$000<br />
6-12 Months<br />
$000<br />
1-2 Years<br />
$000<br />
2-5 Years<br />
$000<br />
> 5 Years<br />
$000<br />
Total $000<br />
Liabilities<br />
Bank overdraft - - - - - -<br />
Term liabilities - - - - -<br />
Total Liabilities - - - - - -<br />
Repricing Gap - - - - - -<br />
Parent Company Repricing Maturities 2004<br />
Effective<br />
Interest Rates<br />
< 6 Months<br />
$000<br />
6-12 Months<br />
$000<br />
1-2 Years<br />
$000<br />
2-5 Years<br />
$000<br />
> 5 Years<br />
$000<br />
Total $000<br />
Liabilities<br />
Bank overdraft - - - - - -<br />
Term liabilities - - - - -<br />
Total Liabilities - - - - - -<br />
44<br />
Repricing Gap - - - - - -
<strong>Pumpkin</strong> <strong>Patch</strong> Limited & Subsidiaries notes to and forming part of the financial statements<br />
for the 12 months ended 31 July <strong>2005</strong><br />
4. Concentration of Credit Risk<br />
In the normal course of business, the Group incurs credit risk from trade debtors and transactions with financial<br />
institutions. The Group has a credit policy which is used to manage this risk.<br />
The Group has no significant concentrations of credit risk. The Group does not require any collateral or security to<br />
support financial instruments due to the quality of financial institutions and trade debtors dealt with.<br />
(b) Fair Values<br />
The estimated fair values of the Group’s financial assets and liabilities which differ from the carrying values are noted<br />
below:<br />
31 July <strong>2005</strong> 31 July 2004<br />
Carrying Value<br />
$000<br />
Fair Value<br />
$000<br />
Carrying Value<br />
$000<br />
Fair Value<br />
$000<br />
Assets<br />
Investments 4 4 4 4<br />
Unrecognised<br />
Foreign exchange contracts - 3,077 - 1,712<br />
The Group anticipates that term liabilities will be held to maturity and that settlement at fair value is unlikely.<br />
The following methods and assumptions were used to estimate the fair values for each class of financial instrument.<br />
Trade Debtors, Trade Creditors and Bank Overdraft<br />
The carrying value of these items is equivalent to their fair value and therefore they are excluded from the table<br />
shown above.<br />
Investments<br />
The fair value of listed investments is estimated based on quoted market prices at balance date. The fair value of<br />
unlisted investments is estimated to be the net asset backing, as there are no quoted market prices available.<br />
Term Liabilities<br />
The fair value of the Group’s term liabilities is estimated based on current market rates available to the Group for debt<br />
of similar maturity.<br />
Foreign Exchange Contracts<br />
The fair value of these instruments is estimated based on the quoted market price of these instruments.<br />
Guarantees and Overdraft Facilities<br />
The fair value of these instruments is estimated on the basis that management do not expect settlement at face value<br />
to arise. The carrying value and fair value of these instruments is nil.<br />
45
<strong>Pumpkin</strong> <strong>Patch</strong> Limited & Subsidiaries notes to and forming part of the financial statements<br />
for the 12 months ended 31 July <strong>2005</strong><br />
20. reconciliation of net profit after taxation to cashflow from operating activities<br />
Group<br />
Parent<br />
Note<br />
12 months<br />
31 July <strong>2005</strong><br />
$000<br />
12 months<br />
31 July 2004<br />
$000<br />
12 months<br />
31 July <strong>2005</strong><br />
$000<br />
12 months<br />
31 July 2004<br />
$000<br />
Net Profit After Tax 24,599 8,080 6,485 644<br />
Add/(Less) non-cash items:<br />
Depreciation expense 2 8,473 7,428 1,179 1,040<br />
(Increase)/Decrease in deferred taxation 1,599 (3,190) 428 (1,337)<br />
Provision for prelisting employee share scheme<br />
restructuring<br />
6 - 8,983 - 8,983<br />
Fit out contributions amortised (1,207) (1,333) - -<br />
Amortisation expense 2 63 51 - -<br />
Add/(Less) movements in working capital items:<br />
(Increase)/Decrease in receivables and prepayments (6,983) 208 3,849 (51)<br />
Increase/(Decrease) in creditors and provisions (2,813) 7,625 (1,959) (3,289)<br />
Increase/(Decrease) in creditors re stock in transit (734) 4,780 - -<br />
(Increase)/Decrease in inventories on hand (8,003) (12,668) - -<br />
(Increase)/Decrease in stock in transit 9,606 (4,893) - -<br />
(Increase)/Decrease in related party balances - -<br />
(2,284)<br />
(30,233)<br />
Net Cash Flow From Operating Activities 24,600 15,071 7,698 (24,243)<br />
21. significant events after balance date<br />
No significant events have occurred after balance date.<br />
22. implementation of international financial <strong>report</strong>ing standards<br />
As announced by New Zealand’s Accounting Standards Review Board in late 2002, all companies will be required to<br />
prepare financial statements under New Zealand equivalents to International Financial Reporting Standards (“NZIFRS”)<br />
for no later than the financial year beginning on or after 1 January 2007, including comparative financial information<br />
for the financial year beginning on or after 1 January 2006.<br />
During 2004 a project team was established to plan for the transition to NZIFRS and identify the impacts of<br />
its implementation. A high level overview has been completed and <strong>report</strong>ed to the Audit, Compliance and Risk<br />
Management Committee of the Board. The project team has recommended adopting NZIFRS from 1 August 2006. This<br />
means that the first NZIFRS compliant financial statements will be published for the half year ending 31 January 2008<br />
and the full year ending 31 July 2008.<br />
46<br />
To date the project team has identified a number of accounting policy changes that will be required although some of<br />
these are subject to interpretation and further review before the impact on the Group is fully understood. The areas of<br />
significant difference for the Group, between New Zealand Generally Accepted Accounting Practice (“NZ GAAP”) and<br />
NZIFRS, are set out below:
<strong>Pumpkin</strong> <strong>Patch</strong> Limited & Subsidiaries notes to and forming part of the financial statements<br />
for the 12 months ended 31 July <strong>2005</strong><br />
Taxation<br />
• Initial impact on retained earnings on implementation.<br />
• Additional tax assets or liabilities may be required to be recognised<br />
Under NZIFRS, deferred tax will be calculated using a “balance sheet” approach which recognises deferred tax assets<br />
and liabilities by reference to differences between accounting and tax values of balance sheet items rather than the<br />
accounting and tax values recognised in the Statements of Financial Performance.<br />
Hedge Accounting<br />
• Initial impact on retained earnings on implementation<br />
• Volatility in future earnings<br />
• New assets or liabilities to be recognised<br />
The Group maintains an off-balance sheet portfolio of forward exchange contracts to hedge the currency risks<br />
associated with its future purchasing requirements of overseas sourced inventories and the receipt of net revenues from<br />
overseas business segments. Under NZ GAAP these contracts are accounted for as hedges with any gains or losses<br />
deferred and recognised when the hedged transaction occurs.<br />
Under IFRS all derivative contracts, whether used as hedging instruments or otherwise, will be recognised at fair value<br />
in the statements of financial position. Changes in the fair value of the derivatives will be recognised in the statements<br />
of financial performance unless strict hedge criteria are met. Portfolio hedging of currency risk does not meet NZIFRS<br />
hedge criteria and would require any foreign currency gains or losses on the portfolio hedge to be recognised in<br />
the statement of financial performance. The project team is currently investigating how the Group will manage these<br />
currency exposures in the future.<br />
Where the Group is unable to meet NZIFRS hedge criteria this will result in increased earnings volatility.<br />
Employee Benefits<br />
• Initial impact on retained earnings on implementation<br />
• New liabilities to be recognised<br />
Under NZIFRS, the liability for both vested and non-vested long-term employee benefits, will be recognised in the<br />
statements of financial position at the present value of the expected future obligation.<br />
Share-based Remuneration<br />
• Initial impact on retained earnings on implementation<br />
• Higher expenses<br />
The Group issues share options to executives as a form of equity-based compensation. The Group’s current accounting<br />
policy does not recognise an expense in respect of these share options.<br />
Under NZIFRS the Group will be required to determine the fair value of all share-based remuneration and amortise the<br />
expenses over the relevent vesting periods.<br />
The above differences from current accounting policy have not been quantified as, at this stage, the Group is unable to<br />
reliably quantify the effects. On adoption of NZIFRS a majority of the transitions required will be made, retrospectively,<br />
against opening retained earnings.<br />
The areas identified above should not be taken as an exhaustive list of all differences between NZ GAAP and NZIFRS.<br />
The impacts discussed are based on the project team’s current interpretation of the standards that have been released to<br />
date. There is potential for the significance of the impact to change when the Group prepares its first full set of NZIFRS<br />
financial statements due to changes in standards, changes in business, or changes in interpretation of the standards.<br />
47
<strong>Pumpkin</strong> <strong>Patch</strong> Limited & Subsidiaries notes to and forming part of the financial statements<br />
for the 12 months ended 31 July <strong>2005</strong><br />
23. comparison against prospectus forecast<br />
Summary Statement of Financial Performance for the year ended 31 July <strong>2005</strong><br />
Actual <strong>2005</strong><br />
$000<br />
Forecast <strong>2005</strong><br />
$000<br />
Operating revenue 280,378 246,774<br />
Group earnings before interest and tax 36,357 23,035<br />
Net profit after income tax 24,599 15,331<br />
• Operating revenue was higher than forecast due to sales growth across United Kingdom and Australian stores, and<br />
wholesale accounts.<br />
• EBIT was higher than forecast due to the above noted sales growth and improved sales margins.<br />
Summary Statement of Financial Position as at 31 July <strong>2005</strong><br />
Actual<br />
<strong>2005</strong><br />
$000<br />
Forecast<br />
<strong>2005</strong><br />
$000<br />
Current assets 72,070 67,137<br />
Non-current assets 39,269 27,811<br />
Total Assets 111,339 94,948<br />
Other current liabilities 25,722 15,525<br />
Non-current liabilities 3,360 1,913<br />
Total Liabilities 29,082 17,438<br />
Net Assets 82,257 77,510<br />
Represented by:<br />
Share capital 56,134 60,620<br />
Retained earnings 26,123 16,890<br />
Total Equity 82,257 77,510<br />
• Share capital is lower than forecast due to the lower carried forward balance from 2004 resulting from the<br />
forecasted final price on listing in 2004 being $1.25 compared to the forecasted $1.32, and total issue costs<br />
being higher than forecasted.<br />
• Current assets includes higher than forecasted inventory levels resulting from increased purchases for the higher than<br />
forecasted number of stores and increased wholesale account activity. Higher than forecasted wholesale sales has<br />
also led to higher than forecasted trade debtors.<br />
• Non current assets are higher than forecast due to an increase in fixed assets resulting from the opening of more<br />
stores than forecasted for 2004 and <strong>2005</strong>.<br />
• Other current liabilities are higher than forecast due to increased accounts payable resulting from increased stock<br />
and general expense purchases for the larger than forecasted retail and wholesale operations.<br />
48
<strong>Pumpkin</strong> <strong>Patch</strong> Limited & Subsidiaries notes to and forming part of the financial statements<br />
for the 12 months ended 31 July <strong>2005</strong><br />
Cash Flow Summary For the year ended 31 July <strong>2005</strong><br />
Actual<br />
<strong>2005</strong><br />
$000<br />
Forecast<br />
<strong>2005</strong><br />
$000<br />
Net cash flow from operating activities 24,600 22,699<br />
Net cash flow from investing activities (13,633) (4,350)<br />
Net cash flow from financing activities (6,353) (2,400)<br />
Net increase/(decrease) in cash held 4,614 15,949<br />
Forecasted landlord fitout contributions of $600,000 which were disclosed in the Prospectus as investing cash flows<br />
have been reclassified as operating cash flows to allow comparison with the statement of cash flows for the year ended<br />
31 July <strong>2005</strong>.<br />
• Cash flows from operating activities were higher than forecast due to the improved trading result for the period,<br />
mostly offset by increases in other working capital items.<br />
• Higher than forecasted cash out flows from investing activities was the result of the opening of 14 stores not<br />
forecasted in <strong>2005</strong> and other general capital expenditure relating to the overall larger retail and wholesale<br />
operations.<br />
• Higher than forecasted cash outflows from financing activities resulted from dividend payments being above<br />
forecasted levels due to the better than forecasted trading result.<br />
49
Auditors’ <strong>report</strong> to the shareholders of <strong>Pumpkin</strong> <strong>Patch</strong> Limited<br />
We have audited the financial statements on pages 24 to 49. The financial statements provide information about the past<br />
financial performance and cash flows of the Company and Group for the year ended 31 July <strong>2005</strong> and their financial position<br />
as at that date. This information is stated in accordance with the accounting policies set out on pages 27 to 30.<br />
directors’ responsibilities<br />
The Company’s Directors are responsible for the preparation and presentation of the financial statements which give a true and<br />
fair view of the financial position of the Company and Group as at 31 July <strong>2005</strong> and their financial performance and cash<br />
flows for the year ended on that date.<br />
auditors’ responsibilities<br />
We are responsible for expressing an independent opinion on the financial statements presented by the Directors<br />
and <strong>report</strong>ing our opinion to you.<br />
basis of opinion<br />
An audit includes examining, on a test basis, evidence relevant to the amounts and disclosures in the financial statements.<br />
It also includes assessing:<br />
a)<br />
b)<br />
the significant estimates and judgements made by the Directors in the preparation of the financial statements; and<br />
whether the accounting policies are appropriate to the circumstances of the Company and Group,<br />
consistently applied and adequately disclosed.<br />
We conducted our audit in accordance with generally accepted auditing standards in New Zealand. We planned and<br />
performed our audit so as to obtain all the information and explanations which we considered necessary to provide us with<br />
sufficient evidence to give reasonable assurance that the financial statements are free from material misstatements, whether<br />
caused by fraud or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information<br />
in the financial statements.<br />
We have no <strong>relations</strong>hip with or interests in the Company or any of its subsidiaries other than in our capacity as auditors and<br />
accounting advisors.<br />
unqualified opinion<br />
We have obtained all the information and explanations we have required.<br />
In our opinion:<br />
a) proper accounting records have been kept by the Company as far as appears from our examination of those records; and<br />
b)<br />
the financial statements on pages 24 to 49:<br />
i)<br />
ii)<br />
comply with generally accepted accounting practice in New Zealand; and<br />
give a true and fair view of the financial position of the Company and Group as at 31 July <strong>2005</strong> and their financial<br />
performance and cash flows for the year ended on that date.<br />
Our audit was completed on 13 September <strong>2005</strong> and our unqualified opinion is expresssed as at that date.<br />
50<br />
Chartered Accountants<br />
Auckland
shareholder information<br />
for the year ended 31 July <strong>2005</strong><br />
Size of Holdings<br />
Number of<br />
Holders<br />
% Number of Shares %<br />
1 - 1,000 1,009 22.56 688,517 0.41<br />
1001 - 5,000 2,184 48.82 6,678,656 4.01<br />
5,001 - 10,000 705 15.76 5,342,283 3.21<br />
10,001 - 100,000 534 11.94 12,998,578 7.81<br />
Over 100,000 41 0.92 140,804,966 84.56<br />
4,473 100.00 166,513,000 100.00<br />
The details set out above were as at 31 August <strong>2005</strong>.<br />
principal shareholders<br />
The names and holdings of the twenty largest registered shareholders as at 31 August <strong>2005</strong> were:<br />
Ordinary Shares %<br />
Nigel P Smith and Wynyard Wood Trustee Services Limited as Trustees for Feruza Trust 24,390,000 14.65<br />
Maurice J Prendergast, Kerry D Prendergast and Stuart G Callender as Trustees for Kezza<br />
Family Trust<br />
13,400,000 8.05<br />
Perpetual Trustee Limited 12,000,000 7.21<br />
Mark J Synnott, Sally R Synnott and The Gale Trustee Company Limited as Trustees for The<br />
Opito Family Trust<br />
10,400,000 6.25<br />
TEA Custodians Limited 8,203,819 4.93<br />
Portfolio Custodian Limited 8,000,000 4.80<br />
Nigel P Smith and Wynyard Wood Trustee Services Limited as Trustees for Simdec Trust 7,400,000 4.44<br />
ANZ Nominees Limited 5,771,648 3.47<br />
Westpac Banking Corporation – Client Assets No 2 5,280,100 3.17<br />
Premier Nominees Limited – Armstrong Jones NZ Share Fund 5,162,428 3.10<br />
National Nominees New Zealand Limited 4,535,823 2.72<br />
<strong>Pumpkin</strong> <strong>Patch</strong> Nominees Limited 4,492,162 2.70<br />
New Zealand Superannuation Fund Nominees Limited 3,156,388 1.90<br />
TEA Custodians Limited No2 Account 2,523,629 1.52<br />
Asteron Life Limited 2,298,550 1.38<br />
Gregory J Muir, Debra J Muir and Geoffrey A Lawrie as Trustees for Muir Trust 1,969,767 1.18<br />
Citibank Nominees (New Zealand) Limited 1,707,858 1.03<br />
River Capital Pty Limited 1,620,000 0.97<br />
Custody and Investments Nominees Limited 1,540,976 0.93<br />
52<br />
Bruce M Walkley and Deborah F Walkley as Trustees for Walkley Family Trust 1,403,471 0.84
substantial security holders<br />
Pursuant to Section 26 of the Securities Markets Act 1988, the substantial security holders at 31 August <strong>2005</strong> were<br />
as follows:<br />
Ordinary Shares<br />
Setar A Motani (notice dated 22 June 2004) 24,390,000<br />
Maurice J Prendergast and Kerry D Prendergast (notice dated 18 June 2004) 13,400,000<br />
Perpetual Trustee Limited (notice dated 21 June 2004) 12,000,000<br />
Fisher Funds Management Limited (notice dated 5 April <strong>2005</strong>) 11,434,683<br />
Mark J Synnott and Sally R Synnott (notice dated 18 June 2004) 10,400,000<br />
ING NZ Limited (notice dated 19 October 2004) 10,330,655<br />
53
corporate directory<br />
registered office<br />
439 East Tamaki Road<br />
Auckland<br />
New Zealand<br />
contact details<br />
Private Bag 94 310<br />
Pakuranga<br />
Auckland<br />
New Zealand<br />
Phone: +64 9 274 7088<br />
Facsimile: +64 9 274 1122<br />
Website: www.pumpkinpatch.co.nz<br />
<strong>investor</strong> <strong>relations</strong><br />
E-mail: <strong>investor</strong>@pumpkinpatch.co.nz<br />
Website: www.pumpkinpatch.biz<br />
share registrar<br />
BK Registries Limited<br />
PO Box 384<br />
Ashburton<br />
New Zealand<br />
Phone: +64 3 308 8887<br />
Facsimile: +64 3 308 1311<br />
solicitors<br />
Simpson Grierson<br />
Private Bag 92 518<br />
Wellesley Street<br />
Auckland<br />
New Zealand<br />
auditors<br />
PricewaterhouseCoopers<br />
Private Bag 92 162<br />
Auckland<br />
New Zealand<br />
bankers<br />
ANZ Banking Group (New Zealand) Limited
id culture