annual report 2005 - Pumpkin Patch investor relations

annual report 2005

The annual meeting of shareholders will be held on Tuesday 22nd November 

2005 at 1pm at the Ellerslie Convention Centre, Auckland. 

The Notice of Meeting is enclosed with this Annual Report. 

The Directors are pleased to present the Annual Report of Pumpkin Patch Limited 

for the year ended 31st July 2005 

For and on behalf of the Directors, 

Maurice Prendergast 

Greg Muir 

13 September 2005

contents 

performance highlights 1 

financial highlights 2 - 3 

chairman’s letter 5 

managing director’s report 6 - 9 

directors & senior management 10 - 13 

corporate governance 15 - 17 

general disclosures 19 - 21 

group financial statements 23 - 49 

auditors’ report 50 

shareholder information 52 - 53 

corporate directory 

inside back cover

Group operating revenue of $280.4m; up 27% on 2004 

Net profit after tax (1) of $25.4m; up 64% on 2004 

Opening of the first company owned store in the United States 

performance highlights 

Group EBIT (1) of $37.5m; up 64% on 2004 

22 Pumpkin Patch stores opened across Australia (11), United Kingdom (7) and New Zealand (4) 

Sales growth across all major wholesale markets 

Dividend for the year of 8.00 cents per share 

(1) Before one off United States retail market development costs; compared to 2004 before costs of restructuring pre-listing employee share schemes. 

1

financial highlights 

Year ended 31 July 

2005 

NZ$000 

2004 

NZ$000 

Change 

Trading Results 

Group operating revenue 280,378 220,292 +27.3% 

Earnings before interest and tax (1) 37,509 22,928 +63.6% 

Net cash flow from operating activities 24,600 14,956 +64.5% 

Financial Position at Year End 

Total equity 82,257 63,537 

Total assets 111,339 101,053 

Net debt - 4,656 

Shareholders funds to total assets 73.9% 62.8% 

Current ratio 2.5:1 2.0:1 

Capital expenditure 13,577 7,990 

Number of Stores 

Australia 75 64 

New Zealand 45 41 

United Kingdom 16 9 

United States 1 - 

Total 137 114 

(1) Before one off United States retail market development costs; compared to 2004 before costs of restructuring pre-listing employee share schemes. 

2

Store Numbers 

Sales Composition 

140 

137 

$280,000 

$260,000 

120 

100 

114 

$240,000 

$220,000 

$200,000 

80 

71 

84 

NZ$ ’000 

$180,000 

$160,000 

$140,000 

60 

56 

$120,000 

40 

40 

$100,000 

$80,000 

27 

$60,000 

20 

0 

1 

1992 

1 

1993 

2 

1994 

4 

1995 

8 

1996 

11 

1997 

14 

1998 

1999 

2000 2001 2002 2003 2004 2005 

$40,000 

$20,000 

0 

2001 2002 2003 2004 2005 

New Zealand Australia UK US Retail NZ Retail Aust Retail UK Other 

3

id culture

chairman’s letter 

Dear Shareholders 

On behalf of the Board I am pleased to report that Pumpkin Patch Limited has again generated a very strong result for 

its shareholders. Net profit after tax (before one-off costs of developing the United States retail operation) was $25.4m. 

Earnings before interest and tax (before one-off costs of developing the United States retail operation) of $37.5m was 

64% ahead of the 2004 year (before costs of restructuring pre-listing employee share schemes). 

The improved performance was due to solid sales growth in all markets – particularly our home markets of 

New Zealand and Australia, allied with ongoing focus on margin management. It also reflects our developing 

international wholesale business. We now have operations in 10 countries with active business development teams 

located in New Zealand and Europe targeting a number of new markets for 2006 and 2007. 

We have had a very active store opening programme in 2005 – with 23 stores opened across 4 countries. Of 

particular note is our first store in the United States. Located at the Glendale Galleria in Los Angeles, California this 

store is the culmination of 12 months work testing the viability of stand alone stores (given we already have a significant 

wholesale business in the US). We extend a very warm welcome to all our new US based team and look forward to 

their contribution over coming years. 

Your company continues to maintain excellent financial health – recording positive net cash flow of $4.6m after the 

significant store roll-out programme and the growth in the wholesale sector – allied to a very strong balance sheet 

with nil debt, giving us plenty of scope to pursue our international growth agenda. 

We look forward to paying a fully imputed dividend of 4.25cps on 18 October 2005 bringing the total amount paid 

for 2005 to 8.00cps which is in line with our stated policy of distributing approximately 50% of net profit after tax. 

The Directors look forward to welcoming shareholders to our second AGM to be held at the Ellerslie Convention Centre 

on Tuesday 22 November 2005 at 1pm. At the meeting Chrissy Conyngham and Sally Synnott will resign by rotation 

and being eligible will offer themselves for re-election. We will also be seeking shareholder approval for the 2005 

executive director share option plan (details of which are included in the enclosed Notice of Meeting). 

And finally a huge thank you to Maurice and all the fabulous team at “the Patch”. 

This is a truly outstanding result – one that reflects the developing 

maturity of the business as an Australasian company growing a great 

brand in markets across the world. 

Greg Muir 

5

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managing director’s report 

our year 

2005 was an exciting year for Pumpkin Patch with continued sales and earnings growth in all areas of our business. 

We have continued to use the strength of the Pumpkin Patch brand to drive improved performance in existing markets 

while identifying new markets which will be fruitful in future years. 

our results 

Group operating revenue increased 27.3%. Sales growth was seen in all segments especially Australia, 

the United Kingdom, and our wholesale accounts. 

$300,000 

$250,000 

27% 

NZ$ ’000 

$200,000 

$150,000 

17% 

11% 

14% 

$100,000 

$50,000 

0 

2001 2002 2003 2004 2005 

Pumpkin Patch was able to develop its core Australasian market increasing revenue and enhancing margins. Net Profit 

After Tax (before non-recurring items) was $25.4m up 63.5% on the 2004 financial year. Since 2001 we have had a 

compound average growth rate in EBIT of 52.1%. We continue to benefit from economies of scale and 

new store openings. 

Australia retail 


$000 

2004 

$000 

Turnover AUD 141,387 120,400 17.4% 

Turnover NZD 157,496 138,449 13.8% 

EBIT 29,021 22,935 26.5% 

18.4% 16.6% 

Stores 

Pumpkin Patch 74 64 

6 

Urban Angel 1 - 

75 64

The highlight in Australia was our strong sales growth up 17.4% (in AUD) on 2004. This reflects the full 

sales impact of 10 new stores in 2004 and part trading of the 11 stores opening in 2005. The full 

effect of the new 2005 stores will not be seen until 2006. Our focus as always was to increase the 

performance of existing stores while ensuring that the standards for our new stores were in keeping with our 

high service expectations. This strategy paid off with strong improvements in earnings while reducing inventory holdings 

and seeing the benefit of the economies of scale in an expanding store network. 

Despite a less than favourable Australian dollar exchange rate we managed to increase our EBIT $6.1m to a creditable 

18.4% of sales. 

Australia continues to offer opportunities to open stores in areas that currently have no or little Pumpkin Patch presence. 

We have identified possible store locations that could continue to be opened at the current rate of 8 to 10 stores 

per year for the next 3 years. 

We continue to be confident as market leader in fashion childrenswear that we have brand integrity and a range that 

will weather most economic environments. 

New Zealand retail 


$000 

2004 

$000 

Turnover NZD 57,844 45,763 26.4% 

EBIT 10,591 9,150 15.7% 

18.3% 20.0% 

Stores 

Pumpkin Patch 31 27 

Urban Angel 14 14 

45 41 

New Zealand sales grew 26.4% to $57.8m. This resulted mainly from the effect of a full years trading from 14 Urban 

Angel stores (the re-branded HBK stores purchased in May 2004) and new store openings. Excluding the Urban Angel 

stores, turnover from Pumpkin Patch stores was up 15.8% on 2004. 

Earnings increased 15.7% on 2004 to $10.6m. The reduction in earnings as a percentage of sales 

to18.3% reflected the full years trading of the Urban Angel stores which trade at a lower earnings 

percentage than Pumpkin Patch stores. The re-branding of the old format HBK stores to the new 

format Urban Angel stores was completed in the year, the full benefits of this will not be 

seen until late in the 2006/2007 years. 

During the year 4 stores were opened, taking total store numbers to 45. 

We are expecting to open 1 new Pumpkin Patch and 2 new outlet stores 

in the 2006 financial year. 

7

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United Kingdom retail 


$000 

2004 

$000 

Turnover GBP 9,994 6,999 42.8% 

Turnover NZD 26,408 19,537 35.2% 

EBIT (283) (1,333) 78.8% 

(1.1%) (6.8%) 

Stores 16 9 

The 42.8% growth in GBP sales came from new stores opened in the year and the continued growth in turnover at the 

more established stores created by the increase in customer awareness of the Pumpkin Patch brand. Considering the soft 

nature of the United Kingdom retail environment we are very happy with this sales result. 

During the year 7 new stores were opened, taking the total number of stores to 16. The full trading impact of these 

new stores will not be seen until the 2006 and 2007 years. 

The trading loss for the year of $0.3m, was an improvement on the $1.3m loss in 2004. 

The opening of the 7 new stores this year has significantly reduced the impact of 

improved trading at the more established stores. The stores that have been open for more 

than 24 months are generating acceptable earnings as a percentage 

of sales. As we increase store numbers off a relatively low number of existing stores, 

the impact of the improved trading results from more established stores will continue to 

be understated. 

Overall the result, especially that from the more established stores, reinforces our 

confidence in this market and the future of the Pumpkin Patch brand in it. We plan 

to open 6 new stores in the 2006 financial year. 

wholesale and direct 


$000 

2004 

$000 

Turnover NZD 38,225 16,002 138.9% 

EBIT 9,626 2,127 352.6% 

25.2% 13.3% 

The relationships developed with wholesale customers over the last three to 

four years resulted in increased wholesale orders in 2005. Turnover increased 

across all major wholesale markets, especially the Middle East, 

the United States and Ireland. 

8 

The very nature of the wholesale business, especially the time it takes to 

convert a new relationship into confirmed wholesale orders, will give us some 

fluctuations in sales growth each year.

Direct (mail order and internet) turnover also increased this year as effort was concentrated on better utilising 

our large Australasian customer database to generate sales. 

We are currently expanding our Wholesale and Direct business in the UK, however, these are not expected 

to generate earnings in the 2006 financial year. 

As a percentage of sales, earnings increased 11.9% to 25.2%, reflecting the highly fixed nature of overheads 

associated with the Wholesale and Direct operations. 

United States retail 

Late in July 2005 our first United States retail store opened in Los Angeles. It is too early to make any comment 

regarding levels of trading, although feedback from customers to date has been as expected, very favourable. 

Prior to confirming the entry into this new retail market we undertook a series of detailed investigations into the 

viability of the market and developed an appropriate strategy of entry to it. The investigation and development 

process had a one-off after tax cost in the 2005 year of approximately $0.8m. 

Leases on 3 additional stores have been confirmed; 2 in Los Angeles and 1 in the San Francisco Bay Area. 

We expect the 3 stores will be open in the 2006 financial year. 

This exploratory market entry strategy is similar to that employed five years ago when Pumpkin Patch entered 

the United Kingdom retail market. 

We are confident that this staged approach will result in long term benefits for shareholders. 

outlook 

We continue to look for strong growth in all of our markets. Consumer awareness of the Pumpkin Patch brand 

continues to develop in new markets. Australia in particular still offers our greatest near term opportunity. 

I am confident that the Company’s long term strategy will continue to add 

value for all shareholders. 

Finally, I would again like to acknowledge the entire team. Their dedication and 

enthusiasm for Pumpkin Patch continues to be our inspiration, giving us continued ability 

to grow the brand in our existing and new markets around the world. 


9

ur team spirit! 

directors 

Greg Muir 

Executive Chairman, BA, MBA 

Greg Muir was appointed Executive Chairman in February 2004. 

Prior to joining Pumpkin Patch he was Chief Executive Officer of 

The Warehouse Group Ltd, and held senior management roles with 

TNT Australia Pty Ltd, Enerco New Zealand Ltd and Lion Nathan Ltd. 

Greg is currently a director of Vector Limited and NGC Holdings Ltd. 


Managing Director 

Maurice Prendergast has been Managing Director 

of Pumpkin Patch since 1993. Maurice has held 

executive positions in accounting, distribution and 

property development in both New Zealand and 

Australian companies. 

Chrissy Conyngham 

Design and Marketing Director 

Chrissy Conyngham joined Pumpkin Patch as Design 

Director in 1993. Chrissy leads the design and 

marketing teams and is responsible for bringing 

together comprehensive ranges, product sourcing and 

brand promotion. Chrissy has 18 years of experience 

in the fashion industry. 

10

Jane Freeman 

Independent Non-Executive Director, BCom 

Chairman of the Remuneration and Nomination Committee and member of the Audit, 

Compliance and Risk Management Committee 

Jane has held senior marketing and management positions at Telecom’s e-solutions, BankDirect, 

Clear Communications and ASB Bank Ltd. Jane is currently a director of Air New Zealand Ltd, Sheffield 

Consulting Ltd, St George New Zealand Bank Ltd, Delegats Group Ltd and Albert Street Dental Ltd. 

David Jackson 

Independent Non-Executive Director, MCom (Hons), FCA 

Chairman of the Audit, Compliance and Risk Management Committee and member of the 

Remuneration and Nomination Committee 

David was appointed as a Director of Pumpkin Patch in March 2004 and was a Senior Audit Partner 

with and former Chairman of Ernst & Young. David is currently a director of 

CanWest MediaWorks (NZ) Ltd and The New Zealand Refining Company Ltd, 

and a member of the Securities Commission. 

Sally Synnott 

Non-Executive Director 

Member of the Remuneration and Nomination Committee and the Audit, Compliance and 

Risk Management Committee 

Sally Synnott founded Pumpkin Patch in 1990 and held an executive role within 

the Company until 1993. Since then Sally has undertaken specialist assignments for the company 

and has been a non-executive Director.

ur team spirit! 

senior management team 

12 

Lyn Bryant 

General Manager 

– Operations 

Lyn joined Pumpkin Patch in 

1994 as Customer Service 

Supervisor. 

Lyn was appointed Customer 

Service Manager in 1996, 

Distribution Centre Manager 

in 1999 and General 

Manager – Operations in 

2003. 

Carina Hull 


– Development 

Carina rejoined 

Pumpkin Patch in June 2005 

after having previously 

worked for the business as 

both Global HR Manager 

and as a private consultant 

since 2002. 

Carina is responsible for 

the development of the 

Company’s most important 

asset, its people. 

She has 13 years 

experience in senior 

HR management roles 

with a number of global 

multinationals. 

Kay Gillard 


– Retail 

Kay joined Pumpkin Patch 

in 1996 as Operations 

Manager to head the retail 

initiative into Australia. 

In 1997 Kay was 

appointed General 

Manager, Australia and 

in 1999 was appointed 

General Manager – Retail 

for the global 

retail operation.

Kate Tattersfield 

Zarina Thesing 

Bruce Walkley 

Matthew Washington 


– Marketing 

BA 

Kate joined Pumpkin Patch 

in 1998 as Creative 

Director and became 

Marketing Manager in 

2001. Kate has over 

13 years experience in 

the marketing and graphic 

design industries in both 

corporate and freelance 

capacities. 


– Information Technology 

BCom 

Zarina joined Pumpkin 

Patch in 2000 as an IT 

Development Manager and 

was appointed as General 

Manager – IT in 2002. 

Zarina had been involved 

and gained extensive 

experience in the IT industry 

for 9 years prior to joining 

Pumpkin Patch. 

General Manager – Direct 

BCom 

Bruce joined Pumpkin Patch 

in 1993 as Finance Director 

and in 2000 was appointed 

General Manager – 

United Kingdom. 

In 2005 he was appointed 

General Manager – Direct 

with responsibility for the 

direct operation (mail order 

and internet sales). 

Chief Financial Officer 

BCom, CA 

Matthew joined Pumpkin 

Patch in 2000 as Group 

Financial Controller. 

Matthew has over 17 

years of accounting and 

commercial experience in 

a variety of industry areas. 

13

corporate governance 

The Board of Directors has the responsibility of ensuring the Company is properly managed to protect and enhance 

shareholders’ interests. The Directors take this responsibility seriously and to this end, the Board has in place what it 

believes to be appropriate corporate governance policies and practices. 

The Board has undertaken to regularly review the corporate governance policies to ensure the Company’s 

responsibilities and obligations are met. 

committees 

The Board has an Audit, Compliance and Risk Management Committee and a Remuneration and Nomination Committee. 

Each committee has a charter setting out its objectives, composition and responsibilities. These charters are available on 

the Company’s corporate and investor relations website www.pumpkinpatch.biz 

Audit, Compliance and Risk Management Committee 

The Committee provides assistance to the Board in fulfilling their oversight responsibility to the shareholders, potential 

shareholders, the investment community, and others relating to the Company’s financial statements and the financial 

reporting process, the systems of internal accounting and financial controls, the internal audit function, the annual 

independent audit of the Company’s financial statements, and the legal compliance and ethics programs as established 

by management and the Board. 

The Committee comprises a minimum of three non-executive Directors, the majority of which must be independent 

directors. The current members of the Committee are David Jackson (Chair), Jane Freeman, and Sally Synnott. 

Remuneration and Nomination Committee 

The Committee provides assistance to the Board to ensure that the Company adopts remuneration policies that attract, 

retain and motivate high calibre executives and directors so as to encourage enhanced performance by the Company, 

motivate directors and management to pursue the long-term growth and success of the Company within an appropriate 

control framework, and demonstrate a clear relationship between key executive performance and remuneration. 

The Committee comprises a minimum of three non-executive Directors, the majority of which must be independent 

directors. The current members of the Committee are Jane Freeman (Chair), David Jackson, and Sally Synnott. 

15

Board and Committee meetings held during the year: 

Board Meetings 

Chrissy Conyngham 8 

Audit, 

Compliance 

and Risk 

Management 

Committee 

Remuneration 

and Nomination 

Committee 

Jane Freeman 9 3 2 

David Jackson 9 3 2 

Greg Muir 9 

Maurice Prendergast 8 

Sally Synnott 8 1 2 

Total Meetings Held 9 3 2 

independent directors 

The Company considers that two of the current six Directors are independent directors, namely Jane Freeman and David 

Jackson. The remaining four directors are deemed not to be independent due to disqualifying relationships as defined in 

NZX Listing Rules; Chrissy Conyngham, Greg Muir, and Maurice Prendergast due to being executives in the Company, 

and Sally Synnott due to having a beneficial interest in securities held by a substantial security holder. 

The Company notes that it has a minimum of two independent Directors as required by the NZX Listing Rules. 

Having reviewed the composition of the Board, the Company considers the Directors hold an appropriate mix of skills, 

expertise, and independence. 

share trading by directors and officers 

The Company has formal procedures that directors and officers are to follow when trading in Pumpkin Patch Limited 

shares. Directors and officers must notify and obtain the consent of the Remuneration and Nominations Committee prior 

to trading. All trading must be conducted within two trading window periods. These periods commence from the date 

on which the annual and half year results are announced and run for four weeks. 

A copy of this policy is available on the Company’s website www.pumpkinpatch.biz 

continuous disclosure policy 

The Board has adopted a Market Disclosure Policy to provide a framework to assist the Company to meet its obligations under 

the NZX continuous disclosure rules. A copy of this policy is available on the Company’s website www.pumpkinpatch.biz 

In the period 1 August 2004 to 31 July 2005 the Company made the following disclosures to the market: 

- 24 September 2004: release of the audited result for the full year ended 31 July 2004 

- 20 December 2004: provided the market with guidance on the Company’s expected result for the year ended 31 July 2005 

- 17 February 2005: release of the unaudited result for the half year ended 31 January 2005 

- 8 April 2005: announcement of the Company’s intention to enter the USA retail market 

The Company believes it has met its obligations under the NZX continuous disclosure rules. 

16

external auditor independence 

To ensure the independence of the Company’s external auditor is maintained the Board has agreed the external auditor 

should not provide any services not permitted under IFAC (International Federation of Accountants) auditor independence 

regulations. The Audit, Compliance and Risk Management Committee review services provided by the external auditor 

to ensure the Company complies with this policy. 

risk management 

The Company has a number of risk management policies that are designed to: 

• safeguard the assets and reputation of the Company 

• protect the interests of shareholders, and 

• enhance the Company’s performance. 

The Board has ultimate responsibility for internal control and compliance across the Company. 

17

general disclosures 

directors’ remuneration 

Directors’ remuneration and other benefits received, or due and receivable during the year was as follows: 

$000 

Non Executive Directors 

Jane Freeman (1) 60 

David Jackson (1) 60 

Sally Synnott 50 

Executive Directors 

Chrissy Conyngham 542 

Greg Muir 546 

Maurice Prendergast 680 

Executive Director remuneration may include salary, bonus payments, provision of a motor vehicle, and other benefits received in their capacity as 

employees. Executive Directors do not receive Directors’ fees. 

(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 

Jackson, holding the position of Chair of the Audit, Compliance and Risk Management Committee. 

In addition to the above remuneration, Executive Directors were each issued share options during the period, the value 

of which were independently assessed using a binominal option pricing model at the time of granting. The number of 

options issued and their independently assessed values were: Chrissy Conyngham 290,000 options, $170,520; Greg 

Muir 150,000 options, $91,350; Maurice Prendergast 150,000 options, $91,350. Refer to note 4 in the Financial 

Statements for full details of the option scheme. 

Prior to listing in 2004 the Company restructured all pre-listing employee share schemes. 

The effect of the restructuring was: 

• the Company provided loans to pay for any shares under the schemes not already purchased by the employee 

in cash. 

• the Company prior to listing in 2004 paid Executive Directors grossed up bonuses to substantially discharge 

the amount of the loans. 

• A portion of each Executive Directors’ shares issued under the schemes are held by a trustee as security for the 

payment of the loans owing to the Company. These shares are to be progressively released over three years. As 

at 31 July 2005 the trustee holds security over shares relating to Chrissy Conyngham 380,000 shares (2004: 

570,000 shares), Greg Muir 341,333 shares, (2004: 512,000 shares), and Maurice Prendergast 1,000,000 

shares (2004: 1,500,000 shares). 

• Should an Executive Director’s employment cease they are required to forfeit to the Company any remaining shares 

held as security. 

• As at 31 July 2005 a portion of the loans to Executive Directors remain outstanding. The outstanding balances were: 

Chrissy Conyngham $76,346 (2004: $76,346), Greg Muir $68,776 (2004: $68,776), and Maurice Prendergast 

$137,015 (2004: $137,015). These loans are repayable by 9 June 2007 and are interest free. 

19

directors shareholdings 

31 July 2005 31 July 2004 

Chrissy Conyngham 

Beneficially owned 1,500,000 1,500,000 

Options to acquire ordinary shares (1) 580,000 290,000 

Jane Freeman 

Beneficially owned 27,000 8,000 

David Jackson 

Beneficially owned 31,200 31,200 

Greg Muir 






Not beneficially owned (2) 4,492,170 5,800,847 

Sally Synnott 


Not beneficially owned (2) 4,492,170 5,800,847 

(1) The Executive Directors hold options under the 2004 and 2005 Employee Share Option Plans (refer note 4 of the Financial Statements). The 2004 options 

have an exercise period of between 9 June 2007 and 9 June 2009, and the 2005 options of between 9 June 2008 and 9 June 2010. 

(2) Maurice Prendergast and Sally Synnott are Directors of Pumpkin Patch Nominees Limited which acts as Trustee for the DF7 Scheme and holds shares on 

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 

Financial Statements). 

share dealings by directors 

The Board has received a disclosure from the Director named below of an acquisition of a relevant interest in the 

Company during the period 1 August 2004 and 31 July 2005. 

Particulars of the disclosure are: 

- Jane Freeman acquired a joint interest in 19,000 ordinary shares on 6 October 2004 at $2.11 per share. 

20

disclosure of interests by directors 

The Directors named below have made a general disclosure of interest to the Board and entered the interest in the 

Company’s interest register. 

Chrissy Conyngham Shareholder in: Pumpkin Patch Limited 

Jane Freeman Director of: Air New Zealand Limited 

Jane Freeman Consulting Limited 

Shareholder in: 

Pumpkin Patch Limited 

David Jackson Director of: CanWest MediaWorks (NZ) Limited 

Shareholder in: 


Greg Muir Director of: NGC Holdings Limited 

Vector Limited 

Beneficial shareholder in: 


Maurice Prendergast Director of: Sports Resources Limited 

Espies Shopfitters Limited 



Espies Shopfitters Limited 

Sally Synnott Director of and shareholder in: Eager Beaver Toys Limited 



The Dickens Street Partnership 

remuneration of employees 

The number of employees (not including directors) whose remuneration exceeded $100,000 is disclosed in the 

following table. Remuneration may include salary, performance related bonus payments, provision of a motor vehicle, 

and other miscellaneous employment related benefits. 

$000 2005 2004 $000 2005 2004 

100 - 110 6 3 190 - 200 2 1 

110 - 120 1 3 200 - 210 1 - 

120 - 130 1 4 210 - 220 1 - 

130 - 140 4 2 220 - 230 1 - 

140 - 150 1 - 240 - 250 - 1 

150 - 160 1 - 250 - 260 1 - 

160 - 170 1 - 260 - 270 1 - 

170 - 180 1 4 280 - 290 - 1 

180 - 190 2 2 320 - 330 1 - 

Australian and United Kingdom remuneration has been converted into New Zealand dollars at $0.8988 and 

$0.3896 respectively. 21

Pumpkin Patch Limited & Subsidiaries 

group financial statements 

for the 12 months ended 31 July 2005 

contents 

statements of financial performance 24 

statements of movements in equity 24 

statements of financial position 25 

statements of cashflows 26 

statements of accounting policies 27 - 30 

notes to the financial statement 31 - 49 

auditors’ report 50 

The Board of Directors is pleased to present the financial statements of Pumpkin Patch Limited & Subsidiaries, 

incorporating the financial statements and auditors’ report, for the 12 months ended 31 July 2005. 

The financial statements presented on pages 24 to 49 are signed for and on behalf of the Board, 

and were authorised for issue on the date below. 

Managing Director 

Executive Chairman 

13 September 2005 

23

Pumpkin Patch Limited & Subsidiary statements of financial performance 


Group 

Parent 

Notes 

12 months 

31 July 2005 

$000 

12 months 

31 July 2004 

$000 

12 months 


$000 

12 months 

31 July 2004 

$000 

Operating revenue 280,378 220,292 41,093 32,266 

Operating profit (loss) before income tax 2 35,809 11,321 7,267 (1,430) 

Income tax expense (benefit) 3 11,210 3,241 782 (2,074) 

Net profit attributable to the 

shareholders of the parent company 

24,599 8,080 6,485 644 

Pumpkin Patch Limited & Subsidiaries statements of movements in equity 


Group 

Parent 

Notes 

12 months 


$000 

12 months 

31 July 2004 

$000 

12 months 


$000 

12 months 

31 July 2004 

$000 

Equity at beginning of period 63,537 20,330 53,787 16,142 

Net profit for period 24,599 8,080 6,485 644 

Shares issued during the period 4 - 107,995 - 109,869 

Shares repurchased during the period 4 - (61,284) - (61,284) 

Movement in treasury stock 4 474 - - - 

Dividends paid (6,353) (9,627) (6,353) (9,627) 

Issue costs on share capital issue - (1,957) - (1,957) 

Equity at end of period 82,257 63,537 53,919 53,787 

24

Pumpkin Patch Limited & Subsidiaries statements of financial position 

as at 31 July 2005 

Group 

Parent 

Notes 


$000 

31 July 2004 

$000 


$000 

31 July 2004 

$000 

Equity 

Share capital 4 56,134 55,660 57,535 57,535 

Retained earnings 7 26,123 7,877 (3,616) (3,748) 

Total Equity 82,257 63,537 53,919 53,787 

Equity Represented by: 

Current Assets 

Cash and bank balances 73 - 36 1 

Trade debtors 10,724 1,774 30 - 

Amounts owed from subsidiaries - - 41,485 38,355 

Advances to employee share scheme and employees 6 1,214 1,357 1,214 1,357 

Other receivables and prepayments 2,885 1,843 2,178 2,090 

Inventories 10 57,174 58,777 - - 

Income tax receivable 3 - - 512 2,131 

Total Current Assets 72,070 63,751 45,455 43,934 

Current Liabilities 

Bank overdraft - 4,541 - - 

Trade creditors 8,884 11,238 853 660 

Income tax payable 3 2,753 2,276 - - 

Amounts owed to subsidiaries - - 3,542 2,697 

Accruals and provisions 9 14,085 13,780 3,184 2,782 

Total Current Liabilities 25,722 31,835 7,579 6,139 

Net Working Capital 46,348 31,916 37,876 37,795 

Non Current Assets 

Property plant and equipment 11 35,181 30,112 4,668 4,538 

Intangible assets 18 238 210 - - 

Advances to employee share scheme and employees 6 1,810 2,995 1,810 2,995 

Investments in subsidiaries 12 - - 10,188 10,188 

Investments 4 4 4 4 

Deferred taxation 13 2,036 3,635 1,077 1,505 

Total Non Current Assets 39,269 36,956 17,747 19,230 

Non Current Liabilities 

Accruals and provisions 9 3,360 5,335 1,704 3,238 

Total Non Current Liabilities 3,360 5,335 1,704 3,238 

Net Assets 82,257 63,537 53,919 53,787 

25

Pumpkin Patch Limited & Subsidiaries statements of cashflows 


Group 

Parent 

12 months 

12 months 

12 months 

12 months 


31 July 2004 


31 July 2004 

Notes 

$000 

$000 

$000 

$000 

Cash Flow From Operating Activities 

CASH WAS PROVIDED FROM: 

Receipts from customers 273,366 220,347 38,434 26,942 

Interest received 29 153 150 112 

Net GST received 277 - 45 - 

Dividends received - - 6,358 5,273 

CASH WAS APPLIED TO: 

Payment to suppliers and employees (239,388) (200,022) (36,605) (54,837) 

Net GST paid - (13) - (95) 

Income tax paid (9,108) (2,617) (421) (1,440) 

Interest paid (576) (2,777) (263) (198) 

Net Cash Flow from Operating Activities 20 24,600 15,071 7,698 (24,243) 

Cash Flow From Investing Activities 


Proceeds from sale of property plant and equipment 35 104 - 16 


Purchase of property plant and equipment (13,577) (7,990) (1,310) (858) 

Purchase of trade marks (91) (53) - - 

Net Cash Used in Investing Activities (13,633) (7,939) (1,310) (842) 

Cash Flow From Financing Activities 


Issue of shares prior to listing - 1,000 - 1,000 

101,284 

Issue of shares upon float - 101,284 - 


Repayment of loans (term debt) - (36,637) - (4,290) 

Purchase of shares - (61,284) - (61,284) 

Costs of share issue - (1,957) - (1,957) 


Net Cash Used in Financing Activities (6,353) (7,221) (6,353) 25,126 

Net Increase / (Decrease) In Cash Held 4,614 (89) 35 41 

Add opening cash brought forward (4,541) (4,452) 1 (40) 

Effect of exchange rate changes on cash - - - - 

Ending Cash Carried Forward 73 (4,541) 36 1 

26 

Proceeds from short term borrowings have been netted against payments of short term borrowings. 

These borrowings are covered by an arranged finance facility.

Pumpkin Patch Limited & Subsidiaries statements of accounting policies 


entities reporting 

The financial statements for the “Parent” are for Pumpkin Patch Limited as a separate legal entity. The consolidated 

financial statements for the “Group” are for the economic entity comprising Pumpkin Patch Limited and its subsidiaries. 

statutory base 

Pumpkin Patch Limited is a company registered under the Companies Act 1993 and is an issuer in terms of the 

Securities Act 1978. 

The financial statements are those of Pumpkin Patch Limited and its subsidiaries and are prepared and presented in 

accordance with the Companies Act 1993 and the Financial Reporting Act 1993. 

measurement base 

The financial statements have been prepared on the historical cost basis. 

To ensure consistency with the current period, comparative figures have been restated where appropriate. 

accounting policies 

The financial statements are prepared in accordance with New Zealand generally accepted accounting practice. The 

accounting policies that materially affect the measurement of financial performance, financial position and cash flows 

are set out below. 

group financial statements 

The Group financial statements consolidate the financial statements of subsidiaries, using the purchase method. 

Subsidiaries are entities that are controlled, either directly or indirectly, by the Parent. 

All material transactions between subsidiaries or between the Parent and subsidiaries are eliminated on consolidation. 

The results of subsidiaries acquired or disposed of during the year are included in the consolidated statement of 

financial performance from the date of acquisition or up to the date of disposal. 

operating revenues 

goods and services 

Revenue comprises the amounts received and receivable for goods and services supplied to customers in the 

ordinary course of business. 

investment income 

Dividend income is recognised in the period the dividend is declared. Interest and rental income are accounted 

for as earned. 

income tax 

The income tax expense recognised for the year is based on the accounting surplus, adjusted for permanent differences 

between accounting and tax rules. 

The impact of all timing differences between accounting and taxable income is recognised as a deferred tax liability or 

asset. This is the comprehensive basis for the calculation of deferred tax under the liability method. A deferred tax asset, 

or the effect of losses carried forward that exceed the deferred tax liability, is recognised in the financial statements only 

where there is virtual certainty that the benefit of the timing differences, or losses, will be utilised. 

goods and services tax (GST) 

The statement of financial performance and statement of cash flows have been prepared so that all components are 

stated exclusive of GST. All items in the statement of financial position are stated net of GST, with the exception of 

receivables and payables, which include GST invoiced. 

27



foreign currencies 

transactions 

Transactions denominated in a foreign currency are converted to New Zealand dollars at the exchange rates in effect 

at the date of the transaction, except when forward currency contracts have been taken out to cover short-term forward 

currency commitments. Where short-term forward currency contracts have been taken out, the transaction is translated 

at the rate contained in the contract. 

Monetary assets and liabilities arising from trading transactions, such as inventory, trade debtors, cash and trade 

creditors, or overseas borrowings are translated at closing rates from the following currencies as at the financial 

period end: 

31 July 


31 July 

2004 

Australian Dollar 0.8988 0.9076 

US Dollar 0.6842 0.6424 

British Pound 0.3896 0.3494 

Gains and losses due to currency fluctuations on these items are included in the statement of financial performance. 

foreign operations 

The results of integrated foreign operations are translated in the same way as if the underlying transactions had 

been entered into by the reporting entity. 

Exchange differences arising from the translation of integrated foreign operation are recognised in the statement 

of financial performance. 

share schemes and employee ownership plans 

The company operates employee share ownership plans for certain employees. The initial purchase of shares by the 

scheme is funded by advances from the company, the advances being recognised as assets in the statement of financial 

position. Where shares are issued in lieu of bonus, the expense is recognised in the statement of financial performance. 

The company operates share schemes for certain executive employees. No compensation expense is recognised in the 

statement of financial performance. 

deferred landlord contributions 

Landlord contributions to fit-out costs are capitalised as deferred contributions and amortised to the statement of financial 

performance over the lesser of the minimum period of the lease or the useful life of the asset. 

property, plant and equipment 

The cost of purchased property, plant and equipment is the value of the consideration given to acquire the assets 

and the value of other directly attributable costs which have been incurred in bringing the assets to the location and 

condition necessary for their intended service. 

The cost of assets constructed by the Group includes the cost of all materials used in construction, direct labour on the 

project and financing costs that are directly attributable to the project. Costs cease to be capitalised as soon as the 

asset is ready for productive use. 

28



depreciation 

Depreciation on property, plant and equipment, other than freehold land, has been calculated on a straight line basis so 

as to expense the cost of the assets to their residual values over their useful lives as follows: 

Shop Fit Out 

Office Equipment 

Point of Sale Equipment 

Computer Equipment & Software 

Motor Vehicles 

Plant and Machinery 

Furniture and Fittings 

Leasehold Improvements 

3 – 10 years 

3 – 10 years 

3 years 

3 – 5 years 

4 – 5 years 

2 – 14 years 

3 – 10 years 

6 – 7 years 

leased assets 

Operating lease payments are representative of the pattern of benefits derived from the leased assets and 

accordingly are charged to the statements of financial performance in the periods in which they are incurred. 

Landlord contributions to fit-out costs are recognised in the statements of financial performance over the minimum 

period of the lease, as a reduction in operating lease costs. 

investments 

Investments in subsidiaries are stated at the lower of cost or net realisable value. Other investments are stated at the 

lower of cost or net realisable value. 

intangibles 

The excess of cost over the fair value of the net assets of the subsidiary entities is recognised as goodwill and is amortised 

to the statements of financial performance on a straight line basis over the shorter of its estimated life or five years. 

Other intangibles comprise of the cost of registering trademarks. These are amortised over their anticipated useful lives 

which range between 5 and 10 years. 

inventories 

Raw materials and finished goods are stated at the lower of average weighted cost and net realisable value. 

Cost is determined on a first in, first out basis. 

accounts receivable 

Accounts receivable are carried at estimated realisable value after providing against debts where collection is doubtful. 

impairment 

Annually, the directors assess the carrying value of each asset. Where the estimated recoverable amount of the asset 

is less than its carrying amount, the asset is written down. The impairment loss is recognised in the statements of 

financial performance. 

employee entitlements 

Employee entitlements to salaries and wages, annual leave, long service leave and other benefits are recognised 

when they accrue to employees. 

The liability for employee entitlements is carried at the present value of the estimated future cash outflows. 

29



financial instruments 

recognised 

Financial instruments carried on the statements of financial position include cash and bank balances, investments, 

receivables, trade creditors and borrowings. The particular recognition methods adopted are disclosed in the individual 

policy statements associated with each item. 

Forward exchange contracts entered into as hedges of foreign exchange assets and liabilities are valued at exchange 

rates prevailing at period end. Any unrealised gains or losses are offset against foreign exchange gains and losses 

on the related asset or liability. Premiums paid on currency options are amortised over the period to maturity. 

unrecognised 

Financial instruments with off-balance sheet risk, have been entered into for the primary purpose of reducing 

exposure to fluctuations in foreign exchange rates and interest rates. While financial instruments are subject to risk that 

market rates may change subsequent to acquisition, such changes would generally be offset by opposite effects on the 

items hedged. 

Financial instruments purchased with the intention to be held for the long term or until maturity are recorded 

at original cost, adjusted for amortisation of premiums and discounts to maturity. 

statements of cashflows 

The following are the definitions of the terms used in the statements of cashflows: 

i) 

ii) 

Cash is considered to be cash on hand and current accounts in the bank, net of bank overdrafts. 

Investing activities are those activities relating to the acquisition, holding and disposal of property, plant and 

equipment and of investments. Investments can include securities not falling within the definition of cash. 

iii) Financing activities are those activities which result in changes in the size and composition of the capital structure of 

the Group. This includes both equity and debt not falling within the definition of cash. Dividends paid in relation to 

the capital structure are included in financing activities. 

iv) 

Operating activities include all transactions and other events that are not investing or financing activities. 

changes in accounting policies 

There were no changes to accounting policies during the period. 

30

Pumpkin Patch Limited & Subsidiaries notes to and forming part of the financial statements 


1. segment information 

New Zealand Retail Australia Retail United Kingdom Retail 

12 months 


$000 

12 months 

31 July 2004 

$000 

12 months 


$000 

12 months 

31 July 2004 

$000 

12 months 


$000 

12 months 

31 July 2004 

$000 

Assets 

Segment 16,850 19,836 41,069 44,491 27,797 17,861 

Unallocated and Other 

Consolidated 16,850 19,836 41,069 44,491 27,797 17,861 

Revenue 

Segment 57,844 45,763 157,496 138,449 26,408 19,537 

Unallocated and Other 

Consolidated 57,844 45,763 157,496 138,449 26,408 19,537 

Result 

Segment 10,591 9,150 29,021 22,935 (283) (1,333) 

Interest Expense 

Unallocated and Other - - - - - 

Consolidated 10,591 9,150 29,021 22,935 (283) (1,333) 

United States Retail Other Total 

12 months 


$000 

12 months 

31 July 2004 

$000 

12 months 


$000 

12 months 

31 July 2004 

$000 

12 months 


$000 

12 months 

31 July 2004 

$000 

Assets 

Segment 1,798 - 14,101 6,185 101,615 88,373 

Unallocated and Other 9,724 12,334 

Consolidated 1,798 - 14,101 6,185 111,339 100,707 

Revenue 

Segment 15 - 38,225 16,002 279,988 219,751 

Unallocated and Other 390 541 

Consolidated 15 - 38,225 16,002 280,378 220,292 

Result 

Segment (1,152) - 9,626 2,127 47,803 32,879 

Interest Expense (548) (2,624) 

Unallocated and Other - - (11,446) (18,934) 

Consolidated (1,152) - 9,626 2,127 35,809 11,321 

“Other” represents wholesale, mail order and internet sales. The result is that of the Group before income tax. 

The Group operates in one industry being the retailing and wholesaling of children’s clothing. Intersegment sales are on an arms length basis. 

31



2. operating profit before income tax 

The operating profit before taxation is stated after charging/(crediting): 

Group 

Parent 

12 months 


$000 

12 months 

31 July 2004 

$000 

12 months 


$000 

12 months 

31 July 2004 

$000 

Depreciation: 

Leasehold improvements 280 286 57 51 

Computer equipment 733 740 580 483 

Shop fitouts 5,777 4,765 - - 

POS equipment 226 147 - - 

Plant and machinery 508 487 422 394 

Office equipment 102 96 38 42 

Motor vehicles - 14 - - 

Furniture and fittings 847 893 82 70 

Total Depreciation 8,473 7,428 1,179 1,040 

Foreign currency (gains)/losses 2,670 1,849 209 (44) 

Rental and operating lease costs 31,417 24,343 1,913 1,792 

Bad debts written off 75 77 - - 

Interest expense 576 2,777 263 198 

Gain on sale of property plant and equipment (7) (11) - (15) 

Dividends received - - (6,358) (5,273) 

Interest received (28) (153) (150) (112) 

Amortisation expense 63 51 - - 

Directors’ fees 170 176 170 176 

Donations 192 88 3 31 

Audit fees (PricewaterhouseCoopers) 

Statutory audit 128 125 110 125 

Half year audit - 80 - 80 

Other services 20 - - - 

In 2004 fees amounting to $246,250 were also paid to PricewaterhouseCoopers for services provided to the Group relating directly to the share issue. 

These costs were capitalised to share capital. Refer to note 4. 

32



3. taxation 

The income tax expense has been calculated as follows: 

Group 

Parent 

12 months 


$000 

12 months 

31 July 2004 

$000 

12 months 


$000 

12 months 

31 July 2004 

$000 

Operating profit/(loss) for the period before tax: 35,809 11,321 7,267 (1,430) 

Income tax on the operating profit/(loss) for the period at 33% 11,817 3,736 2,398 (472) 

Plus/(Less): 

Prior period adjustment 150 (155) 489 59 

Tax effect of permanent differences (782) (340) (2,105) (1,661) 

Foreign tax credits not utilised 25 - - - 

11,210 3,241 782 (2,074) 

The Income Tax Expense is represented by: 

Current taxation 9,541 6,588 (85) (795) 

Prior period adjustment 150 (155) 489 59 

Deferred taxation 1,494 (3,192) 378 (1,338) 


11,210 3,241 782 (2,074) 

Income Tax Payable/(Receivable) 

Opening Balance 2,276 (1,537) (2,131) 45 

Current taxation 9,541 6,588 (85) (795) 

Withholding tax paid (881) (722) (1) (25) 

Income tax paid (8,012) (2,763) (111) (21) 

Income tax refunded 95 2,100 - 2 

Income tax transferred - - - (160) 

Prior period adjustment 19 (154) 2,126 59 

Foreign investor tax credit (310) (1,236) (310) (1,236) 


Closing Balance 2,753 2,276 (512) (2,131) 

The group has estimated losses of $3,028,954 (2004: $4,638,114) available to carry forward arising from Pumpkin Patch Limited (UK). 

33



4. share capital 

Group 

Parent 


$000 

31 July 2004 

$000 


$000 

31 July 2004 

$000 

Issued and paid up capital brought forward: 57,535 10,907 57,535 10,907 

Share issue pre-listing - 1,000 - 1,000 

Share issue under pre-listing employee share schemes - 5,710 - 5,710 

Share issue under DF7 Scheme pre-listing - 1,875 - 1,875 

Share issue on listing - 101,284 - 101,284 

Share repurchase on listing - (61,284) - (61,284) 

Share issue costs - (1,957)* - (1,957)* 

Issued and paid up capital carried forward 57,535 57,535 57,535 57,535 

Shares held as treasury stock (1,401) (1,875) - - 

Balance at the end of the period 56,134 55,660 57,535 57,535 

As at 31 July 2005 there were 166,513,000 shares on issue (2004: 166,513,000). All ordinary shares are fully paid and rank equally with one vote 

attaching to each share. 

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 

employee share schemes. 

* Fees amounting to $246,250 were paid to PricewaterhouseCoopers for services provided to the Group relating directly to the share issue in 2004. 

ordinary shares (formerly A class shares) 


Opening balance 166,513,000 1,132,800 

Conversion of B Class shares pre-listing - 70,861 

Conversion of C Class shares pre-listing - 110,358 

Issue of ordinary shares prior to listing - 11,111 

Ordinary shares prior to 100:1 share split in 2004 166,513,000 1,325,130 

Ordinary shares after 100:1 share split in 2004 166,513,000 132,513,000 

Issue of ordinary shares to DF7 Scheme pre-listing - 2,000,000 

Issue of ordinary shares on listing - 81,027,200 

Repurchase of ordinary shares on listing - (49,027,200) 

Closing balance 166,513,000 166,513,000 

34



B class shares 


Opening balance - 68,700 

Issue of B Class shares under pre-listing employee ownership plans - 2,161 

Conversion to ordinary shares pre-listing - (70,861) 

Closing balance - - 

C class shares 


Opening balance - 47,350 

Issue of C Class shares under pre-listing employee ownership plans - 63,008 

Conversion to ordinary shares pre-listing - (110,358) 


Total shares on issue 166,513,00 166,513,000 

employee share ownership scheme – DF7 scheme 

Prior to listing in 2004 the Company established an employee share ownership scheme under DF7 of the Income Tax 

Act 1994. Under the Scheme the Company issued 2,000,000 shares (1.2% of total ordinary shares) to the Scheme’s 

trustee, Pumpkin Patch Nominees Limited, to be held on behalf of employees who elect to participate in the Scheme. 

During the period 522,690 shares were offered to New Zealand employees under the DF7 Scheme at $0.94 per 

share, being 25% less than the final listing price of $1.25. The value of shares offered was limited to a maximum of 

$2,340 per employee. The qualifying period between grant and vesting dates is 3 years. Dividends paid during the 

qualifying period on shares allocated to employees are paid to the employees. Voting rights on shares not allocated 

under the Scheme are exercisable by the trustees. 

The shares are allocated under the condition that should the employee leave the Company before the qualifying period 

ends, their shares will be repurchased by the Scheme at the lesser of market value and the price at which the shares 

were originally allocated to the employees, subject to the repayment of the original loan. Any such shares are reallocated 

to other employees by the Scheme. During the period 17,423 shares were repurchased by the Scheme as a 

result of employees ceasing employment with the Company. 

The Company, prior to listing, gave the Trustee an interest free loan to enable it to purchase the shares issued to it for 

this Scheme. The Company has agreed that the Trustee is, in turn, entitled to novate a portion of that loan to individual 

employees to assist them to purchase shares under the Scheme. As at 31 July 2005 the balance of this loan outstanding 

was $1,740,326 (2004: $1,875,000). 

The Company intends to implement similar schemes for its employees in the United Kingdom and in Australia in 2006. 

The Company believes the 1,494,733 shares held by the Trustee but unallocated as at 31 July 2005 will be sufficient 

to provide for the estimated number of United Kingdom and Australian employees likely to elect to join the schemes. 

35



employee share option plan 

Prior to listing in 2004 the Company established a Share Option Plan for selected senior employees, including 

Executive Directors, under the following terms: 

• One option entitles the employee to purchase one ordinary share in the Company 

• The exercise price of the 2004 options issued was the price per share paid by investors upon initial listing on 

9 June 2004, being $1.25. In the case of the 2005 options the exercise price of $2.75 was the volume weighted 

average selling price of the Company’s shares traded on the New Zealand Stock Exchange during the 10 working 

days prior to issue date, being 9 June 2005. 

• Options can only be exercised: 

- in the exercise period commencing three years after issue date and ending 5 years after issue date or in other 

extraordinary circumstances, for example if a person or group of associated persons acquire an interest in at least 

50% of the total voting rights in the Company, and 

- if, on the day of exercise, the market price of the ordinary shares is equal to or greater than the benchmark price. 

• The benchmark price is calculated by taking the exercise price and adjusting for the required weighted average cost 

of capital, as determined by independent advisors, and expected annual dividends over the period from the issue 

date to the commencement of the exercise period. 

• Options will lapse if not exercised within the exercise period. 

In the current period 2,427,000 (2004: 2,274,000) options were granted under the Share Option Plan 

Options: 

Number Issued 

Exercise 

Price 

Exercise 

Period Starts 

Exercise 

Period Ends 

Options issued in June 2004 2,274,000 $1.25 

Opening balance 2,274,000 

Options issued in June 2005 2,427,000 $2.75 

Closing balance 4,701,000 

9 June 

2007 

9 June 

2008 

9 June 

2009 

9 June 

2010 

Under the Scheme Executive Directors were issued with the following options: Chrissy Conyngham 290,000, Greg Muir 150,000, and Maurice Prendergast 

150,000. 

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; 

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 

financial performance. 

5. treasury stock 

1,494,733 shares (2004: 2,000,000) have been issued under the DF7 Scheme but at balance date have not been 

allocated to employees. The shares are held in trust by Pumpkin Patch Nominees Limited. The terms of the Trust Deed 

between the Company and the Trustee gives the Company the right to appoint trustees and to benefit from any surplus 

funds held by the Trust. 

Therefore the Company has consolidated the DF7 Scheme as an in substance subsidiary and as such has recognised 

unallocated DF7 Scheme shares as Treasury Stock. 

36 

The value of balance of Treasury Stock as at 31 July 2005 is $1,401,312 (2004: $1,875,000).



6. pre-listing employee share ownership schemes 

In the period from 1999 to prior to listing in June 2004 the Company established a number of employee share 

ownership schemes which allowed employees (including Executive Directors) to purchase shares in the Company. These 

share purchases were funded by interest free loans from the Company. 

Prior to listing and the allotment of shares under the share offer in June 2004 the Company restructured all pre-listing 

employee share ownership schemes. 

The effect of the restructuring was: 

• All shares allocated under these schemes were fully paid. In 2004 the Company provided additional interest free 

loans of $5,710,750 to employees to pay for any shares under the schemes not already purchased in cash 

• The Company committed to pay grossed up bonuses to employees, in some cases over a three year period and in 

some cases prior to listing, to fully or substantially discharge the amount of the loans. 

• The total net tax cost of restructuring the pre-listing employee share ownership schemes of $7,431,490 was fully 

provided for prior to listing in 2004. This consisted $7,220,411 for the provision of bonuses to employees, 

including Executive Directors, to fully or substantially discharge their loans and $211,079 for the discharge of a loan 

outstanding from the pre-listing Pumpkin Patch Employee Share Scheme Trust. 

• Approximately one third of each employees shares issued under the schemes were held by a Trustee as security for 

the payment of the loans owing to the Company and are to be released to employees progressively over three years 

from 2004 to 2007 as their loans are progressively discharged. During 2005 security over 1,266,316 shares was 

released to employees. 

• Should an employee’s employment cease they are required to forfeit to the Company any remaining shares held as 

security. During 2005 employees ceasing employment forfeited 24,978 shares to the Company. These shares are 

held by the Trustee for use in satisfying its obligations under other existing employee share schemes. 

• Employees retain full voting and dividend rights attached to their shares while held as security. 

• As at 31 July 2005 the Trustee holds 2,479,389 shares as security (2004: 3,800,847). 

37



Group 

Parent 


$000 

31 July 2004 

$000 


$000 

31 July 2004 

$000 

Pre-listing Employee Share Ownership Scheme Loans 

Opening balance 4,352 1,647 4,352 1,647 

Loans relating to issue of shares under pre-listing employee share 

schemes prior to restructuring 

- 74 - 74 

Loans established upon the pre-listing restructuring of the 

employee share schemes 

- 5,711 - 5,711 

Discharge of loan to pre-listing employee share scheme trust prior 

to listing 

- (211) - (211) 

Loans discharged by application of net bonuses paid prior to 

listing 

- (2,869) - (2,869) 

Loans discharged by application of net bonuses paid (1,223) - (1,223) - 

Loans forfeited due to staff leaving (105) - (105) - 

Closing balance 3,024 4,352 3,024 4,352 

Current portion 1,214 1,357 1,214 1,357 

Term portion 1,810 2,995 1,810 2,995 

3,024 4,352 3,024 4,352 

Provision for Pre-listing Employee Share Scheme Restructuring 

Bonuses 

Opening balance 4,070 - 4,070 - 

Provision of bonuses prior to listing - 7,220 - 7,220 

Application of provision to bonuses paid (1,327) (3,150) (1,327) (3,150) 

Provision released due to staff leaving (105) - (105) - 

Closing balance 2,638 4,070 2,638 4,070 

Current portion 1,319 1,357 1,319 1,357 

Term portion 1,319 2,713 1,319 2,713 

2,638 4,070 2,638 4,070 

7. retained earnings 

Group 

Parent 

12 months 


$000 

12 months 

31 July 2004 

$000 

12 months 


$000 

12 months 

31 July 2004 

$000 

Opening balance 7,877 9,423 (3,748) 5,235 

Surplus for the period 24,599 8,081 6,485 644 


Closing balance 26,123 7,877 (3,616) (3,748) 

38 

The dividends were fully imputed. Supplementary dividends of $423,100 (2004 : $1,236,424) were paid to 

shareholders not tax resident in New Zealand for which the Group received a foreign investor tax credit entitlement.



8. imputation credit account 

Parent 


$000 

Parent 

31 July 2004 

$000 

Opening balance 38 743 

Plus income tax paid 111 18 

Imputation credits attached to dividends received 3,132 2,597 

Less imputation credits attached to dividends paid to shareholders (2,766) (3,505) 

Transfer from group companies - 160 

Withholding tax credits - 25 

Use of money interest - 3 

Tax refund - (3) 

Closing balance 515 38 

9. accruals and provisions 

Group 

Parent 

Notes 


$000 

31 July 2004 

$000 


$000 

31 July 2004 

$000 

Current 

Sundry accruals 8,885 9,238 1,559 1,678 

Provision for pre-listing ESOP restructuring bonuses 6 1,319 1,357 1,319 1,357 

Employee entitlements 2,144 1,634 969 789 

GST payable 523 239 (803) (1,182) 

Deferred landlord contributions 1,214 1,312 140 140 

14,085 13,780 3,184 2,782 

Non Current 

Deferred landlord contributions 2,041 2,622 385 525 

Provision for pre-listing ESOP restructuring bonuses 6 1,319 2,713 1,319 2,713 

3,360 5,335 1,704 3,238 

17,445 19,115 4,888 6,020 

39



10 inventories 

Group 

Parent 


$000 

31 July 2004 

$000 


$000 

31 July 2004 

$000 

Inventories comprise: 

Finished goods 45,762 36,663 - - 

Stock in transit 9,157 18,763 - - 

Raw materials 2,255 3,351 - - 

57,174 58,777 - - 

11 property plant and equipment - group 


Cost 

$000 

Acc Depn 

$000 

Book Value 

$000 

Cost 

$000 

Acc Depn 

$000 

Book Value 

$000 

Leasehold improvements 1,951 967 984 1,864 744 1,120 

Computer equipment 6,824 5,647 1,177 6,031 4,913 1,118 

Shop fit out 48,298 23,292 25,006 36,859 17,534 19,325 

Point of sale equipment 1,325 1,000 325 1,138 774 364 

Plant and machinery 4,691 3,263 1,428 4,172 2,824 1,348 

Office equipment 976 560 416 828 458 370 

Motor vehicles 42 36 6 110 76 34 

Furniture and fittings 7,399 3,524 3,875 7,107 2,638 4,469 

Land 1,964 - 1,964 1,964 - 1,964 

Total 73,470 38,289 35,181 60,073 29,961 30,112 

property plant and equipment - parent company 


Cost 

$000 

Acc Depn 

$000 

Book Value 

$000 

Cost 

$000 

Acc Depn 

$000 

Book Value 

$000 

Computer equipment 4,465 3,582 883 3,869 3,002 867 

Plant and machinery 3,886 2,748 1,138 3,318 2,326 992 

Office equipment 431 279 152 401 241 160 

Motor vehicles 28 28 - 52 52 - 

Furniture and fittings 1,106 575 531 990 435 555 

Land 1,964 -- 1,964 1,964 - 1,964 

40 

Total 11,880 7,212 4,668 10,594 6,056 4,538



Property Valuation 

The Directors, having taken into consideration purchase offers, independent and government valuations and other known 

factors, have assessed the fair value of freehold land to be $3.05million. 

12. investments in subsidiaries 

The Group’s investments in subsidiaries are as follows: 

Interest held by the group 

2005 2004 

Audited By 

Torquay Enterprises Limited 100% 100% PricewaterhouseCoopers 

Pumpkin Patch Originals Limited 100% 100% PricewaterhouseCoopers 

Pumpkin Patch (Australia) Pty Limited 100% 100% PricewaterhouseCoopers 

Pumpkin Patch Limited (UK) 100% 100% PricewaterhouseCoopers 

Pumpkin Patch LLC 100% - PricewaterhouseCoopers 

Patch Kids Limited 100% - PricewaterhouseCoopers 

The Catalogue Studio Pty Limited 100% 100% PricewaterhouseCoopers 

All subsidiary entities have a balance date of 31 July. Pumpkin Patch (Australia) Pty Limited and The Catalogue Studio 

Pty Limited are incorporated in Australia. Pumpkin Patch Limited (UK) is incorporated in the United Kingdom. Pumpkin 

Patch LLC is incorporated in the United States of America. All other subsidiary entities are incorporated in New 

Zealand. 

The principal activities of the subsidiaries are: 

Torquay Enterprises Limited 

Pumpkin Patch Originals Limited 

Pumpkin Patch (Australia) Pty Limited 

Pumpkin Patch Limited (UK) 

Pumpkin Patch LLC 

Patch Kids Limited 

The Catalogue Studio Pty Limited 

Investment Company 

Clothing Retailer and Wholesaler 

Limited Holding/Administration Functions 

Clothing Retailer and Wholesaler 

Clothing Retailer 

Non trading 

Non trading 

13. deferred taxation 

Group 

Parent 


$000 

31 July 2004 

$000 


$000 

31 July 2004 

$000 

Deferred taxation opening 3,635 446 1,505 167 

Prior year adjustment (105) (3) (49) - 

On surplus for the period (1,494) 3,192 (379) 1,338 

Deferred taxation closing 2,036 3,635 1,077 1,505 

41



14. contingent liabilities 

Group and Parent Company 

The Company has guaranteed, together with subsidiary companies, the indebtedness of Pumpkin Patch Limited and 

subsidiaries at 31 July 2005, together with, in all cases, interest thereon under a deed of guarantee dated 18 April 

1996. The deed with the ANZ National Bank Limited provides for the issue of securities in respect of indebtedness 

from time to time of Pumpkin Patch Limited and/or any guaranteeing subsidiary. At 31 July 2005 the total indebtedness 

guaranteed by the deed amounted to $5,200,156 (2004: $8,165,004). 

Other guarantees held by the ANZ National Bank Limited include rent guarantees to certain landlords amounting to 

$1,607,021 (2004: $1,468,352), rent guarantees provided to the landlords of a subsidiary, Pumpkin Patch Limited 

(UK), amounting to $1,447,787 (2004: $1,216, 646), and a guarantee of $75,000 (2004: $75,000) to the NZX. 

The amount of outstanding liabilities under Letters of Credit at 31 July 2005 amounted to $144,652 (2004: Nil). 

15. capital expenditure commitments 

The Group has commitments for future capital expenditure at 31 July 2005 amounting to $3,642,084 

(2004: $1,830,000). 

16. operating lease obligations 

Obligations payable after balance date on non-cancellable operating leases as follows: 

Group 

Parent 


$000 

31 July 2004 

$000 


$000 

31 July 2004 

$000 

Not later than one year 25,362 25,851 1,940 1,622 

Later than one year and not later than two years 19,717 18,789 1,831 1,518 

Later than two years and not later than five years 33,394 28,916 4,750 4,555 

Later than five years 10,790 10,071 4,822 6,050 

89,263 83,627 13,343 13,745 

17. related party transactions 

The parent company has entered into certain transactions in the form of recharging of expenses and overheads with its 

subsidiaries. Details of the identity of subsidiaries are disclosed in Note 12 - Investments in subsidiaries. 

The Group has paid rent of $54,853 (2004: $8,042) to The Dickens Street Partnership which is 66% owned by The 

Opito Family Trust, a shareholder in Pumpkin Patch Limited. These payments were made on normal commercial terms 

and there are no outstanding balances at period end. 

The Group has made purchases of shop fixtures and fittings from Espies Shopfitters Limited of $3,677,690 (2004: 

$2,984,717). Espies Shopfitters Limited is 48.75% beneficially owned by Kezza Family Trust, a shareholder of Pumpkin 

Patch Limited. Kezza Family Trust is associated with Maurice Prendergast, a Director in Pumpkin Patch Limited. These 

were made on normal commercial terms. At period end $129,775 was outstanding (2004: $321,626). 

42



18. intangible assets 

Group 

Parent 


$000 

31 July 2004 

$000 


$000 

31 July 2004 

$000 

Patents and Trademarks 

Patents and trademarks at beginning of period 210 207 - - 

Acquisitions 91 54 - - 

Current period amortisation (63) (51) - - 

Patents and trademarks at end of period 238 210 - - 

Total intangible assets 238 210 - - 

19. financial instruments 

(a) Currency and Interest Rate Risk 

Nature of activities and management policies with respect to financial instruments: 

1. Currency 

The Group undertakes transactions denominated in foreign currencies from time to time and resulting from these 

activities, exposures in foreign currency arise. It is the Group’s policy to hedge foreign currency risks as they arise 

except for foreign currency risks authorised by the Board. To manage these exposures, the Group uses forward foreign 

exchange contracts and foreign currency options. 

The notional principal or contract amounts of foreign exchange instruments outstanding at balance date are: 


$000 

2004 

$000 

Forward foreign exchange contracts - buy 62,168 50,946 

Forward foreign exchange contracts – sell 19,794 38,914 

Forward options - buy 72,865 4,839 

Forward options - sell 16,199 - 

Total 171,026 94,699 

The cash settlement requirements of the forward foreign exchange contracts and options approximates the notional 

amount shown above. 

2. Interest Rate 

The Group utilises as required long-term fixed rate borrowings which are used to fund on-going activities. Management 

monitors the levels of interest rates on an on-going basis and periodically will lock in fixed rates on the next floating 

reset, when they are of the view that interest rates may increase. 

43



3. Repricing Analysis 

Trade debtors, other debtors, trade creditors, other creditors and dividends payable have not been included in the 

table below as they are not interest rate sensitive. 

Group Repricing Maturities 2005 

Effective 

Interest Rates 

< 6 Months 

$000 

6-12 Months 

$000 

1-2 Years 

$000 

2-5 Years 

$000 

> 5 Years 

$000 

Total $000 

Liabilities 

Bank overdraft - - - - - - - 

Total Liabilities - - - - - - 

Repricing Gap - - - - - - 

Group Repricing Maturities 2004 

Effective 


< 6 Months 

$000 

6-12 Months 

$000 

1-2 Years 

$000 

2-5 Years 

$000 

> 5 Years 

$000 

Total $000 

Liabilities 

Bank overdraft 8.35% 4,656 - - - - 4,656 

Short & long term 

borrowings 

- - - - - 

Term liabilities - - - - - 

Total Liabilities 4,656 - - - - 4,656 

Repricing Gap 4,656 - - - - 4,656 

Parent Company Repricing Maturities 2005 

Effective 


< 6 Months 

$000 

6-12 Months 

$000 

1-2 Years 

$000 

2-5 Years 

$000 

> 5 Years 

$000 

Total $000 

Liabilities 

Bank overdraft - - - - - - 



Repricing Gap - - - - - - 

Parent Company Repricing Maturities 2004 

Effective 


< 6 Months 

$000 

6-12 Months 

$000 

1-2 Years 

$000 

2-5 Years 

$000 

> 5 Years 

$000 

Total $000 

Liabilities 

Bank overdraft - - - - - - 



44 

Repricing Gap - - - - - -



4. Concentration of Credit Risk 

In the normal course of business, the Group incurs credit risk from trade debtors and transactions with financial 

institutions. The Group has a credit policy which is used to manage this risk. 

The Group has no significant concentrations of credit risk. The Group does not require any collateral or security to 

support financial instruments due to the quality of financial institutions and trade debtors dealt with. 

(b) Fair Values 

The estimated fair values of the Group’s financial assets and liabilities which differ from the carrying values are noted 

below: 


Carrying Value 

$000 

Fair Value 

$000 

Carrying Value 

$000 

Fair Value 

$000 

Assets 

Investments 4 4 4 4 

Unrecognised 

Foreign exchange contracts - 3,077 - 1,712 

The Group anticipates that term liabilities will be held to maturity and that settlement at fair value is unlikely. 

The following methods and assumptions were used to estimate the fair values for each class of financial instrument. 

Trade Debtors, Trade Creditors and Bank Overdraft 

The carrying value of these items is equivalent to their fair value and therefore they are excluded from the table 

shown above. 

Investments 

The fair value of listed investments is estimated based on quoted market prices at balance date. The fair value of 

unlisted investments is estimated to be the net asset backing, as there are no quoted market prices available. 

Term Liabilities 

The fair value of the Group’s term liabilities is estimated based on current market rates available to the Group for debt 

of similar maturity. 

Foreign Exchange Contracts 

The fair value of these instruments is estimated based on the quoted market price of these instruments. 

Guarantees and Overdraft Facilities 

The fair value of these instruments is estimated on the basis that management do not expect settlement at face value 

to arise. The carrying value and fair value of these instruments is nil. 

45



20. reconciliation of net profit after taxation to cashflow from operating activities 

Group 

Parent 

Note 

12 months 


$000 

12 months 

31 July 2004 

$000 

12 months 


$000 

12 months 

31 July 2004 

$000 

Net Profit After Tax 24,599 8,080 6,485 644 

Add/(Less) non-cash items: 

Depreciation expense 2 8,473 7,428 1,179 1,040 

(Increase)/Decrease in deferred taxation 1,599 (3,190) 428 (1,337) 

Provision for prelisting employee share scheme 

restructuring 

6 - 8,983 - 8,983 

Fit out contributions amortised (1,207) (1,333) - - 

Amortisation expense 2 63 51 - - 

Add/(Less) movements in working capital items: 

(Increase)/Decrease in receivables and prepayments (6,983) 208 3,849 (51) 

Increase/(Decrease) in creditors and provisions (2,813) 7,625 (1,959) (3,289) 

Increase/(Decrease) in creditors re stock in transit (734) 4,780 - - 

(Increase)/Decrease in inventories on hand (8,003) (12,668) - - 

(Increase)/Decrease in stock in transit 9,606 (4,893) - - 

(Increase)/Decrease in related party balances - - 

(2,284) 

(30,233) 

Net Cash Flow From Operating Activities 24,600 15,071 7,698 (24,243) 

21. significant events after balance date 

No significant events have occurred after balance date. 

22. implementation of international financial reporting standards 

As announced by New Zealand’s Accounting Standards Review Board in late 2002, all companies will be required to 

prepare financial statements under New Zealand equivalents to International Financial Reporting Standards (“NZIFRS”) 

for no later than the financial year beginning on or after 1 January 2007, including comparative financial information 

for the financial year beginning on or after 1 January 2006. 

During 2004 a project team was established to plan for the transition to NZIFRS and identify the impacts of 

its implementation. A high level overview has been completed and reported to the Audit, Compliance and Risk 

Management Committee of the Board. The project team has recommended adopting NZIFRS from 1 August 2006. This 

means that the first NZIFRS compliant financial statements will be published for the half year ending 31 January 2008 

and the full year ending 31 July 2008. 

46 

To date the project team has identified a number of accounting policy changes that will be required although some of 

these are subject to interpretation and further review before the impact on the Group is fully understood. The areas of 

significant difference for the Group, between New Zealand Generally Accepted Accounting Practice (“NZ GAAP”) and 

NZIFRS, are set out below:



Taxation 

• Initial impact on retained earnings on implementation. 

• Additional tax assets or liabilities may be required to be recognised 

Under NZIFRS, deferred tax will be calculated using a “balance sheet” approach which recognises deferred tax assets 

and liabilities by reference to differences between accounting and tax values of balance sheet items rather than the 

accounting and tax values recognised in the Statements of Financial Performance. 

Hedge Accounting 

• Initial impact on retained earnings on implementation 

• Volatility in future earnings 

• New assets or liabilities to be recognised 

The Group maintains an off-balance sheet portfolio of forward exchange contracts to hedge the currency risks 

associated with its future purchasing requirements of overseas sourced inventories and the receipt of net revenues from 

overseas business segments. Under NZ GAAP these contracts are accounted for as hedges with any gains or losses 

deferred and recognised when the hedged transaction occurs. 

Under IFRS all derivative contracts, whether used as hedging instruments or otherwise, will be recognised at fair value 

in the statements of financial position. Changes in the fair value of the derivatives will be recognised in the statements 

of financial performance unless strict hedge criteria are met. Portfolio hedging of currency risk does not meet NZIFRS 

hedge criteria and would require any foreign currency gains or losses on the portfolio hedge to be recognised in 

the statement of financial performance. The project team is currently investigating how the Group will manage these 

currency exposures in the future. 

Where the Group is unable to meet NZIFRS hedge criteria this will result in increased earnings volatility. 

Employee Benefits 


• New liabilities to be recognised 

Under NZIFRS, the liability for both vested and non-vested long-term employee benefits, will be recognised in the 

statements of financial position at the present value of the expected future obligation. 

Share-based Remuneration 


• Higher expenses 

The Group issues share options to executives as a form of equity-based compensation. The Group’s current accounting 

policy does not recognise an expense in respect of these share options. 

Under NZIFRS the Group will be required to determine the fair value of all share-based remuneration and amortise the 

expenses over the relevent vesting periods. 

The above differences from current accounting policy have not been quantified as, at this stage, the Group is unable to 

reliably quantify the effects. On adoption of NZIFRS a majority of the transitions required will be made, retrospectively, 

against opening retained earnings. 

The areas identified above should not be taken as an exhaustive list of all differences between NZ GAAP and NZIFRS. 

The impacts discussed are based on the project team’s current interpretation of the standards that have been released to 

date. There is potential for the significance of the impact to change when the Group prepares its first full set of NZIFRS 

financial statements due to changes in standards, changes in business, or changes in interpretation of the standards. 

47



23. comparison against prospectus forecast 

Summary Statement of Financial Performance for the year ended 31 July 2005 

Actual 2005 

$000 

Forecast 2005 

$000 

Operating revenue 280,378 246,774 

Group earnings before interest and tax 36,357 23,035 

Net profit after income tax 24,599 15,331 

• Operating revenue was higher than forecast due to sales growth across United Kingdom and Australian stores, and 

wholesale accounts. 

• EBIT was higher than forecast due to the above noted sales growth and improved sales margins. 

Summary Statement of Financial Position as at 31 July 2005 

Actual 


$000 

Forecast 


$000 

Current assets 72,070 67,137 

Non-current assets 39,269 27,811 

Total Assets 111,339 94,948 

Other current liabilities 25,722 15,525 

Non-current liabilities 3,360 1,913 

Total Liabilities 29,082 17,438 

Net Assets 82,257 77,510 

Represented by: 

Share capital 56,134 60,620 

Retained earnings 26,123 16,890 

Total Equity 82,257 77,510 

• Share capital is lower than forecast due to the lower carried forward balance from 2004 resulting from the 

forecasted final price on listing in 2004 being $1.25 compared to the forecasted $1.32, and total issue costs 

being higher than forecasted. 

• Current assets includes higher than forecasted inventory levels resulting from increased purchases for the higher than 

forecasted number of stores and increased wholesale account activity. Higher than forecasted wholesale sales has 

also led to higher than forecasted trade debtors. 

• Non current assets are higher than forecast due to an increase in fixed assets resulting from the opening of more 

stores than forecasted for 2004 and 2005. 

• Other current liabilities are higher than forecast due to increased accounts payable resulting from increased stock 

and general expense purchases for the larger than forecasted retail and wholesale operations. 

48



Cash Flow Summary For the year ended 31 July 2005 

Actual 


$000 

Forecast 


$000 

Net cash flow from operating activities 24,600 22,699 

Net cash flow from investing activities (13,633) (4,350) 

Net cash flow from financing activities (6,353) (2,400) 

Net increase/(decrease) in cash held 4,614 15,949 

Forecasted landlord fitout contributions of $600,000 which were disclosed in the Prospectus as investing cash flows 

have been reclassified as operating cash flows to allow comparison with the statement of cash flows for the year ended 

31 July 2005. 

• Cash flows from operating activities were higher than forecast due to the improved trading result for the period, 

mostly offset by increases in other working capital items. 

• Higher than forecasted cash out flows from investing activities was the result of the opening of 14 stores not 

forecasted in 2005 and other general capital expenditure relating to the overall larger retail and wholesale 

operations. 

• Higher than forecasted cash outflows from financing activities resulted from dividend payments being above 

forecasted levels due to the better than forecasted trading result. 

49

Auditors’ report to the shareholders of Pumpkin Patch Limited 

We have audited the financial statements on pages 24 to 49. The financial statements provide information about the past 

financial performance and cash flows of the Company and Group for the year ended 31 July 2005 and their financial position 

as at that date. This information is stated in accordance with the accounting policies set out on pages 27 to 30. 

directors’ responsibilities 

The Company’s Directors are responsible for the preparation and presentation of the financial statements which give a true and 

fair view of the financial position of the Company and Group as at 31 July 2005 and their financial performance and cash 

flows for the year ended on that date. 

auditors’ responsibilities 

We are responsible for expressing an independent opinion on the financial statements presented by the Directors 

and reporting our opinion to you. 

basis of opinion 

An audit includes examining, on a test basis, evidence relevant to the amounts and disclosures in the financial statements. 

It also includes assessing: 

a) 

b) 

the significant estimates and judgements made by the Directors in the preparation of the financial statements; and 

whether the accounting policies are appropriate to the circumstances of the Company and Group, 

consistently applied and adequately disclosed. 

We conducted our audit in accordance with generally accepted auditing standards in New Zealand. We planned and 

performed our audit so as to obtain all the information and explanations which we considered necessary to provide us with 

sufficient evidence to give reasonable assurance that the financial statements are free from material misstatements, whether 

caused by fraud or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information 

in the financial statements. 

We have no relationship with or interests in the Company or any of its subsidiaries other than in our capacity as auditors and 

accounting advisors. 

unqualified opinion 

We have obtained all the information and explanations we have required. 

In our opinion: 

a) proper accounting records have been kept by the Company as far as appears from our examination of those records; and 

b) 

the financial statements on pages 24 to 49: 

i) 

ii) 

comply with generally accepted accounting practice in New Zealand; and 

give a true and fair view of the financial position of the Company and Group as at 31 July 2005 and their financial 

performance and cash flows for the year ended on that date. 

Our audit was completed on 13 September 2005 and our unqualified opinion is expresssed as at that date. 

50 

Chartered Accountants 

Auckland

shareholder information 

for the year ended 31 July 2005 

Size of Holdings 

Number of 

Holders 

% Number of Shares % 

1 - 1,000 1,009 22.56 688,517 0.41 

1001 - 5,000 2,184 48.82 6,678,656 4.01 

5,001 - 10,000 705 15.76 5,342,283 3.21 

10,001 - 100,000 534 11.94 12,998,578 7.81 

Over 100,000 41 0.92 140,804,966 84.56 

4,473 100.00 166,513,000 100.00 

The details set out above were as at 31 August 2005. 

principal shareholders 

The names and holdings of the twenty largest registered shareholders as at 31 August 2005 were: 

Ordinary Shares % 

Nigel P Smith and Wynyard Wood Trustee Services Limited as Trustees for Feruza Trust 24,390,000 14.65 

Maurice J Prendergast, Kerry D Prendergast and Stuart G Callender as Trustees for Kezza 

Family Trust 

13,400,000 8.05 

Perpetual Trustee Limited 12,000,000 7.21 

Mark J Synnott, Sally R Synnott and The Gale Trustee Company Limited as Trustees for The 

Opito Family Trust 

10,400,000 6.25 

TEA Custodians Limited 8,203,819 4.93 

Portfolio Custodian Limited 8,000,000 4.80 

Nigel P Smith and Wynyard Wood Trustee Services Limited as Trustees for Simdec Trust 7,400,000 4.44 

ANZ Nominees Limited 5,771,648 3.47 

Westpac Banking Corporation – Client Assets No 2 5,280,100 3.17 

Premier Nominees Limited – Armstrong Jones NZ Share Fund 5,162,428 3.10 

National Nominees New Zealand Limited 4,535,823 2.72 

Pumpkin Patch Nominees Limited 4,492,162 2.70 

New Zealand Superannuation Fund Nominees Limited 3,156,388 1.90 

TEA Custodians Limited No2 Account 2,523,629 1.52 

Asteron Life Limited 2,298,550 1.38 

Gregory J Muir, Debra J Muir and Geoffrey A Lawrie as Trustees for Muir Trust 1,969,767 1.18 

Citibank Nominees (New Zealand) Limited 1,707,858 1.03 

River Capital Pty Limited 1,620,000 0.97 

Custody and Investments Nominees Limited 1,540,976 0.93 

52 

Bruce M Walkley and Deborah F Walkley as Trustees for Walkley Family Trust 1,403,471 0.84

substantial security holders 

Pursuant to Section 26 of the Securities Markets Act 1988, the substantial security holders at 31 August 2005 were 

as follows: 

Ordinary Shares 

Setar A Motani (notice dated 22 June 2004) 24,390,000 

Maurice J Prendergast and Kerry D Prendergast (notice dated 18 June 2004) 13,400,000 

Perpetual Trustee Limited (notice dated 21 June 2004) 12,000,000 

Fisher Funds Management Limited (notice dated 5 April 2005) 11,434,683 

Mark J Synnott and Sally R Synnott (notice dated 18 June 2004) 10,400,000 

ING NZ Limited (notice dated 19 October 2004) 10,330,655 

53

corporate directory 

registered office 

439 East Tamaki Road 

Auckland 

New Zealand 

contact details 

Private Bag 94 310 

Pakuranga 

Auckland 

New Zealand 

Phone: +64 9 274 7088 

Facsimile: +64 9 274 1122 

Website: www.pumpkinpatch.co.nz 

investor relations 

E-mail: investor@pumpkinpatch.co.nz 

Website: www.pumpkinpatch.biz 

share registrar 

BK Registries Limited 

PO Box 384 

Ashburton 

New Zealand 

Phone: +64 3 308 8887 

Facsimile: +64 3 308 1311 

solicitors 

Simpson Grierson 


Wellesley Street 

Auckland 

New Zealand 

auditors 

PricewaterhouseCoopers 


Auckland 

New Zealand 

bankers 

ANZ Banking Group (New Zealand) Limited

id culture

annual report 2005 - Pumpkin Patch investor relations

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