annual report 2005 - Pumpkin Patch investor relations

Pumpkin Patch Limited & Subsidiaries notes to and forming part of the financial statements
for the 12 months ended 31 July 2005
B class shares
31 July 2005 31 July 2004
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
31 July 2005 31 July 2004
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)
31 July 2005 31 July 2004
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.
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