GALE PACIFIC LIMITED 2016 ANNUAL REPORT 01
Annual Report 2016
GALE PACIFIC LIMITED 2016 ANNUAL REPORT
Contents
IFC Corporate Directory
1
Company Introduction
2
Results at a Glance
3
Chairman’s Letter
6
Group Managing Director’s Review
9
Operational Report
12 Executive Leadership
14 Corporate Governance
15 Directors’ Report
30 Financial Report
2016 Annual General Meeting
The Annual General Meeting will be held at 11am on
Friday 28 October 2016 at the Grand Hyatt,
123 Collins Street, Melbourne.
Corporate Directory
Gale Pacific Limited
ABN 80 082 263 778
Directors
David Allman (Chairman)
Nick Pritchard (Group Managing Director)
Peter Landos (Non Executive Director)
John Murphy (Non Executive Director)
Company Secretary
Sophie Karzis
Registered Office
145 Woodlands Drive,
Braeside, Victoria, 3195
T + 613 9518 3333
Principal Places of Business
Australia
145 Woodlands Drive, Braeside, VIC, 3195
Tel: +61 3 9518 3333
New Zealand
Unit 9, 39 Apollo Drive, Rosedale, Auckland, 0632
Tel: +64 9 479 9119
China
777 Hengshan West Road, Beilun, Ningbo, 315800
Tel: +86 574 5626 8888
USA
Suite 1704, 285 West Central Parkway,
Altamonte Springs, Florida 32714
Tel: +1 407 333 1038
UAE
PO Box 17696, Jebel Ali, Dubai
Tel: +971 4 881 7114
Solicitors
Norton Gledhill
Level 23, 459 Collins Street, Melbourne, Victoria, 3000
T + 613 9614 8933
Auditors
Deloitte Touche Tohmatsu
550 Bourke Street, Melbourne, Victoria, 3000
T + 613 9671 7000
Stock Exchange Listing
Gale Pacific Limited shares are listed on the Australian
Securities Exchange (ASX code: GAP)
Share Registry
Computershare
Yarra Falls, 452 Johnston Street, Abbotsford, Victoria, 3067
T + 613 9415 4000
Website Address
www.galepacific.com
GALE PACIFIC LIMITED 2016 ANNUAL REPORT 1
GALE PACIFIC LIMITED 2016 ANNUAL REPORT 1
Who we are
GALE Pacific is a manufacturer and
marketer of commercial and DIY
products that protect and enhance
environments around the world.
the Coolaroo brand. Commercial
products are marketed under the
GALE Pacific brand.
Based in Australia, we operate
globally with approximately half our
revenue coming from other markets.
Our products are marketed across
commercial and retail sectors,
with distribution into architectural,
horticultural, agricultural,
mining, construction, and home
improvement channels. They are
stocked by many of the world’s
largest retailers and also have
strong online distribution.
In Australia and New Zealand we
also market a range of interior
window furnishings under the
ZONE Interiors brand and a range
of glass DIY pool fencing and
balustrading, shower screens and
other glass products under the
EVERTON brand.
GALE Pacific is a world leader
in specialised textiles and
associated products and is
Key products include architectural
shade fabrics, exterior window
shades, shade sails and an array of
specialised commercial fabrics used
for crop protection, irrigation, water
storage and screening.
Retail shade and screening
products are marketed under
recognised in our markets as an
innovator and long-term producer
of premium quality products.
The company is focused on
strengthening our global market
position through product innovation
and brand strength.
2 GALE PACIFIC LIMITED 2016 ANNUAL REPORT
2 GALE PACIFIC LIMITED 2016 ANNUAL REPORT
Results at a glance
Revenue $A million
H1
H2
Growth
Operating Cash Flow $A million
H1
H2
as a % of EBITDA
200 –
150 –
100 –
50 –
0
137.3
76.4
148.0
80.6
60.9
67.4
173.2
90.8
– 20%
200 –
– 15%
100 –
– 10%
0 –
82.4
– 5%
(10) –
(4.0)
8.2
13.4
1.5
16.3
(9.0)
2014
2015
2016
– 0%
(20)
H1 14
H2 14
H1 15
H2 15
H1 16
H2 16
–150%
–50%
–(50%)
–(150%)
–(250%)
NPAT $A million
H1
H2
Net Debt $A million
H1
H2
as a % of Equity
12.0 –
8.0 –
4.0 –
0.0 –
8.2
4.7
3.5
2014
*Underlying
10.2
7.0
3.2
2016
6.9*
5.8
1.1
2015
30 –
20 –
10 –
0
26.2
20.0
16.7
13.6
11.2
8.2
H1 14
H2 14
H1 15
H2 15
H1 16
H2 16
– 40%
– 30%
– 20%
– 10%
– 0%
EBITDA $A million
H1
H2
Sales by Region $A ’000s
18.2*
13.7
22.3
14.1
8.2
4.5
2015
2016
3.40
1.72
EurAsia
6,766
Middle East / North Africa
15,352
Americas
53,603
Australasia
97,470
24.0 –
16.0 –
8.0 –
0.0 –
17.6
10.3
7.3
2014
*Underlying
EPS (diluted) cents
4.00 –
3.00 –
2.72
2.00 –
1.00 –
0.0 –
2014
2015
2016
GALE PACIFIC LIMITED 2016 ANNUAL REPORT 3
Chairman’s Letter
David Allman
I am pleased to report that GALE Pacific has
delivered strong financial results for FY2016, while
also making good progress on the implementation
of key growth strategies. It is pleasing to see the
strategies announced in August 2014 translating to
improved profitability and increased shareholder value.
FY2016 Result
Sales revenue of $173.2 million represented a 17% increase
on the prior year, while statutory earnings per share increased
by 98%. These results were achieved while exiting markets
and product categories determined to be non-core and
unprofitable, and investing in brands, facilities, technology and
new leadership to position us better for future growth.
The Australia/New Zealand region increased sales by 18%,
with growth in both commercial and retail sectors. Profitability
improved, driven by higher sales, manufacturing efficiencies
and supply chain improvements, and is now trending towards
more acceptable levels.
Operating cash flow (net of tax) of $17.8 million enabled net
debt to reduce to $8.2 million at 30 June 2016, compared
with $16.7 million at 30 June 2015. Our debt level provides
flexibility to fund prudent value-adding investments and growth
opportunities as they arise.
Shareholder Returns
The board has declared a final dividend for FY2016 of 1 cent
per share (unfranked). This takes the total dividend for the year
to 1.75 cents per share, a 75% increase on the prior year and
representing a 51% payout ratio. The record date for the final
dividend is 26 September 2016 and the dividend payment
date is 3 October 2016.
Our People
One of our key goals is the development of a true performance-
driven culture which requires that we attract and retain
talented employees with diverse experience and backgrounds.
During the year we made new leadership appointments in
Australia/New Zealand, the Americas and China and we
welcome these new leaders. The board is confident that they
will make a valuable contribution to GALE Pacific.
On behalf of the board, I thank all our employees for their
contribution and positive outlook.
Looking Forward
Our results in FY2016 were positive and, following many of the
investments and activities of the last two years, we are well
positioned for ongoing earnings growth.
In FY2017, the company will continue to execute its growth
strategy. Our plan, as previously communicated, has not
changed significantly although there will be increased focus
on our China manufacturing operations and on positioning
our Americas and Middle East/North Africa businesses for
accelerated growth.
We continue to see growth potential in all selling regions and
across both the commercial and retail sectors. We are also
excited by the pipeline of new products in development.
I look forward to the next opportunity to update you on our
company’s performance.
David Allman
Chairman
18 August 2016
4 GALE PACIFIC LIMITED 2016 ANNUAL REPORT
4 GALE PACIFIC LIMITED 2016 ANNUAL REPORT
GALE Pacific:
Geared for growth
Big 5 Show Dubai. Each year the company exhibits
at this important regional event. The Big 5 Show is the
largest construction event in the Middle East, attracting
nearly 75,000 visitors.
Our vision
To be the leading provider
of innovative and practical
products that protect
and enhance the
environments and lifestyles
of our customers.
Our values
GALE PACIFIC LIMITED 2016 ANNUAL REPORT 5
GALE PACIFIC LIMITED 2016 ANNUAL REPORT 5
Integrity. We do what is right. We are honest and
ethical, worthy of the trust of others. It is the price of
entry to our team.
Respect. Respect guides the way we operate at
all levels – with consumers, customers, suppliers,
investors, the community and our own team.
Collaboration. We believe in the power of working
together in a collaborative way. Every function and every
role is as important as each other.
People. People are the heart and soul of our business.
We continually strive to provide a safe, supportive and
engaging environment for our team to achieve their full
potential.
Community. We are proud to be part of the
communities we operate in globally. We are committed
to supporting local causes and operating in an
environmentally responsible manner at all times.
innovation. Creative thinking inspires innovation in
everything we do. We seek and value ideas from our
team that improve our products and provide meaningful
benefits to our consumers and customers.
Our strengths
•
Innovation and Technology
• Premium Brands and Marketing
• Our People and Culture
• Our World Class Manufacturing
•
Financial Discipline
How we plan to grow
•
Extending our market-leading shading,
screening and technical fabrics businesses
in Australia and New Zealand
•
Accelerating the growth in our Middle East
and North Africa markets, focusing on
commercial shading
•
Accelerating the development of our
Americas business, focusing on shading and
screening, whilst simultaneously entering
the market for commercial coated fabrics
•
Investing in differentiated technologies and
technical partnerships that support the
development of innovative products driven
by consumer need.
Our vision
To be the leading provider
of innovative and practical
products that protect
and enhance the
environments and lifestyles
of our customers.
6 GALE PACIFIC LIMITED 2016 ANNUAL REPORT
Group Managing
Director’s Review
Nick Pritchard
I am very pleased to report that GALE Pacific
delivered strong financial performance for FY2016, as
well as considerable progress with the transformation
of the company.
Net profit after tax (NPAT) was $10.2 million, an increase of
47% over the prior year’s underlying NPAT of $6.9 million and
98% over the prior year’s statutory NPAT of $5.2 million.
Sales revenues increased 17% to $173.2 million. Earnings
before interest and tax (EBIT) were $15.1 million, up 43% on
the underlying result for the prior year.
There was a considerable improvement in working capital
management. Operating cash generated was $17.8 million,
with net debt at 30 June 2016 of $8.2 million compared to
$16.7 million a year earlier.
The result was driven by strong sales growth in our core markets
and product categories, as well as manufacturing efficiencies
and supply chain improvements. Importantly, the result was
achieved whilst continuing to exit non-core businesses, invest in
our brands, and build capability for the future.
Building a Growth Platform
In August 2014, we announced a strategy to create a focused,
more innovative, collaborative business, service-driven and
leveraging its global scale.
Over the last two years we have been transforming the
business in line with this plan.
In 2015, to focus our business we rationalised brands and
made decisions to exit numerous immaterial and non-core
product categories. We also moved to localise our selling
regions with the goal of improving service to a smaller number
of markets.
To build our execution capability, we have invested in our core
manufacturing technologies and IT systems, rationalised our
supplier base and strengthened our planning processes. We
reduced the number of Australian warehouses to remove
complexity and cost, and took our first steps towards building a
stronger service and performance driven culture.
Also in line with our strategy, we accelerated our research and
development and worked hard to earn improved customer and
supplier trust.
The Momentum Continues
In 2016 we continued to execute our plan.
Making Our Brands Really Matter
Our strategy is to increase investment in a smaller number of
brands to make them more meaningful to consumers. Our four
core brands: Coolaroo, GALE, EVERTON and ZONE Interiors,
have been refreshed with new logos, packaging and supporting
digital platforms.
Our investment in research and product development is
generating strong returns with the launch of new and innovative
products in our core categories. Significant new ranging wins
were secured in key shading categories, and in the commercial
sector we launched new architectural shade and crop
protection fabric products. Furthermore, key technical alliances
were built and/or strengthened to support our continuing
research and development.
Building Our Execution Capability
Throughout the year, we continued to develop our information
technology platform, further aligning the regions. We are
leveraging information technology to drive cost reductions and
improve service and reporting.
Activities to transform our China manufacturing operations
have commenced. Our strategy involves exiting non-core
manufacturing processes and low volume products, in order
to increase the efficiency and flexibility of the plant. These
improvements are aimed at removing cost and improving
the service performance of the facility which, over time, will
translate to improved profitability and lower inventories.
GALE PACIFIC LIMITED 2016 ANNUAL REPORT 7
In procurement, the business made great strides to rationalise
our supplier base and focus on working more collaboratively
with a smaller number of sophisticated suppliers. Strong
supplier relationships are key to our success and we are
pleased with the achievements in this area.
Simplify and Align the Business
In Australia, we continued to reduce the number of
warehouses to remove supply chain complexity and cost. We
successfully relocated our retail products warehouse to a new
facility which helped to generate immediate transport cost and
service improvements.
Whilst recognising the uniqueness of our markets, we are
targeting collaboration and alignment wherever sensible.
Throughout the year, we continued to remove duplication
and implement more globally aligned processes to support
our growth.
Focused Business Expansion
In line with our plan to reduce cost and improve service at
our manufacturing operations, Cliff Zhang was appointed to
lead our China manufacturing transformation. Cliff brings
considerable manufacturing leadership experience in world-
class businesses and we look forward to benefiting from his
contribution to GALE Pacific.
We are excited about the growth opportunity in the Americas
region, specifically in the United States, Canada and Mexico. To
lead accelerated growth in this key region, Lindsay Klebenow
was appointed President/General Manager – Americas.
In Australia and New Zealand, Craig Fuller commenced as
General Manager, leading the continued improvement of our
largest business region.
These leadership appointments were important in building a
higher performance culture aligned to our business strategy.
Throughout the year, we also made investments to strengthen
our technical capability. Technical centres in Australia and
China were built, and training protocols were established to
support our leadership and technical competence worldwide.
During the year, we continued to refine our product, geographic
and channel strategies.
Health and Safety
In addition to continuing to exit various non-core product
categories, we decided to withdraw from non-core markets.
Whilst fortunate to have organic growth potential in multiple
geographies and channels, we increased company-wide
disciplines to focus on all aspects of our core business.
In May 2016, a new, long-term, multi-currency banking
facility was secured. This facility provides us with both access
to capital and flexibility to pursue growth initiatives in our
international markets.
Developing the Team for Growth
Late in the year, we made a number of key senior
management changes aimed at building capability and leading
our growth strategy.
We have a steadfast commitment to ensuring GALE Pacific is a
safe place to work.
Our safety performance across our business was strong. I am
encouraged by the improvements we are seeing in ‘Hazard and
Near Miss’ reporting, a solid indicator of a positive safety culture.
During the year, we invested in dedicated health and safety
leadership to build our capability and accelerate improvements
across all regions. Given the importance of health and safety,
this new role reports directly to me.
In 2016, we conducted our first global safety culture survey
across all employees. The findings from this survey will help
to drive the health and safety strategy in the future. We will
conduct this culture survey on an annual basis enabling us to
measure our safety performance more effectively.
Manufacturing. Extrusion coating plant – Braeside,
Victoria, Australia. GALE Pacific manufactures
technically complex fabrics at its extrusion coating
plant. The company continues to invest in its core
manufacturing technologies.
Landmark Recycled. In 2016, in conjunction with Deakin
University, GALE Pacific pioneered a fabric made from recycled
grain covers, solving a significant ‘end of life’ disposal issue
for grain handlers. GALE Pacific’s patent pending technology
presents a considerable opportunity. The new Recycled
Landmark was launched in Australia in June.
8 GALE PACIFIC LIMITED 2016 ANNUAL REPORT
Manufacturing – Throughout the year the
company invested in important technical
upgrades to improve product performance and
deliver manufacturing efficiencies.
Specialty Textiles Association Trade
Show – Gold Coast, June 2016. At this show
the company launched its new Commercial
Heavy architectural shade fabric, designed
specifically for large structures.
Melbourne Retail Products Distribution Centre –
Dandenong South, Victoria, Australia. During the year the
company relocated retail warehousing operations to a new
facility supporting service and cost improvements.
Looking Forward
We are confident that GALE Pacific is well positioned to deliver
consistent sales and earnings growth.
The next phase of our business is exciting. Whilst our
transformation is not yet complete, we now have an
opportunity to move into a different mode.
Our People
Our next phase will focus on:
• China Manufacturing Transformation – reducing
complexity in the plant, building technical capability, more
sophisticated procurement and creating a greater service
orientation.
• Americas – developing a manufacturing and logistics
infrastructure to support faster growth, focusing on core
retail categories and designing a plan for commercial
sector growth.
• Middle East/North Africa – investing in additional sales
resources to capitalise on the market opportunity.
• Research & Development - continuing our innovation
initiatives, working closely with global technical partners
who will help bring our ideas to reality.
All our employees, irrespective of geography, seniority or job
function are guided by GALE Pacific’s values, as listed on
page 5.
Our employees around the world have made a significant
contribution to a successful year for GALE Pacific and I would
like to thank all of them for their efforts. They have responded
particularly well to the challenges of a fast-changing business
and I am grateful for their ongoing commitment to improve the
company’s performance.
Thank you, too, to our customers, our suppliers and our
shareholders for your continued support of GALE Pacific.
• Focus – accelerating our exit from non-core product
categories and sharpening our focus on a smaller number of
geographic regions and channels, based on market insights.
Nick Pritchard
Group Managing Director
18 August 2016
• Marketing – global transition to our new branding
frameworks and investing in building more global digital
platforms to engage with our consumers more fully.
Operational Report
Revenue
Underlying EBITDA
Underlying EBIT
Underlying profit before tax
Underlying profit after tax
Statutory profit/loss before tax
Statutory profit/loss after tax
Net cash provided by operating activities
Net debt
Diluted earnings per share
Dividends per share
Australia/New Zealand
Revenue
Underlying EBITDA
GALE PACIFIC LIMITED 2016 ANNUAL REPORT 9
FY2016
A$ million
FY2015
A$ million
Change
%
173.2
148.0
22.3
15.1
13.5
10.2
13.5
10.2
17.8
8.2
18.2
10.6
8.7
6.9
6.2
5.2
4.4
16.7
3.40 cents
1.72 cents
1.75 cents
1.0 cent
17
22
43
55
47
117
98
307
(51)
98
75
FY2016
A$ million
FY2015
A$ million
Change
%
97.5
3.6
82.7
3.2
18
12
Sales grew through both the retail and commercial channels.
In the retail sector, the Company secured considerable new distribution for core product categories, including portable sun
shelters, umbrellas and synthetic grass. The prior year’s investment in the establishment of the EVERTON brand for glass
products, and its relaunch, resulted in solid growth in the category and returned it to profitability.
In the commercial sector, growth was achieved as a result of new products and service improvements.
Throughout the year there was ongoing focus on achieving further improvements in the supply chain. These resulted in improved
inventory turns, supplier rationalisation and improvements in trading terms, as well as transport and labour savings.
Restructuring initiatives strengthened the team’s capability and separated commercial and retail sector responsibilities,
positioning them for further growth.
Americas
Revenue
EBITDA
FY2016
A$ million
FY2015
A$ million
Change
%
53.6
4.9
43.4
5.0
24
(1)
Demand for GALE’s products in the Americas was strong and new retail business was secured in the core window shades
category. The region’s performance, however, was impacted by supply chain challenges that restricted its ability to service
market requirements effectively.
The Company invested in new supply chain leadership, strengthened the planning function and made warehousing and
manufacturing improvements. These changes, combined with the cost savings and service improvements in the China
operations, have established a solid platform for profitable future growth.
10 GALE PACIFIC LIMITED 2016 ANNUAL REPORT
Late in the year, GALE appointed a new President/General Manager for the region with the goal of accelerating growth in the
retail sector and building a strategy for commercial market expansion. A provision for the cost of the leadership transition is
included in the FY2016 accounts.
GALE has significant opportunities in this region and, after making appropriate changes, attention is turning to investing more
heavily in the Americas to capitalise on these opportunities.
Middle East/North Africa
Revenue
EBITDA
FY2016
A$ million
FY2015
A$ million
Change
%
15.4
3.1
14.4
3.3
7
(4)
Market conditions in the region were particularly challenging throughout the year. Low oil prices and political volatility combined
to put pressure on regional cash flows. Demand for GALE products remained strong, but ongoing focus on the quality of the
customer base resulted in lower sales growth.
During the year, there was a soft launch of GALE’s new Commercial Heavy architectural fabric, with a number of initial projects.
There is considerable potential demand for higher performing architectural fabrics in the region, and new product development
initiatives have been deliberately focused in this area.
The Middle East/North Africa market continues to be highly attractive. Investments in this area will be limited largely to new
products (inventory) and additional sales resources.
China Manufacturing & Eurasia
Revenue
Intersegment Sales (eliminated when consolidating group results)
EBITDA
FY2016
A$ million
FY2015
A$ million
Change
%
6.8
58.4
12.6
7.5
43.0
10.6
(10)%
36%
19%
Sales to the Eurasia region were slightly lower compared to the prior period, reflecting the transition to higher margin
commercial fabrics. Unfavourable legacy trading arrangements were addressed and a platform was created for sustained
profitable growth.
The formation of a regionally-based sales and support team was completed, with roles transferred from Australia, and a decision
was taken to focus on a smaller number of geographic regions and channels.
At the Company’s Chinese manufacturing operations, facilities and plant were upgraded and efficiency remained high, with
gains in quality and waste reduction. There was higher demand for knitted and woven fabrics from all selling regions which also
contributed to improved capacity utilisation.
The strategy to treat the Chinese manufacturing facility as a cost centre focused on quality, cost reduction and service remains,
as shown by the improvement in key performance indicators.
Balance Sheet
Net debt at 30 June 2016 was $8.2 million, compared with $20.0 million at 31 December 2015 and $16.7 million at
30 June 2015. The decrease in debt during the year reflected strong sales growth, continued improvements in the supply chain
and improvements in global inventory management.
Group working capital increased compared with the prior corresponding period as a result of unfavourable exchange rate
translation. Notwithstanding this, there were improvements in all major working capital metrics. Efforts to rationalise the
Company’s supplier base resulted in significant improvements in trading terms and positive cash generation throughout
the period.
GALE PACIFIC LIMITED 2016 ANNUAL REPORT 11
The Company continues to be focused on disciplined inventory management, with increases in inventory turns and decreases in
aged inventory.
Cash Generation and Working Capital
Group working capital increased vs prior corresponding period as a result of unfavourable exchange rate translation.
Notwithstanding currency, we have seen improvements in all major working capital metrics. Efforts to rationalise our supplier
base has resulted in significant improvements in trading terms translating to positive cash generation throughout the period.
The company continues to be focused on disciplined inventory management demonstrated by increases in inventory turns and
decreases in aged inventory. Despite challenges in the middle east region, the company’s receivables metrics remain on track
with good progress in the Americas particularly.
Operating cash flow for the period was $17.8m a 4 times improvement over prior year driven by profitable growth and
improvements in working capital management. The company’s positive cash position provides GALE Pacific with significant
opportunity to enable the growth strategy detailed above.
Reconciliation of Underlying Results to Statutory Results for Prior Corresponding Period
In the prior corresponding period, the company incurred non-recurring costs related to restructuring and the re-launch of the
company’s pool fencing and balustrade ranges. The following table reconciles the underlying results to the statutory results.
Statutory
Restructuring costs
Product re-launch costs
Underlying
EBITDA
A$ million
EBIT
A$ million
Profit before
tax
A$ million
Profit after tax
A$ million
15.7
0.3
2.2
18.2
8.0
0.3
2.2
10.6
6.2
0.3
2.2
8.7
5.2
0.2
1.5
6.9
Underlying profit, EBITDA and EBIT are the Statutory profit, EBITDA and EBIT respectively adjusted for non recurring costs related
to restructuring and the re-launch of the company’s pool fencing and balustrade ranges. The Company believes that underlying
profit, EBITDA and EBIT provide a better understanding of its financial performance and allows for a more relevant comparison of
financial performance between financial periods.
Underlying profit, EBITDA and EBIT are useful as they remove significant items that are material items of revenue or expense that
are unrelated to the underlying performance of the business thereby facilitating a more representative comparison of financial
performance between financial periods.
Underlying profit is presented with reference to the Australian Securities and Investments Commission Regulatory Guide 230
“Disclosing non-IFRS financial information” issued in December 2011. The Company’s policy for reporting underlying profit is
consistent with this guidance. The Directors had the consistency of the application of the policy reviewed by the external auditor.
Innovation – the company has a clear goal of
being a technical leader with real innovation driven
by consumer insights. During the year the company
invested in technical centres in Australia and China to
better support the technical agenda.
12 GALE PACIFIC LIMITED 2016 ANNUAL REPORT
Executive Leadership
Back row (from left): Craig Fuller, Ted Varani and Bruno Marotta; Front row (from left): Cliff Xin-Hua Zhang, Ali Haidar, Nick Pritchard,
Matt Parker, Sharon Elding and Lindsay Klebenow.
Nick Pritchard
Group Managing Director
Matt Parker
Chief Financial Officer
Nick re-joined GALE Pacific in August 2013 following
Matt joined GALE Pacific in April 2015. Matt is an
11 years in senior leadership positions at Newell Rubbermaid
experienced finance professional having held key finance
(IRWIN Tools, Rubbermaid, Waterman, Parker, PaperMate,
roles at Ford Motor Company Australia, Nissan Motor
DYMO, Liquid Paper). He led the GALE Australia/New Zealand
Company Australia and Cadbury Schweppes. Prior to joining
business until August 2014 when he was appointed as Group
GALE, he was the CFO of Paragon Care Ltd (ASX:PGC). Matt
Managing Director. Nick was formerly Marketing Manager
is a certified practising accountant and holds a Bachelor’s
and Product Manager of GALE Pacific between 1996 and
Degree in Business and Arts (Japanese). He is a registered
2003. He developed the Coolaroo brand and many of the
member of CPA Australia and an affiliate of the Securities
company’s highly successful products.
Institute of Australia.
Bruno Marotta
General Manager – Supply Chain
Bruno joined GALE Pacific in October 2014 and has over
30 years’ experience in the supply chain arena. He spent
18 years in senior supply chain roles at American Tool
Company/Newell Rubbermaid where his responsibilities
included leading warehouse facilities, logistics,
procurement and customer service functions across the Asia
Pacific region.
GALE PACIFIC LIMITED 2016 ANNUAL REPORT 13
Sharon Elding
Manager – People and Culture
Sharon joined GALE Pacific in March 2014 after relocating
from Singapore. She is an experienced HR practitioner who
acquired regional HR experience at BOSCH South-East Asia
and Hyflux, a global environmental solutions company listed
on the Singapore Stock Exchange. Sharon holds a Bachelor
of Science (Biomedical) and a Postgraduate Diploma in
in international sales, cross-border management and
entrepreneurialism based out of the USA, Japan, France
and China. Ted has been involved in projects in the fields
of predictive analytics, mobile apps, public utilities, and
medical devices, with a notable period of 9 years within
the Veolia Group where he served as worldwide Business
Development Manager as well as General Manager of a
US $50M Chinese subsidiary.
Human Capital Management. She is a registered Certified
Lindsay Klebenow
Professional with the Australian Human Resources Institute.
General Manager – Americas
Cliff Xin-Hua Zhang
General Manager - Manufacturing
Cliff joined GALE Pacific in May 2016. He is an experienced
manufacturing leader having held senior manufacturing and
product quality roles at Bosch Power Tools over twelve years,
and operations, logistics and production roles at Andrews
Telecommunications, Honeywell CATIC Engine Co. and
Solectron Technology Co., Ltd., a U.S.-based manufacturer
of electronics products. Cliff has a Bachelor of Science,
Lindsay joined GALE Pacific in June 2016. He is an
experienced general management, sales and marketing
professional serving roles at Culligan, Newell Rubbermaid,
and Stanley Black & Decker. Prior to GALE, Lindsay was a
business unit General Manager at Elkay, a North American
manufacturer of kitchen cabinetry, sinks and water fountains
and bottle fillers. Lindsay holds a Bachelors’ degree in
mechanical engineering technology from Purdue University
and an MBA from Ashland University.
Mechanical Engineering, from Nanjing University of Science
Craig Fuller
& Technology, China.
Ali Haidar
General Manager – Middle East North Africa
Ali joined GALE Pacific in August 2004 and has 12 years’
experience in sales and marketing at GALE with a strong
record of business development in the region. He has led
GALE Pacific’s profitable growth in the Middle East and was
recently given responsibility to lead the company’s focused
expansion in the Middle East/North Africa region.
Ted Varani
General Manager – Eurasia
Ted joined GALE Pacific in April 2015. Originally from
the USA, for the past 20 years he has been involved
General Manager – Australia/New Zealand
Craig joined GALE Pacific in March 2016 and has more than
25 years’ experience in sales, marketing, engineering and
general management across industrial and retail markets,
including building products and consumer durables. He spent
12 years at Alesco Corporation where he held key roles,
including as General Manager of Robinhood and General
Manager of Ingram Corporation. In addition to this Craig
held the role of National Operations Manager at Bunnings
Trade. Craig holds a Masters of Business Administration, an
Honours Degree in Civil Engineering and is a Member of the
Institution of Engineers.
The DIY pool fencing category was returned to growth
and profitability during the year following the prior year’s
investment in the creation of the Everton brand.
Large scale tension structures require fabrics with a suitable
combination of weight, strength, elongation and UV stability
(life). The company recently launched its first architectural fabric
in many years. Suitable for large scale structures, the fabric
has consistent elongation in both directions – very difficult to
achieve, but eagerly sought by engineers and fabricators due to
its suitability for large, unsupported structures and its ‘set and
forget’ advantages. Commercial Heavy will be marketed in all
geographic regions.
14 GALE PACIFIC LIMITED 2016 ANNUAL REPORT
Corporate Governance
The Company’s Directors and management are committed
to conducting the Group’s business in an ethical manner
and in accordance with the highest standards of corporate
governance. The Company has adopted and substantially
complies with the ASX Corporate Governance Principles
and Recommendations (Third Edition) (Recommendations)
to the extent appropriate to the size and nature of the
Group’s operations.
The Company has prepared a statement which sets out
the corporate governance practices that were in operation
throughout the financial year for the Company, identifies any
Recommendations that have not been followed, and provides
reasons for not following such Recommendations (Corporate
Governance Statement).
In accordance with ASX Listing Rules 4.10.3 and 4.7.4, the
Corporate Governance Statement will be available for review
on GALE Pacific’s website (www.galepacific.com), and will be
lodged together with an Appendix 4G with ASX at the same
time that this Annual Report is lodged with ASX.
The Appendix 4G will particularise each Recommendation
that needs to be reported against by GALE Pacific, and will
provide shareholders with information as to where relevant
governance disclosures can be found.
The Company’s corporate governance policies and
charters are all available on GALE Pacific’s website
(www.galepacific.com).
GALE’s renowned Commercial 95 shade fabric is used for
sun protection and aesthetics around the world.
ZONE Interiors Window Furnishings – a completely
refreshed program has now positioned this category
for growth. New packaging, new products, and a
completely transformed website (zoneinteriors.com.
au) combine to inspire shoppers and make product
selection easy.
Directors’ Report
GALE PACIFIC LIMITED 2016 ANNUAL REPORT 15
From left: Peter Landos (Non Executive Director), Nick Pritchard (Group Managing Director), Matt Parker (Chief Financial Officer),
David Allman (Chairman), John Murphy (Non Executive Director), Sophie Karzis (Company Secretary)
David Allman, B.Sc.
Nick Pritchard, B Bus. (Marketing)
Chairman and Non Executive Director since November 2009
Group Managing Director appointed 22 August 2014
David was Managing Director of McPherson’s Limited from
Nick joined GALE Pacific in August 2013 as Managing
1995 to 2009 and prior to that was Managing Director of
Director of the Australia/New Zealand region. He was
Cascade Group Limited for 7 years. Before this David held
appointed to the position of Group Managing Director
senior positions with Elders IXL Limited and Castlemaine
in August 2014. Prior to joining GALE, Nick held senior
Tooheys Limited. David holds a degree in engineering and
leadership positions at Newell Brands (Newell Rubbermaid)
prior to obtaining general management positions held
for 11 years, most recently, Vice-President/General
managerial roles in production management, finance and
Manager – Australia & New Zealand, where he led all
marketing. David is Chairman of Muir Engineering Pty Ltd.
business segments. Nick has considerable local and
In the three years prior to 30 June 2016 David was also a
director of McPherson’s Group Limited.
international experience leading a highly profitable, high
growth organisation.
David is Chairman of the Company’s Nomination
Peter Landos, B.Econ., CA
Committee and is a member of the Audit and Risk and
Non Executive Director since May 2014
Remuneration Committees.
Peter is the Chief Operating Officer of the Thorney
Investment Group of Companies with which he has been
since September 2000, having previously worked at
Macquarie Bank Limited. Peter has extensive business and
corporate experience specialising in advising boards and
management in mergers and acquisitions, divestments,
16 GALE PACIFIC LIMITED 2016 ANNUAL REPORT
Directors’ Report continued
business restructurings and capital markets. He is also a
Non Executive Chairman of Adacel Technologies Limited.
State of Affairs
In the three years prior to 30 June 2016 Peter was also a
There were no significant changes in the state of affairs of
director of McPherson’s Group Limited, Rattoon Holdings
the Group during the financial year.
Limited and Adacel Technologies Limited.
Peter is a member of the Company’s Nomination, Risk, Audit
and Remuneration Committees.
Events Subsequent to
Balance Date
John Murphy, CA, FCPA, B.Comm, M.Comm
Non Executive Director since August 2007
John was the Managing Director of Investec Wentworth
Private Equity Limited from 2002 until 30 September 2011.
Also on that date he changed from being an executive to a
non executive director of Investec Bank (Australia) Limited.
John is currently a director of Ariadne Australia Limited.
In the three years prior to 30 June 2016 John was
also a director of Clearview Wealth Limited, Kresta
Holdings Limited, Redflex Holdings Limited and Vocus
Communications Limited.
John is the Chairman of the Company’s Remuneration
Committee, the Audit and Risk Committee and is a member
of the Nomination Committee.
George Richards, CPA (Retired 30 October 2015)
Non Executive Director from May 2004 to 30 October 2015
Ms Sophie Karzis, B Juris LLB
Company Secretary since June 2004
Sophie is a practising lawyer with over 15 years’ experience
as a corporate and commercial lawyer, company secretary
and general counsel for a number of private and public
companies. Sophie is principal of Corporate Counsel,
a corporate law practice with a focus on equity capital
markets, mergers and acquisitions, corporate governance for
ASX-listed entities, as well as the more general aspects of
corporate and commercial law. She is currently the company
secretary of a number of ASX-listed and unlisted entities, and
is a member of the Law Institute of Victoria as well as the
Governance Institute of Australia.
The Directors of Gale Pacific Limited (“the Company”)
present their annual financial report for the Company and its
Apart from the dividend declared as discussed above, no
other matter or circumstance has arisen since 30 June 2016
that has significantly affected, or may significantly affect the
Group’s operations, the results of those operations, or the
Group’s state of affairs in future financial years.
Likely Developments
Disclosure of information regarding likely developments in the
operations of the Group in future financial years has been
made in part in the Chairman’s Letter of this Annual Report.
Environmental Regulation
and Performance
The Group’s operations are not subject to any significant
environmental regulations under the Commonwealth or
State legislation. The Directors believe that the Group
has adequate systems in place for the management of
its environmental requirements and is not aware of any
breach of those environmental requirements as they apply to
the Group.
Dividends
Dividends paid to members during the financial year were
as follows:
2015/2016
($’000)
Final ordinary dividend for the year ended
30 June 2015 of 1.00 cent per share paid
on 1 December 2015
2,975
controlled entities (“the Group”) for the financial year ended
Interim ordinary dividend for the half year
30 June 2016.
ended 31 December 2015 of 0.75 cents
per share paid on 1 April 2016
2,231
In addition to the above dividends, on the 18 of August
2016 the Directors declared a dividend of 1 cent per share
to the holders of fully paid ordinary shares in respect of the
year ended 30 June 2016, payable on 3rd October 2016
to shareholders on the register at 26 September 2016.
The final dividend will be unfranked. This dividend has not been included as a liability in these financial statements. The total
estimated dividend to be paid is $2,974,744.
For the full year, the dividend of 1.75 cents per share has been declared on earnings of 3.44 cents per share.
GALE PACIFIC LIMITED 2016 ANNUAL REPORT 17
Share Based Payments
Performance Rights
The number of performance rights on issue at the date of this report is 3,602,405. No amount is payable on the vesting of a
performance right. Each performance right entitles the holder to one (1) ordinary share in GALE Pacific Limited in the event that
the performance right is exercised. Performance rights carry no rights to dividends and no voting rights.
3,022,000 performance rights were granted to executives and the Group Managing Director on 9 October 2015. The
performance rights will vest subject to a continuation of employment to 30 June 2018 and the satisfying of relevant
performance hurdles based on the Group’s diluted earnings per share over the three year period from 1 July 2015 to
30 June 2018. None of these performance rights can vest until 30 June 2018 and expire on 1 December 2018.
As at 30 June 2016, 1,783,733 performance rights lapsed during the year to 30 June 2016 as the relevant personnel ceased
employment with the Company.
The performance rights are subject to a continuation of employment for three years and then the satisfying of relevant
performance hurdles based on improvements in the Group’s diluted earnings per share over the three year period.
Further details of the options and performance rights movements during the reporting period are disclosed in the
Remuneration Report.
Directors’ Shareholdings
The following table sets out each Director’s relevant interest in shares, options and performance rights in shares of the Company
as at the date of this report.
Directors
D Allman
P Landos
J Murphy
N Pritchard
Fully Paid
Ordinary
Shares
2,400,000
Nil
4,416,599
212,804
Options
Performance
Rights
Nil
Nil
Nil
Nil
Nil
Nil
Nil
1,778,385
Directors’ Meetings
The table below sets out the attendance by Directors.
Directors’ Meetings
Audit and Risk Committee
Meetings
Remuneration Committee
Meetings
Nomination Committee
Meetings
No of
Meetings
Eligible to
Attend
Attended
No of
Meetings
Eligible to
Attend
Attended
No of
Meetings
Eligible to
Attend
Attended
No of
Meetings
Eligible to
Attend
Attended
11
11
11
5
11
10
11
11
5
11
3
3
3
1
–
3
3
3
1
–
1
1
1
1
–
1
1
1
1
–
2
2
2
–
–
2
2
2
–
–
Directors
D Allman
P Landos
J Murphy
G Richards1
N Pritchard
1. G Richards retired 30 October 2015
18 GALE PACIFIC LIMITED 2016 ANNUAL REPORT
Directors’ Report continued
The members of the Audit and Risk Committee are David Allman, Peter Landos and John Murphy. The Chairman of the Audit and
Risk Committee is John Murphy.
The members of the Remuneration Committee are David Allman, Peter Landos and John Murphy. The Chairman of the
Remuneration Committee is John Murphy.
The members of the Nomination Committee are David Allman, Peter Landos and John Murphy. The Chairman of the Nomination
Committee is David Allman.
Remuneration Report
This report contains the remuneration arrangements in place for Directors and Executives of the Group.
The Remuneration Committee reviews the remuneration packages of all Directors and Executive Officers on an annual basis and
makes recommendations to the Board. Remuneration packages are reviewed with due regard to performance and other relevant
factors, and advice is sought from external advisors in relation to their structure.
The Group’s remuneration policy is based on the following principles:
• Provide competitive rewards to attract high quality executives;
• Provide an equity incentive for senior executives that will provide an incentive to executives to align their interests with those of
the Group and its shareholders; and
• Ensure that rewards are referenced to relevant employment market conditions.
Remuneration packages contain the following key elements:
• Primary benefits – salary/fees;
• Benefits, including the provision of motor vehicles and incentive schemes, including performance rights; and
• Performance rights, if the performance criteria and any Board discretion are satisfied, entitle an executive to be issued shares in
the Company at no cost to the executive. Shares are issued subsequently after the time all performance rights vesting conditions
are met
Relationship between the Remuneration Policy and Company Performance
The table below set out summary information about the consolidated entity’s earnings and movements in shareholder wealth for
the five years to 30 June 2016:
Revenue
Net profit before tax
Net profit after tax
30 June 2016
30 June 2015
30 June 2014
30 June 2013
30 June 2012
173,191
147,993
137,304
119,988
110,473
13,509
10,228
6,221
5,170
10,988
12,016
11,454
8,233
9,084
8,477
Share price at start of year
17 cents
23 cents
26 cents
24 cents
21 cents
Share price at end of year
36 cents
17 cents
23 cents
26 cents
24 cents
Interim dividend
Final dividend
0.75 cents
–
1.30 cents
1.20 cents
1.20 cents
1.0 cents
1.0 cent
1.35 cents
1.35 cents
1.20 cents
Basic earnings per share
3.44 cents
1.74 cents
2.77 cents
3.07 cents
2.86 cents
Diluted earnings per share
3.40 cents
1.72 cents
2.72 cents
3.00 cents
2.45 cents
Remuneration Practices
The Group policy for determining the nature and amount of emoluments of Board members and Senior Executives is as follows.
The remuneration structure for Executive Officers, including Executive Directors, is based on a number of factors including length
of service, particular experience of the individual concerned, and overall performance of the Group. The contracts of service
between the Group and Executive Directors and Executives are on a continuing basis, the terms of which are not expected to
change in the immediate future. Upon retirement Executive Directors and Executives are paid employee benefit entitlements
GALE PACIFIC LIMITED 2016 ANNUAL REPORT 19
accrued to date of retirement. Payment of bonuses, and
Structure
other incentive payments are made at the discretion of the
Remuneration Committee to Key Executives of the Group
based predominantly on an objective review of the Group’s
financial performance, the individuals’ achievement of stated
financial and non financial targets and any other factors
In determining the level and make up of executive
remuneration, the Remuneration Committee reviews reports
detailing market levels of remuneration for comparable roles.
Remuneration consists of fixed and variable elements.
the Committee deems relevant. Non Executive Directors
(a) Share Based Payments
receive a fee for being Directors of the Company and do not
participate in performance based remuneration.
Remuneration Structure
The Group maintains a performance rights scheme
for certain staff and executives, including the Group
Managing Director, as approved by shareholders at an
annual general meeting. These schemes are designed
In accordance with best practice corporate governance, the
to reward key personnel when the Group meets
structure of Non Executive Directors and Senior Managers
performance hurdles increasing the diluted earnings per
remuneration is separate and distinct.
share and relate to:
Non Executive Director Remuneration
Objective
The Board seeks to set remuneration at a level which
provides the Company with the ability to attract and retain
directors of relevant experience and skill, whilst incurring
costs which are acceptable to shareholders.
Structure
The Company’s Constitution and the Australian Securities
Exchange Listing Rules specify that the aggregate
remuneration of Non Executive Directors shall be determined
from time to time by a general meeting. An amount not
exceeding the amount determined is then divided between
the Directors as agreed. The last determination was at the
Annual General Meeting held on 26 October 2012 when
shareholders’ approved the Company’s constitution which
provides for an aggregate remuneration of $500,000
per annum. The amount of the aggregate remuneration
and the manner in which it is apportioned is reviewed
periodically. The Board considers fees paid to Non Executive
Directors of comparable companies when undertaking this
review process.
Each Non Executive Director receives a fee for being
a Director of the Company and does not participate in
performance based remuneration.
Senior Manager and Executive Director
Remuneration
Objective
The Group aims to reward executives with a level and mix
of remuneration commensurate with their position and
responsibilities within the Group. The objective of the
remuneration policy is:
• Reward executives for Group and individual performance;
• Align the interests of the executives with those of the
shareholders; and
• Ensure that total remuneration is competitive by
market standards.
•
•
Improvement in earnings per share; and
Improvement in return to shareholders.
The number of unissued ordinary shares under the
performance rights scheme at 30 June 2016 was
3,602,405. 2,364,138 of these shares were granted on
11 December 2014 and will not vest until the time of the
company’s 2017 annual report is released on the ASX
(on or around 1st October 2017). A further 3,022,000
of these shares were granted on the 9th of October
2015 and will not vest until the time of the company’s
2018 annual report is released on the ASX (on or around
1st October 2018). In the period between July 1st
2015 and June 30th 2016, 1,783,733 shares lapsed
as the relevant personnel ceased employment with the
company. Each performance right entitles the holder
to one (1) ordinary share in Gale Pacific Limited and is
subject to satisfying the relevant performance hurdles
based on improvements in the Group’s diluted earnings
per share.
Options and performance rights issued to executives
during the year were issued in accordance with the
Group’s remuneration policy which:
• Reward executives for Group and individual
performance;
• Align the interests of the executives with those of the
shareholders; and
• Ensure that total remuneration is competitive by
market standards.
(b) Cash Bonuses
One year short term performance cash bonus payments
are awarded in accordance with the company’s
remuneration policy. The budget targets for each
business unit and the company overall are established
each year by the Board. The performance criteria include
sales and earnings before interest and tax growth and
working capital management. For corporate executives,
the performance criteria include growth in earnings
before interest and tax and profit after tax.
20 GALE PACIFIC LIMITED 2016 ANNUAL REPORT
Directors’ Report continued
Key Management Personnel of the Group who held office during the year
Directors
D Allman (Chairman Non Executive)
P Landos (Non Executive)
J Murphy (Non Executive)
G Richards (Non Executive) (Retired 29 September 2015)
N Pritchard (Group Managing Director)
Executives
M Parker (Chief Financial Officer)
C Fuller (General Manager – Australia & New Zealand)
L Klebenow (General Manager – Americas)
C Zhang (General Manager – Manufacturing)
B Marotta (General Manager – Supply Chain)
A Haidar (General Manager – Middle East & North Africa)
T Varani (General Manager – EurAsia)
The following table discloses the remuneration of the Directors of the Company:
2015/2016
Short Term Benefits
Post
Employ-
ment
Share
Based
Payments
Termina-
tion
Benefits
Total
Performance Related
Salary &
Fees
$
Bonus
$
Non
Monetary
$
Super
$
Rights
$
$
$
Total %
Rights %
Directors
Executive Directors
N Pritchard2
420,000
Non-Executive Directors
D Allman
G Richards3
J Murphy
P Landos
Total
92,720
16,667
83,508
68,493
681,388
–
–
–
–
–
–
–
–
–
–
–
–
30,000
111,611
–
561.611
20%
20%
32,280
5,833
8,158
6,507
–
–
–
–
82,778
111,611
–
–
–
–
–
125,000
22,500
91,666
75,000
875,777
13%
13%
2. Mr Pritchard commenced employment as Managing Director – Australia & New Zealand on 19 August 2013 and became a Director on 22 August 2014.
3. Mr Richards retired 29 September 2015
GALE PACIFIC LIMITED 2016 ANNUAL REPORT 21
2014/2015
Short Term Benefits
Post
Employ-
ment
Share
Based
Payments
Termina-
tion
Benefits
Total
Performance Related
Salary &
Fees
$
Bonus
$
Non
Monetary
$
Super
$
Rights
$
$
$
Total %
Rights %
Directors
Executive Directors
N Pritchard
343,263
P McDonald4
362,059
Non-Executive Directors
D Allman
114,220
G Richards
J Murphy
P Landos
50,000
77,626
68,493
Total
1,015,661
–
–
–
–
–
–
–
–
–
–
–
–
–
–
25,000
32,683
–
400,946
8.2%
8.2%
12,500
–
235,813
610,372
10,845
35,000
7,374
6,507
–
–
–
–
–
–
–
–
125,065
85,000
85,000
75,000
–
–
–
–
–
–
–
–
–
–
97,226
32,683
235,813 1,381,383
2.3%
2.3%
4. Mr McDonald resigned from the company on 22 August 2014.
The following table discloses the remuneration of the Group’s key management personnel:
Short Term Benefits
Post
Employ-
ment
Share
Based
Payments
Termina-
tion
Benefits
Total
Performance Related
2015/2016
Key
Management
Personnel
Salary &
Fees
$
Bonus
$
Non
Monetary
$
Super
$
Rights
$
B Wang1
109,377
102,529
14,911
M Denney2
365,836
106,597
29,138
514
–
–
–
M Parker3
B Marotta4
E Varani5
A Haidar6
S Elding7
A Richardson8
C Fuller9
C Zhang10
L Klebenow11
245,000
228,883
240,490
178,890
131,553
79,514
70,192
23,923
21,061
–
–
–
–
–
–
–
–
–
–
–
23,275
18,260
21,744
36,945
6,195
46,036
–
–
11,184
17,219
–
–
–
11,186
–
12,497
13,583
7,554
6,668
694
–
–
–
–
–
$
$
Total %
Rights %
287,082
514,413
6%
13%
4%
7%
9%
6%
13%
4%
7%
9%
–
–
–
–
–
–
–
–
–
–
501,571
286,535
287,572
257,869
242,144
157,633
87,068
76,860
35,803
21,061
Total
1,694,719
209,126
107,465
72,947
97,191
287,082 2,468,530
4%
4%
1. Mr Wang was the General Manager – China, remunerated in Chinese renminbi converted to Australian dollars in the above table. Mr Wang resigned 21 October 2015.
2. Mr Denney was the General Manager – Americas, remunerated in United States dollars converted to Australian dollars in the table above. Mr Denney resigned 10 May 2016.
3. Mr Parker is the Chief Financial Officer. He is located in Australia and remunerated in Australian dollars.
4. Mr Marotta is General Manager – Supply Chain. He is located in Australia and remunerated in Australian dollars.
5. Mr Varani is the General Manager – EurAsia. He is based in Shanghai and remunerated in United States dollars converted to Australian dollars in the table above.
6. Mr Haidar is the General Manager – Middle East and North Africa and is based in Dubai. He is remunerated in United States dollars converted to Australian dollars in the
table above.
7. Ms Elding is the Manager – People and Culture. She is located in Australia and remunerated in Australian dollars.
8. Mr A Richardson was the General Manager, Australia and New Zealand located in Australia. Mr Richardson resigned 16 October 2015.
9. Mr Fuller is the General Manager, Australia and New Zealand. He is located in Australia and remunerated in Australian dollars. Commenced on the 22nd of March 2016
10. Mr Zhang is the General Manager – Manufacturing and is based in China and remunerated in Chinese renminbi converted to Australia dollars in the above table.
Commenced on 3rd May 2016
11. Mr Klebenow is the General Manager – Americas and is remunerated in United States dollars converted to Australian dollars in the table above.
Commenced on 6th June 2016
2.9%
3.2%
5.0%
–
1.8%
5.8%
–
–
–
–
22 GALE PACIFIC LIMITED 2016 ANNUAL REPORT
Directors’ Report continued
2014/2015
Key
Management
Personnel
Short Term Benefits
Post
Employ-
ment
Share
Based
Payments
Termina-
tion
Benefits
Total
Performance Related
Salary &
Fees
$
Bonus
$
Non
Monetary
$
Super
$
Rights
$
$
$
Total %
Rights %
M Denney
319,933
94,381
18,202
B Wang
223,724
32,221
22,763
A Richardson
229,669
H Abbey12
185,235
–
–
–
–
–
–
12,985
9,359
21,819
13,110
–
–
–
445,501
24.1%
288,067
14.4%
264,598
5.0%
22,502
–
39,795
247,532
–
A Haidar
B Marotta
A Scott13
M Parker
N Pritchard
E Varani
Total
138,697
29,127
39,184
–
3,753
16,057
10,919
158,513
101,053
57,795
47,170
32,588
–
–
–
–
–
–
–
–
–
5,805
5,490
5,000
6,953
–
–
–
–
–
–
–
–
–
–
–
210,761
15.6%
185,489
5.8%
106,858
63,285
52,170
39,541
–
–
–
–
1,494,377
155,729
87,102
76,673
50,126
39,795 1,903,802
10.8%
2.6%
12. Mr Abbey was the Chief Financial Officer. He resigned from the company on 27 March 2015.
13. Mr Scott was the General Manager International Sales and Marketing and was located in Australia. Mr Scott resigned from the company on 31 October 2014.
Directors’ and Executives’ Equity Holdings: Fully Paid Ordinary Shares
2015/2016
Executive Directors
N Pritchard
Non-Executive Directors
J Murphy
D Allman
G Richards1
Executives
M Denney
B Wang
Total
1. Mr Richards retired 29 September 2015
Balance
30 June 2015
No.
Granted as
Compensation
No.
Received on
Exercise of
Options
No.
Other
Movements
No.
Balance
30 June 2016
No.
212,804
3,316,599
1,443,804
491,899
800,000
1,500,000
7,765,106
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
212,804
1,100,000
4,416,599
956,196
2,400,000
–
491,899
(300,000)
500,000
(1,500,000)
–
256,196
8,021,302
GALE PACIFIC LIMITED 2016 ANNUAL REPORT 23
Balance
30 June 2015
No.
Granted as
Compensation
No.
Received on
Exercise of
Options
No.
Other
Movements
No.
Balance
30 June 2015
No.
–
2,816,599
1,000,000
491,899
1,500,000
800,000
6,608,498
–
–
–
–
–
–
–
–
–
–
–
–
–
–
212,804
212,804
500,000
3,316,599
443,804
1,443,804
–
–
–
491,899
1,500,000
800,000
1,156,608
7,765,106
2014/2015
Executive Directors
N Pritchard
Non-Executive Directors
J Murphy
D Allman
G Richards
Executives
M Denney
B Wang
Total
Share Based Compensation
The terms and conditions of each grant of performance rights granted but not vested as at 30 June 2016 affecting remuneration
in the current or a future reporting period are as follows:
Grant Date
Value per performance rights at grant date
9 October 2015
11 December
2014
0.2143
0.1751
Each performance right entitles the holder to one (1) ordinary share in GALE Pacific in the event that the performance rights are
exercised. Performance rights carry no rights to dividends and no voting rights.
The performance rights granted on 11 December 2014 are subject to a continuation of employment to 30 June 2017 and then
the satisfying of relevant performance hurdles based on improvements in the Group’s diluted earnings per share over the three
year period from 1 July 2014 to 30 June 2017. None of these performance rights can vest until the Company releases its FY17
Annual Report to the ASX (on or around 1 October 2017) and expire on 1 December 2017.
The performance rights granted on 9th of October 2015 are subject to the continuation of employment to 30 June 2018 and
then the satisfying of relevant performance hurdles based on improvements in the Groups diluted earnings per share over the
three year period from 1 July 2015 to 30 June 2018. None of these rights can vest until the company releases its FY18 annual
report to the ASX (on or around 1 October 2018) and expire on 1 December 2018.
24 GALE PACIFIC LIMITED 2016 ANNUAL REPORT
Directors’ Report continued
Directors’ and Executives’ Equity Holdings, Compensation Options and Performance Rights: Granted
and Vested during the year
2015/2016
Vested
Number
Granted
Number
Grant Date
Executive Directors (Performance Rights)
Terms and Conditions for Each Grant
Value Per
Option/Right
at Grant
Date
Exercise
Price
Expiry Date
First
Exercise
Date
Last
Exercise
Date
N Pritchard
–
913,000 09/10/2015
$0.2143
Nil 01/12/2018 01/10/2018 01/10/2018
Non-Executive Directors
None
Management Personnel (Performance Rights)
Other Management
Total
–
–
2,109,000 09/10/2015
$0.2143
Nil 01/12/2018 01/10/2018 01/10/2018
3,022,000
2014/2015
Vested
Number
Granted
Number
Grant Date
Executive Directors (Performance Rights)
Terms and Conditions for Each Grant
Value Per
Option/Right
at Grant
Date
Exercise
Price
Expiry Date
First
Exercise
Date
Last
Exercise
Date
N Pritchard
–
865,385 11/12/2014
$0.1751
nil
1/12/2017 20/09/2017 20/09/2017
Non-Executive Directors
None
Management Personnel (Performance Rights)
Other Management
Total
–
–
1,498,753 11/12/2014
$0.1751
nil
1/12/2017 20/09/2017 20/09/2017
2,364,138
GALE PACIFIC LIMITED 2016 ANNUAL REPORT 25
Directors’ and Executives’ Equity Holdings Compensation Options and Performance Rights: Movements
during the year
Balance
1 July 2015
No.
Granted as
Compen-
sation
No.
2015/2016
Exercised
No.
Lapsed
No.
Net Other
Change
No.
Balance
30 June
2016
No.
Balance Held
Nominally
No.
Value of
Lapsed
Options/
Rights
$
Executive Directors (Performance Rights)
N Pritchard
865,385
913,000
Non-Executive Directors
None
Executives (Performance Rights)
B Marotta
289,122
299,000
M Parker
A Haidar
S Elding
E Varani
B Wang
–
320,000
99,364
182,000
99,603
118,000
–
196,000
247,793
367,000
M Denney
343,805
478,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(614,793)
(821,805)
Other Management Personnel (Performance Rights)
Other
Management
419,066
149,000
Total
2,364,138
3,022,000
–
–
(347,135)
(1,783,733)
–
1,778,385
–
–
–
–
–
–
–
–
–
588,122
320,000
281,364
217,603
196,000
–
–
220,931
3,602,405
–
–
–
–
–
–
–
–
–
–
Balance
1 July 2014
No.
Granted as
Compen-
sation
No.
2014/2015
Exercised
No.
Lapsed
No.
Net Other
Change
No.
Balance
30 June
2015
No.
Balance Held
Nominally
No.
Executive Directors (Performance Rights)
N Pritchard
562,500
865,385
P McDonald
600,000
–
Non-Executive Directors
None
Executives (Performance Rights)
M Denney
275,000
343,805
B Wang
A Scott
H Abbey
275,000
247,793
275,000
–
–
326,827
–
–
–
–
–
–
(562,500)
(600,000)
(275,000)
(275,000)
(275,000)
(326,827)
–
–
–
–
–
–
865,385
–
343,805
247,793
–
–
–
–
–
–
–
–
–
–
–
–
–
–
122,025
162,621
60,791
345,437
Value of
Lapsed
Options/
Rights
$
112,163
88,500
40,563
40,563
40,563
–
Other Management Personnel (Performance Rights)
Other
Management 1,712,500
907,155
Total
3,700,000
2,690,965
–
–
(1,712,500)
907,155
331,230
(4,026,827)
–
2,364,138
–
653,580
26 GALE PACIFIC LIMITED 2016 ANNUAL REPORT
Directors’ Report continued
Employment Agreements
Executives serve under terms and conditions contained in
another person or firm on the auditor’s behalf), is compatible
with the general standard of independence for auditors
imposed by the Corporations Act 2001.
a standard executive employment agreement, that allows
The Directors are of the opinion that the services as
for termination under certain conditions with two to three
disclosed in note 30 to the financial statements do
months’ notice. The agreements include restraints of trade
not compromise the external auditor’s independence
on the employee as well as confidentiality and intellectual
requirements of the Corporations Act 2001 for the
property agreements.
following reasons:
Indemnity and Insurance
of Officers
The Company has indemnified the directors and executives
of the Company for costs incurred, in their capacity as a
director or executive, for which they may be held personally
liable, except where there is a lack of good faith.
During the financial year, the Company paid a premium in
respect of a contract to insure the directors and executives
of the Company against a liability to the extent permitted
by the Corporations Act 2001. The contract of insurance
prohibits disclosure of the nature of the liability and the
amount of the premium.
• all non-audit services have been reviewed and approved to
ensure that they do not impact the integrity and objectivity
of the auditor; and
• none of the services undermine the general principles
relating to auditor independence as set out in APES 110
Code of Ethics for Professional Accountants issued by the
Accounting Professional and Ethical Standards Board,
including reviewing or auditing the auditor’s own work,
acting in a management or decision-making capacity for
the Company, acting as advocate for the Company or
jointly sharing economic risks and rewards.
Officers of the Company who
are Former Partners of Deloitte
Touche Tohmastsu
Indemnity and Insurance of Auditor
partners of Deloitte Touche Tohmastsu.
There are no officers of the Company who are former
The Company has not, during or since the end of the
financial year, indemnified or agreed to indemnify the auditor
of the Company or any related entity against a liability
incurred by the auditor.
Rounding of Amounts
The Company is of a kind referred to in Class Order 98/100,
issued by the Australian Securities and Investments
During the financial year, the Company has not paid a
Commission, relating to ‘rounding-off’. Amounts in this report
premium in respect of a contract to insure the auditor of the
have been rounded off in accordance with that Class Order
Company or any related entity.
to the nearest thousand dollars, or in certain cases, the
Proceedings on Behalf of
the Company
nearest dollar.
Auditor’s Independence
Declaration
No person has applied to the Court under section 237 of
the Corporations Act 2001 for leave to bring proceedings on
A copy of the auditor’s independence declaration as required
behalf of the Company, or to intervene in any proceedings
under section 307C of the Corporations Act 2001 is set out
to which the Company is a party for the purpose of taking
on the following page.
responsibility on behalf of the Company for all or part of
those proceedings.
Non Audit Services
Details of the amounts paid or payable to the auditor for
non-audit services provided during the financial year by the
auditor are outlined in note 31 to the financial statements.
The Directors are satisfied that the provision of non-audit
services during the financial year, by the auditor (or by
Auditor
Deloitte Touche Tohmastsu continues in office in accordance
with section 327 of the Corporations Act 2001.
This report is made in accordance with a resolution of
Directors, pursuant to section 298(2)(a) of the Corporations
Act 2001.
Auditor’s Independence Declaration
GALE PACIFIC LIMITED 2016 ANNUAL REPORT 27
Deloitte Touche Tohmatsu
ABN 74 490 121 060
550 Bourke Street
Melbourne VIC 3000
GPO Box 78
Melbourne VIC 3001 Australia
Tel: +61 (0) 3 9671 7000
Fax: +61 (0) 3 9671 7001
www.deloitte.com.au
The Board of Directors
Gale Pacific Limited
145 Woodlands Drive
BRAESIDE VIC 3195
18 August 2016
Dear Board Members
Gale Pacific Limited
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the
following declaration of independence to the directors of Gale Pacific Limited.
As lead audit partner for the audit of the financial statements of Gale Pacific Limited for the
financial year ended 30 June 2016, I declare that to the best of my knowledge and belief, there
have been no contraventions of:
(i)
the auditor independence requirements of the Corporations Act 2001 in relation to
the audit; and
(ii) any applicable code of professional conduct in relation to the audit.
Yours sincerely
DELOITTE TOUCHE TOHMATSU
Stephen Roche
Partner
Chartered Accountants
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Touche Tohmatsu Limited
28 GALE PACIFIC LIMITED 2016 ANNUAL REPORT
Independent Auditor’s Report
Deloitte Touche Tohmatsu
ABN 74 490 121 060
550 Bourke Street
Melbourne VIC 3000
GPO Box 78
Melbourne VIC 3001 Australia
Tel: +61 (0) 3 9671 7000
Fax: +61 (0) 3 9671 7001
www.deloitte.com.au
Independent Auditor’s Report
to the members of Gale Pacific Limited
Report on the Financial Report
We have audited the accompanying financial report of Gale Pacific Limited which comprises the
consolidated statement of financial position as at 30 June 2016, the consolidated statement of profit or
loss, the consolidated statement of comprehensive income, the consolidated statement of cash flows
and the consolidated statement of changes in equity for the year ended on that date, notes comprising a
summary of significant accounting policies and other explanatory information, and the directors’
declaration of the consolidated entity, comprising the company and the entities it controlled at the
year’s end or from time to time during the financial year as set out on pages 30 to 63.
Directors’ Responsibility for the Financial Report
The directors of the company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error. In Note 1, the directors also state, in accordance with Accounting Standard AASB 101
Presentation of Financial Statements,
the consolidated financial statements comply with
that
International Financial Reporting Standards.
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted
our audit in accordance with Australian Auditing Standards. Those standards require that we comply
with relevant ethical requirements relating to audit engagements and plan and perform the audit to
obtain reasonable assurance whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the financial report. The procedures selected depend on the auditor’s judgement, including the
assessment of the risks of material misstatement of the financial report, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control, relevant to the company’s
preparation of the financial report that gives a true and fair view, in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the company’s internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of accounting estimates made by the directors, as
well as evaluating the overall presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion.
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Touche Tohmatsu Limited
GALE PACIFIC LIMITED 2016 ANNUAL REPORT 29
Auditor’s Independence Declaration
In conducting our audit, we have complied with the independence requirements of the Corporations
Act 2001. We confirm that the independence declaration required by the Corporations Act 2001,
which has been given to the directors of Gale Pacific Limited, would be in the same terms if given to
the directors as at the time of this auditor’s report.
Opinion
In our opinion:
(a) the financial report of Gale Pacific Limited is in accordance with the Corporations Act 2001,
including:
(i) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2016
and of its performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001; and
(b) the consolidated financial statements also comply with International Financial Reporting
Standards as disclosed in Note 1.
Report on the Remuneration Report
We have audited the Remuneration Report included in pages 18 to 25 of the directors’ report for the
year ended 30 June 2016. The directors of the company are responsible for the preparation and
presentation of the Remuneration Report in accordance with section 300A of the Corporations Act
2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit
conducted in accordance with Australian Auditing Standards.
Opinion
In our opinion the Remuneration Report of Gale Pacific Limited for the year ended 30 June 2016,
complies with section 300A of the Corporations Act 2001.
DELOITTE TOUCHE TOHMATSU
Stephen Roche
Partner
Chartered Accountants
Melbourne, 18 August 2016
30 GALE PACIFIC LIMITED 2016 ANNUAL REPORT
Gale Pacific Limited
Statement of profit or loss and other comprehensive income
For the year ended 30 June 2016
Revenue
Sale of goods
Other income
Expenses
Raw materials and consumables used
Employee benefits expense
Depreciation and amortisation expense
Marketing and advertising
Occupancy costs
Warehouse and related costs
Other expenses
Finance costs
Profit before income tax expense
Income tax expense
Profit after income tax expense for the year attributable to the owners of Gale
Pacific Limited
Other comprehensive income
Consolidated
Note
2016
$'000
2015
$'000
5
6
6
6
7
173,191
147,993
5,234
2,554
(96,863)
(28,511)
(7,180)
(3,200)
(5,160)
(11,178)
(11,203)
(1,621)
(76,393)
(29,545)
(7,636)
(4,502)
(3,534)
(11,100)
(9,796)
(1,820)
13,509
6,221
(3,281)
(1,051)
10,228
5,170
Items that may be reclassified subsequently to profit or loss
Net change in the fair value of cash flow hedges taken to equity, net of tax
Foreign currency translation
19
19
(1,949)
(1,523)
1,462
11,447
Other comprehensive income for the year, net of tax
(3,472)
12,909
Total comprehensive income for the year attributable to the owners of Gale
Pacific Limited
Basic earnings per share
Diluted earnings per share
6,756
18,079
Cents
Cents
8
8
3.44
3.40
1.74
1.72
The above statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
Gale Pacific Limited
Statement of financial position
As at 30 June 2016
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Derivative financial instrument - cash flow hedges
Income tax refundable
Prepayments
Total current assets
Non-current assets
Prepayments
Property, plant and equipment
Intangibles
Deferred tax
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Borrowings
Derivative financial instrument - cash flow hedges
Current tax liabilities
Employee benefits
Provisions
Total current liabilities
Non-current liabilities
Borrowings
Deferred tax
Employee benefits
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Retained profits
Total equity
GALE PACIFIC LIMITED 2016 ANNUAL REPORT 31
Consolidated
Note
2016
$'000
2015
$'000
9
10
11
7
12
13
7
14
15
7
16
17
7
18
19
24,563
30,226
44,577
-
-
969
100,335
357
30,414
25,210
4,068
60,049
17,769
27,081
39,229
1,363
3,147
819
89,408
-
34,872
25,311
-
60,183
160,384
149,591
19,598
13,192
1,421
2,771
1,832
318
39,132
19,523
2,000
106
21,629
12,887
33,641
-
2,179
1,758
62
50,527
783
397
96
1,276
60,761
51,803
99,623
97,788
71,485
(988)
29,126
71,485
1,598
24,705
99,623
97,788
The above statement of financial position should be read in conjunction with the accompanying notes
32 GALE PACIFIC LIMITED 2016 ANNUAL REPORT
Gale Pacific Limited
Statement of changes in equity
For the year ended 30 June 2016
Consolidated
Balance at 1 July 2014
Profit after income tax expense for the year
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Transactions with owners in their capacity as owners:
Share-based payments (note 29)
Statutory transfers from retained earnings
Dividends paid (note 20)
Issued
capital
$'000
Reserves
$'000
Retained
profits
$'000
Total equity
$'000
71,485
(11,415)
23,566
83,636
-
-
-
-
-
-
-
12,909
5,170
-
5,170
12,909
12,909
5,170
18,079
89
15
-
-
(15)
(4,016)
89
-
(4,016)
Balance at 30 June 2015
71,485
1,598
24,705
97,788
Consolidated
Balance at 1 July 2015
Profit after income tax expense for the year
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Transactions with owners in their capacity as owners:
Share-based payments (note 29)
Statutory transfers from retained earnings
Other
Dividends paid (note 20)
Issued
capital
$'000
Reserves
$'000
Retained
profits
$'000
Total equity
$'000
71,485
1,598
24,705
97,788
-
-
-
-
-
-
-
-
(3,472)
10,228
-
10,228
(3,472)
(3,472)
10,228
6,756
187
699
-
-
-
(699)
98
(5,206)
187
-
98
(5,206)
Balance at 30 June 2016
71,485
(988)
29,126
99,623
The above statement of changes in equity should be read in conjunction with the accompanying notes
Gale Pacific Limited
Statement of cash flows
For the year ended 30 June 2016
Cash flows from operating activities
Profit before income tax expense for the year
Adjustments for:
Depreciation and amortisation
Share-based payments
Foreign currency (gain) / loss
Interest and other finance costs paid
Increase in trade and other receivables
Increase in inventories
Increase in derivative assets
Decrease/(increase) in prepayments
Increase/(decrease) in trade and other payables
Increase/(decrease) in derivative liabilities
Increase/(decrease) in employee benefits
Increase in other provisions
Interest and other finance costs paid
Income taxes paid
Net cash from operating activities
Cash flows from investing activities
Payments for property, plant and equipment
Payments for intangibles
Proceeds from disposal of property, plant and equipment
Net cash used in investing activities
Cash flows from financing activities
Proceeds from borrowings
Other
Dividends paid
Repayment of borrowings
Net cash from/(used in) financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Effects of exchange rate changes on cash and cash equivalents
GALE PACIFIC LIMITED 2016 ANNUAL REPORT 33
Consolidated
Note
2016
$'000
2015
$'000
13,509
6,221
7,180
187
(151)
1,621
22,346
(3,145)
(5,348)
(586)
(507)
6,711
1,421
84
256
21,232
(1,621)
(1,797)
7,636
89
4,338
1,820
20,104
(7,330)
(4,378)
(1,363)
1,946
(422)
(709)
(145)
12
7,715
(1,820)
(1,522)
17,814
4,373
(3,841)
(712)
343
(3,953)
(2,572)
5
(4,210)
(6,520)
25,386
(112)
(5,206)
(27,095)
10,150
-
(4,016)
-
(7,027)
6,134
6,577
17,769
217
3,987
13,058
724
12
13
20
Cash and cash equivalents at the end of the financial year
9
24,563
17,769
The above statement of cash flows should be read in conjunction with the accompanying notes
34 GALE PACIFIC LIMITED 2016 ANNUAL REPORT
Gale Pacific Limited
Notes to the financial statements
30 June 2016
Note 1. General information
The financial report covers Gale Pacific Limited ('Company' or 'parent entity') and controlled entities as a consolidated
entity (referred to as the 'Group'). The financial statements are presented in Australian dollars, which is Gale Pacific
Limited's functional and presentation currency.
Gale Pacific Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its registered
office and principal place of business is:
145 Woodlands Drive
Braeside, VIC 3195
A description of the nature of the Group's operations is included in the directors' report, which is not part of the financial
statements.
The entity’s principal activities are the manufacture of branded screening and shading products for domestic, commercial
and industrial applications
The financial statements were authorised for issue, in accordance with a resolution of directors, on 18 August 2016. The
directors have the power to amend and reissue the financial statements.
Note 2. Significant accounting policies
The principal accounting policies adopted in the preparation of the financial statements are set out either in the respective
notes or below. These policies have been consistently applied to all the years presented, unless otherwise stated.
New, revised or amending Accounting Standards and Interpretations adopted
The Group has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the
Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period. The adoption of
these Accounting Standards and Interpretations did not have any significant impact on the financial performance or
position of the Group.
Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been early
adopted.
Statement of Compliance
These financial statements are general purpose financial statements which have been prepared in accordance with the
Corporations Act 2001, Accounting Standards and Interpretations, and comply with other requirements of the law. The
financial statements comprise the consolidated financial statements of the Group.
For the purposes of preparing the consolidated financial statements, the Company is a for-profit entity.
Accounting Standards include Australian Accounting Standards. Compliance with Australian Accounting Standards
ensures that the financial statements and notes of the company and the Group comply with International Financial
Reporting Standards (‘IFRS’).
Basis of Preparation
The consolidated financial statements have been prepared on the basis of historical cost, except for certain properties
and financial instruments that are measured at revalued amounts or fair values at the end of each reporting period, as
explained in the accounting policies below.
Historical cost is generally based on the fair values of the consideration given in exchange for
goods and services. All amounts are presented in Australian dollars, unless otherwise noted.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Gale Pacific Limited as at
30 June 2016 and the results of all subsidiaries for the year then ended.
Subsidiaries are all those entities over which the Group has control. The Group controls an entity when the Group is
exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns
through its power to direct the activities of the entity. Subsidiaries are consolidated from the date on which control is
transferred to the Group. They are de-consolidated from the date that control ceases.
GALE PACIFIC LIMITED 2016 ANNUAL REPORT 35
Gale Pacific Limited
Notes to the financial statements
30 June 2016
Note 2. Significant accounting policies (continued)
Intercompany transactions, balances and unrealised gains on transactions between entities in the Group are eliminated.
Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset
transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the
policies adopted by the Group.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership
interest, without the loss of control, is accounted for as an equity transaction, where the difference between the
consideration transferred and the book value of the share of the non-controlling interest acquired is recognised directly in
equity attributable to the parent.
Where the Group loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non-
controlling interest in the subsidiary together with any cumulative translation differences recognised in equity. The Group
recognises the fair value of the consideration received and the fair value of any investment retained together with any
gain or loss in profit or loss.
Foreign currencies and translations
Foreign currency transactions
Foreign currency transactions are translated into the entity's functional currency using the exchange rates prevailing at
the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and
from the translation at financial year-end exchange rates of monetary assets and liabilities denominated in foreign
currencies are recognised in profit or loss.
Foreign operations
The assets and liabilities of foreign operations are translated into Australian dollars using the exchange rates at the
reporting date. The revenues and expenses of foreign operations are translated into Australian dollars using the average
exchange rates, which approximate the rates at the dates of the transactions, for the period. All resulting foreign
exchange differences are recognised in other comprehensive income through the foreign currency reserve in equity.
On the disposal of a foreign operation (i.e. a disposal of the Group’s entire interest in a foreign operation, or a disposal
involving loss of control over a subsidiary that includes a foreign operation, loss of joint control over a jointly controlled
entity that includes a foreign operation, or loss of significant influence over an associate that includes a foreign
operation), the cumulative amount in the foreign currency translation reserve in respect of that operation is then
recognised in profit or loss
Monetary items forming net investment in foreign operations
The Group classifies monetary items of a non-current nature where settlement is not planned in the foreseeable future as
part of the net investment in foreign operations. All foreign exchange differences on these items are recognised in other
comprehensive income through the foreign currency reserve in equity. As and when settlements occur, the cumulative
amount in the foreign currency translation reserve is then recognised in profit or loss.
Revenue recognition
Revenue is recognised when it is probable that the economic benefit will flow to the Group and the revenue can be
reliably measured. Revenue is measured at the fair value of the consideration received or receivable.
Sale of goods
Sale of goods revenue is recognised at the point of sale, which is where the customer has taken delivery of the goods,
the risks and rewards are transferred to the customer and there is a valid sales contract. Amounts disclosed as revenue
are net of sales returns and trade discounts.
Government grant
Where a government grant, including Strategic Investment Plan income ('SIP'), is received or receivable relating to
development costs that have been expensed, the grant is recognised as revenue. Where a grant is received or receivable
relating to research and development costs that have been deferred, the grant is deducted from the carrying amount of
the deferred costs.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current classification.
36 GALE PACIFIC LIMITED 2016 ANNUAL REPORT
Gale Pacific Limited
Notes to the financial statements
30 June 2016
Note 2. Significant accounting policies (continued)
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the
Group's normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12
months after the reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used
to settle a liability for at least 12 months after the reporting period. All other assets are classified as non-current.
A liability is classified as current when: it is either expected to be settled in the Group's normal operating cycle; it is held
primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no
unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All other
liabilities are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
Derivative financial instruments
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently
remeasured to their fair value at each reporting date. The accounting for subsequent changes in fair value depends on
whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged.
Derivatives are classified as current or non-current depending on the expected period of realisation.
Cash flow hedges
Cash flow hedges are used to cover the Group's exposure to variability in cash flows that is attributable to particular risks
associated with a recognised asset or liability or a firm commitment which could affect profit or loss. The effective portion
of the gain or loss on the hedging instrument is recognised in other comprehensive income through the cash flow hedges
reserve in equity, whilst the ineffective portion is recognised in profit or loss. Amounts taken to equity are transferred out
of equity and included in the measurement of the hedged transaction when the forecast transaction occurs.
Cash flow hedges are tested for effectiveness on a regular basis both retrospectively and prospectively to ensure
that each hedge is effective and continues to be designated as a cash flow hedge. If the forecast transaction is no
longer expected to occur, the amounts recognised in equity are transferred to profit or loss.
If the hedging instrument is sold, terminated, expires, exercised without replacement or rollover, or if the hedge becomes
ineffective and is no longer a designated hedge, the amounts previously recognised in equity remain in equity until the
forecast transaction occurs.
Leases
The determination of whether an arrangement is or contains a lease is based on the substance of the arrangement and
requires an assessment of whether the fulfilment of the arrangement is dependent on the use of a specific asset or
assets and the arrangement conveys a right to use the asset.
A distinction is made between finance leases, which effectively transfer from the lessor to the lessee substantially all the
risks and benefits incidental to the ownership of leased assets, and operating leases, under which the lessor effectively
retains substantially all such risks and benefits.
Operating lease payments, net of any incentives received from the lessor, are charged to profit or loss on a straight-line
basis over the term of the lease. The Group has no finance leases.
Impairment of assets
Goodwill, other intangible assets that have an indefinite useful life, and assets not yet ready for use as intended by
management, are not subject to amortisation and are tested annually for impairment, or more frequently if events or
changes in circumstances indicate that they might be impaired. Other non-financial assets are reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment
loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. Where the asset
does not generate independent cash flows, the Group estimates the recoverable amount of the cash generating unit
('CGU') to which the asset belongs.
Recoverable amount is the higher of fair value less cost of disposal and value-in-use. In assessing value-in-use, the
estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows
have not been adjusted. In assessing fair value less cost of disposal, recognised valuation methodologies are applied,
utilising current and forecast financial information as appropriate, benchmarked against relevant market data.
GALE PACIFIC LIMITED 2016 ANNUAL REPORT 37
Gale Pacific Limited
Notes to the financial statements
30 June 2016
Note 2. Significant accounting policies (continued)
Employee benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to be
settled wholly within 12 months of the reporting date is measured at the amounts expected to be paid when the liabilities
are settled.
Long-term employee benefits
The liability for annual leave and long service leave not expected to be settled within 12 months of the reporting date are
measured as the present value of expected future payments to be made in respect of services provided by employees up
to the reporting date using the projected unit credit method. Consideration is given to expected future wage and salary
levels, experience of employee departures and periods of service. Expected future payments are discounted using
market yields at the reporting date on corporate bonds with terms to maturity and currency that match, as closely as
possible, the estimated future cash outflows.
Defined contribution superannuation expense
Contributions to defined contribution superannuation plans are expensed in the period in which they are incurred.
Rounding of amounts
The Company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument
2016/191, issued by the Australian Securities and Investments Commission, relating to 'rounding-off'. Amounts in this
report have been rounded off in accordance with that Instrument to the nearest thousand dollars, or in certain cases, the
nearest dollar.
Note 3. Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and assumptions that
affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates
in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements,
estimates and assumptions on historical experience and on other various factors, including expectations of future events,
management believes to be reasonable under the circumstances. The resulting accounting judgements and estimates
will seldom equal the related actual results. The judgements, estimates and assumptions that have a significant risk of
causing a material adjustment to the carrying amounts of assets and liabilities (refer to the respective notes) within the
next financial year are discussed below.
Share-based payment transactions
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity
instruments at the date at which they are granted. The fair value is determined by using the Binomial model taking into
account the terms and conditions upon which the instruments were granted. The accounting estimates and assumptions
relating to equity-settled share-based payments would have no impact on the carrying amounts of assets and liabilities
within the next annual reporting period but may impact profit or loss and equity.
Provision for impairment of inventories
The provision for impairment of inventories assessment requires a degree of estimation and judgement. The level of the
provision is assessed by taking into account the recent sales experience, the ageing of inventories and other factors that
affect inventory obsolescence.
Goodwill
The Group tests annually, or more frequently if events or changes in circumstances indicate impairment, whether
goodwill has suffered any impairment, in accordance with the accounting policy stated in note 2. The recoverable
amounts of cash-generating units have been determined based on value-in-use calculations. These calculations require
the use of assumptions, including estimated discount rates based on the current cost of capital and growth rates of the
estimated future cash flows.
Income tax
The Group is subject to income taxes in the jurisdictions in which it operates. Significant judgement is required in
determining the provision for income tax. There are many transactions and calculations undertaken during the ordinary
course of business for which the ultimate tax determination is uncertain. Where the final tax outcome of these matters is
different from the carrying amounts, such differences will impact the current and deferred tax provisions in the period in
which such determination is made.
38 GALE PACIFIC LIMITED 2016 ANNUAL REPORT
Gale Pacific Limited
Notes to the financial statements
30 June 2016
Note 3. Critical accounting judgements, estimates and assumptions (continued)
Recovery of deferred tax assets
Deferred tax assets are recognised for deductible temporary differences and tax losses only if the Group considers it is
probable that future taxable amounts will be available to utilise those temporary differences and losses.
Derivative financial instruments
Forward foreign exchange contracts, designated as cash flow hedges, are measured at fair value. Reliance is placed on
future cash flows and judgement is made on a regular basis, through prospective and retrospective testing, including at
the reporting date, that the hedges are still highly effective.
Note 4. Operating segments
Identification of reportable operating segments
The Group is organised into four operating segments identified by geographic location and identity of the service line
manager, together with Corporate. These operating segments are based on the internal reports that are reviewed and
used by the Group Managing Director (who is identified as the Chief Operating Decision Maker ('CODM')) in assessing
performance and in determining the allocation of resources. There is no aggregation of operating segments.
The Group operates predominantly in one business segment, being branded shading, screening and home improvement
products.
The CODM reviews revenue and segment earnings, before interest, tax, depreciation and amortisation ('EBITDA'). The
accounting policies adopted for internal reporting to the CODM are consistent with those adopted in the financial
statements.
Discrete financial information about each of these segments is reported on a monthly basis.
The operating segments are as follows:
Australasia
China Manuf. and EurAsia
Americas
Middle East and North Africa
('MENA')
Manufacturing and distribution facilities are located in Australia, and distribution facilities
are located in New Zealand. Sales offices are located in all states in Australia and in New
Zealand.
Manufacturing facilities are located in Beilun, China which supply to the Group’s sales and
marketing operations throughout the world.
Sales offices are located in Florida and custom blind assembly and distribution facilities
are located in California which service the North American region.
A sales office and distribution facility is located in the United Arab Emirates to service this
market.
The 'Other Segments' represents Corporate and Intersegment eliminations.
Major customers
During the year ended 30 June 2016 approximately 36% (2015: 35%) of the Group's external revenue was derived from
sales to one (2015: one) customer in the Australasian region.
GALE PACIFIC LIMITED 2016 ANNUAL REPORT 39
Gale Pacific Limited
Notes to the financial statements
30 June 2016
Note 4. Operating segments (continued)
Operating segment information
Consolidated - 2016
Revenue
Sales to external customers
Intersegment sales
Total sales revenue
Total revenue
Segment EBITDA
Depreciation and amortisation
Finance costs
Profit before income tax
expense
Income tax expense
Profit after income tax
expense
Segment results include:
Depreciation and amortisation
Finance costs
Assets
Segment assets
Total assets
Liabilities
Segment liabilities
Total liabilities
China Manuf.
and
EurAsia
$'000
Australasia
$'000
America
$'000
MENA
$'000
Other
segments
$'000
Total
$'000
97,470
3,077
100,547
100,547
6,766
58,451
65,217
65,217
53,603
37
53,640
53,640
15,352
20
15,372
15,372
-
(61,585)
(61,585)
(61,585)
173,191
-
173,191
173,191
3,578
12,620
4,920
3,148
(1,956)
(813)
(190)
(4,547)
(1,037)
(1,321)
(452)
(3)
(88)
(496)
146
58,544
36,089
32,203
10,738
22,810
15,168
13,109
5,680
674
26,130
22,310
(7,180)
(1,621)
13,509
(3,281)
10,228
(7,180)
(1,621)
160,384
160,384
60,761
60,761
40 GALE PACIFIC LIMITED 2016 ANNUAL REPORT
Gale Pacific Limited
Notes to the financial statements
30 June 2016
Note 4. Operating segments (continued)
Consolidated - 2015
Revenue
Sales to external customers
Intersegment sales
Total sales revenue
Total revenue
Segment EBITDA
Depreciation and amortisation
Finance costs
Profit before income tax
expense
Income tax expense
Profit after income tax
expense
Segment results include:
Depreciation and amortisation
Finance costs
Assets
Segment assets
Total assets
Liabilities
Segment liabilities
Total liabilities
China Manuf.
and
EurAsia
$'000
Australasia
$'000
Americas
$'000
MENA
$'000
Other
segments
$'000
Total
$'000
82,742
2,768
85,510
85,510
7,486
43,084
50,570
50,570
43,360
44
43,404
43,404
14,405
16
14,421
14,421
-
(45,912)
(45,912)
(45,912)
147,993
-
147,993
147,993
1,013
10,572
4,952
3,288
(4,148)
(1,002)
-
(5,345)
(849)
(761)
(368)
(2)
(119)
(526)
(484)
50,698
41,165
31,721
10,588
15,419
7,154
13,278
4,522
736
26,113
15,677
(7,636)
(1,820)
6,221
(1,051)
5,170
(7,636)
(1,820)
149,591
149,591
51,803
51,803
Accounting policy for operating segments
Operating segments are presented using the 'management approach', where the information presented is on the same
basis as the internal reports provided to the CODM. The CODM is responsible for the allocation of resources to operating
segments and assessing their performance.
Note 5. Other income
Net foreign exchange gain
Other income (including sales of scrap material from manufacturing)
Other income
Consolidated
2016
$'000
2015
$'000
4,219
1,015
1,099
1,455
5,234
2,554
Gale Pacific Limited
Notes to the financial statements
30 June 2016
Note 6. Expenses
Profit before income tax includes the following specific expenses:
Depreciation
Property, plant and equipment (note 12)
Amortisation
Intangible assets (note 13)
Total depreciation and amortisation
Employee benefit expense
Employment costs and benefits
Share-based payment expense
Total employee benefit expense
Finance costs
Interest and finance charges paid/payable
Rental expense relating to operating leases
Minimum lease payments
Note 7. Income tax
Income tax expense
Current tax
Deferred tax - origination and reversal of temporary differences
Adjustment recognised for prior periods
Aggregate income tax expense
Deferred tax included in income tax expense comprises:
Increase in deferred tax assets
Numerical reconciliation of income tax expense and tax at the statutory rate
Profit before income tax expense
Tax at the statutory tax rate of 30%
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Non allowable/(non assessable) items
Adjustment recognised for prior periods
Difference in overseas tax rates
Income tax expense
GALE PACIFIC LIMITED 2016 ANNUAL REPORT 41
Consolidated
2016
$'000
2015
$'000
6,165
6,855
1,015
781
7,180
7,636
28,324
187
29,456
89
28,511
29,545
1,621
1,820
4,505
3,029
Consolidated
2016
$'000
2015
$'000
3,719
(325)
(113)
2,027
(763)
(213)
3,281
1,051
(325)
(763)
13,509
6,221
4,053
1,866
340
1,132
4,393
(113)
(999)
2,998
(213)
(1,734)
3,281
1,051
42 GALE PACIFIC LIMITED 2016 ANNUAL REPORT
Gale Pacific Limited
Notes to the financial statements
30 June 2016
Note 7. Income tax (continued)
Amounts charged/(credited) directly to equity
Deferred tax assets
Deferred tax asset/(liability)
Deferred tax asset comprises temporary differences attributable to:
Amounts recognised in P&L:
Tax losses
Property, plant and equipment
Foreign exchange
Capitalised costs
Provisions
Impairment of receivables
Other financial liabilities
Employee benefits
Franking Deficit Credit
Other
Deferred tax asset/(liability)
Movements:
Opening balance
Credited to profit or loss
Credited/(charged) to equity
Transfer from Current Tax Liability
Closing balance
Income tax refundable
Income tax refundable
Provision for income tax
Provision for income tax
Consolidated
2016
$'000
2015
$'000
(835)
610
Consolidated
2016
$'000
2015
$'000
1,450
(642)
(1,183)
(957)
(223)
14
304
717
1,590
998
-
156
(1,327)
(354)
(31)
3
269
498
-
389
2,068
(397)
(397)
325
835
1,305
2,068
(550)
763
(610)
-
(397)
Consolidated
2016
$'000
2015
$'000
-
3,147
Consolidated
2016
$'000
2015
$'000
2,771
2,179
Accounting policy for income tax
The tax currently payable is based on taxable profit for the financial year. Taxable profit differs from profit as reported in
the statement of comprehensive income because of items of income or expense that are taxable or deductible in other
years and items that are never taxable or deductible. The Group’s liability for current tax is calculated using tax rates that
have been enacted or substantively enacted by the end of the reporting period.
GALE PACIFIC LIMITED 2016 ANNUAL REPORT 43
Gale Pacific Limited
Notes to the financial statements
30 June 2016
Note 7. Income tax (continued)
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applied when
the assets are recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted,
except for:
● When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or liability in
a transaction that is not a business combination and that, at the time of the transaction, affects neither the
accounting nor taxable profits; or
● When the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures, and
the timing of the reversal can be controlled and it is probable that the temporary difference will not reverse in the
foreseeable future.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that
future taxable amounts will be available to utilise those temporary differences and losses.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date. Deferred
tax assets recognised are reduced to the extent that it is no longer probable that future taxable profits will be available for
the carrying amount to be recovered. Previously unrecognised deferred tax assets are recognised to the extent that it is
probable that there are future taxable profits available to recover the asset.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets
against current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable
authority on either the same taxable entity or different taxable entities which intend to settle simultaneously.
Gale Pacific Limited (the 'head entity') and its wholly-owned Australian subsidiaries have formed an income tax
consolidated group under the tax consolidation regime. The head entity and each subsidiary in the tax consolidated group
continue to account for their own current and deferred tax amounts. The tax consolidated group has applied the 'separate
taxpayer within group' approach in determining the appropriate amount of taxes to allocate to members of the tax
consolidated group.
In addition to its own current and deferred tax amounts, the head entity also recognises the current tax liabilities (or
assets) and the deferred tax assets arising from unused tax losses and unused tax credits assumed from each subsidiary
in the tax consolidated group.
Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as amounts
receivable from or payable to other entities in the tax consolidated group. The tax funding arrangement ensures that the
intercompany charge equals the current tax liability or benefit of each tax consolidated group member, resulting in neither
a contribution by the head entity to the subsidiaries nor a distribution by the subsidiaries to the head entity.
Note 8. Earnings per share
Consolidated
2016
$'000
2015
$'000
Profit after income tax attributable to the owners of Gale Pacific Limited
10,228
5,170
Weighted average number of ordinary shares used in calculating basic earnings per share
Adjustments for calculation of diluted earnings per share:
297,474,396 297,474,396
Performance rights
3,768,003
2,352,479
Weighted average number of ordinary shares used in calculating diluted earnings per share 301,242,399 299,826,875
Number
Number
Basic earnings per share
Diluted earnings per share
Accounting policy for earnings per share
Cents
Cents
3.44
3.40
1.74
1.72
44 GALE PACIFIC LIMITED 2016 ANNUAL REPORT
Gale Pacific Limited
Notes to the financial statements
30 June 2016
Note 8. Earnings per share (continued)
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of Gale Pacific Limited, excluding
any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding
during the financial year, adjusted for bonus elements in ordinary shares issued during the financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account
the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the
weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential
ordinary shares.
Note 9. Current assets - cash and cash equivalents
Cash on hand
Cash at bank
Cash on deposit
Consolidated
2016
$'000
2015
$'000
12
24,413
138
17
17,619
133
24,563
17,769
Accounting policy for cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly
liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash
and which are subject to an insignificant risk of changes in value.
Note 10. Current assets - trade and other receivables
Trade receivables
Less: Provision for impairment of receivables
Other receivables
Consolidated
2016
$'000
2015
$'000
29,649
(80)
29,569
26,987
(97)
26,890
657
191
30,226
27,081
The Group has recognised a loss of $66,000 (2015: $33,000) in profit or loss in respect of impairment of receivables for
the year ended 30 June 2016.
The ageing of the impaired receivables provided for above are as follows:
Over 6 months overdue
Consolidated
2016
$'000
2015
$'000
80
97
Gale Pacific Limited
Notes to the financial statements
30 June 2016
Note 10. Current assets - trade and other receivables (continued)
Movements in the provision for impairment of receivables are as follows:
Opening balance
Additional provisions recognised
Receivables written off during the year as uncollectable
Closing balance
GALE PACIFIC LIMITED 2016 ANNUAL REPORT 45
Consolidated
2016
$'000
2015
$'000
97
66
(83)
80
64
33
-
97
Past due but not impaired
Customers with balances past due but without provision for impairment of receivables amount to $6,763,000 as at 30
June 2016 ($7,746,000 as at 30 June 2015).
The Group did not consider a credit risk on the aggregate balances after reviewing the credit terms of customers based
on recent collection practices.
The ageing of trade receivables not impaired at the reporting date was:
Outside credit terms 0-30 days
Outside credit terms 31-120 days
Outside credit terms 121 days to one year
More than one year
Consolidated
2016
$'000
2015
$'000
3,522
1,954
1,083
204
4,429
2,758
559
-
6,763
7,746
Accounting policy for trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective
interest method, less any provision for impairment.
Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectable are written
off by reducing the carrying amount directly. A provision for impairment of trade receivables is raised when there is
objective evidence that the Group will not be able to collect all amounts due according to the original terms of the
receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial
reorganisation and default or delinquency in payments (more than 60 days overdue) are considered indicators that the
trade receivable may be impaired. The amount of the impairment allowance is the difference between the asset's carrying
amount and the present value of estimated future cash flows, discounted at the original effective interest rate. Cash flows
relating to short-term receivables are not discounted if the effect of discounting is immaterial.
Other receivables are recognised at amortised cost, less any provision for impairment.
46 GALE PACIFIC LIMITED 2016 ANNUAL REPORT
Gale Pacific Limited
Notes to the financial statements
30 June 2016
Note 11. Current assets - inventories
Raw materials - at cost
Work in progress - at cost
Finished goods - at cost
Less: Provision for impairment
Consolidated
2016
$'000
2015
$'000
5,723
4,445
4,508
675
35,283
(937)
34,346
35,454
(1,345)
34,109
44,577
39,229
Accounting policy for inventories
Raw materials, work in progress and finished goods are stated at the lower of cost and net realisable value on a 'first in
first out' basis. Cost comprises of direct materials and delivery costs, direct labour, import duties and other taxes, an
appropriate proportion of variable and fixed overhead expenditure based on normal operating capacity, and, where
applicable, transfers from cash flow hedging reserves in equity. Costs of purchased inventory are determined after
deducting rebates and discounts received or receivable.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of
completion and the estimated costs necessary to make the sale.
Note 12. Non-current assets - property, plant and equipment
Buildings and leasehold improvements - at cost
Less: Accumulated depreciation
Plant and equipment - at cost
Less: Accumulated depreciation
Motor vehicles - at cost
Less: Accumulated depreciation
Capital work-in-progress - at cost
Consolidated
2016
$'000
2015
$'000
14,125
(5,162)
8,963
102,949
(82,199)
20,750
374
(247)
127
574
10,209
(2,819)
7,390
119,800
(93,135)
26,665
484
(322)
162
655
30,414
34,872
GALE PACIFIC LIMITED 2016 ANNUAL REPORT 47
Gale Pacific Limited
Notes to the financial statements
30 June 2016
Note 12. Non-current assets - property, plant and equipment (continued)
Reconciliations
Reconciliations of the movements in property, plant and equipment at the beginning and end of the current and previous
financial year are set out below:
Consolidated
Balance at 1 July 2014
Additions
Disposals
Exchange differences
Capital Work in Progress
Transfers in/(out)
Depreciation expense
Balance at 30 June 2015
Additions
Disposals
Exchange differences
Transfers in/(out)
Depreciation expense
Buildings and
leasehold
improvement
s
$'000
Plant and
Motor
Capital work-
equipment
$'000
vehicles
$'000
in-progress
$'000
Total
$'000
7,541
129
-
20
-
-
(300)
7,390
871
-
(262)
1,327
(363)
22,673
3,824
(5)
6,531
-
168
(6,526)
26,665
2,197
(334)
(1,507)
(496)
(5,775)
93
-
-
98
-
-
(29)
162
-
(9)
1
-
(27)
127
162
-
-
6
655
(168)
-
655
773
-
(23)
(831)
-
30,469
3,953
(5)
6,655
655
-
(6,855)
34,872
3,841
(343)
(1,791)
-
(6,165)
574
30,414
Balance at 30 June 2016
8,963
20,750
Accounting policy for property, plant and equipment
Property, plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost
includes expenditure that is directly attributable to the acquisition of the items.
Depreciation is calculated on a straight line basis to write off the net cost of each item of property, plant and equipment
over their estimated useful lives as follows:
Buildings
Leasehold improvements
Plant and equipment
Motor vehicles
45 years
Over lease term
2-15 years
2-5 years
Depreciation commences from the time the asset is held ready for use. The residual values, useful lives and depreciation
methods are reviewed, and adjusted if appropriate, at each reporting date. When changes are made, adjustments are
reflected in current and future periods only.
Leasehold improvements and plant and equipment under lease are depreciated over the unexpired period of the lease or
the estimated useful life of the assets, whichever is shorter.
An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit to
the Group. Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss.
48 GALE PACIFIC LIMITED 2016 ANNUAL REPORT
Gale Pacific Limited
Notes to the financial statements
30 June 2016
Note 13. Non-current assets - intangibles
Goodwill - at cost
Less: Impairment
Development - at cost
Patents, trademarks and licenses - at cost
Less: Accumulated amortisation
Application software - at cost
Less: Accumulated amortisation
Consolidated
2016
$'000
2015
$'000
21,607
(1,054)
20,553
565
1,562
(1,210)
352
6,917
(3,177)
3,740
21,516
(1,054)
20,462
-
1,674
(1,172)
502
6,538
(2,191)
4,347
25,210
25,311
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Consolidated
Balance at 1 July 2014
Additions
Exchange differences
Amortisation expense
Balance at 30 June 2015
Additions
Exchange differences
Transfers in/(out)
Amortisation expense
Balance at 30 June 2016
Patents,
trademarks
Development and licenses
$'000
$'000
Application
software
$'000
Goodwill
$'000
Total
$'000
19,978
-
484
-
20,462
-
91
-
-
20,553
-
-
-
-
-
565
-
-
-
565
350
55
128
(31)
502
-
4
(121)
(33)
352
2,655
2,517
(75)
(750)
4,347
147
107
121
(982)
22,983
2,572
537
(781)
25,311
712
202
-
(1,015)
3,740
25,210
Impairment testing for goodwill
In accordance with the accounting policies, the Group performs an annual impairment assessment of goodwill. The
review did not result in an impairment charges being recognised by the Group for the year ended 30 June 2016 (2015: no
impairment).
Impairment testing approach
Impairment testing compares the carrying value of a CGU with its recoverable amount, based on value-in-use. Value-in-
use was calculated based on the present value of cash flow projections over a five year period with the period extending
beyond five years extrapolated using estimated revenue growth rates between of 2.5%. Years one to three are based on
budgets and forecasts, with years four onwards extrapolated at the rate of 5%. These growth rates are based on
management's expectations, industry knowledge and other features specific to the CGU. Cash flows are discounted
using the weighted average cost of capital with mid-year discounting.
GALE PACIFIC LIMITED 2016 ANNUAL REPORT 49
Gale Pacific Limited
Notes to the financial statements
30 June 2016
Note 13. Non-current assets - intangibles (continued)
Goodwill acquired through business combinations have been allocated to the following cash generating units (CGU):
Goodwill
Australasia
USA (2015/2016: US$2,077,000; 2014/2015: US$ 2,077,000)
China
Consolidated
2016
$'000
2015
$'000
17,455
2,751
347
17,455
2,660
347
20,553
20,462
Australasia
In assessing the recoverable amount of the Australasian CGU, management considered information available from
industry analysts and other sources in relation to the key assumptions used. Management considers that it has taken a
conservative view of the market conditions and business operations.
The following assumptions were used in the value-in-use calculations in the model for Australasia:
Discount Factor
The discount factor used in the model is 10.5%
Revenue growth rate assumption
Average actual revenue growth rate from 2013 to 2016 was 9%. From 2015 to 2016 the Australasia CGU achieved
18% revenue growth. The values assigned in the assumptions for 2017 to 2021 is an average of 5% which is somewhat
lower than historical values. Management believe this is achievable based on historical trends and the plans to
continue to invest in product development
EBITDA margin assumption
Margin achieved in the period immediately before the budget period, increasing for expected efficiency
improvements. Management expect efficiency improvements averaging 1% per year to be achievable for years 2017 to
2021.
Working capital assumption
Key components affecting working capital include inventory on hand, debtor day collections and accounts payable
days. Management believes the assumptions used in the cash flow projection period are conservative based on
historic performance and measures to improve inventory positions going forward.
USA
In assessing the recoverable amount of the USA CGU, management made a number of significant assumptions
including foreign exchange rates and risk adjustments to future cash flows. Management considered information
available from industry analysts and other sources in relation to key assumptions used. Management considers that
it has taken a conservative view of the market conditions and business operations.
Management believe that any reasonably possible further change in the key assumptions on which recoverable
amount is based would not cause the USA CGU's carrying amount to exceed its recoverable amount.
Accounting policy for intangible assets
Intangible assets acquired as part of a business combination, other than goodwill, are initially measured at their fair
value at the date of the acquisition. Intangible assets acquired separately are initially recognised at cost. Indefinite life
intangible assets are not amortised and are subsequently measured at cost less any impairment. Finite life intangible
assets are subsequently measured at cost less amortisation and any impairment. The gains or losses recognised in
profit or loss arising from the derecognition of intangible assets are measured as the difference between net disposal
proceeds and the carrying amount of the intangible asset. The method and useful lives of finite life intangible
assets are reviewed annually. Changes in the expected pattern of consumption or useful life are accounted for
prospectively by changing the amortisation method or period.
50 GALE PACIFIC LIMITED 2016 ANNUAL REPORT
Gale Pacific Limited
Notes to the financial statements
30 June 2016
Note 13. Non-current assets - intangibles (continued)
Goodwill
Goodwill arises on the acquisition of a business. Goodwill is not amortised. Instead, goodwill is tested annually for
impairment, or more frequently if events or changes in circumstances indicate that it might be impaired, and is carried at
cost less accumulated impairment losses. Impairment losses on goodwill are taken to profit or loss and are not
subsequently reversed.
Research and development
Research costs are expensed in the period in which they are incurred. Development costs are capitalised when it is
probable that the project will be a success considering its commercial and technical feasibility; the Group is able to use or
sell the asset; the Group has sufficient resources; and intent to complete the development and its costs can be measured
reliably. Capitalised development costs are amortised on a straight-line basis over the period of their expected benefit.
Patents, trademarks and licenses
Significant costs associated with patents and trademarks are deferred and amortised on a straight-line basis over the
period of their expected benefit, being their finite useful life of 20 years.
Application software
Significant costs associated with software are deferred and amortised on a straight-line basis over the period of their
expected benefit, being their finite useful life of 5 years.
Note 14. Current liabilities - trade and other payables
Trade payables
Sundry payables and accruals
Consolidated
2016
$'000
2015
$'000
10,161
9,437
6,375
6,512
19,598
12,887
Refer to note 22 for further information on financial instruments.
Accounting policy for trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year and
which are unpaid. Due to their short-term nature they are measured at amortised cost and are not discounted. The
amounts are unsecured and are usually paid within 30 days of recognition.
Note 15. Current liabilities - borrowings
Bank loans
Commercial bills payable
Other loans
Refer to note 22 for further information on financial instruments.
Note 16. Current liabilities - provisions
Warranties
Consolidated
2016
$'000
2015
$'000
12,691
-
501
8,337
24,500
804
13,192
33,641
Consolidated
2016
$'000
2015
$'000
318
62
GALE PACIFIC LIMITED 2016 ANNUAL REPORT 51
Gale Pacific Limited
Notes to the financial statements
30 June 2016
Note 16. Current liabilities - provisions (continued)
Warranties
The provision represents the estimated warranty claims in respect of products sold which are still under warranty at the
reporting date. The provision is estimated based on historical warranty claim information, sales levels and any recent
trends that may suggest future claims could differ from historical amounts.
Consolidated - 2016
Carrying amount at the start of the year
Additional provision recognised
Claims
Carrying amount at the end of the year
Warranties
$'000
62
409
(153)
318
Accounting policy for provisions
Provisions are recognised when the Group has a present (legal or constructive) obligation as a result of a past event, it is
probable the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the
obligation. The amount recognised as a provision is the best estimate of the consideration required to settle the present
obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation. If the time value
of money is material, provisions are discounted using a current pre-tax rate specific to the liability. The increase in the
provision resulting from the passage of time is recognised as a finance cost in profit or loss.
Note 17. Non-current liabilities - borrowings
Bank loans
Other loans
Refer to note 22 for further information on financial instruments.
Total secured liabilities
The total secured liabilities (current and non-current) are as follows:
Bank loans
Commercial bills payable
Consolidated
2016
$'000
2015
$'000
19,280
243
19,523
-
783
783
Consolidated
2016
$'000
2015
$'000
31,971
-
8,337
24,500
31,971
32,837
Assets pledged as security
The bank loans are secured by a fixed and floating charge (or equivalent foreign charge) over all the assets and
undertakings, including uncalled capital of each entity in the Group.
Accounting policy for borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs.
They are subsequently measured at amortised cost using the effective interest method.
52 GALE PACIFIC LIMITED 2016 ANNUAL REPORT
Gale Pacific Limited
Notes to the financial statements
30 June 2016
Note 18. Equity - issued capital
Consolidated
2016
Shares
2015
Shares
2016
$'000
2015
$'000
Ordinary shares - fully paid
297,474,396 297,474,396
71,485
71,485
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the Company in
proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and
the Company does not have a limited amount of authorised capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each
share shall have one vote.
Share buy-back
There is no current on-market share buy-back.
Capital risk management
The Group's objectives when managing capital is to safeguard its ability to continue as a going concern, so that it can
provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure to
reduce the cost of capital. This is achieved through monitoring of historical and forecast performance and cash flows.
Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt is
calculated as total borrowings less cash and cash equivalents.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders,
return capital to shareholders, issue new shares or sell assets to reduce debt.
Accounting policy for issued capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax,
from the proceeds.
Note 19. Equity - reserves
Foreign currency reserve
Hedging reserve - cash flow hedges
Share-based payments reserve
Enterprise reserve fund
Consolidated
2016
$'000
2015
$'000
(2,856)
(995)
762
2,101
(1,333)
954
575
1,402
(988)
1,598
Foreign currency reserve
The reserve is used to recognise exchange differences arising from the translation of the financial statements of foreign
operations to Australian dollars. It is also used to recognise gains and losses on hedges of the net investments in foreign
operations.
Hedging reserve - cash flow hedges
The reserve is used to recognise the effective portion of the gain or loss of cash flow hedge instruments that is
determined to be an effective hedge.
Share-based payments reserve
The reserve is used to recognise the value of equity benefits provided to employees and directors as part of their
remuneration, and other parties as part of their compensation for services.
GALE PACIFIC LIMITED 2016 ANNUAL REPORT 53
Gale Pacific Limited
Notes to the financial statements
30 June 2016
Note 19. Equity - reserves (continued)
Enterprise reserve fund
Gale Pacific Special Textiles (Ningbo) Limited and Gale Pacific Trading (Ningbo) Limited are required by Chinese
Company Law to maintain this reserve in its financial statements. This reserve is unavailable for distribution to
shareholders but can be used to expand the entity's business, make up losses or increase the registered capital. Both
companies are required to allocate 10% of their annual profit after tax to this reserve until it reaches 50% of the registered
capital.
Movements in reserves
Movements in each class of reserve during the current and previous financial year are set out below:
Consolidated
Balance at 1 July 2014
Foreign currency translation *
Movement in hedge
Income tax
Share-based payment
Statutory transfers from retained earnings
Balance at 30 June 2015
Foreign currency translation *
Movement in hedge
Income tax
Share-based payment
Statutory transfers from retained earnings
Foreign
currency
$'000
Hedging
$'000
Share-based Enterprise
payments
$'000
reserve fund
$'000
Total
$'000
(12,780)
11,447
-
-
-
-
(1,333)
(1,523)
-
-
-
-
(508)
-
2,072
(610)
-
-
954
-
(2,784)
835
-
-
486
-
-
-
89
-
575
-
-
-
187
-
762
1,387
-
-
-
-
15
1,402
-
-
-
-
699
2,101
(11,415)
11,447
2,072
(610)
89
15
1,598
(1,523)
(2,784)
835
187
699
(988)
Balance at 30 June 2016
(2,856)
(995)
*
Refer to note 21 for details of monetary items identified as a net investment in a foreign operation
Note 20. Equity - dividends
Dividends
Dividends paid during the financial year were as follows:
Final dividend for the year ended 30 June 2014 of 1.35 cents per ordinary share
(unfranked)
Final dividend for the year ended 30 June 2015 of 1.00 cent per ordinary share (unfranked)
Interim dividend for the year ended 30 June 2016 of 0.75 cents per ordinary share
(unfranked)
Consolidated
2016
$'000
2015
$'000
-
2,975
2,231
4,016
-
-
5,206
4,016
In addition to the above dividends, on the 18th of August 2016, the directors declared a final dividend for the year ended
30 June 2016 of 1.00 cent per ordinary share (unfranked), payable on the 3rd of October to shareholders on the register
at 26th September 2016. This dividend has not been included as a liability in these financial statements. The
total estimated dividend to be paid is $2,975,000.
For the full year, the dividends of 1.75 cents per ordinary share have been declared on earnings of 3.44 cents per
share.
54 GALE PACIFIC LIMITED 2016 ANNUAL REPORT
Gale Pacific Limited
Notes to the financial statements
30 June 2016
Note 20. Equity - dividends (continued)
Franking credits
Consolidated
2016
$'000
2015
$'000
Franking credits available for subsequent financial years based on a tax rate of 30%
-
197
The above amounts represent the balance of the franking account as at the end of the financial year, adjusted for:
●
●
●
franking credits that will arise from the payment of the amount of the provision for income tax at the reporting date
franking debits that will arise from the payment of dividends recognised as a liability at the reporting date
franking credits that will arise from the receipt of dividends recognised as receivables at the reporting date
Accounting policy for dividends
Dividends are recognised when declared during the financial year and no longer at the discretion of the Company.
Note 21. Monetary items identified as a net investment in a foreign operation
In 2006/2007, the Group reclassified a portion of its related party balances as net investments in foreign operations,
being monetary items of a non-current nature where settlement is not planned in the foreseeable future, with all foreign
exchange differences on these items recognised in other comprehensive income through the foreign currency reserve in
equity.
In 2008/2009, a portion of the net investment in Gale Pacific Special Textiles (Ningbo) Limited was converted to equity
and additional balances in Gale Pacific (New Zealand) Limited and Gale Pacific USA, Inc. were reclassified as net
investments in foreign operations.
In 2014/2015, the balances relating to the portion of the net investment in Gale Pacific Special Textiles (Ningbo) Limited
was de-classified as it was deemed that settlement of these balances is planned in the foreseeable future.
In 2015/2016, the balances relating to the portion of net investment in Gale Pacific USA Inc. was de-classified as it was
deemed that settlement of these balances is planned in the foreseeable future.
In 2015/2016, a portion of the balances relating to Gale Pacific (New Zealand) Limited was declassified as it was deemed
that settlement of a portion of those balances is planned in the foreseeable future.
Details of the monetary items classified as net investments in a foreign operations are as follows:
Related party receivable to the Company from Gale Pacific (New Zealand) Limited
Related party receivable to the Company from Gale Pacific USA, Inc.
Monetary items identified as a net investment in a foreign operation
Consolidated
2016
$'000
2015
$'000
5,049
-
6,800
9,473
5,049
16,273
The foreign exchange gain arising during the financial year on monetary items forming part of the net investment in
related party, recognised in foreign currency translation reserve is detailed in note 19.
Note 22. Financial instruments
Financial risk management objectives
The Group's activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk.
The Group’s financial risk management processes and procedures seek to minimise the potential adverse effects on the
Group’s financial performance that may occur due to the unpredictability of financial markets. Risk management policies
are reviewed regularly to reflect changes in market conditions and the Group’s activities.
GALE PACIFIC LIMITED 2016 ANNUAL REPORT 55
Gale Pacific Limited
Notes to the financial statements
30 June 2016
Note 22. Financial instruments (continued)
Derivative financial instruments are used by the Group to limit exposure to exchange rate risk associated with foreign
currency transactions. Transactions to reduce foreign currency exposure are undertaken without the use of collateral as
the Group only deals with reputable institutions with sound financial positions. The Group does not enter into or trade
financial instruments, including derivative financial instruments, for speculative purposes.
Market risk
Foreign currency risk
The Group undertakes certain transactions denominated in foreign currency and is exposed to foreign currency risk
through foreign exchange rate fluctuations.
The Group enters into foreign exchange contracts to buy and sell specified amounts of foreign currency in the future at
stipulated exchange rates. The objective of entering into forward exchange contracts is to protect the Group against
exchange rate movements for both contracted and anticipated future sales and purchases undertaken in foreign
currencies. There was no cash flow hedge ineffectiveness during the reporting period.
The Group adopts hedge accounting and classifies forward exchange contracts as cash flow hedges where these
contracts are hedging highly probable forecasted transactions and they are timed to mature when the cash flow from the
underlying transaction is scheduled to occur. Cash flows are expected to occur during the next financial year.
The maturity, settlement amounts and the average contractual exchange rates of the Group's outstanding forward foreign
exchange contracts at the reporting date were as follows:
Buy US dollars/sell Australian dollars
Maturity:
Less than 6 months
6 - 12 months
Sell Australian dollars
Average exchange rates
2016
$'000
2015
$'000
2016
2015
28,831
8,371
15,867
4,732
0.7096
0.7168
0.8225
0.7819
The carrying amount of the Group's foreign currency denominated financial assets and financial liabilities at the reporting
date were as follows:
Consolidated
US dollars
New Zealand dollars
Chinese renminbi
UAE dirham
Assets
Liabilities
2016
$'000
2015
$'000
2016
$'000
2015
$'000
20,514
1,564
6,489
890
24,483
454
478
1,129
4,043
229
1,668
-
790
126
2,381
-
29,457
26,544
5,940
3,297
The Group had net assets denominated in foreign currencies of $23,519,000 (assets of $29,457,000 less liabilities of
$5,940,000 as at 30 June 2016 (2015: $23,246,000 (assets of $26,544,000 less liabilities of $3,297,000)). Based on this
exposure, had the Australian dollars strengthened by 10% / weakened by 10% (2015: strengthened by 10% / weakened
by 10%) against these foreign currencies with all other variables held constant, the Group's profit before tax for the year
would have been $308,000 higher/lower (2015: $80 lower/ higher) and equity would have been $1,746,000 higher/lower
(2015: $2,326,000 higher/lower). The percentage change is the expected overall volatility of the significant currencies,
which is based on management's assessment of reasonable possible fluctuations taking into consideration movements
over the last 12 months each year and the spot rate at each reporting date.
Price risk
The Group is not exposed to any significant price risk.
56 GALE PACIFIC LIMITED 2016 ANNUAL REPORT
Gale Pacific Limited
Notes to the financial statements
30 June 2016
Note 22. Financial instruments (continued)
Interest rate risk
The Group is exposed to interest rate risk as entities in the Group borrow and deposit funds at both fixed and variable
interest rates. Effective weighted average interest rates on classes of financial liabilities are disclosed under liquidity risk.
The Group does not have material long term borrowings and does not use interest rate swaps to manage the risk of
interest rate changes.
As at the reporting date, the Group had the following variable rate bank balances and borrowings outstanding:
Consolidated
Cash and cash equivalents
Bank loans
Commercial bills payable
Other loans
Net exposure to cash flow interest rate risk
2016
2015
Weighted
average
interest rate
%
Weighted
average
interest rate
%
Balance
$'000
Balance
$'000
-
3.65%
-
6.96%
24,563
(31,971)
-
(744)
(8,152)
-
4.89%
2.89%
6.96%
17,752
(8,337)
(24,500)
(1,587)
(16,672)
An analysis by remaining contractual maturities in shown in 'liquidity and interest rate risk management' below.
An official increase/decrease in interest rates of 100 basis points would have an adverse/favourable effect on profit
before tax of $327,000 per annum. The percentage change is based on the expected volatility of interest rates using
market data and analysts forecasts.
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the
Group. Before accepting any new customer, the Group uses internal resources and criteria to assess the potential
customer’s credit quality and defines credit limits by customer. The maximum exposure to credit risk at the reporting date
to recognised financial assets is the carrying amount, net of any provisions for impairment of those assets, as disclosed
in the statement of financial position and notes to the financial statements. The Group does not hold any collateral.
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s
approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its
liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage
to the Group’s reputation.
The Group manages liquidity risk by maintaining adequate cash reserves and available borrowing facilities by
continuously monitoring actual and forecast cash flows and matching the maturity profiles of financial assets and
liabilities.
GALE PACIFIC LIMITED 2016 ANNUAL REPORT 57
Gale Pacific Limited
Notes to the financial statements
30 June 2016
Note 22. Financial instruments (continued)
Remaining contractual maturities
The following tables detail the Group's remaining contractual maturity for its financial instrument liabilities. The tables
have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the
financial liabilities are required to be paid. The tables include both interest and principal cash flows disclosed as
remaining contractual maturities and therefore these totals may differ from their carrying amount in the statement of
financial position.
Consolidated - 2016
Non-derivatives
Non-interest bearing
Trade payables
Sundry payables and accruals
Interest-bearing - variable
Bank loans
Other loans
Total non-derivatives
Consolidated - 2015
Non-derivatives
Non-interest bearing
Trade payables
Sundry payables and accruals
Interest-bearing - variable
Bank loans
Other loans
Total non-derivatives
Weighted
average
interest rate 1 year or less
%
$'000
Between 1
and 2 years
$'000
Between 2
and 5 years Over 5 years
$'000
$'000
Remaining
contractual
maturities
$'000
-
-
3.65%
6.96%
10,161
9,437
13,858
553
34,009
-
-
-
-
3,584
260
3,844
17,597
-
17,597
-
-
-
-
-
10,161
9,437
35,039
813
55,450
Weighted
average
interest rate 1 year or less
%
$'000
Between 1
and 2 years
$'000
Between 2
and 5 years Over 5 years
$'000
$'000
Remaining
contractual
maturities
$'000
-
-
3.40%
6.90%
6,375
6,512
34,084
914
47,885
-
-
-
586
586
-
-
-
268
268
-
-
-
-
-
6,375
6,512
34,084
1,768
48,739
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed
above.
Note 23. Fair value measurement
Fair value hierarchy
The following tables detail the Group's assets and liabilities, measured or disclosed at fair value, using a three level
hierarchy, based on the lowest level of input that is significant to the entire fair value measurement, being:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the
measurement date
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly
or indirectly
Level 3: Unobservable inputs for the asset or liability
Consolidated - 2016
Liabilities
Forward foreign exchange contracts
Total liabilities
Level 1
$'000
Level 2
$'000
Level 3
$'000
Total
$'000
-
-
1,421
1,421
-
-
1,421
1,421
58 GALE PACIFIC LIMITED 2016 ANNUAL REPORT
Gale Pacific Limited
Notes to the financial statements
30 June 2016
Note 23. Fair value measurement (continued)
Consolidated - 2015
Assets
Forward foreign exchange contracts
Total assets
Level 1
$'000
Level 2
$'000
Level 3
$'000
Total
$'000
-
-
1,363
1,363
-
-
1,363
1,363
There were no transfers between levels during the financial year.
The net fair value of assets and liabilities approximates their carrying value. No financial assets or financial liabilities are
readily traded on organised markets in standardised form other than forward exchange contracts.
Valuation techniques for fair value measurements categorised within level 2 and level 3
Derivative financial instruments have been valued using quoted market rates. This valuation technique maximises the
use of observable market data where it is available and relies as little as possible on entity specific estimates.
Accounting policy for fair value measurement
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the
fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date; and assumes that the transaction will take place
either: in the principal market; or in the absence of a principal market, in the most advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the asset or liability,
assuming they act in their economic best interests. For non-financial assets, the fair value measurement is based on its
highest and best use. Valuation techniques that are appropriate in the circumstances and for which sufficient data are
available to measure fair value, are used, maximising the use of relevant observable inputs and minimising the use of
unobservable inputs.
Assets and liabilities measured at fair value are classified, into three levels, using a fair value hierarchy that reflects the
significance of the inputs used in making the measurements. Classifications are reviewed at each reporting date and
transfers between levels are determined based on a reassessment of the lowest level of input that is significant to the fair
value measurement.
For recurring and non-recurring fair value measurements, external valuers may be used when internal expertise is either
not available or when the valuation is deemed to be significant. External valuers are selected based on market
knowledge and reputation. Where there is a significant change in fair value of an asset or liability from one period to
another, an analysis is undertaken, which includes a verification of the major inputs applied in the latest valuation and a
comparison, where applicable, with external sources of data.
Note 24. Commitments
Lease commitments - operating
Committed at the reporting date but not recognised as liabilities, payable:
Within one year
One to five years
Consolidated
2016
$'000
2015
$'000
3,142
4,560
2,484
1,915
7,702
4,399
The above lease commitments relate to property leases. The Group has no rights to purchase the properties at the end of
the lease term.
Note 25. Related party transactions
Parent entity
Gale Pacific Limited is the parent entity.
GALE PACIFIC LIMITED 2016 ANNUAL REPORT 59
Gale Pacific Limited
Notes to the financial statements
30 June 2016
Note 25. Related party transactions (continued)
Subsidiaries
Interests in subsidiaries are set out in note 28.
Key management personnel
Disclosures relating to key management personnel are set out in note 26 and the remuneration report included in the
directors' report.
Receivable from and payable to related parties
The following balances are outstanding at the reporting date in relation to transactions with related parties:
Current payables:
Accrued director fees and superannuation contributions
Loans to/from related parties
There were no loans to or from related parties at the current and previous reporting date.
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates.
Note 26. Key management personnel disclosures
Consolidated
2016
$
2015
$
-
2,493
Compensation
The aggregate compensation made to directors and other members of key management personnel of the Group is set
out below:
Short-term employee benefits
Post-employment benefits
Termination benefits
Share-based payments
Note 27. Parent entity information
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Profit after income tax
Total comprehensive income
Consolidated
2016
$
2015
$
2,692,699
155,724
287,082
208,802
2,752,869
173,899
275,608
82,809
3,344,307
3,285,185
Parent
2016
$'000
2015
$'000
4,706
6,567
2,757
8,029
60 GALE PACIFIC LIMITED 2016 ANNUAL REPORT
Gale Pacific Limited
Notes to the financial statements
30 June 2016
Note 27. Parent entity information (continued)
Statement of financial position
Total current assets
Total assets
Total current liabilities
Total liabilities
Equity
Issued capital
Hedging reserve - cash flow hedges
Share-based payments reserve
Retained profits
Total equity
Parent
2016
$'000
2015
$'000
45,333
43,113
124,694
113,510
21,208
27,391
40,837
27,391
71,485
(995)
762
12,605
71,485
954
575
13,105
83,857
86,119
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity had no guarantees in relation to the debts of its subsidiaries as at 30 June 2016 and 30 June 2015.
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2016 and 30 June 2015.
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2016 and 30 June 2015.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the Group, as disclosed in note 2, except for the
following:
●
●
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
Dividends received from subsidiaries are recognised as other income by the parent entity and its receipt may be an
indicator of an impairment of the investment.
Note 28. Interests in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in
accordance with the accounting policy described in note 2:
Name
Principal place of business /
Country of incorporation
Gale Pacific (New Zealand) Limited
Gale Pacific FZE
Gale Pacific Special Textiles (Ningbo) Limited
Gale Pacific Trading (Ningbo) Limited
Gale Pacific USA, Inc.
Zone Hardware Pty Ltd
Riva Window Fashions Pty Ltd
New Zealand
United Arab Emirates
China
China
USA
Australia
Australia
Ownership interest
2015
2016
%
%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
GALE PACIFIC LIMITED 2016 ANNUAL REPORT 61
Gale Pacific Limited
Notes to the financial statements
30 June 2016
Note 29. Share-based payments
The Group maintains a performance rights scheme for certain staff and executives, including executive directors, as
approved by shareholders at an annual general meeting. The scheme is designed to reward key personnel when the
Group meets performance hurdles relating to:
● Improvement in earnings per share; and
● Improvement in return to shareholders.
Each performance right entitles the holder one ordinary share in the Company when exercised and is subject to the
satisfying of relevant performance hurdles based on improvements in the Group’s diluted earnings per share.
Performance rights issued to executives during the financial year were issued in accordance with the Group’s
remuneration policy which:
● Reward executives for Group and individual performance;
● Align the interests of the executives with those of the shareholders; and
● Ensure that total remuneration is competitive by market standards.
Refer to note 6 for the amount expensed to profit or loss during the financial year.
Set out below are summaries of performance rights granted under the plan:
2016
Grant date
Expiry date
11/12/2014
09/10/2015
01/12/2017
01/12/2018
2015
Grant date
Expiry date
30/06/2014
30/06/2014
30/06/2014
11/12/2014
30/06/2014
30/06/2014
30/06/2014
01/12/2017
Grant
price
Balance at
the start of
the year
Granted
Exercised
$0.18
$0.21
2,364,138
-
2,364,138
-
3,022,000
3,022,000
Grant
price
Balance at
the start of
the year
Granted
Exercised
$0.15
$0.15
$0.15
$0.18
2,125,000
600,000
975,000
-
3,700,000
-
-
-
2,690,965
2,690,965
Expired/
forfeited/
other
Balance at
the end of
the year
(1,783,733)
-
(1,783,733)
580,405
3,022,000
3,602,405
Expired/
forfeited/
other
Balance at
the end of
the year
(2,125,000)
(600,000)
(975,000)
(326,827)
(4,026,827)
-
-
-
2,364,138
2,364,138
-
-
-
-
-
-
-
-
There were no performance rights exercisable at the reporting dated (30 June 2016).
For performance rights granted during the current financial year, the valuation model inputs used to determine the fair
value at the grant date, using the binominal option pricing, are as follows:
Grant date
Expiry date
Share price
at grant date
Exercise
price
Expected
volatility
Dividend
yield
Risk-free
interest rate
Fair value
at grant date
09/10/2015
01/12/2018
$0.26
$0.00
-
80.00%
1.80%
$0.214
Accounting policy for share-based payments
Equity-settled share-based compensation benefits are provided to certain employees including executive directors.
Equity-settled transactions are awards of performance rights over shares, that are provided to employees in exchange for
the rendering of services.
The cost of equity-settled transactions is measured at fair value on grant date. Fair value is independently determined
using the Binomial option pricing model that takes into account the exercise price, the term of the option, the impact of
dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield
and the risk free interest rate for the term of the option, together with non-vesting conditions that do not determine
whether the Group receives the services that entitle the employees to receive payment. No account is taken of any other
vesting conditions.
62 GALE PACIFIC LIMITED 2016 ANNUAL REPORT
Gale Pacific Limited
Notes to the financial statements
30 June 2016
Note 29. Share-based payments (continued)
The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity over the
vesting period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the
best estimate of the number of awards that are likely to vest and the expired portion of the vesting period. The amount
recognised in profit or loss for the period is the cumulative amount calculated at each reporting date less amounts already
recognised in previous periods.
Market conditions are taken into consideration in determining fair value. Therefore any awards subject to market
conditions are considered to vest irrespective of whether or not that market condition has been met, provided all other
conditions are satisfied.
The weighted average fair value of the share options granted during the financial year is $0.21 (2015: $0.18).
Expected volatility is based on the historical share price volatility over the past 3 years. To allow for the effects of early
exercise, it was assumed that executives and senior employees would exercise the options after vesting date when the
share price is two and a half times the exercise price.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been made.
An additional expense is recognised, over the remaining vesting period, for any modification that increases the total fair
value of the share-based compensation benefit as at the date of modification.
If the non-vesting condition is within the control of the Group or employee, the failure to satisfy the condition is treated as
a cancellation. If the condition is not within the control of the Group or employee and is not satisfied during the vesting
period, any remaining expense for the award is recognised over the remaining vesting period, unless the award is
forfeited.
If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining
expense is recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled and
new award is treated as if they were a modification.
Note 30. Remuneration of auditors
During the financial year the following fees were paid or payable for services provided by Deloitte Touche Tohmastsu, the
auditor of the Company:
Audit services - Deloitte Touche Tohmastsu
Audit or review of the financial statements
Other services - Deloitte Touche Tohmastsu
Other services (including tax services)
Consolidated
2016
$
2015
$
223,250
270,750
57,484
21,000
280,734
291,750
Note 31. New Accounting Standards and Interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet
mandatory, have not been early adopted by the Group for the annual reporting period ended 30 June 2016. The Group's
assessment of the impact of these new or amended Accounting Standards and Interpretations, most relevant to the
Group, are set out below.
GALE PACIFIC LIMITED 2016 ANNUAL REPORT 63
Gale Pacific Limited
Notes to the financial statements
30 June 2016
Note 31. New Accounting Standards and Interpretations not yet mandatory or early adopted (continued)
AASB 9 Financial Instruments
This standard is applicable to annual reporting periods beginning on or after 1 January 2018. The standard replaces all
previous versions of AASB 9 and completes the project to replace AASB 39 'Financial Instruments: Recognition and
Measurement'. AASB 9 introduces new classification and measurement models for financial assets and makes minor
amendments for financial liabilities. New simpler hedge accounting requirements are intended to more closely align the
accounting treatment with the risk management activities of the entity. New impairment requirements will use an
'expected credit loss' model to recognise an allowance. The Group will adopt this standard from 1 July 2018 but the
impact of its adoption is yet to be assessed by the Group.
AASB 15 Revenue from Contracts with Customers
This standard is applicable to annual reporting periods beginning on or after 1 January 2018. The standard provides a
single standard for revenue recognition. The core principle of the standard is that an entity will recognise revenue to
depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the
entity expects to be entitled in exchange for those goods or services. The Group will adopt this standard from 1 July 2018
but the impact of its adoption is yet to be assessed by the Group
AASB 16 Leases
This standard is applicable to annual reporting periods beginning on or after 1 January 2019. The standard will eliminate
the classifications of operating leases and finance leases for lessees. Subject to exceptions (short-term leases of 12
months or less and leases of low-value assets), a 'right-of-use' asset will be capitalised in the statement of financial
position, measured as the present value of the unavoidable future lease payments to be made over the lease term. A
liability corresponding to the capitalised lease will also be recognised, adjusted for lease prepayments, lease incentives
received, initial direct costs incurred and an estimate of any future restoration, removal or dismantling costs. Straight-line
operating lease expense recognition will be replaced with a depreciation charge for the leased asset and an interest
expense on the recognised lease liability. In the earlier periods of the lease, the expenses associated with the lease
under AASB 16 will be higher when compared to lease expenses under AASB 117 ‘Leases’. However EBITDA results will
be improved as the operating expense is replaced by interest expense and depreciation in profit or loss under AASB 16.
For lessor accounting, the standard does not substantially change how a lessor accounts for leases. The Group will adopt
this standard from 1 July 2019 but the impact of its adoption is yet to be assessed by the Group.
Other amending accounting standards
Other amending accounting standards issued are not considered to have a significant impact on the financial statements
of the Group as their amendments provide either clarification of existing accounting treatment or editorial amendments.
Note 32. Events after the reporting period
Apart from the dividend declared as disclosed in note 20, no other matter or circumstance has arisen since 30 June 2016
that has significantly affected, or may significantly affect the Group's operations, the results of those operations, or the
Group's state of affairs in future financial years.
64 GALE PACIFIC LIMITED 2016 ANNUAL REPORT
Additional securities exchange information
In accordance with ASX Listing Rule 4.10, the Company
provides the following information to shareholders not
elsewhere disclosed in this Annual Report. The
information provided is current as at 9 August 2016
(Reporting Date).
Corporate Governance
Statement
The Company has prepared a Corporate Governance
Statement which sets out the corporate governance
practices that were in operation throughout the financial
year for the Company. In accordance with ASX Listing
Rule 4.10.3, the Corporate Governance Statement will be
available for review on Gale Pacific’s website (Error!
Hyperlink reference not valid.), and will be lodged with
ASX at the same time that this Annual Report is lodged
with ASX.
Number of Holdings of Equity
Securities
As at the Reporting Date, the number of holders in each
class of equity securities on issue in Gale Pacific is as
follows:
The fully paid issued capital of the Company consisted of
297,474,396 ordinary fully paid shares held by 1,498
shareholders. Each share entitles the holder to one vote.
8 holders have been granted 3,602,405 performance
rights over ordinary shares. Performance rights do not
carry a right to vote.
Voting Rights of Equity
Securities
The only class of equity securities on issue in the
Company which carry voting rights is ordinary shares.
As at the Reporting Date, there were 1,498 holders of a
total of 297,474,396 ordinary shares of the Company.
The voting rights attaching to the ordinary shares, set out
in Article 54 of the Company’s Articles of Association are:
“Subject to any rights or restrictions for the time being
attached to any class or classes of shares:
at meetings of members or classes of
members each member is entitled to vote in
person or by proxy or attorney; and
on a show of hands every person present who
is a member has one vote, and on a poll every
person present in person or by proxy or
attorney has one vote for each ordinary share
he holds.”
Distribution of Holders of Equity
Securities
Ordinary Fully Paid Shares
Range
Total
Holders
Units
% of Issued
Capital
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
114
285
218
664
217
28,903
875,693
1,758,463
25,301,981
0.01
0.29
0.59
8.51
269,509,356
90.60
Total
1,498
297,474,396
100.00
Range
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
Performance Rights
Total
Holders
Units
% of
Performance
Rights
0
0
0
0
0.00
0.00
0.00
0
3,602,405
3,602,405
100.00
100.00
0
0
0
0
8
8
Unmarketable Parcels
The number of holders of less than a marketable parcel of
ordinary shares as at the Reporting Date is as follows:
Unmarketable Parcels
as at 9 August 2016
Minimum
Parcel Size
Holders
Units
Minimum $500 parcel
at $0.38 per unit
1,316
127
43,758
Substantial Shareholders
As at the Reporting Date, the names of the substantial
holders of Gale Pacific and the number of equity
securities in which those substantial holders and their
associates have a relevant interest, as disclosed in
substantial holding notices given to Gale Pacific, are as
follows:
Shareholder
No.
%
THORNEY HOLDINGS PTY LTD
79,702,646
26.79%
WINDHAGER HOLDING AG
41,925,781
14.09%
JP MORGAN NOMINEES AUSTRALIA
LIMITED
20,196,966
6.79%
11 GALE PACIFIC LIMITED 2016 ANNUAL REPORT
GALE PACIFIC LIMITED 2016 ANNUAL REPORT 65
3,187,327
1.07
CONVERTIBLE NOTES
Securities Exchange. The home exchange is Melbourne.
Registers of securities are held by Computershare
Investor Services Pty Limited, Yarra Falls, 452 Johnston
Street, Abbotsford, Victoria, 3067, Australia, local call is
1300 850 505, international call is + 613 9415 4000.
Stock Exchange Listing
Gale Pacific’s ordinary shares are quoted on the
Australian Securities Exchange (ASX issuer code: GAP)
Voluntary Escrow
There are no securities on issue in Gale Pacific that are
subject to voluntary escrow.
Unquoted Equity Securities
The number of each class of unquoted equity securities
on issue, and the number of their holders, are as follows:
CLASS OF EQUITY
SECURITIES
NUMBER OF UNQUOTED
EQUITY SECURITIES
NUMBER OF HOLDERS
SHARES
OPTIONS
0
0
0
PERFORMANCE RIGHTS
4,424,210
0
0
0
8
There are no persons who hold 20% or more of equity
securities in each unquoted class other than under an
employee incentive scheme.
On Market Buyback
The Company is not currently conducting an on-market
buy-back.
Item 7 Issues of Securities
There are no issues of securities approved for the
purposes of item 7 of section 611 of the Corporations Act
which have not yet been completed.
Securities purchased on-
market
No securities were purchased on-market during the
reporting period under or for the purposes of an employee
incentive scheme or to satisfy the entitlements of the
holders of options or other rights to acquire securities
granted under an employee incentive scheme.
Twenty Largest Holders of
Quoted Equity Securities
The Company only has one class of quoted securities,
being ordinary shares. The names of the 20 largest
holders of ordinary shares, and the number of ordinary
shares and percentage of capital held by each holder is
as follows:
Shareholder
No.
%
HSBC CUSTODY NOMINEES
(AUSTRALIA) LIMITED
74,531,770
25.05
WINDHAGER HOLDING AG
41,925,781
14.09
J P MORGAN NOMINEES AUSTRALIA
LIMITED
20,195,966
6.79
GALE AUSTRALIA PTY LTD
UBS NOMINEES PTY LTD
13,997,844
7,718,384
GERNIS HOLDINGS PTY LIMITED
7,409,665
NATIONAL NOMINEES LIMITED
4,968,574
4.71
2.59
2.49
1.67
CONTEMPLATOR PTY LTD
MR GEOFFREY DUNCAN NASH
BNP PARIBAS NOMINEES PTY LTD
CITICORP NOMINEES PTY LIMITED
STITCHING PTY LTD
4,691,433
1.58
3,327,428
1.12
3,069,480
1.03
3,050,000
1.03
W DONNELLY SERVICES PTY LTD
2,602,485
0.87
CHILLEN PTY LIMITED (TALLEN)
2,431,317
0.82
BOND STREET CUSTODIANS
LIMITED
2,400,000
0.81
GALLIUM PTY LTD
2,279,359
0.77
HSBC CUSTODY NOMINEES
(AUSTRALIA) LIMITED - A/C 2
2,262,288
0.76
CITICORP NOMINEES PTY LIMITED
2,088,389
0.70
GFS SECURITIES PTY LTD
VENN MILNER SUPERANNUATION
PTY LTD
TOTAL: TOP 20 HOLDERS OF ORDINARY
FULLY PAID SHARES AS AT 9 AUGUST
2016
2,080,935
0.70
2,000,000
0.67
206,218,425
69.32
TOTAL: REMAINING HOLDERS BALANCE
91,255,971
30.68
Other Information
The name of the Company Secretary is Ms Sophie Karzis.
The address of the principal registered office in Australia,
and the principal administrative office is 145 Woodlands
Drive, Braeside, 3195, Victoria, Australia, telephone is
(03) 9518 3333. The Company is listed on the Australian
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