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2023 ReportPeers and competitors of GALE Pacific:
GALE Pacific2 0 2 2
A N N U A L
R E P O R T
A B O U T
G A L E PA C I F I C
GALE Pacific is an innovative, market-leading
manufacturer of technical fabrics used for
consumer and commercial applications
around the world.
2 0 2 2 H I G H L I G H T S
$205.5m
R E V E N U E
PCP: $205.2m
$22.9m
E B I T D A
PCP: $28.2m
$7.2m
N E T C A S H F L O W
from operating activities
PCP: $34.6m
2.76c
E A R N I N G S
P E R S H A R E
PCP: 4.48c
$13.0m
E B I T
PCP: $19.0m
$(5.5)m
2.0c#
N E T C A S H / ( D E B T )
PCP: $1.5m
T O TA L D I V I D E N D
PCP: 4.0c^ unfranked
# Interim dividend franked
at 50% and final dividend
franked at 75%
^
Includes 2.0 cent per
share special dividend,
unfranked
Revenue $m
Profit before tax $m
2019
2020
2021
2022
$149.2m
$156.3m
$205.2m
$205.5m
$4.8m
2019
2020
2021
2022
$11.2m
$11.0m
$17.2m
Operating Cash Flow $m
Net Cash/(Debt) $m
$15.3m
2019
2020
2021
2022
$7.2m
$7.2m
$34.6m
2019
2020
2021
2022
($10.9m)
($15.3m)
$1.5m
($5.5m)
* All figures compare FY22 to FY21 unless otherwise indicated
1
2.76c
E A R N I N G S
P E R S H A R E
PCP: 4.48c
G L O B A L
R E A C H
with operations
in Australia,
New Zealand, USA,
China, and Dubai
6 0 0 +
S TA F F
G R O W T H
F O C U S E D
employed around the world
working out of our 4 offices,
4 manufacturing sites and
8 warehouses
through innovation,
category expansion,
expanded distribution,
and efficiency
C O N S U M E R
P R O D U C T S
C O M M E R C I A L
P R O D U C T S
includes outdoor roller shades, shade
sails, shade and garden fabrics, shade
structures and pet products sold
through major retailers globally
includes knitted, coated, and advanced
polymer fabrics for agricultural,
architectural, construction, mining,
and packaging
C O N T E N T S
1 2022 highlights
2 Chairman’s letter
4 FY22 overview
16 Directors’ report
27 Auditor’s independence declaration
28 Independent auditor’s report
8 Business overview
32 Directors’ declaration
10 Our Growth Acceleration Plan
33 Financial report
12 Board of directors
72 Additional Securities Exchange information
13 Executive leadership
76 Corporate directory
2022 ANNUAL REPORT | GALE PACIFIC | 2
C H A I R M A N ’ S
L E T T E R
“Our core markets, Australia and
the Americas, produced significant
second half revenue and profit growth
compared to prior year.”
David Allman
The 2022 financial year presented considerable
difficulties and operating complexities in the form
of supply chain disruptions, significant input cost
increases, changed trading patterns following
increased COVID-induced demand during FY21, and
operating restrictions at our plant in China. These
factors particularly impacted the first half of the year.
I am pleased to report that despite all these
difficulties our management team managed to
maintain a high level of customer service throughout
the year and also managed to achieve operating
efficiencies and improvements.
During the first half, we successfully introduced
price increases which, together with operating
efficiencies, offset a proportion of the cost increases
and led to much improved financial outcomes in the
second half. Pleasingly, second half sales volumes
held up well despite higher consumer prices, with
new products and placements adding to growth.
As a result, both of our core markets,
Australia and the Americas, produced
significant second half revenue and
profit growth compared to prior year.
of $11.0 million was 36% below prior year but more
than double FY20. Earnings per share of 2.8 cents
enabled dividends totalling 2 cents per share. Net
cash generation of $7.2 million was impacted by
the requirement to fund higher cost inventories
and increased debtors which resulted from higher
second half revenue, while net debt of $5.5 million
at 30 June represented conservative gearing and a
strong balance sheet.
Despite the difficult trading and operating conditions
experienced during the first half of the year, we
continued with our strategies aimed at building
GALE into a much larger, fast growing global fabrics
technology business.
Our most significant growth opportunity is to
expand our presence in the large Americas market,
and during FY21 we centralised a number of key
management positions in the USA, where our
managing director, John Paul Marcantonio, has been
based since his appointment to the role in November
2019. The management team has been further
enhanced and streamlined globally and the new
structure is working extremely well. Over the last two
years, we have also invested in resources for the long
term in other areas, particularly in sales, marketing
and product development, and we have some very
exciting products in our development pipeline.
For the full year, revenue of $205.5 million was in
line with FY21, but 31% above FY20. Profit before tax
While these investments have resulted in
considerable short-term increases in expenses,
2022 ANNUAL REPORT | GALE PACIFIC | 3
we are confident they will enable us to achieve
our growth objectives. We now have a first-class,
well-structured management team and we
do not see the need to add further significant
management resources.
The management team and all our employees
have successfully dealt with numerous challenges
over the past two, quite extraordinary, years while
prioritising health and safety. I would like to thank all
of them for their commitment during this period.
The second half results give us great confidence
that our growth objectives are realistic and that we
have the management team and strategies in place
to achieve them. This has been confirmed through
our engagement with our advisors Luminis Partners.
We are planning for and anticipating revenue and profit
growth in FY23, driven mainly by the Americas region
during its peak selling season in our second half.
David Allman
Chairman
$11.0m
P R O F I T
B E F O R E TA X
PCP: $17.2m
2.0c
D I V I D E N D
PCP: 4.0c
2022 ANNUAL REPORT | GALE PACIFIC | 4
G A L E PA C I F I C
F Y 2 2 O V E R V I E W
“We are energised by the momentum with
which we finished the year, delivering
double-digit increases in second-half
revenue, earnings and profit.”
John Paul Marcantonio
C H I E F E X E C U T I V E O F F I C E R &
M A N A G I N G D I R E C T O R ’ S R E V I E W
The 2022 financial year was a tale of two separate
halves in the face of continued, full-year macro
complexity across our global supply chain and input
cost inflation across our global operations.
After a challenging first half, we are energised by
the momentum with which we finished the year,
delivering double-digit year-on-year increases in
second-half revenue, earnings and profit.
This result marks the third consecutive year of
record second-half revenue and profit for the
Company, driven by robust business performance in
Australia and the United States, our anchor markets,
and a return to growth in the Middle East & North
Africa region.
We are encouraged by our ability to manage the
headwinds we have faced across international
shipping, logistics, input cost inflation, operating
restrictions in China and overall market volatility
throughout this reporting period and prior years.
Our results provide further evidence that our growth
and operating strategies are working well and that
our business and team are highly resilient in the
face of continued challenging and complex global
operating conditions.
Our pricing measures throughout the year offset a
meaningful portion of the significant increase in input
costs, with further benefits to be realised in FY23.
We have additional price increases in place
entering FY23 across all selling regions, and we
are encouraged by some early signs of stabilisation
across input cost categories.
Most importantly, we continued to invest in and
accelerate our work to achieve our primary
strategy and objective of building GALE Pacific
into a fast-growing, world-class, global fabrics
technology business.
We are a stronger company exiting FY22 with a
newly reorganised, talented, experienced executive
leadership team collaboratively and efficiently
driving our growth strategy into action.
We have continued investing in people and
capabilities to grow GALE Pacific well into the future,
with a particular focus on sales, marketing and
2022 ANNUAL REPORT | GALE PACIFIC | 5
$7.2m
N E T C A S H F L O W
from operating activities
PCP: $34.6m
2022 ANNUAL REPORT | GALE PACIFIC | 6
G A L E PA C I F I C
F Y 2 2 O V E R V I E W ( c o n t i n u e d )
operational talent in the United States, given its scale
and long-term growth potential for the Company.
The GALE Pacific Growth Acceleration Plan builds
on our growth strategy. It outlines how we will grow
the Company over the coming years by focusing
our efforts, investments and teams on expanding
our categories, markets, supply chain, capabilities
and people.
In line with our growth framework, we have
recently announced a significant investment
to upgrade our ERP systems across markets to
cloud-based Microsoft Dynamics 365. These
system improvements will significantly enhance
cybersecurity while enabling our team to scale the
company efficiently to achieve our growth plans.
We added new consumer insights, concept
development and testing capabilities to the
Company in FY22. These have improved the
quality and scale of our innovation and new product
funnel, with the team preparing to launch in FY23
the Company’s most significant new-to-world
fabric innovation for the consumer and commercial
end-markets in many years.
We are confident that our brands and products have
significant growth potential outside Australia and the
United States. We now have the supply chain and
operational capabilities to service this core element
of our growth strategy. We will invest in growing
these new and developing markets for GALE Pacific
in FY23.
Our supply chain and operations teams are now
aligned and integrated, forming ONE Global GALE
Supply Chain team. Our planning, procurement,
manufacturing, delivery, distribution and service
teams are responsible for improving our operations
by increasing efficiency, capacity utilisation
and flexibility while delivering productivity and
attacking the trapped cost of failure across our
global business.
The key differentiator for our organisation over
the coming years is also our most important
responsibility as leaders, which is to grow our
people. With our Attract, Engage, Develop
organisational development model, we’ll build
and mobilise our team to deliver our growth
plans while concurrently building our functional
leadership capabilities.
Our goal is to build and empower the team to double
our business by becoming an employer of choice for
top talent to grow their careers. The results of our
annual employee engagement survey show that we
have made breakthrough progress toward this goal
over the last year.
I would like to conclude by first thanking our
entire GALE Pacific team for their hard work
and commitment to improving the Company’s
operations and service while concurrently
delivering record results in a highly challenging
operating environment.
In addition, I would like to thank my fellow directors
for their collaboration, support, counsel and
continued belief in our team and our plan to build a
larger, stronger GALE Pacific well into the future.
Finally, thank you, our shareholders, for your
continued support.
The opportunities in front of us energise us.
We are just getting started.
John Paul Marcantonio
Chief Executive Officer & Managing Director
2022 ANNUAL REPORT | GALE PACIFIC | G R O W T H A C C E L E R AT I O N P L A N
V A L UES
Integrity | Respect | Collaboration
People | Community
Innovation
S
E
I
R
O
G
E
T
A
Consumer and
commercial
technical fabrics
and associated
finished
goods
V I S I O N
Build GALE Pacific into
a fast-growing, world-class,
global fabrics technology
business
Americas
Australia and
New Zealand
Developing
Markets
M
A
R
K
E
T
S
C
A high-performance culture of great leaders
and functional experts known for
best-in-class results
T E A M
G R O W O U R
C AT E G O R I E S
■ DEVELOP AND LAUNCH breakthrough innovation in our core categories
■ ACCELERATE new & near neighbour category entry
■ ACCELERATE penetration via leadership brand activation and communication
W
O
R
G
E
W
W
O
H
G R O W O U R
M A R K E T S
■ DRIVE CATEGORY GROWTH in retail & commercial in Australia & the United States
■ RAPIDLY EXPAND distribution & availability in the United States
■ EXTEND OUR BORDERS into Latin America,Southeast Asia,Canada, Middle East & Europe
G R O W
O U R S U P P LY
C H A I N
■ LEVERAGE ONE Global GALE Supply Chain | Plan, Procure, Manufacture, Deliver,
Distribute & Serve
■ ENHANCE utilisation, efficiency & flexibility across our global supply chain and operations
■ EXPAND productivity delivery & ATTACK trapped cost of failure
G R O W O U R
C A PA B I L I T I E S
■ SIMPLIFY OUR BUSINESS and ways of working for improved clarity, efficiency & execution
■ BUILD & IMPLEMENT the right global IT strategy, tools & team to enable our growth plans
■ DEEPEN OUR INSIGHTS & INNOVATION capabilities to accelerate our growth strategy
G R O W O U R
P E O P L E
■ DEVELOP our functional leadership capabilities throughout the organisation
■ EMBED our Attract, Engage, Develop organisational development model
■ BUILD & EMPOWER the team to DOUBLE by becoming an employer of choice
for TOP TALENT to GROW their CAREERS
D E L I V E R E D W I T H E D G E: E very Day Great Execution
7
18
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F
I
C
A
P
E
L
A
G
|
S
T
L
U
S
E
R
2
2
Y
F
2022 ANNUAL REPORT | GALE PACIFIC |
B U S I N E S S O V E R V I E W
8
Gale Pacific is a fast-growing, world-class global
fabrics technology business.
We are a market leading manufacturer and innovator of technical fabrics used
for consumer and commercial applications around the world. Our products
are used in various industries, such as architectural, agricultural, mining,
construction and home improvement.
Americas
Second-half revenue of $62.7 million and EBITDA
of $13.3 million were records for GALE in the
Americas region for the third consecutive year.
Australia & New Zealand
Delivered a robust second half despite weather
and supply chain challenges. Primary drivers
were increased demand for fabrics used in
grain handling and water containment and for
non-woven coated products used in food handling.
Middle East & North Africa
Improving business conditions, increased
infrastructure project investment, new products,
price increases and GALE’s tightened credit policy
improved overall and long-dated debtors drove
revenue and EBITDA growth in the second half.
Eurasia
Revenue and EBITDA were lower compared to
corresponding prior periods, driven primarily by
demand normalisation across both commercial and
consumer end-markets and despite price increases
across the market.
2022 ANNUAL REPORT | GALE PACIFIC | “We are confident that our brands and products have
significant growth potential outside Australia and the
United States. ”
John Paul Marcantonio
9
M A P L E G E N D :
Head office
Sales office
Warehouse
Manufacturing
Los Angeles, USA
Dubai, UAE
Ningbo, China
Orlando, USA
2 0 2 2
R E V E N U E
by region
Perth, Australia
Brisbane, Australia
Melbourne, Australia
Auckland, New Zealand
2 0 2 2
E B I T D A
by region
● Australia & New Zealand
● Americas
● Middle East & North Africa
● Eurasia
Revenue
$m
EBITDA
$m
93.7
95.6
8.5
7.6
11.5
13.0
1.5
2.5
2022 ANNUAL REPORT | GALE PACIFIC |
10
O U R G R O W T H
A C C E L E R AT I O N P L A N
The Growth Acceleration Plan framework to grow the
Company in the United States and Australia and build its
business across new and developing markets.
V A L UES
Integrity | Respect | Collaboration
People | Community
Innovation
S
E
I
R
O
G
E
T
A
Consumer and
commercial
technical fabrics
and associated
finished
goods
V I S I O N
Build GALE Pacific into
a fast-growing, world-class,
global fabrics technology
business
Americas
Australia and
New Zealand
Developing
Markets
M
A
R
K
E
T
S
C
A high-performance culture of great leaders
and functional experts known for
best-in-class results
T E A M
2022 ANNUAL REPORT | GALE PACIFIC |
11
W
O
R
G
E
W
W
O
H
G R O W O U R
C AT E G O R I E S
■ DEVELOP AND LAUNCH breakthrough innovation in
our core categories
■ ACCELERATE new & near neighbour category entry
■ ACCELERATE penetration via leadership brand
activation and communication
G R O W O U R
M A R K E T S
■ DRIVE CATEGORY GROWTH in retail & commercial
in Australia & the United States
■ RAPIDLY EXPAND distribution & availability in the
United States
■ EXTEND OUR BORDERS into Latin America &
Southeast Asia; expand Canada, Middle East
& Europe
G R O W O U R
S U P P LY C H A I N
■ LEVERAGE ONE Global GALE Supply Chain | Plan,
Procure, Manufacture, Deliver, Distribute & Serve
■ ENHANCE utilisation, efficiency & flexibility across our
global supply chain and operations
■ EXPAND productivity delivery & ATTACK trapped cost
of failure
G R O W O U R
C A PA B I LT I T E S
■ SIMPLIFY OUR BUSINESS and ways of working for
improved clarity, efficiency & execution
■ BUILD & IMPLEMENT the right global IT strategy,
tools & team to enable our growth plans
■ DEEPEN OUR INSIGHTS & INNOVATION
capabilities to accelerate our growth strategy
G R O W O U R
P E O P L E
■ DEVELOP our functional leadership capabilities
throughout the organisation
■ EMBED our Attract, Engage, Develop organisational
development model
■ BUILD & EMPOWER the team to
DOUBLE by becoming an employer of choice
for TOP TALENT to GROW their CAREERS
D E L I V E R E D W I T H E D G E :
Every Day Great Execution
2022 ANNUAL REPORT | GALE PACIFIC |
B O A R D O F D I R E C T O R S
12
DAVID ALLMAN,
B.SC.
CHAIRMAN AND NON-
EXECUTIVE DIRECTOR
SINCE NOVEMBER 2009
David was Managing Director
of McPherson’s Limited
from 1995 to 2009 and prior to that was Managing
Director of Cascade Group Limited for seven years.
Before this David held senior positions with Elders
IXL Limited and Castlemaine Tooheys Limited. David
holds a degree in engineering and prior to obtaining
general management positions held managerial
roles in production management, finance and
marketing. During the last three years David has
been Chairman of Catalyst Education Pty Ltd and
Chairman of Direct Couriers Group Pty Ltd.
David is the Chairman of the Company’s Nomination
Committee and is a member of the Remuneration
and Audit and Risk Committees.
PETER LANDOS,
B.ECON., CA
NON-EXECUTIVE
DIRECTOR SINCE
MAY 2014
Peter is the Chief Operating
Officer of the Thorney
Investment Group of Companies which he joined in
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,
business restructurings and capital markets.
Peter is a non-executive director of Adacel
Technologies Limited, Chairman of PRT Company
Limited (formerly Prime Media Group Limited) and
a non-executive director of various entities within
the Australian Community Media Group including
20 Cashews Pty Ltd and Rural Press Pty Ltd.
Peter is the Chairman of the Audit and Risk
Committee and is a member of the Company’s
Nomination Committee.
DONNA
MCMASTER, GAICD
NON-EXECUTIVE
DIRECTOR SINCE
MARCH 2018
Donna has extensive
experience in senior executive
and strategic roles within public and private retail
companies, with a proven track record in retail,
brand and product development, marketing
and communications.
Donna serves on multiple Boards and is currently
Board Chair & Non-Executive Director of Dandenong
Market Pty Ltd, Deputy Chair & Non-Executive
Director of YMCA Service Pty Ltd where she is
also Chair of the HR & Governance Committee,
Non-Executive Director with Leading Edge Retail
where she is also Chair of the Remuneration
Committee and Non-Executive Director of Leading
Edge, New Zealand.
Donna is a member of the Company’s Nomination
and Remuneration Committees.
TOM STIANOS,
B.APP.SC., FAICD
NON-EXECUTIVE
DIRECTOR SINCE
OCTOBER 2017
Tom has extensive experience
as a non-executive director
of listed companies including many years as
Managing Director. Tom is currently Chairman of
Xref Limited (ASX:XF1), and Chairman of Escient.
Tom was previously chairman of Empired Limited
(ASX:EPD) a non-executive director of Inabox Group
(ASX:IAB), CEO of SMS Management & Technology
(ASX:SMX), and Director of the Australian Information
Industry Association.
Tom is the Chairman of the Remuneration Committee
and is a member of the Company’s Nomination and
Audit and Risk Committees.
2022 ANNUAL REPORT | GALE PACIFIC | E X E C U T I V E L E A D E R S H I P
13
JOHN PAUL
MARCANTONIO
CEO & MANAGING
DIRECTOR
John Paul joined GALE Pacific
in October 2017 as the
General Manager of the
Americas business. He was appointed Chief
Executive Officer in November 2019 and then
Managing Director in August 2020. John Paul has
broad experience working globally across consumer
and commercial product sectors. Before joining
GALE Pacific, John Paul built his career at Newell
Brands in roles of increasing responsibility and
scope in marketing, sales, and management over
fifteen years. He has held multiple global product
and brand marketing leadership positions over his
tenure. John Paul lived and worked in Melbourne,
Australia, as the Marketing Director of Newell
Brands’ APAC hardware business.
MATT RUSSELL
CHIEF HUMAN
RESOURCES OFFICER
Matt joined GALE Pacific in
January 2021 as the Chief
Human Resources Officer
and leader of the Global
Health & Safety Environmental function for GALE
Pacific. Matt has extensive experience leading the
Human Resources function for public and private
equity-backed global businesses in consumer and
commercial durable goods. Before joining GALE
Pacific, Matt was the global Human Resources leader
for several business units of Newell Brands, most
recently the Rubbermaid & Rubbermaid Commercial
Business Unit. During his tenure with Newell
Brands, Matt lived in Hong Kong, serving as the Vice
President, Human Resources for the Asia Pacific
region. Matt spent 15 years with Newell Brands in
Human Resources roles of increasing responsibility
and scope.
SHERYL SMITH
CHIEF FINANCIAL
OFFICER
Sheryl joined GALE Pacific
in January 2022 and has
extensive experience working
in various finance leadership
positions for global manufacturing companies.
Before joining GALE Pacific, Sheryl held roles of
increasing worldwide responsibility and scope in
finance at Polypore International, including the
previous four years as the company’s CFO, GETRAG
Corporation, PPG, and Morgan Stanley. Sheryl holds
an International Master of Business Administration
from the University of South Carolina and a Master
of International Business from the Escuela de
Administracion de Empresas in Barcelona, Spain.
ADAM BOCCELLI
GLOBAL VICE
PRESIDENT | SUPPLY
CHAIN
Adam joined GALE Pacific
in August 2020 as the
Vice President, Americas
Operations for GALE Pacific. He assumed
responsibility for GALE’s global supply chain
functions, including the company’s manufacturing
operations in Ningbo, China, in August of 2021.
Adam has extensive experience leading global
supply chain functions, including planning, sourcing,
manufacturing, and logistics of international
businesses in the consumer, high tech, and medical
diagnostics industries. Before joining GALE Pacific,
Adam held several roles as a global operations
leader for IDEXX Laboratories with positions of
increasing responsibility and scope. Before IDEXX,
Adam held roles with 3rd Party Logistics providers
and publicly held consumer goods companies. Adam
is also a United States Marine Corp veteran.
2022 ANNUAL REPORT | GALE PACIFIC | E X E C U T I V E L E A D E R S H I P
14
NATHAN
BIRCKHEAD
GLOBAL VICE
PRESIDENT | IT
Nathan joined GALE Pacific
in June 2021 and has
extensive experience in the
Information Technology function, having held various
leadership positions during his career. Before joining
GALE Pacific, Nathan was the Director of Information
Technology for Omni-Parts Automotive, a wholly
owned affiliate of Nissan Motor Company. Nathan
developed, implemented, and led all aspects of
the IT function, strategy, team, and infrastructure
for Omni’s automotive parts aftermarket business
venture. Before joining Omni, Nathan spent ten
years with Nissan in various IT roles of increasing
responsibility and leadership.
TROY MORTLEMAN
GENERAL MANAGER |
AUSTRALIA &
NEW ZEALAND &
DEVELOPING MARKETS
Troy joined GALE Pacific
in January 2020. Over the
last 14 years, he has built an impressive career at
previously NZX listed Methven Ltd (MVN) as the
Chief Operating Officer of Methven Australia. Troy
held various senior roles of increasing responsibility
in sales and general management and has
experience across both retail & commercial channels
of distribution for both consumer & commercial
durables categories. Troy has a proven track record
of concurrently building growing businesses while
developing and leading high-functioning teams.
Troy holds a Master of Business Administration from
Deakin University and is a Graduate Member of the
Australian Institute of Company Directors.
KEVIN HARSHAW
VICE PRESIDENT &
GENERAL MANAGER
| AMERICAS &
INNOVATION
Kevin Harshaw joined
GALE Pacific in August 2021
as the company’s Vice President of Global Marketing
& Innovation. In January 2022, Kevin assumed
additional responsibility as the General Manager
of the Americas region. Before joining GALE
Pacific, Kevin Harshaw built an international career
with leadership positions at Procter & Gamble,
Reckitt, Kimberly-Clark, and private equity-backed
companies. Kevin has lived and worked in the
United States, Canada, Switzerland, and Thailand,
leading local, regional, and global organisations
across Health/OTC, Fabric Care, Personal Care,
and Outdoor categories. Kevin has a track record
of concurrently developing and launching global
innovations that meet consumers’ needs and
energizing teams to overdeliver results.
2022 ANNUAL REPORT | GALE PACIFIC | C O R P O R AT E G O V E R N A N C E
15
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 complies with the ASX Corporate
Governance Principles and Recommendations (Fourth
Edition) (Recommendations).
The Company has prepared a statement which sets
out the corporate governance practices that were in
operation throughout the financial year for the Company
(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 (https://www.
galepacific.com/investor-info/corporate-governance)
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 (https://www.galepacific.com/investor-info/
corporategovernance).
2022 ANNUAL REPORT | GALE PACIFIC | 16
The directors present their report, together with the
consolidated financial statements, of Gale Pacific
Limited (referred to hereafter as the ‘Company’ or
‘Parent entity’) and its controlled entities (together the
‘Group’) for the year ended 30 June 2022 and the
independent Auditor’s report thereon.
Changes in state of affairs
Throughout the COVID-19 global pandemic, the
Group has prioritised the health and safety of its team,
allowing remote work for those able to perform their
job responsibilities in a remote work environment and
ensuring the health, safety, and hygiene protocols
across all global locations. The Group continues to
operate in line with jurisdictional requirements and
best available practices across its operating entities.
The Group’s global supply chain proved resilient,
effectively managing through delays and cost inflation
and disruption across international and local logistics
with a focus on ensuring customer service through
increased inventory holdings, particularly in the United
States and Australia. The Group efficiently managed
the challenges imposed by mandated production
interruptions to its Ningbo, China, manufacturing
facility due to electricity restrictions and COVID-19
lockdown protocols in both Ningbo and Shanghai
throughout the year. As presented in the executive
leadership section of the annual report, the Group’s
restructured executive leadership team brings improved
capabilities in human resources, finance, marketing,
innovation, information technology, and global supply
chain management and aligns clearly with the Group’s
growth acceleration strategy. Additionally, the Group
identified and commenced the work on the Charlotte,
NC office location, US-based members of the executive
leadership team will relocate to the Charlotte area to
leverage the key geographic region as it relates to key
customers and the textile industry.
Principal activities
During the financial year, the principal continuing
activities of the Group consisted of marketing, sales,
manufacture and distribution of branded screening,
architectural shading, commercial agricultural
/ horticultural fabric products to domestic and
global markets.
Review of operations
The profit for the Group after providing for income
tax amounted to $7,617,000 (30 June 2021: profit
of $12,327,000).
Events subsequent to balance date
Apart from the dividend declared, no other matter or
circumstance has arisen since 30 June 2022 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.
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.
GALE assesses its exposure to climate risks and
incorporates such assessments into its annual
strategic planning process. The identified risks and
possible impacts associated with the climate risks are
appropriately considered and integrated into the various
levels of planning and decision-making that drive the
company’s go-forward strategy.
Dividends
Dividends paid to members during the financial year
were as follows:
Final Dividend for the year ended
30 June 2021 (paid 15 October 2021)
2022
2.00 cents
Interim Dividend for the 6 months ended
31 Dec 2021 (paid 14 April 2022)
1.00 cent
In addition to the above dividends, on the 23 August
2022 the Directors declared a dividend of 1.00 cent
per share to the holders of fully paid ordinary shares in
respect of the year ended 30 June 2022, payable on
14 October 2022 to shareholders on the register at 30
August 2022. The final dividend will be franked at 75%.
DIRECTORS’ REPORTfor the year ended 30 June 20222022 ANNUAL REPORT | GALE PACIFIC | 17
This dividend has not been included as a liability in these financial statements. The total estimated dividend to be
paid is $2,800,000.
For the full year, dividends of 2.00 cents per share have been declared on earnings of 2.76 cents per share.
Share based payments
Performance rights
The number of performance rights on issue at the date of this report is 18,980,338 (2021: 17,907,971). 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.
In the current financial year, a total of 3,074,000 performance rights (December 2021, 2,870,000 performance rights
and April 2022, 204,000 performance rights) were granted to executive officers (excluding the CEO & MD) and
senior managers under the Company’s Performance Rights Plan scheme for a three year period to 30 June 2024.
2,451,000 performance rights that were issued to executive officers and senior managers is subject to meeting the
two vesting conditions (performance hurdle and time hurdle) as outlined below.
623,000 performance rights were issued to executive officers and senior managers is subject only to the vesting
condition related to time hurdle as outlined below.
Vesting conditions
Performance hurdle – The compound annual growth rate (CAGR) of the diluted earnings per share over the relevant
performance period should be greater than 3%. The vesting % will be prorated between 0% and 100% for CAGR less
than 3% and 10% or above respectively.
Time hurdle – Continuous employment from the grant date to 30 September 2024.
During the financial year, a total of 1,001,732 performance rights vested and 999,901 performance rights forfeited.
The vesting and forfeiting of those performance rights was subject to a continuation of employment for three years
and the satisfactory achievement of performance hurdles based on improvements in the Group’s diluted earnings
per share over the three year period between 1 July 2018 and 30 June 2021.
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
D McMaster
T Stianos
J P Marcantonio
Fully Paid
Ordinary
Shares
4,500,000
–
50,000
600,000
285,882
Options
Performance
Rights
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
14,000,0001
1 In accordance with the early achievement criteria of the three-year incentive scheme in place for the CEO & Managing Director,
TSR hurdles up to 30 June 2022 have been satisfied and accordingly 7,621,600 performance rights will convert to ordinary
fully paid shares subject to all of the other requirements under the incentive scheme being met.
2022 ANNUAL REPORT | GALE PACIFIC | 18
Directors’ meetings
The table below sets out the attendance by Directors.
Board of 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
10
10
10
10
10
10
10
10
10
10
5
5
–
5
–
5
5
–
5
–
1
–
1
1
–
1
–
1
1
–
–
–
–
–
–
–
–
–
–
–
Directors
D Allman
P Landos
D McMaster
T Stianos
JP Marcantonio
As at the date of this report, the Company has an Audit
& Risk Committee, a Remuneration Committee and a
Nomination Committee of the Board of Directors.
As at the date of this report the members of the Audit
& Risk Committee are Peter Landos, Tom Stianos
and David Allman. The Chairman of the Audit & Risk
Committee is Peter Landos.
As at the date of this report the members of the
Remuneration Committee are Tom Stianos, David
Allman and Donna McMaster. The current Chairman of
the Remuneration Committee is Tom Stianos.
As at the date of this report the members of the
Nomination Committee are David Allman, Peter Landos,
Donna McMaster, and Tom Stianos. 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
DIRECTORS’ REPORT (continued)for the year ended 30 June 20222022 ANNUAL REPORT | GALE PACIFIC | 19
Relationship between the remuneration policy and Company performance
The table below set out summary information about the Group’s earnings and movements in shareholder wealth for
the five years to 30 June 2022:
Sales (‘000s)
Net profit before tax (‘000s)
Net profit after tax (‘000s)
Share price at start of year
Share price at end of year
Interim dividend
Final dividend
Basic earnings per share
Diluted earnings per share
30 June
2022
30 June
2021
30 June
2020
30 June
2019
30 June
2018
205,543
205,223
156,338
149,217
10,952
7,617
17,220
12,327
4,757
3,719
11,208
9,198
148,811
12,484
9,807
41.0 cents
16.0 cents
32.0 cents
35.5 cents
40.0 cents
29.0 cents
41.0 cents
16.0 cents
32.0 cents
35.5 cents
1.00 cent
2.00 cents
0.0 cent
1.00 cent
1.00 cent
1.00 cent
2.00 cents
1.00 cent
1.00 cent
1.00 cent
2.76 cents
4.48 cents
1.34 cents
3.21 cents
3.35 cents
2.59 cents
4.21 cents
1.32 cents
3.16 cents
3.29 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
accrued to date of retirement. Payment of bonuses, and
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 the Committee deems relevant.
Non Executive Directors receive a fee for being
Directors of the Company and do not participate in
performance based remuneration.
Remuneration Practices
In accordance with best practice corporate governance,
the structure of Non Executive Directors and Senior
Managers remuneration is separate and distinct.
Non-executive directors remuneration
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.
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 25 October 2019 when
shareholders approved the Company’s constitution
which provides for an aggregate remuneration of
$600,000 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
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
2022 ANNUAL REPORT | GALE PACIFIC | 20
■ Ensure that total remuneration is competitive by
market standards.
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 executive remuneration packages contain the
following key elements:
■ Primary benefits – salary/fees;
■ 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 is 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.
■ Share based payments, if the performance criteria
and any Board discretion are satisfied, entitle an
executive or senior manager to be issued shares in
the Company at no cost to them. Shares are issued
subsequently after the time all performance rights
vesting conditions are met.
The combination of these comprises the senior
manager and executive ‘s total remuneration.
Share-based payments
The Group maintains a performance rights scheme
for certain staff and executives, including the Group
Managing Director and Chief Executive Officer, as
approved by shareholders at an annual general
meeting. These schemes are designed to reward key
personnel when the Group meets performance hurdles
increasing the diluted earnings per share and relate to:
■ Improvement in earnings per share; and
■ Improvement in return to shareholders.
The number of performance rights on issue as at
30 June 2022 was 18,980,338. 559,338 of these
performance rights were granted on 16 January 2020
and will not vest until the time of the Company’s 2022
annual report is released on the ASX (on or around
1 October 2022). 1,347,000 of these performance rights
were granted on 30 October 2020 and 14,000,000
of these performance rights were granted on
23 December 2020 and both will not vest until the time
of the Company’s 2023 annual report is released on
the ASX (on or around 1 October 2023). 3,074,000 of
these performance rights were granted in this financial
year and will not vest until the time of the Company’s
2024 annual report is release on the ASX (on or
around 1 October 2024). Each performance right has
$nil exercise price and 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.
Key management personnel of
the group who held office during
the year
Non-executive directors
D Allman (Chairman Non Executive)
P Landos (Non Executive)
D McMaster (Non Executive)
T Stianos (Non Executive)
Executive officers
J P Marcantonio (CEO and Managing Director)
M Russell (Global Chief Human Resources Officer) –
appointed 10 August 2021 (previously Chief Human
Resources Officer)
A Boccelli (Global Vice President, Supply Chain) –
appointed 10 August 2021 (previously Vice President
Operations – Americas)
K Harshaw (Vice President/General Manager of the
Americas) – appointed 1 January 2022 (previously Head
of Global Marketing and Innovation)
T Mortleman (General Manager – ANZ / Vice President
Developing Markets) – appointed 23 February 2022)
DIRECTORS’ REPORT (continued)for the year ended 30 June 20222022 ANNUAL REPORT | GALE PACIFIC | 21
S Smith (Chief Financial Officer) – appointed 31 January 2022
M Nicholls (General Manager – EurAsia) – effective 23 February 2022, the role is not considered as
Key Management
A Haidar (General Manager – Middle East & North Africa) – effective 23 February 2022, the role is not considered as
Key Management
D Romanelli (Chief Financial Officer) – resigned 30 September 2021
C Zhang (General Manager – China Manufacturing) – resigned 30 September 2021
Except as noted, the named persons held their current position for the whole of the financial year and since the end
of the financial year.
Remuneration of key management personnel:
Short Term Benefits
Salary &
Fees
$
Bonus
$
Other7
$
Non
Mone-
tary
$
Post
employ-
ment
Share
Based
Pay-
ments
Super
$
Rights
$
Term-
ination
Ben-
efits
$
Performance
Related
Total
$
Total
%
Rights
%
2022
Non-Executive Directors
D Allman
P Landos*
T Stianos
D McMaster
Executive Officers
117,756
95,388
87,123
77,169
–
–
–
–
–
–
–
–
– 19,752
–
–
–
7,375
8,712
7,717
–
–
–
–
– 137,508
– 102,763
– 95,836
– 84,886
J P Marcantonio
636,206
– 480,106
14,535
19,424 882,806
– 2,033,077
S Smith1
M Russell2
A Boccelli3
153,676
41,061
343,388
91,751
–
–
113
6,915
5,959
19,759
16,415
41,757
303,114
81,556
53,734
17,347
19,015
18,980
K Harshaw4
192,891
78,494 106,297
10,787
10,678 22,630
T Mortleman
306,213 95,083
M Nicholls5
A Haidar5
D Romanelli6
C Zhang6
145,136
10,123
179,581 22,226
80,325
55,596
–
–
–
–
–
–
–
– 23,568 56,407
11,699
47,694
–
63,351
–
–
–
–
8,033
– 124,880 213,238
–
–
47,054 102,650
– 207,725
– 513,069
– 493,746
– 421,775
– 481,270
– 214,651
– 265,158
–
–
–
–
43%
23%
26%
20%
24%
31%
27%
32%
0%
0%
–
–
–
–
43%
3%
8%
4%
5%
12%
22%
24%
0%
0%
1 S Smith (Chief Financial Officer) – appointed 31 January 2022
2 M Russell (Global Chief Human Resources Officer) – appointed 10 August 2021 (previously Chief Human Resources Officer)
3 A Boccelli (Global Vice President, Supply Chain) – appointed 10 August 2021 (previously Vice President
Operations – Americas)
4 K Harshaw (Vice President/General Manager of the Americas) – appointed 1 January 2022 (previously Head of Global
Marketing and Innovation)
5 Effective 23 February 2022, the role is not considered as Key Management
6 Resigned 30 September 2021
7 Relocation benefits paid
* The Director’s fees payable to P Landos are paid directly to Thorney Investment Group
2022 ANNUAL REPORT | GALE PACIFIC | 22
Short Term Benefits
Salary &
Fees
$
Bonus
$
Other
$
Non
Mone-
tary
$
Post
employ-
ment
Share
Based
Pay-
ments
Super
$
Rights
$
Term-
ination
Ben-
efits
$
Performance
Related
Total
$
Total
%
Rights
%
2021
Non-Executive Directors
D Allman
P Landos*
T Stianos
D McMaster
117,756
95,388
87,123
77,169
Executive Officers
J P Marcantonio
599,910
–
–
–
–
–
T Mortleman
279,125 121,857
M Nicholls
A Haidar
206,922
73,124
255,025 33,624
D Romanelli
319,725 186,730
C Zhang
209,173
42,851
– 19,752
–
–
–
7,375
8,277
7,331
–
–
–
–
– 137,508
– 102,763
– 95,400
– 84,500
–
–
–
–
–
–
17,566
20,137 991,830
– 1,629,444
–
–
–
26,517
14,489
16,934 75,429
– 107,016
– 30,374 66,525
9,457
–
77,301
– 441,988
– 372,409
– 395,665
– 603,353
– 338,781
–
–
–
–
61%
31%
40%
36%
42%
35%
–
–
–
–
61%
3%
20%
27%
11%
23%
* The Director’s fees payable to P Landos are paid directly to Thorney Investment Group
Key management personnel equity holdings:
Fully paid ordinary shares
Balance at the
start of the
year
No.
Granted as
Compensation
No.
Received on
Exercise of
Options
No.
Other1
Movements
No.
Balance at
the end of the
year
No.
2022
Non-Executive Directors
D Allman
T Stianos
D McMaster
Executive Officers
J P Marcantonio
A Haidar2
M Nicholls2
D Romanelli3
4,500,000
600,000
50,000
–
526,364
–
455,190
–
–
–
–
–
–
–
–
–
285,882
157,325
106,981
314,896
–
–
–
–
4,500,000
600,000
50,000
285,882
(683,689)
(106,981)
(770,086)
–
–
–
1 Includes shares traded on the stock market and other adjustments
2 The role is not considered as Key Management
3 Resigned 30 September 2021
DIRECTORS’ REPORT (continued)for the year ended 30 June 20222022 ANNUAL REPORT | GALE PACIFIC | 23
Balance at the
start of the
year
No.
Granted as
Compensation
No.
Received on
Exercise of
Options
No.
Other1
Movements
No.
Balance at
the end of the
year
No.
4,500,000
600,000
50,000
516,364
263,000
–
–
–
–
–
–
–
–
–
–
–
–
–
4,500,000
600,000
50,000
10,000
192,190
526,364
455,190
2021
Non-Executive Directors
D Allman
T Stianos
D McMaster
Executive Officers
A Haidar
D Romanelli
Share based compensation
Each performance right entitles the holder to one ordinary share in the Company 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 16 January 2020 are subject to the continuation of employment to
30 June 2022 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 2020 to 30 June 2022. None of these rights can
vest until the Company releases its FY22 annual report to the ASX (on or around 1st October 2022) and expire on
1 December 2022.
The performance rights granted on 30 October 2020 to the senior executives are subject to the continuation of
employment to 30 June 2023 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 2020 to 30 June 2023. The
performance rights granted on 23 December 2020 to the CEO and Managing Director are subject to employment
conditions and satisfying of relevant performance hurdles based on TSR over the three year period from 1 July 2020
to 30 June 2023. None of these rights can vest until the Company releases its FY23 annual report to the ASX (on or
around 1st October 2023) and expire on 1 December 2023.
The performance rights granted on 23 December 2021 and 6 April 2022 are subject to the continuation of
employment to 30 June 2024 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 2021 to 30 June 2024. None of these
rights can vest until the Company releases its FY24 annual report to the ASX (on or around 1st October 2024) and
expire on 1 December 2024.
In addition to the time requirement of continuous 3 year employment, the diluted EPS needs to increase by greater
than a CAGR of 3.0% and over the relevant 3-year performance period. The number of Rights vesting will be
determined proportionately, on a straight-line basis, between CAGR of 3.0% and CAGR of 10.0%.
2022 ANNUAL REPORT | GALE PACIFIC | 24
Key management personnel & other management equity holdings – compensation options and
performance rights:
Granted and vested during the year
Vested
Number
Granted
Number
Grant
Date
2022
Non-Executive Directors
Executive Director
–
–
Executive Officers
– 2,173,000
23/12/21
Other Management
–
901,000
23/12/21
Total
2021
– 3,074,000
Non–Executive Directors
Executive Director
Executive Officers
14,000,000 23/12/20
– 1,504,000 30/10/20
Other Management
–
483,000 30/10/20
Total
– 15,987,000
Movements during the year
Value Per
Option/
Right at
Grant
Date
Terms and Conditions for Each Grant
Exercise
Price
Expiry
Date
First
Exercise
Date
Last
Exercise
Date
0.31
0.30
0.18
0.16
0.16
Nil
Nil
Nil
Nil
Nil
01/12/24
01/10/24
01/10/24
01/12/24
01/10/24
01/10/24
01/12/23
01/10/23
01/10/23
01/12/23
01/10/23
01/10/23
01/12/23
01/10/23
01/10/23
Balance at
the start
of the
year
No.
Granted
as Comp-
ensation
No.
Net Other
Change4
No.
Balance at
the end of
the year
No.
Balance
Held
Nominally
No.
Value of
Lapsed
Options/
Rights
$
Exercised
No.
Lapsed
No.
2022
Non-Executive Directors
None
–
–
–
–
–
–
Executive Officers
J P Marcantonio
14,318,000
–
(285,882)
(32,118)
T Mortleman
361,000
455,000
–
–
– 14,000,000
–
816,000
A Haidar2
Cliff Zhang1
M Nicholls2
S Smith
A Boccelli
K Harshaw
M Russell3
676,088
232,000
(157,325)
(17,675)
(733,088)
508,737
–
–
(508,737)
–
494,585
179,000
(106,981)
(12,019)
(554,585)
–
–
–
–
–
–
–
204,000
331,000
393,000
379,000
–
–
–
–
–
–
–
–
–
–
–
204,000
331,000
393,000
229,000
608,000
D Romanelli1
728,896
–
(314,896)
(414,000)
–
–
Other Management
Other
Management
820,665
901,000
(136,648)
(15,352)
1,058,673 2,628,338
Total
17,907,971 3,074,000 (1,001,732)
(999,901)
– 18,980,338
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
DIRECTORS’ REPORT (continued)for the year ended 30 June 20222022 ANNUAL REPORT | GALE PACIFIC | 25
Balance at
the start
of the
year
No.
Granted
as Comp-
ensation
No.
Net Other
Change4
No.
Balance at
the end of
the year
No.
Balance
Held
Nominally
No.
Value of
Lapsed
Options/
Rights
$
Exercised
No.
Lapsed
No.
2021
Non-Executive Directors
None
–
–
Executive Officers
J P Marcantonio
588,000 14,000000
T Mortleman
–
361,000
A Haidar
Cliff Zhang
M Nicholls
535,088
285,000
386,737
226,000
389,585
218,000
D Romanelli
314,896
414,000
Other Management
Other
Management
662,665
483,000
Total
2,876,971 15,987,000
1 Resigned 30 September 2021
–
–
–
–
–
–
–
–
–
–
(270,000)
– 14,318,000
–
(144,000)
(104,000)
(113,000)
–
–
–
–
–
–
361,000
676,088
508,737
494,585
728,896
–
(325,000)
– (956,000)
–
820,665
– 17,907,971
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
2 Effective 23 February 2022, the role is not considered as Key Management
3 Appointed 10 August 2021 (previously Chief Human Resources Officer)
4 Net Other Change represents the reclassification between KMP and other management
Employment and service agreements
Executives serve under terms and conditions contained
in a standard executive employment agreement,
that allows for termination under certain conditions
with two to three months’ notice. The agreements
include restraints of trade on the employee as well as
confidentiality and intellectual property agreements.
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.
Indemnity and insurance of auditor
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.
During the financial year, the Company has not paid a
premium in respect of a contract to insure the auditor of
the Company or any related entity.
Proceedings on behalf of
the company
No person has applied to the Court under section
237 of the Corporations Act 2001 for leave to bring
proceedings on behalf of the Company, or to intervene
in any proceedings to which the Company is a party
for the purpose of taking responsibility on behalf of the
Company for all or part of those proceedings.
2022 ANNUAL REPORT | GALE PACIFIC | Rounding of amounts
The Company is of a kind referred to in Class Order
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 Class Order to the nearest
thousand dollars, or in certain cases, the nearest dollar.
Auditor’s independence declaration
A copy of the auditor’s independence declaration as
required under section 307C of the Corporations Act
2001 is set out immediately after this directors’ report.
Auditor
Deloitte Touche Tohmatsu 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.
26
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 32 to the consolidated
financial statements.
The directors are satisfied that the provision of non-
audit services during the financial year, by the auditor
(or by 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.
The directors are of the opinion that the services as
disclosed in note 32 to the consolidated financial
statements do not compromise the external auditor’s
independence requirements of the Corporations Act
2001 for the following reasons:
■ 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
Tohmatsu
There are no officers of the Company who are former
partners of Deloitte Touche Tohmatsu.
DIRECTORS’ REPORT (continued)for the year ended 30 June 20222022 ANNUAL REPORT | GALE PACIFIC | 27
Deloitte Touche Tohmatsu
ABN 74 490 121 060
477 Collins Street
Melbourne, VIC, 3000
Australia
Phone: +61 3 9671 7000
www.deloitte.com.au
23 August 2022
The Board of Directors
Gale Pacific Limited
145 Woodlands Drive
Braeside VIC 3195
Dear Board Members
GGaallee PPaacciiffiicc LLiimmiitteedd
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 2022, I declare that to the best of my knowledge and belief, there have been no
contraventions of:
(i)
(ii)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit;
and
any applicable code of professional conduct in relation to the audit.
Yours sincerely
DELOITTE TOUCHE TOHMATSU
Paul Schneider
Partner
Chartered Accountants
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
AUDITOR’S INDEPENDENCE DECLARATIONfor the year ended 30 June 20222022 ANNUAL REPORT | GALE PACIFIC |
28
Deloitte Touche Tohmatsu
ABN 74 490 121 060
477 Collins Street
Melbourne, VIC, 3000
Australia
Phone: +61 3 9671 7000
www.deloitte.com.au
IInnddeeppeennddeenntt AAuuddiittoorr’’ss RReeppoorrtt ttoo tthhee MMeemmbbeerrss ooff GGaallee PPaacciiffiicc LLiimmiitteedd
RReeppoorrtt oonn tthhee AAuuddiitt ooff tthhee FFiinnaanncciiaall RReeppoorrtt
Opinion
We have audited the financial report of Gale Pacific Limited (the “Company”) and its subsidiaries (the “Group”)
which comprises the consolidated statement of financial position as at 30 June 2022, the consolidated
statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and
the consolidated statement of cash flows for the year then ended, and notes to the consolidated financial
statements, including a summary of significant accounting policies and other explanatory information, and the
directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
including:
•
•
Giving a true and fair view of the Group’s financial position as at 30 June 2022 and of its financial
performance for the year then ended; and
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our
report. We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are
relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in
accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to
the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s
report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the financial report for the current period. These matters were addressed in the context of our audit of the
financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters.
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF GALE PACIFIC LIMITEDfor the year ended 30 June 20222022 ANNUAL REPORT | GALE PACIFIC |
29
KKeeyy AAuuddiitt MMaatttteerr
HHooww tthhee ssccooppee ooff oouurr aauuddiitt rreessppoonnddeedd ttoo tthhee KKeeyy AAuuddiitt MMaatttteerr
RReeccoovveerraabbiilliittyy ooff ttrraaddee rreecceeiivvaabblleess
MMiiddddllee EEaasstt aanndd NNoorrtthh AAffrriiccaa
iinn
Our procedures included, but were not limited to:
Refer to Note 10 Current assets – trade and
other receivables.
•
As at 30 June 2022, the carrying amounts
of Middle East and North Africa (“MENA”)
trade receivables totalled AU$8.27 million
with AU$1.88 million of the outstanding
balance aged over 365 days. The balance
of the expected credit loss allowance over
in MENA
receivables
impairment of
accounts
trade
for $1.74 million of
receivables greater than 365 days.
The allowance determination as
to
whether the receivables are collectable
level of management
requires a high
judgment
estimates, whereby
and
management considers specific factors
including the age of the balances, historical
payment patterns and any other relevant
information
the
creditworthiness of the counterparties.
concerning
•
•
•
Obtaining an understanding of how the allowance for
impairment of MENA receivables
is estimated by
management and assessing management’s process in
determining the estimated future cash flows of MENA
receivables;
Evaluating on a sample basis, the aging analysis and
subsequent settlement of the MENA receivables to the
source documents including invoices and bank statements;
Assessing the reasonableness of allowance for impairment
of MENA receivables with reference to the credit history
including default or delay in payments, settlement records,
subsequent settlements and aging analysis of the MENA
receivables; and
Evaluating the historical accuracy of management’s
assessment of allowance for MENA receivables by
assessing the actual write-offs, the reversal of previous
recorded allowances and new allowances recorded in the
current year in respect of MENA receivables.
We also assessed the appropriateness of disclosures included in
Note 10 of the financial report relating to accounts receivables.
Other Information
The directors are responsible for the other information. The other information comprises the information included
in the Group’s annual report for the year ended 30 June 2022 but does not include the financial report and our
auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial report or our knowledge
obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed,
we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of the Directors 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 preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or to cease operations, or has no realistic
alternative but to do so.
2022 ANNUAL REPORT | GALE PACIFIC |
30
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and
maintain professional scepticism throughout the audit. We also:
•
•
•
•
•
•
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient
and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit 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 Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that
may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw attention in our auditor’s report to the related
disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However,
future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial report, including the disclosures,
and whether the financial report represents the underlying transactions and events in a manner that
achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Group to express an opinion on the financial report. We are responsible for the
direction, supervision and performance of the Group’s audit. We remain solely responsible for our audit
opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies in internal control that we identify during our
audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably
be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards
applied.
From the matters communicated with the directors, we determine those matters that were of most significance
in the audit of the financial report of the current period and are therefore the key audit matters. We describe
these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be communicated in our report
because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF GALE PACIFIC LIMITED (continued)for the year ended 30 June 20222022 ANNUAL REPORT | GALE PACIFIC |
31
RReeppoorrtt oonn tthhee RReemmuunneerraattiioonn RReeppoorrtt
Opinion 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 2022.
In our opinion, the Remuneration Report of Gale Pacific Limited, for the year ended 30 June 2022, complies with
section 300A of the Corporations Act 2001.
Responsibilities
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.
DELOITTE TOUCHE TOHMATSU
Paul Schneider
Partner
Chartered Accountants
Melbourne, 23 August 2022
2022 ANNUAL REPORT | GALE PACIFIC |
32
In the opinion of the Directors of Gale Pacific Limited (the Company):
■ the attached consolidated financial statements and notes comply with the Corporations Act 2001, the
Australian Accounting Standards, the Corporations Regulations 2001 and other mandatory professional
reporting requirements;
■ the attached consolidated financial statements and notes (page 33 to 71) comply with Australian Financial
Reporting Standards as issued by the Australian Accounting Standards Board as described in note 2 to the
financial statements;
■ the attached consolidated financial statements and notes give a true and fair view of the Group’s financial
position as at 30 June 2022 and of its performance for the financial year ended on that date; and
■ there are reasonable grounds to believe that the Group will be able to pay its debts as and when they become
due and payable.
The directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001.
On behalf of the directors
David Allman
Chairman
23 August 2022
Melbourne
John Paul Marcantonio
Chief Executive Officer and Managing Director
DIRECTORS’ DECLARATIONfor the year ended 30 June 20222022 ANNUAL REPORT | GALE PACIFIC |
33
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
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
Other comprehensive income for the year, net of tax
Total comprehensive income for the year attributable to the owners of
Gale Pacific Limited
Basic earnings per share
Diluted earnings per share
Consolidated
Note
2022
$’000
2021
$’000
5
6
6
6
6
7
205,543
205,223
1,079
1,935
(109,632)
(107,520)
(41,284)
(40,254)
(9,970)
(3,188)
(2,510)
(13,446)
(13,636)
(2,004)
10,952
(3,335)
(9,198)
(1,949)
(2,679)
(13,326)
(13,215)
(1,797)
17,220
(4,893)
7,617
12,327
22
22
8
8
317
4,396
4,713
12,330
Cents
2.76
2.59
263
(1,210)
(947)
11,380
Cents
4.48
4.21
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction
with the accompanying notes.
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOMEfor the year ended 30 June 20222022 ANNUAL REPORT | GALE PACIFIC |
34
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Derivative financial instrument – hedges
Prepayments
Total current assets
Non-current assets
Property, plant and equipment
Intangibles
Right-of-use assets
Deferred tax
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Borrowings
Lease liabilities
Derivative financial instrument – hedges
Current tax liabilities
Employee benefits
Provisions
Total current liabilities
Non-current liabilities
Borrowings
Lease liabilities
Deferred tax
Employee benefits
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Retained profits
Total equity
Consolidated
Note
2022
$’000
2021
$’000
9
10
11
26
12
13
14
7
15
16
18
26
7
17
19
20
7
21
22
28,465
47,295
56,299
–
3,126
30,407
41,471
46,547
515
3,421
135,185
122,361
30,845
30,705
8,794
26,415
8,998
8,142
20,314
6,889
75,052
66,050
210,237
188,411
30,692
21,059
4,677
1,355
3,053
5,548
507
29,507
19,364
3,764
–
1,156
6,174
501
66,891
60,466
12,935
24,111
8,112
212
9,575
18,579
6,702
170
45,370
35,026
112,261
97,976
95,492
92,919
63,403
10,335
24,238
97,976
63,068
4,459
25,392
92,919
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
CONSOLIDATED STATEMENT OF FINANCIAL POSITIONas at 30 June 20222022 ANNUAL REPORT | GALE PACIFIC |
35
Consolidated
Balance at 1 July 2020
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 31)
Transfer to Enterprise Reserve Fund
Dividends paid (note 23)
Balance at 30 June 2021
Consolidated
Balance at 1 July 2021
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 31)
Vesting of performance rights (note 31)
Transfer to Enterprise Reserve Fund
Dividends paid (note 23)
Balance at 30 June 2022
Issued
Capital
$’000
Reserves
(Note 22)
$’000
Retained
Profits
$’000
63,068
3,992
–
–
–
–
–
–
–
(947)
(947)
1,435
(21)
–
63,068
4,459
21,306
12,327
–
–
–
21
(8,262)
25,392
Issued
Capital
$’000
Reserves
(Note 22)
$’000
Retained
Profits
$’000
Total
equity
$’000
88,366
12,327
(947)
(947)
1,435
–
(8,262)
92,919
Total
equity
$’000
63,068
4,459
25,392
92,919
–
–
–
–
335
–
–
–
4,713
4,713
999
(335)
499
–
63,403
10,335
7,617
–
7,617
–
–
(499)
(8,272)
24,328
7,617
4,713
12,330
999
–
–
(8,272)
97,976
The above consolidated statement of changes in equity should be read in conjunction with the
accompanying notes.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITYfor the year ended 30 June 20222022 ANNUAL REPORT | GALE PACIFIC | 36
Cash flows from operating activities
Profit before income tax expense for the year
Adjustments for:
Depreciation and amortisation
Share-based payments
Foreign currency gain
Interest and other finance costs
Change in operating assets and liabilities:
Increase in trade and other receivables
Decrease/(increase) in inventories
Decrease/(increase) in derivative assets
Decrease/(increase) in prepayments
Increase 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/(repayment) of leases
Dividends paid
Proceeds/(repayment) of borrowings
Net cash used in financing activities
Net increase/(decrease) 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
Consolidated
Note
2022
$’000
2021
$’000
10,952
17,220
9,970
999
(63)
2,004
23,862
(5,824)
(9,752)
514
295
1,185
1,673
(584)
8
11,377
(2,004)
(2,137)
7,236
9,198
1,435
1,461
1,797
31,111
(1,868)
2,152
(515)
(1,200)
6,363
(333)
1,960
357
38,027
(1,797)
(1,612)
34,618
12
13
18, 20
23
19
(3,960)
(3,002)
(889)
122
(4,727)
(2,943)
(8,272)
5,059
(6,156)
(3,647)
30,407
1,705
(855)
96
(3,761)
(4,182)
(8,262)
(14,159)
(26,603)
4,254
27,811
(1,658)
Cash and cash equivalents at the end of the financial year
9
28,465
30,407
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
CONSOLIDATED STATEMENT OF CASH FLOWSfor the year ended 30 June 20222022 ANNUAL REPORT | GALE PACIFIC | 37
Note 1. General information
The consolidated financial report covers Gale Pacific
Limited (‘Company’ or ‘parent entity’) and its controlled
entities (together the ‘Group’). The consolidated
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
Australia
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 Group’s principal activities are the marketing,
sales, manufacture and distribution of branded
screening, architectural shading, commercial agricultural
/ horticultural fabric products to domestic and
global markets.
The financial statements were authorised for issue,
in accordance with a resolution of directors, on
23 August 2022. The directors have the power to
amend and reissue the financial statements.
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 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.
Note 2. Significant accounting
policies
The principal accounting policies adopted in the
preparation of the consolidated 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 or amended 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.
New and revised Standards and amendments thereof
and Interpretations effective for the current year that are
relevant to the Group include:
AASB 2020-8 Amendments to Australian
Accounting Standards – Interest Rate
Benchmark Reform
In September 2020, the AASB made amendments
to AASB 9 Financial Instruments, AASB 139 Financial
Instruments: Recognition and Measurement, AASB 7
Financial Instruments: Disclosures, AASB 4 Insurance
Contracts and AASB 16 Leases to address issues that
arise during the reform of an interest rate benchmark
(IBOR), including the replacement of one benchmark
with an alternative one.
The Group has assessed the impact of AASB 2020-8
Amendments and determined there is no impact to the
financial statements.
AASB 2021-3 Amendments to Australian
Accounting Standards – Covid-19-related rent
concessions beyond 30 June 2021
As a result of the coronavirus (COVID-19) pandemic, rent
concessions have been granted to lessees. The AASB
made an amendment that provides an optional practical
expedient where lessees benefiting from these rent
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 20222022 ANNUAL REPORT | GALE PACIFIC |
38
Note 2. Significant accounting policies (continued)
concessions may account for them as variable lease
payments in the periods in which they are granted.
The Group has assessed the impact of AASB 2021-3
Amendments and determined there is no impact to the
financial statements.
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.
AASB 2020-3 Amendments to Australian
Accounting Standards – Annual improvements
2018-2020 and other amendments
The AASB has made narrow scope amendments to
■ AASB 116 Property, Plant and Equipment in relation
to proceeds before intended use
■ AASB 137 Provisions, Contingent Liabilities and
Contingent Assets in relation to onerous contracts
and the cost of fulfilling a contract
■ AASB 3 Business combinations in relation to
references to the Conceptual Framework, and
annual improvements to AASB 16, AASB 1, AASB 9
and AASB 141.
The Group has assessed the impact of AASB 2020-3
Amendments and determined there is no impact to the
financial statements.
Comparatives
Where necessary, the comparative statement of profit
or loss and other comprehensive income has been
reclassified and repositioned for consistency with the
current period disclosures.
Principles of consolidation
The consolidated financial statements incorporate the
assets and liabilities of all subsidiaries of Gale Pacific
Limited as at 30 June 2022 and the results of all
subsidiaries for the year then ended.
Subsidiaries are all those entities over which the
Company has control. The Company 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
Company. They are de-consolidated from the date that
control ceases.
Intercompany transactions, balances and unrealised
gains on transactions between entities in the Group
are eliminated. Unrealised losses are also eliminated
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
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) for the year ended 30 June 20222022 ANNUAL REPORT | GALE PACIFIC | 39
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
The Group recognises revenue as follows:
Sale of goods
Revenue is recognised at an amount that reflects the
consideration to which the Group is expected to be
entitled in exchange for transferring goods or services
to a customer. For each contract with a customer, the
Group: identifies the contract with a customer; identifies
the performance obligations in the contract; determines
the transaction price which takes into account
estimates of variable consideration and the time
value of money; allocates the transaction price to the
separate performance obligations on the basis of the
relative stand-alone selling price of each distinct good
or service to be delivered; and recognises revenue
when or as each performance obligation is satisfied in a
manner that depicts the transfer to the customer of the
goods or services promised.
Variable consideration within the transaction price, if
any, reflects concessions provided to the customer
such as discounts, rebates and refunds, any potential
bonuses receivable from the customer and any other
contingent events. Such estimates are determined
using either the ‘expected value’ or ‘most likely amount’
method. The measurement of variable consideration
is subject to a constraining principle whereby revenue
will only be recognised to the extent that it is highly
probable that a significant reversal in the amount
of cumulative revenue recognised will not occur.
The measurement constraint continues until the
uncertainty associated with the variable consideration
is subsequently resolved. Amounts received that are
subject to the constraining principle are recognised as a
refund liability.
Revenue from the sale of goods is recognised at
the point in time when the performance obligation is
satisfied and customer obtains control of the goods,
which is generally at the time of delivery.
Other income
Other income 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.
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.
2022 ANNUAL REPORT | GALE PACIFIC | 40
Note 2. Significant accounting policies (continued)
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 highly 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.
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 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. The Group primarily
uses the value-in-use methodology to estimate the
recoverable amount for impairment testing purposes.
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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) for the year ended 30 June 20222022 ANNUAL REPORT | GALE PACIFIC | 41
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. There are no critical accounting
judgements, estimates and assumptions that are likely
to affect the current or future financial years.
The preparation of the consolidated 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 a combination of Monte Carlo simulation model
and Dividend Discount model taking into account
the terms and conditions upon which the instruments
were granted, expected volatility, expected dividend
yield and risk-free rate assumptions. 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.
Allowance for expected credit losses
The allowance for expected credit losses assessment
requires a degree of estimation and judgement. It is
based on the lifetime expected credit loss, grouped
based on days overdue, and makes assumptions
to allocate an overall expected credit loss rate for
each group. These assumptions include recent sales
experience and historical collection rates.
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.
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.
2022 ANNUAL REPORT | GALE PACIFIC | 42
Note 3. Critical accounting judgements, estimates and
assumptions (continued)
Cash flow hedges
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.
Fair value hedges
Forward foreign exchange contracts, designated as fair
value hedges, are measured as such. Changes in the
fair value of derivatives that are designated and qualify
as fair value hedges are recognised in profit or loss
immediately, together with any changes in the fair value
of the hedged asset or liability that are attributable to
the hedged risk.
Hedge accounting is discontinued when the Group
revokes the hedging relationship, when the hedging
instrument expires or is sold, terminated, or exercised,
or when it no longer qualifies for hedge accounting.
The fair value adjustment to the carrying amount of the
hedged item arising from the hedged risk is amortised
to profit or loss from that date.
Note 4. Operating segments
Identification of reportable operating segments
The Group is organised into four operating segments
identified by geographic location, 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 market
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.
To continuously improve the transparency of the
Group’s management reporting GALE Pacific Limited
follows an activity-based allocation method of
reporting. Intersegment sales/margin and central
costs are allocated to external revenue generating
segments where the final economic benefit is derived.
This enhanced method of reporting is being used by
the CODM, to target product costing, product line
profitability analysis, customer profitability analysis, and
service pricing structures.
The operating segments are as follows:
Australasia: 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.
EurAsia: Sales distribution based in China and
Australasia, servicing European and Asian countries.
Americas: Sales office is located in Florida. Custom
blind assembly and distribution facilities are located
in both California and Florida which service the North
American region.
Middle East and North Africa (‘MENA’): 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. The results from our
manufacturing operations in China are allocated to
the operating segments where the sales originate,
whilst its assets and liabilities are included within the
EurAsia segment.
Major customers
During the year ended 30 June 2022 approximately
38% (2021: 35%) of the Group’s external revenue was
derived from sales to two customers (2021: Two), one
customer located in the Australasian region and one
customer located in the Americas region.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) for the year ended 30 June 20222022 ANNUAL REPORT | GALE PACIFIC | 43
Operating segment information
Consolidated – 2022
Revenue
Sales to external customers
Total revenue
Segment EBITDA
Depreciation and amortisation
Finance costs
Profit/(loss) before income
tax expense
Income tax expense
Profit after income tax expense
Assets
Segment assets
Total assets
Liabilities
Segment liabilities
Total liabilities
Consolidated – 2021
Revenue
Sales to external customers
Total revenue
Segment EBITDA
Depreciation and amortisation
Finance costs
Profit/(loss) before income
tax expense
Income tax expense
Profit after income tax expense
Assets
Segment assets
Total assets
Liabilities
Segment liabilities
Total liabilities
Australasia
$’000
Americas
$’000
MENA
$’000
Eurasia
$’000
Other
Segments
$’000
Total
$’000
93,704
93,704
11,535
(3,603)
(703)
95,641
95,641
13,015
(5,855)
(1,200)
8,556
8,556
1,553
(242)
(50)
7,642
7,642
2,591
(270)
(51)
–
–
205,543
205,543
(5,768)
22,926
–
–
(9,970)
(2,004)
7,229
5,960
1,261
2,270
(5,768)
10,952
(3,335)
7,617
48,021
85,717
10,881
41,861
23,757
210,237
27,082
39,224
576
17,870
27,509
210,237
112,261
112,261
Australasia
$’000
Americas
$’000
MENA
$’000
Eurasia
$’000
Other
Segments
$’000
Total
$’000
91,971
91,971
14,397
(3,828)
(698)
96,219
96,219
13,515
(4,822)
(1,002)
8,603
8,603
2,208
(239)
(48)
8,430
8,430
2,722
(309)
(50)
–
–
205,223
205,223
(4,626)
28,216
–
–
(9,198)
(1,798)
9,871
7,691
1,921
2,363
(4,626)
17,220
39,689
73,694
11,008
41,531
22,489
24,464
32,464
633
17,899
20,032
(4,893)
12,327
188,411
188,411
95,492
95,492
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.
2022 ANNUAL REPORT | GALE PACIFIC | 44
Note 5. Other income
Other income
Note 6. Expenses
Consolidated
2022
$’000
1,079
2021
$’000
1,935
Consolidated
2022
$’000
2021
$’000
Profit before income tax includes the following specific expenses:
Raw materials and consumables used
Provision for personal protective equipment (note 11)
–
6,574
Depreciation
Property, plant and equipment (note 12)
Right-of-use assets (note 14)
Total depreciation
Amortisation
Intangible assets (note 13)
Total depreciation and amortisation
Employee benefits expense
Employment costs and benefits
Share-based payment expense
Total employee benefits expense
Finance costs
Interest and finance charges paid/payable on borrowings
Interest and finance charges paid/payable on lease liabilities
Finance costs expensed
Leases
Variable lease payments
4,589
4,716
9,305
665
9,970
40,285
999
41,284
1,108
896
2,004
4,423
4,207
8,630
568
9,198
38,819
1,435
40,254
1,013
784
1,797
1,549
1,648
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) for the year ended 30 June 20222022 ANNUAL REPORT | GALE PACIFIC | Note 7. Income tax
Income tax expense
Current tax
Deferred tax (Benefit)/Expense – origination and reversal of
temporary differences
Aggregate income tax expense
Deferred tax included in income tax expense comprises:
Decrease/(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
Difference in tax rates
Income tax expense
Amounts charged directly to equity
Deferred tax assets
45
Consolidated
2022
$’000
2021
$’000
4,444
1,503
(1,109)
3,335
3,390
4,893
(1,109)
3,390
10,952
3,286
17,220
5,166
232
3,518
(183)
3,335
117
5,283
(390)
4,893
Consolidated
2022
$’000
2021
$’000
136
112
2022 ANNUAL REPORT | GALE PACIFIC | 46
Note 7. Income tax (continued)
Net deferred tax asset
Deferred taxes 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
Other
Deferred tax asset
Movements:
Opening balance
Credited/(charged) to profit or loss
Charged to equity
Transfer from current tax liability
Closing balance
Provision for income tax
Provision for income tax
Consolidated
2022
$’000
2021
$’000
2,543
(1,487)
(892)
(598)
110
177
6
840
187
886
187
1,109
(136)
(274)
886
–
(885)
(1,249)
(774)
1,667
174
303
974
(23)
187
3,335
(3,390)
(112)
354
187
Consolidated
2022
$’000
2021
$’000
3,053
1,156
The 2022 net deferred tax asset of $886,000 (2021:
$187,000) is comprised of $8,998,000 in deferred
tax assets (2021: $6,889,000) and $8,112,000 (2021:
$6,702,000) in deferred tax liabilities, reflecting various
tax positions in different jurisdictions.
As at 30 June 2022, the Group has $9,953,000 unused
tax losses (2021: $nil) and $2,543,000 deferred tax
with respect to any such losses (2021: $nil) in the
consolidated financial statements, which are related to
the Gale Pacific USA Inc entity, primarily driven by the
write-off of Personal protective equipment (Gale Guard)
which was provided for in full in the 2021 financial year.
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.
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
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) for the year ended 30 June 20222022 ANNUAL REPORT | GALE PACIFIC | 47
settled, based on those tax rates that are enacted or
substantively enacted, except for:
entity or different taxable entities which intend to
settle simultaneously.
■ 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.
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.
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
Note 8. Earnings per share
Profit after income tax attributable to the owners of Gale Pacific Limited
Consolidated
2022
$’000
7,617
2021
$’000
12,326
Number
Number
Weighted average number of ordinary shares used in calculating basic earnings
per share
276,062,536
275,391,310
Adjustments for calculation of diluted earnings per share:
Performance rights
Weighted average number of ordinary shares used in calculating diluted
earnings per share
Basic earnings per share
Diluted earnings per share
18,049,075
17,608,820
294,111,611
293,000,130
Cents
2.76
2.59
Cents
4.48
4.21
2022 ANNUAL REPORT | GALE PACIFIC | 48
Note 8. Earnings per share (continued)
Accounting policy for earnings per share
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
Consolidated
2022
$’000
4
28,461
28,465
2021
$’000
5
30,402
30,407
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: Allowance for expected credit losses
Other receivables
Consolidated
2022
$’000
49,124
(2,039)
2021
$’000
42,545
(1,621)
47,085
40,924
210
47,295
547
41,471
Allowance for expected credit losses
The Group has recognised an additional expected credit loss allowance of $487,000 (2021: $465,000) in profit or
loss in respect of impairment of receivables for the year ended 30 June 2022.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) for the year ended 30 June 20222022 ANNUAL REPORT | GALE PACIFIC | Trade receivables and allowances for expected credit losses
The following table details the risk profile of trade receivables based on the Group’s provision matrix.
49
Trade receivables
Not Outside of Credit Terms
Outside Credit Terms 0-30 Days
Outside Credit Terms 31-120 Days
Outside Credit Terms 121 Days to one year
More than One Year
Allowance for expected credit losses
Outside Credit Terms 31-120 Days
Outside Credit Terms 121 Days to one year
More than One Year
Consolidated
2022
$’000
2021
$’000
38,901
30,620
3,983
1,725
2,289
2,226
6,257
1,854
1,589
2,225
49,124
42,545
(2)
(46)
(1,991)
(2,039)
(2)
(30)
(1,589)
(1,621)
As per management’s assessment the allowance for expected credit losses on Not Outside of Credit Terms and
Outside Credit Terms 0-30 Days is not material and not recognised.
Movements in the allowance for expected credit losses are as follows:
Opening balance
Additional allowances recognised
Receivables written off during the year as uncollectable
Closing balance
Consolidated
2022
$’000
1,621
487
(69)
2,039
2021
$’000
1,199
465
(43)
1,621
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.
Other receivables are recognised at amortised cost, less
any allowance for expected credit losses.
The Group always measures the loss allowance for
trade receivables at an amount equal to lifetime ECL.
The average credit terms vary between 30 to 60
days which depend on the sales region and the type
of customer. The expected credit losses on trade
receivables are estimated using a provision matrix by
reference to past default experience of the debtor and
an analysis of the debtor’s current financial position,
adjusted for factors that are specific to the debtors,
general economic conditions of the industry in which
the debtors operate and an assessment of both the
current as well as the forecast direction of conditions
at the reporting date. The Group has recognised a loss
allowance of 89% (2021: 71%) against all receivables
over 365 days past due because historical experience
has indicated that these receivables are generally not
recoverable. The Group has significantly increased the
expected loss rates for trade receivables from the prior
year based on its judgement of the impact of current
economic conditions and the forecast direction of travel
at the reporting date. There has been no change in the
2022 ANNUAL REPORT | GALE PACIFIC | 50
Note 10. Current assets – trade and other receivables (continued)
estimation techniques during the current reporting period. The Group writes off a trade receivable when there is
information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery,
e.g. when the debtor has been placed under liquidation or has entered into bankruptcy proceedings.
Note 11. Current assets – inventories
Raw materials
Work in progress
Finished goods
Less: Provision for impairment
Consolidated
2022
$’000
10,064
2,206
48,017
(3,988)
44,029
56,299
2021
$’000
8,177
2.958
44,958
(9,546)
35,412
46,547
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
‘weighted average cost’ 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
2022
$’000
17,974
(8,464)
9,510
119,304
(98,706)
20,598
309
(134)
175
562
2021
$’000
17,399
(7,701)
9,698
114,584
(94,712)
19,872
305
(142)
163
972
30,845
30,705
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) for the year ended 30 June 20222022 ANNUAL REPORT | GALE PACIFIC | 51
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
Buildings and
leasehold
improvements
$.000
Plant and
equipment
$’000
Motor
vehicles
$’000
Capital
work in
progress
$’000
Balance at 1 July 2020
10,465
21,378
Additions
Disposals
Exchange differences
Transfers in/(out)
Depreciation expense
Balance at 30 June 2021
Additions
Disposals
Exchange differences
Transfers in/(out)
Depreciation expense
Balance at 30 June 2022
25
–
(26)
236
(1,002)
9,698
90
(69)
427
402
(1,038)
9,510
73
(96)
(102)
2,028
(3,409)
19,872
2,456
(53)
653
1,203
(3,533)
20,598
118
52
–
–
5
(12)
163
–
–
4
–
(18)
149
393
2,852
–
(4)
(2,269)
–
972
1,414
–
(16)
(1,782)
–
588
Total
$’000
32,354
3,002
(96)
(132)
–
(4,423)
30,705
3,960
(122)
1,068
(177)
(4,589)
30,845
Leasehold improvements 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.
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
allocate cost on a systematic basis for each item of
property, plant and equipment over their estimated
useful lives as follows:
Buildings
45 years
Leasehold improvements
Over lease term
Plant and equipment
Motor vehicles
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.
2022 ANNUAL REPORT | GALE PACIFIC | 52
Note 13. Non-current assets – intangibles
Goodwill – at cost
Less: Impairment
Development – at cost
Less: Accumulated amortisation
Patents, trademarks and licenses – at cost
Less: Accumulated amortisation
Application software – at cost
Less: Accumulated amortisation
Consolidated
2022
$’000
11,275
(7,961)
3,314
5,075
(790)
4,285
1,682
(1,462)
220
9,312
(8,337)
975
8,794
2021
$’000
11,027
(7,961)
3,066
4,074
(404)
3,670
1,652
(1,410)
242
8,966
(7,802)
1,164
8,142
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 2020
Additions
Exchange differences
Amortisation expense
Balance at 30 June 2021
Additions
Exchange differences
Transfers in/(out)
Amortisation expense
Balance at 30 June 2022
Goodwill
$’000
Development
$’000
Patents,
trademarks
and licenses
$’000
Application
software
$’000
3,325
–
(259)
–
3,066
–
248
–
–
3,314
3,051
837
(4)
(214)
3,670
877
3
120
(385)
4,285
277
18
(1)
(52)
242
8
–
–
(30)
220
1,466
–
–
(302)
1,164
4
–
57
(250)
975
Total
$’000
8,119
855
(264)
(568)
8,142
889
251
177
(665)
8,794
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) for the year ended 30 June 20222022 ANNUAL REPORT | GALE PACIFIC | 53
Goodwill acquired through business combinations have been allocated to the following cash generating units (CGU):
Goodwill
USA (2022: US$2,077,000; 2021: US$ 2,077,000)
China
Consolidated
2022
$’000
2021
$’000
2,967
347
3,314
2,719
347
3,066
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 charge
being recognised by the Group for the year ended
30 June 2022.
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 a terminal growth rate of 2.0%
(2021: 2.0%).
invest in product development and expansion within
the Americas region. The terminal growth rate was set
at 2% inline with the long-term real growth rate of the
US economy.
Sensitivity analysis
Management have conducted an analysis of the
sensitivity of the impairment test to reasonably possible
changes in the key assumptions used to determine the
recoverable amount of the CGU. This sensitivity analysis
considered the changes to terminal growth rate from
1.5% to 2.5% and discount rate from 9.25% to 10.75%.
The analysis revealed that there is sufficient headroom
in all instances of changes for two factors and there is
no risk of impairment.
USA
China
In assessing the recoverable amount of the USA CGU,
management considered information available from
industry analysts and other sources in relation to the
key assumptions used. Management considers that it
has taken an appropriate view of the market conditions
and business operations.
The following assumptions were used in the
value-in-use calculations in the model for USA:
Discount Rate
The pre-tax discount rate used in the model is 10.0%
(2021: 8.5%)
EBITDA assumptions
In assessing the recoverable amount of the China CGU,
management made a number of significant assumptions
including assumptions regarding 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 believes that any reasonably possible
change in the key assumptions on which recoverable
amount is based would not cause the carrying amount
to exceed the recoverable amount of the CGU.
EBITDA for FY2023 is based on the Board approved
budget, with FY2024 to FY2027 increasing by an
average of 5.0% per annum, which is in line with the
management’s growth strategies for the short to
medium term. Management believes this is achievable
based on historical trends and the plans to continue to
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
2022 ANNUAL REPORT | GALE PACIFIC | 54
Note 13. Non-current assets – intangibles (continued)
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.
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. Non-current assets – right-of-use assets
Land and buildings – right-of-use
Less: Accumulated depreciation
Consolidated
2022
$’000
35,570
(9,155)
26,415
2021
$’000
27,664
(7,350)
20,314
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) for the year ended 30 June 20222022 ANNUAL REPORT | GALE PACIFIC | 55
Note 14. Non-current assets – right-of-use assets (continued)
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 2020
Additions
Disposals
Exchange differences
Depreciation expense
Balance at 30 June 2021
Additions
Exchange differences
Depreciation expense
Balance at 30 June 2022
Land
buildings –
right-of-use
$’000
21,780
4,784
(1,427)
(616)
(4,207)
20,314
9,384
1,433
(4,716)
26,415
Accounting policy for right-of-use assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost,
which comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or
before the commencement date net of any lease incentives received, any initial direct costs incurred, and, except
where included in the cost of inventories, an estimate of costs expected to be incurred for dismantling and removing
the underlying asset, and restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated
useful life of the asset, whichever is the shorter. Where the Group expects to obtain ownership of the leased asset
at the end of the lease term, the depreciation is over its estimated useful life. Right-of use assets are subject to
impairment or adjusted for any remeasurement of lease liabilities.
The Group has elected not to recognise a right-of-use asset and corresponding lease liability for short-term leases
with terms of 12 months or less and leases of low-value assets. Lease payments on these assets are expensed to
profit or loss as incurred.
Note 15. Current liabilities – trade and other payables
Trade payables
Sundry payables and accruals – Customer rebates
Sundry payables and accruals – Other
Refer to note 25 for further information on financial instruments.
Consolidated
2022
$’000
17,175
9,420
4,097
2021
$’000
17,927
8,054
3,526
30,692
29,507
2022 ANNUAL REPORT | GALE PACIFIC | 56
Note 15. Current liabilities – trade and other payables (continued)
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 16. Current liabilities – borrowings
Bank loans
Consolidated
2022
$’000
2021
$’000
21,059
19,364
Refer to note 25 for further information on financial instruments. Refer note 19 for non-current portion of
the borrowings.
Note 17. Current liabilities – provisions
Warranties
Warranties
Consolidated
2022
$’000
507
2021
$’000
501
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.
Warranty movements
Carrying amount at the start of the year
Additional provisions recognised
Claims
Carrying amount at the end of the year
Accounting policy for provisions
Consolidated
2022
$’000
2021
$’000
501
382
(376)
507
144
708
(351)
501
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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) for the year ended 30 June 20222022 ANNUAL REPORT | GALE PACIFIC | Note 18. Current liabilities – lease liabilities
Lease liability
Refer to note 25 for further information on financial instruments.
Note 19. Non-current liabilities – borrowings
Total Bank loans
Refer to note 25 for further information on financial instruments.
Total secured liabilities
The total secured liabilities (current and non-current) are as follows:
Total Bank loans
Assets pledged as security
57
Consolidated
2022
$’000
4,677
2021
$’000
3,764
Consolidated
2022
$’000
12,935
2021
$’000
9,575
Consolidated
2022
$’000
2021
$’000
33,994
28,939
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.
2022 ANNUAL REPORT | GALE PACIFIC | 58
Note 20. Non-current liabilities – lease liabilities
Lease liability – 1 to 5 years
Lease liability – greater than 5 years
Consolidated
2022
$’000
22,624
1,487
24,111
2021
$’000
17,977
602
18,579
Refer to note 25 for further information on financial instruments.
Accounting policy for lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at
the present value of the lease payments to be made over the term of the lease, discounted using the interest rate
implicit in the lease or, if that rate cannot be readily determined, the Group’s incremental borrowing rate. Lease
payments comprise of fixed payments less any lease incentives receivable, variable lease payments that depend
on an index or a rate, amounts expected to be paid under residual value guarantees, exercise price of a purchase
option when the exercise of the option is reasonably certain to occur, and any anticipated termination penalties.
The variable lease payments that do not depend on an index or a rate are expensed in the period in which they
are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are
remeasured if there is a change in the following: future lease payments arising from a change in an index or a rate
used; residual guarantee; lease term; certainty of a purchase option and termination penalties. When a lease liability
is remeasured, an adjustment is made to the corresponding right-of use asset, or to profit or loss if the carrying
amount of the right-of-use asset is fully written down.
Note 21. Equity – issued capital
Consolidated
Consolidated
2022
Shares
2021
Shares
2022
$’000
2021
$’000
Ordinary shares fully paid
276,393,042
275,391,310
63,403
63,068
Movements in ordinary share capital
Consolidated
Opening Balance
Consolidated
2022
Shares
2021
Shares
2022
$’000
2021
$’000
275,391,310
275,391,310
63,068
63,068
Vesting of performance rights
1,001,732
–
335
–
Closing Balance
Ordinary shares
276,393,042
275,391,310
63,403
63,068
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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) for the year ended 30 June 20222022 ANNUAL REPORT | GALE PACIFIC | 59
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.
Consolidated
2022
$’000
2,195
435
3,271
4,434
10,335
2021
$’000
(2,201)
118
2,607
3,935
4,459
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
No new buy-back scheme was effective for the financial
year ended 30 June 2022.
Vesting of performance rights
1,001,732 performance rights vested meeting the
performance and time hurdles during the financial year
ended 30 June 2022 (2021: Nil).
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.
Note 22. Equity – reserves
Foreign currency reserve
Hedging reserve – cash flow hedges
Share-based payments reserve
Enterprise reserve fund
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.
2022 ANNUAL REPORT | GALE PACIFIC | 60
Note 22. 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 2020
Foreign currency translation*
Movement in hedge
Income tax
Share-based payment
Statutory transfers from retained earnings
Balance at 30 June 2021
Foreign currency translation*
Movement in hedge
Income tax
Share-based payment
Vesting of performance rights
Statutory transfers from retained earnings
Foreign
currency
$.000
(991)
(1,210)
–
–
–
–
(2,201)
4,396
–
–
–
–
–
Hedging
$’000
(145)
–
342
(79)
–
–
118
–
454
(137)
–
–
–
Share-
based
payments
$’000
Enterprise
reserve
fund
$’000
1,172
3,956
–
–
–
1,435
–
2,607
–
–
–
999
(335)
–
–
–
–
–
(21)
3,935
–
–
–
–
–
499
4,434
Total
$’000
3,992
(1,210)
342
(79)
1,435
(21)
4,459
4,396
454
(137)
999
(335)
499
10,335
Balance at 30 June 2022
2,195
435
3,271
* Refer to note 24 for details of monetary items identified as a net investment in a foreign operation
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) for the year ended 30 June 20222022 ANNUAL REPORT | GALE PACIFIC | Note 23. Equity – dividends
Dividends paid during the financial year were as follows:
Final Dividend for the year ended 30 June 2020 of 1.00 cent per ordinary
share (unfranked)
Interim Dividend for the year ended 30 June 2021 of 2.00 cents per
ordinary share (unfranked)
Final Dividend for the year ended 30 June 2021 of 2.00 cents per
ordinary share (unfranked)
Interim Dividend for the year ended 30 June 2022 of 1.00 cent per
ordinary share (50% franked)
61
Consolidated
2022
$’000
2021
$’000
–
–
5,508
2,764
8,272
2,754
5,508
–
–
8,262
On 23 August 2022 the Directors declared a dividend of 1.00 cent per share to the holders of fully paid ordinary
shares in respect of the year ended 30 June 2022. This dividend has not been included as a liability in these
financial statements. Including the final dividend with respect to 30 June 2022, for the full year, the dividends of
2.00 cents per ordinary share have been declared on earnings of 2.76 cents per share.
Accounting policy for dividends
Dividends are recognised when declared during the financial year and no longer at the discretion of the Company.
Note 24. Monetary items identified as a net investment in a
foreign operation
Related party receivable to the Company from Gale Pacific Special
Textiles (Ningbo) Limited
Related party receivable to the Company from Gale Pacific
(New Zealand) Limited
Consolidated
2022
$’000
2021
$’000
10,306
9,444
2,958
13,264
3,828
13,272
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 22.
Note 25. 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.
2022 ANNUAL REPORT | GALE PACIFIC | 62
Note 25. 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 applicable 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 Group adopts fair value hedge accounting on forward exchange contracts that are designated and qualify as
fair value hedges. Forward exchange contracts are recognised in the profit and loss immediately, together with any
changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.
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:
Consolidated
Buy US dollars/sell Australian dollars
Maturity:
Less than 6 months
6 – 12 months
Consolidated
Buy Chinese yuan/sell US dollars
Maturity:
Less than 6 months
Sell Australian dollars
Average exchange rates
2022
$’000
2021
$’000
2022
2021
12,554
1,950
8,313
1,362
0.7185
0.7179
0.7638
0.7710
Sell US dollars
Average exchange rates
2022
$’000
2021
$’000
2022
2021
35,400
33,000
6.4500
6.5112
The carrying amount of the Group’s foreign currency denominated financial assets and financial liabilities at the
reporting date were as follows:
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) for the year ended 30 June 20222022 ANNUAL REPORT | GALE PACIFIC | Consolidated
US dollars
New Zealand dollars
Chinese renminbi
UAE dirham
63
Assets
Liabilities
2022
$’000
2021
$’000
2022
$’000
2021
$’000
58,489
60,370
27,274
26,097
1,527
1,326
1,104
746
489
849
437
–
–
275
–
–
62,446
62,454
27,711
26,372
The Group had net assets denominated in foreign currencies of $34,735,000 (assets of $62,446,000 less liabilities
of $27,711,000 as at 30 June 2022 (2021: $36,082,000 (assets of $62,454,000 less liabilities of $26,372,000)).
Based on this exposure, had the Australian dollar strengthened by 10% / weakened by 10% (2021: 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 $103,000 lower/higher (2021: $285,000 higher/lower) and equity would
have been $3,296,000 lower/higher (2021: $2,952,000 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.
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 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
2022
2021
Weighted
average
interest rate
%
Weighted
average
interest rate
%
Balance
$’000
–
28,465
2.80%
(33,995)
–
2.19%
(5,530)
Balance
$’000
30,407
(28,912)
1,495
An analysis by remaining contractual maturities is shown in ‘liquidity and interest rate risk management’ below.
An official increase/decrease in interest rates of 100 (2021: 100) basis points would have an adverse/favourable
effect on profit before tax of $339,940 (2021: $289,116) 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
2022 ANNUAL REPORT | GALE PACIFIC | 64
Note 25. Financial instruments (continued)
those assets, as disclosed in the statement of financial
position and notes to the financial statements. The
Group does not hold any collateral.
The Group has adopted a lifetime expected loss
allowance in estimating expected credit losses to trade
receivables through the use of a provisions matrix using
fixed rates of credit loss provisioning. These provisions
are considered representative across all customers of
the Group based on recent sales experience, historical
collection rates and forward-looking information that
is available.
Generally, trade receivables are written off when there
is no reasonable expectation of recovery. Indicators
of this include the failure of a debtor to engage in a
repayment plan, no active enforcement activity and
a failure to make contractual payments for a period
greater than 1 year.
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.
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 – 2022
Non-derivatives
Non-interest bearing
Trade payables
Customer rebates
Other sundry payables and accruals
Interest-bearing – variable
Bank loans
Lease liability
Total non-derivatives
Weighted
average
interest
rate
%
1 year or
less
$’000
Between
1 and
2 years
$’000
Between
2 and
5 years
$’000
Over
5 years
$’000
Remaining
contractual
maturities
$’000
–
–
–
17,175
9,420
4,097
–
–
–
2.80%
21,059
3.41%
5,782
12,935
6,653
57,533
19,588
–
–
–
–
–
–
–
–
17,148
17,148
2,013
2,013
17,175
9,420
4,097
33,994
31,596
96,282
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) for the year ended 30 June 20222022 ANNUAL REPORT | GALE PACIFIC | 65
Weighted
average
interest
rate
%
1 year or
less
$’000
Between
1 and
2 years
$’000
Between
2 and
5 years
$’000
Over
5 years
$’000
Remaining
contractual
maturities
$’000
Consolidated – 2021
Non-derivatives
Non-interest bearing
Trade payables
Customer rebates
Other sundry payables and accruals
Interest-bearing – variable
Bank loans
Lease liability
2.19%
3.49%
19,364
4,497
9,575
4,497
Total non-derivatives
53,368
14,072
12,252
–
–
–
17,927
8,054
3,526
–
–
–
–
–
–
–
12,252
–
–
–
–
3,509
3,509
17,927
8,054
3,526
28,939
24,755
83,201
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually
disclosed above.
Note 26. 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 – 2022
Liabilities
Forward foreign exchange contracts
Total liabilities
Consolidated – 2021
Assets
Forward foreign exchange contracts
Total liabilities
Level 1
$’000
Level 2
$’000
Level 3
$’000
Total
$’000
–
–
1,355
1,355
–
–
1,355
1,355
Level 1
$’000
Level 2
$’000
Level 3
$’000
Total
$’000
–
–
515
515
–
–
515
515
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.
2022 ANNUAL REPORT | GALE PACIFIC | 66
Note 26. Fair value measurement (continued)
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 27. Related party transactions
Parent entity
Gale Pacific Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 30.
Key management personnel
Disclosures relating to key management personnel are
set out in note 28 and the remuneration report included
in the directors’ report.
Receivable from and payable to related parties
There were no trade receivables from or trade
payables to related parties at the current and previous
reporting date.
Loans to/from related parties
There were no loans to or from related parties at the
current and previous reporting date.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) for the year ended 30 June 20222022 ANNUAL REPORT | GALE PACIFIC | 67
Note 28. Key management personnel disclosures
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 29. 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
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
Consolidated
2022
$’000
2021
$’000
3,896,531
2,732,525
159,303
136,696
171,934
1,139,584
1,332,590
5,367,352
4,201,811
Parent
2022
$’000
6,511
6,828
2021
$’000
10,610
10,873
Parent
2022
$’000
32,285
121,441
25,916
49,607
2021
$’000
22,846
116,201
21,688
43,922
63,403
63,068
435
3,270
4,726
117
2,606
6,488
71,834
72,279
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity has guarantees in relation to the debts of its subsidiaries in fixed and floating charges (or
equivalent foreign charge) over all the assets and undertakings, including uncalled capital of each entity in the
Group as at 30 June 2021 and 30 June 2022.
2022 ANNUAL REPORT | GALE PACIFIC | 68
Note 30. Interests in subsidiaries (continued)
Please note comparative year has been changed to reflect consolidation entries between group entities.
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2021 and 30 June 2022.
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 30. 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
New Zealand
Gale Pacific FZE
United Arab Emirates
Gale Pacific Special Textiles (Ningbo) Limited
China
Gale Pacific Trading (Ningbo) Limited
Gale Pacific USA, Inc.
Zone Hardware Pty Ltd
Riva Window Fashions Pty Ltd
China
USA
Australia
Australia
Ownership interest
2022
%
100%
100%
100%
100%
100%
100%
100%
2021
%
100%
100%
100%
100%
100%
100%
100%
Note 31. 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.
A share option plan has been established by the
Group and approved by shareholders at a general
meeting, whereby the Group may, at the discretion of
the Nomination and Remuneration Committee, grant
options over ordinary shares in the Company to certain
key management personnel of the Group. The options
are issued for nil consideration and are granted in
accordance with performance guidelines established by
the Nomination and Remuneration Committee.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) for the year ended 30 June 20222022 ANNUAL REPORT | GALE PACIFIC | 69
Set out below are summaries of performance rights granted under the plan:
2022
Grant date
Expiry date
Grant price
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
13/11/2018
01/12/2021
$0.35
886,000
16/01/2020
01/12/2022
$0.26
1,034,971
30/10/2020
01/12/2023
$0.16
1,987,000
23/12/2020
01/12/2023
$0.18
14,000,000
–
–
–
–
23/12/2022
01/12/2024
06/04/2022
01/12/2024
$0.28
$0.28
–
–
2,870,000
204,000
(686,836)
(199,164)
–
–
(160,737)
874,234
(314,896)
(640,000)
1,032,104
–
–
–
– 14,000,000
–
–
2,870,000
204,000
17,907,971
3,074,000
(1,001,732)
(999,901) 18,980,338
2021
Grant date
Expiry date
Grant price
Balance at
the start of
the year
Granted
Exercised
22/11/2017
01/12/2020
$0.31
956,000
13/11/2018
01/12/2021
$0.35
886,000
16/01/2020
01/12/2022
$0.26
1,034,971
–
–
–
30/10/2020
01/12/2023
23/12/2020
01/12/2023
$0.16
$0.18
–
1,987,000
– 14,000,000
2,876,971
15,987,000
–
–
–
–
–
–
Expired/
forfeited/
other
Balance at
the end of
the year
(956,000)
–
–
–
–
886,000
1,034,971
1,987,000
– 14,000,000
(956,000)
17,907,971
The performance rights granted on the
23 December 2021 and 6 April 2022 to the senior
executives are subject to performance conditions and
time hurdles as outlined below.
Performance condition – The number of Rights issued
that will vest will be determined proportionately from
zero Rights vesting if the diluted EPS CAGR is less than
3.0% to 100% of the Rights vesting if the diluted EPS
CAGR of 10.0% (or higher) is achieved.
Time hurdle – The vesting of your Rights is also
dependent upon the employee remaining in
continuous employment with the Company until
30 September 2024.
623,000 of the performance rights granted on the
23 December 2021 to the senior executives and
senior managers are subject only to the time hurdle as
outlined below.
Time hurdle – The vesting of your Rights is also
dependent upon the employee remaining in
continuous employment with the Company until
30 November 2024.
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 Monte Carlo simulation 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.
2022 ANNUAL REPORT | GALE PACIFIC | 70
Note 31. Share-based payments (continued)
The cost of equity-settled transactions is 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 $0.28 (2021: $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 32. Remuneration of auditors
During the financial year the following fees were paid or payable for services provided by Deloitte Touche
Tohmatsu, the auditor of the Company:
Audit services – Deloitte Touche Tohmatsu
Audit or review of the financial statements
Other services – Deloitte Touche Tohmatsu
Other services (including tax services)
Consolidated
2022
$
2021
$
416,806
385,978
283,328
228,840
700,134
614,818
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) for the year ended 30 June 20222022 ANNUAL REPORT | GALE PACIFIC | 71
Note 33. New accounting standards and interpretations not yet mandatory
or early adopted
At the date of authorisation of the consolidated financial statements, other Standards and Interpretations in issue
but not yet effective were listed below.
Standard / amendment
AASB 2020-1 Amendments to Australian Accounting Standards – Classification of
Liabilities as Current or Non-current and AASB 2020-6 Amendments to Australian
Accounting Standards – Classification of Liabilities as Current or Non-current – Deferral of
Effective Date
AASB 2021-2 Amendments to Australian Accounting Standards – Disclosure of
Accounting Policies and Definition of Accounting Estimates
AASB 2021-5 Amendments to Australian Accounting Standards – Deferred Tax related to
Assets and Liabilities arising from a Single Transaction
Effective for annual
reporting periods
beginning on or after
1 January 2023
1 January 2023
I January 2023
In addition, at the date of authorisation of the financial statements no IASB Standards and IFRIC Interpretations were
on issue but not yet effective, but for which Australian equivalent Standards and Interpretations have not yet been
issued. The Directors of the Group do not anticipate that the adoption of above amendments will have a material
impact in future periods on the financial statements of the Group.
Note 34. Events after the reporting period
On 23 August 2022, the directors declared a 75% franked final dividend of 1.00 cent per share to the holders
of fully paid ordinary shares in respect of the full-year ended 30 June 2022, to be paid to shareholders on
14 October 2022. This dividend has not been included as a liability in these consolidated financial statements. The
total estimated dividend to be paid is $2,800,000.
No matters or circumstances, other than those disclosed elsewhere in this interim condensed financial report, have
risen since the end of the financial half year which significantly affected or could significantly affect the operations of
the Group, the results of those operations or the state of affairs of the Group in future financial years.
2022 ANNUAL REPORT | GALE PACIFIC | 72
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 19 August 2022
(Reporting Date).
Corporate Governance Statement
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 complies
with the ASX Corporate Governance Principles and Recommendations (Fourth Edition) (Recommendations).
The Company has prepared a statement which sets out the corporate governance practices that were in operation
throughout the financial year for the Company (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 (https://www.galepacific.com/investor-info/corporate-governance) 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
(https://www.galepacific.com/investor-info/corporate-governance).
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:
Class of Equity Securities
Fully paid ordinary shares
Performance rights expiring 1 December 2022
Performance rights expiring 1 December 2023
Performance rights expiring 1 December 2024
Number of
holders
1,865
3
6
15
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 1,865 holders of a total of 276,393,420 ordinary shares of the Company. The
voting rights attaching to the ordinary shares are set out in Clause 6.8 of the Company’s Constitution which states
as follows:
“….at a general meeting, on a show of hands, every person present who is a member or a proxy, attorney or
representative of a member has 1 vote; and on a poll, every person present who is a member or a proxy, attorney
or representative of a member has 1 vote for each share the member holds and which entitles the member to vote,
except for partly paid shares, each of which confers on a poll only a fraction of one vote equal to the proportion of
the total amount paid and payable (excluding amounts credited) on the share which has been paid (not credited) on
the share.”
ADDITIONAL SECURITIES EXCHANGE INFORMATION for the year ended 30 June 20222022 ANNUAL REPORT | GALE PACIFIC | Distribution of holders of equity securities
The distribution of holder of equity securities on issue in the Company as at the Reporting Date is as follows:
73
Range
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
Performance rights
Range
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
Ordinary fully paid shares
Total holders
126
549
252
718
220
Units
22,872
1,603,046
2,009,777
25,668,431
247,068,916
1,865
276,393,042
% of issued
capital
0.01
0.58
0.73
9.29
89.39
100
Performance rights
Holders of
performance
rights expiring
1 December 2022
Holders of
performance
rights expiring
1 December 2023
Holders of
performance
rights expiring
1 December 2024
–
–
–
–
3
3
–
–
–
–
6
6
–
–
–
2
10
12
Unmarketable parcels
The number of holders of less than a marketable parcel of ordinary shares based on the closing market price as at
the Reporting Date is as follows:
Unmarketable parcels as at reporting date
Minimum
parcel size
Holders
Minimum $500 parcel at $0.3000 per unit
1,667
241
Units
187,816
2022 ANNUAL REPORT | GALE PACIFIC | 74
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:
Class of equity securities
Thorney Holdings Proprietary Limited
Windhager Holding AG
Castle Point Funds Management
No. of ordinary
fully paid
shares
78,800,399
44,358,481
17,131,603
%
28.61
16.05
6.22
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
THORNEY HOLDINGS PTY LTD
WINDHAGER HOLDING AG
NATIONAL NOMINEES LIMITED
ARD CORPORATION PTY LTD
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