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ANNUAL RE PORT
| 2023 ANNUAL REPORT | GALE PACIFIC1 ABOUT
GALE PACIFIC
Founded in Melbourne, Australia, in 1951, GALE Pacific is the market-leading manufacturer
of technical fabrics used for consumer and commercial applications worldwide. Today, GALE
employs more than 550 people based in Australia, China, the United States, Europe, and Asia,
with products recognised around the world for their quality, durability, sustainability, and reliability.
GALE Pacific is on a mission to inspire life to thrive with textile innovations guided by four principles:
Design, Comfort, Protection, and Sustainability.
The Company’s commercial products, marketed
under the GALE Pacific Commercial® brand, include
knitted, coated, and advanced polymer fabrics used
in a growing number of applications across the
agricultural, horticultural, aquacultural, architectural,
construction, mining, and packaging industries.
The Company’s consumer products, marketed
under the Coolaroo® brand, include outdoor
roller shades, shade sails, shade and garden
fabrics, shade structures, and pet products. They
can be found at market-leading major retailers,
both in-store and online, around the world.
PRODUCT CATEGORIES
■ Architectural Shade Fabric
■ Horticultural Knitted Fabric
■ Commercial Netting
■ Agricultural Shade and Protection
■ All-Weather Advertising Banners
■ Coated Polyfabrics
■ Food-Grade Coated Non-Wovens
PRODUCT CATEGORIES
■ Roller Shades
■ Shade Sails
■ Shade Fabric
■ Pergolas and Gazebos
■ Umbrellas
■ Grow and Utility Bags
■ Pet Beds
| 2023 ANNUAL REPORT | GALE PACIFIC2 | 2023 ANNUAL REPORT | GALE PACIFIC3 | 2023 ANNUAL REPORT | GALE PACIFIC4 CONTENTS
Business Overview ___________________________________ 6
Chairman’s Letter _____________________________________ 8
Board of Directors ___________________________________ 10
Results at a Glance __________________________________ 12
FY23 Overview ______________________________________ 14
Growth Acceleration Plan ____________________________ 24
Growth Acceleration Plan In Action ___________________ 26
Environmental, Social, and Governance _______________ 35
Ecobanner™: Sustainable Skies _______________________ 36
New Americas Headquarters _________________________ 38
Executive Leadership ________________________________ 40
Meet Our Customers _________________________________ 44
Directors’ Report ____________________________________ 50
Auditor’s Independence Declaration __________________ 68
Directors’ Declaration _______________________________ 69
Consolidated Financial Statement ____________________ 70
Independent Auditor’s Report _______________________ 124
Additional Securities Exchange Information __________ 130
Corporate Directory _________________________________ 134
All financial data in this report are represented in
Australian Dollars (AU$) unless otherwise noted.
| 2023 ANNUAL REPORT | GALE PACIFIC5 BUSINESS OVERVIEW
Map legend: Head office Sales Office Warehouse Manufacturing
Charlotte, USA
Los Angeles,
USA
Orlando,
USA
Ningbo, China
Brisbane,
Australia
Dubai, UAE
Perth,
Australia
13.3
Americas
3.9
2023
Revenue
by region $M
91.9
82.2
Australia &
New Zealand
Developing
Markets
10.3
2023
EBITDA
by region $M
12.2
Melbourne,
Australia
Auckland,
New Zealand
COMPANY MILESTONES
1951
Harry and Barbara Gale
establish Gale Scarves
in Victoria, Australia.
Barbara weaves
products from home,
while Harry sells them
to local merchants.
1974
The Gales experimented
with new materials and
processes, eventually
creating a fabric which
doesn’t fray or tear
under tension – resulting
in the invention of high
density polyethylene
shade fabric.
1982
The demand for shade
fabric continues to
grow, prompting entry
into the U.S. market
with the opening of
the first GALE office in
Orlando, Florida. GALE
has been servicing
major U.S. retailers and
distributors ever since.
1996
GALE relocates
the head office,
assembly floor,
and warehouse to
Braeside, Melbourne.
The Coolaroo®
brand is born, and all
consumer products
are consolidated
under one brand.
| 2023 ANNUAL REPORT | GALE PACIFIC6 DID YOU KNOW?
Since the start of FY19 GALE Pacific has...
processed over 50,000 tonnes of material. That is the same weight as:
222 Statues
of Liberty
90 Airbus
A380s
333 Blue
Whales
The Sydney
Harbour Bridge
& produced over 80 million metres or 262 million feet of fabric. That would:
Wrap around
the globe
2 times
Span the width
of Australia more
than 20 times
Travel Charlotte to
Melbourne more
then 5 times
Ascend
Mount Everest
9,000 times
2000
GALE Pacific lists on the
Australian Securities
Exchange (ASX: GAP).
GALE acquires the
coated fabrics business
from VISY, enabling
innovation such as
Landmark grain covers
and growth into new
verticals. GALE Middle
East established.
2005
GALE builds and
opens it’s wholly-
owned, state of the
art, purpose-built
manufacturing facility
for knitted products in
Ningbo, China to serve
our growing global
customer base.
2018
Roller Shades expand
in the U.S. and Australia
making it GALE’s largest
category. Cancer
Council Australia’s
2020 endorsement
of Coolaroo and
GALE Pacific products
reinforces the
Company’s leadership
role in sun protection.
2023
US HQ moves to
Charlotte, North
Carolina, a major US
textile hub and home
to some of GALE’s
largest customers.
New textile innovations,
HeatShield® and
Ecobanner™, launch.
| 2023 ANNUAL REPORT | GALE PACIFIC7 CHAIRMAN’S
LETTER David Allman
The financial result for the 2023 financial
year was disappointing and well below
our expectations at the start of the year
as global markets shifted markedly and
surprisingly post-pandemic.
During the year the impact of improving
global supply chain conditions was more
than offset by demand reductions resulting
from broad market inflation negatively
impacting consumer spending on home
improvement, customer inventory de-
stocking, and poor weather conditions
across Australia and the United States
during critical summer trading periods.
Full-year revenue of $187.6 million was
down 9% on FY22, while profit before tax
of $5.3 million was down 52% on FY22.
Earnings per share of 1.34 cents was
down from 2.76 cents in FY22, enabling
an interim dividend of 1 cent. Net cash
generation from operations of $8.4 million
was positively impacted by the team
reducing inventory rapidly in response to
the demand pressures.
Despite the challenging operating
environment and lower-than-anticipated
financial results, we continued to invest in
enabling our team to improve the Company
as outlined in our Growth Acceleration
Plan, an example being our investment in
a new ERP system to allow the Company
to scale with greater efficiency and data
transparency and security.
| 2023 ANNUAL REPORT | GALE PACIFIC8 Our investments in new product innovation are beginning to come to market in greater volume and
with more significant impact, helping the Company enter new categories and drive greater growth in
core categories while adding to the Company’s intellectual property portfolio.
With the opening of our new office in March, the transition of our Americas head office and team
from Orlando to Charlotte is complete. The Directors traveled to Charlotte in July to meet with group
leadership and the newly formed Americas team, and we came away confident in their ability to
deliver on the opportunity to expand our business in the Company’s most significant growth region
over the coming years.
Our management team dealt with a very challenging year while executing restructuring programs with
professionalism and speed in our key markets of Australia and the United States and at our production
facilities at Ningbo in China and Melbourne.
We remain confident in the opportunity to build GALE Pacific into a faster-growing,
world-class global fabrics technology business and that we have the right strategy
and management team to realise this vision for the Company over the coming years.
We are planning for revenue and profit growth in FY24 driven by business expansion in the Americas
in the second half after a more challenging first half.
I want to thank our management team and all our employees worldwide for their continued
commitment to improving the Company and their resilience during a very difficult year.
David Allman
Chairman
| 2023 ANNUAL REPORT | GALE PACIFIC9 BOARD OF
DIRECTORS
DAVID ALLMAN
B.SC.
DONNA MCMASTER
GAICD
CHAIRMAN AND NON-EXECUTIVE
DIRECTOR SINCE NOVEMBER 2009
NON-EXECUTIVE DIRECTOR
SINCE MARCH 2018
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.
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 Chair & Non-Executive Director of
Dandenong Market Pty Ltd and serves as a
Member of the Audit and Risk Committee as
well as Deputy Chair & Executive Director
of YMCA Service Pty Ltd where she is also a
Member of the HR & Governance Committee.
Donna is a member of the Company’s
Nomination and Remuneration 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. 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 20 Cashews Pty Ltd group, including Australian
Community Media and View Media Group.
Peter is the Chairman of the Audit and Risk
Committee and is a member of the Company’s
Nomination Committee.
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 Soco Limited, Chairman
of Xref Limited, and Chairman of
Escient. Tom was previously chairman
of Empired Limited, a non-executive
director of Inabox Group, CEO of SMS
Management & Technology, 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.
2023
RESULTS AT
A GLANCE
$8.4M
$20.7M
EBITDA
PCP: $22.9m
NET CASH FROM OPERATIONS
PCP: $7.2m
$187.6M
REVENUE
PCP: $205.5m
$8.9M
EBIT
PCP: $13.0m
$15.8M
NET DEBT
PCP: $5.5m
1.34C
EARNINGS PER SHARE
PCP: 2.76c
1.0C
TOTAL DIVIDEND
PCP: 2.0c
Global inventory reduced by
$27.1 million
($80.4 million to $53.3 million)
November - June
Design phase completed
Dynamics 365 cloud ERP
Restructuring programs to deliver
$5 million
in three year savings
Over $4.7 million saved
via operational excellence initiatives
Opened new US HQ in
Charlotte, NC
Product lead-times
reduced by
by 50%
globally
Launched
| 2023 ANNUAL REPORT | GALE PACIFIC13 GALE
PACIFIC
FY23
OVERVIEW
John Paul Marcantonio
CHIEF EXECUTIVE OFFICER &
MANAGING DIRECTOR’S REVIEW
Though we are constructively dissatisfied with the 2023 financial result, we are encouraged by our
progress against our strategic plan, which we firmly believe is the right one for the Company and will
lead to superior earnings growth over time. Our team built further competency, capability, and capacity
across many critical elements outlined in our Growth Acceleration Plan in FY23.
Growth Acceleration Plan
VALUES
Integrity | Respect
Collaboration | People
Community | Innovation
CATEGORIES
Consumer and commercial
technical fabrics and
associated
finished goods
VISION
Build GALE Pacific
into a fast-growing,
world-class, global
fabrics technology
business
MARKETS
Americas
Australia & New Zealand
Developing Markets
TEAM
A high-performance culture
of great leaders and
functional experts known for
best-in-class results
HOW WE GROW
CATEGORIES
Develop and launch
breakthrough
innovation in our
core categories
MARKETS
Drive category
growth in retail
& commercial in
Australia & the U.S.
Accelerate new
& near-neighbour
category entry
Rapidly expand
distribution &
availability in the U.S.
PEOPLE
Develop our functional
leadership capabilities
throughout organisation
Embed our Attract,
Engage, Develop
organisational
development model
Accelerate
penetration via
leadership brand
activation and
communication
Extend our borders
into Latin America
& Southeast Asia;
expand Canada,
Middle East & Europe
Build & empower the
team to double by
becoming an employer
of choice for top talent
to grow their careers
CAPABILITIES
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
SUPPLY CHAIN
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
Delivered with EDGE: Every Day Great Execution
Trading conditions were challenging throughout the year in all selling regions. Historically aggressive
interest rate hikes by global central banks to fight broad market inflation, particularly in the United
States and Australia, coupled with an accelerated shift in post-pandemic consumer spending on
household goods to travel and services and overall challenging housing market conditions led to
demand headwinds across markets and categories for the Company.
| 2023 ANNUAL REPORT | GALE PACIFIC14 As an outdoor products company, weather conditions greatly influence the Company’s performance.
Unseasonably cool and historically wet weather across the eastern half of Australia negatively
impacted the overall result for consumer and commercial categories. Similarly, poor weather across
the western, southern, and southeastern United States throughout quarter three and much of quarter
four negatively impacted the second-half result.
Global supply chain conditions materially improved in the second
half, with international shipping capacity and costs now nearly fully
normalised due to lower overall international demand for goods.
Our customers materially reduced on-hand inventories at stores and
across their warehouse networks as these improved global supply
chain conditions allowed for shorter product delivery lead times from
order to shelf.
Additionally, the overall reduction in consumer spending resulted
in year-over-year declines in comparative unit sell-through across
customers and the broad market.
Our teams responded professionally and with speed, sidelining
production capacity and balancing labour to match lower demand
profiles while concurrently reducing lead time for goods made at our
facility in Ningbo, China, by 50% in the second half.
Global Inventory
decreased by
$27.1 million
($80.4 million to $53.3 million)
from November to June
Manufacturing lead
times reduced by
50%
+$5 million
from restructuring
savings over 3yrs
As a result of these efforts, overall global inventory was reduced by $27.1 million, from $80.4 million to
$53.3 million, at year-end from its peak in November without any impact to service and delivery. Our
operations are efficient, and manufacturing capacity closely aligns with anticipated forward-looking
demand entering FY24.
New product innovation in our core categories is one of the most critical elements of our growth
strategy, and our team delivered significant new product innovation projects across consumer and
commercial categories in the year while managing the noted challenges.
New Coolaroo® shade fabric with HeatShield® technology launched in the second half of the year in the
United States and led to record levels of sell-through for the shade sails category in only a few months.
“This double protection ensures things
stay much cooler underneath, setting it
apart from other products on the market.”
– Nathalie Pimentel, Director,
Product Marketing & Innovation
Read more about HeatShield® on p. 34
| 2023 ANNUAL REPORT | GALE PACIFIC15 HeatShield® is a patent pending, new-to-world fabric innovation developed by our R&D team
that delivers fabric surface temperature reductions of up to 10 degrees Celsius or 15 degrees
Fahrenheit by blocking both infrared and ultraviolet light.
Launching across our product portfolio in FY24, our selling teams have already secured commitments to
expand Coolaroo® consumer products and GALE Pacific commercial fabrics with Heat Shield® technology
across categories and at most existing and some significant new retail partners entering FY24.
Entering new near-neighbour categories and high-growth end-use markets with innovative new
products that utilise our existing, differentiated manufacturing capabilities is another essential
element of our growth strategy.
131.2M
Households
in the US
+11.0M
GALE Products
Sold Since 2019
8.5%
Household
Penetration
Even with 11 million units sold since 2019, GALE Pacific products can only be found in a small portion of U.S. homes today. The total addressable
market for GALE Pacific products in the United States is large today and will continue to develop over the coming years.
Leveraging several patented and patent-pending technologies in our coated commercial and
technical fabrics portfolio, our team developed and launched a new-to-world, sustainable technical
fabric for the away-from-home advertising industry.
Ecobanner™ is a patent pending, reinforced, fully recyclable printable fabric designed for large
outdoor billboards and advertising. Developed and manufactured by GALE Pacific, Ecobanner™ is the
only Australian-made, PVC-free flexible banner fabric capable of offering a 100% closed-loop end-of-
life recycling and reuse solution.
Ecobanner™ on Glebe Island silo billboard in Sydney, Australia, for the FIFA 2023 Women’s World Cup. Australia’s first PVC-free printable banner
fabric, championing a 100% closed-loop solution, Ecobanner™ demonstrates our commitment to sustainability and revolutionises outdoor
advertising. Photo credit: oOh! Media.
| 2023 ANNUAL REPORT | GALE PACIFIC16 Our transition to Charlotte, North Carolina was completed in March, with our group leadership
and Americas operating teams moving into a new, purpose-built office location. The high-performance
teams are now conveniently located to deliver on the Company’s growth goals in our key target
market. The proximity to our largest core customers, access to technology, and a large talent pool
specific to the textile industry are core enablers of our growth plan over the coming years.
GALE Pacific’s new Americas headquarters grand opening
in Charlotte, North Carolina on 30 March 2023.
We completed the design phase of our global Enterprise Resource Planning (ERP) system
reimplementation project in June, having reviewed and optimised all business processes across
operations and finance for the Company following industry best practices for manufacturing and
distribution firms that run cloud-based Microsoft Dynamics 365.
We are finalising a rigorous integration vendor selection process and will begin implementing the
newly configured ERP system in September, with go-live scheduled for quarter four FY24. These
newly streamlined operating systems are critical enablers of our growth plans and will support us to
scale the Company efficiently while increasing information transparency and security.
In June, we announced and actioned two distinct strategic restructuring programs to further align our
teams to our growth strategy, match our resources to the operating environment, and ensure the best total
cost of production for our goods.
These programs in Australia (aligning teams to our growth categories in the commercial end markets
while lowering total regional headcount) and the United States (the transition of our custom roller
shade fabrication from a leased and operated facility in Orlando to a partner firm in Spartanburg, South
Carolina) will deliver meaningful productivity and increased profit with combined three-year savings of
over $5 million.
| 2023 ANNUAL REPORT | GALE PACIFIC17 Sheryl Smith, our CFO, is leading a cross-functional team on an
essential piece of work to understand better our current position
regarding all matters ESG. We recently concluded a benchmarking
study with a partner consulting firm with global ESG expertise to
help our team and our company develop and implement a roadmap
of activities over the coming years to improve the foundation in
place today.
Despite the challenges, our team made significant foundational
improvements to the Company throughout the 2023 financial
year that will pay dividends in FY24 and beyond.
Throughout this year’s annual report, you will see evidence of
our plans in action and have an opportunity to meet a few of the
members of our team who are actively improving the Company and
describe how we Grow Our Categories, Markets, Supply Chain,
Capabilities and, most importantly, our People.
“GALE Pacific is
firmly committed to
protection – from
safeguarding
individuals and
assets to preserving
our environment...”
– Sheryl Smith,
Chief Financial Officer
Read more about our
ESG efforts on p. 35
You will also hear from a few of our largest and most strategic global customers as to the importance
of their partnership with our company and how the products and services we provide, coupled with
our ability to partner with them to expand and grow the size of our categories, makes GALE Pacific a
partner of choice for GROWTH.
We also brought to life some of the Company’s most significant product innovations and global project
installations to show how our brands and products are presented to our target consumers and how
they are used in application.
The opportunity to build the Company into a faster-growing, world-class global fabrics technology
business is apparent. I want to thank our team for their commitment, dedication, and focus toward
realising this vision for the Company over this and the coming years.
John Paul Marcantonio
Chief Executive Officer & Managing Director
| 2023 ANNUAL REPORT | GALE PACIFIC18
PROJECT SPOTLIGHT
TURNING FUNCTION
TO ART
Bangkok Keerapat International School
Sang Thong,
Thailand
Shade Sail in
Desert Sand
In the heart of Bangkok, Keerapat International School took creativity to new heights. Using Coolaroo’s
standard 3.6 sq.m. retail shade sails, they crafted a breathtaking canopy over their football field. By
ingeniously interlinking multiple sails, they achieved a mesmerising play of shade and light, making the
field not just functional, but visually spectacular!
| 2023 ANNUAL REPORT | GALE PACIFIC19 FY23 REGIONAL
RESULTS
AMERICAS
Revenue
EBITDA
FY23
FY22
91.9
12.2
95.6
13.0
FY21
96.2
13.5
FY20
73.3
11.8
% vs
FY22
(4)
(6)
% vs
FY21
(4)
(10)
% vs
FY20
25
3
Americas revenue of $91.9 million
was down 4% compared to FY22
due to poor weather conditions in
the second half and lower year-
on-year unit sell-through across
retail channels and customers as
US consumers lowered overall
spending versus prior year in
the face of retail price inflation
and shifted spending away from
household goods and prioritised
travel, entertainment, and services.
The improvement in global supply chain capacity led to product delivery lead time improvement,
which, coupled with lower demand, led to significant on-hand inventory destocking at major retail
partners across the region, which also negatively impacted revenue in FY23.
EBITDA declined 6% driven primarily by higher than forecasted weighted average product cost due to
lower trading volumes in the second half, the inefficiency impact of lowering production volumes at
GALE’s manufacturing facility in Ningbo, China, to reduce Americas regional on-hand inventory levels
and year-over-year increases in warehousing costs.
Americas regional revenue was up 25% compared to pre-pandemic financial year 2020 with
comparable regional earnings as the Company continued investments in resources ahead of growth
to drive scale and increased earnings in the Company’s lead strategic growth region.
Regional profit margins improved exiting the year, driven by lower inbound freight costs in the second
half and the further balancing of input costs compared to pricing measures enacted.
Regional inventory of US $12.4 million at year-end represented a reduction of US $10.3 million or
45% from the November peak driven by forecast accuracy improvements, reductions in required
| 2023 ANNUAL REPORT | GALE PACIFIC20 manufactured products from GALE’s facility in Ningbo, China, and improved lead times resulting from
international shipping capacity increases in the second half.
Distribution expansion and consumer availability improvements for the Company’s core product
ranges in existing and new customers continued, with new placements in shade sails, fabrics, roller
shades, pet beds, and commercial fabrics driven by new product launches featuring the benefits of
Coolaroo® with HeatShield® technology across categories.
Commercial fabric demand improved in the second half, with quarter four ending as the largest quarter for
commercial fabric revenue in the region’s history, up 11% from the previous commercial sales record set in
quarter four of 2022.
GALE completed its Americas headquarters relocation to Charlotte, North Carolina, in March 2023
and has now completed its group executive leadership and Americas regional team restructuring
and relocation activities with significant increases in capability and capacity across sales, marketing,
engineering, product development, and program management to drive delivery of the regional growth
strategy over the coming years.
AUSTRALIA | NEW ZEALAND
Revenue
EBITDA
FY23
FY22
82.2
10.4
93.7
11.5
FY21
92.0
14.4
FY20
64.6
5.4
% vs
FY22
(12)
(10)
% vs
FY21
(11)
(28)
% vs
FY20
27
92
Revenue of $82.2 million was down $11.5
million or 12% from the prior year, driven
primarily by unseasonably cool and
historically wet weather across the east
coast of Australia, which had a negative
impact across both consumer and
commercial end markets.
This resulted in lower year-on-year unit
sell-through at retail as consumers lowered
overall spending in the face of retail price
inflation and shifted spending away from
household goods and prioritised travel,
entertainment, and services.
EBITDA declined 10%, driven primarily by higher than forecasted weighted average product cost
impacts driven by lower trading volumes and the inefficiency impact of lowering production volumes
at GALE’s manufacturing facilities in Ningbo, China and Braeside, Victoria.
| 2023 ANNUAL REPORT | GALE PACIFIC21 Regional revenue was up 27% compared to pre-pandemic
financial year 2020, while earnings nearly doubled as a direct
result of the Company’s strategy to focus on profitability
improvement initiatives and profit enhancing growth programs.
Regional profit margins improved due to lower inbound
freight costs and the further balancing of input costs
compared to pricing measures enacted.
Regional inventory of $21.0 million at year-end represented a reduction of $14.3 million or 40% from
the November peak, driven by forecast accuracy improvements, reductions in required manufactured
products across facilities and suppliers, and improved lead times resultanting from international
shipping capacity increases.
Record rainfall across the east coast grain belt constrained year-on-year demand for the Company’s
grain storage-related coated fabrics; however market share for these products stayed consistent and
remain the benchmark across the Australian agricultural sector.
Additional share was secured throughout the year in the horticultural segment with GALE’s
differentiated orchard netting products driving growth at the largest regional fabricators.
Incremental placements for the FY24 peak consumer selling season have been secured that will
improve the consumer purchase experience across the Company’s market leading shade fabric, shade
sail, outdoor roller blind and umbrella categories at Bunnings. The region also delivered market share
expansion across established and developing e-commerce retailers.
Leveraging GALE’s proprietary and differentiated coating capability to unlock new market opportunities,
commercial trials are underway on increased recycled content in grain storage fabrics designed to
provide a repeatable, closed-loop, end-of-life recycling solution, a first in the agricultural sector.
The first commercial installation of GALE’s patent-pending Ecobanner™ was completed on Australia’s
largest outdoor billboard in Sydney. Further market penetration is expected across the coming year
with market-leading outdoor advertising partners.
GALE also extended partnerships with leading produce and ready-made meal packaging
manufacturers to develop and supply sustainable packaging innovation to meet Australia’s single use
plastic reduction targets.
| 2023 ANNUAL REPORT | GALE PACIFIC22 DEVELOPING MARKETS
FY23
FY22
FY21
FY20
Revenue
EBITDA
13.4
3.9
16.2
4.1
17.0
4.9
18.4
4.8
% vs
FY22
(17)
(5)
% vs
FY21
(21)
(21)
% vs
FY20
(27)
(19)
Revenue of $13.4 million was down $2.8 million or 17% due mainly to constrained demand in the
Middle East from the continued implementation and execution of the Company’s improved credit
discipline in the region. Due to these stricter policies and operating measures, the Company reduced
long-dated outstanding debtor balances by over 34% throughout the year.
IImproved margins across the company’s commercial architectural shade fabrics from the
maintenance of prior price increases and tight cost control limited the decline in year-on-year EBITDA
to $0.2 million or 5%. The Company grew revenue across Europe and Southeast Asia by 20% due to
further conversion of commercial shade fabric customers and projects throughout the year.
The Company’s growth ambition outside its core revenue markets remains active, with growth
initiatives in progress to penetrate new markets and segments that complement GALE’s core
capabilities and leverage its category-leading experience in established markets in Europe and Asia.
| 2023 ANNUAL REPORT | GALE PACIFIC23 GROWTH
ACCELERATION
PLAN
The Growth Acceleration Plan defines how we will grow our Company
over the coming years by focusing our efforts, investments and teams on
growing our categories, markets, supply chain, capabilities and people.
VALUES
Integrity | Respect
Collaboration | People
Community | Innovation
CATEGORIES
Consumer and commercial
technical fabrics and
associated
finished goods
VISION
Build GALE Pacific
into a fast-growing,
world-class, global
fabrics technology
business
MARKETS
Americas
Australia & New Zealand
Developing Markets
TEAM
A high-performance culture
of great leaders and
functional experts known for
best-in-class results
| 2023 ANNUAL REPORT | GALE PACIFIC24 HOW WE GROW
CATEGORIES
Develop and launch
breakthrough
innovation in our
core categories
MARKETS
Drive category
growth in retail
& commercial in
Australia & the U.S.
Accelerate new
& near-neighbour
category entry
Rapidly expand
distribution &
availability in the U.S.
PEOPLE
Develop our functional
leadership capabilities
throughout organisation
Embed our Attract,
Engage, Develop
organisational
development model
Accelerate
penetration via
leadership brand
activation and
communication
Extend our borders
into Latin America
& Southeast Asia;
expand Canada,
Middle East & Europe
Build & empower the
team to double by
becoming an employer
of choice for top talent
to grow their careers
CAPABILITIES
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
SUPPLY CHAIN
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
Delivered with EDGE: Every Day Great Execution
GROWTH
ACCELERATION
PLAN IN ACTION
| 2023 ANNUAL REPORT | GALE PACIFIC26 GROW OUR PEOPLE
Transforming Culture and
Empowering Growth
Lisa Hill, HR Manager, ANZ & Developing Markets
Function: Human Resources Office/Region: Braeside, Australia
“We’ve been making strategic shifts to ensure our growth is not just about numbers,
but about fostering our people’s development.”
What are the standout projects you have
introduced at GALE Pacific?
One standout is our partnership with Culture
Amp. We teamed up to use their tools and
expertise to find out what makes our teams tick.
As we venture into our second year, we notice
trends shaping our path forward.
What’s your next big goal?
We’re diving into two things: Recognition and
Career Development. We are eager to streamline
the recognition process across the team and
explore fresh avenues for career growth that go
beyond the norm.
How have your initiatives made an impact?
Our revamped Performance Management
approach has been well-received, and the
Learn@GALE platform, with its extensive array
of learning modules, has been a hit for both
professional and personal growth. Our newly
introduced Leadership Behaviours are also
making a positive impact by empowering team
members to step up in diverse roles.
How is GALE Pacific putting people first?
We have been making strategic shifts to ensure
our growth is not just about numbers, but about
fostering our people’s development. We’ve
implemented technology upgrades, aligned
global policies, and initiated regional groups
to encourage connections, well-being, and
community engagement.
What is the strategy for nurturing talent within
the organisation?
Our talent development strategy involves
revamping Performance Management, introducing
Leadership Behaviours, and implementing a
comprehensive Talent & Succession planning
process. These efforts are resulting in increased
internal promotions and a more supportive
environment for professional growth.
How have teams responded to this new focus?
They are embracing their roles as integral
contributors to our collective success.
Development discussions are sparking innovative
ideas, and individuals are emerging as leaders,
challenging norms and introducing impactful
changes. The momentum is truly inspiring.
GROW OUR PEOPLE
ANZ Employee Engagement:
Evolving Together and Building Community
Tom Lawless, Product Manager, Retail
Function: Retail ANZ Office/Region: Braeside, Australia
“Engagement isn’t just a buzzword for us – it’s brought about unity, made us more
proud of our achievements, and optimistic about the journey ahead.”
Why is Employee Engagement such a focal
point in your region for GALE Pacific?
Although we have exceptional leaders in
Australia and an engaged US-based leadership
team, we’ve recognised the need to encourage
growth here in the ANZ region. It’s not about
filling positions; it’s about empowering our team
to be more agile and self-driven.
Any standout initiatives that you feel have
made a notable impact?
Definitely. During the National Blood Donor
week, many from our Australian office
stepped up to donate. It was an amazing
experience, both for building team camaraderie
and contributing to the community.
What’s next on the agenda for Employee
Engagement?
I’m genuinely excited about collaborating more
with our US team. We’re looking at forming a
group to brainstorm and share insights. It’s about
fostering a strong, global collaborative spirit and
leverage the collective creativity of our team.
How has Employee Engagement shifted the
dynamics at GALE Pacific?
It’s been transformative. Engagement isn’t just a
buzzword for us – it’s brought about unity, made
us prouder of our achievements, and made us
optimistic about the journey ahead.
What’s the general feedback from the team
regarding these new changes?
The response has been heartening. Everyone
appreciates the opportunities to bond
outside of regular tasks. It’s enhanced
our collaboration, making problem-
solving smoother and more innovative.
| 2023 ANNUAL REPORT | GALE PACIFIC28 GROW OUR PEOPLE
US Employee Engagement:
A Fresh Approach to Crafting Culture
Derek Johnson, Product Marketing Manager
Function: Product Marketing Office/Region: Charlotte, USA
“With a brand-new office, and a fresh team, we have an exciting opportunity to
build a stellar work atmosphere from the ground up.”
where everyone syncs up effortlessly: regular
celebrations, recognition for great work, and
a genuine sense of community. A vibe where
coming to work, be it at the office or from home,
feels refreshing, engaging, and invigorating.
Is Employee Engagement making an impact at
GALE Pacific yet?
While we’re still setting the stage, there’s clear
momentum building. As we roll out both the
tangible and intangible aspects of our plans,
we’re definitely steering GALE Pacific towards
an awesome cultural transformation.
How is Employee Engagement shaping GALE
Pacific in your region?
For the US Engagement Team, we see ourselves
as the architects of our region’s culture. With
a brand-new office and a fresh team, we have
an exciting opportunity to build a stellar work
atmosphere from the ground up.
What initiatives by the team have really stood out?
Our ‘Office Housewarming Party’ was a smashing
hit. It wasn’t just for our team – everyone’s
families got involved too. The whole planning and
execution were spot-on. Beyond the fun, it was
important for this new team to really connect.
Can you hint at any future plans from the US
Engagement Team?
More than specific events, I’m excited about
evolving our workplace culture. Think of a space
| 2023 ANNUAL REPORT | GALE PACIFIC29 GROW OUR PEOPLE
Making Safety Our Competitive Edge
Madge Fu, HSE Manager, GPST, ANZ & Developing Markets
Function: Health, Safety, and Environment Office/Region: Ningbo, China
“Elevating our safety culture to a “Leading” stage, where shared ownership among
employees becomes our competitive edge”
What is your main goal in your role?
To establish a culture of HSE excellence, aiming
for zero incidents and positioning ourselves as
industry leaders in safety and environment.
What are some standout projects during your
tenure with GALE Pacific?
We’ve upgraded our firefighting facilities in
China, introduced a Behaviour-Based Safety
program, and updated our safety recognition
system to boost hazard reporting.
What’s your next big milestone?
Elevating our safety culture to a “Leading” stage,
where shared ownership among employees
becomes our competitive edge.
How have employees responded to
these changes?
I have heard positive feedback from our safety
training, enhanced work environment, and
swift hazard solutions. Our annual surveys also
reflected this encouraging sentiment.
How has Health and Safety changed during
your time with GALE Pacific?
HSE performance, especially in China, improved
dramatically. Our Total Recordable Injury Frequency
Rate (TRIFR) dropped significantly in five years, and
in the ANZ region, we have committed to continual
refinement of our safety practices.
Any noticeable shifts in the region’s working
conditions?
Safety-wise, we’ve enhanced machinery guards
and minimised working-at-height risks. For
health, we’ve reduced manual labour risks by
integrating automation and providing lifting aids.
Additionally, facility improvements like canteen,
dormitory, and tearoom renovation have
positively impacted our working environment.
| 2023 ANNUAL REPORT | GALE PACIFIC30 GROW OUR SUPPLY CHAIN
Streamlining Our Supply Chain for Success
Jeff Pearce, Senior Manager, Global Logistics
Function: Supply Chain Office/Region: Charlotte, USA
“Identifying and addressing non-value-added costs in GALE Pacific’s supply
chain will result in millions of dollars in cost avoidance year over yearw.”
What positive results have you seen from
these changes?
By identifying and addressing non-value-added
costs in GALE Pacific’s supply chain, we’re set to
achieve over USD$1 million in year-over-year cost
avoidance. We’ve successfully cut ocean-shipment
lead times by 50%, all while maintaining a delivery
record of over 98% in full and on time.
How has the customer been impacted
by this project?
These changes now ensure product availability,
faster delivery times, and improved product quality,
resulting in a better overall customer experience.
What has been the focus of your role this year?
Streamlining our inbound ocean supply chain to
create cost-effective transportation and unloading
methods while decreasing overall spend.
What changes have been implemented to
enhance efficiency?
By optimising GALE Pacific’s inbound ocean
routes, we have decreased the overall time we
hold sea containers. We have also leveraged our
freight forwarder and created track and trace
tools which has led to proactive labour planning
and standardised work.
What has had the biggest impact?
We have created a culture of continuous
improvement by regularly reviewing processes,
gathering feedback from stakeholders, and
actively seeking ways to enhance efficiency. Our
lean business model allows us to challenge the
status quo and quickly implement new processes
when necessary.
| 2023 ANNUAL REPORT | GALE PACIFIC31 GROW OUR CATEGORIES
The Revolutionary Comfort of HeatShield®
Nathalie Pimentel, Director, Product Marketing & Innovation
Function: Product Marketing & Innovation Office/Region: Charlotte, USA
“This double protection ensures things stay much cooler underneath,
setting it apart from other products on the market.”
Why is everyone talking about HeatShield®?
Our new shade fabric is unique because it not
only blocks UV rays, which can be harmful, but
also stops the heat from infrared rays. This
double protection ensures things stay much
cooler underneath, setting it apart from other
products on the market.
Why is HeatShield® a favourite for
everyday users?
HeatShield® is all about simplicity and comfort.
When you set up a Coolaroo roller shade, pet
bed, or any other product with HeatShield®
technology, you’ll immediately feel cooler
underneath. It provides a refreshing spot,
especially on those scorching hot days.
How will commercial or public spaces benefit
from this technology?
HeatShield® is a game-changer. Businesses are
always looking for ways to enhance comfort in
outdoor areas and add an eye-catching feature to
their space. Imagine playgrounds where kids play
comfortably or parking areas where cars stay cooler.
How is HeatShield® different from other
shades?
While most shades offer some relief from the
sun, HeatShield® shades go the extra mile. The
fabric circulates fresh air, offers visibility, and
importantly, it shields from both UV and the heat
rays. It’s the complete package, and no other
shade offers all of these features together.
What’s next for HeatShield®?
HeatShield® is not just a product, it’s the future
of our Coolaroo brand, and we’re introducing it
across our Commercial fabrics. This unique fabric
is a testament to GALE Pacific’s core principles:
Design, Comfort, Protection, and Sustainability.
With its captivating aesthetic and unparalleled
dual protection, it stands apart from other
products on the market.
| 2023 ANNUAL REPORT | GALE PACIFIC32 THE COOLEST
EXPERIENCE
UNDER THE SUN
Fabric feels up to 10˚C or 15˚F cooler
for people, pets, and play
Comparing surface
temperature of
HeatShield® fabric (left)
vs standard fabric (right)
“We all noticed a drop in temperature, as well
as some shady relief from the intense sun
when sitting under it. Highly recommend!’”
Within months of its U.S. launch, our groundbreaking HeatShield®
fabric technology achieved record sell-through rates, and as we
gear up for FY24, we’re expanding its reach with both current and
major new retail partners, as well as into GALE Commercial.
*Patent pending
| 2023 ANNUAL REPORT | GALE PACIFIC33 GROW OUR CAPABILITIES
Beyond Sustainability:
Redefining the Fabric Industry
Andrew Nasarczyk, Senior Manager, Global R&D
Function: Research & Development Office/Region: Braeside, Australia
“GALE isn’t just embracing sustainability, we’re setting standards.”
How is sustainability shaping GALE Pacific?
GALE isn’t just embracing sustainability, we’re setting
standards. Securing a 2021 grant from Sustainability
Victoria, we’re crafting ways to transform end-of-life
products into eco-friendly innovations.
offering a complete closed-loop solution. Additionally,
our Closed Loop Grain covers signify a pivotal
advancement in our sustainability journey. We’re
repurposing used grain covers and processing them
into prime-grade resin, giving them a new purpose.
What initiatives is GALE Pacific taking
around sustainability?
We’re actively pioneering solutions that have a
tangible positive impact on the environment.
Can you highlight some standout sustainable
products and their importance to GALE Pacific?
Ecobanner™ is a game-changing recyclable fabric,
tailor-made for outdoor billboards and advertising
with its patent-pending, reinforced, printable surface.
It’s Australia’s first PVC-free flexible banner fabric
What are some of the latest sustainability
initiatives at GALE?
We’re committed to finding eco-friendly solutions
to industry challenges. Our technical fabrics stand
out with impeccable environmental credentials
– free from harmful chemicals, easily recyclable,
and tailored to meet the stringent demands
of a discerning market. We’re streamlining our
manufacturing to ensure minimal waste, and
optimising material, energy, and resources.
| 2023 ANNUAL REPORT | GALE PACIFIC34 ENVIRONMENTAL,
SOCIAL AND
GOVERNANCE (ESG)
GALE Pacific is firmly committed to safety and protection – from safeguarding individuals and assets to
preserving our environment. Our collaboration with Australian institutions like Deakin University, as well as
with local recycling partners in Victoria, show our dedication to progressing fabric recycling efforts.
Supported by Cancer Council Australia, our advanced fabrics protect and cool more than traditional
materials. From our iconic shade sails to innovative, efficient agricultural crop protection, we prioritise
protection from the sun and other adverse weather conditions. Our coating technology ensures
textiles are durable against chemical erosion and reinforced for high liquid retention, and we use the
same techniques to deliver Ecobanner™, our 100% recyclable printable advertising fabric.
Recognising our employees’ pivotal role in GALE Pacific’s success, we are dedicated to ensuring their
well-being. Our commitment is evident in our safe, modern facilities, comprehensive benefits, and
initiatives for employee development. We maintain open communication, continually
nurturing a positive workplace.
“From our iconic shade sails to
innovative, efficient agricultural
crop protection, we prioritise
protection from the sun and other
adverse weather conditions.”
– Sheryl Smith, Chief Financial Officer
| 2023 ANNUAL REPORT | GALE PACIFIC35 Ecobanner™ is revolutionising Out of Home advertising with its
groundbreaking sustainability. Created by GALE Pacific in collaboration
with industry experts, Ecobanner™ is Australia’s only PVC-free banner
fabric, aligning with global efforts to remove non-recyclable plastics.
Made of specially reinforced, non-composite fabrics, it offers a 100%
closed-loop recycling solution, making a more eco-friendly alternative to
the PVC used in traditional billboards today. Ideal for large-scale outdoor
installations, the durability of Ecobanner™was on full display during the
FIFA 2023 Women’s World Cup for a banner on Sydney’s Glebe Island silo
– the largest billboard in the southern hemisphere.
See Ecobanner™
on Sydney’s Glebe
Island silos
Photo/video credit: oOh!media
| 2023 ANNUAL REPORT | GALE PACIFIC36 SUSTAINABLE SKYLINES
The New Standard in
Outdoor Advertising
“Sustainability is a cornerstone of our design
approach and Ecobanner™ is the latest innovation
that gives the Out of Home industry a new option
that can be repurposed back in the manufacturing
stream, creating a true end-of-life waste solution
which avoids landfill. We are delighted to have
worked with oOh!media on this launch.”
– Troy Mortleman
General Manager, ANZ & Developing Markets
| 2023 ANNUAL REPORT | GALE PACIFIC37 CHARLOTTE,
NORTH CAROLINA
| 2023 ANNUAL REPORT | GALE PACIFIC38 GALE PACIFIC OPENS NEW
AMERICAS HEADQUARTERS IN
CHARLOTTE, NORTH CAROLINA
In March 2023, GALE Pacific celebrated a pivotal
milestone as we successfully completed our
US Headquarters’ transition to Charlotte, North
Carolina. The culmination of a plan years in the
making, our transition journey was exciting, but
not without challenges, such as global disruptions
caused by the pandemic. Despite these hurdles, on
March 30th, 2023, we officially opened the doors
of our new, purpose-built office, marking not just a
change in location but the start of a new chapter for
the Company in the Americas.
This move brought our group leadership and
Americas operating teams to a strategic location,
with a formidable high-performance team
assembled to propel the Company forward in the
heart of America’s textile industry. Charlotte’s unique
advantages, such as its proximity to our largest
core customers, rich technological resources, and
increasing talent pool, are crucial components in our
ambitious growth strategy for the ensuing years.
Many of our major customers have expressed their
enthusiasm for having us in closer proximity, further
validating our strategic relocation. As we reflect on
our journey, it’s impressive to think how far we’ve
come from when GALE first entered the US market in
1982. The evolution of GALE Pacific in the Americas
serves as a testament to our resilience and echoes
a broader sentiment of growth, adaptability, and
forward-thinking. We are excited for what lies ahead
and the opportunities our new home presents.
“Our move to Charlotte
is not just a change in
location, but the start
of a new chapter.”
– Chris Gibson
Vice President/GM,
Americas & Global Innovation
| 2023 ANNUAL REPORT | GALE PACIFIC39 EXECUTIVE
LEADERSHIP
JOHN PAUL MARCANTONIO
SHERYL SMITH
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.
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.
MATT RUSSELL
ADAM BOCCELLI
CHIEF HUMAN RESOURCES OFFICER
Matt joined GALE Pacific in January 2021 as the
Chief Human Resources Officer and leader of
the Global HSE (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.
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.
TROY MORTLEMAN
CHRIS GIBSON
GENERAL MANAGER | AUSTRALIA &
NEW ZEALAND & DEVELOPING MARKETS
Troy joined GALE Pacific in January 2020. Over
the 14 years prior, he 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 and
commercial channels of distribution for both
consumer and 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.
VICE PRESIDENT & GENERAL
MANAGER | AMERICAS & INNOVATION
Chris joined GALE Pacific in October 2022 as General
Manager of the Americas and Vice President of Global
Innovation. Prior to GALE Pacific, Chris was Chief Product &
Marketing Officer for a global retail intelligence company,
InVue. Prior to InVue, he was Vice President of Marketing
and Product Management for Humanscale, a leading global
designer and manufacturer of ergonomic products based
in New York. Chris worked for General Electric in various
commercial roles, including Director of Strategic Marketing
at GE Corporate. Over his career, Chris has led more than
72 new product launches, across more than 90 countries.
Chris holds an M.P.A. from New York University, an M.B.A.
from Louisiana State University, and a Bachelor of Industrial
Design from Auburn University. He currently serves as
the Executive Board Chairman for Auburn’s College of
Architecture, Design, and Construction.
PROJECT SPOTLIGHT
SUN-SAFE FUN
FOR FAMILIES
Memorial Park Playground, Merrylands
Western Sydney,
Australia
Commercial
Heavy 430
Cumberland City Council teamed up with Western Sydney University, GALE Pacific, and
dynamic collaborators to craft a ‘UV Shade Smart’ masterpiece. This ingenious shade
structure breathes new life into an existing playground, slashing soaring surface
temperatures and UV hazards. Now, families and little adventurers can revel in
sunny days, knowing they’re shielded from the scorching heat!
| 2023 ANNUAL REPORT | GALE PACIFIC43 MEET OUR
CUSTOMERS
| 2023 ANNUAL REPORT | GALE PACIFIC44 RETAIL USA
A Bright Future: Lowe’s Sees
GALE Pacific as a Partner for Growth
Valeria Diaz Oramas,
Associate Merchant – Blinds & Shades
“The relationship built between Lowe’s and
GALE Pacific has evolved to be a strong one”
What drew you to GALE Pacific/Coolaroo initially?
The brand and products met the Lowe’s
customer’s needs for price, quality, and aesthetics.
Coolaroo’s strong market presence makes Lowe’s
competitive by carrying their product.
How has partnering with GALE Pacific/
Coolaroo boosted your business?
The trust, reliability, and effective communication
we have built together has positively impacted
Lowe’s, leading to localisation opportunities and
assortment expansion.
What upcoming products excite you the most?
I’m excited about the new Lowe’s Allen + Roth
program GALE Pacific will produce. It will
differentiate Lowe’s from the competition as it’s
only offered in the custom category today and no
other retailers offer it in-aisle.
What excites you about the future partnership
with GALE Pacific/Coolaroo?
Working together to grow the category, positioning
Lowe’s at a competitive advantage with product
and price offerings, and leveraging GALE Pacific’s
NC move for a more hands on/in-store approach!
What have you found the most valuable part
of working with GALE Pacific/Coolaroo?
Building a strong relationship! This has facilitated
difficult conversations, business decisions, and
securing a win-win approach to both of our
businesses.
How has Coolaroo/GALE Pacific supported
your business challenges and changes?
GALE Pacific has been adaptable and resilient
when presented with business challenges. They
are proactive and creative, coming to the table
with solutions catering to a win-win scenario.
How has the relationship evolved?
The relationship between Lowe’s and GALE
Pacific has evolved to be a strong one in which
goals and objectives are met, negotiations are
successful, results are achieved, and sustained
collaboration and innovation are obtained. GALE
Pacific is a critical supplier for Lowe’s, and I
am glad to work with the team on achieving
continued success for both parties!
COMMERCIAL ANZ
Redefining Partnerships: GALE Pacific and
Bartlett’s Journey of Development & Innovation
Dave O’Brien, CEO
“The collaboration between our two companies and
the continued investment into innovation and R&D
is the most valuable part of working together.”
What drew you to GALE Pacific’s product line?
Our relationship was born out of Bartlett’s need for
technical industrial products to service the various
markets that we operate in. Over the journey, GALE
Pacific has consistently produced high-quality
products that support our growing business.
How does GALE Pacific add value to your
operations?
Having GALE Pacific products produced here
in Australia helps to support our manufacturing
business and Australian manufacturing as a whole.
Delivering high-quality technical products with
short lead times makes sure we stay competitive.
How has the partnership positively impacted
your business?
Our teams have worked together on several
exclusive technical products. The relationship
between the two companies has always been
one of collaboration and trust. This has been
evident in particular with the R&D team where
together, we have solved a number of unique
and challenging problems for our end customers.
What have you found the most valuable part
of working with GALE Pacific?
The collaboration between our two companies
and the continued investment into innovation and
R&D is the most valuable part of working together.
How has GALE Pacific supported your
business challenges and changes?
GALE Pacific is a market leader in technical industrial
fabrics. As an Australian manufacturer we continue
to explore, service, and grow unique market
opportunities, and to be successful in this, we rely on
our key suppliers to support these challenges.
How has the relationship with GALE Pacific
evolved?
We have become more partners than just suppliers.
We work together to solve problems and to find
new ways to improve our products and services.
RETAIL ANZ
Sailing Ahead: The Ongoing Success of
Bunnings’ Partnership with GALE Pacific
Koula Guardiani, National Buyer
“They listen to my wants and needs as a buyer and
include me in initial product development sessions to
ensure we are working towards the same goal.”
What sparked your interest in Coolaroo?
The huge range of shade cloth and shade sail
options. Coolaroo is definitely the leader in this
space in Australia.
How has partnering with GALE Pacific shaped
your business approach?
It’s a true partnership. They listen to my wants
and needs as a buyer and include me in initial
product development sessions to ensure we are
working towards the same goal.
What are you most excited about going
forward in your partnership with GALE Pacific?
Most companies in a market-leading position tend
to be complacent and do very little innovation in a
mature market. Not GALE Pacific. Their dedicated
product team is challenged with creating innovation
and they deliver. I’m very excited to be an exclusive
partner for Coolaroo HeatShield® Shade Sails for 12
months after its launch to market.
What’s next on the horizon as you continue to
collaborate with GALE Pacific?
More exclusive products to Bunnings, being
first to market with innovation, and nailing the
customers’ expectations every time.
What have you found the most valuable part
of working with GALE Pacific?
We work as a team to grow GALE Pacific
and Bunnings businesses through a leading,
innovative range that meets our customers’
needs and wants.
How has the relationship progressed over the
time you’ve worked with us?
The relationship has evolved from a one-way
educational relationship (as a new buyer needs),
to a true partnership where we collaborate on
new product ideas, marketing initiatives, and
long-term strategies.
| 2023 ANNUAL REPORT | GALE PACIFIC47 Grow Bags
SAME SOIL.
SAME WATER.
BETTER RESULTS.
The perfect environment to accelerate growth & increase yield
Strong &
durable
Rinse &
reuse
100% Recyclable
HDPE fabric
Instagram influencer
120k followers
“Plants grew bigger
& healther.”
Grow Bags
Total Vegetable Yield
& plant height over time
20 count | 63”
Terracotta
Total Vegetable Yield
& plant height over time
8 count | 48”
| 2023 ANNUAL REPORT | GALE PACIFIC48 FY23
DIRECTORS’
REPORT
| 2023 ANNUAL REPORT | GALE PACIFIC49 DIRECTORS’ REPORT
for the year ended 30 June 2023
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 2023 and the independent Auditor’s report thereon.
CHANGES IN STATE OF AFFAIRS
The Company is well progressed in its refinancing project which will deliver both a global solution and
a more streamlined approach to support the Company’s growth strategy. While these arrangements
are being finalized, our existing facilities with ANZ Bank for Australia and the US have been extended
through 30 August 2024; the China facility was refinanced with Ningbo Bank during the second half of
2023. See note 16 for additional information.
On the backside of the COVID-19 global pandemic, supply chain interruptions eased throughout fiscal
year 2023 and customer inventory levels, especially in the U.S., were reduced back to pre-pandemic
levels. This inventory de-stocking impacted sales in the second half in the Americas region, along
with the cooler spring temperatures across much of the United States. Australia also experienced a
cooler wetter spring which impacted their commercial business and retail sell through. The cooler
spring weather was followed by extreme heat in the United States and Europe; during this period
GALE Pacific launched new breakthrough innovation with the Company’s HeatShield® products,
the first commercial order was sold to a U.S. customer. HeatShield® is new innovation that actively
reflects the sun’s hot infrared rays to keep the fabric surface up to 10ºC (15ºF) cooler.
Lastly, the Charlotte, NC office location opened, housing the US-based members of the executive
leadership team and the Americas team, the office is strategically located close 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 $3,696,000 (30 June 2022: profit
of $7,617,000).
EVENTS SUBSEQUENT TO BALANCE DATE
Subsequent to 30 June 2023, the Group extended its existing credit facilities with the ANZ Bank
until 30 August 2024. There are no other matters that have arisen since 30 June 2023, that have
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.
| 2023 ANNUAL REPORT | GALE PACIFIC50 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 Pacific is committed to integrating ESG (Environmental, Social, Governance) principals and activities
into its annual strategic planning process, business model, operations and reporting to align with its
stakeholder’s expectations and future regulatory requirements in Australia and other jurisdictions
worldwide. The Company acknowledges that the expectations around ESG reporting will only increase
and, accordingly, is putting plans in place to enable the Company to report relevant and material ESG
data and metrics to its stakeholders and update associated corporate policies and business practices.
The Company has engaged a third-party consulting firm with expertise in ESG to support its efforts to
further integrate ESG into its organization, building upon existing initiatives. One such initiative is the
work the Company has done since FY18 to reduce its global TRIFR (Total Recordable Injury Frequency
Rate) by 65% (from FY18 to FY23); this reduction is a result of a safety-first culture that focuses on
training to prevent accidents before they happen. As the Company continues to focus on a GALE Safe
culture, during FY23, the Company invested in a global injury management system that allows it to
improve processes and enhances visibility to manage, measure and train employees. The Company
also worked with Out of Home media to launch the latest innovation in billboards, the new revolutionary
Ecobanner®, developed and manufactured by GALE Pacific, is the only Australian made, PVC-free flexible
banner fabric, offering a 100% closed loop recycling solution. The first installation at the Glebe Island
Silos in Sydney advertised a campaign for the FIFA Women’s World Cup.
DIVIDENDS
Dividends paid to members during the financial year were as follows:
Final Dividend for the year ended 30 June 2022 (paid 14 October 2022)
Interim Dividend for the 6 months ended 31 Dec 2022 (paid 2 June 2023)
There were no full year dividends declared for the year ended 30 June 2023.
2023
1.00 cent
1.00 cent
| 2023 ANNUAL REPORT | GALE PACIFIC51 SHARE BASED PAYMENTS
Performance Rights
The number of performance rights on issue at the date of this report is 20,640,000 (2022:
18,980,338). 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 3,223,000 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 2025.
Vesting Conditions
Performance hurdle - The compound annual growth rate (CAGR) of the diluted earnings per share (for
the financial year ended 30 June 2022) over the relevant performance period (1 July 2022 to 30 Jun
2025) 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 2025.
During the financial year, a total of 559,338 performance rights lapsed and 1,004,000 performance
rights were forfeited. The vesting conditions of those performance rights that lapsed, 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 2019 and 30 June 2022.
Further details of the performance rights movements during the reporting period for the Key
management personnel 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
N/A
N/A
N/A
N/A
N/A
Performance Rights
N/A
N/A
N/A
N/A
14,000,0001
1 As at 30 June 2023, there were 14 million performance rights on issue to the CEO under his three year incentive arrangement which was
approved by shareholders at the Company’s Annual General Meeting in 2020.
As at 1 July 2023, in accordance with the contractual terms and conditions of the three year incentive, the Board assessed the performance
hurdles attaching to the performance rights and determined that 7,621,600 performance rights had vested and that the balance of 6,378,400
had lapsed.
The Company expects to issue 7,621,600 fully paid ordinary shares to the CEO in conversion of the 7,621,600 vested performance rights in early
September 2023.
| 2023 ANNUAL REPORT | GALE PACIFIC52 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
# Eligible
to Attend
Attended
# Eligible
to Attend
Attended
# Eligible
to Attend
Attended
# Eligible
to Attend
Attended
10
10
10
10
10
10
9
10
8
10
5
5
-
5
-
5
5
-
5
-
1
-
1
1
-
1
-
1
1
-
1
1
1
1
-
1
1
1
1
-
Directors
D Allman
P Landos
D McMaster
T Stianos
J P
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.
COMPANY SECRETARY
Sophie Karzis (B. Juris, LLB), is a qualified lawyer with over 20 years’ experience as a corporate and
commercial lawyer and Company Secretary and General Counsel for a number of private and public
companies. Sophie is the principal of Legal Counsel, a corporate law practice with a focus on equity
capital markets, mergers and acquisitions, corporate governance for ASX-listed entities, as well as the
more general aspects of corporate and commercial law. Sophie holds a bachelor’s degree in law and
jurisprudence from Monash University.
| 2023 ANNUAL REPORT | GALE PACIFIC53 REMUNERATION REPORT
(AUDITED)
The Directors present the Remuneration Report for the Company and its controlled entities for the
year ended 30 June 2023. This Report forms part of the Directors’ Report and has been audited in
accordance with section 300A of the Corporations Act 2001. The Report details the remuneration
arrangements for the Group’s Directors and Executive Officers.
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 align their
interests with those of the Group and its shareholders; and
■ Ensure that rewards are aligned 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
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)
■ A Boccelli (Global Vice President, Supply Chain)
■ C Gibson (Vice President/General Manager of the Americas) – appointed 1 November 2022
■ K Harshaw (Vice President/General Manager of the Americas) – resigned 31 October 2022
■ T Mortleman (General Manager – ANZ / Vice President Developing Markets)
■ S Smith (Chief Financial Officer)
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.
| 2023 ANNUAL REPORT | GALE PACIFIC54 RELATIONSHIP BETWEEN THE REMUNERATION
POLICY AND COMPANY PERFORMANCE
The table below summarises information about the Group’s earnings and movements for the five
years to 30 June 2023:
30 June 2023 30 June 2022 30 June 2021 30 June 2020 30 June 2019
149,217
205,223
205,543
156,338
187,564
5,310
10,952
17,220
4,757
11,208
3,696
7,617
12,327
3,719
9,198
29.0 cents
41.0 cents
16.0 cents
32.0 cents
35.5 cents
18.0 cents
29.0 cents
41.0 cents
16.0 cents
32.0 cents
1.00 cent
1.00 cent
2.00 cents
Nil
1.00 cent
Nil
1.00 cent
2.00 cents
1.00 cent
1.00 cent
1.34 cents
2.76 cents
4.48 cents
1.34 cents
3.21 cents
1.30 cents
2.69 cents
4.21 cents
1.32 cents
3.16 cents
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
REMUNERATION PRACTICES
The Group policy for determining the nature and amount of emoluments of Board members and
Executive officers is as follows.
The remuneration structure for Executive officers 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 officers are on a continuing basis, the terms
of which are not expected to change in the immediate future. Upon retirement, Executive officers 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 Executive officers
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.
| 2023 ANNUAL REPORT | GALE PACIFIC55 REMUNERATION STRUCTURE
In accordance with best practice corporate governance, the structure of Non-executive directors and
Executive officers 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.
Executive officers 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
■ 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 officer and senior manager remuneration packages contain the following key elements:
■ Primary benefits – salary/fees;
■ Cash bonuses (STI) – One-year short term performance cash bonus payments are awarded in
accordance with the Company’s remuneration policy. The budget targets for each business unit and the
Company overall are established each year by the Board. The performance criteria include sales and
earnings before interest and tax growth and working capital management. For corporate executives, the
performance criteria include growth in earnings before interest and tax and profit before tax.
■ Share based payments (LTI) – 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 Executive Officer’s and Senior manager’s total remuneration.
| 2023 ANNUAL REPORT | GALE PACIFIC56 Cash bonus (STI)
The Group’s Executive officers with the exception of the CEO have a target STI opportunity which is
a percentage of fixed remuneration. The maximum payout would be 150% of that portion. The STI
targets will be based on the budgeted profit before tax, operating cashflow, specific regional net
revenue, earnings before interest and tax and working capital days.
Share-based payments (LTI)
The Group maintains a performance rights scheme for Executive officers. The CEO and Managing
Director’s scheme is 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 2023 for Executive officers was 18,030,000.
14,000,000 of these performance rights were granted to the CEO and Managing Director on
23 December 2020 and the vesting conditions will be assessed on 1 July 2023 and 590,000 of
these performance rights were granted on 30 October 2020 and will not vest until the time of the
Company’s 2023 annual report is released on the ASX (on or around 31 August 2023). 1,369,000 of
these performance rights were granted on 23 December 2021 and will not vest until the time of the
Company’s 2024 annual report is released on the ASX (on or around 1 October 2024). 2,071,000 of
these rights were granted in this financial year and will not vest until the time of the Company’s 2025
annual report is released on the ASX (On or around 1 October 2025). 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 and in the case of the CEO and Managing Director’s scheme, total shareholder return.
Performance rights issued to Executive officers 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.
| 2023 ANNUAL REPORT | GALE PACIFIC57 EXECUTIVE EMPLOYMENT AGREEMENT
Remuneration arrangements for executives are formalised in employment agreements. The following
outlines the details of contracts with executives:
CEO & Managing Director
The CEO is employed under an ongoing contract which can be terminated with notice by either the Group
or the CEO. Under the terms of the present contract, as disclosed to the ASX on 23 November 2020:
■ The CEO & MD receives fixed remuneration of US$458,400 per annum effective 1 December 2020.
■ The CEO & MD’s target STI opportunity is 50% of fixed remuneration
■ The CEO & MD is eligible to participate in the LTI plan on terms determined by the Board, subject to
receiving any required or appropriate shareholder approval.
■ The CEO & MD is eligible for a 3-Year incentive scheme from the commencement date to three
years ending 30 June 2023. During this period, they will not be eligible for the STI and LTI plans
outlined above.
All other executives are employed on individual open-ended employment contracts that set out the
terms of their employment.
TERMINATION PROVISIONS
The Executive Officers’ termination provisions are as follows:
Resignation
Termination
for cause
Disability
Death or termination
other than cause or
disability
3 Months
None
None
12 Months
1 Month
None
None
3 Months
None
None
None
None
CEO notice period (by
company or executive)
Other executives notice
period (by company or
executive) – Americas
Other executives notice
period (by company or
executive) – Australia
The agreements include restraints of trade on the employee as well as confidentiality and intellectual
property agreements.
| 2023 ANNUAL REPORT | GALE PACIFIC58 REMUNERATION OF KEY MANAGEMENT PERSONNEL
t
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$
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o
$ T
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s
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i
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Short Term Benefits
&
y
r
a
a
S
l
$
s
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F
$
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7
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2023
Non-Executive Directors
D Allman
P Landos*
T Stianos
D McMaster
117,756
86,716
87,123
77,169
Executive Officers
J P Marcantonio
667,846
-
-
-
-
-
S Smith
M Russell
A Boccelli
K Harshaw 1
C Gibson 2
422,752
59,888
393,596
55,759
349,864
49,563
162,534
-
287,698
21,008
T Mortleman
320,121
21,990
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
19,752
7,375
9,148
8,103
-
-
-
-
9,365
24,900
1,236,666
137,508
94,091
96,271
85,272
-
-
-
-
-
-
-
-
1,938,777
64%
64%
506,964
13%
1%
450,198
3% (10)%
432,672
9%
(8)%
10%
(2)%
(8)%
4%
-
-
-
-
-
-
-
-
-
-
394
17,567
24,253
20,207
20,524
21,516
5,974
16,288
11,137
11,136
6,363
(43,616)
(8,794)
(22,630)
128,763
285,779
13,389
349,520
-
25,292
6,019
(46,201)
327,221
(7)% (14)%
1 Resigned 31 October 2022
2 C Gibson (Vice President/GM Americas & Global Innovation) – appointed 1 November 2022
*The Director’s Fees payable to P Landos are paid directly to Thorney Investment Group.
| 2023 ANNUAL REPORT | GALE PACIFIC59
REMUNERATION OF KEY MANAGEMENT PERSONNEL
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e
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o
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t
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2022
Non-Executive Directors
D Allman
P Landos*
T Stianos
D McMaster
117,756
86,716
87,123
77,169
Executive Officers
J P
Marcantonio8
636,206
-
-
-
-
-
-
-
-
-
-
-
-
-
19,752
7,375
8,712
7,717
480,106
14,535
19,424
1,236,666
S Smith 1
M Russell 2
A Boccelli 3
153,676
41,061
343,388
91,751
-
-
113
19,759
303,114
81,556
53,734
17,347
6,915
16,415
19,015
K Harshaw 4
192,891
78,494
106,297
10,787
10,678
T Mortleman
306,213
95,083
M Nicholls 5
145,136
10,123
A Haidar 5
179,581
22,226
D Romanelli 6
C Zhang 6
80,325
55,596
-
-
-
-
-
-
-
-
-
-
-
-
23,568
5,827
11,699
-
8,033
-
5,959
41,757
18,980
22,630
56,407
47,694
63,351
d
e
s
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e
r
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h
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a
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%
s
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g
R
i
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-
-
-
-
-
-
-
-
-
-
-
-
137,508
94,091
95,836
84,886
-
-
-
-
-
-
-
-
2,386,937
52% 52%
207,725
513,069
493,746
421,775
23%
26%
20%
24%
3%
8%
4%
5%
487,097
31% 12%
214,651
27% 22%
265,158
32% 24%
-
-
124,880
47,054
213,238
102,650
0%
0%
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.
8 Amount restated to reflect updated valuation of CEO share based payment incentive scheme (previously $882,806).
* The Director’s Fees payable to P Landos are paid directly to Thorney Investment Group.
| 2023 ANNUAL REPORT | GALE PACIFIC60
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.
2023
Non-Executive Directors
D Allman
T Stianos
D McMaster
Executive Officers
J P Marcantonio
2022
Non-Executive Directors
D Allman
T Stianos
D McMaster
Executive Officers
J P Marcantonio
A Haidar2
M Nicholls2
4,500,000
600,000
50,000
285,882
4,500,000
600,000
50,000
-
526,364
-
-
-
-
-
-
-
-
-
-
-
D Romanelli3
1 Includes shares traded on the stock market and other adjustments
2 Effective 23 February 2022, the role is not considered as Key Management
3 Resigned 30 September 2021
455,190
-
-
-
-
-
-
-
-
285,882
157,325
106,981
314,896
-
-
-
-
-
-
-
-
(683,689)
(106,981)
(770,086)
4,500,000
600,000
50,000
285,882
4,500,000
600,000
50,000
285,882
-
-
-
| 2023 ANNUAL REPORT | GALE PACIFIC61 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 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.
The performance rights granted on 17 March 2023 are subject to the continuation of employment to
30 June 2025 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 2022 to 30 June 2025. None
of these rights can vest until the Company releases its FY25 annual report to the ASX (on or around 1st
October 2025) and expire on 1 December 2025.
In addition to the time requirement of continuous 3-year employment, the diluted EPS needs to increase
(from the prior financial year reported diluted EPS) 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%.
| 2023 ANNUAL REPORT | GALE PACIFIC62 KEY MANAGEMENT PERSONNEL & OTHER
MANAGEMENT EQUITY HOLDINGS - COMPENSATION
OPTIONS AND PERFORMANCE RIGHTS
Granted and Vested During the Year
r
e
b
m
u
N
d
e
t
s
e
V
-
-
-
-
2023
Non-Executive
Directors
Executive Officers
2022
Non-Executive
Directors
Executive Officers
Terms and Conditions for Each Grant
i
t
h
g
R
/
n
o
i
t
p
O
e
t
a
D
t
n
a
r
G
t
a
r
e
P
e
u
a
V
l
e
t
a
D
t
n
a
r
G
e
c
i
r
P
e
s
i
c
r
e
x
E
e
t
a
D
y
r
i
p
x
E
e
s
i
c
r
e
x
E
t
s
r
i
F
e
t
a
D
e
s
i
c
r
e
x
E
t
s
a
L
e
t
a
D
d
e
t
n
a
r
G
r
e
b
m
u
N
-
2,071,000 17/03/23
0.24
Nil
31/12/25
01/10/25 01/10/25
-
2,173,000 23/12/21
0.31
Nil
01/12/24
01/10/24
01/10/24
| 2023 ANNUAL REPORT | GALE PACIFIC63
KEY MANAGEMENT PERSONNEL & OTHER
MANAGEMENT EQUITY HOLDINGS - COMPENSATION
OPTIONS AND PERFORMANCE RIGHTS
Movements During the Year
f
o
t
r
a
t
s
e
h
t
t
a
e
c
n
a
a
B
l
.
o
N
r
a
e
y
e
h
t
.
o
N
n
o
i
t
a
s
n
e
p
m
o
C
s
a
d
e
t
n
a
r
G
.
o
N
d
e
s
i
c
r
e
x
E
.
o
N
1
e
g
n
a
h
C
r
e
h
t
O
t
e
N
.
o
N
d
e
s
p
a
L
2023
Non-Executive Directors
None
-
Executive Officers
J P Marcantonio
14,000,000
T Mortleman
S Smith
A Boccelli
C Gibson 2
K Harshaw 3
M Russell
Total
816,000
204,000
331,000
-
393,000
608,000
-
-
341,000
450,000
372,000
489,000
-
419,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(393,000)
-
(393,000)
-
-
-
-
-
-
-
-
-
16,352,000
2,071,000
f
o
d
n
e
e
h
t
t
a
e
c
n
a
a
B
l
.
o
N
r
a
e
y
e
h
t
-
14,000,000
1,157,000
654,000
703,000
489,000
-
1,027,000
18,030,000
y
l
l
i
l
a
n
m
o
N
d
e
H
e
c
n
a
a
B
l
d
e
s
p
a
L
f
o
e
u
a
V
l
i
$
s
t
h
g
R
/
s
n
o
i
t
p
O
-
-
-
-
-
(109,694)
-
(109,694)
.
o
N
-
-
-
-
-
-
-
-
| 2023 ANNUAL REPORT | GALE PACIFIC64
.
o
N
r
a
e
y
e
h
t
f
o
t
r
a
t
s
e
h
t
t
a
e
c
n
a
a
B
l
2022
Non-Executive Directors
None
-
Executive Officers
J P Marcantonio
14,000,000
361,000
676,088
508,737
494,585
T Mortleman
A Haidar
Cliff Zhang
M Nicholls
S Smith
A Boccelli
K Harshaw
M Russell
.
o
N
n
o
i
t
a
s
n
e
p
m
o
C
s
a
d
e
t
n
a
r
G
-
-
455,000
232,000
-
.
o
N
1
e
g
n
a
h
C
r
e
h
t
O
t
e
N
-
-
-
.
o
N
d
e
s
i
c
r
e
x
E
-
-
-
.
o
N
d
e
s
p
a
L
-
-
-
(157,325)
(17,675)
(733,088)
-
(508,737)
-
179,000
(106,981)
(12,019)
(554,585)
-
-
-
-
204,000
331,000
393,000
379,000
-
-
-
-
-
-
-
-
-
-
-
229,000
-
r
a
e
y
e
h
t
f
o
d
n
e
e
h
t
t
a
e
c
n
a
a
B
l
.
o
N
-
14,000,000
816,000
-
-
-
204,000
331,000
393,000
608,000
-
i
$
s
t
h
g
R
/
s
n
o
i
t
p
O
d
e
s
p
a
L
f
o
e
u
a
V
l
.
o
N
y
l
l
l
i
a
n
m
o
N
d
e
H
e
c
n
a
a
B
l
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(6,186)
(120,652)
(4,206)
-
-
-
-
(66,240)
(197,284)
D Romanelli
728,896
-
(314,896)
(414,000)
Total
16,769,306
2,173,000
(579,202)
(952,431)
(1,058,673)
16,352,000
1 Net Other Change represents reclassifications
2 Appointed 1 November 2022
3 Resigned 31 October 2022
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.
| 2023 ANNUAL REPORT | GALE PACIFIC65
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 Com-pany 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.
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 objectivi-ty 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.
| 2023 ANNUAL REPORT | GALE PACIFIC66 OFFICERS OF THE COMPANY WHO ARE FORMER
PARTNERS OF ERNST & YOUNG
There are no officers of the Company who are former partners of Ernst & Young.
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
Ernst & Young 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.
SIGNED
in accordance with a resolution of Directors on 29 August 2023.
___________________________
David Allman
Chairman
___________________________
John Paul Marcantonio
Chief Executive Officer and Managing Director
29 August 2023
Melbourne, Victoria, Australia
29 August 2023
Charlotte, North Carolina, United States of America
| 2023 ANNUAL REPORT | GALE PACIFIC67
AUDITOR’S INDEPENDENCE DECLARATION
for the year ended 30 June 2023
Ernst & Young
8 Exhibition Street
Melbourne VIC 3000 Australia
GPO Box 67 Melbourne VIC 3001
Tel: +61 3 9288 8000
Fax: +61 3 8650 7777
ey.com/au
Auditor’s Independence Declaration to the Directors of Gale Pacific
Limited
As lead auditor for the audit of the financial report of Gale Pacific Limited for the financial year ended
30 June 2023, I declare to the best of my knowledge and belief, there have been:
a. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit;
b. No contraventions of any applicable code of professional conduct in relation to the audit; and
c. No non-audit services provided that contravene any applicable code of professional conduct in
relation to the audit.
This declaration is in respect of Gale Pacific Limited and the entities it controlled during the financial
year.
Ernst & Young
Joanne D Lonergan
Partner
29 August 2023
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
| 2023 ANNUAL REPORT | GALE PACIFIC68
DIRECTORS’ DECLARATION
for the year ended 30 June 2023
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 70 to page 129) 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 2023 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
___________________________
John Paul Marcantonio
Chief Executive Officer and Managing Director
29 August 2023
Melbourne, Victoria, Australia
29 August 2023
Charlotte, North Carolina, United States of America
Ernst & Young
8 Exhibition Street
Melbourne VIC 3000 Australia
GPO Box 67 Melbourne VIC 3001
Tel: +61 3 9288 8000
Fax: +61 3 8650 7777
ey.com/au
Auditor’s Independence Declaration to the Directors of Gale Pacific
Limited
As lead auditor for the audit of the financial report of Gale Pacific Limited for the financial year ended
30 June 2023, I declare to the best of my knowledge and belief, there have been:
a. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit;
b. No contraventions of any applicable code of professional conduct in relation to the audit; and
c. No non-audit services provided that contravene any applicable code of professional conduct in
relation to the audit.
This declaration is in respect of Gale Pacific Limited and the entities it controlled during the financial
year.
Ernst & Young
Joanne D Lonergan
Partner
29 August 2023
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
| 2023 ANNUAL REPORT | GALE PACIFIC69
CONSOLIDATED
FINANCIAL
STATEMENTS
| 2023 ANNUAL REPORT | GALE PACIFIC70 CONSOLIDATED STATEMENT OF PROFIT OR
LOSS AND OTHER COMPREHENSIVE INCOME
for the year ended 30 June 2023
Revenue
Revenue from contracts with customers
Other income
Expenses
Raw materials and consumables used
Employee benefits expense
Depreciation and amortisation expense
Marketing and advertising
Occupancy costs
Transport, 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 (loss)/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 (loss)/income for the year, net of tax
Consolidated
2023
$’000
187,564
681
2022
$’000
205,543
1,079
Note
4
5
(92,119)
6 (40,902)
(11,823)
6
(3,816)
(2,722)
(13,160)
(14,826)
(3,567)
6
6
6
7
5,310
(1,614)
3,696
(109,632)
(41,284)
(9,970)
(3,188)
(2,669)
(13,446)
(13,477)
(2,004)
10,952
(3,335)
7,617
22
22
(237)
(2,166)
(2,403)
317
4,396
4,713
Total comprehensive income for the year attributable to the
owners of GALE Pacific Limited
1,293
12,330
Basic earnings per share
Diluted earnings per share
Cents
1.34
1.30
8
8
Cents
2.76
2.69
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes
| 2023 ANNUAL REPORT | GALE PACIFIC71 CONSOLIDATED STATEMENT OF FINANCIAL
POSITION for the year ended 30 June 2023
Consolidated
Assets
Current Assets
Cash and cash equivalents
Trade and other receivables
Inventories
Income tax refundable
Prepayments
Total current assets
Non-current assets
Property, plant and equipment
Right-of-use assets
Intangibles
Deferred tax assets
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 liabilities
Employee benefits
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Retained profits
Total equity
Note
2023 $’000
2022 $’000
9
10
11
7
12
14
13
7
15
16
18
26
7
17
19
20
7
21
22
23,641
43,169
53,344
1,822
1,907
28,465
47,296
56,299
-
3,126
123,883
135,186
30,847
28,429
12,176
2,391
73,843
197,726
22,084
39,156
5,695
2,576
789
5,164
624
76,088
-
26,405
242
112
26,759
102,847
94,879
63,403
9,821
21,655
94,879
30,845
26,415
8,794
1,164
67,218
202,404
30,776
20,995
4,677
1,355
3,033
5,548
507
66,891
12,935
24,111
279
212
37,537
104,428
97,976
63,403
10,335
24,238
97,976
The above consolidated statement of financial position should be read in conjunction with the accompanying notes
| 2023 ANNUAL REPORT | GALE PACIFIC72 CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY
for the year ended 30 June 2023
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
Share-based payments (note 31)
Transfer to Enterprise Reserve Fund
Issue
Capital
$’000
63,068
-
-
Reserves
(Note 22)
$’000
4,459
-
4,713
Retained
Profits
$’000
25,392
7,617
-
-
-
-
4,713
999
499
7,617
-
(499)
Transactions with owners in their capacity as owners:
Vesting of performance rights (note 31)
Dividends paid (note 23)
335
-
(335)
-
-
(8,272)
Balance at 30 June 2022
63,403
10,335
24,238
Consolidated
Balance at 1 July 2022
Issue
Capital
$’000
63,403
Reserves
(Note 22)
$’000
10,335
Retained
Profits
$’000
24,238
Profit after income tax expense for the year
Other comprehensive loss for the year, net of tax
Total comprehensive (loss)/income for the year
Share-based payments (note 31)
Transfer to Enterprise Reserve Fund
Transactions with owners in their capacity as owners:
Dividends paid (note 23)
-
-
-
-
-
-
-
(2,403)
(2,403)
1,138
751
-
Balance at 30 June 2023
63,403
9,821
3,696
-
3,696
-
(751)
(5,528)
21,655
(5,528)
94,879
Total
equity
$’000
92,919
7,617
4,713
12,330
999
-
-
(8,272)
97,976
Total
equity
$’000
97,976
3,696
(2,403)
1,293
1,138
-
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes
| 2023 ANNUAL REPORT | GALE PACIFIC73 CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 30 June 2023
Consolidated
Cash flows from operating activities
Note
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:
Decrease/(increase) in trade and other receivables
Decrease/(increase) in inventories
Decrease in derivative assets
Decrease in prepayments
Increase/(decrease) in trade and other payables
Increase in derivative liabilities
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
Repayment of leases
Dividends paid
Proceeds of borrowings
Net cash used in financing activities
Net 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
2023
$’000
5,310
11,823
1,138
(3,183)
3,567
2022
$’000
10,952
9,970
999
(63)
2,004
18,655
23,862
4,127
2,955
-
1,219
(8,692)
984
(484)
117
18,881
(3,567)
(6,944)
8,370
(5,629)
(3,894)
10
(9,513)
(4,155)
(5,528)
5,226
(4,457)
(5,600)
28,465
776
12
13
25
23
25
(5,824)
(9,752)
514
295
1,185
1,673
(584)
8
11,377
(2,004)
(2,137)
7,236
(3,960)
(889)
122
(4,727)
(2,943)
(8,272)
5,059
(6,156)
(3,647)
30,407
1,705
Cash and cash equivalents at the end of the financial year
9
23,641
28,465
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes
| 2023 ANNUAL REPORT | GALE PACIFIC74 NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS for the year ended 30 June 2023
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
29 August 2023. 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.
| 2023 ANNUAL REPORT | GALE PACIFIC75
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:
IFRS 9 Financial Instruments – Fees in the ’10 per cent’ test for
derecognition of financial liabilities
The amendment clarifies the fees that an entity includes when assessing whether the terms of a new
or modified financial liability are substantially different from the terms of the original financial liability.
These fees include only those paid or received between the borrower and the lender, including fees
paid or received by either the borrower or lender on the other’s behalf. There is no similar amendment
proposed for IAS 39 Financial Instruments: Recognition and Measurement.
The Group has assessed the impact of IFRS 9 Financial Instruments – Fees in the ’10 per cent’ test for
derecognition of financial liabilities and determined there is no impact to the financial statements.
Onerous Contracts – Costs of Fulfilling a Contract –
Amendments to IAS 37
An onerous contract is a contract under which the unavoidable of meeting the obligations under the
contract costs (i.e., the costs that the Group cannot avoid because it has the contract) exceed the
economic benefits expected to be received under it.
The amendments specify that when assessing whether a contract is onerous or loss-making, an entity
needs to include costs that relate directly to a contract to provide goods or services including both
incremental costs (e.g., the costs of direct labour and materials) and an allocation of costs directly
related to contract activities (e.g., depreciation of equipment used to fulfil the contract and costs of
contract management and supervision). General and administrative costs do not relate directly to a
contract and are excluded unless they are explicitly chargeable to the counterparty under the contract.
The Group has assessed the impact of amendments to IAS 37 and determined there is no impact to
the financial statements.
| 2023 ANNUAL REPORT | GALE PACIFIC76 Reference to the Conceptual Framework – Amendments to IFRS 3
The amendments replace a reference to a previous version of the IASB’s Conceptual Framework with a
reference to the current version issued in March 2018 without significantly changing its requirements.
The amendments add an exception to the recognition principle of IFRS 3 Business Combinations to
avoid the issue of potential ‘day 2’ gains or losses arising for liabilities and contingent liabilities that
would be within the scope of IAS 37 Provisions, Contingent Liabilities and Contingent Assets or IFRIC 21
Levies, if incurred separately. The exception requires entities to apply the criteria in IAS 37 or IFRIC 21,
respectively, instead of the Conceptual Framework, to determine whether a present obligation exists at
the acquisition date.
These amendments had no impact on the consolidated financial statements of the Group as there
were no contingent assets, liabilities or contingent liabilities within the scope of these amendments
that arose during the period.
Property, Plant and Equipment: Proceeds before Intended Use –
Amendments to IAS 16 Leases
The amendment prohibits entities from deducting from the cost of an item of property, plant and
equipment, any proceeds of the sale of items produced while bringing that asset to the location and
condition necessary for it to be capable of operating in the manner intended by management. Instead,
an entity recognises the proceeds from selling such items, and the costs of producing those items, in
profit or loss.
In accordance with the transitional provisions, the Group applies the amendments retrospectively only
to items of PP&E made available for use on or after the beginning of the earliest period presented
when the entity first applies the amendment (the date of initial application).
These amendments had no impact on the consolidated financial statements of the Group as there
were no sales of such items produced by property, plant and equipment made available for use on or
after the beginning of the earliest period presented.
Comparatives
Where necessary, the comparative statement of profit or loss and financial position 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 2023 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 abil-ity 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.
| 2023 ANNUAL REPORT | GALE PACIFIC77 Intercompany transactions, balances and unrealised gains on transactions between entities in the
Group are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence
of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed
where necessary to ensure con-sistency with the policies adopted by the Group.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change
in ownership interest, without the loss of control, is accounted for as an equity transaction, where
the difference be-tween 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 for-eign currency reserve in equity.
On the disposal of a foreign operation (i.e. a disposal of the Group’s entire interest in a foreign
operation, or a disposal involving loss of control over a subsidiary that includes a foreign operation,
loss of joint control over a jointly controlled entity that includes a foreign operation, or loss of
significant influence over an associate that includes a foreign operation), the cumulative amount in the
foreign currency translation reserve in respect of that operation is then recognised in profit or loss.
Monetary items forming net investment in foreign operations
The Group classifies monetary items of a non-current nature where settlement is not planned in
the foreseeable future as part of the net investment in foreign operations. All foreign exchange
differences on these items are recognised in other comprehensive income through the foreign
currency reserve in equity. As and when settlements occur, the cumulative amount in the foreign
currency translation reserve is then recognised in profit or loss.
| 2023 ANNUAL REPORT | GALE PACIFIC78 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; deter-mines 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, reflects concessions provided to the customer
such as discounts, rebates and refunds 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 relates to the sale of branded screening, architectural shading, and commer-
cial agricultural and horticultural fabric products, and is recognised at the point in time when the performance
obligation is satisfied and customer obtains control of the goods. This is generally at the time of delivery, or
collection of goods by the customer. Payment is generally due within 30 – 90 days of invoicing.
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.
| 2023 ANNUAL REPORT | GALE PACIFIC79 Derivative financial instruments
Derivatives are initially recognised at fair value on the date a derivative contract is entered into
and are subsequently remeasured to their fair value at each reporting date. The accounting for
subsequent changes in fair value depends on whether the derivative is designated as a hedging
instrument, and if so, the nature of the item being hedged.
Derivatives are classified as current or non-current depending on the expected period of realisation.
Cash flow hedges
Cash flow hedges are used to cover the Group’s exposure to variability in cash flows that is
attributable to particular risks associated with a recognised asset or liability or a firm commitment
which could affect profit or loss. The effective portion of the gain or loss on the hedging instrument is
recognised in other comprehensive income through the cash flow hedges reserve in equity, whilst the
ineffective portion is recognised in profit or loss. Amounts taken to equity are transferred out of equity
and included in the measurement of the hedged transaction when the forecast transaction occurs.
Cash flow hedges are tested for effectiveness on a regular basis both retrospectively and
prospectively to ensure that each hedge is 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.
Leases
The Group applies a single recognition and measurement approach for all leases, except for short-term
leases and leases of low-value assets. The Group recognises lease liabilities to make lease payments
and right-of-use assets representing the right to use the underlying assets.
Right-of-use assets
The Group recognises right-of-use assets at the commencement date of the lease (i.e., the date the
underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated
depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost
of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred,
and lease payments made at or before the commencement date less any lease incentives received.
Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the
estimated useful lives.
If ownership of the leased asset transfers to the Group at the end of the lease term or the cost reflects
the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset.
The right-of-use assets are also subject to impairment.
| 2023 ANNUAL REPORT | GALE PACIFIC80 Lease liabilities
At the commencement date of the lease, the Group recognises lease liabilities measured at the
present value of lease payments to be made over the lease term. The lease payments include fixed
payments (including insubstance fixed payments) less any lease incentives receivable, variable lease
payments that depend on an index or a rate, and amounts expected to be paid under residual value
guarantees. The lease payments also include the exercise price of a purchase option reasonably
certain to be exercised by the Group and payments of penalties for terminating the lease, if the lease
term reflects the Group exercising the option to terminate.
Variable lease payments that do not depend on an index or a rate are recognised as expenses (unless
they are incurred to produce inventories) in the period in which the event or condition that triggers the
payment occurs.
In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the
lease commencement date because the interest rate implicit in the lease is not readily determinable.
After the commencement date, the amount of lease liabilities is increased to reflect the accretion of
interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is
remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g.,
changes to future payments resulting from a change in an index or rate used to determine such lease
payments) or a change in the assessment of an option to purchase the underlying asset.
Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to its short-term leases of machinery
and equipment (i.e., those leases that have a lease term of 12 months or less from the commencement
date and do not contain a purchase option). It also applies the lease of low-value assets recognition
exemption to leases of office equipment that are considered to be low value. Lease payments on
short-term leases and leases of low-value assets are recognised as expense on a straight-line basis
over the lease term.
Impairment of assets
Goodwill, other intangible assets that have an indefinite useful life, and assets not yet ready for use
as in-tended 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 esti-mate the recoverable amount for impairment testing purposes.
| 2023 ANNUAL REPORT | GALE PACIFIC81 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.
| 2023 ANNUAL REPORT | GALE PACIFIC82 NOTE 3. CRITICAL ACCOUNTING JUDGEMENTS,
ESTIMATES AND ASSUMPTIONS
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 have no impact on the carrying amounts of assets
and liabilities 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.
| 2023 ANNUAL REPORT | GALE PACIFIC83 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.
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
testing, including at the reporting date, that the hedges are still highly effective.
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.
Variable consideration for rebates, discounts and returns
The Group estimates variable considerations to be included in the transaction price with rights of return
and volume rebates.
The Group forecasts sales returns using a historical running rates adjusted for impacts from seasonality.
These percentages are applied to the trailing six months sales to determine the expected value of the
variable consideration related to the returns. Any significant changes in the historical return pattern will
be included and estimated by the Group.
The Group’s rebates and allowances are analysed and estimated on a per customer basis based on the
customer’s trading agreement. Variable considerations related to volume and revenue growth tiers are
evaluated and assessed periodically using year-to-date and projected sales.
| 2023 ANNUAL REPORT | GALE PACIFIC84 NOTE 4. OPERATING SEGMENTS
Identification of reportable operating segments
The Group was previously organised into 4 operating segments identified by geographic segments
together with Other items consisting of the Corporate division. From the current reporting period and
onwards, the Eurasia and MENA segments will be combined to a single Developing Markets segment
which combines the markets to streamline resources and strategic initiatives. As a result of this
change, the comparatives have been restated to align with the new reporting format.
In the new structure, the Group is organised into three operating segments identified by geographic
location (two anchor markets and developing markets), together with Other items which is related to
the Corporate division. 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.
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:
Americas (AMR)
Australia / New Zealand (ANZ)
Developing Markets (DEV)
Main sales office is located in North Carolina. May distribution
facility is located in California. Custom blind assembly and
distribution is located in Florida. All locations service the Americas
region.
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.
A sales office and distribution facility is located in the United Arab
Emirates to service the countries in that region. Additional sales team
members located in Europe and Asia are responsible for servicing the
applicable countries in their respective geographic area.
The ‘Other Items’ represents Corporate, Intersegment eliminations and total net assets of our
manufacturing operations in China.
The results from our manufacturing operations in China are allocated to the operating segments of
Americas, Australia / New Zealand and Developing Markets.
Discrete financial information about each of these segments is reported on a monthly basis.
| 2023 ANNUAL REPORT | GALE PACIFIC85 Major customers
During the year ended 30 June 2023 approximately 40% (2022: 38%) of the Group’s external revenue
was derived from sales to two customers (2022: Two), one customer located in the Australasian
region and one customer located in the Americas region.
Operating segment information
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Consolidated - 2023
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
91,935
82,247
13,382
91,935
82,247
13,382
-
-
187,564
187,564
12,216
(7,710)
(2,315)
10,383
(3,347)
(984)
3,917
(650)
(185)
(5,816)
(116)
(83)
2,191
6,052
3,082
(6,015)
20,700
(11,823)
(3,567)
5,310
(1,614)
3,696
88,396
43,370
7,896
58,064
197,726
197,726
39,907
26,024
745
36,171
102,847
102,847
| 2023 ANNUAL REPORT | GALE PACIFIC86
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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
95,641
95,641
13,015
(5,855)
(1,200)
93,704
93,704
11,536
(3,603)
(703)
16,198
16,198
4,143
(512)
(101)
-
-
(5,768)
-
-
205,543
205,543
22,926
(9,970)
(2,004)
5,960
7,230
3,530
(5,768)
10,952
(3,335)
7,617
85,714
48,024
11,708
56,958
202,404
202,404
39,223
27,098
576
37,531
104,428
104,428
Accounting policy for operating segments
Operating segments are presented using the ‘management approach’, where the information
presented is on the same basis as the internal reports provided to the CODM. The CODM is
responsible for the allocation of resources to operating segments and assessing their performance.
NOTE 5. OTHER INCOME
Scrap sales
Other income (primarily grants)
Other income
Consolidated
2023
$’000
657
24
2022
$’000
931
148
681
1,079
| 2023 ANNUAL REPORT | GALE PACIFIC87
NOTE 6. EXPENSES
Profit before income tax includes the following specific expenses:
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 benefit expense
Employment costs and benefits
Share-based payment expense
Total employee benefit expense
Finance costs
Interest and finance charges paid/payable on borrowings
Interest and finance charges paid/payable on lease liabilities
Interest income
Total finance costs expensed
Occupancy costs
Variable lease payments
Utilities
Cleaning & rubbish removal
Other - sundry
Total occupancy costs
Transport, Warehouse and related costs
Outbound transportation costs
Repairs and maintenance
Other
Total Transport, Warehouse and related costs
The following are the total lease costs recognised:
Depreciation expense of right-of-use assets
Interest expense on lease liabilities
Variable lease payments (included in ocupancy costs)
Total lease related expenses
Consolidated
2023
$’000
2022
$’000
5,189
5,961
11,150
4,589
4,716
9,305
673
665
11,823
9,970
39,764
1,138
40,285
999
40,902
41,284
2,403
1,360
(196)
3,567
1,459
846
417
-
1,129
896
(21)
2,004
1,549
642
448
30
2,722
2,669
10,932
2,161
67
13,160
5,961
1,360
1,459
8,780
10,713
2,665
68
13,446
4,716
896
1,549
7,161
| 2023 ANNUAL REPORT | GALE PACIFIC88 NOTE 7. INCOME TAX
Income tax expense
Current tax
Net deferred tax benefit - origination and reversal of temporary differences
Prior year tax true-up
Aggregate income tax expense
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%
Non allowable/(non-assessable) items
Prior year tax true-up
Difference in overseas tax rates
Income tax expense
Amounts charged/(credited) directly to equity
Deferred tax assets
Consolidated
2023
$’000
2022
$’000
2,547
(1,162)
229
1,614
5,310
1,593
312
229
(520)
1,614
4,199
(1,109)
245
3,335
10,952
3,286
232
245
(428)
3,335
Consolidated
2023
$’000
2022
$’000
(102)
137
| 2023 ANNUAL REPORT | GALE PACIFIC89 Net deferred tax asset
Deferred taxes comprises temporary differences attributable to:
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 to profit or loss
Charged to equity
Transfer from current tax liability
Closing balance
Income tax receivable
Income tax receivable
Current tax liability
Current tax liability
Consolidated
2023
$’000
2022
$’000
2,135
(1,051)
(503)
138
203
2
-
697
528
2,149
885
1,162
102
-
2,149
2,543
(1,487)
(892)
(598)
110
177
6
840
186
885
187
1,109
(137)
(274)
885
Consolidated
2023
$’000
2022
$’000
1,822
-
Consolidated
2023
$’000
2022
$’000
789
3,033
| 2023 ANNUAL REPORT | GALE PACIFIC90 The 2023 net deferred tax asset of $2,149,000 (2022: $885,000) is comprised of $2,391,000 in deferred
tax assets (2022: $1,164,000) and $242,000 (2022: $279,000) in deferred tax liabilities, reflecting
various tax positions in different jurisdictions.
As at 30 June 2023, the Group has $8,243,000 unused tax losses (2022: $9,953,000) and $2,135,000
deferred tax with respect to those losses (2022: $2,543,000) in the consolidated financial statements,
which are related to the GALE Pacific USA Inc entity, primarily driven by the write-off of inventory, being
personal protective equipment (GALE GUARD face masks) 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 settled, based on those tax rates that are
enacted or substantively enacted, except for:
■ When the deferred income tax asset or liability arises from the initial recognition of goodwill or
an asset or liability in a transaction that is not a business combination and that, at the time of the
transaction, affects neither the accounting nor taxable profits; or
■ When the taxable temporary difference is associated with interests in subsidiaries, associates
or joint ven-tures, and the timing of the reversal can be controlled and it is probable that the
temporary difference will not reverse in the foreseeable future.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is
probable that future taxable amounts will be available to utilise those temporary differences and losses.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting
date. Deferred tax assets recognised are reduced to the extent that it is no longer probable that future
taxable profits will be available for the carrying amount to be recovered. Previously unrecognised deferred
tax assets are recognised to the extent that it is probable that there are future taxable profits available to
recover the asset.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current
tax assets against current tax liabilities and deferred tax assets against deferred tax liabilities; and they
relate to the same taxable authority on either the same taxable entity or different taxable entities which
intend to settle simultaneously.
GALE Pacific Limited (the ‘head entity’) and its wholly-owned Australian subsidiaries have formed an
income tax consolidated group under the tax consolidation regime. The head entity and each subsidiary
in the tax consol-idated group continue to account for their own current and deferred tax amounts. The
| 2023 ANNUAL REPORT | GALE PACIFIC91
tax consolidated group has applied the ‘separate taxpayer within group’ approach in determining the
appropriate amount of taxes to allocate to members of the tax consolidated group.
In addition to its own current and deferred tax amounts, the head entity also recognises the current tax
liabilities (or assets) and the deferred tax assets arising from unused tax losses and unused tax credits
assumed from each subsidiary in the tax consolidated group.
Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised
as amounts receivable from or payable to other entities in the tax consolidated group. The tax funding
arrangement ensures that the intercompany charge equals the current tax liability or benefit of each tax
consolidated group member, resulting in neither a contribution by the head entity to the subsidiaries nor a
distribution by the subsidiaries to the head entity.
NOTE 8. EARNINGS PER SHARE
Profit after income tax attributable to the
owners of GALE Pacific Limited
Weighted average number of ordinary shares used in calculating
basic earnings per share
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
Consolidated
2023 $’000
2022 $’000
3,696
7,617
Number
Number
276,393,042 276,062,536
7,621,600
7,192,502
284,014,642 283,255,038
Cents
1.34
1.30
Cents
2.76
2.69
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.
| 2023 ANNUAL REPORT | GALE PACIFIC92 NOTE 9. CURRENT ASSETS - CASH AND CASH
EQUIVALENTS
Cash on hand
Cash at bank
Consolidated
2023 $’000
3
23,638
2022 $’000
4
28,461
23,641
28,465
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
2023 $’000
44,295
(1,342)
2022 $’000
49,125
(2,039)
42,953
216
43,169
47,086
210
47,296
Allowance for expected credit losses
The Group has recognised a net release of expected credit loss allowance of $506,000 (2022: net charge
of $487,000) in profit or loss in respect of impairment of receivables for the year ended 30 June 2023.
| 2023 ANNUAL REPORT | GALE PACIFIC93 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.
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
2023 $’000
2022 $’000
23,957
13,879
2,706
1,835
1,918
44,295
38,901
3,983
1,725
2,289
2,226
49,124
2023 $’000
(2)
(58)
(1,282)
2022 $’000
(2)
(46)
(1,991)
(1,342)
(2,039)
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:
Trade receivables
Opening balance
Additional allowances recognised
Excess allowances released
Receivables written off during the year as uncollectable
Closing balance
Consolidated
2023 $’000
2,039
224
(730)
(191)
2022 $’000
1,621
487
-
(69)
1,342
2,039
The net release in ECL provision for this financial year is primarily related to the revised credit policy
in the Middle East region; the discipline put in place during FY23 has driven material reductions in the
region’s overall aged receivables, allowing the Company to true up the provision.
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.
| 2023 ANNUAL REPORT | GALE PACIFIC94 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 90 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
67% (2022: 89%) against all receivables over 365 days past. The Group has reduced the expected
loss rates for trade receivables from the prior year based on its judgement of the impact of current
economic conditions. There has been no change in the 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
2023 $’000
11,194
2,061
42,694
(2,605)
40,089
2022 $’000
10,064
2,206
48,017
(3,988)
44,029
53,344
56,299
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.
| 2023 ANNUAL REPORT | GALE PACIFIC95 NOTE 12. NON-CURRENT ASSETS - PROPERTY, PLANT
AND EQUIPMENT
Consolidated
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
2023 $’000
19,245
(8,851)
2022 $’000
17,974
(8,464)
10,394
121,279
(101,087)
20,192
306
(177)
129
132
9,510
119,304
(98,706)
20,598
309
(161)
148
589
30,847
30,845
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 - 2022
Balance at 1 July 2021
Additions
Disposals
Exchange differences
Transfers in/(out)
Depreciation expense
Balance at 30 June 2022
Additions
Disposals
Exchange differences
Transfers in/(out)
Depreciation expense
Balance at 30 June 2023
Buildings and
leasehold
improvements
$’000
Plant and
equipment
$’000
Motor
vehicles
$’000
Capital
work in-
progress
$’000
9,698
90
(69)
427
402
(1,038)
9,510
-
-
(260)
2,236
(1,092)
10,394
19,872
2,456
(53)
653
1,203
(3,533)
20,598
97
(10)
(245)
3,831
(4,079)
20,192
163
-
-
3
-
(18)
148
-
-
(1)
-
(18)
129
Total
$’000
30,705
3,960
(122)
1,068
(177)
(4,589)
972
1,414
-
(15)
(1,782)
-
589
30,845
5,532
-
78
(6,067)
-
5,629
(10)
(428)
-
(5,189)
132
30,847
| 2023 ANNUAL REPORT | GALE PACIFIC96 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
Leasehold improvements
Plant and equipment
Motor vehicles
45 years
Over lease term
2-15 years
2-5 years
Depreciation commences from the time the asset is held ready for use. The residual values, useful
lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting date.
When changes are made, adjustments are reflected in current and future periods only.
Leasehold improvements 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.
NOTE 13. NON-CURRENT ASSETS - INTANGIBLES
Consolidated
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
Intangible work-in-progress
2023 $’000
11,391
(7,961)
2022 $’000
11,275
(7,961)
3,430
3,314
5,783
(1,223)
4,560
1,693
(1,497)
196
9,444
(8,686)
758
3,232
12,176
5,075
(790)
4,285
1,682
(1,462)
220
9,312
(8,337)
975
-
8,794
| 2023 ANNUAL REPORT | GALE PACIFIC97 Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous
financial year are set out below:
0
0
0
$
’
l
l
i
w
d
o
o
G
3,066
-
248
-
-
3,314
-
116
-
Consolidated
Balance at 1 July 2021
Additions
Exchange differences
Transfers in/(out)
Amortisation expense
Balance at 30 June 2022
Additions
Exchange differences
Amortisation expense
t
n
e
m
p
o
e
v
e
D
l
0
0
0
$
’
-
d
a
r
t
,
s
t
n
e
t
a
P
0
0
0
$
’
s
e
s
n
e
c
i
l
d
n
a
s
k
r
a
m
0
0
0
$
’
e
r
a
w
t
f
o
s
n
o
i
t
a
c
i
l
p
p
A
l
-
k
r
o
w
e
b
g
n
a
t
n
I
i
s
s
e
r
g
o
r
p
-
n
i
0
0
0
$
’
3,670
877
3
120
(385)
4,285
707
-
(432)
242
8
-
-
(30)
220
-
-
(24)
1,164
4
-
57
(250)
975
-
-
(217)
-
-
-
-
-
3,187
45
-
0
0
0
$
’
l
a
t
o
T
8,142
889
251
177
(665)
8,794
3,894
161
(673)
Balance at 30 June 2023
3,430
4,560
196
758
3,232
12,176
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
2023 $’000
3,083
347
2022 $’000
2,967
347
3,430
3,314
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 2023.
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% (2022: 2.0%).
| 2023 ANNUAL REPORT | GALE PACIFIC98
USA
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 12.0% (2022: 10.0%)
EBITDA assumptions
EBITDA for FY2024 is based on the Board approved budget, with FY2025 to FY2028 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 invest in product development and expansion within the Americas region. The terminal
growth rate was set at 2% in-line with the long-term real growth rate of the US economy.
Sensitivity Analysis
Management have conducted an analysis to reasonably test the sensitivity of the impairment assessment
to possible changes in the key assumptions used to determine the changes in the recoverable amount of
the CGU. This sensitivity analysis considered the changes to terminal growth rate from 0.5% to 2.5% and
discount rate from 8.00% to 18.00%, which did not result in an impairment.
Around 40% reduction in the FY24 Budget EBITDA will reduce the headroom to zero, but not result in
an impairment.
The analysis revealed that there is sufficient headroom in all instances of changes of these factors and
there is no impact on the impairment assessment.
China
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.
Accounting policy for intangible assets
Intangible assets acquired separately are measured on initial recognition at cost. The cost of
intangible assets acquired in a business combination is their fair value at the date of acquisition.
Following initial recognition, intangible assets are carried at cost less any accumulated amortisation
and accumulated
impairment losses. Internally generated intangibles, excluding capitalised development costs, are
not capitalised and the related expenditure is reflected in profit or loss in the period in which the
expenditure is incurred.
| 2023 ANNUAL REPORT | GALE PACIFIC99 The useful lives of intangible assets are assessed as either finite or indefinite.
Intangible assets with finite lives are amortised over the useful economic life and assessed for
impairment whenever there is an indication that the intangible asset may be impaired. The amortisation
period and the amortisation method for an intangible asset with a finite useful life are reviewed at
least at the end of each reporting period. Changes in the expected useful life or the expected pattern
of consumption of future economic benefits embodied in the asset are considered to modify the
amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The
amortisation expense on intangible assets with finite lives is recognised in the statement of profit or loss
in the expense category that is consistent with the function of the intangible assets.
Intangible assets with indefinite useful lives are not amortised, but are tested for impairment annually,
either individually or at the cash-generating unit level. The assessment of indefinite life is reviewed annually
to determine whether the indefinite life continues to be supportable. If not, the change in useful life from
indefinite to finite is made on a prospective basis.
An intangible asset is derecognised upon disposal (i.e., at the date the recipient obtains control) or
when no future economic benefits are expected from its use or disposal. Any gain or loss arising upon
derecognition of the asset (calculated as the difference between the net disposal proceeds and the
carrying amount of the asset) is included in the statement of profit or loss.
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
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 between 5 - 10 years based on the type of
application software.
Intangible - work-in-progress
Intangible work-in-progress additions represent the capitalised expenses relating to the phase-1
implementation of a new ERP solution (Dynamics 365). The expenses incurred thus far relate to the
initial design stage of the project. The anticipated completion and launch of the new ERP is estimated
to be at the end of the following financial year.
| 2023 ANNUAL REPORT | GALE PACIFIC100 NOTE 14. NON-CURRENT ASSETS - RIGHT-OF-USE
ASSETS
Land and buildings - right-of-use
Less: Accumulated depreciation
Consolidated
2023 $’000
43,598
(15,169)
2022 $’000
35,570
(9,155)
28,429
26,415
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 2021
Additions
Exchange differences
Depreciation expense
Balance at 30 June 2022
Additions
Exchange differences
Depreciation expense
Balance at 30 June 2023
Land and buildings
- right-of-use
$’000
20,314
9,384
1,433
(4,716)
26,415
7,467
508
(5,961)
28,429
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 in-curred, 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.
| 2023 ANNUAL REPORT | GALE PACIFIC101 NOTE 15. CURRENT LIABILITIES - TRADE AND OTHER
PAYABLES
Consolidated
Trade payables
Sundry payables and accruals - Customer rebates and variable
revenue
Sundry payables and accruals - Other
Refer to note 25 for further information on financial instruments.
2023 $’000
9,995
2022 $’000
17,175
8,894
9,420
3,195
22,084
4,181
30,776
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
2023 $’000
39,156
2022 $’000
20,995
Refer to note 25 for further information on financial instruments. Refer note 19 for non-current portion
of the borrowings.
Subsequent to 30 June 2023, the Group extended the debt facilities with ANZ Bank until 30 August
2024. The extension covers Australia and the US facilities, the China facility was refinanced during
the second half of FY23 to Ningbo Bank. The revised facilities with the ANZ Bank are subject to final
documentation.
NOTE 17. CURRENT LIABILITIES - PROVISIONS
Warranties
Consolidated
2023 $’000
624
2022 $’000
507
Warranties
The provision represents the estimated warranty claims in respect of products sold which are still under
warranty at the reporting date. The provision is estimated based on historical warranty claim information,
sales levels and any recent trends that may suggest future claims could differ from historical amounts.
The group typically provides for warranties for general defects that existed at the time of sale, as
required by law.
| 2023 ANNUAL REPORT | GALE PACIFIC102 Warranty movements
Carrying amount at the start of the year
Additional provisions recognised
Claims
Carrying amount at the end of the year
Consolidated
2023 $’000
507
629
(512)
2022 $’000
501
382
(376)
624
507
Accounting policy for provisions
Provisions are recognised when the Group has a present (legal or constructive) obligation as a
result of a past event, it is probable the Group will be required to settle the obligation, and a reliable
estimate can be made of the amount of the obligation. The amount recognised as a provision is the
best estimate of the consideration required to settle the present obligation at the reporting date,
taking into account the risks and uncertainties surrounding the obligation. If the time value of money
is material, provisions are discounted using a current pre-tax rate specific to the liability. The increase
in the provision resulting from the passage of time is recognised as a finance cost in profit or loss.
NOTE 18. CURRENT LIABILITIES - LEASE LIABILITIES
Lease liability
Refer to note 25 for further information on financial instruments.
Consolidated
2023 $’000
5,695
2022 $’000
4,677
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
Consolidated
2023 $’000
-
2022 $’000
12,935
Consolidated
2023 $’000
39,156
2022 $’000
33,930
Assets pledged as security
The bank loans are secured by a fixed and floating charge (or equivalent foreign charge) over all the
assets and undertakings, including uncalled capital of each entity in the Group.
Accounting policy for borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of
transaction costs. They are subsequently measured at amortised cost using the effective interest method.
| 2023 ANNUAL REPORT | GALE PACIFIC103 NOTE 20. NON-CURRENT LIABILITIES - LEASE
LIABILITIES
Lease liability - 1 to 5 years
Lease liability - greater than 5 years
Consolidated
2023 $’000
19,984
6,421
2022 $’000
22,624
1,487
26,405
24,111
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.
The Group has several lease contracts that include extension and termination options. These options are
negotiated by management to provide flexibility in managing the leased asset portfolio and align with
the Group’s business needs. Management exercises significant judgement in determining whether these
extension and termination options are reasonably certain to be exercised.
Set out below are the undiscounted potential future rental payments relating to periods following the
exercise date of extension and termination options that are not included in the lease term:
As at 30 June 2023
Extension options expected not to be
exercised
Within five years
$’000
More than five
years $’000
Total
-
30,365
30,365
| 2023 ANNUAL REPORT | GALE PACIFIC104 NOTE 21. EQUITY - ISSUED CAPITAL
Consolidated
2023 Shares 2022 Shares
Ordinary shares - fully paid
276,393,042
276,393,042
2023
$’000
63,403
2022
$’000
63,403
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the
Company in proportion to the number of and amounts paid on the shares held. The fully paid ordinary
shares have no par value and the Company does not have a limited amount of authorised capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and
upon a poll each share shall have one vote.
Share buy-back
No new buy-back scheme was effective for the financial year ended 30 June 2023.
Vesting of performance rights
No new performance rights vested during the financial year ended 30 June 2023 (2022: 1,001,732).
Capital risk management
The Group’s objectives when managing capital is to safeguard its ability to continue as a going
concern, so that it can provide returns for shareholders and benefits for other stakeholders and
to maintain an optimum capital structure to reduce the cost of capital. This is achieved through
monitoring of historical and forecast performance and cash flows.
Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt.
Net debt is calculated as total borrowings less cash and cash equivalents.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid
to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
Accounting policy for issued capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a
deduction, net of tax, from the proceeds.
| 2023 ANNUAL REPORT | GALE PACIFIC105 NOTE 22. EQUITY - RESERVES
Foreign currency reserve
Hedging reserve - cash flow hedges
Share-based payments reserve
Enterprise reserve fund
Consolidated
2023 $’000
29
198
4,409
5,185
2022 $’000
2,195
435
3,271
4,434
9,821
10,335
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.
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.
| 2023 ANNUAL REPORT | GALE PACIFIC106 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 2021
Foreign currency translation *
Movement in hedge
Income tax
Share-based payment
Vesting of performance rights
Statutory transfers from
retained earnings
Balance at 30 June 2022
Foreign currency translation *
Movement in hedge
Income tax
Share-based payment
Statutory transfers from
retained earnings
Balance at 30 June 2023
Foreign
currency
$’000
(2,201)
4,396
-
-
-
-
-
2,195
(2,166)
-
-
-
-
29
Hedging
$’000
118
-
454
(137)
-
-
-
435
-
(339)
102
-
-
198
Share-based
payments
$’000
2,607
-
-
-
999
(335)
Enterprise
reserve
fund $’000
3,935
-
-
-
-
-
-
499
Total
$’000
4,459
4,396
454
(137)
999
(335)
499
3,271
4,434
10,335
-
-
-
1,138
-
-
-
-
-
(2,166)
(339)
102
1,138
751
751
4,409
5,185
9,821
*Refer to note 24 for details of monetary items identified as a net investment in a foreign operation
NOTE 23. EQUITY - DIVIDENDS
Dividends
Dividends paid during the financial year were as follows:
Final Dividend for the year ended 30 June 2022 of 1.00 cent per
ordinary share (75% franked)
Interim Dividend for the year ended 30 June 2023 of 1.00 cent per
ordinary share (100% franked)
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)
Consolidated
2023 $’000
2022 $’000
2,764
2,764
-
-
5,528
-
-
5,508
2,764
8,272
There were no dividends recommended or declared during the half year ended 30 June 2023.
| 2023 ANNUAL REPORT | GALE PACIFIC107 Franking credits
Franking credits available at the reporting date based on a tax rate of 30%
Franking credits that will arise from the payment of the amount of the
provision for income tax at the reporting date based on a tax rate of 30%
Franking debits that will arise from the income tax receivable at the
reporting date based on a tax rate of 30%
Franking debits that will arise from the payment of dividends declared
subsequent to the reporting date based on a tax rate of 30%
Franking credits available for subsequent financial years based on a tax
rate of 30%
Consolidated
2023
$’000
2,018
2022
$’000
241
-
1,886
(1,674)
-
-
(888)
344
1,239
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
Monetary items identified as a net investment in a foreign
operation
Consolidated
2023 $’000
2022 $’000
10,724
10,306
2,754
2,958
13,478
13,264
The foreign exchange gain or loss arising during the financial year on monetary items forming part of the net
investment in foreign operations, 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.
| 2023 ANNUAL REPORT | GALE PACIFIC108 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:
Buy US dollars/sell Australian dollars
Maturity:
Less than 6 months
6 - 12 months
Sell Australian dollars
Average exchange rates
2023 $’000
2022 $’000
2023
2022
11,482
-
12,554
1,950
0.6793
-
0.7185
0.7179
Buy Chinese Yuan/sell US Dollars
Maturity:
Less than 6 months
6 - 9 months
Sell US dollars
Average exchange rates
2023 $’000
2022 $’000
2023
2022
26,500
9,000
35,400
-
6.8300
6.8800
6.4500
-
| 2023 ANNUAL REPORT | GALE PACIFIC109 The carrying amount of the Group’s foreign currency denominated financial assets and financial
liabilities at the reporting date were as follows:
Consolidated
US dollars
New Zealand dollars
Chinese yuan
UAE dirham
Assets
Liabilities
2023 $’000
49,868
550
714
917
2022 $’000 2023 $’000
14,896
39
2,935
-
58,489
1,527
1,326
1,104
2022 $’000
27,274
437
-
-
52,049
62,446
17,870
27,711
The Group had net assets denominated in foreign currencies of $34,179,000 (assets of $52,049,000 less
liabilities of $17,870,000 as at 30 June 2023 (2022: $34,735,000 (assets of $62,446,000 less liabilities
of $27,711,000)). Based on this exposure, had the Australian dollar strengthened by 5% / weakened by
5% (2022: 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 $127,000 lower/
higher (2022: $103,000 lower/higher) and equity would have been $3,296,000 lower/higher (2022:
$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
Net exposure to cash flow interest
rate risk
2023
2022
Weighted
average
interest
rate %
-
4.90%
Weighted
average
interest
rate %
-
2.80%
Balance
$’000
23,641
(39,156)
(15,515)
Balance
$’000
28,465
(33,930)
(5,465)
| 2023 ANNUAL REPORT | GALE PACIFIC110 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 (2022: 100) basis points would have an ad-verse/
favourable effect on profit before tax of $391,560 (2022: $339,940) per annum. The percentage change is
based on the expected volatility of interest rates using market data and analysts forecasts.
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in
financial loss to the Group. Before accepting any new customer, the Group uses internal resources
and criteria to assess the potential customer’s credit quality and defines credit limits by customer.
The maximum exposure to credit risk at the reporting date to recognised financial assets is the
carrying amount, net of any provisions for impairment of those assets, as disclosed in the statement of
financial position and notes to the financial statements. The Group does not hold any collateral.
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.
| 2023 ANNUAL REPORT | GALE PACIFIC111 e
g
a
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e
v
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g
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l
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-
6,909
6,909
-
15,612
-
7,047
39,911
36,573
15,612
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s
r
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5
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17,175
9,420
4,181
2.80%
-
20,995
5,947
57,718
12,935
6,667
19,602
-
17,649
-
1,810
17,649
1,810
33,930
32,073
96,779
Consolidated 2023
Non-derivatives
Non-interest bearing
Trade payables
Customer rebates
Other sundry payables
and accruals
Interest-bearing - variable
Bank loans
Lease liability
Total non-derivatives
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
The cash flows in the maturity analysis above are not expected to occur significantly earlier than
contractually disclosed above.
| 2023 ANNUAL REPORT | GALE PACIFIC112
LIABILITIES FROM FINANCING ACTIVITIES
Changes in liabilities arising from financing activities are shown below.
Consolidated
Balance at 1 July 2021
Net proceeds / (repayments)
New / extension of leases
Balance at 30 June 2022
Net proceeds / (repayments)
New / extension of leases
Other
Current
Borrowings
$’000
Non-Current
Borrowings
$’000
19,296
1,699
-
20,995
5,226
-
12,935
9,575
3,360
-
12,935
-
-
(12,935)
Current
Lease
Liabilities
$’000
3,768
(2,943)
3,852
Non-current
Lease
Leabilities
$’000
18,579
-
5,532
4,677
(4,155)
5,173
-
24,111
-
2,294
-
Total
$’000
51,218
2,116
9,384
62,718
1,071
7,467
-
Balance at 30 June 2023
39,156
-
5,695
26,405
71,256
‘Other’ represents the reclassification of non-current borrowings to current borrowings based on the
termination date of the ANZ Bank related facilities as at 30 June 2023.
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 - 2023
Liabilities
Forward foreign exchange contracts
Total liabilities
Consolidated - 2022
Liabilities
Forward foreign exchange contracts
Total liabilities
Level 1
$’000
Level 2
$’000
Level 3
$’000
Level 4
$’000
-
-
2,576
2,576
-
-
2,576
2,576
Level 1
$’000
Level 2
$’000
Level 3
$’000
Level 4
$’000
-
-
1,355
1,355
-
-
1,355
1,355
| 2023 ANNUAL REPORT | GALE PACIFIC113 There were no transfers between levels during the financial year.
The net fair value of assets and liabilities approximates their carrying value. No financial assets or
financial liabilities are readily traded on organised markets in standardised form other than forward
exchange contracts.
Valuation techniques for fair value measurements categorised
within level 2 and level 3
Derivative financial instruments have been valued using quoted market rates. This valuation technique
maximises the use of observable market data where it is available and relies as little as possible on
entity specific estimates.
Accounting policy for fair value measurement
When an asset or liability, financial or non-financial, is measured at fair value for recognition or
disclosure purposes, the fair value is based on the price that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between market participants at the measurement
date; and assumes that the transaction will take place either: in the principal market; or in the absence
of a principal market, in the most advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the
asset or liability, assuming they act in their economic best interests. For non-financial assets, the fair
value measurement is based on its highest and best use. Valuation techniques that are appropriate
in the circumstances and for which sufficient data are available to measure fair value, are used,
maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
Assets and liabilities measured at fair value are classified into three levels, using a fair value hierarchy
that reflects the significance of the inputs used in making the measurements. Classifications
are reviewed at each reporting date and transfers between levels are determined based on a
reassessment of the lowest level of input that is significant to the fair value measurement.
For recurring and non-recurring fair value measurements, external valuers may be used when internal
expertise is either not available or when the valuation is deemed to be significant. External valuers
are selected based on market knowledge and reputation. Where there is a significant change in fair
value of an asset or liability from one period to another, an analysis is undertaken, which includes a
verification of the major inputs applied in the latest valuation and a comparison, where applicable,
with external sources of data.
NOTE 27. RELATED PARTY TRANSACTIONS
Parent entity
GALE Pacific Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 30.
| 2023 ANNUAL REPORT | GALE PACIFIC114 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.
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
Consolidated
2023 $
3,264,199
176,134
128,763
1,135,178
4,704,274
2022 $
3,887,859
159,303
171,934
1,493,444
5,712,540
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
(Loss)/profit after income tax
Total comprehensive (loss)/income
Parent
2023 $’000
(788)
(1,025)
2022 $’000
6,511
6,828
| 2023 ANNUAL REPORT | GALE PACIFIC115 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
(Accumulated losses)/retained profits
Total equity
Parent
2023 $’000
27,486
115,381
37,758
47,940
63,403
198
4,409
(569)
67,441
2022 $’000
32,285
121,441
25,916
49,607
63,403
435
3,270
4,726
71,834
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2022 and 30 June 2023.
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.
| 2023 ANNUAL REPORT | GALE PACIFIC116 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
GALE Pacific (New Zealand) Limited
GALE Pacific FZE
GALE Pacific Special Textiles (Ningbo)
Limited
GALE Pacific Trading (Ningbo) Limited
GALE Pacific USA, Inc.
Zone Hardware Pty Ltd
Riva Window Fashions Pty Ltd
Principal place of business
/Country of incorporation
New Zealand
United Arab Emirates
Ownership interest
2023 %
2022 %
100%
100%
100%
100%
China
100%
100%
China
USA
Australia
Australia
100%
100%
100%
100%
100%
100%
100%
100%
On 24 May 2023, two dormant subsidiaries, Riva Window Fashions Pty Ltd (ACN 145 083 254) and
Zone Hardware Pty Ltd (ACN 115 484 878) were deregistered.
Apart from the above, there were no other entities, associates or joint venture entities over which
control was gained or lost during the period.
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 to 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 or return to shareholders.
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.
This performance rights 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 performance rights for ordinary shares in the Company to key management
personnel and certain senior managers of the Group. The performance rights are issued for nil
consideration and are granted in accordance with performance guidelines established by the
Nomination and Remuneration Committee.
Refer to note 6 for the amount expensed to profit or loss during the financial year.
| 2023 ANNUAL REPORT | GALE PACIFIC117 2023
Grant date
Expiry
date
01/12/2022
16/01/2020
01/12/2023
30/10/2020
01/12/2023
23/12/2020
23/12/2021
01/12/2024
06/04/2022 01/12/2024
01/12/2025
17/03/2023
2022
559,338
1,347,000
Balance at
the start
of the year
Grant
date
Fair
value
$0.26
$0.16
$0.27
$0.28 2,870,000
204,000
$0.28
$0.24
14,000,000
-
-
-
-
-
- 3,223,000
18,980,338 3,223,000
Granted Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
-
-
-
-
-
-
-
(559,338)
(218,000)
-
(786,000)
-
-
-
1,129,000
14,000,000
2,084,000
204,000
3,223,000
(1,563,338) 20,640,000
Grant date
Expiry
date
01/12/2021
13/11/2018
01/12/2022
16/01/2020
01/12/2023
30/10/2020
01/12/2023
23/12/2020
01/12/2024
23/12/2021
06/04/2022 01/12/2024
Grant
date
Fair
value
$0.35
$0.26
$0.16
$0.27
$0.28
$0.28
Balance at
the start
of the year
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
886,000
1,034,971
1,987,000
14,000,000
-
-
-
-
- 2,870,000
204,000
-
(686,836)
(314,896)
-
-
-
-
(199,164)
(160,737)
(640,000)
-
-
-
-
559,338
1,347,000
14,000,000
2,870,000
204,000
17,907,971 3,074,000 (1,001,732)
(999,901)
18,980,338
The performance rights granted on the 17 March 2023 to the senior executives are subject to
performance conditions and time hurdles as outlined below.
Performance condition - The diluted EPS needs to increase (from the prior financial year reported
diluted EPS) by greater than a CAGR of 3.0% and over the relevant 3-year performance period (1 July
2022 to 30 Jun 2025). The number of Rights vesting will be determined proportionately, on a straight-
line basis, between CAGR of 3.0% and CAGR of 10.0%.
Time hurdle - The vesting of Rights is also dependent upon the employee remaining in continuous
employment with the Company until 30 September 2025.
The other performance rights granted (with the exception of those granted to the CEO as set out
below) are subject to the same performance condition as the 17 March 2023 grant, but tested over the
three year performance period starting from 30 June before the award was granted, with employees
required to remain in continuous employment with the Company until 30 September after the end of
the performance period.
The performance rights granted on 23 December 2020 to the CEO (also the Managing Director of the
Group) are subject to employment conditions and satisfying of relevant performance hurdles based on
total shareholder return (TSR) over the three-year period from 1 July 2020 to 30 June 2023.
| 2023 ANNUAL REPORT | GALE PACIFIC118 The percentage of the Performance Rights that will vest will be determined in accordance with the
table below.
TSR
Below Threshold: TSR of below 25% Nil
At Threshold: TSR of 25%
Above Threshold
Percentage of Performance Rights that vest
25% (i.e., 3.5 million Performance Rights)
Each additional whole 1% TSR above 25% will add 0.32% to
proportion of Performance Rights vesting to a maximum of
100% of Performance Rights vesting at 260% TSR or above
Any early achievement of the TSR thresholds will be taken into account at the end of the Performance
Period. In particular, if the required TSR increase of 25% or above is achieved in any financial half
year prior to 1 January 2023 (Early Achievement), the TSR performance condition will deemed to be
satisfied as at the end of the Performance Period to the same extent as if the increase in the TSR had
occurred over the full Performance Period (even if there is a subsequent decline in the TSR).
For the purpose of testing the TSR performance condition at the end of the Performance Period, the
highest TSR increase over the Performance Period or any single financial half year prior to 1 January
2023 will be used (i.e., TSR increases in respect of different periods, and any vesting of Performance
Rights referrable to such increases, will not be cumulative).
If there is a change of control, the TSR performance condition will be immediately tested and
calculated on the basis of an end price determined with reference to the change of control event (the
Change of Control Price) and Performance Rights may vest accordingly.
| 2023 ANNUAL REPORT | GALE PACIFIC119 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.
The fair value of equity settled performance rights with non-market vesting conditions is determined
using the share price at grant date less the present value of the expected dividend yield during the
vesting period. No account is taken of any other vesting conditions.
The fair value of equity settled performance rights with market based vesting conditions is determined
using a Monte Carlo simulation, that takes into account the opening share price at grant date, the
expected dividend yield, risk free interest rate for the term of the option, market volatility, assumed
exercise price and any specific vesting conditions that would impact the fair value at grant date.
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.
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 (i.e internal conditions), the
failure to satisfy the condition is treated as a cancellation.
If the condition is not within the control of the Group or employee (i.e market based conditions) 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.
| 2023 ANNUAL REPORT | GALE PACIFIC120 NOTE 32. REMUNERATION OF AUDITORS
During the financial year the following fees were paid or payable for services provided by Ernst &
Young, the auditor of the Company:
Audit services
Audit or review of the financial statements - Ernst & Young
Audit or review of the financial statements - Deloitte Touche Tohmatsu
Other services
Other services - Deloitte Touche Tohmatsu
Consolidated
2023
$’000
672,320
-
2022
$’000
-
416,806
672,320
416,806
395,950
283,328
1,068,270
700,134
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.
Definition of Accounting Estimates - Amendments to IAS 8
In February 2021, the IASB issued amendments to IAS 8, in which it introduces a definition of
‘accounting estimates’. The amendments clarify the distinction between changes in accounting
estimates and changes in accounting policies and the correction of errors. Also, they clarify how
entities use measurement techniques and inputs to develop accounting estimates.
The amendments are effective for annual reporting periods beginning on or after 1 January 2023
and apply to changes in accounting policies and changes in accounting estimates that occur on or
after the start of that period. Earlier application is permitted as long as this fact is disclosed. The
amendments are not expected to have a material impact on the Group’s financial statements.
| 2023 ANNUAL REPORT | GALE PACIFIC121 Deferred Tax related to Assets and Liabilities arising from a
Single Transaction - Amendments to IAS 12
In May 2021, the Board issued amendments to IAS 12, which narrow the scope of the initial recognition
exception under IAS 12, so that it no longer applies to transactions that give rise to equal taxable and
deductible temporary differences.
The amendments should be applied to transactions that occur on or after the beginning of the earliest
comparative period presented. In addition, at the beginning of the earliest comparative period
presented, a deferred tax asset (provided that sufficient taxable profit is available) and a deferred tax
liability should also be recognised for all deductible and taxable temporary differences associated
with leases and decommissioning obligations.
The Group is currently assessing the impact of the amendments.
Disclosure of Accounting Policies - Amendments to IAS 1 and
IFRS Practice Statement 2
In February 2021, the IASB issued amendments to IAS 1 and IFRS Practice Statement 2 Making
Materiality Judgements, in which it provides guidance and examples to help entities apply materiality
judgements to accounting policy disclosures. The amendments aim to help entities provide
accounting policy disclosures that are more useful by replacing the requirement for entities to disclose
their ‘significant’ accounting policies with a requirement to disclose their ‘material’ accounting policies
and adding guidance on how entities apply the con-cept of materiality in making decisions about
accounting policy disclosures.
The amendments to IAS 1 are applicable for annual periods beginning on or after 1 January 2023
with earlier application permitted. Since the amendments to the Practice Statement 2 provide non-
mandatory guidance on the application of the definition of material to accounting policy information,
an effective date for these amendments is not necessary.
The Group is currently assessing the impact of the amendments.
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 amend-ments will have a material impact in future periods on the financial
statements of the Group.
NOTE 34. EVENTS AFTER THE REPORTING PERIOD
Subsequent to 30 June 2023, the Company extended its existing credit facilities with the ANZ
Bank until 30 August 2024. There are no other matters that has arisen since 30 June 2023, 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.
| 2023 ANNUAL REPORT | GALE PACIFIC122 Over 54,000 5 star reviews
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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS
OF GALE PACIFIC LIMITED
for the year ended 30 June 2023
Ernst & Young
8 Exhibition Street
Melbourne VIC 3000 Australia
GPO Box 67 Melbourne VIC 3001
Tel: +61 3 9288 8000
Fax: +61 3 8650 7777
ey.com/au
Independent Auditor’s Report to the Members of Gale Pacific Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of Gale Pacific Limited (the Company) and its subsidiaries
(collectively the Group), which comprises the consolidated statement of financial position as at 30 June
2023, the consolidated statement of profit or loss and comprehensive income, consolidated statement
of changes in equity and consolidated statement of cash flows for the year then ended, notes to the
financial statements, including a summary of significant accounting policies, and the directors’
declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
a. Giving a true and fair view of the consolidated financial position of the Group as at 30 June 2023
and of its consolidated financial performance for the year ended on that date; and
b. 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
and 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 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 judgment, were of most significance in our
audit of the financial report of the current year. These matters were addressed in the context of our
audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide a
separate opinion on these matters. For each matter below, our description of how our audit addressed
the matter is provided in that context.
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the
financial report section of our report, including in relation to these matters. Accordingly, our audit
included the performance of procedures designed to respond to our assessment of the risks of material
misstatement of the financial report. The results of our audit procedures, including the procedures
performed to address the matters below, provide the basis for our audit opinion on the accompanying
financial report.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
| 2023 ANNUAL REPORT | GALE PACIFIC124
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS
OF GALE PACIFIC LIMITED
for the year ended 30 June 2023
Carrying Value of Inventories
Why significant
How our audit addressed the key audit matter
As at 30 June 2023, the Group held $53.3 million
in inventories representing 26% of total assets in
various locations.
As detailed in Note 2 and Note 11 of the financial
report, inventories are valued at the lower of cost
and net realisable value. There is judgment
involved in determining the cost of inventories
and in assessing net realisable value.
In determining the cost of inventories, the Group
considers elements relating to the costs to
operate the Group’s factories, as well as freight,
duty and exchange rates. Judgments were
involved in the process of allocating these costs
to inventories.
The Group is also required to eliminate any
intercompany profits in inventory at year end
which requires estimation.
There is also judgement involved in estimating
the value of inventory which may be sold below
cost and determining required provisioning
against this inventory. Such judgments include
expectations for future sales and movement
strategies for slow moving inventories.
Given the judgment involved in determining the
carrying value of inventories, this was considered
a key audit matter.
Our audit procedures included the following:
► Assessed the application of the Group’s
inventory costing methodology, and
whether this was consistent with Australian
Accounting Standards;
► Assessed the accuracy of key inputs to the
Group’s inventory valuation model, on a
sample basis;
► Assessed management’s process for the
elimination of intercompany profit in
inventory and recalculated the adjustment;
► Assessed the basis for inventory provisions
recorded by the Group to determine
whether inventory was recorded at the
lower of cost and net realisable value. In
doing so, we examined the process for
identifying specific slow-moving
inventories, historical inventory turnover
and management’s judgment with respect
to future sales expectations;
► Compared the net realisable value post year
end for a sample of inventory items with the
carrying value of inventories at 30 June
2023;
► Assessed the Group’s disclosures included
in Note 2 and Note 11 of the financial
report.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
| 2023 ANNUAL REPORT | GALE PACIFIC125
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS
OF GALE PACIFIC LIMITED
for the year ended 30 June 2023
Allowance for Expected Credit Loss in relation to Middle East and North Africa (“MENA”) Trade
Receivables
Why significant
As at 30 June 2023, the carrying amounts of
MENA trade receivables totalled $3.9 million with
$0.6 million of the outstanding balance aged over
365 days. The balance of the expected credit loss
allowance for MENA receivables accounts for
$1.1 million of trade receivables greater than
365 days. There is a high level of management
judgement involved in determining the expected
credit
loss allowance, whereby management
considers specific factors including the age of the
balances, historical payment patterns and any
other relevant
the
creditworthiness of the counterparties.
information concerning
Given the judgement involved and the aged
nature of these receivables, allowance for
expected credit loss was considered a key audit
matter.
How our audit addressed the key audit matter
Our procedures included the following:
► Obtained an understanding of how the
allowance for expected credit loss on MENA
receivables is estimated by management
in
and assessed management’s process
determining the estimated future cash flows
of MENA receivables;
► Evaluated on a sample basis, the aging
analysis and agreed
subsequent
settlement of the MENA receivables to
source documents including invoices and
bank statements, as appropriate;
the
► Assessed
the
reasonableness of
the
allowance for expected credit loss of MENA
receivables with reference to the credit
history
in
payments, settlement records, subsequent
settlements and agreed repayment plans;
including default or delay
► Assessed
the historical accuracy of
management’s assessment of allowance for
expected credit loss of 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;
► Assessed the appropriateness of disclosures
included in Note 2 and Note 10 of the
to accounts
financial
receivables.
relating
report
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
| 2023 ANNUAL REPORT | GALE PACIFIC126
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS
OF GALE PACIFIC LIMITED
for the year ended 30 June 2023
Customer Rebates and Variable Revenue
Why significant
The Group has various rebate and other
contracted arrangements with its customers that
vary on a customer and geographical basis. The
Group also provides credit to customers on a non-
standard basis for items including, but not limited
to, damaged or defective product. The Group is
required to calculate known and estimate
variable revenue at the time of initial revenue
recognition.
The accrual for Customer Rebates and variable
Revenue at 30 June 2023 is $8.9 million.
Given the varied nature of the arrangements with
customers and the
in
estimating variable revenue, customer rebates
and variable revenue was considered a key audit
matter.
judgement required
How our audit addressed the key audit matter
Our audit procedures included the following:
► Obtained an understanding of the nature of
the various rebate arrangements through
discussion with sales representatives and
assessed whether the terms of a sample of
agreements were appropriately reflected in
the accounting treatment in accordance with
Australian Accounting Standards;
► Agreed rebate percentages
in
accrual calculations to signed customer
contracts and claims from customers made
during the financial year, on a sample basis;
included
► Assessed accruals against actual rebate
expense to assess the accuracy of the
accruals process and that expenses were
recognised in the appropriate period;
► Performed detailed analytical review of the
expenses related to non-standard customer
claims to sales compared to prior periods;
► Assessed the appropriateness of disclosures
included in Note 2 and note 15 of the
financial report relating to judgments used
in
and
customer
estimating variable revenue.
assessing
rebates
Information other than the financial report and auditor’s report thereon
The directors are responsible for the other information. The other information comprises the
information included in the Company’s 2023 annual report, 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 accordingly we do not
express any form of assurance conclusion thereon, with the exception of the Remuneration Report and
our related assurance opinion.
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.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
| 2023 ANNUAL REPORT | GALE PACIFIC127
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS
OF GALE PACIFIC LIMITED
for the year ended 30 June 2023
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 Group’s ability to
continue as a going concern, disclosing, as applicable, matters relating 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 have no realistic alternative but to do so.
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
judgment 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.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
| 2023 ANNUAL REPORT | GALE PACIFIC128
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS
OF GALE PACIFIC LIMITED
for the year ended 30 June 2023
► 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 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 to the directors, we determine those matters that were of most
significance in the audit of the financial report of the current year 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.
Report on the audit of the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 54 to 65 of the directors’ report for the
year ended 30 June 2023.
In our opinion, the Remuneration Report of Gale Pacific Limited for the year ended 30 June 2023,
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.
Ernst & Young
Joanne D Lonergan
Partner
Melbourne
29 August 2023
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
| 2023 ANNUAL REPORT | GALE PACIFIC129 ADDITIONAL SECURITIES
EXCHANGE INFORMATION
In accordance with ASX Listing Rule 4.10, the Company provides the following information to
shareholders not elsewhere disclosed in this Annual Report. The information provided is current as at
29 August 2023 (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 2023
Performance rights expiring 1 December 2024
Performance rights expiring 1 December 2025
Number of holders
1,776
5
10
9
| 2023 ANNUAL REPORT | GALE PACIFIC130 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 1,776 holders of a total of 276,393,042 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.”
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:
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
130
509
244
683
210
Units
25,453
1,470,925
1,958,408
24,511,983
248,426,273
% of Issued Capital
0.01
0.53
0.71
8.87
89.88
1,776
276,393,042
100
Performance Rights
Range
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
Holders of performance
rights expiring 1
December 2023
-
-
-
-
5
Holders of performance
rights expiring 1
December 2024
-
-
-
2
8
Holders of performance
rights expiring 1
December 2025
-
-
-
-
9
5
10
9
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 $500 parcel at $0.2300 per unit
Minimum Parcel Size
2,174
Holders
325
Units
350,546
| 2023 ANNUAL REPORT | GALE PACIFIC131 SUBSTANTIAL SHAREHOLDERS
As at the Reporting Date, the names of the substantial holders of GALE Pacific and the number of
equity securities in which those substantial holders and their associates have a relevant interest, as
disclosed in substantial holding notices given to GALE Pacific, are as follows:
Shareholder
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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