Pental Limited Annual Report 2021

FY2021 Annual Report · Pental Limited
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CONNECTING WITH OUR BRANDS

ANNUAL REPORT 2021

PENTAL ANNUAL REPORT 2021

2

Contents

16

Chairman’s 
Report

20

Directors’
Report

56 

Directors’ 
Declaration

52

Auditor’s 
Independence 
Declaration

58

Consolidated 
Statement of 
Proﬁt or Loss

61

Consolidated 
Statement of 
Cash Flows

44

Corporate 
Governance 
Statement

53

Independent 
Auditors’
Report

59

Consolidated 
Statement 
of Financial 
Position

62

Notes to the 
Financial 
Statements

PENTAL ANNUAL REPORT 2021

60

Consolidated 
Statement of 
Changes in 
Equity

90

ASX Additional 
Information

3

PENTAL ANNUAL REPORT 2021

4

PENTAL ANNUAL REPORT 2021

Connecting our 
brands with a 
future proof focus 

For over 60 years, our iconic, proudly Australian brands 
have been a trusted household staple in all areas of the 
home. With the current environment highlighting the need 
for brands to offer their customers integrity, sustainability 
and convenience, Pental’s reputation as a company 
that is 100% committed to investing in Australia’s growth 
stands us in good stead for the future.

While 2020 was a challenging year, it reinforced the 
ability and agility of our business to grow through 
innovation and develop the clear connectivity between 
our brands and our customers.

Success in the post-Covid landscape demands 
diversiﬁcation in sales channels, and we have responded 
by fast-tracking a clear, structured e-commerce growth 
strategy to further connect our brands with new markets 
and reinforce our relationships with existing customers.

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PENTAL ANNUAL REPORT 2021
PENTAL ANNUAL REPORT 2021

Our ability to leverage new markets to drive growth 
Our ability to leverage new markets to drive growth 
combined with Pental’s enviable brand recognition 
now gives us the power to connect customers with 
their brands on a much broader scale. 

TRANSFORMATIVE
ACQUISITIONS

Hampers With Bite (HWB) are
hamper and gifting specialists,
who have delivered exceptional
growth in the e-commerce space. 
Pental’s acquisition of HWB allows
us immediate and direct reach to 
customers through a proven
revenue stream of targeted
e-commerce channels.

STRONG GROWTH WITH
STRATEGIC PURPOSE 

A key strategic objective of
expanding the e-commerce
sales channel is to drive volume,
revenue and margins of existing
and newly developed products. 

ENHANCING CUSTOMER
CONNECTION AND CONVENIENCE 
THROUGH NEW REVENUE STREAMS

Leveraging HWB’s existing online 
channel allows Pental’s suite of
products and bundle packs to be
cross sold to increase reach and
visibility. Pental will also be adopting
a subscription model for select
products to be sold direct to
customers, further increasing
brand loyalty.

COMMITTED TO GROWTH
THROUGH INVESTMENT 

Our ongoing commitment to supporting 
our own trusted brands such as White 
King, Janola, Country Life and Softly 
is reﬂected with strong above the line 
investment.

POWERED BY PARTNERSHIPS

With a proven track record in strategic 
distribution partnerships, we will
continue to explore additional 
partnership opportunities.

PRODUCT INNOVATION DRIVEN
BY A SUSTAINABLE PURPOSE 

Products with a unique point of 
difference have long been a strength of 
Pental and the company was successful 
in executing the launch of many new 
innovative products during the year. 

Our product innovation pipeline has a 
particular focus on sustainability and 
we’re making advances in assessing 
the viability of more sustainable, 
environmentally friendly raw materials. 

EXPANDING DISTRIBUTION 

Leveraging our production strength and 
available capacity, Pental continues 
to explore and expand its offering of 
contractually manufactured products 
including private label products for 
leading retailers.

6
6

Thinking 
Forward

PENTAL ANNUAL REPORT 2021

7

PENTAL ANNUAL REPORT 2021

Bondi Soap making 
waves in luxury 
e-commerce

In a year in which the consumer was ﬁrmly focused on creating a safe, 
healthy home environment, Pental responded with the launch of luxury, 
high-end health and wellness products for the home. 

The new Bondi Soap range will play a vital role in leveraging and 
expanding our e-commerce strategy, targeting discerning online shoppers 
who are actively seeking out Australian-made, all-natural, organic products. 

With sustainable packaging and an ethical manufacturing proﬁle, the 
Bondi Soap range includes individual and boxed Hand & Body Washes, 
Body Bars, Hand Sanitisers, Room Air Fresheners, Pillow & Linen Sprays and 
Soy Candles. The lucrative gift market is catered for with a selection of gift 
boxes for family & friends and corporate clients. 

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PENTAL ANNUAL REPORT 2021

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PENTAL ANNUAL REPORT 2021

Hungry for growth: 
the Hampers With 
Bite story 

The acquisition of Hampers With Bite (HWB) was a synergistic move that will 
greatly accelerate Pental’s push into online channels and increase opportunities to 
cross-sell its products and bundles.

Considered a transformative acquisition for Pental, HWB’s efficient distribution 
capabilities, delivery options and proven expertise in e-commerce aligns with our 
strategy to deepen relationships with a broader customer base, expand product 
offerings and provide more convenient product delivery options. 

ADDING A BITE OF BONDI TO THE MIX

As a luxury product tailored to the gift market, Pental’s newly launched Bondi 
Soap range is the ideal ﬁt for cross-selling through the HWB platform and will 
greatly accelerate the proﬁle of the new brand.

HWB FINANCIAL PERFORMANCE

25%

20%

15%

10%

5%

0%

$40m

$30m

$20m

$24.0m

$14.5m

$10m

$7.7m

$9.9m

$0m

$0.6m

$1.0m

$1.9m

$5.1m

FY18

FY19

FY20

FY21

Net Sales Revenue

EBITDA

EBITDA Margin (%)

HWB has grown from a ~$10m revenue business in FY19 to a ~$24m revenue business in FY211

The HWB business has delivered strong EBITDA Margin growth as it continues to build scale

1Based on unaudited FY21 ﬁnancial and other data provided by HWB

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PENTAL ANNUAL REPORT 2021

$24.0m
Revenue1

$5.1m
EBITDA1

Melbourne
HQ

2004
Founded

+134,000
Email 
Subscribers1

1 Key Corporate Customers

54%
Repeat 
Customers1

+60%
Own 
Branded 
Sales1

+4,200
B2B 
Customers1

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PENTAL ANNUAL REPORT 2021

View from the top: 
developments driving
our future proof focus

Exclusive 
Distribution

Exclusive Bleach Distribution 
Agreement with Major Retailer
Pental has successfully negotiated to be the sole 
supplier of bleach to Australia’s largest retailer

White King Bleach to be ranged in major hardware 
retailer commencing September 2021

New Jiffy Firelighter Products
Two new Jiffy Firelighter variants ranged in 
major grocery retailers commencing July 2021

Pental is now the number one supplier of 
ﬁrelighters across all major grocery retailers
ﬁrelighters across all major grocery retailers

Expanded 
Range

New White King Toilet Gel 
Range
Pental has developed new improved Toilet 
Gel Cleaners. These products have been 
ranged in major grocery retailers.

Scheduled to promote the new range at 
half price across FY22

Product 
Innovation

12
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PENTAL ANNUAL REPORT 2021

Maintaining our position as Australia’s leader in household goods and FMCG 
drives our vision for growth through product innovation, investment and greater 
connectivity with our partners and customers through diversiﬁed sales channels.

New
Product 
Launch

New White King Stain 
New White King Stain 
Remover Range
White King Stain Remover is a new product 
produced in Shepparton and has been 
ranged in major Supermarkets

New Softly Range
Re-launch of Softly range in June 2021

Relaunch
of Expanded 
Range

Two new variants currently being rolled out 
into major grocery retailers

Three new variants will be presented for 
ranging in FY22

Bundle packs being developed 
White King’s new bundle buys will deliver more 
convenience and value to the customer

Distribution through HWB channels and major 
retailers

Promotion of new range begins September 21

Innovative 
Bundles

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PENTAL ANNUAL REPORT 2021

Innovation 
Embracing New Ideas

Dare to be different

Challenge the status quo

Encourage fresh ways of working

Maximise consumer insights

 Core
 Core
Values
Values
Values
Values

Customers
Heart of our business

Build trusted and recognised brands

Develop lasting relationships

Responsive to their needs

Provide outstanding value

Pride in delivering the best
products on time

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PENTAL ANNUAL REPORT 2021

Safety
#1 Priority

Zero harm objective

Proactive in hazard identiﬁcation

Maintain clean and safe
equipment

People 
People 
Trust & Development

Compassion, honesty and consistency

Empower, trust and support others

Encourage positive can-do attitudes

Work as one team, communication

Foster personal growth and career
development, success

15

Quality
Quality
Quality
Quality Control
Quality Control
Quality Control

Build trusted and recognised brands
Build trusted and recognised brands
Build trusted and recognised brands

Develop lasting relationships
Develop lasting relationships
Develop lasting relationships

Responsive to their needs
Responsive to their needs

Provide outstanding value

Pride in delivering the best
products on time

PENTAL ANNUAL REPORT 2021

Chairman’s Report

On behalf of the board and the Pental team, 
I am pleased to present Pental’s Annual 
Report for the year ended 27 June 2021.

It was pleasing that in a year of great uncertainty and disruption 
Pental was able to build upon the momentum of 2020 and delivered 
yet another strong performance for the ﬁnancial year 2021.

We have delivered three successive years of strong bottom-line 
performance due to our continuous focus on growth through both 
Pental and our agency brands. Our underlying proﬁt after tax1 for FY21 
increased by 11.7% from last year, and we also grew our statutory proﬁt 
increased by 11.7% from last year, and we also grew our statutory proﬁt 
by 6.9% to $5.4 million from $5.0 million in FY20.
by 6.9% to $5.4 million from $5.0 million in FY20.

We grew our 
underlying 
underlying proﬁt
after tax by 
after tax by 11.7%
to $5.6 million

1 Refer to table on page 27 for a reconciliation 
of underlying proﬁt to statutory proﬁt.

16
16

PENTAL ANNUAL REPORT 2021

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PENTAL ANNUAL REPORT 2021

Chairman’s Report (CONT)

Prior year comparison to the March to June period is distorted by 
the consumer response to COVID-19 which created unprecedented 
market demand in household cleaning products. As we entered 
FY21, the market had stabilised, supply chains had been reinstated 
and we saw the return of deep price promotions across many 
segments. The success of the plans and marketing strategies the 
Company implemented towards the end of FY20 drove our revenue 
up signiﬁcantly on the prior year for the ﬁrst 8 months of FY21.

During the ﬁnancial year, Jiffy revenue grew by 44.4% in FY21 
compared to FY20 supported by the Company’s launch of two 
new innovative scented ﬁrelighter products. When excluding 
the COVID-19 market impacts over the ﬁrst 8 months White King 
branded sales grew by a healthy 11.9%, despite that fact that Pental 
did not participate in deep price promotions during that period. 
Pleasingly during the same period, Country Life revenue also
grew by 11%.

Revenues from the New Zealand operation for FY21 were down 6.5% 
in New Zealand Currency (8% in Australian currency after conversion) 
compared to the prior period. There were repeated disruptions to 

the supply chain predominantly due to COVID-19 which caused 
shipping delays to the New Zealand market. These delays stretched 
shipment durations from 2 weeks to 16 weeks in some cases. As a 
consequence, Pental experienced various prolonged stock outages 
during the year and has since increased the level of safety stock in 
New Zealand on key lines to mitigate this risk.

Pental’s export market revenue deteriorated during FY21, 
predominantly due to the tense political environment between 
Australia and China. We saw Chinese distributors and sub-
distributors take a very cautious approach to any imports from 
Australia. As a result, our export revenue fell $0.5 million to $1.8 
million, we do however remain optimistic about the export segment 
as international relations improve.

Despite distributorship agreement changes that took effect at the 
start of May 2021 Duracell performed very strongly compared to the 
previous ﬁnancial year with revenue up 24.0% compared to FY20 
and included the expansion into more proﬁtable channels which 
translated into improved proﬁt margins.

REVENUE AND UNDERLYING PROFIT OVER LAST 4 YEARS ($’M)

9.0

8.0

7.0

6.0

5.0

4.0

3.0

2.0

1.0

0.0

75.7

2.6

3.8

FY18

(Unaudited Non-IFRS data)

126.5

124.9

100.4

3.5

5.0

5.6

5.0

FY19

7.4

FY20

8.1

FY21

Underlying NPAT

Underlying EBIT

Net Sales Revenue

140.0

120.0

100.0

80.0

60.0

40.0

20.0

0.0

DIVIDEND

The board has declared a fully franked ﬁnal dividend of 1.6 cents per share payable to shareholders on 24 September 2021, with a record 
date of 6 September 2021. This takes total dividends for the year to 2.6 cents per share. Excluding a special dividend of 0.7 cents per share 
paid last year, this represents a 18.18% increase on the prior year’s dividend of 2.2 cents, with a payout ratio of 63.2% of net proﬁt after tax.

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PENTAL ANNUAL REPORT 2021

DURACELL & HWB ACQUISITION

LOOKING FORWARD

As announced to the market in February 2021, following a successful 
partnership over the previous two and a half years, Pental agreed 
to Duracell changing the existing distribution agreement. This 
will see Duracell Australia directly manage and supply some of 
the major retail chains in the Australian market effective 10th May 
2021. Pental will continue to supply a wide range of channels and 
continues to see a great potential for strong growth opportunities. 
Pental estimates the impact of these changes will free up 
approximately $9 million cash tied in Duracell related working 
capital and a reduction in its annual EBITDA of approximately $3m.

As conveyed in the last Annual Report, Pental has been actively 
searching and assessing various strategically suitable acquisition 
options. With $9m freed up in cash and no debt, Pental has found 
itself in a strong position to execute a strategic acquisition. We 
are therefore pleased to advise that we have signed a conditional 
agreement to purchase 100% of the issued capital in Hampers with 
Bite Pty Ltd (HWB).

HWB is a Melbourne-based online hamper and gifting specialist. 
Its range of premium hampers and gifts at affordable prices are 
targeted towards gifts to friends & family and corporate clients. 
HWB provides customers with the option of creating their own 
hamper or simply purchasing one of HWB’s pre-designed
hampers online.

HWB has grown from an approximately $10 million1 revenue business 
in FY19 to an approximately $24 million1 revenue business in FY21 with 
an expected EBIT of $5.0 million1. We believe this acquisition brings 
many opportunities to Pental through online channel customer 
base, improved scale, e-commerce expertise, revenue synergies 
and new product capabilities.

With continuing core business growth and new product and market 
offerings, Pental is very excited about its future.
The Company is well positioned to reap rewards for its strong 
brand recognition reinforced by its ability to leverage new markets 
and direct reach to consumers through an e-commerce channel 
provided by the acquisition of HWB.

The commitment to support our own trusted brands such as White 
King, Janola, Country Life and Softly is reﬂected with ongoing 
strong above the line investment. Pental also has a proven track 
record in strategic distribution partnerships and we will continue to 
explore additional partnership opportunities. 

Pental pursues a product innovation pipeline with a particular 
focus on sustainability. Pental is making advances in assessing 
the viability of alternative raw materials and packaging that are 
sustainable and environmentally friendly. Products with a unique 
point of difference have long been a strength for Pental and the 
company was successful in executing the launch of many new 
innovative products during the year. This included two variants of 
Jiffy scented ﬁrelighters, White King toilet gels with additional stain 
removing capability, enzyme-based stain removers for laundry and 
removing capability, enzyme-based stain removers for laundry and 
specialised laundry cleaning products, the latter under its Softly brand.
specialised laundry cleaning products, the latter under its Softly brand.

Leveraging its production strength and available capacity, 
The Company continues to explore and expand its offering of 
The Company continues to explore and expand its offering of 
contractually manufactured products including private label 
contractually manufactured products including private label 
products for leading retailers.

Pental is exploring and investigating distribution opportunities
Pental is exploring and investigating distribution opportunities
in other Asian markets given challenges in exports to China. 

We will continue delivering on our ﬁve strategic priorities:

Please refer to the Company’s market announcement dated 
20 August 2021 for further details in relation to this acquisition. 
Using HWB’s FY21 performance as a guide1, we expect the HWB 
acquisition to fully offset the annualised impact from the change 
in our Duracell agreement and deliver an additional $2 million of 
EBITDA to Pental Group.

1. Driving sales growth through key brands

2. Developing new products and channels

3. Expand export markets

4. New projects and acquisitions

5. Continuous manufacturing improvements

I acknowledge the efforts of Pental management team
and my fellow Directors over the past year.

On behalf of the Board, I sincerely thank our people for their 
committed efforts during the year, especially our operations 
team at our Shepparton facilities who for the last 18 months have 
team at our Shepparton facilities who for the last 18 months have 
successfully navigated an unprecedented tough environment to 
successfully navigated an unprecedented tough environment to 
deliver our customers and shareholders a great result. We again 
thank our shareholders, suppliers and customers for their ongoing 
loyalty and support.

Mark Hardgrave
Chairman

1 Based on unaudited FY21 ﬁnancial and other data provided by HWB

19

PENTAL ANNUAL REPORT 2021

Directors’ Report

The directors of Pental Limited submit herewith the annual ﬁnancial report of the company for the year (52 weeks) 
ended 27 June 2021. In order to comply with the provisions of the Corporations Act 2001, the directors report as follows:

INFORMATION ABOUT THE DIRECTORS

The names and particulars of the directors of the company 
during or since the end of the ﬁnancial year are:

Mr Mark Hardgrave                          

Bachelor of Commerce, ACA, GAICD
Non-Executive Independent Chairman

Mark has over 35 years’ experience having held previous positions in 
corporate ﬁnance, funds management and various C-suite roles. He 
is currently a non-Executive Director of ASX listed company Traffic 
Technologies Limited (ASX: TTI). He is also a director on the board of 
Forbidden Foods Limited (ASX: FFF). Previously, Mark held a directorship in 
Wingara AG Ltd (ASX: WNR) from March 2018 to June 2020

He is a co-founder and former joint Managing Director of M&A Partners,
a Melbourne based boutique corporate advisory group. Prior to that, 
Mark was involved in funds management, equity capital markets
and mergers & acquisitions in various roles at ﬁrms such as
Bennelong Group, Thorney Investment Group,
Merrill Lynch and Taverners Group. 

Mr Charlie McLeish 

Bachelor of Business
Managing Director & CEO

Before his appointment at Pental, Charlie McLeish spent
over 30 years in the Fast-Moving Consumer Goods (FMCG) industry
including 20 years managing major bakeries within Bunge Australia 
(Goodman Fielder) focusing on Business Turnaround.

After Goodman Fielder, Charlie spent 15 years at George Weston
Foods in the position of General Manager of Tip Top Bakeries Victoria
where he managed a major turnaround to proﬁtability. Charlie then 
transitioned to National Sales Director of Don Smallgoods.

Charlie has vast sales, marketing, manufacturing and logistics
experience with proven turnaround capabilities.

Appointed CEO 1 January 2014
Appointed Managing Director 6 April 2020

Appointed Director 1 May 2019
Appointed Chairman on 31 December 2019
Member of Audit Committee and
Remuneration Committee 

Mr Fred Harrison

Non-Executive
Independent Director

Each of the directors held office during 
the ﬁnancial year and as at the date of 
this report, unless otherwise noted above.

All directorships of other listed companies 
held by directors in the three years 
immediately before the end of the 
ﬁnancial year are indicated above under 
each proﬁle.

20

Fred is the CEO of Ritchies Stores Pty Ltd.  He began his 
career as a casual with Ritchies in 1975, whilst still at Frankston 
High School, and worked his way up to management before 
being appointed as General Manager in 1987 and then as 
Chief Executive Officer in 1994.

Ritchies operates 78 supermarkets and liquor stores making 
Ritchies the largest Independent in Australia, with annual 
sales greater than $1.15 billion.

Appointed Director 28 August 2019
Member of Remuneration Committee.

PENTAL ANNUAL REPORT 2021

Mr Jeff Miciulis

Non-Executive
Independent Director

Jeff brings 35 years’ experience in Sales, Marketing, Country Leadership, 
and Regional Leadership at Energizer in both Household Batteries, and 
Personal Care Shaving Products. He commenced his career as a Sales 
Trainee with Eveready Australia and rose to become National Sales 
Manager before taking his career overseas for the next 20 years. During 
that time he held numerous leadership roles of increasing responsibility 
across multiple international markets.

Overseas roles included International Marketing,
General Manager South Africa, Managing Director Malaysia,
Regional Vice President Middle East, and Africa, and
Regional Vice President South Asia, and China.

Appointed 5 March 2019.
Chairman of Remuneration Committee
and Member of the Audit Committee

Ms Kerrie Parker 

B.Bus, FCPA, GAICD
Non-Executive Independent Director 

Kerrie Parker is currently the CFO at Deakin University and during her 
career has worked in CFO roles with Golden Circle Limited, GM Finance 
Amcor Fibre Packaging and CFO and Managing Director Sara Lee 
Household & Body Care Australia.

Kerrie has signiﬁcant whole of business experience gained in CEO, CFO 
and General Management leadership roles in fast moving consumer 
goods (FMCG), agriculture, manufacturing and government roles. She 
is experienced in publicly listed ASX/NSX organisations, multinationals, 
private equity and government, and has a deep understanding of the 
demands and expectations of many business environments.

Kerrie has a Bachelor of Business, Graduate certiﬁcate in Information 
Technology, is a Fellow Certiﬁed Practising Accountant and a
Graduate of the Australian Institute of Company Directors.

Appointed Director 1 February 2021
Chairman of Audit Committee and Member
of Remuneration Committee.

RETIRED DIRECTOR

Mr John Etherington AM                      

B.Ec, FCA, FAICD
Non-Executive Independent Director
Resigned

John is a former senior partner of Deloitte, where he held both senior 
leadership positions and provided audit and advisory services to public, 
private and not for proﬁt organisations, with a particular specialisation on 
rapidly-growing Australian-listed entities. He is also currently a non-executive 
director on a range of private and not for proﬁt organisations.

Appointed Director 2 April 2013.
Chairman of Audit Committee and Member of Remuneration Committee.
Resigned 31 March 2021

21

PENTAL ANNUAL REPORT 2021

Directors’ Report (CONT)

DIRECTORS’ SHAREHOLDINGS 

The following table sets out each director’s relevant interest in shares, and options over shares of the company as at the date of this report. 

Directors

Mark Hardgrave

Charlie McLeish

Kerrie Parker

Jeff Miciulis

Fred Harrison

Fully paid ordinary shares 
Number

Share options
Number

Unvested Performance rights 
Number

100,000

14,500

-

800,000

250,000

-

-

-

-

-

-

1,321,000

-

-

-

SHARE OPTIONS GRANTED TO DIRECTORS 
AND SENIOR MANAGEMENT

During and since the end of the ﬁnancial year no share options 
were granted to Non-Executive Directors or senior management, 
however the Group’s Executive Director (Charlie McLeish) and 
senior management were issued performance rights pursuant 
to the Executive Variable Incentive Plan (EVIP) as detailed in the 
Remuneration Report.

PRINCIPAL ACTIVITIES

The principal activities of the Group during the course of the ﬁnancial 
year were the manufacturing and distribution of personal care and
home products. 

Mr Oliver Carton 

B Juris LL.B
Company Secretary

Experience and Responsibilities

Oliver is a qualiﬁed lawyer with over 30 years’ experience in a 
variety of corporate roles. He currently runs his own consulting 
business and was previously a Director of the Chartered 
Accounting ﬁrm KPMG where he managed its Corporate 
Secretarial Group. Prior to that, he was a senior legal officer 
with ASIC. 

Oliver is an experienced company secretary and is currently 
company secretary of a number of listed and unlisted 
companies, ranging from Pental Limited to the
not-for-proﬁt Melbourne Symphony
Orchestra Pty Ltd.

22

Underlying
EBIT increased
by

PENTAL ANNUAL REPORT 2021

23

PENTAL ANNUAL REPORT 2021

Directors’ Report (CONT)

COMPANY OVERVIEW - TRUSTED BRANDS THAT GET THE JOB DONE

Pental Limited is a trusted manufacturer and distributor of personal, 
household and commercial products across Australia, New Zealand 
and Asia. The Company is based in Australia and has 127 full time 
equivalent employees at reporting date. 

The Company manages a portfolio of leading brands, which are 
household names in Australia and New Zealand - it is a branded 
market leader and the largest local manufacturer of bar soaps, 
liquid bleach and ﬁrelighter cubes. 

Shepparton, Victoria. 

The production plant at Shepparton facilities comprise of:

• Household Cleaning Liquids plant;

• Bar Soap plant;

• Laundry and Dishwashing Liquids plant;

• Firelighters plant.

The Company also provides distributorship services to brands and 
products that are non-perishable and have a long shelf life. 

Pental has grown through dedication to customer service, efficiency 
and quality. 

Across Australia and New Zealand, Pental’s products are stocked in 
all major grocery retailers and convenience stores that sell personal 
care and household cleaning products. We continue to expand into 
commercial and industrial channels.

For more than 60 years we have worked hard to stay true to 
our Australian heritage, investing in our manufacturing plant in 

PENTAL’S CORE BRANDS

Pental’s core brands are household names: 

• WHITE KING IN AUSTRALIA

• COUNTRY LIFE AND VELVET IN AUSTRALIA

• SOFTLY IN AUSTRALIA AND NEW ZEALAND

• LITTLE LUCIFER IN AUSTRALIA AND NEW ZEALAND

• JANOLA AND SUNLIGHT IN NEW ZEALAND

• JIFFY IN AUSTRALIA

Personal Care

Household cleaning

Laundry

Fire Needs

Kitchen

Pental is expanding distribution throughout Asia, through developing products and pack sizes that are suitable for these new markets.
The Company currently exports into China, Vietnam and Thailand. 

This has been achieved mainly through creating partnerships with strategically aligned distributors. We are also exploring opportunities 
around e-commerce platforms and other overseas markets to expand our business.

24

REVIEW OF OPERATIONS

Financial performance highlights

Net sales revenue

Underlying EBITDA

Underlying EBITDA margin on net sales

FY21(i)

$’000

FY20(i)

$’000

124,940

126,460

11,998

9.6%

11,972

9.5%

Depreciation & Amortisation

(3,849)

(4,576)

Underlying EBIT

Underlying EBIT margin on net sales

Underlying net proﬁt after tax

Reported proﬁt after tax

Shareholder metrics

Basic EPS - cents per share

Underlying Basic EPS - cents per share (iii)

Total Dividends declared - cents per share

Cashﬂow and capital management

Working Capital (iv)

Net Cash/(Debt)

Cash ﬂows from operating activities

EBITDA conversion to operating cash

Gearing (v)

8,149

6.5%

5,607

5,363

3.94

4.12

2.60

17,858

12,702

16,045

134%

0.0%

7,396

5.8%

5,019

5,019

3.68

3.68

2.90

25,405

3,668

8,505

71%

0.0%

PENTAL ANNUAL REPORT 2021

 Change

$’000

(1,520)

26

727

753

588

344

0.26

0.44

-0.30

(7,547)

9,034

7,540

%

-1.2%

0.2%

0.1%

-15.9%

10.2%

0.7%

11.7%

6.9%

7.1% 

12.0% 

-10.3% 

-29.7% 

246.3%

88.7%

63%

(i) Unaudited Non-IFRS ﬁnancial table
(ii) FY 21 EBITDA adjusted for non cash brand impairment refer to reconciliation on page 27.
(iii) Underlying Basic EPS represents underlying net proﬁt after tax divided by the number of ordinary shares on issue during FY 21 and FY 20 of 136,250,633 used in the 
(iii) Underlying Basic EPS represents underlying net proﬁt after tax divided by the number of ordinary shares on issue during FY 21 and FY 20 of 136,250,633 used in the 
calculated of reported EPS
(iv) Receivables plus inventory less trade and other payables
(v) Net debt (Net of cash and ﬁnancial liabilities) to equity.

Underlying
EPS increased

by 12%

25

PENTAL ANNUAL REPORT 2021

Directors’ Report (CONT)

Financial Performance

• Net sales revenue was marginally down by 1.2% compared to 
prior period, with the decrease experienced predominantly in 
the last 4 months of the ﬁnancial year as signiﬁcant demand 
and favourable market conditions created in FY20 due to the 
ﬁrst wave of the COVID-19 pandemic did not recur in FY21. 
Duracell distribution agreement changes also took effect at the 
start of May 2021 which impacted revenue for the last 2 months 
of the ﬁnancial year. 

• Net sales revenue in Australia was in line with prior year at $109.7 
million (2020: $109.6million) despite favourable market conditions 
experienced in the prior year subsiding early in FY21. Demand for 
cleaning and personal care products stabilised early in the year 
combined with reinstated supply chains of competitors. Pental 
maintains a strong hold in market share across many segments 
including White King in liquid bleach segment, Jiffy in ﬁrelighters 
and Softly in wool wash segments maintaining their number one 
position2. Duracell branded products delivered strong net sales 
growth of 24% in Australia compared to the prior period, despite 
having lower sales for the last two months of the ﬁnancial year 
due to changes in its distribution agreement. 

• Net sales revenue in New Zealand was down $1.0 million 

compared to last year (in New Zealand dollars) or 6.5%. New 
compared to last year (in New Zealand dollars) or 6.5%. New 
Zealand ports faced unprecedented challenges posed by 
Zealand ports faced unprecedented challenges posed by 
COVID-19 related disruptions leading to signiﬁcant shipping 
COVID-19 related disruptions leading to signiﬁcant shipping 
delays. These delays resulted in several occasions of out of 
delays. These delays resulted in several occasions of out of 
stocks for Pental’s products causing lost sales. In response, 
stocks for Pental’s products causing lost sales. In response, 
Pental has increased its stock holding in New Zealand on key 
Pental has increased its stock holding in New Zealand on key 
lines to avoid such outcomes in the short term. Pental’s share 
lines to avoid such outcomes in the short term. Pental’s share 
in the New Zealand market in several categories such as Toilet, 
in the New Zealand market in several categories such as Toilet, 
Household Cleaning and Dish Wash remains strong. 

Exports to Asia were down by $0.5 million or 21.6% compared 
• Exports to Asia were down by $0.5 million or 21.6% compared 
to prior year. China makes up for a signiﬁcant portion of Asian 
to prior year. China makes up for a signiﬁcant portion of Asian 
territory sales for Pental. Political relations between Australia 
territory sales for Pental. Political relations between Australia 
and China have been tense in the last 12 months with the 
introduction of tariffs on various Australian exports. Whilst no 
introduction of tariffs on various Australian exports. Whilst no 
introduction of tariffs on various Australian exports. Whilst no 
tariffs have been introduced on Pental’s product range, these 
tariffs have been introduced on Pental’s product range, these 
conditions have forced China based distributors and sub 
distributors to take a cautious approach to any imports from 
distributors to take a cautious approach to any imports from 
Australia, resulting in subdued sales through this channel. 

2 Source: IRI Scan, AU Weighted Grocery, Dollars, MAT 27/06/2021
Source: IRI Scan, AU Weighted Grocery, Dollars, MAT 27/06/2021

Underlying EBIT (Earnings Before Interest and Tax) of $8.149 million 
was $0.753 million (or 10.2%) higher compared to last year after 
adjusting reported EBIT for non-cash impairment charge of $0.348 
million ($0.244 million net of tax) on brand names. On a reported 
basis, EBIT grew by 5.5% compared to prior year (FY21: $7.801 million 
vs FY20: $7.396 million).

Pental achieved net proﬁt after tax (NPAT) of $5.363 million, which 
was 6.9% higher compared to NPAT for FY20. On an underlying 
basis, after adjusting reported NPAT for non-cash impairment 
charge of $0.244 million net of tax on brand names, NPAT grew by 
11.7% compared to prior year.

• The Group believes that presenting underlying results provides a 
better understanding of its ﬁnancial performance by facilitating 
a more representative comparison of ﬁnancial performance 
between ﬁnancial periods. Underlying results exclude the effect 
of non-operating items that are unrelated to the underlying 
performance of the business.

• Underlying results have been presented with reference to the 
Australian Securities and Investment Commission Regulatory 
Australian Securities and Investment Commission Regulatory 
Guide 230 “Disclosing non-IFRS ﬁnancial information”.
Guide 230 “Disclosing non-IFRS ﬁnancial information”.
Guide 230 “Disclosing non-IFRS ﬁnancial information”.

Inventory cover 
reinstated to 
adequate levels
following June 
2020 depletions

26
26

PENTAL ANNUAL REPORT 2021

FY21(i)

$’000

11,998

(3,849)

8,149

(121)

8,028

(2,421)

5,607

(244)

5,363

FY20(i)

$’000

11,972

(4,576)

7,396

(175)

7,221

(2,202)

5,019

-

5,019

% Change

0.2%

10.2%

11.2%

11.7%

6.9%

Please refer to the following reconciliation for statutory proﬁt comparison to prior period:

Statutory & underlying proﬁt comparison to prior period

 Underlying EBITDA

   Depreciation and amortisation

Underlying EBIT

   Financial costs

Underlying proﬁt before tax

   Underlying income tax expense

Underlying net proﬁt after tax

Signiﬁcant items (net of tax):

   Impairment of brandnames (net of tax)

Reported proﬁt after tax

(i) Unaudited Non-IFRS ﬁnancial table

• Pental continued its focus on labour efficiencies and utilisation 
improvements to drive production costs down. As a result, both 
efficiency and utilisation factors improved compared to prior 
year, leading to a 1.7% improvement in labour recovery.

• Energy and utility costs dropped by 13.4% compared to last year, as 
the Group was able to review and source favourable energy prices 
following signiﬁcant increases experienced in the prior few years.

• The Group experienced a signiﬁcantly deteriorated insurance 

market with limited capacity available at signiﬁcantly increased 
premium rates compared to prior year. These insurance market 
conditions were driven by recent loss-making events including 
natural disasters like bushﬁres and COVID-19. As a result, the 
Group’s insurance premiums increased by more than 100%. 
Insurance costs for the reported period were $1.23 million 
compared to $0.55 million in prior period.

• Freight and distribution expenses for the reported period were 
$0.78 million or 9.74% less than the prior period, which was 
predominantly a result of less volumes being shipped compared 
to prior year. As a ratio to gross sales revenue, the percentage 
of freight and distribution costs dropped from 4.23% in the 
prior period to 4.15% in the reported period, reﬂecting tight 
management of transport utilisation and controls on price 
pressures.

Shareholder metrics

• The total dividend for the 2021 ﬁnancial year is 2.6 cents per 

ordinary share (2020: 2.9 cents), representing a payout ratio of 
63.2% of the full-year NPAT (2020: 78.7% of the underlying NPAT)
and consists of:

- Interim fully franked dividend of 1.0 cents per ordinary share,

which was paid on 26 March 2021;

Cash generation and capital management

Net cash provided by operating activities was $16.045 million 
(2020: Net cash provided by operating activities $8.505 million) 
representing a strong cash conversion of EBITDA at 133.7%. However, 
net cash provided by operating activities includes approximately 
$8.0 million freed up in working capital due to changes in the 
Duracell distribution agreement, with an estimated $1.0 million 
further expected to be released early in the next ﬁnancial year due 
to payment terms with some of the channels. Excluding the impact 
of Duracell working capital, it represents a healthy cash conversion 
of EBITDA ratio at 67%. 61.2% after paying substantial income tax 
relating to FY20 proﬁts (total tax liabilities including deferred taxes 
reduced by $1.415 million during the reported period).

Net working capital (receivables, inventories less trade and other 
payables) of $17.858 million was lower than last year by $7.354 
million, predominantly due to changes in the Duracell distribution 
agreement effective start of May 2021. Inventory holding for 
manufactured products were increased to normal levels by 
approximately $1.0 million following their depletion in the last 
quarter of the previous ﬁnancial year.

Pental’s debtors’ position and cash collection continue to be strong, 
with minimal overdues as at the reporting date. 

Capital investment of $1.955 million was marginally lower than 
prior year (2020: $2.079 million). Major capital investment initiatives 
undertaken during FY21 year included upgrade of its ﬁre protection 
systems at the Shepparton facilities. The Group undertook this 
project with the objective of signiﬁcantly mitigating the risk of ﬁre at 
the plant by implementing upgraded ﬁre hydrant systems as well as 
implementing automatic ﬁre sprinkler systems. These initiatives are 
also expected to represent Pental as a lower risk client in a further 
deteriorating insurance market. 

- Proposed ﬁnal fully franked dividend of 1.60 cents per ordinary 
share, payable to shareholders on 24 September 2021, with a 
record date of 6 September 2021. 

The Company’s closing net cash position of $12.7 million was
debt free. Please refer to Note 27 (a) to the ﬁnancial statements
for details.

27

 
 
 
PENTAL ANNUAL REPORT 2021

Directors’ Report (CONT)

Impact of COVID 19

The Group experienced a healthy uplift in demand for its strong 
anti-bacterial cleaning and personal care products in the prior 
period. The Group noted that whilst this demand has subsided 
since then, it expects a healthy level of demand will remain in the 
market for strong cleaning and hygiene products.

The Directors believe COVID 19 will not have a material impact on 
the Group’s ability to continue as a going concern. The Group is 
debt free as at the reporting date with a healthy cash balance of 
$12.7 million supported by a banking facility of $8 million. 

Whilst there are risks associated with the Group’s raw material 
supply chain from other countries, the Directors and management 
assess this risk as manageable due to the Group’s reliance on local 
sources for a majority of its raw materials. The Group has been 
stringently following government issued guidelines to mitigate risks 
associated with spread of novel coronavirus in the workplace.

Strategic Objectives: The Five Key Pillars

Pental’s core brands are recognisable by consumers when 
conducting their daily shopping in supermarkets and convenience 
stores across both Australia and New Zealand. Pental’s strategy 
supports its vision to be a leading supplier of shelf stable (non-
food) products to its chosen markets through delivering quality, 
innovation and sustainability to the satisfaction of customer needs 
while enhancing shareholder value. 

Our strategy has ﬁve pillars as detailed below. These ﬁve pillars 
support growth and are matched by our strategy to establish new 
partnerships and distributorships that will complement our product 
range, expertise, and leverage our infrastructure while expanding 
into new channels. 

This year saw promising progress across the ﬁve strategic pillars as 
outlined here.

1. Driving sales growth through key brands

2. Developing new products and channels

We are investing in product innovation, advertising, and ﬁeld support 
to grow our share of shelf space, our market share and brand equity in 
key categories. We constantly review the effectiveness of promotions 
in driving sales and margins, and the contribution made by products 
to overall sales. This enables us to identify early opportunities for 
innovation and product development which support sales growth and 
differentiate us from the competition. 

We also tender for private label opportunities to complement 
revenues from our branded portfolio by manufacturing these products 
where it makes commercial and strategic sense. Securing third 
party accreditation for our manufacturing and supply chain through 
ISO9002 and HACCP makes Pental an attractive manufacturing 
partner with established credentials.

Pental has spent the past 12 months developing a brand of products 
for the e-commerce sales channel. This new brand, Bondi Soap, will be 
launched through Pental’s new online shopping channel early in the 
new ﬁnancial year. This new brand is a premium range of high-quality 
products targeting house proud consumers who are prepared to pay 
top premium prices for top end premium presented products. 

The combination of a trusted name with an innovative idea 
encourages loyal consumers to stay with their preferred brands 
while tempting other consumers to switch. Pental’s commitment to 
innovation ensures we continue to grow and protect our brands.

Pental is constantly reviewing the sales performance of each product 
ensuring we are supplying our consumers high quality and value for 
spend products.

The strategy to manufacture all products here in Australia is well on 
track with the latest development of the White King stain lift remover 
now manufacturing in Shepparton and not imported. We now 
manufacture 99% of our product range in Australia and New Zealand. 

White King’s new range of Australian-made disinfectant products 
have been received very positively by our customers and consumers. 
This new range is 99.9% effective on germs which has been a major 
consumer need since the start of the COVID 19 pandemic. The Group 
also launched a renewed formulation of toilet cleaners with additional 
capability to remove stains.

Pental also developed a range of new innovative, ﬁrst to the market 
products in scented ﬁrelighters launched under its Jiffy brand. Pental 
also launched two new products under the Softly brand during the 
reported period to target specialised laundry cleaning segment.

The year saw further alignment between Pental’s brands and the 
Australian Made Campaign. All new products packaging designs 
across the four major brands were updated to include the green 
and gold Australian Made logo. The on-pack logo reinforces Pental’s 
commitment to provide Australian consumers with high quality, 
affordable, locally manufactured consumer products.

28

PENTAL ANNUAL REPORT 2021

3. Expand export markets

4. New Projects and acquisitions

Pental’s strong market presence in New 
Zealand across several categories 
continues to be leveraged to support 
export growth.

We enjoy a strong partnership with our 
Auckland-based sales and distribution 
agent. This growth was achieved 
through both product innovation and 
increased ﬁeld support at store level. 
We are continuing to update the Janola 
packaging and the introduction of new 
products for the New Zealand market. 

China and Vietnam are the other priority 
markets for export growth. Pental has 
formed strong alliances with distributors 
in both markets, The Company is also 
exploring opportunities in South Korea 
and Indonesia.

Our commitment for further growth includes 
entering new sales channels.

As such, Pental has been actively searching 
and assessing various strategically 
suitable acquisition options and identiﬁed 
‘Hampers with Bite’ (HWB) as a perfect ﬁt 
for acquisition. HWB provides customers 
with the option of creating their own 
hamper or simply purchasing one of 
HWB’s pre-designed hampers online. 
HWB has grown from an approximately 
$10 million1 revenue business in FY19 to an 
approximately $24 million1 revenue business 
in FY21 with an expected EBIT of $5.0 million1. 
We believe this acquisition brings many 
opportunities to Pental through an online 
channel customer base, improved scale, 
e-commerce expertise, revenue synergies 
and new product capabilities.

The year saw Pental’s products being 
launched into Bunnings stores for further 
range extensions. Bunnings presents an 
opportunity for Pental to develop and 
extend its range of core brands into new 
channels to reach new consumers. 

During the year Pental increased its 
emphasis on developing growth within the 
Pharmacy channel with outstanding results, 
achieving 100% growth on the previous year.

5. Continuous manufacturing 
improvement

Pental’s ﬁnal strategic pillar is continuous 
manufacturing improvement to support 
proﬁtable growth through capital investment, 
along with cost savings and delivering high 
quality, trusted products. 

At the Shepparton plant we have focused on 
improving productivity and line efficiency through 
labour reduction initiatives and CAPEX strategies 
to reduce changeover times, increased 
line availability and ongoing preventative 
maintenance programs.

The installation of a new ﬁlling line at Pental’s 
Shepparton manufacturing site is enabling the 
production and development of products that 
are more earth friendly and sustainable for the 
market.

Pental takes pride in its agility and ﬂexibility to 
scale up as demand levels ﬂuctuate. As a result 
of capital investment and increased demand this 
year, increased production is being achieved in 
the soap plant, delivering cost reductions and 
supporting future growth of single bar soaps for 
supply in both local and export markets. 

We have enhanced preventative maintenance 
with further development in computerised 
maintenance management systems (CMMS)
and predictive tools and technologies. 

1 Based on unaudited FY21 ﬁnancial and other data
provided by HWB

29

PENTAL ANNUAL REPORT 2021

Directors’ Report (CONT)

OPERATIONAL RISKS

Pental faces speciﬁc and general operational risks which may 
impact the future operating and ﬁnancial performance of the 
Group. There can be no guarantee that Pental will achieve its 
objectives or that forward-looking statements will be realised. 

The operating and ﬁnancial performance is inﬂuenced by a variety 
of general economic and business conditions including levels of 
consumer spending, inﬂation, interest and exchange rates, and 
certain raw material prices.

Following is a summary of the most signiﬁcant risks facing 
continuing business operations, as identiﬁed and assessed by a risk 
management process carried out by the Audit and Risk Committee 
and Pental’s risk mitigation approaches: -

Competition and demand: The majority of Pental’s branded 
products are sold in supermarkets in Australia and New Zealand. In 
both countries competition between retail chains is intense, leading 
to aggressive reviews of product mixes as well as increased moves 
towards own or private label products to improve retail margins. 
This situation is not unique to Pental and affects suppliers of most 
products stocked across supermarket chains.

New entrants into Pental’s market segment have the potential to 
cause market disruption across ours and competitors’ brands as 
they bid to secure shelf space. This disruption has the potential to 
erode revenues. Across the supermarket sector in both countries, 
operators are competing for shoppers’ share of wallet through 
discounting and private label diversiﬁcation. The competitive 
environment is challenging when suppliers need to recover rising 
input costs through prices rises and this impacts margins.

Pental believes it can continue to successfully operate in the fast-
moving consumer goods market through strong product innovation 
and managing its product sourcing and manufacturing costs.

Workplace Health and safety: Being a leading manufacturer and 
the physical nature of its operations, Pental considers workplace 
health and safety of paramount importance. Pental has invested 
heavily into its hazard reporting, compliance and training systems 
including a dedicated health and safety officer to ensure the Group 
strives towards a zero-incident mindset.

Distributorship agreement: Pental currently has distributorship 
agreements with Berkshire Hathaway which allows Pental to 
distribute “Duracell” and “Procell” branded batteries in agreed 
consumer channels. These agreements in aggregate account for a 
material portion of Pental’s operating margins. These distributorship 
agreements are typically renegotiated and renewed every three 
years and include provisions that allow the contracts to be 
terminated on a performance or no-cause basis with notice period. 
Pental proactively manages the performance of its distributorship 
agreements through joint business plans and monthly business 
reviews.

Product sourcing: Pental relies on a range of parties for its product-
sourcing strategy. Any change in existing relationships (including 
the termination of any key supply arrangements) or any change in 
terms or conditions of overseas/local suppliers and any change in 
the political or economic environment may impact performance. 
Pental is continually reﬁning its sourcing arrangements, including 
operating dual sourcing arrangements to mitigate risk.

30

PENTAL ANNUAL REPORT 2021

Supply chain: Pental has an extensive and reliable supply chain 
that enables it to efficiently procure and deliver products to 
customers. Disruption to a material aspect of this supply chain 
could have a material adverse impact on Pental’s operational and 
ﬁnancial performance. Pental’s ongoing review of supply chain 
costs and the corresponding change of supply chain arrangements 
with minimal disruption especially through the COVID-19 pandemic 
period, has demonstrated that Pental can effectively manage this risk. 

Raw material price ﬂuctuation: A vast majority of Pental’s products 
contain raw materials that are considered commoditised. These 
raw materials such as tallow, paraffin, caustic soda, coconut oil etc. 
are subject to market and price movements including exposure 
to foreign exchange rates. Factors outside of the Group’s control 
such as weather impacting cattle numbers which in turn impacts 
tallow supply, international demand and supply of crude oil 
impacting paraffin supply etc. can impact these raw material prices 
signiﬁcantly without a possible recovery through price increases. 
Pental manages this risk through its hedging policy and wherever 
commercially viable, through securing contracts against price 
movements.

Loss of key personnel: Pental’s future success depends to a 
signiﬁcant extent on the retention of key personnel, particularly 
in senior management, who have extensive market and business 
knowledge. The loss of key personnel and the time taken to recruit 
suitable replacements or additional personnel could adversely 
affect the Company’s future ﬁnancial performance. The Board 
reviews the organisational structure of the business to ensure the 
best people are retained, whilst investing in developing other key 
people in the business. 

Damage to Pental’s brands: the reputation and value associated 
with Pental’s brand names could be adversely impacted by various 
factors including quality failures, disputes with third parties such 
as suppliers or customers or adverse media coverage. Signiﬁcant 
erosion in the reputation of, or value associated with, Pental’s 
brands could have an adverse effect on Pental’s future ﬁnancial 
performance. Pental believes that its quality processes and 
systems, and proactive tracking and management of any disputes, 
minimises this risk. 

Cyber security: Pental relies heavily on its Information Technologies 
(IT) to operate on a daily basis in transacting with its customers 
as well as to continue manufacturing its quality products at 
the Shepparton facilities. In today’s hyperconnected age, all 
businesses are exposed to threats posed by internet connectivity 
such as ransomware attacks (malicious software), phishing 
scams attempting to gain access or credentials, or suffering data 
breaches or network security etc. Such attacks, if successful, can 
result in prolonged period of IT outages affecting the Group’s ability 
to transact with its customers as well as its ability to manufacture 
thus impacting its proﬁtability. Pental puts a high importance on 
this risk and proactively manages it through strong IT controls and 
software systems including ﬁrewall monitoring, anti-virus software, 
multi-factor authentication systems, virtual private network systems 
(VPN) etc.

OUTLOOK

The outlook for the Group is contained in the Chairman’s report.

CHANGES IN THE STATE OF AFFAIRS

During the ﬁnancial year, there were no signiﬁcant changes in
the state of affairs of the Group, other than as referred to in this 
Annual Report.

FUTURE DEVELOPMENTS

Information regarding likely developments in the operations of the 
Group in future ﬁnancial years is set out in the Review of operations 
and elsewhere in the Annual Report.

31

PENTAL ANNUAL REPORT 2021

Directors’ Report (CONT)

SUBSEQUENT EVENTS

As announced to the market on 20 August 2021, the Group entered 
into a conditional agreement to acquire Hampers with Bite Pty 
Ltd through acquisition of 100% of its shares. The acquisition is 
expected to be funded through a combination of cash at bank, 
shares issued to Vendors, capital raised through placement of 
shares and a share purchase plan. Refer to ASX announcement 
dated 20 August 2021 for further details.

There has not been any other matter or circumstance occurring 
subsequent to the end of ﬁnancial year that has signiﬁcantly 
affected, or may affect, the operations of the Group, the results 
of those operations, or the state of affairs of the Group in future 
ﬁnancial years.

DIVIDENDS

In respect of the year (52 weeks) ended 27 June 2021 an interim 
fully franked dividend of 1.0 cent per ordinary share was paid on 
25 March 2021. The directors have declared the payment of a 
ﬁnal fully franked dividend of 1.6 cents per ordinary share, payable 
to shareholders on 24 September 2021, with a record date of 6 
September 2021. The total dividend for the FY21 ﬁnancial year of 2.6 
cents per share represents a payout ratio of 63.2% of net proﬁt after 
tax (i.e. before signiﬁcant non cash items).

In the prior year ended 28 June 2020, the total dividend paid was 
2.9 cents per ordinary share including a special dividend of 0.7 
cents per share, representing a payout ratio of 78.7% of net proﬁt 
after tax.

ENVIRONMENTAL REGULATIONS

The Shepparton manufacturing site is subject to the Environmental 
Protection Act 1970, although due to current practices Pental is not 
required to have an EPA license. 

Pental has a Trade Waste Agreement with Goulburn Valley Water 
which stipulates limits on volume and content of our Trade Waste 
emissions. Pental proactively monitors the trade waste discharged 
from site as part of that Trade Waste Agreement.

Continuous Improvement initiatives focussing on Trade waste 
system dilution capital improvements, internal hard waste 
segregation management and compliance cleaning programs are 
in progress.

Pental continues to be focussed on working with authorities and 
waste service providers to implement sustainable solutions.

Environmental performance is reported monthly to the Site 
Management Group and the Board.

SHARES UNDER OPTION OR ISSUED ON 
EXERCISE OF OPTIONS 

There were no unissued shares under options as at the date of this 
report.

The Group’s Executive Director (Charlie McLeish), Chief Financial 
Officer (Neil Godara) and senior management were issued 
performance rights pursuant to the Executive Variable Incentive 
Plan (EVIP) as detailed in the Remuneration Report.

INDEMNIFICATION OF OFFICERS AND 
AUDITORS

During the ﬁnancial year, the company paid a premium in respect 
of a contract insuring the directors of the company (as named 
above), the company secretary, Oliver Carton, and all executive 
officers of the company and of any related body corporate against 
a liability incurred by such a director, secretary or executive officer 
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.

The company has not otherwise, during or since the end of the 
ﬁnancial year, except to the extent permitted by law, indemniﬁed 
or agreed to indemnify an officer or auditor of the company or of 
any related body corporate against a liability incurred as such an 
officer or auditor.

ANNUAL REPORTING CALENDAR

REPORTING REQUIREMENT

Lodgement of Appendix 4E - FY21

FY21 Annual Financial Report

Deadline for nomination as Director

23 August 2021

23 August 2021

30 September 2021

Annual Report and Notice of Annual General Meeting

19 October 2021

Annual General Meeting

18 November 2021

32

PENTAL ANNUAL REPORT 2021

DIRECTORS’ MEETINGS 

The following table sets out the number of directors’ meetings (including meetings of committees of directors) held during the ﬁnancial year 
and the number of meetings attended by each director (while they were a director or committee member). During the ﬁnancial year, 12 
Board, 4 Audit Committee and 2 Remuneration Committee meetings were held. 

Directors

Mark Hardgrave 

Kerrie Parker (i)

Jeff Miciulis 

Fred Harrison

Charlie McLeish

John Etherington (ii)

Board of Directors

Audit and Risk Committee

Remuneration Committee

Eligible to 
Attend

Attended

Eligible to 
Attend

Attended

Eligible to 
Attend

Attended

12

5

12

12

12

9

12

5

12

12

12

9

4

2

4

-

-

3

4

2

4

-

-

3

2

1

2

2

-

1

2

-

2

2

-

1

(i) Kerrie Parker was appointed as a non-executive director on 1 February 2021.
(ii) John Etherington resigned as non-executive director on 31 March 2021.

Non-audit services

Auditor’s independence declaration

Details of amounts paid or payable to the auditor for non-audit 
services provided during the year by the auditor are outlined in 
Note 30 to the ﬁnancial statements.

The directors are satisﬁed that the provision of non-audit services 
during the 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 
The directors are of the opinion that the services as disclosed 
in Note 30 to the ﬁnancial statements do not compromise the 
in Note 30 to the ﬁnancial statements do not compromise the 
external auditor’s independence, based on advice received from 
external auditor’s independence, based on advice received from 
the Audit Committee, for the following reasons:

all non-audit services have been reviewed and approved to 
• all non-audit services have been reviewed and approved to 
ensure that they do not impact the integrity and objectivity of 
ensure that they do not impact the integrity and objectivity of 
the auditor, and

none of the services undermine the general principles relating 
• none of the services undermine the general principles relating 
to auditor independence as set out in Code of Conduct APES 
to auditor independence as set out in Code of Conduct APES 
110 Code of Ethics for Professional Accountants issued by the 
110 Code of Ethics for Professional Accountants issued by the 
Accounting Professional & Ethical Standards Board, including 
Accounting Professional & Ethical Standards Board, including 
reviewing or auditing the auditor’s own work, acting in a 
management or decision-making capacity for the company, 
management or decision-making capacity for the company, 
acting as advocate for the company or jointly sharing
economic risks and rewards.

The auditor’s independence declaration is included on page 52
of the annual report.

Rounding off of amounts

The Company is a company of a kind referred to in ASIC 
Corporations (Rounding in Financial/Directors’ Reports) Instrument 
2016/191 dated 24 March 2016, and in accordance with that 
Corporations Instrument, amounts in the Directors’ Report and 
ﬁnancial report are rounded off to the nearest hundred thousand 
ﬁnancial report are rounded off to the nearest hundred thousand 
dollars, unless otherwise indicated. 
dollars, unless otherwise indicated. 

Strong cash 
position with 
$12.7m

33
33

PENTAL ANNUAL REPORT 2021
PENTAL ANNUAL REPORT 2021

Remuneration 
report - Audited

This remuneration report details the nature and 
This remuneration report details the nature and 
amount of remuneration for each director and senior 
management personnel of Pental Limited.

KEY MANAGEMENT PERSONNEL

The directors and other members of key management personnel of the Group during the year were:

Mark Hardgrave

Charlie McLeish

Jeff Miciulis

Fred Harrison

Kerrie Parker

Non-executive Independent Chairman

Managing Director and Chief Executive Officer

Non-executive Independent Director

Non-Executive Independent Director

Non-executive Independent Director (commencement date, 1 February 2021)

John Etherington AM Non-executive Independent Director (resignation date, 31 March 2021)

Neil Godara

Chief Financial Officer

There have been no changes in key management personnel since the end of the reporting period.

34

PENTAL ANNUAL REPORT 2021

REMUNERATION POLICY

The remuneration policy of Pental Limited has been designed to 
align executive objectives with shareholder and business objectives 
by providing a ﬁxed remuneration component and offering variable 
cash and equity incentives based upon key performance areas 
affecting the Group’s ﬁnancial results. The Board of Pental Limited 
believes the remuneration policy to be appropriate and effective 
in its ability to attract and retain the best executives to run and 
manage the Group, as well as create goal congruence between 
executives and shareholders.

The Board’s policy for determining the nature and amount of 
remuneration for executives and board members of the Group is
as follows:

Executives

developed and approved by the Board. Executive packages 
are reviewed annually by reference to the Group’s performance, 
executive performance and comparable information from industry 
sectors and other listed companies in similar industries and of 
comparable size. The performance of executives is measured 
regularly against agreed key performance indicators (KPIs) and is 
based predominantly on the forecast growth of the Group’s proﬁts 
and shareholders’ value. All bonuses and incentives are linked to 
predetermined operational and ﬁnancial KPIs. Executives are also 
entitled to participate in an Executive Variable Incentive Plan (EVIP). 
The executives receive a superannuation guarantee contribution 
required by the law, and do not receive any other retirement 
beneﬁts. Some individuals, however, may choose to sacriﬁce part of 
their salary to increase payments towards superannuation.

The remuneration policy, setting the terms and conditions for the 
Managing Director and other senior executives (executives), was 

The various elements of the executive remuneration structure serve 
various purposes as listed below:

Element

Purpose

Performance metrics

Potential value

Fixed 
remuneration

To attract and retain high performing 
talent by providing a market 
competitive salary.

Nil

Market rate which is reviewed 
annually to ensure it remains 
competitive. Not guaranteed to 
increase in executives’ contracts.

EVIP – cash 
component

Reward for current year performance 
when value has been created 
for shareholders by achieving or 
outperforming proﬁtability targets.

Group earnings before interest and 
tax (EBIT) targets together with 
pre-determined key performance 
indicators within the executive’s area 
of responsibility.

20% of total ﬁxed remuneration for 
the Chief Financial Officer.

35% of total ﬁxed remuneration for 
the Managing Director and Chief 
Executive Officer.

EVIP – equity 
component

Alignment to long term shareholder 
return by achieving or outperforming 
current year proﬁtability targets 
and ensuring long term share price 
preservation.

Share price as at vesting date to 
remain above the share price on
grant date.

30% of total ﬁxed remuneration (at 
face value) for the Chief Financial 
Officer.

Group earnings before interest and 
tax (EBIT) targets together with 
pre-determined key performance 
indicators within the executive’s area 
of specialisation.

40% of total ﬁxed remuneration (at 
face value) for the Managing Director 
and Chief Executive Officer.

35

PENTAL ANNUAL REPORT 2021

Remuneration report - Audited (CONT)

Maximum possible remuneration for the executives has been structured as per below to strike a balance between the short-term and 
long-term objectives of the remuneration policy.

EXECUTIVE REMUNERATION STRUCTURE

Charlie McLeish

Neil Godara

57%

67%

20%

23%

13%

20%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

  Fixed remuneration

  EVIP – Cash component

  EVIP – Equity component

Non-executive members of the board

The Board policy is to remunerate non-executive directors at 
market rates for comparable companies for time, commitment 
and responsibilities. The Board determines payments to the non-
executive directors and reviews their remuneration annually, based 
on market practice, duties and accountability. The maximum 
aggregate amount of fees that can be paid to non-executive 
directors is subject to approval by shareholders at the Annual 
General Meeting. The maximum aggregate amount of fees that 
can be paid to non-executive directors as per last approval is 
$0.750 million. Fees for non-executive directors are not linked to the 
performance of the Group. No shares or options have been issued 
to non-executive directors, under the EVIP or an option scheme, 
within the last ﬁve years.

KEY TERMS OF EXECUTIVE EMPLOYMENT 
CONTRACTS

The executives and the Group are bound by formal employment 
contracts which contain key terms of their employment including 
ﬁxed remuneration inclusive of superannuation and where eligible, 
ability to participate in EVIP.

The agreements do not reﬂect a ﬁxed term of employment 
or nominate a speciﬁed amount to be paid on termination 
of employment. The agreements normally provide that the 
termination notice period may be paid out by the Group. 

The major provisions of the employment agreements are as per 
below:

Executive Name

Term of 
agreement

Total ﬁxed 
remuneration including 
superannuation

Eligibility to
participate
in EVIP

Notice of termination

Charlie McLeish

On-going

$550,000

Eligible

Neil Godara

On-going

$250,000

Eligible

The period of notice required by the Group to 
terminate the employment is twelve months 
without cause and the notice required by Mr 
McLeish is four months.

The period of notice required by either 
the Group or Mr Godara to terminate the 
employment without cause is one month.

36

PENTAL ANNUAL REPORT 2021

Relationship between the remuneration policy and 
company performance

Fees for non-executive directors are not linked to the performance 
of the Group.

The remuneration policy has been tailored to increase goal 
congruence between shareholders and executives. To improve 
transparency, this has been achieved through structuring executive 
remuneration with a combination of total ﬁxed remuneration and 
a performance-based incentive system controlled through EVIP. 
Details of EVIP are provided within the remuneration report.

The following tables set out summary information about the Group’s 
earnings and movements in shareholder wealth for the ﬁve years to 
June 2021. It has been the focus of the Board of Directors to retain 
management personnel essential to the proﬁtable operations of 
the Group, and to attract suitable executives.

Gross sales

Net proﬁt/(loss) before tax

Net proﬁt/(loss) after tax 

Underlying net proﬁt after tax

27 June
20211
$’000

28 June
20201
$’000

30 June
20191
$’000

1 July
20181
$’000

174,213

188,994

153,986

108,427

7,680

5,363

5,607

7,221

5,019

5,019

2,756

1,921

3,451

(26,824)

 (27,839)

2,602

2 July
20171
$’000

117,660

8,343

5,850

5,962

1 Underlying net proﬁt after tax has been adjusted to exclude brand impairment for FY21: $348 thousand, FY19: $2,185 thousand, goodwill impairment for FY18: $29,446 thousand, ACCC 
penalty for FY18: $700 thousand, ACCC legal costs for FY18: $421 thousand & FY17: $160 thousand, and their respective income tax impact (FY21: $104 thousand, FY19: $655 thousand,
FY18: $126 thousand, FY17: $48 thousand). 

Share price at start of year 

Share price at end of year 

Interim dividend (cents) per share 1

Special dividend (cents) per share 1, 2

Final dividend (cents) per share 1, 2

Basic earnings/(loss) cents per share

Diluted earnings/(loss) cents per share

27 June
2021

$0.34

$0.415

1.00

-

1.60

3.94

3.85

28 June
2020

$0.288

$0.34

0.70

0.70

1.50

3.68

3.64

30 June
2019

$0.280

$0.288

0.70

-

1.30

1.41

1.41

1 July
2018

$0.595

$0.280

0.60

-

0.90

(20.43)

(20.43)

2 July
2017

$0.575

$0.595

1.15

-

2.10

4.29

4.18

1 Franked to 100% at 30% corporate income tax rate.
2 Declared after the balance date and not reﬂected in the ﬁnancial statements of that year.

37

PENTAL ANNUAL REPORT 2021

Remuneration report - Audited (CONT)

The compensation of each member of the key management personnel of the Group for the current year is set out below: 

Short-term employee beneﬁts

Long-term 
employee 
beneﬁts

Post-employment 
beneﬁts

Share–
based 
payments

2021

Salary 
& fees (i)
$

Bonus
$

Non-
Monetary(ii)
$

Long
service 
leave (iii)
$

Superannuation
$

Rights
$

Total
$

Non Executive 
Directors

Mark Hardgrave

109,589

Jeff Miciulis 

Fred Harrison

Kerrie Parker(iv)

John Etherington(v) 

73,059

73,059

30,441 

54,795

Total Directors

340,943

Executives

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

Charlie McLeish

 568,747

192,500

Neil Godara

 235,336 

 50,000 

 6,600 

 3,436 

Total Executives

804,083 

 242,500 

 10,036 

Total Remuneration

1,145,026 

 242,500 

 10,036 

16,382

3,802

20,184

20,184

(i) Salary & fees includes movements in the annual leave provision relating to the executives.
(ii) Non-monetary beneﬁts include car parking & motor vehicle toll tags
(iii) Long service leave beneﬁt represents movements in the long service leave provision relating to the executives.
(iv) Kerrie Parker was appointed non-executive director n 1 February 2021.
(v) John Etherington resigned as non-executive director on 31 March 2021.

10,411

6,941

6,941

2,892 

5,205

32,390

-

-

-

-

-

-

120,000

80,000

80,000

33,333 

60,000

373,333

 24,996 

60,937 

 870,162 

21,690 

17,381 

 331,645 

 46,686 

78,318 

 1,201,807

 79,076 

78,318 

 1,575,140

38

PENTAL ANNUAL REPORT 2021

The compensation of each member of the key management personnel of the Group for the prior year is set out below: 

Short-term employee beneﬁts

Post-employment 
beneﬁts

Share–based 
payments

Salary 
& fees
$

Bonus
$

Non-
Monetary(vi)
$

Superannuation
$

Rights
$

Total
$

82,192

63,927 

63,927

60,883

 45,662 

 9,132 

325,723

-

-

-

-

-

-

-

-

-

-

-

-

-

-

7,808

6,073 

6,073

5,784

 4,338 

 868 

30,944

 24,996 

 18,870 

 43,866 

 74,810 

-

-

-

-

-

-

-

90,000

 70,000 

70,000

66,667

 50,000 

 10,000 

356,667

27,229 

8,864 

 708,427 

 277,386 

36,093 

 985,813

36,093 

 1,342,480 

Charlie McLeish (v)

 475,004 

175,000

Neil Godara

 198,630 

 43,500 

Total Executives

 673,634 

 218,500 

Total Remuneration

 999,357 

 218,500 

 6,198 

 7,522 

 13,720 

 13,720 

(i) Mark Hardgrave was appointed non-executive chairman on 31 December 2019.
(ii) Fred Harrison was appointed non-executive director on 28 August 2019.
(iii) Peter Robinson retired as non-executive chairman on 31 December 2019.
(iv) John Rishworth resigned as non-executive director on 28 August 2019.
(v) Charlie McLeish was appointed as managing director on 6 April 2020. He was Chief Executive Officer until that date.
(vi) Non-monetary beneﬁts include car parking & motor vehicle toll tags.

2020

Non Executive 
Directors

Mark Hardgrave (i)

John Etherington

Jeff Miciulis 

Fred Harrison (ii)

Peter Robinson (iii)

John Rishworth (iv)

Total Directors

Executives

Transactions with key management personnel

Executive Variable Incentive Plan (EVIP)

As disclosed in information about the Directors, Mr Fred Harrison 
is the CEO of Ritchies. Mr Harrison’s employer, Ritchies Stores 
Pty Ltd invoiced the Group a total of $266,239.93 inclusive of 
GST (2020: $236,351.88 inclusive of GST) relating to the Group’s 
participation in various promotional activities and supplier 
trading terms during the ﬁnancial year. All transactions were 
conducted at arm’s length. As at the reporting date, the Group 
owed Ritchies Stores Pty Ltd $106,288.84 (2020: $36,300) in 
relation to abovementioned promotional activities and supplier 
trading terms.

Under Pental’s EVIP, executives and selected senior management 
employees are eligible for both a cash and equity incentive upon 
the achievement of certain Group level KPI’s and personal KPIs set 
at the commencement of each ﬁnancial year, weighted as follows: 

• Fifty percent of both the cash and equity incentive KPIs relate to 

the achievement of a target EBIT for the ﬁnancial year. 

• The remaining ﬁfty percent are based on speciﬁc KPIs relevant 

to the participant’s particular responsibilities.

39

PENTAL ANNUAL REPORT 2021

Remuneration report - Audited (CONT)

Variable Incentive – cash

The vesting of the Rights is conditional on:

Variable cash incentive under EVIP is paid shortly after the 
release of audited full year results. The maximum amount of 
remuneration under the variable cash incentive plan ranges 
from 20 to 35 percent of the individual executive / senior 
management employee’s total ﬁxed remuneration. 

Variable Incentive – equity

The variable equity incentive is designed to reward achievement of 
annual KPIs, assist the retention of key high performing executives 
and align the rewards to the company’s share price. The maximum 
amount of remuneration under the variable equity incentive plan 
varies from 30 to 40 percent of the individual executive / senior 
management employee’s total ﬁxed remuneration. The variable 
equity incentive is delivered as Performance Rights (Rights), which 
are granted under the existing Executive Performance Rights Plan 
(Rights Plan) to enable the subsequent acquisition of the share 
component. The Rights will convert to ordinary shares after three 
years from the end of ﬁnancial year of the grant date. Rights will 
be granted on a face value basis using the last ten business days 
of the previous ﬁnancial year Volume Weighted Average Price 
(VWAP). The variable equity incentive is based upon an assessment 
of performance against respective KPIs in the year in which it is 
granted. If the performance criteria are not met within the ﬁnancial 
year, the Rights lapse at the end of the same ﬁnancial year.

a)  The executive satisfying Group level and personal 

performance criteria,

b)  the executive being employed by the Group on the vesting 

date; and

c)  Pental’s VWAP share price for the last ten business days 

preceding the vesting date being equal to or greater than 
the VWAP for the preceding ten business days from the 
grant date.

In total, the Rights are held for four years from the grant date. 
The value to the executive therefore is not at the grant date, 
rather at the vesting date which is three years from the end of 
ﬁnancial year of the grant date.

Dividends are not payable on the Rights. Dividends are 
payable on ordinary shares after conversion of the Rights to 
ordinary shares. 

Under the EVIP, the executives can receive the following 
annualised remuneration from the vesting of the Rights:

Percentage of total ﬁxed remuneration:

Charlie McLeish

Neil Godara

Up to 40%

Up to 30%

40

PENTAL ANNUAL REPORT 2021

EVIP – FY21 PERFORMANCE

The following table contains details of EVIP entitlements achieved by the executive team during the year:

2021

% of EVIP
achieved

EVIP – cash
component
$

EVIP – Equity
component at
face value
$

VWAP (i) used to 
calculate number of 
Rights
$

Number of Rights 
issued (ii)

Executives

Charlie McLeish 

Neil Godara

100% 

100% 

192,500

50,000

242,500

220,000 

 75,000 

 295,000

 0.3458 

0.3458 

636,000 

217,000

853,000

(i) Volume Weighted Average Price (VWAP) based on closing share price of last 10 business days of ﬁnancial year 2020 and volume traded on each day in that period.
Source – Commonwealth Securities Limited.
(ii) Number of Rights have been rounded to nearest thousand.

The fair value of the Rights granted is measured using Monte Carlo method. The following table contains relevant inputs to measure the
fair value of the Rights as at grant date:

Grant
Date

No. of 
Rights 
granted

Share 
price at 
grant 
date(ii)

Exercise 
price

Expected 
volatility

Risk free 
rate

Expected 
dividend 
yield

Fair value 
per Right 
at grant 
date

Fair value 
of Rights 
at grant 
date

Executives

Charlie McLeish (i)

19/11/2020

636,000

$0.4100

Neil Godara

01/07/2020

217,000

$0.3458

Nil

Nil

51%

51%

0.30%

0.40%

7%

7%

$0.212

$134,832

$0.157

$34,069

(ii) Rights granted to Mr McLeish were voted and approved by the shareholders at the last Annual General Meeting through an ordinary resolution.
(ii) Volume Weighted Average Price (VWAP) based on closing share price of last 10 business days of ﬁnancial year 2020 and volume traded on each day in that period.
Source – Commonwealth Securities Limited.

The following tables contains details of EVIP entitlements achieved by the executive team during the previous ﬁnancial year:

2020

% of EVIP achieved

EVIP – cash
component
$

EVIP – Equity
component
$

VWAP (i) used to 
calculate number
of Rights
$

Number of
Rights issued (ii)

Executives

Charlie McLeish 

Neil Godara

100% 

100% 

175,000

43,500

218,500

200,000 

 65,250 

 265,250

 0.2921 

0.2921 

685,000 

223,000

908,000

(i) Volume Weighted Average Price (VWAP) based on closing share price of last 10 business days of ﬁnancial year 2019 and volume traded on each day in that period.
Source – Commonwealth Securities Limited.
(ii) Number of Rights have been rounded to nearest thousand.

The fair value of the Rights granted were measured using Monte Carlo method. The following table contains relevant inputs to measure the 
fair value of the Rights as at grant date of 1 July 2019:

No. of 
Rights 
granted

Share 
price at 
grant 
date(i)

Exercise 
price

Expected 
volatility

Risk free 
rate

Expected 
dividend 
yield

Fair value 
per Right 
at grant 
date

Fair value 
of Rights
at grant 
date

Executives

Charlie McLeish

685,000

$0.2921

Neil Godara

223,000

$0.2921

Nil

Nil

45.95%

45.95%

0.94%

0.94%

5.52%

5.52%

$0.159

$0.159

$108,915

$35,457

(i) Volume Weighted Average Price (VWAP) based on closing share price of last 10 business days of ﬁnancial year 2019 and volume traded on each day in that period.
Source – Commonwealth Securities Limited.(iv) Number of Rights have been rounded to nearest thousand.

41

PENTAL ANNUAL REPORT 2021

SHARE-BASED PAYMENTS (RIGHTS PLAN)

All performance rights under the EVIP are issued pursuant to the Executive Performance Rights Plan (Rights Plan). Under the conditions of 
Rights Plan, performance Rights are convertible to ordinary shares (with no exercise price) as at the vesting date which is 4 years from the 
grant date (or 3 years from the end of the ﬁnancial year)

All Rights issued are convertible to ordinary shares at no consideration, subject to achieving any performance or other vesting conditions.

The following table discloses changes in the performance rights holdings of management personnel:

Grant Date

Vesting 
Date

Balance at
28/06/2020
No.

Rights 
granted
No.

Rights
vested
No.

Rights
forfeited
No.

Rights
lapsed
No.

Balance at
27/6/2021
No.

Charlie McLeish

1/7/2019

1/7/2023

685,000

Neil Godara

1/7/2019

1/7/2023

223,000

-

-

Charlie McLeish

19/11/2020

1/7/2024

Neil Godara

1/7/2020

1/7/2024

-

-

636,000

217,000

-

-

-

-

-

-

-

-

-

-

-

-

685,000

223,000

636,000

217,000

KEY MANAGEMENT PERSONNEL EQUITY HOLDINGS

Fully paid ordinary shares of Pental Limited held by key management personnel including a close member of family or an entity that is 
controlled or signiﬁcantly inﬂuenced are as per below:

Balance
at 30/6/2019

Net change
other (i)

Balance(v)
at 28/6/2020

Net change
other (i)

Balance(v)
at 27/6/2021

Non-Executive Directors

Mark Hardgrave 

Fred Harrison 

Kerrie Parker(ii)

Jeff Miciulis 

John Etherington(iii)

Peter Robinson(iv)

John Rishworth(iv)

Executives

Charlie McLeish (v)

Neil Godara (v)

-

-

-

800,000

160,000

100,000

250,000

-

-

-

4,210,927

(4,210,927)

13,208

(13,208)

14,500

-

-

-

100,000

250,000

-

800,000

160,000

-

-

14,500

-

-

-

-

-

(160,000)

-

-

-

-

100,000

250,000

-

800,000

-

-

-

14,500

-

(i) Net change other includes shares traded during the ﬁnancial year.
(ii) Kerrie Parker was appointed non-executive director on 1 February 2021.
(iii) Mr Etherington retired as director during the ﬁnancial year.
(iv) Mr Robinson and Mr Rishworth retired as directors during the previous ﬁnancial year.
(v) Both Mr McLeish and Mr Godara have been issued performance rights under the Executive Variable Incentive Plan (EVIP).
(vi) There has been no change in shareholdings from the end of the ﬁnancial year to the date of this report.

KEY MANAGEMENT PERSONNEL SHARE OPTION HOLDINGS

Other than the performance rights holdings disclosed previously, no share options are on issue as at the date of this report.

This directors’ report is signed in accordance with a resolution of directors made pursuant to s.298 (2) of the Corporations Act 2001.

On behalf of the Directors

Mark Hardgrave
Chairman
Melbourne, 23 August 2021

42

PENTAL ANNUAL REPORT 2021

4343

PENTAL ANNUAL REPORT 2021

Corporate Governance 
Statement

This Corporate Governance Statement sets out the Company’s current compliance with the ASX 
Corporate Governance Council’s Principles of Good Corporate Governance and Best Practice 
Recommendations (Best Practice Recommendations). 

The Company’s website www.pental.com.au contains an Investor Section, which details the 
Company’s Corporate Governance policies and procedures. This provides public access to all 
the information relevant to the Company meeting its corporate governance obligations. 

BEST PRACTICE RECOMMENDATION

COMMENT

The Corporate Governance Policies include a Board Charter, which 
discloses the speciﬁc responsibilities of the Board and provides that 
the Board shall delegate responsibility for the day-to-day operations 
and administration of the Company to the Managing Director and 
Chief Executive Officer.

The responsibilities of the Board, which are reserved for the Board 
and not delegated to management, include:

•  Oversight of the business and affairs of the Company;

• 

• 

Establishment of control and accountability systems;

Establishment with management of a strategic direction, 
supporting strategies and operating performance objectives;

•  Appointing the Managing Director and any other Executive 

Director; and

•  Reviewing and ratifying systems of risk management and 

internal compliance and control, codes of conduct and legal 
compliance.

The Board Charter is available on the Company’s website.

The Board has not established a Nominations Committee given the 
size of the Board and the Company’s operations. The Board as a 
whole performs the role of selection of potential new directors, and 
appropriate checks are made before an appointment occurs.

The Company provides security holders with all material information 
in its possession concerning the appointment or re-appointment 
of a director in the Notice of Shareholder Meeting concerning that 
appointment or re-appointment. A recommendation of the Directors 
concerning that appointment or re-appointment is also given.

1.

1.1

Lay solid foundations for management and oversight

A listed entity should disclose:

(a)

(b)

the respective roles and responsibilities of its 
board and management; and

those matters expressly reserved to the board 
and those delegated to management.

1.2

A listed entity should:

(a)

(b)

undertake appropriate checks before 
appointing a person, or putting forward to 
security holders a candidate for election, as a 
director; and

provide security holders with all material 
information in its possession relevant to a 
decision on whether or not to elect or re-elect 
a director.

44

PENTAL ANNUAL REPORT 2021

BEST PRACTICE RECOMMENDATION

COMMENT

1.3

1.4

A listed entity should have a written agreement with 
each director and senior executive setting out the 
terms of their appointment.

The Company has a written agreement with each director and senior 
executive setting out the terms of their appointment.

The company secretary of a listed entity should be 
accountable directly to the board, through the chair, 
on all matters to do with the proper functioning of
the board.

The company secretary is accountable directly to the board, through 
the chair, on all matters to do with the proper functioning of the 
board. The current company secretary is a long-standing appointee 
and has direct contact with all directors as and when required.

1.5

A listed entity should:

(a)

(b)

(c)

have a diversity policy which includes 
requirements for the board or a relevant 
committee of the board to set measurable 
objectives for achieving gender diversity and 
to assess annually both the objectives and to 
assess annually both the objectives and the 
entity’s progress in achieving them;

disclose that policy or a summary of it; and

disclose as at the end of each reporting period 
the measurable objectives for achieving 
gender diversity set by the board or a relevant 
committee of the board in accordance with the 
entity’s diversity policy and its progress towards 
achieving them and either:

(1)

(2)

the respective proportions of men 
and women on the board, in senior 
executive positions and across the whole 
organisation (including how the entity 
has deﬁned “senior executive” for these 
purposes); or

if the entity is a “relevant employer” under 
the Workplace Gender Equality Act, the 
entity’s most recent “Gender Equality 
Indicators”, as deﬁned in and published 
under that Act.

1.6

A listed entity should:

(a)

(b)

have and disclose a process for periodically 
evaluating the performance of the board, its 
committees and individual directors; and

disclose, in relation to each reporting 
period, whether a performance evaluation 
was undertaken in the reporting period in 
accordance with that process.

The Company does not have a speciﬁc policy or measurable 
objectives for achieving gender diversity. The Board believes the 
existing Code of Conduct anti-discrimination provisions provides 
for this. The Company does not believe it is appropriate to establish 
a quota system for measuring gender diversity, and indeed such a 
quota system could itself lead to discrimination.

As a “relevant employer” under the Workplace Gender Equality Act, 
the company is compliant with the minimum requirements of the act 
and intends to take appropriate action should it be of the view that 
there is insufficient gender diversity within the business.

As at 27 June 2021, there were 29 (28 June 2020, 36) women employed 
representing 22.66% (28 June 2020, 24.49%) of total employees. There 
were no female senior executives as at the reporting date (28 June 
2020: None). 

There was one female on the Board of Directors (28 June 2020, None). 

The Company’s Corporate Governance Section on its website 
includes the Company’ 2020 Workplace Gender Equality public 
report and the corresponding compliance notice issued to the 
company on the 22nd July 2020. 

The Company does not have a formal policy for the periodic 
evaluation of it Board. The Board does not consider that a formal 
policy is necessary given the size of the Board and operations of the 
Company. The Company intends to carry out an internal process of 
evaluation during the current period.

1.7

A listed entity should:

(a)

(b)

have and disclose a process for periodically 
evaluating the performance of its senior 
executives; and

disclose, in relation to each reporting 
period, whether a performance evaluation 
was undertaken in the reporting period in 
accordance with that process.

The Board is responsible for assessing the performance of the 
Managing Director. The Managing Director is responsible for assessing 
the performance of all executives within the Company, in conjunction 
with the Board.

Key performance indicators are set annually, and appraisals are 
conducted at least biannually for all Pental employees.

A performance evaluation for the Managing Director and all 
executives has taken place during the year under the process 
disclosed.

45

PENTAL ANNUAL REPORT 2021

Corporate Governance Statement (CONT)

BEST PRACTICE RECOMMENDATION

COMMENT

The Board has not established a Nominations Committee. The Board 
as a whole carries out the functions of a Nominations Committee, 
and Pental believes this is appropriate for a Company of its size and 
business. The Board seeks to ensure that it has an appropriate mix of 
skills necessary to fulﬁl its obligations. 

2.

2.1

Structure the board to add value

The board of a listed entity should:

(a)

have a nomination committee which:

(1) has at least three members, a majority of 
whom are independent directors; and

(2)

is chaired by an independent director,

and disclose:

(3) the charter of the committee;

(4) the members of the committee; and

(5) as at the end of each reporting period, 
the number of times the committee met 
throughout the period and the individual 
attendances of the members at those 
meetings; or

(b)

if it does not have a nomination committee, 
disclose that fact and the processes it employs 
to address board succession issues and to 
ensure that the board has the appropriate 
balance of skills, knowledge, experience, 
independence and diversity to enable it 
to discharge its duties and responsibilities 
effectively.

2.2

A listed entity should have and disclose a board skills 
matrix setting out the mix of skills and diversity that 
the board currently has or is looking to achieve in its 
membership.

Pental does not have a board skills matrix. The names and details of 
Directors in office at the date of this Annual Report, including skills, 
experience, term of office and expertise, are included in the Directors’ 
Report Section of this Annual Report. 

2.3

A listed entity should disclose:

(a)

(b)

the names of the directors considered by the 
board to be independent directors;

if a director has an interest, position, association 
or relationship of the type described in Box 2.3 
but the board is of the opinion that it does not 
compromise the independence of the director, 
the nature of the interest, position, association 
or relationship in question and an explanation 
of why the board is of that opinion; and

(c)

the length of service of each director.

Directors of Pental are considered to be independent when they are 
independent of management and free from any business or other 
relationship that could materially interfere with the exercise of their 
independent judgment. The following Directors are considered to 
be Independent: Mr Mark Hardgrave, Ms Kerrie Parker, Mr Jeff Miciulis 
and Mr Fred Harrison. (Mr John Etherington was also considered 
independent who retired as a director on 31 March 2021) 

Mr Charlie McLeish is Managing Director and not considered 
independent.

Mr Harrison is considered to be independent despite the fact that 
his employer Ritchies Stores Pty Ltd invoiced the Group a total of 
$266,239.93 (including GST) relating to the Group’s participation in 
various promotions, rebates, and trading terms during the ﬁnancial 
year. All transactions were conducted at arm’s length. The value of 
the abovementioned promotions, rebates and trading terms are not 
material to Mr Harrison as an employee of Ritchies Stores Pty Ltd, or 
Pental. 

The date of appointment and resignation of each Director is set out 
in the Directors’ Report Section of this Annual Report.

2.4

A majority of the board of a listed entity should be 
independent directors.

At the date of this report and during the period a majority of directors 
were independent directors.

46

PENTAL ANNUAL REPORT 2021

BEST PRACTICE RECOMMENDATION

COMMENT

The chair of the board of a listed entity should be an 
independent director and, in particular, should not be 
the same person as the CEO of the entity.

The Chairman is an independent director. The Managing Director is 
not the Chairman.

A listed entity should have a program for inducting 
new directors and provide appropriate professional 
development opportunities for directors to develop 
and maintain the skills and knowledge needed to 
perform their role as directors effectively.

The Company has an induction program for new directors.

The Company does not provide professional development 
opportunities for Directors. Given the current skill sets of each Director 
the Board considers that this is unnecessary.

Instil a culture of acting lawfully, ethically and responsibly

2.5

2.6

3.

3.1

A listed entity should articulate and disclose
its values

3.2

A listed entity should:

(a)      have a code of conduct for its directors, senior 

executives and employees; and

(b)      disclose that code or a summary of it.

3.3

A listed entity should:

(a)      have and disclose a whistleblower policy; and

(b)      ensure that the board or a committee of the 

board is informed of any material incidents 
reported under that policy

3.4

A listed entity should:

(a)      have and disclose an anti-bribery and 

corruption policy; and

(b)      ensure that the board or a committee of the 

board is informed of any material breaches of 
that policy.

Pental is dedicated to delivering quality, expertise and value in 
everything we make. Our products are designed to help families live 
better. Ours are trusted and loved brands that have been a part of 
Australians’ lives for generations. We always act with dignity and 
respect.

The Company has a formal Code of Conduct, which applies to all 
Pental directors, employees, and contractors. A summary of this 
policy is available on the Company website within the Corporate 
Governance Section.

The Company’s Corporate Governance Section includes the 
Securities Trading Policy, which regulates dealings by directors, 
officers and employees in securities issued by the Company.

The Company has a Whistleblower Policy. The Policy, which 
encourages reporting of unethical, corrupt and illegal practices, and 
any breach of Pental’s Code of Conduct, particularly concerning 
compliance concerns around the Competition and Consumer Act; 
the Australian Consumer Law, is also available on the company 
website within the Corporate Governance Section.

The Company’s Corporate Governance Section on its website 
includes a whisteblower policy

Any material incidents are encouraged to be reported to the 
company secretary who reports to the board in a timely manner.

The Company’s Corporate Governance Section on its website 
includes an anti-bribery and corruption policy.

Any material incidents are encouraged to be reported to the 
company secretary who reports to the board in a timely manner.

47

PENTAL ANNUAL REPORT 2021

Corporate Governance Statement (CONT)

BEST PRACTICE RECOMMENDATION

COMMENT

4.

4.1

Safeguard integrity in ﬁnancial reporting

The board of a listed entity should:

(a)

have an audit committee which:

(1) has at least three members, all of whom are 
non-executive directors and a majority of 
whom are independent directors; and

(2)

is chaired by an independent director, who 
is not the chair of the board,

and disclose:

(3) the charter of the committee;

(4) the relevant qualiﬁcations and experience 
of the members of the committee; and

(5)

in relation to each reporting period, the 
number of times the committee met 
throughout the period and the individual 
attendances of the members at those 
meetings; or

4.2

(b)

if it does not have an audit committee, disclose 
that fact and the processes it employs that 
independently verify and safeguard the 
integrity of its corporate reporting, including the 
processes for the appointment and removal of 
the external auditor and the rotation of the audit 
engagement partner.

The board of a listed entity should, before it approves 
the entity’s ﬁnancial statements for a ﬁnancial 
period, receive from its CEO and CFO a declaration 
that, in their opinion, the ﬁnancial records of the 
entity have been properly maintained and that the 
ﬁnancial statements comply with the appropriate 
accounting standards and give a true and fair view of 
the ﬁnancial position and performance of the entity 
and that the opinion has been formed on the basis 
of a sound system of risk management and internal 
control which is operating effectively.

The Board has an Audit and Risk Committee. The Audit and Risk 
Committee consisted of three members, all of whom are independent 
directors.

The Chair of the Committee was and is not the Chair of the Board 
during the period.

The names of the members of the Committee, details of their 
qualiﬁcations and experience and details of the number of meetings 
held during the period, are contained in the Directors’ Report section 
of this Annual Report.

The Audit and Risk Committee operates under a Charter which is 
available on the Company website within the Corporate Governance 
Section.

The Board has obtained the relevant assurances and declarations 
from the management.

4.3

A listed entity should disclose its process to verify the 
integrity of any periodic corporate report it releases 
to the market that is not audited or reviewed by an 
external auditor

The Company currently does not release any periodic corporate 
report that is not audited or reviewed by an external auditor.

48

PENTAL ANNUAL REPORT 2021

BEST PRACTICE RECOMMENDATION

COMMENT

5.

5.1

5.2

5.3

6.

6.1

6.2

6.3

6.4

6.5

Make timely and balanced disclosure

A listed entity should:

(a) have a written policy for complying with its 
continuous disclosure obligations under the 
Listing Rules; and

(b) disclose that policy or a summary of it.

A listed entity should ensure that its board receives 
copies of all material market announcements promptly 
after they have been made

A listed entity that gives a new and substantive 
investor or analyst presentation should release a 
copy of the presentation materials on the ASX Market 
Announcements Platform ahead of the presentation.

Respect the rights of shareholders

A listed entity should provide information about itself 
and its governance to investors via its website.

A listed entity should design and implement an 
investor relations program to facilitate effective
two-way communication with investors.

The Company has in place a Continuous Disclosure Policy, which has 
been implemented across the Company. The Policy is available on 
the Corporate Governance section of the Company website. 

The Directors are notiﬁed of all material announcements promptly.

The Company is compliant with this recommendation.

The Company provides information about itself and its governance 
on its website. All policies and charters concerning governance 
issues are located within a dedicated section headed Corporate 
Governance.

The Company has in place a Shareholder Communication Policy, 
which promotes effective communication with shareholders. The 
Policy is available on the Corporate Governance section of the 
Company website.

A listed entity should disclose the policies and 
processes it has in place to facilitate and encourage 
participation at meetings of security holders.

The Company has in place a Shareholder Communication Policy, 
which promotes effective communication with shareholders. The 
Policy is available on the Corporate Governance section of the 
Company website.

A listed entity should ensure that all substantive 
resolutions at a meeting of security holders are 
decided by a poll rather than by a show of hands.

A listed entity should give security holders the 
option to receive communications from, and send 
communications to, the entity and its security
registry electronically.

The Company is compliant with this recommendation.

The Company gives security holders the option to receive 
communications from, and send communications to, the entity and 
its security registry electronically.

49

PENTAL ANNUAL REPORT 2021

Corporate Governance Statement (CONT)

BEST PRACTICE RECOMMENDATION

COMMENT

7.

7.1

Recognise and manage risk

The board of a listed entity should:

(a)

have a committee or committees to oversee 
risk, each of which:

(1) has at least three members, a majority of 
whom are independent directors; and

(2)

is chaired by an independent director,

and disclose:

(3) the charter of the committee;

(4) the members of the committee; and

(5) as at the end of each reporting period, 
the number of times the committee met 
throughout the period and the individual 
attendances of the members at those 
meetings; or

(b)

if it does not have a risk committee or 
committees that satisfy (a) above, disclose 
that fact and the processes it employs for 
overseeing the entity’s risk management 
framework.

7.2

The board or a committee of the board should:

(a)

(b)

review the entity’s risk management framework 
at least annually to satisfy itself that it 
continues to be sound; and

disclose, in relation to each reporting period, 
whether such a review has taken place.

7.3

A listed entity should disclose:

(a)

(b)

if it has an internal audit function, how the 
function is structured and what role it performs; 
or

if it does not have an internal audit function, 
that fact and the processes it employs for 
evaluating and continually improving the 
effectiveness of its risk management and 
internal control processes.

The Audit and Risk Committee referred to in section 4 also oversees 
risk as part of its Charter.

The Audit and Risk Committee reviews the Company’s risk 
management framework annually and speciﬁc risks at each meeting. 
Key risks are referred to the Board periodically, and management 
reports on whether risk is being effectively managed.

The Company does not have an internal audit function. The Board 
considers that this is unnecessary given the size of the Company’s 
operations.

The Audit and Risk Committee reviews the Company’s risk 
management framework and risks generally. Where necessary the 
Company has requested external advisors to review particular 
operations to ensure internal controls are effective.

7.4

A listed entity should disclose whether it has any 
material exposure to economic, environmental 
and social sustainability risks and, if it does, how it 
manages or intends to manage those risks.

The Company does not have any economic, environmental and 
social sustainability risks over and above those of every commercial 
organisation, and not already disclosed to security holders.

50

PENTAL ANNUAL REPORT 2021

8.

8.1

BEST PRACTICE RECOMMENDATION

COMMENT

Remunerate fairly and responsibly

The board of a listed entity should:

(a)

have a remuneration committee which:

The Board has established a Remuneration Committee. The 
Remuneration Committee operates under a Charter, which is 
available on the Company’s website.

Memberships of the Committee, and details of meetings held during 
the period, are contained in the Directors’ Report section.

(1) has at least three members, a majority of 
whom are independent directors; and

(2)

is chaired by an independent director,

and disclose:

(3) the charter of the committee;

(4) the members of the committee; and

(5) as at the end of each reporting period, 
the number of times the committee met 
throughout the period and the individual 
attendances of the members at those 
meetings; or

(b)

if it does not have a remuneration committee, 
disclose that fact and the processes it employs 
for setting the level and composition of 
remuneration for directors and senior executives 
and ensuring that such remuneration is 
appropriate and not excessive.

8.2

A listed entity should separately disclose its policies 
and practices regarding the remuneration of non-
executive directors and the remuneration of executive 
directors and other senior executives.

Remuneration policies are set out in the Remuneration Report section 
of this Annual Report. 

When thought desirable the Board utilises specialist third parties to 
benchmark executive and non-executive director remuneration.

8.3

A listed entity which has an equity-based 
remuneration scheme should:

(a)

have a policy on whether participants are 
permitted to enter into transactions (whether 
through the use of derivatives or otherwise) 
which limit the economic risk of participating in 
the scheme; and

(b)

disclose that policy or a summary of it.

The Company has established an Executive Variable Incentive Plan 
that may result in the issue of securities to executives. As those 
securities will be ordinary shares there is no policy on permitting 
participants to enter into transactions limiting the risk of participation 
in the scheme.

51

PENTAL ANNUAL REPORT 2021

Collins Square, Tower 5
727 Collins Street
Collins Square, Tower 5
Melbourne VIC 3008
727 Collins Street
Melbourne VIC 3008
Correspondence to:
GPO Box 4736
Correspondence to:
Melbourne VIC 3001
GPO Box 4736
Melbourne VIC 3001
T +61 3 8320 2222
F +61 3 8320 2200
T +61 3 8320 2222
E info.vic@au.gt.com
F +61 3 8320 2200
W www.grantthornton.com.au
E info.vic@au.gt.com
W www.grantthornton.com.au

Auditor’s Independence Declaration 
Auditor’s Independence Declaration 
To the Directors of Pental Limited
To the Directors of Pental Limited

In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of Pental 
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of Pental 
limited for the year ended 27 June 2021, I declare that, to the best of my knowledge and belief, there have been:
limited for the year ended 27 June 2021, I declare that, to the best of my knowledge and belief, there have been:
a
a
b
b

no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
no contraventions of any applicable code of professional conduct in relation to the audit.

Grant Thornton Audit Pty Ltd
Chartered Accountants
Grant Thornton Audit Pty Ltd
Chartered Accountants

S C Trivett
Partner – Audit & Assurance
S C Trivett
Partner – Audit & Assurance
Melbourne, 23 August 2021
Melbourne, 23 August 2021

Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients 
and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International 
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients 
Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are 
and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International 
delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one 
Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are 
another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to 
delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one 
Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to 
another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to 
Grant Thornton Australia Limited.
Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to 
Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation.

Liability limited by a scheme approved under Professional Standards Legislation.

www.grantthornton.com.au

www.grantthornton.com.au

26

26

52

PENTAL ANNUAL REPORT 2021

Collins Square, Tower 5
727 Collins Street
Melbourne VIC 3008

Correspondence to:
GPO Box 4736
Melbourne VIC 3001

T +61 3 8320 2222
F +61 3 8320 2200
E info.vic@au.gt.com
W www.grantthornton.com.au

Independent Auditor’s Report

To the Members of Pental Limited  

Report on the audit of the financial report

Opinion

We have audited the financial report of Pental Limited (the Company) and its subsidiaries (the Group), which comprises 
the consolidated statement of financial position as at 27 June 2021, the consolidated statement of profit or loss and other 
comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the 
year then ended, and notes to the consolidated financial statements, including a summary of significant accounting 
policies, and 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 Group’s financial position as at 27 June 2021 and of its 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 judgement, were of most significance in our audit of the financial
report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in 
forming our opinion thereon, and we do not provide a separate opinion on these matters. 

Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389

www.grantthornton.com.au

‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients 
and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International 
Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are 
delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one 
another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to 
Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to 
Grant Thornton Australia Limited.

Liability limited by a scheme approved under Professional Standards Legislation.

2(cid:26)

53

PENTAL ANNUAL REPORT 2021

Key audit matter

How our audit addressed the key audit matter

Carrying value of brand names – Note 15

As at 27 June 2021, the Group carries indefinite life brand 
names of $12,006,076. AASB 136 Impairment of Assets,
requires indefinite life intangibles to be assessed for 
impairment, at least annually, or where external or internal 
impairment indicators are identified.  

An impairment is recorded when the recoverable amount of 
an asset exceeds its carrying value. The recoverable amount 
of these brand names has been determined using a ‘relief 
from royalty’ approach, which incorporates significant 
judgement, in particular, the estimation of future maintainable 
revenue and applying an appropriate royalty rate, discount 
rate and long-term growth rate which inherently involves a 
high degree of estimation and judgement by management.

The estimation involved is made further complex by the 
uncertainties associated with the COVID-19 pandemic’s 
impact on the macroeconomic factors underlying the 
assumptions used in the relief from royalty model.

This area was determined to be a key audit matter due to 
the abovementioned judgments involved in preparing a 
relief from royalty model for determining recoverable amount 
in management’s impairment assessments.

Our procedures included, amongst others:

 Documenting and assessing the processes and controls in
place for management to prepare the relief from royalty
model;

 Assessing and challenging management’s valuation

methodology and key assumptions applied;
 Assessing the sensitivity analysis performed by

management on key assumptions and performing
independent sensitivity analysis (including the possible
impacts of COVID-19);

 Involving our valuation specialists to assess the relief from
royalty model and evaluate the reasonableness of key
assumptions including the royalty rate, discount rate and
long-term growth rate;

 Assessing the reasonableness of the Board approved cash
flow projections used in the relief from royalty model, as
well as the Group’s historical ability to forecast accurately;
and

 Assessing the appropriateness of disclosures within the

financial report.

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 
Group’s annual report for the year ended 27 June 2021, but does not include the financial report and our auditor’s report 
thereon.

Our opinion on the financial report does not cover the other information and we do not express any form of assurance 
conclusion thereon. 

In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider 
whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or 
otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are 
required to report that fact. We have nothing to report in this regard.

Responsibilities of the Directors for the financial report 

The Directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in 
accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the Directors 
determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material 
misstatement, whether due to fraud or error. 

In preparing the financial report, the Directors are responsible for assessing the Group’s ability to continue as a going concern, 
disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the 
Directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so. 

54

2(cid:27)

PENTAL ANNUAL REPORT 2021

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.

A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance 
Standards Board website at: https://www.auasb.gov.au/auditors_responsibilites/ar1_2020.pdf. This description forms part of 
our auditor’s report.

Report on the remuneration report

Opinion on the remuneration report

We have audited the Remuneration Report included in pages 34 to 42 of the Directors’ report for the year ended 27 June 
2021. 

In our opinion, the Remuneration Report of Pental Limited, for the year ended 27 June 2021 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. 

Grant Thornton Audit Pty Ltd
Chartered Accountants

S C Trivett
Partner – Audit & Assurance

Melbourne, 23 August 2021

29

55

PENTAL ANNUAL REPORT 2021

Directors’ 
declaration

The Directors declare that:

(a)

(b)

(c)

in the Directors’ opinion, there are reasonable grounds to believe that the company will be able to pay its 
debts as and when they become due and payable; 

in the Directors’ opinion, the attached ﬁnancial statements and notes thereto are in accordance with the 
Corporations Act 2001, including compliance with accounting standards and giving a true and fair view 
of the ﬁnancial position and performance of the Group;

in the Director’s opinion the ﬁnancial statements and notes thereto are in accordance with International 
Financial Reporting Standards issued by the International Accounting Standards Board as stated in note 
2 to the ﬁnancial statements; and

(d)

the Directors have been given the declarations required by s.295A of the Corporations Act 2001.

At the date of this declaration, the company is within the class of companies affected by ASIC Class Order 
98/1418. The nature of the deed of cross guarantee is such that each company which is party to the deed 
guarantees to each creditor payment in full of any debt in accordance with the deed of cross guarantee.

In the Directors’ opinion, there are reasonable grounds to believe that the company and the companies to which 
the ASIC Class Order applies, as detailed in note 12 to the ﬁnancial statements will, as a group, be able to meet 
any obligations or liabilities to which they are, or may become, subject by virtue of the deed of cross guarantee.

Signed in accordance with a resolution of the directors made pursuant to s.295 (5) of the Corporations Act 2001.

On behalf of the Directors

Mark Hardgrave
Chairman
Melbourne, 23 August 2021

56

PENTAL ANNUAL REPORT 2021
PENTAL ANNUAL REPORT 2021

57
57

PENTAL ANNUAL REPORT 2021

CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
For the year (52 weeks) ended 27 June 2021

Continuing Operations

Revenue from the sale of goods

Other revenue and income

Other gains and losses

Changes in inventory of ﬁnished goods and work in progress

Raw materials, consumables used and utilities

Employee beneﬁts expense

Freight out and distribution expense

Marketing expenses

Occupancy expenses

Selling expenses

Repairs and maintenance expense

Other expenses 

Impairment of brand names

Proﬁt before ﬁnance costs, income tax, depreciation and amortisation (EBITDA)

Depreciation and amortisation expense

Proﬁt before ﬁnance costs and income tax (EBIT)

Finance costs

Proﬁt before tax

Income tax expense

Net Proﬁt for the year

Proﬁt Attributable to Members of the Parent Entity

Other comprehensive income

Items that may be classiﬁed subsequently to proﬁt or loss:

Gain/(loss) on cash ﬂow hedges taken to equity

Income tax relating to components of other comprehensive income

Other comprehensive income for the year (net of tax)

Total comprehensive income for the year

Proﬁt attributable to equity holders of the parent

Total comprehensive income attributable to equity holders of the parent

Earnings per share Attributable to the Members of the Parent Entity 

Basic (cents per share)

Diluted (cents per share)

Notes to the ﬁnancial statements are included on pages 62 to 89.

58

Note

4

7

15

7

5

6

8

8

2021
$’000

2020
$’000

 124,940 

 126,460 

201 

 275

7,368

 (90,243)

 (14,500)

(7,222)

(2,259)

(1,535)

(1,050)

(1,149)

(2,828)

(348)

11,650

  (3,849)

7,801

(121)

7,680

(2,317)

5,363

5,363

(273)

82

(191)

5,172

5,363

5,172

3.94

3.85

 92 

 (159)

 (642) 

 (82,401)

 (14,553)

(8,001)

(2,576)

(854)

(1,404)

(1,141)

(2,849)

-

11,972

  (4,576)

7,396

(175)

7,221

(2,202)

5,019

5,019

366

(110)

256

5,275

5,019

5,275

3.68

3.64

Changes in inventory of ﬁnished goods and work in progress

Raw materials, consumables used and utilities

Continuing Operations

Revenue from the sale of goods

Other revenue and income

Other gains and losses

Employee beneﬁts expense

Freight out and distribution expense

Marketing expenses

Occupancy expenses

Selling expenses

Repairs and maintenance expense

Other expenses 

Impairment of brand names

Finance costs

Proﬁt before tax

Income tax expense

Net Proﬁt for the year

Proﬁt before ﬁnance costs, income tax, depreciation and amortisation (EBITDA)

Depreciation and amortisation expense

Proﬁt before ﬁnance costs and income tax (EBIT)

Proﬁt Attributable to Members of the Parent Entity

Other comprehensive income

Items that may be classiﬁed subsequently to proﬁt or loss:

Gain/(loss) on cash ﬂow hedges taken to equity

Income tax relating to components of other comprehensive income

Other comprehensive income for the year (net of tax)

Total comprehensive income for the year

Proﬁt attributable to equity holders of the parent

Total comprehensive income attributable to equity holders of the parent

Earnings per share Attributable to the Members of the Parent Entity 

Basic (cents per share)

Diluted (cents per share)

Notes to the ﬁnancial statements are included on pages 62 to 89.

4

7

15

7

5

6

8

8

Note

2021

$’000

2020

$’000

 124,940 

 126,460 

201 

 275

7,368

 (90,243)

 (14,500)

(7,222)

(2,259)

(1,535)

(1,050)

(1,149)

(2,828)

(348)

11,650

  (3,849)

7,801

(121)

7,680

(2,317)

5,363

5,363

(273)

82

(191)

5,172

5,363

5,172

3.94

3.85

 92 

 (159)

 (642) 

 (82,401)

 (14,553)

(8,001)

(2,576)

(854)

(1,404)

(1,141)

(2,849)

-

11,972

  (4,576)

7,396

(175)

7,221

(2,202)

5,019

5,019

366

(110)

256

5,275

5,019

5,275

3.68

3.64

CONSOLIDATED STATEMENT OF 
FINANCIAL POSITION
As at 27 June 2021

Current assets

Cash and cash equivalents

Trade and other receivables

Inventories

Other ﬁnancial assets

Other assets

Total current assets

Non-current assets

Right-of-use assets

Property, plant and equipment

Intangible assets

Total non-current assets

Total assets

Current liabilities

Trade and other payables

Other ﬁnancial liabilities

Current tax payables

Lease liabilities

Provisions

Total current liabilities

Non-current liabilities

Deferred tax liabilities

Lease liabilities

Provisions

Total non-current liabilities

Total liabilities

Net assets

Equity

Issued capital

Reserves

Accumulated losses

Total equity

Notes to the ﬁnancial statements are included on pages 62 to 89.

PENTAL ANNUAL REPORT 2021

27 June 2021
$’000

28 June 2020
$’000

12,702

14,096

16,053

66

267

43,184

928

19,301

12,181

32,410

3,668

20,133

23,419

340

301

47,861

1,170

20,634

12,508

34,312

75,594

82,173

12,291

18,340

81

449

532

2,613

15,966

2,363

446

72

2,881

212

1,362

456

2,254

22,624

2,865

746

139

3,750

18,847

26,374

56,747

55,799

90,658

248

(34,159)

56,747

90,658

303

(35,162)

55,799

59

Note

27(a)

9

10

11

16

14

13

15

17

18

6

14

20

6

14

20

21

PENTAL ANNUAL REPORT 2021

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year (52 weeks) ended 27 June 2021

Issued 
capital

$’000

Hedging 
reserve

$’000

Note

Retained 
earnings

$’000

Total

$’000

Equity 
settled 
employee 
beneﬁts 
reserve

$’000

Balance at 30 June 2019

Proﬁt for the year

Gain on cash ﬂow hedges

Deferred tax arising on hedges

Total comprehensive income for the year

Dividend Payment

Recognition of share based payments

90,658

-

-

-

-

-

-

(18)

-

366

(110)

256

-

-

6

22(a)

Balance at 28 June 2020

90,658

238

Balance at 28 June 2020

Proﬁt for the year

Loss on cash ﬂow hedges

Deferred tax arising on hedges

Total comprehensive income for the year

Dividend Payment

Recognition of share based payments

90,658

-

-

-

-

-

-

6

22(a)

Balance at 27 June 2021

90,658

Notes to the ﬁnancial statements are included on pages 62 to 89.

238

-

(273)

82

(191)

-

-

47

-

(37,456)

53,184

-

-

-

-

-

65

65

5,019

5,019

-

-

366

(110)

5,019

5,275

(2,725)

(2,725)

-

65

(35,162)

55,799

65

(35,162)

55,799

-

-

-

-

-

136

201

5,363

-

-

5,363

5,363

(273)

82

5,172

(4,360)

(4,360)

-

136

(34,159)

56,747

60

PENTAL ANNUAL REPORT 2021

CONSOLIDATED STATEMENT OF CASH FLOWS
For the year (52 weeks) ended 27 June 2021

Note

2021
$’000

2020
$’000

146,573 

 138,666 

(126,787) 

(128,228) 

Cash ﬂows from operating activities

Receipts from customers

Payments to suppliers and employees

Interest on lease liabilities

Interest and other costs of ﬁnance paid

Income tax paid

Net cash provided by operating activities

Cash ﬂows from investing activities

Payments for plant and equipment

Payments for intangible assets

Net cash used in investing activities

Cash ﬂows from ﬁnancing activities

Repayment of lease liabilities

(Repayment)/utilisation of supplier payment facility

Dividends paid

Net cash used in ﬁnancing activities

Net increase in cash and cash equivalents

Cash and cash equivalents 
at the beginning of the ﬁnancial year

Cash and cash equivalents at the end of the ﬁnancial year

27(a)

Notes to the ﬁnancial statements are included on pages 62 to 89.

14

27(b)

13

15

14

22

(44)

(77)

(3,620)

16,045

(1,837)

(118)

(1,955)

(565)

(131)

(4,360)

(5,056)

(59)

(116)

(1,758)

8,505

(1,990)

(89)

(2,079)

(491)

212

(2,725)

(3,004)

9,034

3,422

3,668

12,702

246

3,668

61

  
  
PENTAL ANNUAL REPORT 2021

NOTES TO THE FINANCIAL STATEMENTS

1. GENERAL INFORMATION

Pental Limited, incorporated and 
domiciled in Australia, is a publicly 
listed company on the Australian 
Stock Exchange, limited by shares.

Company Secretary

Mr Oliver Carton

Principal Registered office
Pental Limited
Level 6, 390 St. Kilda Road
Melbourne Victoria 3004
Telephone: (03) 9251 2311
Facsimile: (03) 9645 3001
www.pental.com.au

Share Registry
Boardroom Pty Limited
Grosvenor Place, Level 12, 
225 George Street Sydney NSW 2000
Telephone within Australia: 1300 737 760
Telephone outside Australia: +61 2 9290 9600
Facsimile: +61 2 9279 0664
www.boardroomlimited.com.au

2. SIGNIFICANT ACCOUNTING POLICIES 

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 consolidated ﬁnancial statements of the 
consolidated entity (the “Group”). For the purposes of preparing the 
consolidated ﬁnancial statements, the Company is a for-proﬁt entity.

Accounting Standards include Australian equivalents to 
International Financial Reporting Standards (‘A-IFRS’). Compliance 
with A-IFRS ensures that the ﬁnancial statements and notes of the 
Group comply with International Financial Reporting Standards (‘IFRS’). 

The ﬁnancial statements were authorised for issue by the directors 
on 23 August 2021.

Basis of preparation

The ﬁnancial statements have been prepared on the basis of 
historical cost, except for the revaluation of certain ﬁnancial 
instruments. Cost is based on the fair values of the consideration 
given in exchange for assets. All amounts are presented in 
Australian dollars, unless otherwise noted. 

The Company is a company of a kind referred to in ASIC 
Corporations (Rounding in Financial/Directors’ Reports) Instrument 
2016/191 dated 24 March 2016, and in accordance with that 
Corporations Instrument, amounts in the Directors’ Report and 
ﬁnancial report are rounded off to the nearest hundred thousand 
dollars, unless otherwise indicated.

Critical accounting judgments and key sources of 
estimation uncertainty

In the application of the Group’s accounting policies, management 
is required to make judgments, estimates and assumptions 
about carrying values of assets and liabilities that are not readily 
apparent from other sources. The estimates and associated 
assumptions are based on historical experience and other factors 
that are considered to be relevant. Actual results may differ from 
these estimates.

62

The estimates and underlying assumptions are reviewed on an 
ongoing basis. Revisions to accounting estimates are recognised in 
the period in which the estimate is revised if the revision affects only 
that period or in the period of the revision and future periods if the 
revision affects both current and future periods. 

The following are the key assumptions concerning the future, and 
other key sources of estimation uncertainty at balance sheet date, 
that have a signiﬁcant risk of causing a material adjustment to the 
carrying amounts of assets and liabilities within the next ﬁnancial year:

Impairment of brand names 

Determining whether brand names are impaired requires an 
estimation of recoverable amount, representing the higher of 
the fair value less costs to sell and the relief from royalty method 
estimate of reasonable future cash ﬂows. The estimation of 
recoverable amount requires the entity to estimate the future 
cash ﬂows expected to arise from the cash-generating unit and a 
suitable discount rate in order to calculate present value.

The carrying amount of brand names at 27 June 2021 was $12.006 
million (28 June 2020: $12.354 million). Details of movements and 
impairment testing are set out in Note 15. 

Trade spend accounting judgement

Trade receivables are disclosed net of rebates payable. The Group 
has the legal right to offset such balances as they are with the 
same customers and it is the Group’s intention to net settle any 
outstanding items. The main judgement related to accruals for 
customer rebates is the timing and extent to which temporary 
promotional activity has occurred prior to year-end. Customer 
rebates consist primarily of customer pricing allowances and 
promotional allowances, which are governed by agreements 
with our trade customers (retailers and distributors). Accruals are 
recognised under the terms of these agreements, to reﬂect the 
expected promotional activity and our historical experience.

PENTAL ANNUAL REPORT 2021

Adoption of new and revised Accounting Standards

Conﬁguration or Customisation Costs in a Cloud Computing 
Arrangement (IAS 38 Intangible Assets)

During the ﬁnancial year the International Financial Reporting 
Interpretations Committee IFRIC identiﬁed that various approaches 
to customisation and conﬁguration costs for cloud computing 
arrangements were utilised by companies depending on internal 
policy. These policies varied from expensing all costs in full to 
capitalisation of all costs in full, with most entities taking a more 
nuanced approach in their capitalisation policy and differentiating 
between expenditure with different underlying fact patterns.

The Agenda Decision requires that management capitalise those 
elements of expenditure that meet the deﬁnition of an “Intangible 
Asset” as deﬁned by AASB 138 Intangible Assets and recognise any 
additional amounts as an expense as the entity beneﬁts from the 
expenditure – either by applying AASB 138 or applying another 
accounting standard.

The impact of this decision has not had a material impact on the 
consolidated entity’s ﬁnancial statements.

In the current year, the Group has not adopted any new and 
revised Standards and Interpretations issued by the Australian 
Accounting Standards Board (the AASB) as in the Group’s 
judgement they are not relevant to its operations.

The Group has not early adopted any other standard, 
interpretation or amendment that has been issued but is not yet 
effective.

Accounting policies

The following signiﬁcant accounting policies have been adopted in 
the preparation and presentation of the ﬁnancial statements:

(a) Basis of consolidation

The consolidated ﬁnancial statements are prepared by combining 
the ﬁnancial statements of all the entities that comprise the 
consolidated entity, being the Company (the parent entity) 
and its subsidiaries (referred to as “the Group” in these ﬁnancial 
statements) as deﬁned in Accounting Standard AASB 10 
‘Consolidated Financial Statements’. A list of subsidiaries appears 
in Note 12 to the ﬁnancial statements. Consistent accounting 
policies are employed in the preparation and presentation of the 
consolidated ﬁnancial statements.

Exchange differences are recognised in proﬁt or loss in the period in 
which they arise except that:

• exchange differences on transactions entered into in order to 

hedge certain foreign currency risks (refer Note 23); and

• exchange differences on monetary items receivable from or 

payable to a foreign operation for which settlement is neither 
planned or likely to occur, which form part of the net investment 
in a foreign operation, are recognised in the foreign currency 
translation reserve and recognised in proﬁt or loss on disposal
of the net investment.

(c) Goods and services tax

Revenues, expenses and assets are recognised net of the amount 
of goods and services tax (GST), except:

i.  where the amount of GST incurred is not recoverable from 

the taxation authority, it is recognised as part of the cost of 
acquisition of an asset or as part of an item of expense; or

ii.  for receivables and payables which are recognised inclusive

of GST.

The net amount of GST recoverable from, or payable to, the 
taxation authority is included as part of receivables or payables.

Cash ﬂows are included in the cash ﬂow statement on a gross 
basis. The GST component of cash ﬂows arising from investing and 
ﬁnancing activities which is recoverable from, or payable to, the 
taxation authority is classiﬁed within operating cash ﬂows.

(d) Revenue

Revenues are recognised at fair value of the consideration received 
net of the amount of goods and services tax (GST) payable to 
the taxation authority. Refer to Note 4 for further details on the 
accounting policy for revenue from the sale of goods.

(e) Share based payment transactions

The Executive Variable Incentive Plan (EVIP) grants performance 
rights over shares in the Company to certain employees. The 
fair value of the performance rights granted under the EVIP is 
recognised as an employee expense with a corresponding increase 
in equity. The fair value is measured at grant date and is spread 
recognised only in the period it was granted. The fair value of 
the performance rights granted is measured using Monte Carlo 
method, taking into account the terms and conditions upon which 
the performance rights were granted.

In preparing the consolidated ﬁnancial statements, all 
intercompany balances and transactions, and unrealised proﬁts 
arising within the Group are eliminated in full.

(f) Income tax

Current tax

(b) Foreign currency

The presentation and functional currency of the Group is Australian 
dollars.

Foreign currency transactions

All foreign currency transactions during the ﬁnancial year are 
brought to account using the exchange rate in effect at the date of 
the transaction. Foreign currency monetary items at reporting date 
are translated at the exchange rate existing at reporting date. 

Current tax is calculated by reference to the amount of income 
taxes payable or recoverable in respect of the taxable proﬁt or tax 
loss for the period. It is calculated using tax rates and tax laws that 
have been enacted or substantively enacted by reporting date. 
Current tax for current and prior periods is recognised as a liability 
(or asset) to the extent that it is unpaid (or refundable).

63

PENTAL ANNUAL REPORT 2021

NOTES TO THE FINANCIAL STATEMENTS (CONT)

2. SIGNIFICANT ACCOUNTING POLICIES (CONT)

Deferred tax

Tax consolidation

Deferred tax is accounted for using the comprehensive balance 
sheet liability method in respect of temporary differences arising 
from differences between the carrying amount of assets and 
liabilities in the ﬁnancial statements and the corresponding tax 
base of those items.

In principle, deferred tax liabilities are recognised for all taxable 
temporary differences. Deferred tax assets are recognised to 
the extent that it is probable that sufficient taxable amounts will 
be available against which deductible temporary differences or 
unused tax losses and tax offsets can be utilised. 

However, deferred tax assets and liabilities are not recognised 
if the temporary differences giving rise to them arise from the 
initial recognition of assets and liabilities (other than as a result 
of a business combination) which affects neither taxable income 
nor accounting proﬁt. Furthermore, a deferred tax liability is not 
recognised in relation to taxable temporary differences arising
from goodwill.

Deferred tax liabilities are recognised for taxable temporary 
differences arising on investments in subsidiaries, except where the 
Group is able to control the reversal of the temporary differences 
and it is probable that the temporary differences will not reverse in 
the foreseeable future. Deferred tax assets arising from deductible 
temporary differences associated with these investments and 
interests are only recognised to the extent that it is probable that 
there will be sufficient taxable proﬁts against which to utilise the 
beneﬁts of the temporary differences and they are expected to 
reverse in the foreseeable future.

Deferred tax assets and liabilities are measured at the tax rates 
that are expected to apply to the period(s) when the asset and 
liability giving rise to them are realised or settled, based on tax 
rates (and tax laws) that have been enacted or substantively 
enacted by reporting date. The measurement of deferred tax 
liabilities and assets reﬂects the tax consequences that would follow 
from the manner in which the Group expects, at the reporting date, 
to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset when they relate 
to income taxes levied by the same taxation authority and the 
Company/Group intends to settle its current tax assets and 
liabilities on a net basis. 

Current and deferred tax for the period

Current and deferred tax is recognised as an expense or income 
in proﬁt or loss, except when it relates to items credited or debited 
directly to equity, in which case the deferred tax is also recognised 
directly in equity, or where it arises from the initial accounting for a 
business combination, in which case it is taken into account in the 
determination of goodwill or excess.

The Company and all its wholly-owned Australian resident entities 
are part of a tax consolidated group under Australian taxation law. 
Pental Limited is the head entity in the tax-consolidated group. 
Tax expense/income, deferred tax liabilities and deferred tax 
assets arising from temporary differences of the members of the 
tax consolidated group are recognised in the separate ﬁnancial 
statements of the members of the tax-consolidated group using 
the ‘separate taxpayer within group’ approach.

Current tax liabilities and assets and deferred tax assets arising 
from unused tax losses and tax credits of the members of the 
tax-consolidated group are recognised by the company (as head 
entity in the tax-consolidated group). Due to the existence of a tax 
funding arrangement between the entities in the tax consolidated 
group, amounts are recognised as payable to or receivable by 
the company and each member of the group in relation to the 
tax contribution amounts paid or payable between the parent 
entity and the other members of the tax-consolidated group in 
accordance with the arrangement.

Where the tax contribution amount recognised by each member of 
the tax-consolidated group for a particular period is different to the 
aggregate of the current tax liability or asset and any deferred tax 
asset arising from unused tax losses and tax credits in respect of 
that period, the difference is recognised as a contribution from (or 
distribution to) equity participants.

(h) Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, cash in banks 
and investments in money market instruments, net of outstanding 
bank overdrafts. 

(i) Financial assets

Trade receivables, and investments in subsidiaries are recognised 
and derecognised on trade date where purchase or sale of an 
investment or a loan and receivable is under a contract whose 
terms require delivery of the asset within the timeframe established 
by the market concerned, and are initially measured at fair 
value, net of transaction costs. Subsequent to initial recognition, 
investments are measured at cost. 

Trade receivables

Trade receivables are initially recognised at fair value and 
subsequently measured at amortised cost using the effective 
interest method, less any expected credit losses. Trade receivables 
are disclosed net of rebates payable where the Group has the legal 
right to offset such balances as they are with the same customers 
and it is the Group’s intention to net settle.

Provision for Expected Credit Loss

The Group applies the simpliﬁed approach to the measurement of 
expected credit losses, using the lifetime expected loss allowance 
for all trade receivables. To measure the expected credit losses, 
trade receivables are group based on credit risk characteristics and 
the days past due. A provision matrix is then determined based on 
historical credit loss rate for each group, adjusted for any material 
expected changes to the future credit risk for that group.

64

PENTAL ANNUAL REPORT 2021

Other ﬁnancial assets

(n) Computer Software

For the accounting policy on derivatives – refer Note 2(r) and Note 23.

(j) Inventories

Inventories are carried at the lower of cost and net realisable value.

Cost includes direct materials, direct labour, other direct variable 
costs and allocated production overheads necessary to bring 
inventories to their present location and condition, based on normal 
operating capacity of the production facilities.

All costs directly incurred in the purchase or development of 
major computer software or subsequent upgrades and material 
enhancements, which can be reliably measured and are not 
integral to a related asset, are capitalised as intangible assets. 
Costs capitalised include external direct costs of materials, services 
and travel. Costs incurred on computer maintenance or during 
planning phase are expensed as incurred. Computer software is 
amortised over the period of time during which the beneﬁts are 
expected to arise being 3 to 5 years.

Manufacturing activities

(n) Impairment of assets

The cost of manufacturing inventories and work-in-progress are 
assigned on a ﬁrst-in ﬁrst-out basis. Costs arising from exceptional 
wastage are expensed as incurred.

Net realisable value

Net realisable value represents the estimated selling price for 
inventories less estimated costs of completion and costs necessary 
to make the sale. Net realisable value is determined on the basis of 
each inventory line’s normal selling pattern. 

(k) Property, plant and equipment

The carrying amount of property, plant and equipment is valued on 
the cost basis. 

Depreciation is calculated on a straight line basis so as to write 
off the net cost of each asset over its expected useful life to its 
estimated residual value. Leasehold improvements are depreciated 
over the period of the lease or estimated useful life, whichever is the 
shorter, using the straight line method. The estimated useful lives, 
residual values and depreciation method are reviewed at the end 
of each annual reporting period. Plant and equipment estimated 
useful life used in the calculation of depreciation is 3 to 20 years. 
Buildings are depreciated over a period of 30 years on a straight 
line basis. Land is not depreciated.

(l) Borrowing costs

Borrowing costs include interest, amortisation of discounts or 
premiums relating to borrowings, amortisation of ancillary costs 
incurred in connection with arrangement of borrowings, foreign 
exchange differences net of hedged amounts on borrowings, 
including trade creditors and lease ﬁnance charges. 

Ancillary costs incurred in connection with the arrangement of 
borrowings are capitalised and amortised over the life of the 
borrowings. Borrowing costs are expensed as incurred.

(m) Intangible assets

Brand names

Brand names are not amortised as the Directors believe the 
brands have an indeﬁnite useful life. Brand names with indeﬁnite 
useful lives are tested for impairment annually and whenever there 
is an indication that the asset may be impaired. Brand names 
are recorded at fair value at the time of acquisition, less any 
impairment subsequently recorded. 

At each reporting date, the Group reviews the carrying amounts 
of its tangible and intangible assets to determine whether there is 
any indication that those assets have suffered an impairment loss. 
If any such indication exists, the recoverable amount of the asset 
is estimated in order to determine the extent of the impairment 
loss (if any). Where the asset does not generate cash ﬂows that 
are independent from other assets, the Group estimates the 
recoverable amount of the cash-generating unit to which the asset 
belongs. Intangible assets with indeﬁnite useful lives are tested for 
impairment at least annually and whenever there is an indication 
that the asset may be impaired. 

Recoverable amount is the higher of fair value less costs to sell 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.

If the recoverable amount of an asset (or cash-generating unit) is 
estimated to be less than its carrying amount, the carrying amount 
of the asset (or cash-generating unit) is reduced to its recoverable 
amount. An impairment loss is recognised in the proﬁt or loss 
immediately.

Where an impairment loss subsequently reverses, the carrying 
amount of the asset (or cash-generating unit) is increased to the 
revised estimate of its recoverable amount, but only to the extent 
that the increased carrying amount does not exceed the carrying 
amount that would have been determined had no impairment loss 
been recognised for the asset (or cash-generating unit) in prior 
years. A reversal of an impairment loss is recognised in proﬁt or loss 
immediately.

(o) Employee beneﬁts

Short-term and long-term employee beneﬁts

Provision is made for beneﬁts accruing to employees in respect of 
wages and salaries, annual leave, long service leave, and sick leave 
when it is probable that settlement will be required and they are 
capable of being measured reliably. Provisions made in respect of 
employee beneﬁts are measured as the present value of estimated 
future cash outﬂows to be made by the Group in respect of services 
provided by employees up to reporting date.

65

PENTAL ANNUAL REPORT 2021

NOTES TO THE FINANCIAL STATEMENTS (CONT)

2. SIGNIFICANT ACCOUNTING POLICIES (CONT)

(p) Provisions

Provisions are recognised when the Group has a present obligation 
(legal or constructive) as a result of a past event, it is probable that 
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 reporting 
date, taking into account the risks and uncertainties surrounding 
the obligation. Where a provision is measured using the cash ﬂows 
estimated to settle the present obligation, its carrying amount is 
the present value of those cash ﬂows.

When some or all of the economic beneﬁts required to settle a 
provision are expected to be recovered from a third party, the 
receivable is recognised as an asset if it is virtually certain that 
reimbursement will be received and the amount of the receivable 
can be measured reliably.

Dividends

A provision for dividends payable is recognised in the reporting 
period in which the dividends are declared, for the entire 
undistributed amount, regardless of the extent to which they will be 
paid in cash.

(q) Financial instruments issued by the company

Debt and equity instruments

Debt and equity instruments are classiﬁed as either liabilities or 
as equity in accordance with the substance of the contractual 
arrangement.

Transaction costs on the issue of equity instruments

Transaction costs arising on the issue of equity instruments are 
recognised directly in equity as a reduction of the proceeds of the 
equity instruments to which the costs relate. Transaction costs are 
the costs that are incurred directly in connection with the issue of 
those equity instruments and which would not have been incurred 
had those instruments not been issued.

Interest and dividends

Interest and dividends are classiﬁed as expenses or as 
distributions of proﬁt consistent with the statement of ﬁnancial 
position classiﬁcation of the related debt or equity instruments or 
component parts of compound instruments.

(r) Derivative ﬁnancial instruments

The Group is exposed to changes in interest rates and foreign 
exchange rates from its activities. The Group uses forward foreign 
exchange contracts to hedge these risks. Derivative ﬁnancial 
instruments are not held for speculative purposes.

The Group uses derivative ﬁnancial instruments, being forward 
foreign currency contracts to hedge the risk associated with foreign 
currency ﬂuctuations. Such derivatives are stated at fair value. The 
fair value of forward exchange contracts is calculated by reference 
to current forward exchange rates for contracts with similar 
maturity proﬁles. 

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. For 
derivatives that do not qualify for hedge accounting, any gains or 
losses arising from changes in fair value are taken directly to proﬁt 
or loss for the year. 

For derivatives that qualify for hedge accounting, the method for 
recognising gains and losses on changes in fair value depends 
on whether the derivative is classiﬁed as a fair value hedge or a 
cash ﬂow hedge. Derivatives are classiﬁed as fair value hedges 
when they hedge the exposure to changes in the fair value of a 
recognised asset or liability and as cash ﬂow hedges when they 
hedge exposure to variability in cash ﬂows that are attributable to 
either a particular risk associated with a recognised asset or liability 
or to a forecast transaction. The Group documents at inception 
of the hedge the relationship between the hedging instruments 
(derivatives) and the hedged items, as well as the risk management 
objective and strategy for undertaking the hedge transaction. 

The Group also documents, both at inception of the hedge and 
on an ongoing basis whether the derivatives that are used in 
the hedging transactions have been, and will continue to be, 
highly effective in offsetting changes in fair values or cash ﬂows of 
hedged items.

Changes in the fair value of derivatives that are designated and 
qualify as fair value hedges are recorded in the proﬁt or loss for the 
year, together with any changes in the fair value of the hedged 
asset or liability that are attributable to the hedged risk. The 
effective portion of changes in the fair value of derivatives that 
are designated and qualify as cash ﬂow hedges is recognised in 
equity in the hedging reserve and transferred to proﬁt or loss when 
the hedged item affects proﬁt or loss. The gain or loss relating 
to the ineffective portion is recognised immediately in the proﬁt 
or loss. However, when the cash ﬂow hedge relates to a forward 
foreign exchange contract to hedge a highly probable forecast 
transaction or ﬁrm commitment that results in a non-ﬁnancial 
asset (e.g. inventory) or a non-ﬁnancial liability, the gains and 
losses previously deferred in equity are transferred from equity and 
included in the initial measurement of the initial cost or carrying 
amount of the asset or liability. 

Hedge accounting is discontinued when the hedging instrument 
expires, or is sold, terminated or exercised, or no longer qualiﬁes 
for hedge accounting. At that point in time, any cumulative gains 
or losses on the hedging instrument recognised in equity is kept 
in equity until the forecast transaction occurs. If the forecast 
transaction is no longer expected to occur, the net cumulative gain 
or loss recognised in equity is transferred to proﬁt or loss for the year.

(s) Financial year

As allowed under Section 323D (2) of the Corporations Act 2001, the 
Directors have determined the ﬁnancial year to be a ﬁxed period of 
52 calendar or 53 calendar weeks. For the period to 27 June 2021, 
the Group is reporting on the 52 week period that began 29 June 
2020 and ended 27 June 2021. For the period to 28 June 2020, the 
Group is reporting on the 52 week period that began 1 July 2019 
and ended 28 June 2020.

66

PENTAL ANNUAL REPORT 2021

3. SEGMENT INFORMATION 

AASB 8 Operating Segments requires operating segments to 
be identiﬁed on the basis of internal reports about components 
of the Group that are regularly reviewed by the chief operating 
decision maker in order to allocate resources to the segment and 
to assess its performance. Information reported to the Group’s chief 
operating decision maker for the purposes of resource allocation 
and assessment of performance is more speciﬁcally focused on the 
Group’s two operating divisions

The Group is organised into two operating segments, consistent 
with management reporting provided to the Group’s Managing 
Director (the chief operating decision maker), which is used to 
manage the business and allocate resources. The consolidated 
entity is organised on an international basis into the following 
reporting segments:

Owned Brands: The Group owns and manages a range of brands 
in the Australian and New Zealand markets including its ﬂagship 
brands White King, Country Life, Jiffy, Janola and Sunlight. This 
segment’s operations contain manufacturing, wholesale and 
management of these brands. The Group promotes these brands 
through advertising, social media, outdoor media and in store 
activities.

Contracted Brands: The Group provides contract services including 
manufacturing and distribution to external brand owners. This 
includes manufacturing of private label products for retailers, 
contractually manufactured products to speciﬁcation for external 
FMCG companies and distribution of products for Duracell 
batteries. The Group does not manage or promote these brands as 
it does not own them.

The Group’s segment ﬁnancial information is as per below:

Owned Brands

Contracted Brands

Total

27 Jun 2021
$’000

28 Jun 2020
$’000

27 Jun 2021
$’000

28 Jun 2020
$’000

27 Jun 2021
$’000

28 Jun 2020
$’000

52,268 

59,832 

72,672 

66,628 

 124,940 

126,460 

Segment Revenue

Sales revenue

Segment Results

Proﬁt before ﬁnance costs and income tax (EBIT)

5,145 

6,507 

2,656 

 889 

 7,801 

7,396 

Finance costs

Proﬁt before income tax

Income tax expense

Net proﬁt for the period

(121)

7,680

(2,317)

5,363

(175)

7,221

(2,202)

5,019

Due to the similar and shared nature of products, customers, suppliers and facilities, a signiﬁcant overlap exists between the assets and 
liabilities utilised by both reported segments. Segment assets and liabilities are, therefore, unable to be allocated to individual segments on 
a reasonable basis.

Geographical analysis

Summarised below is a geographical analysis of revenue based 
on the geographical location of the Group’s customers:

Geographical sales 

Australia

New Zealand

Asia

2021
$’000

2020
$’000

 109,726 

 109,578 

 13,413 

1,801 

 14,586 

 2,296 

Total geographical sales

 124,940 

 126,460 

67

PENTAL ANNUAL REPORT 2021

NOTES TO THE FINANCIAL STATEMENTS (CONT)

4. REVENUE

6. INCOME TAXES

The Group generates revenue from the sale of goods on a point in 
time basis as follows:

 Income tax recognised in proﬁt or loss

Revenue from the sale of goods

124,940

126,460

Tax expense comprises:

2021
$’000

2020
$’000

2021
$’000

2020
$’000

The Group’s Top 6 customers (Woolworths Limited, Coles Group 
Ltd , Metcash Ltd, Foodstuffs (Auckland) Ltd, Costco Wholesale 
Corporation and Battery Specialists Group) generated 77.1% of the 
Group’s revenue for the year ended 27 June 2021 (2020: 79.5% from 
top six customers - Woolworths Limited, Coles Group Ltd , Metcash 
Ltd, Foodstuffs (Auckland) Ltd, Costco Wholesale Corporation and 
Battery Specialists Group). 

Accounting policy for revenue from the sale of goods:

The Group manufactures, markets and distributes a range of 
products targeted at the household essential market in Australia, 
New Zealand and Asia. Revenue from the sale of goods is 
recognised when control of the goods has transferred, being 
when the goods are delivered to the customer, the customer has 
full discretion over the channel and price to sell the goods, and 
there is no unfulﬁlled obligation that could affect the customer’s 
acceptance of the good. Delivery occurs when the goods have 
been shipped to the speciﬁc location, the risks of obsolescence 
and loss have been transferred to the customer, and either the 
customer has accepted the goods in accordance with the terms 
of the sale or the Group has objective evidence that all criteria 
for acceptance has been satisﬁed. A receivable is recognised 
when the goods are delivered as this is the point in time that the 
consideration is unconditional because only the passage of time is 
required before the payment is due.

Goods are often sold with rebates and discounts related to trading 
terms and promotional activities (“Trade Spend”). Revenue from 
these sales is recognised net of the estimated value of Trade 
Spend. Accumulated experience is used to estimate and provide for 
Trade Spend, using the expected value method, and revenue is only 
recognised to the extent that it is highly probable that a signiﬁcant 
reversal will not occur. An accrual for Trade Spend is recognised in 
relation to sales made up to the end of the reporting period. 

No element of ﬁnancing is deemed present as the sales are made 
with typical credit terms of 30 to 60 days from invoice month end, 
consistent with market practice. 

5. FINANCE COSTS

Current tax expense 

Deferred tax expense

Adjustments recognised in relation to 
the current tax of prior years

Total tax expense

2,735

(420)

2,841

(589)

2

(50)

2,317

2,202

The prima facie income tax expense on pre-tax accounting proﬁt 
reconciles to the income tax expense in the ﬁnancial statements
as follows: 

Proﬁt from operations

Tax at the Australian tax rate of 30%

Non Deductible items

Adjustments recognised in relation to 
the current tax of prior years

2021
$’000

7,680

2,304

11

2

2020
$’000

7,221

2,166

86

(50)

Income tax expense

2,317

2,202

The tax rate used in the above reconciliation is the corporate tax 
rate of 30% payable by Australian corporate entities on taxable 
proﬁts under Australian tax law. There has been no change in the 
corporate tax rate when compared with the previous reporting 
period.

Income tax recognised in other comprehensive income

Deferred tax

Arising on amounts recognised in 
other comprehensive income:

Changes in the fair value of cash ﬂow 
hedges

2021
$’000

2020
$’000

82

82

(110)

(110)

2021
$’000

2020
$’000

21

  56  

44 

121

76

  40  

59 

175

Interest on borrowings

Other borrowing costs

Interest on leases

Total interest expense

68

PENTAL ANNUAL REPORT 2021

Deferred tax balances 

Deferred tax assets/ (liabilities) arise from the following:

Opening
balance
$’000

Charged to 
income
$’000

2021

Recognised
in other
comprehensive
income
$’000

Charged to
equity
$’000

Closing
Balance
$’000

35

751

-

369

222

60

1,437

(151)

(351)

(91)

(3,706)

(3)

(4,302)

(2,865)

32

100

60

(67)

151

(2)

274

69

73

(99)

104

(1)

146

420

-

-

-

-

-

-

-

-

-

82

-

-

82

82

-

-

-

-

-

-

-

-

-

-

-

-

-

-

67

851

60

302

373

58

1,711

(82)

(278)

(108)

(3,602)

(4)

(4,074)

(2,363)

Deferred tax assets

Provision for expected credit losses

Provisions

Share based payments

Lease Liabilities

Inventory obsolescence 

Accruals

Deferred tax liabilities 

Property, plant and equipment

Leased Assets

Foreign currency items

Brandnames

Other

Net deferred tax asset / (liability)

69

PENTAL ANNUAL REPORT 2021

NOTES TO THE FINANCIAL STATEMENTS (CONT)

6. INCOME TAXES (CONT)

Opening
balance
$’000

Charged to 
income
$’000

2020

Recognised
in other
comprehensive
income
$’000

Charged to
equity
$’000

Closing
Balance
$’000

9

674

-

4

174

4

865

(500)

-

-

(3,706)

(3)

(4,209)

(3,344)

26

77

369

(4)

48

56

572

349

(351)

19

-

-

17

589

-

-

-

-

-

-

-

-

-

(110)

-

-

(110)

(110)

-

-

-

-

-

-

-

-

-

-

-

-

-

-

35

751

369

-

222

60

1,437

(151)

(351)

(91)

(3,706)

(3)

(4,302)

(2,865)

Limited and each of the entities in the tax-consolidated group has 
agreed to pay a tax equivalent payment to or from the head entity, 
based on the current tax liability or current tax asset of the entity. 
Such amounts are reﬂected in amounts receivable from or payable 
to other entities in the tax-consolidated group. The tax sharing 
agreement entered into between members of the tax-consolidated 
group provides for the determination of the allocation of income 
tax liabilities between the entities should the head entity default 
on its tax payment obligations or if an entity should leave the tax-
consolidated group. The effect of the tax sharing agreement is that 
each member’s liability for tax payable by the tax-consolidated 
group is limited to the amount payable to the head entity under 
the tax funding arrangement.

Unrecognised taxable temporary differences associated 
with investments and interests

In accordance with AASB112.81, there are no taxable temporary 
differences in relation to investments in subsidiaries for which 
deferred tax assets or liabilities have not been recognised.

Deferred tax assets

Provision for expected credit losses

Provisions

Lease Liabilities

Foreign currency items

Inventory obsolescence 

Accruals

Deferred tax liabilities 

Property, plant and equipment

Leased Assets

Foreign currency items

Brand names

Other

Net deferred tax asset / (liability)

Current tax liabilities

Income tax payable

Tax consolidation

2021
$’000

449

449

2020
$’000

1,362

1,362

The company and its wholly-owned Australian resident entities 
have formed a tax-consolidated group, and are therefore taxed as 
a single entity. The head entity within the tax-consolidated group 
is Pental Limited. The members of the tax-consolidated group are 
identiﬁed at Note 12.

Nature of tax funding arrangements and tax sharing 
agreements

Entities within the tax-consolidated group have entered into a tax 
funding arrangement and a tax-sharing agreement with the head 
entity. Under the terms of the tax funding arrangement, Pental 

70

PENTAL ANNUAL REPORT 2021

The earnings and weighted average number of ordinary shares 
used in the calculation of basic and diluted earnings per share are 
as follows:

2021
$’000

2020
$’000

5,363

5,363 

5,019

5,019 

5,363 

5,019 

2021
No.

2020
No.

7. PROFIT FOR THE YEAR 

(a) Proﬁt for the year has been arrived at after charging the 
following expenses:

2021
$’000

2020
$’000

Net proﬁt

Expenses

Cost of goods sold

95,517

96,246

Earnings used in the calculation
of basic EPS 

Earnings used in the calculation 
of diluted EPS

Depreciation: Property, plant and 
equipment

Depreciation: Right-of-use assets

Amortisation: Software

Total depreciation and 
amortisation

Employee beneﬁts expense:

Post-employment beneﬁts – 
deﬁned contribution plans 

3,169

3,942

583

 97 

552

 82 

 3,849 

 4,576 

1,125  

1,057  

Share based payments expense

137

65

Other employee beneﬁts 

13,238

13,431

14,500

14,553

Cost of goods sold includes cost of products or raw materials, 
including inbound freight, direct labour costs for production and 
factory overhead expenses where applicable.

Weighted average number of 
ordinary shares for the purposes 
of basic earnings per share

136,250,633

136,250,633

The weighted average number of ordinary shares for the purposes 
of diluted earnings per share reconciles to the weighted average 
number of ordinary shares used in the calculation of basic earnings 
per share as follows.

2021
No.

2020
No.

136,250,633

136,250,633

Weighted average number of 
ordinary shares for the purposes 
of basic earnings per share

Shares deemed to be issued for 
no consideration in respect of:

8. EARNINGS PER SHARE 

performance rights over 
ordinary shares

2,988,143

1,625,000

2021
Cents
Per Share

2020
Cents
Per Share

Weighted average number of 
ordinary shares for the purposes 
of diluted earnings per share

139,238,776

137,875,633

Basic earnings per share

Diluted earnings per share

3.94

3.85

3.68

3.64

Classiﬁcation of securities as potential ordinary shares

Performance rights over ordinary shares in the Company granted 
under Executive Variable Incentive Plan (EVIP) during the reported 
and prior periods are deemed to be eligible to vest and treated 
as dilutive.

71

-
PENTAL ANNUAL REPORT 2021

NOTES TO THE FINANCIAL STATEMENTS (CONT)

9. TRADE AND OTHER RECEIVABLES

Movement in the allowance for expected credit losses

Current

2021
$’000

2020
$’000

Trade receivables (i)

14,046 

 20,170 

Other (ii)

Allowance for expected credit 
losses

274

(224) 

 79 

(116) 

14,096

20,133

(i) The average credit period on sales of goods is approximately 
60 days. No interest is charged on trade receivables. An allowance 
has been made for expected credit losses using a provision 
matrix based on historical credit loss rates. Trade receivables are 
recognised at amortised cost less provision for credit losses.

Before accepting any new customers, the Group will perform a 
credit check to assess the potential customer’s credit quality and 
deﬁnes credit limits by customer. Limits are reviewed as necessary. 
Of the trade receivables balance at the end of the year $10.202 
million is due from top six customers (2020: $14.971 million from top 
six customers) and these six customers account for 77.1% of total 
sales revenue for the year (2020: 79.5% from top six customers). 
There are no other customers who represent more than 5% of the 
total balance of trade receivables or total sales revenues from 
continuing operations for the year. The Group does not hold any 
collateral over these balances.

(ii) Other receivables generally arise from transactions outside 
the usual operating activities of the Group. These amounts 
are predominantly reimbursements sought from suppliers for 
rebates and payments made in advance to suppliers for goods 
subsequently reclassiﬁed as receivables. Collateral is generally
not obtained.

Ageing of past due

Overdue 31 to 60 days

Overdue 61 to 90 days

Overdue 91 days and beyond

Total

2021
$’000

2020
$’000

144

30

231

405

581

41

12

634

Balance at the beginning of
the year

Re-measurement of loss 
allowance

Balance at the end of the year

2021
$’000

2020
$’000

116

108

224

30

86

116

Under the expected credit loss methodology, the provision for 
impairment of receivables is the carrying value of maximum 
exposure to credit risk at the reporting date. At 27 June 2021, the 
amount of provision for expected credit losses was $224 thousand 
(2020: $116 thousand). 

The amount of the expected credit losses is recognised in proﬁt 
or loss within other expenses. Subsequent recoveries of amounts 
previously written off are credited against the same line item.

10. INVENTORIES 

Raw materials

Goods in transit

Finished goods

2021
$’000

4,071

1,283

10,699

16,053

2020
$’000

4,551

4,927

13,941

23,419

11. OTHER FINANCIAL ASSETS 

Current

Foreign currency forward
contracts

2021
$’000

2020
$’000

66

66

340

340

72

PENTAL ANNUAL REPORT 2021

73

PENTAL ANNUAL REPORT 2021

NOTES TO THE FINANCIAL STATEMENTS (CONT)

12. SUBSIDIARIES

Name of subsidiary

Parent Entity

Pental Limited (i)

Controlled Entities

         Pental Products Pty Ltd  (ii) (iii)

         HWB Pty Ltd (ii) (iii)

Ownership interest

Country of 
incorporation

Australia

Australia

Australia

2021
%

100%

100%

2020
%

100%

100%

(i) Pental Limited is the head entity within the tax-consolidated group.

(ii) These companies are members of the tax-consolidated group.

(iii) The wholly-owned subsidiary has entered into a deed of cross guarantee with Pental Limited pursuant to ASIC Class Order 98/1418 and 
it is relieved from the requirement to prepare and lodge an audited ﬁnancial report. 

The parent entity and all the controlled entities are party to the deed of cross guarantee therefore the consolidated statement of proﬁt or 
loss and other comprehensive income and statement of ﬁnancial position reﬂects the statement of proﬁt or loss and other comprehensive 
income and statement of ﬁnancial position of the parties to the deed of cross guarantee.

74

PENTAL ANNUAL REPORT 2021

13. PROPERTY, PLANT AND EQUIPMENT

Land

$’000

Buildings
at cost

$’000

Plant and 
equipment
at cost

$’000

Construction in 
progress at cost

$’000

Total

$’000

Gross carrying amount

Balance at 30 June 2019

1,732

5,628

Additions

Disposals

Transfer from capital works

-

-

-

-

-

-

Balance at 28 June 2020

1,732

5,628

Additions

Disposals

Transfer from capital works

-

-

-

-

-

-

Balance at 27 June 2021

1,732

5,628

Accumulated depreciation

Balance at 30 June 2019

Depreciation expense

Disposals

Balance at 28 June 2020

Depreciation expense

Disposals

Balance at 27 June 2021

-

-

-

-

-

-

-

Net book value as at 28 June 2020

Net book value as at 27 June 2021

1,732

1,732

(360)

(192)

-

(552)

(192)

-

(744)

5,076

4,884

34,379

1,446

(3)

235

36,057

947

(1,546)

544

36,002

(19,026)

(3,750)

1

(22,775)

(2,978)

1,546

(24,207)

13,282

11,795

235

544

-

(235)

544

890

-

(544)

890

-

-

-

-

-

-

-

544

890

41,974

1,990

(3)

-

43,961

1,837

(1,546)

-

44,252

(19,386)

(3,942)

1

(23,327)

(3,170)

1,546

(24,951)

20,634

19,301

75

PENTAL ANNUAL REPORT 2021

NOTES TO THE FINANCIAL STATEMENTS (CONT)

14. RIGHT-OF-USE ASSETS AND LEASE LIABILITIES

(a) Right-of-use Assets

The movements in the right-of-use assets for the reported period are as per below table:

Balance as at 1 July 2019

Additions

Less: lease contract terminated

Depreciation charge for the year

Balance as at 28 June 2020

Additions

Add: Lease term extension

Less: Lease contract terminated

Depreciation charge for the year

Balance as at 27 June 2021

(b) Lease liabilities

Property

$’000

Plant &
Equipment

$’000

Total

$’000

1,152

-

-

(372)

780

193

115

-

(401)

687

478

112

(20)

(180)

390

33

-

(12)

(170) 

241

The movements in the lease liabilities for the reported period and prior period are as per below table:

2021
$’000

2020
$’000

1,202

226

116

44

-

(610)

978

532

446

978

Balance at start of the period

Additions

Lease term extension

Interest incurred

lease contract terminated

Payments on lease liabilities

Balance as at end of the period

Current lease liabilities 

Non-current lease liabilities

Balance as at end of the period

76

1,630

112

(20)

(552)

1,170

226

115

(12)

(571)

928

1,601

111

-

59

(20)

(549)

1,202

456

746

1,202

PENTAL ANNUAL REPORT 2021

(c) Maturity Analysis

(d) Amount recognised in proﬁt and loss

Within One Year

One to two years

Two to three years

Three to four years

Four to ﬁve years

Depreciation expense on right-of-use assets 
(Includes lease contracts terminated)

Interest expense on lease liabilities

Total
$’000

583

44

Total
$’000

 532 

354

73

54

-

Total Contractual Undiscounted Cash Flows

1,013

Discounting using the lessees incremental 
borrowing rate

Balance as at 27 June 2021

(35)

978

77

PENTAL ANNUAL REPORT 2021

NOTES TO THE FINANCIAL STATEMENTS (CONT)

15. OTHER INTANGIBLE ASSETS

Brand Names
at cost 

$’000

Software
at cost

$’000

Total

$’000

19,000

-

19,000

-

-

19,000

(6,646)

 -   

(6,646)

 -   

-

(348)

(6,994)

12,354 

12,006

2,006

89

 2,095 

118

(843)

1,370 

(1,859)

(82)

(1,941)

(97)

843

-

21,006

89

 21,095 

118

(843)

20,370

(8,505)

(82)

(8,587)

(97)

843

(348)

(1,195)

(8,189)

 154 

 175

 12,508 

 12,181 

The Group used ‘relief from royalty’ method for the purposes of 
impairment testing as at 27 June 2021. 

The key assumptions used were as follows:

• An estimate of maintainable revenue with reference to the 
FY22 budget and historic ﬁnancial performance, with due 
consideration given to the economic uncertainty associated 
with COVID-19.

• Royalty rates ranging between 2% - 4.5% (2020: 2% - 4.5%)

• Discount rate of 10% post-tax (2020: 10%)

•

Long term growth rates of between 0% - 3% (2020: 0% - 3%)

• An estimate of costs to sell equivalent to 2% of the estimated 

recoverable amount for each brand name.

The Group believes that the assumptions adopted in the ‘relief from 
royalty’ calculations reﬂect an appropriate balance between the 
Group’s experience to date, the uncertainty associated with the 
COVID-19 pandemic and expected future performance for each 
brand, as discussed in the Directors Report.

Gross carrying amount

Balance at 1 July 2019

Additions

Balance at 28 June 2020

Additions

Disposals

Balance at 27 June 2021

Accumulated Impairment/Amortisation

Balance at 1 July 2019

Amortisation expense

Balance at 28 June 2020

Amortisation expense

Disposals

Impairment

Balance at 27 June 2021

Net book value as at 28 June 2020

Net book value as at 27 June 2021

Brand names - Useful life assessment

The Group assesses its brand names as having indeﬁnite useful 
lives. This assessment has reﬂected management’s intention to 
continue to utilise the brand names within its portfolio for the 
foreseeable future. 

Each period, the useful lives of the Group’s brand names are 
reviewed to determine whether events and circumstances continue 
to support an indeﬁnite useful life assessment for the assets. 

The Group continue to believe that its remaining brand names have 
indeﬁnite useful lives, as there is no foreseeable limit to the period 
over which they intend to utilise the brand names.

Impairment testing - Indeﬁnite life brand names

Indeﬁnite life brand names 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. 
An impairment loss is recognised for the amount by which the 
asset’s carrying amount exceeds its recoverable amount. The 
recoverable amount is the higher of an asset’s value in use and 
fair value less costs to sell. Brand names that have incurred an 
impairment in previous periods are reviewed for possible reversal of 
the impairment at the end of each reporting period.

78

                             
PENTAL ANNUAL REPORT 2021

2021
$’000

2020
$’000

177

177

177

177

1,820

6,000

3

7,823

8,000

4,810

-

13

4,823

5,000

15. OTHER INTANGIBLE ASSETS (CONT)

19. BANKING FACILITIES 

Following a strategic review of its laundry brand portfolio, the Group 
recognised an impairment loss for full book value of “Huggie” brand 
of $0.348 million (after tax $0.244 million). Whilst the high quality 
“Huggie” branded products will continue to be offered to consumers 
through alternative channels, the Group has made a strategic 
decision to consolidate its multiple offerings of laundry products 
under its power brand “Softly” in major grocery channels. 

The Group did not recognise any impairment losses in the prior period.

16. OTHER ASSETS

Summary of ﬁnancing 
arrangements
Facilities utilised at
reporting date: 

Multi option loan facility

Bank Guarantee

Prepayments

2021
$’000

267

2020
$’000

301

Facilities not utilised at
reporting date: 

Multi option loan facility

17. TRADE AND OTHER PAYABLES

Trade payables

Trade spend liabilities

Sundry payables and accruals

2021
$’000

7,660

299 

4,332

12,291

2020
$’000

11,354 

 122 

6,864 

18,340

The average credit period on the purchases of goods ranges from 
7 to 60 days. No interest is charged on the trade payables. The 
Group has ﬁnancial risk management policies in place to ensure 
that, as often as possible, all payables are paid within a reasonable 
timeframe.

18. OTHER FINANCIAL LIABILITIES 

Bank overdraft

Trade ﬁnance

Bank Guarantee

Multi option loan facility limit

Multi option loan facility

Following the expiry of its multi-option facility with ANZ bank on 31 
October 2020, the Group secured a new multi option loan facility 
with the Commonwealth Bank of Australia (CBA) that allows the 
Group to choose the appropriate type of funding facility to suit 
its business needs. The multi option facility can be used as a 
bank overdraft, variable rate fully drawn advance, cash advance, 
standby letter of credit/guarantee and/or trade ﬁnance facility. 

The multi option facility has a facility limit of $8,000,000 (2020: 
$5,000,000 with ANZ bank). The multi option facility bears various 
interest rates for various facilities as utilised. The interest rates range 
from minimum 0.49% on trade ﬁnance facility to maximum 7.68% on 
overdraft facility plus a line fee of 0.48% as at 27 June 2021 (2020: 
0.94% plus a line fee of 0.8%). The ﬁnancing arrangement is secured 
by the Group’s assets through ﬁrst registered mortgage over its 
Shepparton property and ﬁrst ranking ﬁxed and ﬂoating charges 
over the Company and its subsidiaries (with corresponding cross 
guarantee). The facility expires on 31 October 2024. 

2021
$’000

2020
$’000

Unsecured supplier payment facility

Current

Supplier payment facility

81

81

212

212

As at the reporting date, The Group also has alternative unsecured 
ﬁnancing facilities with a limit of $4.3 million to draw upon through 
American Express, if and when required. There are no restrictions of 
use associated with the supplier ﬁnance facility.

The Group utilised an American Express supplier payment facility 
during the reported period. As at the reporting date, the facility had 
a maximum limit of $4.3 million of which $0.081 million was utilised.

79

-
-
-
-
PENTAL ANNUAL REPORT 2021

NOTES TO THE FINANCIAL STATEMENTS (CONT)

20. PROVISIONS 

22. DIVIDENDS

2021
$’000

2020
$’000

(a) Recognised Amounts

Current

Employee beneﬁts

Make good provision on lease

Non-current

Employee beneﬁts

2,584

29

2,613

72

72

2,225

29

2,254

139

139

Total Provisions

2,685

2,393

The provision for employee beneﬁts represents annual leave, 
rostered days off and vested long service leave entitlements 
accrued by employees. The increase in the carrying amount of 
the provision for the current year results from more beneﬁts being 
accrued than paid in the current year. The provision is discounted 
using high quality Australian corporate bond rates.

21. ISSUED CAPITAL

(a) Fully paid ordinary shares

2021

2020

Cents 
per 
Share

Total
$’000

Cents 
per 
Share

Total
$’000

0.70

954

-

-

1.50

2,044

1.30

1,771

1.00

1,363

0.70

954

3.20

4,361

2.00

2,725

Fully paid 
ordinary shares

Special dividend: 
Fully franked at 
30% tax rate

Final dividend: 
Fully franked at 
30% tax rate

Interim dividend: 
Fully franked at 
30% tax rate

(b) Unrecognised Amounts

2021

2020

Cents 
per 
Share

Total
$’000

2021
No.

2020
No.

Final dividend

1.60

2,180

Special dividend

-

-

Cents 
per 
Share

1.50

0.70

Total
$’000

2,044

954

Share Capital

Opening balance of ordinary 
shares, fully paid

136,250,633

136,250,633

Balance at end of ﬁnancial year

136,250,633

136,250,633

1.60

2,180

2.20

2,998

In respect of the year (52 weeks) ended 27 June 2021, the Directors 
declared a full year fully franked ﬁnal dividend of 1.6 cents per 
ordinary share, payable on 24 September 2021, with a record date 
of 6 September 2021 (2020: 1.50 cents per ordinary share). 

Fully paid ordinary shares

$’000

$’000

Balance at beginning of ﬁnancial 
year

90,658

90,658

In the prior period, the Directors also declared a fully franked 
special dividend of 0.7 cents per ordinary share payable on 7 
August 2020 with a record date of 31 July 2020. 

Adjusted franking account 
balance

Impact on franking account 
balance of dividends not 
recognised

2021
$’000

2020
$’000

20,249

18,496

934

1,285

Balance at end of ﬁnancial year

90,658

90,658

Holders of ordinary shares are entitled to receive dividends as 
declared from time to time and are entitled to one vote per share 
at shareholders’ meetings.

In the event of winding up of the Company, ordinary shareholders 
rank after all creditors and are fully entitled to any proceeds of 
liquidation. 

Changes to the then Corporations Law abolished the authorised 
capital and par value concept in relation to share capital from 1 
July 1998. Therefore, the company does not have a limited amount 
of authorised capital and issued shares do not have a par value.

80

 
 
 
PENTAL ANNUAL REPORT 2021

23. FINANCIAL INSTRUMENTS

(c)  Financial risk management objectives

The Group’s ﬁnance function provides services to the business 
by monitoring and managing the ﬁnancial risks relating to the 
operations through internal risk reports which analyse exposures by 
degree and magnitude of risk. 

The Group’s activities expose it primarily to the ﬁnancial risks of 
changes in foreign currency exchange rates. The Group enters 
into forward foreign currency contracts to manage its exposure to 
foreign currency exchange rate ﬂuctuations where it has entered 
into ﬁxed price contracts. 

The Group does not enter into or trade ﬁnancial instruments, 
including derivative ﬁnancial instruments, for speculative purposes. 
The use of ﬁnancial instruments is governed by the Group’s policies 
approved by the Board of Directors. The Chief Financial Officer 
is responsible for managing the Group’s treasury requirements in 
accordance with this policy.

(d)  Market risk

The Group’s activities expose it primarily to the ﬁnancial risks of 
changes in foreign currency exchange rates. The Group enters 
into derivative ﬁnancial instruments to manage its exposure to 
foreign currency risk, including forward foreign currency contracts to 
manage its exposure to foreign currency exchange rate ﬂuctuations 
(refer notes 23(c) and 23(e)).

(e)  Foreign currency risk management

The Group undertakes transactions denominated in foreign 
currencies; consequently, exposures to exchange rate ﬂuctuations 
arise. Where appropriate, exchange rate exposures are managed 
within approved policy parameters utilising forward exchange 
contracts or by offsetting import and export currency exposures.

The carrying amounts of the Group’s foreign currency denominated 
monetary assets and monetary liabilities at the end of the reporting 
period are as follows:

Assets

Liabilities

2021
$’000

2020
$’000

2021
$’000

2020
$’000

(a)  Capital risk management

The Group manages its capital to ensure that entities in the Group 
will be able to continue as a going concern while maximising the 
return to stakeholders through the optimisation of the debt and 
equity balance. 

The capital structure of the Group consists of cash, occasional 
short term deposits, and equity attributable to equity holders of the 
parent, comprising issued capital (as disclosed in note 21), reserves 
and retained earnings/(accumulated losses). 

Operating cash ﬂows and a multi option bank facility are used 
in combination as required to maintain and expand the Group’s 
assets, as well as to make the routine outﬂows of payables, tax, 
dividends and pay for other ﬁnancial instruments. Refer to Note 19 
for details of the banking facility.

Gearing ratio

The Board of Directors reviews the capital structure on an ongoing 
basis. As a part of this review the Board considers the cost of 
capital and the risks associated with each class of capital. Based 
on recommendations of the Board, the Group will balance its 
overall capital structure through the payment of dividends, new 
share issues, and the issue or repayment of debt to execute its 
strategic plans. The Group was effectively debt free, in a net cash 
position (cash net of borrowings, overdrafts and other ﬁnancial 
liabilities) in both the current and prior ﬁnancial year.

(b)  Categories of ﬁnancial instruments

2021
$’000

2020
$’000

12,702

14,096

3,668

20,133

Financial assets

Cash and cash equivalents

Trade and other receivables 
(amortised cost)

Derivative instruments in 
designated hedge accounting 
relationships

Financial liabilities

Trade and other payables 
(amortised cost)

66

340

Currency of USA

-

-

Currency of
New Zealand

Currency
of Europe

2,600

3,726

-

-

306

805

-

337

728

1

12,291

18,340

Supplier payment facility

81

212

The carrying amount reﬂected in the statement of ﬁnancial position 
represents the Group’s maximum exposure to credit risk for ﬁnancial 
assets.

The Group has signiﬁcant credit risk exposure with the Woolworths 
Limited, Coles Group Ltd, Metcash Ltd, Costco, Foodstuffs 
(Auckland) Ltd and Battery Specialists Groups which represent 
72.6% of trade receivables.

81

PENTAL ANNUAL REPORT 2021

NOTES TO THE FINANCIAL STATEMENTS (CONT)

23. FINANCIAL INSTRUMENTS (CONT)

Forward foreign exchange contracts

The Group enters into forward foreign exchange contracts to hedge a proportion of anticipated sales and purchase commitments 
denominated in foreign currencies (principally US Dollars and New Zealand Dollars) expected in each month. The amount of anticipated 
future sales is forecast in light of current conditions in foreign markets, commitments from customers and experience. 

The following table sets out the gross contract value to be received/paid under forward foreign currency contracts, the weighted average 
contracted exchange rates and settlement periods of outstanding contracts for the Group.

Weighted average
exchange rate

Foreign currency
FC’000

Contract value
$’000

Fair value
gain/(loss)
$’000

Buy USD – less than one year

0.7711

0.6924

2021

2020

2021

2,761

Sell NZD – less than one year

1.0820

1.0197

3,450

2020

1,510

7,200

2021

3,581

3,189

2020

2021

2020

2,181

7,061

88

(22)

66

7

333

340

As at reporting date, the aggregate amount of unrealised gains/(losses) under forward foreign currency contracts relating to anticipated 
future contracts is $0.066 million gain (2020: $0.340 million gain). In the current year, these unrealised gains and losses have been deferred 
in the hedging reserve to the extent the hedge is effective.

Foreign currency sensitivity analysis

The Group is mainly exposed to USD and NZD currencies. The following table details the Group’s sensitivity to a 5 cent increase and 
decrease in the Australian dollar against the relevant foreign currencies. The analysis includes derivative instruments in designated hedge 
accounting relationships, all trade receivables and trade payables outstanding at year end.

USD Impact

NZD Impact

2021
$’000

2020
$’000

2021
$’000

2020
$’000

Proﬁt 

Equity 

28

248

43

79

83

102

137

170

(f)  Interest rate risk management

The Group has been exposed to interest rate risk during the period as it invests cash on call at ﬂoating interest rates and cash in short term 
deposits at ﬁxed interest rates. The Directors consider that the Group’s sensitivity to a reasonably possible change in interest rates would 
not have a material impact on proﬁt or equity.

82

PENTAL ANNUAL REPORT 2021

The following table details the Group’s exposure to interest rate and liquidity risk. The table includes both interest and principal 
cash ﬂows.

2021

Weighted
average
interest
rate

Less than 1 
month
$’000

1-3 months
$’000

3 months 
to 1 year
$’000

1-5 years
$’000

5+ years
$’000

Total
$’000

Financial assets

Variable interest rate instruments

Non-interest bearing

Financial liabilities

Variable interest rate instruments (i)

Non-interest bearing

-

-

-

-

12,702

7,781

20,483

81

6,161

6,242

-

6,315

6,315

-

6,130

6,130

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

12,702

14,096

26,798

81

12,291

12,372

2020

Financial assets

Weighted
average
interest
rate

Less than 1 
month
$’000

1-3 months
$’000

3 months 
to 1 year
$’000

1-5 years
$’000

5+ years
$’000

Total
$’000

Variable interest rate instruments

0.24%

Non-interest bearing

Financial liabilities

Variable interest rate instruments (i)

Non-interest bearing

-

-

-

3,668

10,798

14.466

212

9,271

9,483

-

9,335

9,335

-

9,069

9,069

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

3,668

20,133

23,801

212

18,340

18,552

 (i) Relates to American Express supplier payment facility which, if applicable, charges interest at the time of utilisation and bears no interest charges for repayments made within 
agreed time frame. The Group intends to repay the facility within agreed time frame.

83

PENTAL ANNUAL REPORT 2021

NOTES TO THE FINANCIAL STATEMENTS (CONT)

23. FINANCIAL INSTRUMENTS (CONT)

(g)  Credit risk management

Credit risk management refers to the risk that a counterparty will 
default on its contractual obligations resulting in ﬁnancial loss to 
the Group. The Group has adopted a policy of only dealing with 
creditworthy counterparties and obtaining sufficient collateral, 
where appropriate, as a means of mitigating the risk of ﬁnancial 
loss from defaults. The Group’s exposure and the credit ratings of 
its counterparties are continuously monitored and the aggregate 
values of transactions concluded are spread amongst approved 
counterparties. The Group measures credit risk on a fair value basis.

Trade accounts receivable consist of a number of customers 
supplying the retail sector in Australia, New Zealand and Asia. 
Ongoing credit evaluation is performed on the ﬁnancial condition 
of accounts receivable and, where appropriate, credit guarantees 
are obtained.

The Group has signiﬁcant credit risk exposure with the Woolworths 
Limited, Coles Group Ltd, Metcash Ltd, Foodstuffs (Auckland) Ltd 
and Battery Specialists Groups which represent 72.6% of trade 
receivables.

The credit risk on liquid funds and derivative ﬁnancial instruments 
is limited because the counterparties are banks with high credit-
ratings assigned by international credit-rating agencies.

The carrying amount of ﬁnancial assets recorded in the ﬁnancial 
statements, net of any allowances for losses, represents the Group’s 
maximum exposure to credit risk without taking accounts of the 
value of any collateral obtained.

(h)  Liquidity risk management

The Group manages liquidity risk by maintaining adequate reserves, 
The Group manages liquidity risk by maintaining adequate reserves, 
The Group manages liquidity risk by maintaining adequate reserves, 
banking facilities and reserve borrowing facilities by continuously 
banking facilities and reserve borrowing facilities by continuously 
banking facilities and reserve borrowing facilities by continuously 
monitoring forecast and actual cash ﬂows and matching the 
monitoring forecast and actual cash ﬂows and matching the 
monitoring forecast and actual cash ﬂows and matching the 
maturity proﬁles of ﬁnancial assets and liabilities. 
maturity proﬁles of ﬁnancial assets and liabilities. 
maturity proﬁles of ﬁnancial assets and liabilities. 

The Group has a multi option loan facility with the Commonwealth 
Bank of Australia that allows the Group to choose the appropriate 
type of funding facility to suit its business needs under one interest 
rate. The facility expires 31 October 2024. As highlighted in Note 19, 
the Group also has alternative ﬁnancing facilities to draw upon, if 
and when required. There are no restrictions of use associated with 
the supplier ﬁnance facility.

(i) Fair value of ﬁnancial instruments

The directors consider that the carrying amounts of ﬁnancial assets 
and liabilities recorded in the ﬁnancial statements approximate 
their fair values.

The fair values and net fair values of ﬁnancial assets and liabilities 
are determined as follows:

•

•

•

the fair value of ﬁnancial assets and ﬁnancial liabilities with 
standard terms and conditions and traded on active liquid 
markets are determined with reference to quoted market prices;

the fair value of other ﬁnancial assets and liabilities are 
determined in accordance with generally accepted pricing 
models based on discounted cash ﬂow analysis; and

the fair value of derivative instruments, included in hedging 
assets and liabilities, are calculated using quoted prices, which 
is a Level 2 fair value measurement. Where such prices are not 
available use is made of discounted cash ﬂow analysis using the 
applicable yield curve for the duration of the instruments.

84

PENTAL ANNUAL REPORT 2021

24. SHARE-BASED PAYMENTS

Executive Variable Incentive Plan (EVIP)

Under Pental’s EVIP, executives and selected senior management 
employees are eligible for both a cash and equity incentive upon 
the achievement of certain Group level KPI’s and personal KPIs set 
at the commencement of each ﬁnancial year, weighted as follows: 

• Fifty percent of both the cash and equity incentive KPIs relate to 

the achievement of a target EBIT for the ﬁnancial year. 

ordinary shares after three years from the end of ﬁnancial year of 
the grant date. Rights will be granted on a face value basis using 
the last ten business days of the previous ﬁnancial year Volume 
Weighted Average Price (VWAP). The variable equity incentive is 
based upon an assessment of performance against respective 
KPIs in the year in which it is granted. If the performance criteria is 
not met within the ﬁnancial year, the Rights lapse at the end of the 
same ﬁnancial year.

• The remaining ﬁfty percent are based on speciﬁc KPIs relevant 

The vesting of the Rights is conditional on:

to the participants particular specialisation.

a) The executive satisfying Group level and personal performance 

Variable Incentive – cash

criteria,

b) the executive being employed by the Group on the vesting 

date; and

c) Pental’s VWAP share price for the last ten business days 

preceding the vesting date being equal to or greater than the 
VWAP for the preceding ten business days from the grant date.

In total, the Rights are held for four years from the grant date. The 
value to the executive / senior manager therefore is not at the 
grant date, rather at the vesting date which is three years from the 
end of ﬁnancial year of the grant date.

Dividends are not payable on the Rights. Dividends are payable on 
ordinary shares after conversion of the Rights to ordinary shares. 

Variable cash incentive under EVIP is paid shortly after the release 
of audited full year results. The maximum amount of remuneration 
under the variable cash incentive plan ranges from 20 to 35 percent 
of the individual executive / senior management employee’s total 
ﬁxed remuneration. 

Variable Incentive – equity

The variable equity incentive is designed to reward achievement of 
annual KPIs, assist the retention of key high performing executives 
and align the rewards to the company’s share price. The maximum 
amount of remuneration under the variable equity incentive plan 
varies from 30 to 40 percent of the individual executive / senior 
management employee’s total ﬁxed remuneration. 

The variable equity incentive is delivered as Performance 
Rights (Rights), which are granted under the existing Executive 
Performance Rights Plan (Rights Plan) to enable the subsequent 
acquisition of the share component. The Rights will convert to 

EVIP – FY21 Performance

The following table contains details of total EVIP equity entitlements achieved by the executives and senior managers during the year:

Grant 
date

19 Nov 
2020

1 July 
2020

1 July 
2020

Charlie McLeish

Neil Godara

Senior managers

No. of 
Rights 
granted

Share 
price at 
grant 
date

Exercise 
price

Expected 
volatility

Performance 
period

Risk free 
rate

Expected 
dividend 
yield

Fair 
value at 
grant 
date

636,000

$0.410

217,000

$0.345

760,000

$0.345

Nil

Nil

Nil

51%

51%

51%

4 years

0.30%

4 years

0.40%

4 years

0.40%

7%

7%

7%

$0.212

$0.157

$0.157

As per Note 7, the vesting period expense recognised during the period was $136 thousand (2020: $65 thousand)

85

PENTAL ANNUAL REPORT 2021

NOTES TO THE FINANCIAL STATEMENTS (CONT)

24. SHARE-BASED PAYMENTS (CONT)

The following table contains details of total EVIP equity entitlements achieved by the executives and senior managers during the previous 
reporting period:

Grant 
date

1 July 
2019

EVIP 2020

No. of 
Rights 
granted

Share 
price at 
grant 
date(i)

Exercise 
price

Expected 
volatility

Performance 
period

Risk free 
rate

Expected 
dividend 
yield

Fair 
value at 
grant 
date

1,625,000

$0.2921

Nil

45.95%

4 years

0.94%

5.52%

$0.159

Share-based payments (Rights Plan)

All performance rights under the EVIP are issued pursuant to the Executive Performance Rights Plan (Rights Plan). Under the conditions of 
Rights Plan, Performance Rights are convertible to ordinary shares (with no exercise price) as at the vesting date which is 4 years from the 
grant date (or 3 years from the end of the ﬁnancial year)

All Rights issued are convertible to ordinary shares at no consideration, subject to achieving any performance or other vesting conditions.

The following table discloses changes in the Rights holdings of management personnel:

Vesting 
Date

Balance at
28/6/2020
No.

Rights 
granted
No.

Rights
vested
No.

Rights
forfeited
No.

Rights
lapsed
No.

Balance at
27/6/2021
No.

EVIP 2020

EVIP 2021

1/7/2023

1,625,000

-

1/7/2024

-

1,613,000

-

-

-

-

-

-

1,625,000

1,613,000

3,238,000

25. KEY MANAGEMENT PERSONNEL COMPENSATION

The aggregate compensation of the key management personnel of the Group is set out below 

2021
$

2020
$

1,397,562

1,231,577

20,184

78,318

-

79,076

36,093

-

74,810

1,575,140

1,342,480

Short-term employee beneﬁts

Long-term employee beneﬁts

Share based payments

Termination beneﬁts

Post-employment beneﬁts

86

PENTAL ANNUAL REPORT 2021

26. RELATED PARTY TRANSACTIONS

Mr Fred Harrison is the CEO of Ritchies. Mr Harrison’s employer, Ritchies Stores Pty Ltd invoiced the Group a total of $266,239.93 inclusive of 
GST (2020: $236,351.88 inclusive of GST) relating to the Group’s participation in various promotional activities and supplier trading terms 
during the ﬁnancial year. All transactions were conducted at arm’s length. As at the reporting date, the Group owed Ritchies Stores Pty Ltd 
$106,288.84 (2020: $36,300) in relation to abovementioned promotional activities and supplier trading terms.

Equity interests in subsidiaries

Details of interests in subsidiaries are set out in note 12.

Sales to and purchases from related parties in the normal course of business are made in arm’s length transactions on normal terms and conditions.

27. CASH AND CASH EQUIVALENTS

(a)  Reconciliation of cash and cash equivalents

Cash and cash equivalents at the end of the ﬁnancial year as shown in the cash ﬂow statement is reconciled to the related items in the 
statement of ﬁnancial position as follows:

Cash on hand and at bank

Cash and cash equivalents

27. CASH AND CASH EQUIVALENTS (CONT)

(b)  Reconciliation of Proﬁt for the year to net cash ﬂows from operating activities

Proﬁt/(Loss) for the year 

Depreciation and amortisation expense 

Impairment of brand names

Loss on disposal of assets

Equity settled employee beneﬁts expense

Changes in net assets and liabilities, net of effects from acquisition of businesses:

(Increase)/decrease in assets:

Trade and other receivables

Inventories

Other assets

Increase/(decrease) in liabilities and reserves:

Trade and other payables

Provisions and hedging reserve

Current and deferred tax liabilities

Other liabilities

Net cash from operating activities

2021
$’000

12,702

12,702

2020
$’000

3,668

3,668

2021
$’000

2020
$’000

5,363

3,849

348

-

136

6,037 

7,366 

308

(6,049) 

 102

(1,415) 

-

16,045

5,019

4,576

-

1

65

(2,516) 

(642) 

(373)

1,323 

 531 

 547 

(26) 

8,505

87

PENTAL ANNUAL REPORT 2021

NOTES TO THE FINANCIAL STATEMENTS (CONT)

28. CAPITAL EXPENDITURE COMMITMENT

Plant and equipment

2021
$’000

2020
$’000

404

309

The Group entered into various contracts to purchase equipment for the upgrade and modernisation of Shepparton manufacturing facility.   

29. CONTINGENT LIABILITIES

(a) Bank guarantees to third parties in respect of property lease obligations.

The bank guarantees are held by the parent entity, Pental Limited.

2021
$’000

2020
$’000

177

177

To the best knowledge of the Directors aside from the Bank Guarantees disclosed, no other contingent liabilities exist for the reporting 
period ending 27 June 2021.

30. REMUNERATION OF AUDITORS

Auditor of the parent entity

Audit or review of the ﬁnancial report

Other services

- Tax compliance

- Tax consulting

      - Due diligence services

- Other services

2021
$

2020
$

141,000

227,000

-

-

46,187

10,000

197,187

12,500

8,400

-

7,100

255,000

The auditor of Pental Limited is Grant Thornton in the reported period. The auditor for the group in prior period was Deloitte Touche Tohmatsu.

88

PENTAL ANNUAL REPORT 2021

31. PARENT ENTITY INFORMATION

The accounting policies of the parent entity, which have been applied in determining the ﬁnancial information shown below, are the same as 
those applied in the consolidated ﬁnancial statements. Refer to Note 2 for a summary of the signiﬁcant accounting policies relating to the Group.

Financial position

Assets

Current assets

Non current assets

Total assets

Liabilities

Current liabilities

Non current liabilities

Total liabilities

Net Assets

Equity

Issued capital

Accumulated losses

Total equity

Financial performance

Proﬁt/(loss) for the year

Other comprehensive income

Total comprehensive income/(loss)

32. SUBSEQUENT EVENTS

Acquisition

2021
$’000

2020
$’000

1

53,964

53,965

469

-

469

1

54,877

54,878

1,382

-

1,382

53,496

53,496

90,658

(37,162)

53,496

90,658

(37,162)

53,496

2021
$’000

2020
$’000

4,360

-

4,360

2,725

-

2,725

As announced to the market on 20 August 2021, the Group entered into a conditional agreement to acquire Hampers with Bite Pty Ltd 
through acquisition of 100% of its shares. The acquisition is expected to be funded through a combination of cash at bank, shares issued 
to Vendors, capital raised through placement of shares and a share purchase plan. Refer to ASX announcement dated 20 August 2021 for 
further details.

Dividends

In respect of the year (52 weeks) ended 27 June 2021 the Company will pay ﬁnal fully franked dividend of 1.6 cents per ordinary share, 
payable to shareholders on 24 September 2021, with a record date of 6 September 2021.

Other than the above disclosures, there has not been any matter or circumstance occurring after the end of the ﬁnancial period that has 
signiﬁcantly affected, or may signiﬁcantly affect, the operations of the Group, the results of those operations, or the state of affairs of the 
Group in subsequent ﬁnancial periods.

89

PENTAL ANNUAL REPORT 2021

ADDITIONAL STOCK EXCHANGE INFORMATION
As at 19 August 2021

Additional information required by the Australian Stock Exchange 
Limited Listing Rules and not disclosed elsewhere in this report is set 
out below.

Ordinary share capital

136,250,633 fully paid ordinary shares are held by 1,872 individual 
shareholders.

The voting rights attaching to the fully paid ordinary share, set out 
in clause 43 of the Company’s Constitution are:

“Subject to any rights or restrictions attaching to any class of 
shares:

(a

(b)

(c)

every member may vote;

on a show of hands every member has one vote;

on a poll every member has:

(i) 

for each fully paid share held by the member, one vote; 
and

(ii)  for each partly paid share held by the member, a fraction 
of a vote equivalent to the proportion which the amount 
paid (not credited) is of the total amounts paid and 
payable (excluding amounts credited to) on the share.”

On-market buy-back

There is no current on-market buy-back.

Distribution of holders of equity securities

1 – 1,000

1,001 – 5,000

5,001 – 10,000

10,001 – 100,000

100,001 and over 

Holding less than a marketable parcel

Substantial shareholders

Fully paid 
ordinary shares

245

637

293

598

99

1,872

257

Fully paid ordinary shares

Number of 
shares for 
voting power

Percentage

Performance rights

Ordinary shareholders

There are no voting rights attached to performance rights.

Alan Johnstone (i)

31,330,769

John Rostyn Homewood
John Rostyn Homewood

20,740,000

52,070,769

22.99%

15.22%

38.21%

Alan Johnstone has a relevant interest in Pental shares held by 
Alan Johnstone has a relevant interest in Pental shares held by 
western park holdings pty ltd, PMSF company pty ltd  and Aurisch investments pty ltd
motors burwood super fund> and Aurisch investments pty ltd

90

Twenty largest holders of quoted equity securities

Ordinary shareholders

JOHNOS HOLDINGS PTY LTD 

MR JOHN ROSTYN HOMEWOOD

MR GARRY GEORGE JOHNSON

BNP PARIBAS NOMS (NZ) LTD 

J P MORGAN NOMINEES AUSTRALIA PTY LIMITED

MR JAMES GORDON MOFFATT

P M S F COMPANY PTY LIMITED 

RATHVALE PTY LIMITED

DALLMOUNT PTY LTD 

1

2

3

4

5

6

7

8

9

10

DALLMOUNT CUSTODIANS PTY LTD

11

12

13

14

15

16

17

18

19

W A PEATT PTY LTD 

DALLMOUNT PTY LTD 

VANWARD INVESTMENTS LIMITED

SPORRAN LEAN PTY LTD 

BUDUVA PTY LTD

BARKING DOG PTY LTD 

BNP PARIBAS NOMS PTY LTD 

DIXSON TRUST PTY LIMITED

MRS JOY DOROTHY JOHNSTONE

20

TERRY CLANCY SUPERANNUATION PTY LTD 

PENTAL ANNUAL REPORT 2021

Fully paid ordinary shares

Number

Percentage

27,603,617

20,740,000

6,670,739

5,675,001

3,782,830

3,300,000

3,197,431

2,959,759

2,666,668

2,500,000

2,367,567

1,504,761

1,182,719

1,160,000

1,150,000

1,133,530

902,066

855,000

834,092

760,359

20.26%

15.22%

4.90%

4.17%

2.78%

2.42%

2.35%

2.17%

1.96%

1.83%

1.74%

1.10%

0.87%

0.85%

0.84%

0.83%

0.66%

0.63%

0.61%

0.56%

90,946,139

66.75%

91

PENTAL ANNUAL REPORT 2021
PENTAL ANNUAL REPORT 2021

92
92

PENTAL ANNUAL REPORT 2021
PENTAL ANNUAL REPORT 2021

93
93

Directors
Mark Hardgrave
Charlie McLeish
Kerrie Parker
Jeff Miciulis
Fred Harrison

Company Secretary
Oliver Carton

Registered Office
Level 6, 390 St Kilda Road
Melbourne VIC 3004
Telephone: +61 3 9251 2311

Manufacturing and
Distribution
18-22 Drummond Road
Shepparton VIC 3630
Telephone: +61 3 5820 5200

Shareholder enquiries:
Share Register
Boardroom Pty Limited
Grosvenor Place, Level 12,
225 George Street
Sydney NSW 2000
Telephone within Australia: 1300 737 760
Telephone outside Australia: +61 2 9290 9600
Facsimile: +61 2 9279 0664
www.boardroomlimited.com.au

Auditors
Grant Thornton
Collins Square,
Tower 5, 727 Collins St
Melbourne VIC 3008 Australia
Telephone: +61 3 8320 2222

Securities Exchange Listing
Pental Limited (PTL) shares are listed
on the Australian Securities Exchange (ASX)

Website
www.pental.com.au

ABN
29 091 035 353