AUSTRALIAN
MADE
ANNUAL REPORT
2022
PENTAL ANNUAL REPORT 2022
1
PENTAL ANNUAL REPORT 2022
CONTENTS
07 Chairman's Report
12 Directors' Report
33 Remuneration
Report
46
Corporate
Governance
Statement
63 Directors' Declaration
64
65
66
67
Consolidated
Statement of Profit or
Loss and Other
Comprehensive Income
Consolidated
Statement of
Financial Position
Consolidated
Statement of
Changes in Equity
Consolidated
Statement of Cash
Flows
58 Independent
Auditors' Report
68 Notes to the Financial
Statements
59 Auditor's
Independent Report
108 ASX Additional
Information
2
3
OUR VISION
To be a leading supplier of shelf stable products
to its chosen channels and markets, built around
a reputation of delivering quality, innovation, and
sustainability to the satisfaction of customer
needs whilst enhancing shareholder value.
"We are active in
developing new products
to grow market share and
building strong, ongoing
relationships with our
customers and suppliers.”
4
INNOVATION
Embracing new ideas,
creating new opportunities
We dare to be different
We challenge the status quo and
take calculated risks
We encourage and seek new ideas
and opportunities
We use consumer insights to
create new thinking and innovative
solutions
PENTAL ANNUAL REPORT 2022
CORE
VALUES
CUSTOMERS
Customers are at the
centre of what we do
We build recognisable, strong and
trusted brands
We develop lasting customer
relationships
We respond quickly and effectively
to our customers' needs
We take pride in delivering quality
products on time
We create value for our loyal
customers
5
PENTAL ANNUAL REPORT 2022
PEOPLE
We trust, develop, and care
for our people
We act with compassion, honesty, and
consistency
We empower, trust, and support each other
We listen attentively and communicate openly
We demonstrate positive “can-do” attitudes
every day
We work as one team – Team Pental
We provide opportunities for personal
growth & development
We recognise and celebrate our
successes
6
SAFETY
Safety comes first
We keep our people and visitors safe
We aim for Zero harm - no injuries or
incidents
We model and reinforce safe
behaviour - at work and home
We proactively identify hazards
We main clean and safe workplaces
and equipment
QUALITY
Focused on quality and
continuous improvement
We pride ourselves on quality
We continuously improve
everything we do
We take responsibility for achieving
our business objectives
We are agile, flexible, and respond
rapidly to change
We plan for the long-term and a
sustainable future
PENTAL ANNUAL REPORT 2022
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 26 June 2022 (FY22).
FY22 was a year of significant growth for our business, corner-stoned
by our transformational acquisition of Hampers With Bite. Our ability
to implement initiatives to improve both revenue and costs allowed us
to weather the amendments to our Duracell distribution agreement
and significant shifts overall in the macro-economic environment,
both nationally and internationally. Against the backdrop of tougher
economic conditions, it is very pleasing to be reporting our strong
FY22 results which demonstrate the resilience of our business and the
power of our brands in a challenging operating environment.
Our transformational acquisition has boosted the continuous growth
Pental achieved over the previous three years, by adding a fourth
successful year of profit growth. Our underlying profit after tax for FY22
increased by 32.2% from last year, and we also grew our statutory profit
for FY22 by 18.72% to $6.4 million from $5.4 million in FY21.
7
We grew our
underlying profit
after tax by 32.2%
to $7.4 million
Refer to table on page 22 for a reconciliation of
underlying profit to statutory profit.
PENTAL ANNUAL REPORT 2022
PENTAL ANNUAL REPORT 2022
After reporting a tough first half for the traditional
branded business impacted by significant inflationary
pressures on raw materials, the Group was successful
in executing multiple cost recovery projects in the
second half of FY22. Coupled with strong promotional
plans and a clear communication strategy, we ensured
our brands continued to enjoy a strong position in the
marketplace.
Over the course of the financial year, Pental’s owned
brands revenue grew by 5.2%, marking a strongly
improved growth trajectory. The growth was led by our
powerhouse cleaning brand White King which grew
11.1% compared to prior year. Pleasingly, White King
toilet gels maintained 2 rankings (number 2 and 4) in
the top 5 selling SKUs in the grocery market. For our
leading personal care brand, Country Life, revenue also
grew by 9.3% compared to previous financial year.
Revenue from the New Zealand operations (owned
brands) for FY22 was up 7.0% in New Zealand Dollars
(7.8% in Australian Dollars after conversion) compared
to the prior period despite repeated disruptions to the
supply chain, predominantly due to the COVID-19
driven disruptions at the port of Auckland. Little Lucifer
branded firelighters registered a significant growth of
70.4% in the firelighter category in New Zealand
market while both key household brands – Sunlight
and Janola – enjoyed a healthy year-on-year growth of
6.5% and 5.0% respectively.
Pental’s export market growth was impacted during
FY22 through disruptions caused by supply chain
restrictions. A tense political environment between
Australia and China has impacted trade, and
distributors in China generally remained cautious of
importing Australian manufactured goods. As a result,
our exports (excluding New Zealand) revenue fell $0.5
million to $1.3 million. We remain optimistic about the
export segment as international relations steadily
improve.
As expected, following changes to the Duracell
distributorship agreement effective May 2021,
contracted brands revenue decreased by 57.6% to
$30.81 million. As previously indicated, impact of lost
Duracell business was approximately $3 million on our
FY22 earnings before interest and tax (EBIT) result
compared to the prior year.
Working capital released from reduced Duracell
distributorship business enabled the Group to replace
this low margin business with no ownership rights, to
purchase a high profit margin business, which has
become an integral part of the group. We faced
challenges with increased raw material costs impacted
by various global events which significantly impacted
private label and contract manufacturing profitability.
The company absorbed an estimated $2 million in
increased input costs.
8
PENTAL ANNUAL REPORT 2022
PENTAL ANNUAL REPORT 2022
CHAIRMAN'S REPORT
(CONT)
HWB Acquisition and Capital Raise
In line with Pental’s growth strategy outlined in
previous annual reports, and announced to the
market on 20th August 2021, the Group entered an
agreement to acquire the Hampers with Bite business
on 20 August 2021 and completed the acquisition on 1
September 2021. The Group raised a total of $10.046
million (net of costs) through a placement and a share
purchase plan (SPP) to facilitate its acquisition of
Hampers with Bite.
Hampers With Bite Pty Ltd (HWB) is a Melbourne-
based online hamper and gifting specialist. Its range
of premium hampers and gifts are targeted at
affordable prices focusing on corporate clients and
gifts to family and friends. HWB provides customers
with the option of creating their own hamper or
simply purchasing one of HWB’s pre-designed
hampers online.
Prior to acquisition by the Group, HWB grew from an
approximately $10 million revenue with an EBIT of $1
million EBIT business in FY19 to an approximately $24
million revenue business in FY21 with an EBIT of
approximately $5 million. HWB continued its strong
growth trajectory into FY22, recording revenue of
$37.885 million for the financial year compared with
$23.811 million in FY21, an increase of 59.1%. Under
Pental’s ownership, from 1 September 2021 to 26 June
2022, the business delivered strong revenue of $31.649
million with an EBIT contribution of $6.509 million,
underpinned by a strong Christmas season across
both B2B and B2C channels.
9
Dividend
The Group has built a consistent history of strong dividend
returns as demonstrated by below chart.
Dividend (cents per share) paid over last 5 years
3
2
1
0
FY18
FY19
FY20*
FY21
FY22
*includes special dividend of 0.7 cents per share
The board has continued this trend and declared a
fully franked final dividend of 1.7 cents per share
payable to shareholders on 23 September 2022, with a
record date of 5 September 2022. This takes total
dividends for the year to 3.0 cents per share. This
represents a 15.38% increase on the prior year’s
dividend of 2.6 cents, with a payout ratio of 69% of
underlying net profit after tax excluding significant
items.
PENTAL ANNUAL REPORT 2022
Looking Forward
Pental is very excited about its future, as the Company is well positioned to reap rewards with its strong retail
brands like White King reinforced by its ability to leverage new markets and direct reach to consumers
through the HWB e-commerce channel.
Strengthening our manufacturing capabilities to maintain and improve our position as a leading low-cost
producer through process improvements, capital investment and product innovation our growth strategy also
includes pursuing new markets in Asia, new sales channels, and product categories.
We will continue to invest to grow our capabilities and we will continue to pursue any value-creating
acquisition or distributorship opportunities that may arise in expanding markets with strong growth potential.
The Board and management remain of the firm belief that strong brand management supported by
innovation, a continued focus on driving manufacturing costs down and tight cost controls provides the
foundations that will improve shareholder returns over the long term.
Leveraging its production strength and available capacity, Pental continues to explore and expand its offering
of contract manufactured products for leading retailers and distributors.
Pental continues to explore and investigate distribution opportunities in other offshore markets.
We will continue to focus on our strategic priorities:
1. Driving sales growth through our Number One Brand White King.
2. Developing new hamper and gifting products for the Hampers with Bite business.
3. Developing a full year calendar of events in the e-commerce sales channel.
4. Continue to explore additional acquisition opportunities.
5. Grow the new sales channels we developed in FY22.
6. Continuous operational improvements at both the Shepparton and Maidstone operations sites.
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. We again
thank our shareholders, suppliers and customers for their ongoing loyalty and support.
Mark Hardgrave
Chairman
10
PENTAL ANNUAL REPORT 2022
SALES
ACHIEVEMENTS
FY22 HIGHLIGHTS
Dollar Growth up
(in Australia) 22%
White King
11% Growth in
Net Sales compared
to previous year
Strong
Double-Digit Growth
in Commercial,
Online, Pharmacy &
Retail Discounters
channels
Little Lucifer in New
Zealand experienced
exceptional
70% growth
over previous year
White King is
the #1 Brand in
Bathroom Cleaners
Pental Brands
Net Sales growth
5.2% compared to
previous year
Launched 13 New
Household Cleaning
Products within multiple
grocery and pharmacy
chains
Extended our range of
White King Toilet Gels
in Woolworths
11
PENTAL ANNUAL REPORT 2022
DIRECTORS' REPORT
The directors of Pental Limited submit herewith the annual financial report of the company for the
year (52 weeks) ended 26 June 2022. 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).
Previously, Mark held a directorship in Wingara AG Ltd (ASX: WNR) from March 2018
to June 2020 and Forbidden Foods Limited (ASX: FFF) from August 2020 to July 2022.
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.
Appointed Director 1 May 2019
Appointed Chairman on 31 December 2019
Member of Audit & Risk Committee and Remuneration Committee
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
IRI MarketEdge, 26/06/22
12
PENTAL ANNUAL REPORT 2022
Ms Kerrie Parker
B.Bus, FCPA, GAICD Non-Executive Independent Director
Kerrie Parker is currently the Executive Vice President Resources at Deakin University and
during her career has worked in CFO roles with Golden Circle Limited, GM Finance Amcor
Fibre Packaging also CFO and Managing Director of 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, government and higher education, 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
Chairperson of Audit & Risk Committee and member of Remuneration Committee.
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 & Risk Committee
Mr Fred Harrison
Non-Executive Independent Director
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
13
PENTAL ANNUAL REPORT 2022
Director's 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.
Director's Shareholdings
Fully Paid Ordinary
Shares Number
Share Number
Options
Unvested Performance
Rights Number
Mark Hardgrave
Charlie McLeish
Kerrie Parker
Jeff Miciulis
Fred Harrison
363,158
84,595
77,000
1,000,000
447,368
-
-
-
-
-
-
1,588,000
-
-
-
Share Options Granted To Directors
and Senior Management
Principal Activities
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.
The Group consists of two fully owned subsidiaries
that conduct all trading operations for the Group.
The first subsidiary, Pental Products Pty Ltd, is an
Australia-based leading manufacturer, wholesaler and
distributor of personal care and home products. This
subsidiary offers its product range to consumers
across Australia, New Zealand and Asia through well-
known heritage brands including White King, Country
Life, Janola, Softly, Jiffy and more.
The Group acquired a second subsidiary, Hampers
with Bite Pty Ltd, during the reporting period. The
principal activities of the acquired subsidiary are to
market, assemble and distribute affordable premium
gift hampers across consumers and businesses
Australia wide.
Mr Oliver Carton
B Juris LL.B Company Secretary
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.
14
PENTAL ANNUAL REPORT 2022
Group Overview - Trusted Brands That Get The Job Done
Pental Limited has been a long-standing trusted
manufacturer and distributor of personal, household,
and commercial products across Australia, New
Zealand, and Asia. Pental products has 2 main business
units – Consumer products and Hampers with Bite.
During the 2022 financial year, the Group welcomed
the Hampers with Bite business which was acquired on
1 September 2021. Hampers With Bite Pty Ltd (HWB) is
a Melbourne-based online hamper and gifting
specialist. Its range of premium hampers and gifts are
targeted at affordable prices 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 operates from its main operations site at
Maidstone in the state of Victoria, Australia.
The Group is based in Australia and has 156 full-time
equivalent employees at reporting date. Consumer
products business unit manages a portfolio of leading
consumer brands, which are household names in
Australia and New Zealand - it is a branded market
leader and one of the largest local manufacturers of bar
soaps, liquid bleach, and firelighter cubes.
The consumer products business unit 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.
For more than 60 years we have worked hard to stay
true to our Australian heritage, investing in our
manufacturing plant in Shepparton, Victoria.
The production plant at Shepparton facilities comprise:
Household Cleaning Liquids plant;
Bar Soap plant;
Laundry and Dishwashing Liquids plant;
Firelighters plant.
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.
15
PENTAL ANNUAL REPORT 2022
Pental's Core Brands
Pental’s core brands are household names:
White King in Australia
Softly in Australia and New Zealand
Janola and Sunlight in New Zealand
Little Lucifer in Australia and New Zealand
Country Life and Velvet in Australia
Hampers With Bite
Jiffy in Australia
Household
Cleaning
Personal Care
Laundry
Fire Needs
Kitchen
Gifting &
E-commerce
Pental is expanding distribution throughout Asia, by developing products and pack sizes that are
suitable for these new markets. The Company currently exports to China, Vietnam, and Thailand. This
has been achieved mainly through creating partnerships with strategically aligned distributors. We are
also exploring various opportunities to maximise the recently acquired e-commerce platform of HWB
to expand our business.
16
PENTAL ANNUAL REPORT 2022
MARKET SHARE RECAP
White King’s Toilet Gel grew at double
(Dollars) and triple (Units) that of the
Segment
This has resulted in Market Share gains of
for FY22 +2.2% points*
White King’s Bathroom portfolio
enjoyed sustainable,
7% growth.
This has resulted in Market Share gains of
for FY22 +2.2% points*
#2
sku in
market
#4
sku in
market
#1
sku in
market
#6
sku in
market
IRI MarketEdge, 26/06/22
17
PENTAL ANNUAL REPORT 2022
DIRECTORS' REPORT
(CONT)
Review Of Operations
Net Sales Revenue
Underlying EBITDA
EBITDA Margin on Set Sales
Depreciation & Amortisation
Underlying EBIT
EBIT Margin on Set Sales
Finance Costs
Underlying Profit Before Tax
Income Tax Expense
Underlying Profit After Tax
Underlying Basic EPS (cents)
HWB Acquisition Related Costs
Reported Net Profit After Tax
Reported Basic EPS (cents)
Dividend (cents per share)
Working Capital
(ii)
Cash
Borrowings
Gearing
(iii)
(i) Unaudited non-IFRS financial table
(ii) Receivables plus inventory less trade and other payables
(iii) Net debt to equity
(i)
FY22
$'000
(i)
FY21
$'000
Change
$'000
%
117,432
124,940
(7,508)
(6.0%)
14,682
12.5%
(3,899)
10,783
9.2%
(189)
10,594
(3,180)
7,414
4.53
(1,047)
6,367
3.89
3.00
18,906
8,132
(3,825)
5%
11,998
9.6%
2,684
22.4%
2.9%
1.3%
(3,849)
(50)
8,149
6.5%
(121)
8,028
(2,421)
5,607
4.12
-
5,607
3.94
2.60
17,858
12,702
Nil
Nil
2,634
32.3%
2.7%
(68)
(56.2%)
2,566
(759)
1,807
0.41
32.0%
(31.4%)
32.2%
10.1%
(1,047)
(100.0%)
760
(0.05)
0.40
13.6%
(1.3%)
15.4%
1,048
5.9%
(4,570)
(36.0%)
(3,825)
(100.0%)
18
PENTAL ANNUAL REPORT 2022
Financial Performance
Total Group sales revenue was down by 6.0% compared
to prior period, which was in line with expectations as
announced to the market in the half year report. The
decrease was predominantly driven by decreases in the
Duracell distributorship following changes to the
agreement effective May 2021.
Owned Brands Segment
Owned Brands segment revenue was $54.973 million
which was up on prior year ($52.268 million) by 5.2%.
Pleasingly, the growth was driven by a strong
performance in both the Australia (up 5.9%) and New
Zealand (up 7.8%) markets offset marginally by decline
in exports to Asia and other territories.
In Australia, key drivers of growth were the White King
(up 11.3%) and Country Life (up 22.0%) brands. Pental
maintains a strong hold in market share across many
segments including White King in the liquid bleach
segment, Jiffy in the firelighters, and Softly in the wool
wash segments, all maintaining their number one
position. The Group was successful in securing
ranging of various innovative new products launched
during the financial year:
A new variant of toilet gels was launched in
Woolworths along with a new detergent bleach and
bleach spray under the White King brand.
The Group also grew its strong partnership with
Bunnings where it launched 5 new products in the
second half of the financial year under the White
King and Country Life brands.
The Group was also able to secure new product
ranging with Costco with its White King bleach and
mould and soap scum remover bulk packs
A new bleach-free multipurpose cleaner was
launched in Chemist Warehouse along with
Country Life hand wash.
Net sales revenue in New Zealand was up $0.959 million
compared to prior year (an increase of 7.8%) driven by
strong growth in Little Lucifer firelighters (up 70.4%),
Janola (up 5.0%) and Sunlight (up 6.5%) dishwash
ranges. New Zealand ports faced unprecedented
challenges posed by COVID-19 related disruptions
leading to significant shipping delays. Pental mitigated
these delays by increased its stock holding in New
Zealand on key lines to avoid such outcomes in the
short term. Pental’s share in the New Zealand market in
several key categories such as Toilet, Household
Cleaning, and Dish Wash remains strong.
Exports to Asia were down by $0.523 million or 29.0%
compared to prior year. China comprises a significant
portion of Asian territory sales for Pental. Political
relations between Australia and China have been tense
in the last 24 months with the introduction of tariffs on
various Australian exports. Whilst no 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 Australia, resulting in subdued sales through this
channel.
19
PENTAL ANNUAL REPORT 2022
Contracted Brands Segment
Hampers with Bite Segment
As expected, and as announced to the market in the
2021 annual report, contracted brands revenue fell
sharply by $41.862 million or 57.6% in FY22
predominantly due to amendments to Duracell
distributorship agreement effective May 2022. For the
remaining distribution channels, Duracell performed in
line with prior year despite the commercial channels
being impacted by multiple lockdowns and disruptions
caused by COVID-19. Duracell remains a key part of
Pental’s portfolio of product offerings.
Private label contract manufacturing business revenue
was $17.469 million, marginally down by 1.2% compared
to prior year. The contracted nature of these products
allowed limited ability to pass on significant and sharp
cost increases that the Group incurred during the
financial year. The Group estimates it absorbed
approximately $2 million in cost increases relating to
private label contracts that was not recovered during
the financial year. However, as these contracts phase
out (typically 1-year contracts), the Group is working
closely with its key clients to strategically price new
contracts based on its manufacturing capabilities,
hedging of raw materials (where possible), competition
and potential disruptions.
The Group entered an agreement to acquire the
Hampers with Bite (HWB) business on 20 August 2021
and completed the acquisition on 1 September 2021.
Under Pental’s ownership, from 1 September 2021 to 26
June 2022, HWB delivered strong revenue of $31.649
million with an EBIT contribution of $6.509 million,
underpinned by a strong Christmas season across both
business-to-business (B2B) and business-to-consumer
(B2C) channels.
On a full financial year basis, including the July and
August 2021 trading periods, Hampers with Bite
continued its strong revenue growth trajectory into
FY22 recording revenue of $37.885 million for the
financial year compared with $23.811 million during
FY211, a significant increase of 59.1%.
The Group was successful in commencing a range of
personal care products manufactured at its
Shepparton facilities under Vitale brand that were
included in new hamper offerings in 2022. With the
initial encouraging success of Vitale brand, the group
will continue to develop more products targeted at
hampers consumers. The Group continues to target
key events outside of the Christmas season in order to
pursue growth in other months of the year.
Underlying EBIT of $10.783 million was $2.634 million
(or 32.3%) higher compared to last year after adjusting
reported EBIT for $1.047 million in costs relating to the
acquisition of HWB.
20
PENTAL ANNUAL REPORT 2022
Financial Performance Cont.
FY21 EBIT of $8.149 million excludes non-cash
impairment charge of $0.348 million ($0.244 million net
of tax) on brand names. On a reported basis, EBIT grew
by 24.8% compared to prior year (FY22: $9.736 million vs
FY21: $7.801 million).
On an underlying basis, after adjusting reported FY22
profit before tax for $1.047 million in costs relating to the
acquisition of HWB, profit before tax was $10.594 million,
an increase of 32.0% compared to prior year. On a
statutory basis, Pental achieved net profit after tax
(NPAT) of $6.367 million, which was 18.7% higher
compared to reported NPAT for FY21.
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 Guide 230 “Disclosing non-
IFRS financial information”.
Please refer to the following reconciliation for
statutory profit comparison to prior period:
Underlying Profit After Tax
One Off/Significant Expenses After Tax)
(ii)
Reported Profit After Tax
Income Tax Expense
Finance And Borrowings Cost
Reported EBIT
(ii)
One Off/Significant Expenses Before Tax
Underlying EBIT
Depreciation And Amortisation
Underlying EBITDA
(i)
FY22
$'000
(i)
FY21
$'000
% Change
7,414
(1,047)
6,367
3,180
189
9,736
1,047
10,783
3,899
14,682
5,607
(244)
5,363
2,317
121
7,801
348
8,149
3,849
11,998
32.23%
18.7%
24.8%
32.3%
22.4%
(i) Unaudited non-IFRS financial table
(ii) Costs relating to acquisition of HWB have been deemed non-deductible for tax purposes
(iii) Refer to consolidated statement of profit or loss and other comprehensive income
21
PENTAL ANNUAL REPORT 2022
In FY22, the Group experienced significant price
increases in various input costs predominantly driven
by commoditised raw materials such as tallow (bar
soaps), vegetable noodles (bar soaps), paraffin
(firelighters), surfactants (bleach and laundry liquids)
and resin (impacting bottle prices). The Group was able
to pass on these cost increases to its customers
effective in the second half of the financial year.
Due to international events like low availability of
shipping capacity driven by China’s COVID -19
restrictions and invasion of Ukraine by Russia driving
fuel prices to historically high levels, both international
and local freight remained challenging. The Group was
able to negotiate through these operational challenges
with a robust structure and reliance on multiple service
partners. However, these negotiations came at a cost –
Pental’s outgoing freight, excluding the HWB segment,
increased by $0.591 million despite the reduced
Duracell distributorship. Excluding the impact of
reduced Duracell volume and new HWB business,
outbound freight costs increased by $1.204 million.
Pental continued its focus on labour efficiencies and
utilisation improvements to drive production costs
down. As a result, labour recovery was increased and
net labour costs (differential between labour costs and
labour recovered through production) was reduced
by 14.1%.
Shareholder metrics
The total dividend for the 2022 financial year is 3.0 cents
per ordinary share (2021: 2.6 cents), representing a
payout ratio of 69.0% of the full-year underlying NPAT1
(2021: 63.2% of the underlying NPAT) and consists of:
Interim fully franked dividend of 1.3 cents per
ordinary share, which was paid on 23 March 2022;
Proposed final fully franked dividend of 1.70 cents
per ordinary share, payable to shareholders on 23
September 2021, with a record date of 5 September
2022.
Cash generation and capital management
Net cash provided by operating activities was $9.924
million (2021: Net cash provided by operating activities
$16.045 million) representing a strong cash conversion
of EBITDA at 72.8% (2021: 137.7%, however 2021 net cash
provided by operating activities includes approximately
$8.07 million freed up in working capital due to changes
in the Duracell distribution agreement).
Net working capital (receivables, inventories less trade
and other payables) of $18.906 million was higher than
last year by $1.048 million, predominantly due to
addition of recently acquired Hampers with bite
business. The Group maintained a healthy level of
inventory as at reporting date despite ongoing
disruptions to supply chains.
Pental’s debtors’ position and cash collection continue
to be strong, with minimal overdues as at the reporting
date.
As outlined in its FY21 Annual Report, Pental has
invested approximately $1.6 million across FY21 and
FY22 towards enhancing its fire protection systems at
its Shepparton facilities. These enhancements include
installation of an automated sprinkler system at the
manufacturing facilities and upgrade of the hydrant
system to meet and exceed insurers’ standards.
This investment will not only ensure a high standard of
safety for Pental’s workforce but will also assist with
sourcing Insurance in a very challenging insurance
market. The Insurance market in Australia has
deteriorated significantly in the last 24 months,
following multiple global risk events including Victorian
bushfires, Californian bushfires and COVID-19, all of
which drove significant losses for insurers. Pental
experienced a steep increase in insurance premiums at
the December 2020 renewal, as the pool of insurers
shrunk due to more insurers seeking to de-risk their
portfolios away from high-fire risk businesses. The
Group is pleased to report a significant annual
reduction of approximately $0.5 million in its insurance
premiums effective as of 1 December 2021 upon renewal
The Company’s closing net cash position of $8.132
million with a debt of $3.825 million was effectively cash
positive. Please refer to Note 29 (a) to the financial
statements for details.
22
PENTAL ANNUAL REPORT 2022
DIRECTORS' REPORT
(CONT)
Financial Performance Cont.
Impact of COVID 19
The Group experienced a few disruptions to its operations
driven by COVID-19 mainly in the areas of international
shipping and general increase in freight costs. The Group
however navigated through these disruptions with ample
alternatives.
The Directors believe COVID-19 will not have a material
impact on the Group’s ability to continue as an ongoing
concern. The Group is effectively debt free (or in a net
positive cash position) as at the reporting date with a
healthy cash balance of $8.1 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, as
demonstrated thus far, 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.
23
PENTAL ANNUAL REPORT 2022
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
Pental prides itself on investing in product
innovation, supporting its brands with 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.
A key part of our product offering is to 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 been successful in growing its owned
branded portfolio revenue by 5.2% over the course of
2022 financial year. The growth was pleasingly driven by
expansion of White King and Country Life brands.
White King’s Bathroom cleaning portfolio delivered
strong dollar (+7.0%) and unit (+ 4.8%) growth in FY22
resulting is the Brand being the top brand in the
Segment. Country Life Bar Soap continues to outpace
the Segment experiencing 19% dollar and 5.2% unit
growth.
Pental enjoys a niche rank in the categories
it participates due to its agility to develop new products
and speed to market. Pental constantly reviews the sales
performance of each product ensuring we are supplying
our consumers high quality and value-for-spend
products. We now manufacture 99% of our consumer
product range in Australia and New Zealand. For the
gifting and hamper business, we carefully select and
source most high-quality products locally.
Pental continues to assess opportunities in the Australian
market in order to find new avenues to reach consumers.
As such, we started supplying a range of five products
through a major hardware channel. The early
performance of our products through this channel are
very encouraging. Pental is developing more products for
this channel in order to maximise its offering of efficient,
affordable and well recognised branded products to
consumers. We also launched a range of new products in
existing channels including a bleach free multipurpose
cleaner in pharmacy channel, a new variant of toilet gels
in grocery channel and a new softly liquid for delicates in
major grocery channels.
The acquisition of HWB provides Pental with a strong
avenue to reach consumers. We were successful in
commencing a range of personal care products
manufactured at its Shepparton facilities under Vitale
brand that were included in new hamper offerings in
2022. Encouraged by the initial success of Vitale brand,
we will continue to develop more products targeted at
hampers consumers. We continue to target key events
outside of the Christmas season in order to pursue
growth in other months of the year.
24
PENTAL ANNUAL REPORT 2022
3. Expand export markets
The combination of Pental’s strong presence
in New Zealand market and close geographical proximity
means we can reap rewards from fast product launches
under our strong brands compared to international
competitors.
We continue our strong partnership with our Auckland-
based sales and distribution agent. NZ revenue grew by
7.8% during the reported period. This growth was
achieved through both product innovation and increased
field support at store level. Both our power brands Janola
and Sunlight performed strongly in the New Zealand
market and enjoy a significant share of their respective
categories. Revenue from firelighters under Little Lucifer
brands was up 70.4% in the financial year compared to the
previous financial year.
Asia remains a key part of our growth ambitions despite
the disappointing sales performance in the last 2 financial
years disrupted by COVID-19 related issues and a tense
political environment with China. Pental is making
progress to form strong alliances with distributors outside
of China, mainly in Thailand, South Korea, and Indonesia.
4. New Projects and acquisitions
5. Continuous manufacturing improvement
As communicated on a number of occasions
previously, Pental is targeting growth through
strategically suitable acquisitions to complement its
organic growth.
As such, Pental acquired Hampers with Bite business on
1 September 2021. Hampers With Bite Pty Ltd (HWB) is a
Melbourne-based online hamper and gifting specialist.
Its range of premium hampers and gifts are targeted at
affordable prices focusing on corporate clients and gifts
to family and friends. HWB provides customers with the
option of creating their own hamper or simply
purchasing one of HWB’s pre-designed hampers online.
Prior to its acquisition by the Group, HWB grew from an
approximately $10 million revenue with an EBIT of $1
million EBIT business in FY19 to an approximately $24
million revenue business in FY21 with an EBIT of
approximately $5 million.
HWB continued its strong growth trajectory into FY22.
Under Pental’s ownership, from 1 September 2021 to 26
June 2022, HWB business delivered strong revenue of
$31.649 million with an EBIT contribution of $6.509
million, underpinned by a strong Christmas season
across both B2B and B2C channels.
Pental continues to search for additional strategically
suitable acquisitions that complement its strength and
consumer base.
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 continue to focus 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 last year has enabled the production
and development of products that are more earth-
friendly and sustainable for the market. This investment
has also enabled Pental to participate in tendering of
contract manufacturing opportunities that were
previously not possible.
Pental has made a significant investment over the last
two financial years in upgrading the infrastructure at its
Shepparton plant, mainly through the upgrade of its fire
protection systems and traffic management
improvement initiatives with the safety of our team being
our primary focus.
25
PENTAL ANNUAL REPORT 2022
MARKET SHARE WINS
#1
SKU in
market
#6
SKU in
market
Jiffy outpaced the category average
growth rate in FY22
resulting in Market Share gains of +1.1%
points vs prior year*
Country Life achieved outstanding dollar
(+19%) and unit (+5.2%) growth resulting
in a +0.5 market share percentage point
gain for the full year*.
26
PENTAL ANNUAL REPORT 2022
DIRECTORS' REPORT
(CONT)
Operational Risks
Product sourcing:
Supply chain:
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.
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.
IRI MarketEdge, 26/06/22
27
PENTAL ANNUAL REPORT 2022
Operational Risks Cont.
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.
New entrants into Pental’s market segment have the
potential to cause market disruption across Pental’s and
competitors’ brands as they bid to secure shelf space.
This disruption has the potential to erode revenues and
margins. 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, coupled
with need to recover rising input costs through prices
rises which due to long lead times (typically between 13
weeks and 26 weeks) can lead to shrinkage in margins.
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:
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.
Competition and demand:
Workplace Health and safety:
The majority of Pental’s branded products are sold in
supermarkets in Australia and New Zealand. In both
countries competition between retailchains 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.
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.
28
PENTAL ANNUAL REPORT 2022
DIRECTORS' REPORT
(CONT)
Operational Risks Cont.
Raw material price fluctuation:
Cyber security:
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.
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 its 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 Developements
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.
Subsequent Events
There has not been any 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.
29
Dividends
In respect of the year (52 weeks) ended 26 June 2022
an interim fully franked dividend of 1.3 cent per
ordinary share was paid on 23 March 2022. The
directors have declared the payment of a final fully
franked dividend of 1.7 cents per ordinary share,
payable to shareholders on 23 September 2022, with a
record date of 5 September 2022. The total dividend for
the FY22 financial year of 3.0 cents per share
represents a payout ratio of 69.0% of net profit after tax
(excluding HWB acquisition related costs).
In the prior year ended 27 June 2021, the total dividend
paid was 2.6 cents per ordinary share, representing a
payout ratio of 63.2% of net profit after tax (i.e. before
significant non cash items).
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.
Annual Reporting Calendar
REPORTING REQUIREMENT
Lodgement of Appendix 4E - FY22
FY22 Annual Financial Report
Deadline for nomination as Director
Annual Report and Notice of Annual General Meeting
Annual General Meeting
PENTAL ANNUAL REPORT 2022
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 exercisable
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. These
performance rights remain unvested as at the date of
this 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.
DATE
18 August 2022
18 August 2022
30 September 2022
18 October 2022
17 November 2022
30
PENTAL ANNUAL REPORT 2022
DIRECTORS' REPORT
(CONT)
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, 13 Board, 4 Audit Committee and 2 Remuneration Committee
meetings were held.
Board of Directors
Audit and Risk Committee
Remuneration Commitee
Eligible to
Attend
Attended
$'000
Eligible to
Attend
Attended
Eligible to
Attend
Attended
13
13
13
13
13
13
13
13
13
13
4
4
4
-
-
3
4
4
-
-
2
2
2
2
-
2
2
2
2
-
Directors
Mark Hardgrave
Kerrie Parker
Jeff Miciulis
Fred Harrison
Charlie McLeish
Non-audit services
None of the services undermine the general
principles relating to auditor independence as set
out in Code of Conduct APES 110 Code of Ethics for
Professional Accountants issued by the 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, acting as advocate for the company or
jointly sharing economic risks and rewards.
Auditor’s independence declaration
The auditor’s independence declaration is included on
page 58 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 dollars, unless otherwise indicated.
Details of amounts paid or payable to the auditor for
non-audit services provided during the year by the
auditor are outlined in Note 32 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 in Note 32 to the financial statements do
not compromise the 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 ensure that they do not impact the
integrity and objectivity of the auditor, and
31
PENTAL ANNUAL REPORT 2022
SUSTAINABILITY
Our goal is to create a more sustainable
packaging that still protects our amazing
hampers but also protects the environment.
Comprehensive trials of new paper packaging in collaboration with Ranpak (the
first global producer of 100% sustainable, paper-based packaging) have been
completed in June & July 2022.
View to roll out new packaging from early 2023 with the goal of reducing the
usage of packaging landfill waste by a minimum of 90%. Plastic Version New
Eco-Friendly Material Flat inner bubble Square packaging bubble Flat filling
Plastic Version
Flat Inner Bubble
Square Packaging Bubble
New Eco-Friendly Verison
Flat Filling
Flat Filling
32
PENTAL ANNUAL REPORT 2022
REMUNERATION REPORT -
AUDITED
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
Neil Godara
Non-executive Independent Chairman
Managing Director and Chief Executive Officer
Non-executive Independent Director
Non-executive Independent Director
Non-executive Independent Director
Chief Financial Officer
There have been no changes in key management personnel since the end of the reporting period.
33
PENTAL ANNUAL REPORT 2022
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 on 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
The remuneration policy, setting the terms and conditions for the Managing Director and other senior executives
(Executives), was 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 various elements of the executive remuneration structure serve various purposes as listed below:
Element
Purpose
$'000
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
EVIP - equity 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.
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.
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.
34
PENTAL ANNUAL REPORT 2022
REMUNERATION REPORT - AUDITED
(CONT)
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
$280,000
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.
35
PENTAL ANNUAL REPORT 2022
Relationship between the remuneration policy and company performance
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.
Fees for non-executive directors are not linked to the performance of the Group.
The following tables set out summary information about the Group’s earnings and movements in shareholder
wealth for the five years to June 2022. 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.
26
June
2022
1
27
June
1
2021
28
June
2020
30
June
1
2019
1
July
2018
1
Sales revenue
117,432
124,940
126,460
100,446
75,667
Net profit/(loss) before tax
Net profit/(loss) after tax
Underlying net profit after tax
9,547
6,367
7,414
7,680
5,363
5,607
7,221
5,019
5,019
2,756
(26,824)
1,921
3,451
(27,839)
2,602
1.
Underlying net profit after tax has been adjusted to exclude costs relating to the HWB acquisition for FY22: $1,047 thousand,
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 (FY21: $104 thousand, FY19: $655 thousand, FY18: $126
thousand).
26
June
2022
27
June
2021
28
June
2020
30
June
2019
1
July
2018
Share price at start of year
$0.415
$0.34
$0.288
$0.280
$0.595
Share price at end of year
$0.415
$0.415
$0.34
$0.288
$0.280
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
1.30
1.00
0.70
0.70
0.60
-
-
0.70
-
-
1.70
1.60
3.89
3.94
1.50
3.68
3.64
1.30
0.90
1.41
(20.43)
1.41
(20.43)
Diluted earnings/(loss) cents
per share
3.80
3.85
1.
2.
Franked to 100% at 30% corporate income tax rate.
Declared after the balance date and not reflected in the financial statements of that year.
36
PENTAL ANNUAL REPORT 2022
DRIVING
OUT WASTE
Increasing
Measurements
to Improve
Efficiencies
Working with
Industry Experts
Reducing
Production
Waste
Staff Education
and Training
Programs
Increased
Manufacturing
Performance
Reporting
Questioning and
Benchmarking
All Costs
Ongoing Focus
on Continuous
Improvement
Projects
37
PENTAL ANNUAL REPORT 2022
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
2022
Salary
(i)
& fees
$
Bonus
$
Non-
Monetary
$
(ii)
Long
service
(iii)
leave
$
Superannuation
$
Rights
$
Total
$
Non Executive Directors
Mark Hardgrave
109,091
Jeff Miciulis
Fred Harrison
Kerrie Parker
72,727
76,364
78,182
Total Directors
336,364
Executives
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
10,909
7,273
3,636
1,818
23,636
-
-
-
-
-
120,000
80,000
80,000
80,000
360,000
Charlie McLeish
531,822
70,000
7,231
Neil Godara
266,242
28,000
6,407
8,278
8,327
27,500
73,553
718,384
23,249
22,226
354,451
Total Executives
798,064
98,000
13,638
16,605
50,749
95,779
1,072,835
Total Remuneration
1,134,428
98,000
13,638
16,605
74,385
95,779
1,432,835
(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.
38
PENTAL ANNUAL REPORT 2022
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
Long-term
employee
benefits
Post-
employment
benefits
Share–based
payments
2022
Salary
(i)
& fees
$
Bonus
$
Non-
Monetary
$
(ii)
Long
service
(iii)
leave
$
Superannuation
$
Rights
$
Total
$
Non Executive Directors
Mark Hardgrave
109,589
Jeff Miciulis
Fred Harrison
Kerrie Parker
(iv)
John Etherington
(v)
73,059
73,059
78,182
78,182
Total Directors
336,364
Executives
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
10,411
6,941
6,941
2,892
5,205
32,390
-
-
-
-
-
-
120,000
80,000
80,000
33,333
60,000
373,333
Charlie McLeish
568,747
192,500
6,600
Neil Godara
235,336
50,000
3,436
16,382
3,802
24,996
60,937
870,162
21,690
17,381
331,645
Total Executives
804,083
242,500
10,036
20,184
46,686
78,318
1,201,807
Total Remuneration
1,145,026
242,500
10,036
20,184
79,076
78,318
1,575,140
(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 on 1 February 2021.
(v) John Etherington resigned as non-executive director on 31 March 2021.
Transactions with key management personnel
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
$129,799.66 inclusive of GST (2021: $266,239.93 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 $18,022.90 (2021:
$106,288.84) in relation to above mentioned
promotional activities and supplier trading terms.
39
PENTAL ANNUAL REPORT 2022
REMUNERATION REPORT - AUDITED
(CONT)
Executive Variable Incentive Plan (EVIP)
The vesting of the Rights is conditional on:
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%
In the event the Group fails to meet its annual
financial performance criteria, the Board retains the
discretion to award up to 50 percent of EVIP
entitlements to recognise and reward executives for
extraordinary efforts and achievements during the
financial year.
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.
Variable Incentive – cash
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 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 are forfeited
at the end of the same financial year.
40
PENTAL ANNUAL REPORT 2022
REMUNERATION REPORT - AUDITED
(CONT)
EVIP - FY22 Performance
The following table contains details of EVIP entitlements achieved by the executive team during the year:
2022
Executives
Charlie McLeish
Neil Godara
% of EVIP
achieved
EVIP – cash
component
$
(iii)
EVIP – Equity
component at
face value
$
(i)
VWAP used to
calculate
number
of Rights
$
Number of
Rights
issued
(ii), (iii)
50%
50%
70,000
28,000
98,000
110,000
42,000
152,000
0.4120
267,000
0.4120
102,000
369,000
(i) Volume Weighted Average Price (VWAP) based on closing share price of last 10 business days of financial year 2021 and volume
traded on each day in that period. Source – Commonwealth Securities Limited.
(ii) Number of Rights have been issued after rounding to nearest thousand.
(iii) The executives have been issued partial entitlements for 2022 financial year due to not meeting financial performance
conditions.
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
(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
(i)
Charlie McLeish
18/11/2021
534,000
$0.4150
Neil Godara
1/7/2021
204,000
$0.4000
Nil
Nil
40%
1.38%
5%
$0.189
$100,926
40%
0.72%
5%
$0.190
$38,760
(i) 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 2021 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:
41
PENTAL ANNUAL REPORT 2022
The following tables contains details of EVIP entitlements achieved by the executive team during the previous financial year:
2022
% of EVIP
achieved
EVIP – cash
component
$
EVIP – Equity
component at
face value
$
(i)
VWAP used to
calculate
number
of Rights
$
Number of
Rights
issued
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 issued after rounding 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 granted during previous financial year
Grant
Date
No. of
Rights
granted
Share
price at
grant
(i)
date
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
(i)
Charlie McLeish
19/11/2020
636,000
$0.4100
Neil Godara
1/7/2020
217,000
$0.3458
Nil
Nil
51%
0.30%
7%
$0.212
$134,832
51%
0.40%
7%
$0.157
$34,069
(i) 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 2021 and volume
traded on each day in that period. Source – Commonwealth Securities Limited.
(iii)
42
PENTAL ANNUAL REPORT 2022
SHORT TO MEDIUM
TERM OBJECTIVES
Continuous
IMPROVEMENT
PROJECTS
Focusing on
EMPLOYEE
RETENTION
Ongoing
PACKAGING
REVIEWS
White King
MASTER BRAND
STRATEGY
INCREASED
AUTOMATION
with packing of
Hampers
Pental Shepparton
producing products
for the HAMPER
BUSINESS
GROWTH
through both range
diversification and
range rationalisation
R&D team
to focus on new
SUSTAINABLE
PRODUCTS AND
PACKAGING
Always
progressing with
NEW
TECHNOLOGY
43
PENTAL ANNUAL REPORT 2022
REMUNERATION REPORT - AUDITED
(CONT)
Share-Based Payments (Right 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 from the end of the financial year)
All Rights issued are convertible to ordinary shares at no consideration, subject to achieving performance or vesting
conditions.
The following table discloses changes in the performance rights holdings of management personnel:
Grant
Date
Vesting
Date
Balance at
27/6/2021
No.
Rights
granted
No.
Rights
vested
No.
Rights
forfeited
No.
Rights
lapsed
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
636,000
Neil Godara
1/7/2020
1/7/2024
217,000
-
-
-
-
Charlie McLeish
18/11/2021
1/7/2025
Neil Godara
1/7/2021
1/7/2025
-
-
534,000
204,000
-
-
-
-
-
-
-
-
-
-
267,000
102,000
Balance
at
26/6/2022
No.
685,000
223,000
636,000
217,000
267,000
102,000
-
-
-
-
-
-
44
PENTAL ANNUAL REPORT 2022
Key Management Personnel Equity Holdings
Fully paid ordinary shares of Pental Limited held by key management personnel including a close member of
family or entity that is controlled or significantly influenced are as per below:
Balance at
26/6/2020
Net change
other (i)
Balance
at
27/6/2021
Net
change
other (i)
Balance
at
26/6/2022
(iv)
(ii), (iii)
Non Executive
Directors
Mark Hardgrave
Fred Harrison
Kerrie Parker
100,000
250,000
-
Jeff Miciulis
800,000
-
-
-
-
100,000
250,000
-
263,158
197,368
77,000
363,158
447,368
77,000
800,000
200,000
1,000,000
John Etherington
(ii)
160,000
(160,000)
Executives
Charlie McLeish
(iii)
14,500
(14,500)
Neil Godara
(iii)
-
-
-
-
-
-
-
84,595
84,595
-
-
(i) Net change other includes shares traded during the financial year.
(ii) Mr Etherington retired as director during the previous financial year.
(iii) Both Mr Leish and Mr Godara have been issued performance rights under the Executive Variable Incentive Plan (EVIP)
(iv) There has been no change in shareholding from the end of the financial year to the date of this report.
Key Management Personnel Share Option Holdings
Other than the performance rights holding 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, 18 August 2022
45
PENTAL ANNUAL REPORT 2022
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 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
meetings its corporate governance obligations.
46
PENTAL ANNUAL REPORT 2022
Best Practice Recommendation
Comment
1.
1.1
Lay solid foundations for management
and oversight
A listed entity should disclose:
(a) the respective roles and responsibilities of
its board and management: and
(b) those matters expressly reserved to the
board and those delegated to management
1.2
A listed entity should disclose:
(a) undertake appropriate checks before
appointing a person, or putting forward to
security holders a candidate for election, as a
director; and
(b) 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.
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
strategic directions, 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, code 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 selecting 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.
47
PENTAL ANNUAL REPORT 2022
Best Practice Recommendation
Comment
Lay solid foundations for management
and oversight
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.
1.
1.3
1.4
The company secretary of a listed entity
should be accountable directly to the board,
through the proper functioning of the board.
1.5
A listed entity should:
(a) have a diversity policy that includes
requirements of 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 the
entity's progress in achieving them;
(b) disclose that policy or a summary of it: and
(c) 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 the Act.
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.
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
provide 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 26 June 2022, there were 55 (27 June
2022, 29) women employed representing
35.26% (27 June 2021, 22.66%) of total
employees. There were no female senior
executives as at the reporting date (27 June
2021: None).
There was one female on the Board of
Directors (27 June 2021, one).
The Company's Corporate Governance Section
on its website includes the Company's 2022
Workplace Gender Equality public report and
the corresponding compliance notice issued
to the company on the 22nd July 2020.
48
PENTAL ANNUAL REPORT 2022
Best Practice Recommendation
Comment
1.
Lay solid foundations for management
and oversight
1.6
A listed entity should:
(a) have and disclose the process of
periodically evaluating the performance of the
board, its committees and individual directors;
and
(b) disclose, in relation to each reporting
period, whether a performance evaluation was
undertaken in the reporting period in
accordance with that process.
1.7
A listed entity should:
(a) have and disclose process of periodically
evaluating the performance of its senior
executives; and
(b) 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 formal policy
for the periodic evaluation of its 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 carried out an internal process of
evaluation during the current period.
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.
49
PENTAL ANNUAL REPORT 2022
Best Practice Recommendation
Comment
2.
2.1
Structure the board to add value
The board of a listed entity should:
(a) have a nomination committee which:
1.
2.
3.
4.
5.
has at least three members, a majority of
whom are independent directors; and
is chaired by an independent director, and
disclose
the charter of the committee;
the members of the committee; and
as 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 disclosed 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.
2.3
A listed entity should disclose:
(a) the names of the directors considered by
the board to be independent directors;
(b) 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.
The Board has not established a Nominations
Committee. The Board as a whole carries out
the function 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 and necessary to fulfil its obligations.
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. The Board considers that it
has directors with appropriate skills,
experience and expertise for a business such
as Pental's.
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 judgement. The following
Directors are considered to be independent;
Mr Mark Hardgrave, Ms Kerrie Parker, Mr Jeff
Miciulis and Mr Fred Harrison.
Mr Charlie McLeish is Managing Director and
not considered independent.
Mr Harrison is considered to be independent
despite the fact that his employer Richies
Stores Pty Ltd invoiced the Group a total of
50
PENTAL ANNUAL REPORT 2022
Best Practice Recommendation
Comment
2.
Structure the board to add value
$129.799.66 (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 above
mentioned promotions, rebates and trading
terms are not material to Mr Harrison as an
employee of Richies 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
2.5
2.6
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.
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.
51
PENTAL ANNUAL REPORT 2022
Best Practice Recommendation
Comment
3.
3.1
Instil a culture of acting lawfully, ethically
and responsibly
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 whistleblower 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 report
to the board in a timely manner.
52
PENTAL ANNUAL REPORT 2022
Best Practice Recommendation
Comment
4.
Safeguard integrity in financial reporting
4.1
The board of a listed entity should:
(a) have an audit committee which:
1.
2.
3.
4.
5.
has at least three members, all of whom
are executive directors and a majority of
whom are independent directors; and
is chaired by an independent director, who
is not the chair of the board, and disclose
the charter of the committee;
the relevant qualifications and experience
of the members of the committee; and
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
(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.
4.2
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 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 that 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.
53
PENTAL ANNUAL REPORT 2022
5.
5.1
5.2
5.3
Best Practice Recommendation
Comment
Make timely and balanced disclosure
A listed entity should:
(a) have written policy for complying with its
continuous disclosure obligations under the
Listing Rules; and
(b) disclose that policy or a summary of it
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.
A listed entity should ensure that its board
receives copies of all material market
announcements promptly after they have
been made.
The Directors are notified of all material
announcements promptly.
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.
The Company is compliant with this
recommendation.
54
PENTAL ANNUAL REPORT 2022
6.
6.1
6.2
6.3
6.4
6.5
Best Practice Recommendation
Comment
Respect the rights of shareholders
A listed entity should provide information
about itself and its governance to investors via
its website.
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.
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 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.
The Company is compliant with this
recommendation.
A listed entity should give security holders the
option to receive communication from, and
send communications to, the entity and its
security registry electronically.
The Company gives security holders the
option to receive communications from, and
send communications to, the entity and its
security registry electronically.
7.
Recognise and manage risk
7.1
The board of a listed entity should:
(a) have a committee or committees to
oversee risk, each of which:
1.
2.
3.
4.
has at least three members, a majority of
whom are independent directors; and
is chaired by an independent director, and
disclose:
the charter of the committee;
the members of the committee;
The Audit and Risk Committee referred to in
section 4 also oversees risk as part of its
Charter.
55
PENTAL ANNUAL REPORT 2022
Best Practice Recommendation
Comment
7.
Recognise and manage risk
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) of 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) review the entity's risk management
framework at least annually to satisfy itself
that it continues to be sound; and
(b) disclose, in relation to each reporting
period, whether such a review has taken place.
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.
7.3
A listed entity should disclose:
(a) if it has an internal audit function, how the
function is structured and what role it
performs; or
(b) 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 Company does not have an internal audit
function. The Board considers this
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 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.
56
PENTAL ANNUAL REPORT 2022
Best Practice Recommendation
Comment
8.
Remunerate fairly and responsibly
8.1
The board of a listed entity should:
(a) have a remuneration committee which:
1.
2.
3.
4.
5.
has at least three members, a majority of
whom are independent directors; and
is chaired by an independent director, and
disclose:
the charter of the committee
the members of the committee; and
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.
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 this scheme; and
(b) disclose that policy or a summary of it
The Board has established a Remuneration
Committee. The Remuneration Committee
operates under a Charter, which is available on
the Company's website.
Membership of the Committee, and details of
meetings held during the period, are
contained in the Directors' Report section. The
Remuneration Committee consisted of four
members, all of whom are independent
directors.
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.
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 risks of participation
scheme.
57
58
59
w
60
61
62
PENTAL ANNUAL REPORT 2022
DIRECTORS'
DECLARATION
The Directors declare that:
(a) 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;
(b) in the Directors' opinion, the attached financial statements and notes there to 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;
(c) in the Director's opinion the financial statement and notes there to 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 13 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, 18 August 2022
63
PENTAL ANNUAL REPORT 2022
CONSOLIDATED STATEMENT OF PROFIT OR
LOSS AND OTHER COMPREHENSIVE INCOME
For the year (52 weeks) ended 26 June 2022
Note
2022
$'000
2021
$'000
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 ultilities
Employee benefits expense
Freight out and distribution expense
Marketing expenses
Occupancy expenses
Selling expenses
Repairs and maintenance expense
Other expenses
Acquisition related expense
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:
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 68 to 107.
4
7
8
17
7
5
6
9
9
117,432
124,940
151
19
(853)
(59,120)
(18,728)
(12,074)
(5,273)
(1,539)
(1,092)
(1,010)
(3,231)
(1,047)
-
13,635
(3,899)
9,736
(189)
9,547
(3,180)
6,367
6,367
(44)
13
(31)
6,336
6,367
6,336
3.89
3.80
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
64
PENTAL ANNUAL REPORT 2022
CONSOLIDATED STATEMENT OF PROFIT OF
FINANCIAL POSITION
As at 26 June 2022
Note
26 June
2022
$'000
27 June
2021
$'000
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other financial assets
Other assets
Total currents assets
Non current assets
Right-of-use assets
Property, plant and equipment
Goodwill
Intangible assets
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Borrowings
Other financial liabilities
Current tax payables
Lease liabilities
Contingent consideration
Provisions
Total non-current liabilities
Non-current liabilities
Borrowings
Deferred tax liabilities
Lease liabilities
Provisions
Total currents assets
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Notes to the financial statements are included on pages 68 to 107.
65
29 (a)
10
11
12
18
15
14
16
17
19
20
6
15
8
22
6
15
22
23
8,132
17,395
17,817
23
646
44,013
1,013
18,888
18,903
22,463
61,267
12,702
14,096
16,053
66
267
43,184
928
19,301
-
12,181
32,410
105,280
75,594
16,306
1,700
89
342
667
3,537
2,977
25,618
2,125
5,340
305
80
7,850
33,468
71,812
103,830
390
(32,408)
71,812
12,291
-
81
449
532
-
2,613
15,966
-
2,363
446
72
2,881
18,847
56,747
90,658
248
(34,159)
56,747
PENTAL ANNUAL REPORT 2022
CONSOLIDATED STATEMENT OF CHANGES
IN EQUITY
For the year (52 weeks) ended 26 June 2022
Note
Issued
captial
$'000
Hedging
reserve
$'000
Equity
settled
employee
benefits
reserve
$'000
Retaining
earnings
$'000
Total
$'000
Balance at 28 June 2020
90,658
238
65
(35,162)
55,799
Profit for the year
Loss on cash flow hedges
Deferred tax arising on hedges
6
Total comprehensive income for the year
Transactions with shareholders
Dividend Payment
24(a)
Recognition of share-based payments
Total transactions with shareholders
-
-
-
-
-
-
-
-
(238)
82
(191)
-
-
-
Balance at 27 June 2021
23
90,658
47
Balance at 27 June 2021
90,658
Profit for the year
Loss on cash flow hedges
Deferred tax arising on hedges
6
Total comprehensive income for the year
Transactions with shareholders
Shared issued as consideration
Placement of shares
Share issue cost
Income tax benefit on share issue costs
Dividend Payment
24(a)
Recognition of share-based payments
Total transactions with shareholders
-
-
-
-
3,000
10,466
(420)
126
-
-
13,172
47
-
(44)
13
(31)
-
-
-
-
-
-
-
-
-
-
-
-
136
136
201
5,363
-
-
5,363
5,363
(273)
82
5,172
(4,360)
(4,360)
-
136
(4,360)
(4,224)
(34,159)
56,747
201
(34,159)
56,747
-
-
-
-
-
-
-
-
-
6,367
6,367
-
-
(44)
13
6,367
6,336
-
-
-
-
3,000
10,466
(420)
126
(4,616)
(4,616)
173
173
-
173
(4,616)
8,729
Balance at 26 June 2022
23
103,830
16
374
(32,408)
71,812
Notes to the financial statements are included on pages 68 to 107.
66
PENTAL ANNUAL REPORT 2022
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year (52 weeks) ended 26 June 2022
Note
26 June
2022
$'000
27 June
2021
$'000
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest on lease liabilities
15
Interest and other costs of finance paid
Income tax paid
Income tax refunds recieved
Net cash provided by/ (used in) operation activities
29(b)
Cash flows from investing activities
Acquisition Costs - Expensed
Payments for plant and equipment
Payment for acquisitions (net of cash acquired)
Payments for intangible assets
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of share
Payment for share issue costs
Proceeds from Borrowings
Repayment of borrowings
Repayment of lease liabilities
Utilisation/(repayment) of supplier payment facility
Dividends paid
Net cash used in financing activities
14
8
17
23
23
15
24
Net increase/(decrease) 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
29(a)
Notes to the financial statements are included on pages 68 to 107.
67
128,419
146,573
(113,943)
(126,787)
(34)
(155)
(44)
(77)
(4,497)
(3,620)
135
9,925
(1,047)
(2,085)
(19,607)
(157)
-
-
16,045
%
-
-
(1,837)
-
-
(118)
(22,896)
(1,955)
10,466
(420)
8,500
(4,675)
(862)
8
(4,616)
8,401
(4,570)
12,702
8,132
%
-
-
-
-
-
(565)
(131)
(4,360)
(5,056)
9,034
3,668
12,702
PENTAL ANNUAL REPORT 2022
NOTES TO THE FINANCIAL
STATEMENTS
1.
General Information
Pental Limited, incorporated and
domiciled in Australia, is a publicly
listed company on the Australia Stock
Exchange, limited by shares.
Company Secretary
Mr Oliver Carton
Principal Registered Office
Share Registry
Pental Limited
Level 6, 390 St.Kilda Road
Melbourne Victoria 3004
Telephone: (03) 9251 2311
Facsimile: (03) 9645 3001
www.pental.com.au
Boardroom Pty Limited
Grosvenor Place, Level 12,
225 George Street, Sydney NSW 200
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
-
-
Critical accounting judgements and key
sources of estimation uncertainty
In the application of the Group's accounting policies,
management is required to make judgements
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.
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:
Statement of compliance
These financial statements are general purpose
financial statement 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, the Company is for a for-profit entity.
Accounting Standards include International Financial
Reporting Standards as adopted in Australia ('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 18 August 2022.
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 fair
values of the consideration given in exchange for
assets. All amounts are presented in Australia 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.
68
PENTAL ANNUAL REPORT 2022
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 royalty method estimate of
reasonable future cash flows. The estimation of the
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 26 June 2022
was $22.246 million (27 June 2021: $12.006 million).
Details of movements and impairment testing are set
out in Note 17.
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 The Group's historical experience.
Share-based payment transactions
The consolidated entity measures the cost of equity-
settled transactions with employees by reference to
the fair value of the equity instruments at the date at
which they are granted. The fair value is determined by
using the Binomial model taking into account the
terms and conditions upon which the instruments
were granted. The accounting estimates and
assumptions relating to equity-settled share-based
payments would have no impact on the carrying
amounts of assets and liabilities within the next annual
reporting period but may impact profit or loss and
equity. Refer to note 26 for further information.
Provision for impairment of inventories
The provision for impairment of inventories
assessment requires a degree of estimation and
judgement. The level of the provision is assessed by
taking into account the recent sales experience, the
ageing of inventories, and other factors that affect
inventory obsolescence
Coronavirus (COVID-19) Pandemic
Goodwill
Judgement has been exercised in considering the
impacts that the Coronavirus (COVID-19) pandemic
has had, or may have, on the consolidated entity
based on known information. This consideration
extends to the nature of the products and services
offered, customers, supply chain, staffing and
geographic regions in which the consolidated entity
operates. Other than as addressed in specific notes,
there does not currently appear to be either any
significant impact upon the financial statements or
any significant uncertainties with respect to events or
conditions which may impact the consolidated entity
unfavourably as at the reporting date or subsequently
as a result of the Coronavirus (COVID-19) pandemic.
The consolidated entity tests annually, or more
frequently if events or changes in circumstances
indicate impairment, whether goodwill has suffered
any impairment, in accordance with the accounting
policy stated in note 2. The recoverable amounts of
cash-generating units have been determined based
on value-in-use calculators. These calculations require
the use of assumptions, including estimated discount
rates based on the current cost of capital and growth
rates of the estimated future cash flows.
The carrying amount of Goodwill at 26 June 2022 was
$18.903 million (27 June 2021: Nil). Details of
movements and impairment testing are set in Note 16.
Business combinations
As discussed in note 2, business combinations are
initially accounted for on a provisional basis. The fair
value of assets acquired, liabilities, and contingent
liabilities assumed are initially estimated by the
consolidated entity taking into consideration all
available information at the reporting date. Fair value
adjustments on the finalisation of the business
combination accounting is retrospective, where
applicable, to the period the combination occurred
and may have an impact on the assets and liabilities,
depreciation and amortisation reported. Refer to note
8 for further information.
69
PENTAL ANNUAL REPORT 2022
NOTES TO THE FINANCIAL STATEMENTS
(CONT)
2. Significant Accounting Policies Cont.
-
-
Adoption of new and revised Accounting Standards
costs are expensed as incurred to profit or loss.
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.
Australian Accounting Standards and Interpretations
that have recently been issued or amended but are
not yet mandatory, have not been adopted by the
Group for the annual reporting period ended 26 June
2022. The Group has not yet assessed the impact of
these new or amended Accounting Standards and
Interpretations.
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 statement are prepared
by combining the financial statements of all the
entities that comprise the consolidated, 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 consolidated financial
statements.
In preparing the consolidated financial statements,
all inter-company balances and transactions, and
unrealised profits arising within the Group are
eliminated in full.
(b) Business combinations
The acquisition method of accounting is used to
account for business combinations regardless of
whether equity instruments or other assets are
acquired.
The consideration transferred is the sum of the
acquisition-date fair values of the assets transferred,
equity instruments issued or liabilities incurred by
the acquirer to former owners of the acquiree and
the amount of any non-controlling interest in the
acquiree. For each business combination, the
controlling interest in the acquiree is measured at
either fair value or at the proportionate share of the
acquiree's identifiable net assets. All acquisition
On the acquisition of a business, the consolidated
entity the financial assets acquired and liabilities
assumed for appropriate classification and
designation in accordance with the contractual
terms, economic conditions, the consolidated entity's
operating or accounting policies and other pertinent
conditions in existence at the acquisition-date.
Where the business combination is achieved in
stages, the consolidated entity remeasures its
previously held equity interest in the acquiree at the
acquisition-date fair value and the difference
between the fair value and the pervious carrying
amount is recognised in profit or loss.
-
Contingent consideration to be transferred by the
acquirer is recognised at the acqusition-date fair
value. Subsequent changes in the fair value of the
contingent consideration classified as an assets or
liability is recognised in profit or loss. Contingent
consideration classified as equity is not remeasured
and its subsequent settlement is accounted for
within equity.
The difference between the acquisition-date fair
value of assets acquired, liabilities assumed and non-
controlling interest in the acquiree and the fair value
of the consideration transferred and the fair value of
any pre-exisiting investment in the acquiree is
recognised as goodwill. If the consideration
transferred and the pre-existing fair value is less than
the fair value of the identifiable net assets acquired,
being a bargain purchase to the acquirer, the
difference is recognised as a gain directly in profit or
loss by the acquirer on the acquisition-date, but only
after a reassessment of the identification and
measurement of the net assets required, the non-
controlling interest in the acquiree, if any, the
consideration transferred and the acquirer's
previously held equity interest in the acquirer.
Business combinations are initially accounted for on
a provisional basis. The acquirer retrospectively
adjusts the provisional amounts recognised and also
recognises additional assets or liabilities during the
measurement period, based on new information
obtained about the facts and circumstances that
existed at the acquisition-date. The measurement
period ends on either the earlier of (i) 12 months
from the date of the acquisition or (ii) when the
acquirer receives all the information possible to
determine fair value.
70
PENTAL ANNUAL REPORT 2022
2. Significant Accounting Policies Cont.
(c) Foreign currency
(e) 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.
(f) 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 from grant date to vesting date.
The fair value of the performance rights granted is
measured using the binomial method, taking into
account the terms and conditions upon which the
performance rights were granted.
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 end of the transaction. Foreign
currency monetary items at reporting date are
translated at the exchange rate existing at reporting
date.
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 25); and
exchanges differences on monetary items
receivables 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 translations reserve and recognised in
profit or loss on disposal of the net investment.
(d) 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.
71
PENTAL ANNUAL REPORT 2022
NOTES TO THE FINANCIAL STATEMENTS
(CONT)
2. Significant Accounting Policies Cont.
(g) Income tax
Current tax
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).
Deferred tax
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.
Tax consolidation
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.
72
PENTAL ANNUAL REPORT 2022
2. Significant Accounting Policies Cont.
(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
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 grouped 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.
Other financial assets
For the accounting policy on derivatives – refer Note
2(r) and Note 25.
(j) Inventories
Inventories are carried at a 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.
Manufacturing activities
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
(k) Property, plant and equipment
The carrying amount of property, plant and equipment
is valued on a 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 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.
Goodwill
Goodwill arises on the acquisition of a business. Goodwill is
not amortised. Instead, goodwill is tested annually for
impairment, or more frequently if events or changes in
circumstances indicate that it might be impaired, and is
carried at cost less accumulated impairment losses.
Impairment losses on goodwill are taken to profit or loss
and are not subsequently reversed.
Computer Software
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 the 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.
73
PENTAL ANNUAL REPORT 2022
NOTES TO THE FINANCIAL STATEMENTS
(CONT)
2. Significant Accounting Policies Cont.
(n) Impairment of assets
(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
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.
74
PENTAL ANNUAL REPORT 2022
2. Significant Accounting Policies Cont.
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 26 June 2022, the Group is
reporting on the 52 week period that began 28 June
2021 and ended 26 June 2022. 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.
Interest and dividends
Interest and dividends re 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.
75
NOTES TO THE FINANCIAL STATEMENTS
PENTAL ANNUAL REPORT 2022
(CONT)
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 three operating divisions
The Group is organised into three 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.
Hampers with Bite: The Group acquired an online
gifting business Hampers with Bite Pty Ltd (HWB)
effective as at 1 September 2021. HWB specialises in
sourcing, assembling, and delivering gift hampers
directly to consumers on behalf of both businesses and
individual customers. The chief operating decision
maker views this recently acquired business as a new
segment given the nature of HWB operations is
significantly different to the Group’s existing business
segments.
76
PENTAL ANNUAL REPORT 2022
3. Segment Information Cont.
The Group’s segment financial information is as per below:
Owned Brands
Contracted
Brands
Hampers
With Bite
Total
26 Jun
2022
$'000
27 Jun
2021
$'000
26 Jun
2022
$'000
27 Jun
2021
$'000
26 Jun
2022
$'000
27 Jun
2021
$'000
26 Jun
2022
$'000
27 Jun
2021
$'000
Segment Revenue
Sales revenue
54,973
52,268
30,810
72,672
31,649
-
117,432
124,940
Segment Results
Underlying Profit
before finance costs
and income tax (EBIT)
Costs relating to
acquisition of Hampers
with Bite
6,181
5,493
(1,907)
2,656
6,509
Impairment of
brandnames
-
(348)
(1,047)
-
-
-
-
-
-
-
5,134
5,145
(1,907)
2,656
6,509
Profit before finance
costs and income tax
(EBIT)
Finance costs
Profit before income
tax
Income tax expense
Net profit for the
period
-
-
-
-
10,783
8,149
(1,047)
-
-
(348)
9,736
7,801
(189)
(121)
9,547
7,801
(3,180)
(2,317)
6,367
5,363
Due to the similar and shared nature of products, customers, suppliers and facilities, a significant overlap exists
between the assets and liabilities utilised by the 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
Total geographical sales
77
2022
$'000
2021
$'000
102,649
109,726
13,505
13,413
1,278
1,801
117,432
124,940
NOTES TO THE FINANCIAL STATEMENTS
PENTAL ANNUAL REPORT 2022
(CONT)
4. Revenue
The Group generates revenue from the sale of goods
on a point in time basis as follows:
2022
$'000
2021
$'000
Revenue from the sale
of goods
117,432
124,940
The Group’s Top 2 customers – Customer A and
Customer B, contributed $20,700,500 (17.62% of total
revenue) and $17,057,039 (14.52% of total revenue)
respectively to the Group’s revenue for the year
ended 26 June 2022. No other customer contributed
more than 10% of the revenue for the year ending 26
June 2022.
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
Interest on borrowings
Other borrowing costs
Interest on leases
Total interest expense
2022
$'000
2021
$'000
101
54
34
189
21
56
44
121
78
PENTAL ANNUAL REPORT 2022
NOTES TO THE FINANCIAL STATEMENTS
(CONT)
6. Income Taxes
Income tax recognised in profit or loss
2022
$'000
2021
$'000
Tax expense comprises:
Current tax expense
3,072
2,735
Deferred tax expense
121
(420)
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
2022
$'000
2021
$'000
Adjustments recognised in
relation to the current tax
of prior years
(13)
2
Deferred tax
Total tax expense
3,180
2,317
Arising on amounts
recognised in other
comprehensive income:
The prima facie income tax expense on pre-tax
accounting profit reconciles to the income tax expense
in the financial statements as follows:
Changes in the fair value
of cash flow hedges
13
13
82
82
2022
$'000
2021
$'000
Profit from operations
9,547
7,680
Tax at the Australia tax
rate of 30%
2,864
2,304
Non Deductible items
Adjustments recognised in
relation to the current tax
of prior years
329
(13)
11
2
Total tax expense
3,180
2,317
79
PENTAL ANNUAL REPORT 2022
6. Income Taxes Cont.
Deferred tax balances
Deferred tax assets/ (liabilities) arise from the following:
2022
Opening
balance
$'000
Charged to
income
$'000
Recognised
in other
comprehensive
income
$'000
Additions
through
business
combinations
$'000
(ii), (iii)
Charged
to equity
$'000
Closing
Balance
$'000
Deferred tax assets
Provision for expected
credit losses
Provisions
Share based payments
Lease Liabilities
Inventory obsolescence
Accruals
Costs relating to
issuance of shares
Other
Deferred tax liabilities
Property, planet and
equipment
Leased Assets
Foreign currency items
Brandnames
Other
Net deferred tax
asset/ (liability)
67
851
60
302
373
58
-
-
1,711
5
(79)
52
23
1
3
(25)
5
(15)
(82)
(199)
(278)
(108)
(3,602)
(4)
(4)
98
-
(1)
(4,074)
(106)
(2,363)
(121)
-
-
-
-
-
-
-
-
-
-
-
13
-
-
13
13
-
137
-
-
-
-
-
-
137
(60)
-
-
(3,072)
-
(3,132)
(2,995)
-
-
-
-
-
-
126
-
126
-
-
-
-
-
-
72
909
112
325
374
61
101
5
1,959
(341)
(282)
3
(6,674)
(5)
(7,299)
126
(5,340)
80
PENTAL ANNUAL REPORT 2022
6. Income Taxes Cont.
2021
Opening
balance
$'000
Charged to
income
$'000
Recognised
in other
comprehensive
income
$'000
(ii), (iii)
Charged
to equity
$'000
Closing
Balance
$'000
Deferred tax assets
Provision for expected
credit losses
Provisions
Share based payments
Lease Liabilities
Inventory obsolescence
Accruals
Deferred tax liabilities
Property, planet and
equipment
Leased Assets
Foreign currency items
Brandnames
Other
Net deferred tax
asset/ (liability)
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)
81
PENTAL ANNUAL REPORT 2022
NOTES TO THE FINANCIAL STATEMENTS
(CONT)
6. Income Taxes Cont.
Current tax liabilities
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.
2022
$'000
2021
$'000
7. Profit for the year
Income tax payable
342
449
342
449
Expenses
2022
$'000
2021
$'000
Tax consolidation
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 13.
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 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.
Cost of goods sold
73,662
95,517
Depreciation: Property
plant and equipment
2,888
3,169
Depreciation: Right-of-use
assets
888
583
Amortisation: Software
123
97
Total depreciation and
amortisation
3,899
3,849
Employee benefits expense:
Post-employment benefits -
defined contribution plans
1,471
1,125
Share based payments
expense
173
137
Other employee benefits
17,084
13,238
18,728
14,500
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.
82
PENTAL ANNUAL REPORT 2022
8. Business Combinations
Summary of Acquisition
On 1 September 2021, the Group acquired 100% shares
on issue of Hampers with Bite Pty Ltd, a leading
provider of premium gift hampers directly to the
consumers on behalf of businesses and individuals, for
a total purchase consideration of $27,658,164.
HWB was established in 2004 in Melbourne by 2
brothers – Nick and Rory Boyle. The business has since
then seen significant growth, particularly in the
previous 3 financial years after it emerged as one of the
leading providers of gift hampers in the Australian
market. HWB represents a transformational and
strategically compelling acquisition with significant
growth potential that can advance Pental’s online
channel which is a key strategy of Pental.
Details of the purchase consideration, net identifiable
assets acquired, and goodwill on a provisional basis are
as follows:
Contingent consideration is payable to vendors
subject to HWB achieving an agreed EBIT
performance target range structured as per below:
(a) Maximum amount of $4.0 million will be payable
upon HWB achieving EBIT of $6.3 million or more for
the 2022 financial year;
(b) No consideration will be payable if HWB
achieved an EBIT result below $5.4 million for the
2022 financial year;
(c) If HWB achieved an EBIT result above $5.4
million but below $6.3 million, the contingent
consideration will be calculated by multiplying EBIT
portion above $5.4 million by a factor of 4.5.
Equity consideration is payable in form of 6,666,667
fully paid ordinary shares calculated by dividing
$3,000,000 by volume weighted average price of 5
days prior to acquisition which was $0.45. Shares
issued as a part of equity consideration will be
subject to voluntary escrow until the conclusion of
2022 financial year.
Purchase consideration
Cash paid
Add: contingent consideration
Add: equity consideration
Less: completion working capital
adjustment (receivable)
$'000
The Group and vendors have agreed to offset
completion working capital adjustment amount
against contingent consideration payable to the
Vendors.
21,121
4,000
3,000
(463)
Total purchase consideration
27,658
83
NOTES TO THE FINANCIAL STATEMENTS
(CONT)
PENTAL ANNUAL REPORT 2022
8. Business Combinations Cont.
The acquired identifiable assets and assumed liabilities
recognised as a result of the acquisition are as follows:
Acquired assets &
assumed liabilities
Trade and other receivables
Cash and cash equivalents
Inventories
Plant & equipment
Right-of-use assets
Deferred tax assets associated
with provisions
Intangibles – software
Prepayments
Intangibles – brandnames
Trade and other payables
Income tax liabilities
Provisions
Lease liabilities
Deferred tax liabilities associated
with brandnames and plant &
equipment
Fair
Value
$'000
1,751
1,515
2,624
390
844
137
8
36
10,240
(3,301)
(1,202)
(456)
(699)
(3132)
Net identifiable assets acquired
8,755
Goodwill
Net assets acquired
18,903
27,658
(i) Acquired trade receivables
The fair value of acquired trade receivables is
$1,751,000. The gross contractual amount for trade
receivables due is $1,751,000, with no provision for
doubtful debts recognised on acquisition.
(ii) Revenue and profit contribution
The acquired business contributed revenues of
$31,649,000 and Earnings before interest and tax of
$6,509,000 to the Group for the period from 1
September 2021 to 26 June 2022.
If the acquisition had occurred on 28 June 2021,
consolidated pro-forma revenue and underlying
earnings before interest and tax (excluding costs
incurred associated with the acquisition) for the
financial year ended 26 June 2022 would have been
$123,668,0001 and $11,975,0001 respectively based on
the actual results of the acquired business of the
financial year ended 26 June 2022.
(iii) Acquisition-related costs
Acquisition-related costs of $1,047,000 were
disclosed as a significant item in profit or loss and in
cash flows from investing activities in the statement
of cash flows.
9. Earnings per share
2022
Cents
Per Share
2021
Cents
Per Share
Basic earnings per share
3.89
3.94
Diluted earnings per share
3.80
3.85
The earnings and weighted average number of
ordinary shares used in the calculation of basic and
diluted earnings per share are as follows:
2022
$'000
2021
$'000
Net profit
6,367
5,363
Earnings used in the
calculation of basic EPS
Earnings used in the
calculation of diluted EPS
6,367
5,363
6,367
5,363
84
PENTAL ANNUAL REPORT 2022
9. Earnings per share Cont.
10. Trade and other receivables
2022
No.
2021
No.
163,673,347
136,250,633
Current
2022
No.
$'000
2021
No.
$'000
Weighted average
number of ordinary
shares for the
purposes
of basic earnings per
share
Trade receivables
(i)
16,677
14,046
(ii)
Other
958
274
Allowance for expected
credit loss
(240)
(224)
17,395
14,096
(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 $13.895
million is due from top six customers (2021: $10.202
million from top six customers) and these six customers
account for 56.1% of total sales revenue for the year
(2021: 77.1% 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.
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.
2022
No.
2021
No.
163,673,347
136,250,633
3,887,060
2,988,143
167,560,407
139,238,776
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:
performance rights
over ordinary shares
Weighted average
number of ordinary
shares for the purposes
of diluted earnings per
share
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.
85
NOTES TO THE FINANCIAL STATEMENTS
(CONT)
PENTAL ANNUAL REPORT 2022
10. Trade and other receivables Cont.
11. Inventories
Ageing of past due
2022
$'000
2021
$'000
Overdue 31 to 60 days
283
144
Overdue 61 to 90 days
Overdue 91 days and beyond
Total
84
251
30
231
618
405
2022
$'000
2021
$'000
Raw materials
7,227
4,071
Goods in transit
1,425
1,283
Finished goods
9,165
10,699
17,817
16,053
Movement in the allowance for expected credit losses
12. Other financial assets
Current
Foreign currency forward
contracts
2022
$'000
2021
$'000
23
23
66
66
Balance at the beginning
of the year
Re-measurement of loss
allowance
Balance at the end of
the year
2022
$'000
2021
$'000
224
116
16
108
240
224
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 26 June 2022, the amount of
provision for expected credit losses was $240
thousand (2021: $224 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.
86
PENTAL ANNUAL REPORT 2022
13. Subsidiaries
Name of subsidiary
Parent Entity
Pental Limited
(i)
Controlled Entities
Pental Products Pty Ltd
(ii) (iii)
Hampers with Bite Pty Ltd
(ii) (iii) (iv)
HWB Pty Ltd.
(ii) (iii) (iv) (v)
Country of incorporation
Ownership interest
2022
%
2021
%
Australia
Australia
Australia
Australia
100%
100%
-
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.
(iv) Hampers with Bite Pty Ltd. joined the Group on 1 September 2021 as a result of business combinations disclosed in note 8.
(v) HWB Pty Ltd was registered in prior financial year as a potential vehicle corporation to acquire HWB assets in the event of an
asset acquisition. This entity was deregistered during the reporting period as Hampers with Bite Pty Ltd was acquired through
acquisition of its shares on issue.
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 reflect the
statement of profit or loss and other comprehensive income and statement of financial position of the parties to the
deed of cross guarantee.
87
PENTAL ANNUAL REPORT 2022
NOTES TO THE FINANCIAL STATEMENTS
(CONT)
14. Property, plant and equipment
Land
$'000
Building at
costs
$'000
Plant
equipment at
cost
$'000
(ii), (iii)
Construction
in progress
at cost
$'000
Total
$'000
Gross carrying amount
Balance at 28 June 2020
1,732
5,628
36,057
544
43,961
Balance at 26 June 2022
1,732
5,628
37,580
Accumulated depreciation
Additions
Disposals
Transfer from captial works
-
-
-
-
-
-
Balance at 27 June 2021
1,732
5,628
Additions
Additions through business
combinations
Transfer from capital works
-
-
-
-
-
-
Balance at 28 June 2020
Depreciation expense
Disposals
Balance at 27 June 2021
Depreciation expense
Balance at 26 June 2022
Net book value as at
27 June 2021
Net book value as at
26 June 2022
-
-
-
-
-
-
1,732
1,732
(552)
(192)
-
(744)
(192)
(926)
4,884
4,692
947
890
1,837
(1,546)
544
36,002
298
390
890
(22,775)
(2,978)
1,546
(24,207)
(2,696)
(26,903)
-
(1,546)
(544)
890
1,787
-
(890)
1,787
-
-
-
-
-
-
-
44,252
2,085
390
-
46,727
(23,327)
(3,170)
1,546
(24,951)
(2,888)
(27,839)
11,795
890
19,301
10,677
1,787
18,888
88
PENTAL ANNUAL REPORT 2022
15. 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 28 June 2020
Additions
Add: Lease term extension
Add: Lease term extension
Depreciation charge for the year
Balance as at 27 June 2021
Additions through business combinations
Add: Lease term extension
Depreciation charge for the year
Balance as at 26 June 2022
Property
$'000
Plant &
Equipment
$'000
Total
$'000
780
193
115
-
(401)
687
844
129
(722)
938
390
33
-
(12)
(170)
241
-
-
(166)
75
1,170
226
115
(12)
(571)
928
844
129
(888)
1,013
89
NOTES TO THE FINANCIAL STATEMENTS
(CONT)
PENTAL ANNUAL REPORT 2022
15. Right-of-use assets and lease liabilities Cont.
(b) Lease liabilities
The movements in the lease liabilities for the reported period and prior period are as per below table:
2022
$'000
2021
$'000
Balance as start of the period
Additions through business combinations
Additions
Lease term extension
Interest incurred
Payments on lease liabilities
Balance as at the end of the period
Current lease liabilities
Non-current lease liabiltiies
Balance as at the end of the period
978
699
-
123
34
(862)
972
667
305
972
(ii), (iii)
1,202
-
226
116
44
(610)
978
532
446
978
(c) Maturity Analysis
(d) Amount recognised in profit and loss
Depreciation expense on
right-of-use assets (Includes
lease contracts terminated)
Interest expense on lease
liabilities
Total
$'000
888
34
Within One Year
One to two years
Two to three years
Three to four years
Total Contractual
Undiscounted Cash Flows
Discounting using the lessees
incremental borrowing rate
Balance as at 26 June 2022
Total
$'000
667
196
122
-
985
(13)
972
90
PENTAL ANNUAL REPORT 2022
16. Goodwill
2022
$'000
2021
$'000
Cost
93,681
74,778
Accumulated impairment
losses
(74,778)
(74,778)
Gross carrying amount
Balance at beginning
of financial year
Additions through
business combinations
Balance at the end
of financial year
Accumulated impairment
losses
Balance at beginning of
financial year
Balance at the end
of financial year
18,903
-
74,778
74,778
18,903
-
93,681
74,778
74,778
74,778
74,778
74,778
Allocation of goodwill to cash-generating
units and key assumptions
Management has concluded that the Hampers with
bite (HWB) business forms a new cash generating
unit on the basis that the decision making and
monitoring of the operations of the business unit are
performed by the HWB senior leadership team; and
the core assets will be operated separately to
consumer products unit to generate the revenue of
the acquired HWB business.
(ii)
Goodwill acquired during the reported period has
been fully allocated for impairment testing over the
Hampers with bite cash generating unit. The
recoverable amount of the HWB cash generating unit
is determined based on a value in use calculation,
which uses cash flow projections based on a financial
budget approved by the Board, covering a five-year
period and a discount rate (post-tax) of 10.0%. The
cash flow has been extrapolated using a 3% growth
rate including an inflation rate of 2.5%.
The Group has assessed the sensitivity of carrying
amount of goodwill and determined that a 10%
change in key assumptions of cash flow, growth rate,
inflation rate and discount rate collectively or
individually will not result in impairment to Goodwill.
91
NOTES TO THE FINANCIAL STATEMENTS
(CONT)
PENTAL ANNUAL REPORT 2022
17. Other intangible assets
Gross carrying amount
Balance at 28 June 2020
Additions
Disposals
Balance at 27 June 2021
Additions
Additions through business combinations
Balance at 26 June 2022
Accumulated Impairment/Amortisation
Balance at 28 June 2020
Amortisation expense
Disposals
Impairment
Balance at 27 June 2021
Amortisation expense
Balance at 26 June 2022
Net book value as at 27 June 2021
Net book value as at 26 June 2022
Brand names - Useful life assessment
Brand
Names at
cost
Software at
cost
$'000
Total
$'000
19,000
-
-
19,000
-
10,240
29,240
2,095
118
(843)
1,370
157
8
1,535
(ii), (iii)
21,095
118
(843)
20,370
157
10,248
30,775
(6,646)
(1,941)
(8,587)
-
-
(348)
(6,994)
-
(6,994)
12,006
22,246
(97)
843
-
(1,195)
(123)
(1,318)
175
217
(97)
843
(348)
(8,189)
(123)
(8,312)
12,181
22,463
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 continues 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.
92
PENTAL ANNUAL REPORT 2022
17. Other intangible assets Cont.
Allocation of brandnames to cash generating units
Gross carrying amount of brandnames
Allocated to consumer products CGU
Allocated to Hampers With Bite CGU
Balance at the end of financial year
Accumulated Impairment on brandnames
Allocated to consumer products CGU
Allocated to Hampers With Bite CGU
Balance at the end of financial year
Carrying value of brandnames at end of financial year
Allocated to consumer products CGU
Allocated to Hampers With Bite CGU
Balance at the end of financial year
Impairment testing -
Indefinite life brand names
2022
$'000
2021
$'000
19,000
19,000
10,240
-
29,240
19,000
(6,994)
(6,994)
-
-
(6,994)
(6,994)
12,006
12,006
10,240
-
22,246
12,006
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.
The Group used ‘relief from royalty’ method for the
purposes of impairment testing as at 26 June 2022.
The key assumptions used were as follows:
Royalty rates ranging between 2% - 4.5%
(2021: 2% - 4.5%)
Discount rate of 9.5% post-tax
(2021: 9%)
Long-term growth rates of between 0% - 3%
(2021: 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.
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.
In the prior period, 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).
93
PENTAL ANNUAL REPORT 2022
NOTES TO THE FINANCIAL STATEMENTS
(CONT)
18. Other Assets
21. Banking facilities
2022
$'000
2021
$'000
Prepayments
646
267
19. Trade and other Payables
Summary of financing arrangements
Facilities utilised at
reporting date:
2022
$'000
2021
$'000
Multi option load facility
Bank guarantee
326
177
Market rate loan facility
3,825
-
2022
$'000
2021
$'000
4,151
177
Trade payables
11,221
7,660
Trade spend liabilities
119
299
Facilities not utilised at
reporting date:
2022
$'000
2021
$'000
Sundry payables and
accruals
4,966
4,332
16,306
12,291
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.
Multi option load facility
Bank overdraft
1,820
1,820
Trade finance
5,854
6,000
Bank guarantee
-
3
7,674
7,823
20. Other financial liabilities
Multi option loan facility limit
11,625
8,000
Current
Supplier payment facility
2022
$'000
2021
$'000
89
89
81
81
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
$2.035 million of which $0.089 million was utilised.
94
PENTAL ANNUAL REPORT 2022
Market rate loan facility
Prior to the acquisition of Hampers with Bite Pty Ltd
on 1 September 2021, the Group also secured a new 3-
year market rate loan facility (limit of $8,500,000) with
CBA on 19 August 2021 to facilitate the acquisition of
Hampers with Bite. As at the reporting date,
$3,825,000 remains utilised under the market rate loan
facility after the Group made early repayments of
$3,400,000 during the period along with scheduled
repayments of $1,275,000. Any unutilised limit under
this facility is unable to be drawn upon. This facility
attracts a usage fee of 2.50% per annum (only on
utilised portion) and interest rate is charged quarterly
in line and with reference to Bank Bill Swap Yield rate
(1.7910% as at 26 June 2022).
Unsecured supplier payment facility
As at the reporting date, The Group also has alternative
unsecured financing facilities with a limit of $2.035
million to draw upon through American Express, if and
when required. There are no restrictions of use
associated with the supplier finance facility.
21. Banking facilities Cont.
Trade finance facility
The Group secured a new trade finance facility with
the Commonwealth Bank of Australia (CBA) on 19
August 2021 that allows the Group to choose an
appropriate type of funding facility to suit its business
needs. The trade facility can be used as a bank
overdraft, variable rate fully drawn advance, market
rate loan, and/or contingent liability facility. The limit
for this trade finance facility is $8,000,000 (2021:
$8,000,000) of which $7,674,000 (2021: $7,823,000)
remains unutilised as of 26 June 2022.
The trade finance facility attracts a line fee of 0.48%
(2021: 0.49%) per annum calculated on facility limit
regardless of being utilised. The trade finance facility
bears various interest rates for various facilities as
utilised in addition to line fee. The interest rates on
utilisation range from minimum 2.271% usage fee on
trade advance facility (reference rate of Bank Bill
Swap Yield rate of 1.7910% as at 26 June 2022 plus
margin of 0.48%) to maximum 4.41% on overdraft
facility (reference rate of CBA Variable Corporate
Overdraft Reference Rate of 7.83% as at 26 June 2022
minus a margin of 3.42%).
The financing arrangement is secured by the Group's
assets through the 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 30 June 2024.
95
PENTAL ANNUAL REPORT 2022
Total Provisions
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.
22. Provisions
Current
2022
$'000
2021
$'000
Employee benefits
2,800
2,584
Make good provision on leases
177
29
Non-current
Employee benefits
Make good provision on leases
2,977
2,613
80
80
72
72
3,057
2,685
23. Issued capital
(a) Fully paid ordinary shares
Date
Share
Capital
Number of
shares
Share issue
price
$'000
29 Jun 2020
Opening balance of ordinary shares, fully paid
136,250,633
27 Jun 2021
Balance at end of reporting period
136,250,633
28 Jun 2021
Opening balance of ordinary shares, fully paid
136,250,633
27 Aug 2021
Placement of shares - Tranche 1
01 Sep 2021
Ordinary shares issued as consideration for
purchase of Hampers With Bite
22 Sep 2021
Share purchase plan
05 Oct 2021
Placement of shares - Tranche 2
13,770,928
6,666,666
11,752,726
2,018,547
$0.38
$0.45
$0.38
$0.38
Transactions costs associated with
shares issued
Tax effect of share issue transaction costs
recognised directly in equity
90,658
90,658
90,658
5,233
3,000
4,466
767
(420)
126
26 Jun 2022
Balance at the end of reporting period
170,459,500
103,830
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.
96
PENTAL ANNUAL REPORT 2022
24. Dividends
(a) Recognised Amounts
Fully paid ordinary shares
Final dividend:
Fully franked at 30% tax rate
Interim dividend:
Fully franked at 30% tax rate
Special dividend:
Fully franked at 30% tax rate
(b) Unrecognised Amounts
Final dividend
2022
2021
Cents per
share
Total
$'000
Cents per
share
Total
$'000
-
1.60
1.30
-
2.90
2,400
2,216
-
4,616
1.50
1.00
0.70
3.20
2,044
1,363
954
4,361
2022
2021
Cents per
share
Total
$'000
Cents per
share
1.70
1.70
2,898
2,898
Total
$'000
-
1.60
1.60
2,180
2,180
In respect of the year (52 weeks) ended 26 June 2022, the Directors declared a full year fully franked final dividend of
1.7 cents per ordinary share, payable on 23 September 2022, with a record date of 5 September 2022 (2021: 1.60 cents
per ordinary share).
Adjusted franking account balance
Impact on franking account balance of dividends not recognised
2022
$'000
2021
$'000
22,727
20,249
1,242
934
97
PENTAL ANNUAL REPORT 2022
NOTES TO THE FINANCIAL STATEMENTS
(CONT)
25. Financial Instruments
Fully paid ordinary shares
Cash and cash equivalents
Trade and other receivables (amortised cost)
Derivative instruments in designated hedge accounting relationships
Financial liabilities
Trade and other payable (amortised cost)
Supplier payment facility
2022
$'000
2021
$'000
8,132
17,395
23
16,306
89
(ii), (iii)
12,702
14,096
66
12,291
81
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 ALDI which represent 78.7% of trade receivables.
(c) Financial risk management objectives
(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
2022
$'000
2021
$'000
2022
$'000
2021
$'000
Currency of USA
-
-
1,119
306
Currency of
New Zealand
3,114
2,600
776
805
Currency of Europe
-
-
-
-
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 25(c)
and 25(e)).
98
PENTAL ANNUAL REPORT 2022
25. 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
2022
2021
2022
2021
2022
2021
2022
2021
Buy USD - less than
one year
Buy USD - less than
one year
-
0.7711
-
2,761
-
3,581
1.0624
1.0820
600
3,450
565
3,189
-
23
23
88
(22)
66
As at reporting date, the aggregate amount of unrealised gains/(losses) under forward foreign currency contracts
relating to anticipated future contracts is $0.023 million gain (2021: $0.066 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.
Profit
Equity
USD Impact
NZD Impact
2022
2021
2022
2021
118
-
28
248
99
7
83
102
99
PENTAL ANNUAL REPORT 2022
NOTES TO THE FINANCIAL STATEMENTS
(CONT)
25. Financial Instruments Cont.
(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.
The following table details the Group’s exposure to interest rate and liquidity risk. The table includes both interest
and principal cash flows.
2022
Financial assets
Variable interest rate instruments
Non-interest bearing
Financial liabilities
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
-
-
8,132
-
6,298
11,097
14,430
11,097
-
-
-
-
-
-
(i)
Variable interest rate instruments
4.19%
514
-
1,275
2,125
Non-interest bearing
-
8,137
11,706
-
-
8,651
11,706
1,275
2,125
2021
Financial assets
Variable interest rate instruments
Non-interest bearing
Financial liabilities
(i)
Variable interest rate instruments
Non-interest bearing
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
-
-
-
-
12,702
-
7,781
6,315
20,483
6,315
81
-
6,161
6,130
6,242
6,130
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
8,132
17,395
25,527
3,914
16,306
23,757
Total
$'000
8,132
17,395
25,527
81
12,291
12,372
(i) Includes 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.
100
PENTAL ANNUAL REPORT 2022
25. Financial Instruments Cont.
(g) Credit risk management
Credit risk management refers to the risk that a
counter-party will default on its contractual
obligations resulting in financial loss to the Group.
The Group has adopted a policy of only dealing with
creditworthy counter-parties 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
counter-parties are continuously monitored and the
aggregate values of transactions concluded are
spread amongst approved counter-parties. 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 ALDI which
represent 80.9% of trade receivables.
The credit risk on liquid funds and derivative financial
instruments is limited because the counter-parties
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, banking facilities and reserve
borrowing facilities by continuously monitoring
forecast and actual cash flows and matching the
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 30 June 2024. As highlighted
in Note 21, 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. The Group also has the option to early
settle its outstanding receivables from its major
customers (Coles, Woolworths and Costco) at a
discounted value prior to the due date of such
receivables. The discount varies depending on the
maturity date of receivables, market interest rates and
willingness of the customer to accept an early
settlement.
(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.
101
NOTES TO THE FINANCIAL STATEMENTS
(CONT)
PENTAL ANNUAL REPORT 2022
26. 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.
The remaining fifty percent are based on specific KPIs
relevant to the participants particular specialisation.
In the event the Group fails to meet its annual financial
performance criteria, the Board retains the discretion to
award up to 50 percent of EVIP entitlements to recognise
and reward executives for extraordinary efforts and
achievements during the financial year.
Variable Incentive – cash
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.
(i)
Variable Incentive – equity
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 The variable equity incentive is designed to reward
achievement of annual KPIs, assist the retention of key high
performing year in which it is granted. If the performance
criteria is not met within the financial year, the Rights are
forfeited at the end of the same financial year.
The vesting of the Rights is conditional on:
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 / 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.
In the event the Group fails to meet its annual financial
performance criteria, the Board retains the discretion to award
up to 50 percent of EVIP entitlements to recognise and
reward executives for extraordinary efforts and achievements
during the financial year.
EVIP – FY22 Performance
The following table contains details of total EVIP equity
entitlements achieved by the executives and senior managers
during the year:
Grant
Date
No. of
Rights
granted
(i)
Share
price at
grant
date
Exercise
price
Expected
volatility
Performance
period
Risk
free
rate
Expected
dividend
yield
Fair value
at grant
date
Charlie McLeish
18/11/2021
267,000
$0.4000
Neil Godara
Senior
Managers
1/07/2021
102,000
$0.4050
1/07/2021
389,000
$0.4050
Nil
Nil
Nil
40%%
40%
40%
4 years
1.38%
4 years
0.72%
4 years
0.72%
5%
5%
5%
$0.189
$0.190
$0.190
(i) The executives & senior managers have been issued partial entitlements for 2022 financial year due to not meeting financial performance conditions.
As per Note 7, The vesting period expense recognised during the period was $173 thousand (2021: $136 thousand)
The following table contains details of total EVIP equity entitlements achieved by the executives and senior managers during the
previous reporting period:
Grant
Date
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
Charlie McLeish
19/11/2020
636,000
$0.410
Neil Godara
1/07/2020
217,000
$0.345
Senior
Managers
1/07/2020
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
102
PENTAL ANNUAL REPORT 2022
NOTES TO THE FINANCIAL STATEMENTS
(CONT)
26. Share-Based Payments Cont.
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
27/6/2021
Rights
granted
No.
Rights
vested
No.
Rights
forfeited
No.
Rights
lapsed
No.
Balance
at
26/6/2022
(i)
EVIP 2020
1/7/2023
1,625,000
EVIP 2021
1/7/2024
1,613,000
-
-
EVIP 2022
1/7/2025
-
1,516,000
-
-
-
-
-
758,000
-
-
-
1,625,000
1,613,000
758,000
3,996,000
27. Key Management
Personnel Compensation
28. Related Party Transactions
The aggregate compensation of the key
management personnel of the Group is set out below
Short-term employee
benefits
Long-term employee
benefits
2022
$'000
2021
$'000
1,246,066
1,397,562
16,605
20,184
Share based payments
95,779
78,318
Termination benefits
0
-
Post-employment
benefits
74,385
79,076
1,432,835
1,575,140
Mr Fred Harrison is the CEO of Ritchies. Mr Harrison’s
employer, Ritchies Stores Pty Ltd invoiced the Group
a total of $129,799.66 inclusive of GST (2021:
$266,239.93 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 $18,022.90 (2021: $106,288.84) in relation to
above mentioned promotional activities and supplier
trading terms.
Equity interests in subsidiaries
Details of interests in subsidiaries are set out in
note 13.
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.
103
PENTAL ANNUAL REPORT 2022
29. 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
2022
$'000
2021
$'000
8,183
8,183
12,702
12,702
(b) Reconciliation of Profit for the year to net cash flows from operating activities
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:
2022
$'000
2021
$'000
Profit/(Loss) for the year
Depreciation and amortisation expense
Impairment of brand name
Equity settled employee benefits expense
Acquisition related expenses (not operating in nature)
Changes in net assets and liabilities, net of effects from acquisition
of business:
(Increase)/decrease
Trade and other receivables
Inventories
Other assets
Increase/(decrease) in liabilities
Trade and other payables
Provisions and hedging reserve
Current and deferred tax liabilities
Other liabilities
Net cash from operating activities
6,367
3,899
348
173
1,047
(1,548)
860
(299)
619
(20)
(1,328)
154
9,924
5,363
3,849
348
136
-
6,037
7,366
308
(6,049)
102
(1,415)
-
16,045
104
PENTAL ANNUAL REPORT 2022
30. Capital Expenditure Commitment
32. Remuneration of Auditors
2022
$'000
2021
$'000
Summary of financing arrangements
Plant and equipment
4
404
The Group entered into various contracts to purchase
equipment for the upgrade and modernisation of
Shepparton manufacturing facility.
Auditor of the parent entity
Audit or review of the
financial report
Other services
2022
$'000
2021
$'000
177,000
141,000
31. Contingent Liabilities
Tax consulting
7,800
-
Due diligence services
2022
$'000
2021
$'000
Other services
-
-
46,187
10,000
184,800
197,187
The auditor of Pental Limited is Grant Thornton in
the reported period and the prior period.
Bank guarantees to third
parties in respect of property
lease obligations. The bank
guarantees are held by the
parent entity, Pental Limited.
325
117
To the best knowledge of the Directors aside from
the Bank Guarantees disclosed, no other contingent
liabilities exist for the reporting period ending
26 June 2022.
105
107
NOTES TO THE FINANCIAL STATEMENTS
(CONT)
PENTAL ANNUAL REPORT 2022
33. 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 captial
Accumulated losses
Total equity
Financial performance
Profit/(loss) for the year
Other comprehensive income
Total comprehensive income/(loss)
2022
$'000
2021
$'000
2
73,310
74,312
5,524
2,125
7,649
1
53,964
53,965
469
-
469
66,663
53,496
103,830
90,658
(37,167)
(37,162)
66,663
53,496
4,613
-
4,613
4,360
-
4,360
106
PENTAL ANNUAL REPORT 2022
34. Subsequent events
Dividends
In respect of the year (52 weeks) ended 26 June 2022 the Company will pay final fully franked dividend of 1.7 cents
per ordinary share, payable to shareholders on 23 September 2022, with a record date of 5 September 2022.
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.
107
PENTAL ANNUAL REPORT 2022
ADDITIONAL STOCK EXCHANGE
INFORMATION
AS AT 16TH AUGUST 2022
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
170,459,499 fully paid ordinary shares are held by
2,024 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) every member may vote;
(b) on a show of hands every member has one vote;
(c). 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.”
Distribution of holders of equity securities
Fully paid
ordinary shares
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
247
608
272
744
153
2,024
290
Performance rights
Substantial shareholders
There are no voting rights attached to performance
rights.
Fully paid
ordinary shares
On-market buy-back
There is no current on-market buy-back.
Ordinary
Shareholders
Number of share
for voting power
Percentage
(i)
Alan Johnstone
35,330,769
20.73%
John Rostyn
Homewood
26,920,000
15.79%
62,250,769
36.52%
(i) Alan Johnstone has a relevant interest in Pental shares
held by western park holdings Pty Ltd and PMSF company
Pty Ltd
108
PENTAL ANNUAL REPORT 2022
TWENTY LARGEST HOLDERS OF QUOTES
EQUITY SECURITIES
Ordinary Shareholders
Number
Percentage
Fully paid ordinary share
Fully paid
ordinary shares
JOHNOS HOLDINGS PTY LTD
MR JOHN ROSTYN HOMEWOOD
MR GARRY GEORGE JOHNSON
NATIONAL NOMINEES LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
RATHVALE PTY LIMITED
NICHOLAS PATRICK BOYLE
RORY JOSEPH BOYLE
BNP PARIBAS NOMS (NZ) LTD
31,603,617
26,920,000
6,670,739
3,989,320
3,782,830
3,406,557
3,333,333
3,333,333
3,250,001
P M S F COMPANY PTY LIMITED
3,197,431
DALLMOUNT PTY LTD
W A PEATT PTY LTD
DALLMOUNT CUSTODIANS PTY LTD
BUDUVA PTY LTD
DALLMOUNT PTY LTD
MR JAMES GORDON MOFFATT
BARKING DOG PTY LTD
BNP PARIBAS NOMS PTY LTD
SPORRAN LEAN PTY LTD
TERRY CLANCY SUPERANNUATION PTY LTD
2,666,668
2,510,617
2,500,000
1,650,000
1,504,761
1,268,498
1,262,478
1,118,072
1,110,000
959,307
18.54%
15.79%
3.91%
2.34%
2.22%
2.00%
1.96%
1.96%
1.91%
1.88%
1.56%
1.47%
1.47%
0.97%
0.88%
0.74%
0.74%
0.66%
0.65%
0.56%
106,037,562
62.21%
109
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 2004
Telephone: +613 9251 2311
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
MANUFACTURING AND DISTRIBUTION
1-22 Drummond Road
Shepparton VIC 3630
Telephone: +61 3 5820 5200
SECURITIES EXCHANGE LISTING
Pental Limited (PTL) shares are listed on the Australia
Securities Exchange (ASX)
WEBSITE
www.pental.com.au
ABN
29 091 035 353