DRIVING GROWTH TOGETHER - Pental Products€¦ · through product innovation and marketing investment, such as the White King advertising television campaign in the first half. •

DRIVING GROWTH TOGETHERANNUAL REPORT 2015

Pental LimitedTrusted by families for generations

www.pental.com.au

Pental Limited 2015 Financial Report | 1 |

3 CHAIRMAN’S

REVIEW

7CORPORATE

GOVERNANCE STATEMENT

15DIRECTORS’

REPORT

37AUDITOR’S

INDEPENDENCE DECLARATION

38INDEPENDENT

AUDITOR’S REPORT

40DIRECTORS’

DECLARATION

41CONSOLIDATED

STATEMENT OF PROFIT OR LOSS AND OTHER

COMPREHENSIVE INCOME

42CONSOLIDATED STATEMENT OF

FINANCIAL POSITION

43CONSOLIDATED STATEMENT OF

CHANGES IN EQUITY

44CONSOLIDATED STATEMENT OF CASH FLOWS

45NOTES TO THE

FINANCIAL STATEMENTS

83ADDITIONAL

STOCK EXCHANGE INFORMATION

CONTENTS


On behalf of the Directors of Pental Limited, I am pleased to present the 2015 Annual Report.

Pental is focused on winning with those who matter the most – consumers, customers and shareholders. Pental’s performance during 2015 financial year was another step in this direction of building a stronger business by strategically investing in promoting our power brands and transforming our manufacturing capability.

Underlying Net Profit Before Tax(i)(ii)

(i) Unaudited non-IFRS table (ii) Excludes discontinued operations

$’00

0s

4,214

6,937

8,020

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

FY 15FY 14FY 13

Since setting a new strategic direction three years ago, Pental has grown its gross sales and underlying net profit before tax year-on-year, in a highly competitive market and continues to make positive in roads on delivering against our strategic objectives. During the 2015 financial year:

• WedeliveredstronggrowthinbrandedsalesinAustralia of 5.7% and tactically defended our market position in New Zealand in the face of aggressive promotional campaigns by competitors.

• Ourleadingbrandscontinuedtobestrengthenedthrough product innovation and marketing investment, such as the White King advertising television campaign in the first half.

• ArefreshoftheSheppartonmanufacturingteamhasseen a significant cultural change in the business driving our core values around Customers, People, Quality, Fairness and Safety. This has improved the performance of the site and has facilitated in accelerating the execution of our manufacturing strategy.

• Thecapitalinvestmentof$5.3millionannouncedinFebruary 2015 is on schedule and is expected to be operational by the third quarter of 2016 financial year.

• Wehavecontinuedtodeliverstrongcostsavinginitiatives to fund earnings growth by reducing waste in our work, products and supply chain.

• AfurtherstrengthenedBalanceSheetwitha $6.644million(netofcostsandtax)capitalraisingviaLoyaltyandPiggyBackoptionsholders.Alltheseoptions have now expired.

• Wedeliveredasolidresultforthe2015financialyear, enabling the Company to pay a total dividend forthefinancialyearof2.58centspershare(basedonnumberofsharesissuedat28June2015),representing a payout ratio of 60.85% of the full year underlying earnings, as previously committed.

AsaresulttheBoardhasrecommendedpayment of a fully franked final year dividend of 1.80 cents per ordinary share, payable to shareholders on 30 September 2015, with a record date of 11 September 2015. An interim fully franked dividend of 0.85 cents was paid on 27 March 2015.

CHAIRMAN’S REVIEW

Underlying net profit before tax was up

15.6%to $8.020 million for the financial year

| 4 | Pental Limited 2015 Financial Report

OVERVIEW

Underlying net profit before tax was up 15.6% (or$1.083million)to$8.020millionforthefinancialyear(52weeks),excludingsignificantone-offitemsof:

• Employeerestructuringcostsof$0.432millionasthe business refreshed key operational positions inSheppartonbeforeembarkingonits$5.3millioncapital expenditure program to continue executing its manufacturing strategy, and the exit of employees arising from improved efficiencies of its operations; and

• Animpairmentchargeof$0.553milliononplantandequipment in progress of being replaced as part of the$5.3millioncapitalinvestmentprogram.

Afteroneoffs,thisbroughtthenetprofitaftertaxto$5.087millioncomparedtolastyear’sresultof$5.336million(whichalsoincluded$0.401millionprofitforthesaleoftheCloseUpbrandname).

TheunderlyingEBITDA(EarningsBeforeInterest,TaxDepreciationandAmortisation)wasup6.16%onlastyearto$10.287millionandhasprogressivelyimprovedsince restructuring of the Group, with refocused capital investment and continuous improvement of activities throughout the business. The solid result was achieved after absorbing increased labour and raw materials costs that could not be recovered through price increases, but which have been recovered through other cost-saving initiatives.

TheunderlyingEBITof$8.174millionwasup$0.277million on last year, with depreciation increasing by $0.320millionarisingfromnewcapitalinvestmentsand impacted by the timing of the capital expenditure benefits being achieved between financial periods. We expect further savings to crystalise as production line bottlenecks are eliminated as the Group progressively completes the next stages of its manufacturing strategy.

Thesolidnetprofitaftertax(albeitnotaxwaspaidduetocarriedforwardlosses,nowfullyutilised)andstrongworkingcapitalmanagement(improvementof$2.421million),hasresultedinnetcashfromoperatingactivitiesincreasingby$4.819milliononlastyearto$11.810million.Furthermore,thesuccessfulcapitalraising(netofcostandtax)of$6.644millionviaexerciseoftheLoyaltyandPiggyBackOptionshasplacedPentalinastrongnetcashpositionof$11.040million(2014:$0.025million).Thiswillbeusedforfurther capital investment, focused on maximising growth opportunities and reducing costs.

WhilsttheBoardispleasedwiththeresultandthefinancial position of the Group, some of the strategic targets such as manufacturing efficiency improvements have taken longer than initially anticipated, due to lead times of sourcing and commissioning capital equipment. As with its product innovation and marketing initiatives, Pental through its natural operational agility has proactively adapted to the changing retail conditions. Similarly its capital program has been modified to focus on increasing manufacturing efficiency for its existing products while building sales avenues in readiness for sale growth related capital expenditure projects, such as high speed liquid and bulk production lines.

With a refreshed manufacturing operational team, increased focus on continuous improvement disciplines, ongoing capital investment to eliminate production bottlenecks and undertaking longer high volume production runs, production efficiency levels have progressively improved and the operations are in better position to maintain and/or exceed these efficiency levels moving forward.

CHAIRMAN’S REVIEW CONTINUED


OUTLOOK

The continued positive direction of Pental remains steadfastly based on leveraging the power of our brands and a strong culture of product innovation. New products drive sales growth and brand strength provides margin support. Private label continues to be an important growth channel, but as with brand products, the key focus will be on continuing to compete on value rather than price alone.

Strengthening our manufacturing capabilities to become a leading low-cost producer through process improvements and further capital investments, and investing to grow our power brands, are cornerstones in our strategic plans. Our strategy also includes pursuing growth in new markets such as Asia and new channels such as commercial and industrial, where we will continue to invest to grow our capabilities. Similarly Pental will continue to pursue any value-creating acquisition or distributorship opportunities that may arise in expanding markets with strong growth potential.

As much as brands and new sale markets and channels are important for sales and margin growth, an entrenched culture of active cost control via Profit Delivery Project initiatives ensures Pental remains equipped to profitably grow in a highly competitive grocery retail market.

TheBoardandmanagementremainofthefirmbeliefthat 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.

TheDirectorswouldliketothankallofourstaff,shareholders, suppliers and customers for their ongoing loyalty and support.

Peter RobinsonChairman

Table(i)belowshowsareconciliationbetweenthereportednetprofitaftertaxandtheunderlyingEBITDA.

FY 15 (i)$’000

FY 14 (i)$’000

% Change

Reported profit after tax 5,087 5,336 -4.7%

Income tax expense 1,948 2,002

Finance and borrowings costs 154 960 -84.0%

EBIT 7,189 8,298 -13.4%

Netoneoff/significantexpense/(income)(ii) 985 (401)

Underlying EBIT 8,174 7,897 3.5%

Depreciation and amortisation 2,113 1,793

Underlying EBITDA 10,287 9,690 6.2%

(i)Unauditednon-IFRSfinancialtable.

(ii)Refertoconsolidatedstatementofprofitorlossandothercomprehensiveincome.

Driving growth strategies into new

markets and channelswith no debt and substantial funding capacity


Best Practice Recommendation Comment

1. Lay solid foundations for management and oversight

1.1 A listed entity should disclose:

(a)therespectiverolesandresponsibilitiesofitsboard and management; and

(b)thosemattersexpresslyreservedtotheboardand those delegated to management.

TheCorporateGovernancePoliciesincludeaBoardCharter, which discloses the specific responsibilities oftheBoardandprovidesthattheBoardshalldelegate responsibility for the day-to-day operations and administration of the Company to the Chief Executive Officer.

TheresponsibilitiesoftheBoard,whicharereservedfortheBoardandnotdelegatedtomanagement,include:

• OversightofthebusinessandaffairsoftheCompany;

• Establishmentofcontrolandaccountabilitysystems;

• Establishmentwithmanagementofastrategicdirection, supporting strategies and operating performance objectives;

• AppointingtheChiefExecutiveOfficer(CEO)andany Executive Director; and

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

TheBoardCharterisavailableontheCompany’swebsite.

1.2 A listed entity should:

(a)undertakeappropriatechecksbeforeappointing a person, or putting forward to security holders a candidate for election, as a director; and

(b)providesecurityholderswithallmaterialinformation in its possession relevant to a decision on whether or not to elect or re-elect a director.

TheBoardhasnotestablishedaNominationsCommitteegiventhesizeoftheBoardandtheCompany’soperations.TheBoardasawholeperforms the role of selection of potential new directors, and appropriate checks are made before an appointment occurs.

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

This Corporate Governance Statement sets out the Company’s current compliance with the ASX Corporate Governance Council’s Principles of Good Corporate GovernanceandBestPracticeRecommendations (BestPracticeRecommendations).

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

CORPORATE GOVERNANCE STATEMENT



1.3 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.

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

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


(a)haveadiversitypolicywhichincludesrequirements for the board or a relevant committee of the board to set measurable objectives for achieving gender diversity and to assess annually both the objectives and the entity’s progress in achieving them;

(b)disclosethatpolicyorasummaryofit;and

(c)discloseasattheendofeachreportingperiodthe 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)therespectiveproportionsofmenandwomenon the board, in senior executive positions and acrossthewholeorganisation(includinghowthe entity has defined “senior executive” for thesepurposes);or

(2)iftheentityisa“relevantemployer”undertheWorkplace Gender Equality Act, the entity’s most recent “Gender Equality Indicators”, as defined in and published under that Act.

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

The Company has instead required management to monitor gender diversity in line with the Corporate Governance Council Recommendations and intends to take appropriate action should it be of the view that there is insufficient gender diversity within the business.

As at 28 June 2015, there were 31 women employed representing 21% of total employees. There were no womenontheBoardofDirectorsoraspartoftheexecutive team.


(a)haveanddiscloseaprocessforperiodicallyevaluating the performance of the board, its committees and individual directors; and

(b)disclose,inrelationtoeachreportingperiod,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 periodicevaluationofitBoard.TheBoarddidnotconsider this was necessary during the last three years as the business went through a period of considerablerestructuring.TheBoardwillhoweverundertake an evaluation of its performance during the current financial period.

CORPORATE GOVERNANCE STATEMENT CONTINUED




(a)haveanddiscloseaprocessforperiodicallyevaluating the performance of its senior executives; and

(b)disclose,inrelationtoeachreportingperiod,whether a performance evaluation was undertaken in the reporting period in accordance with that process.

TheBoardisresponsibleforassessingtheperformance of the Chief Executive Officer. The Chief Executive Officer is responsible for assessing the performance of the key executives within the Company,inconjunctionwiththeBoard.Executiveassessments are conducted annually.

Formal appraisals are conducted at least annually forotherstaffandkeyperformanceindicatorsareset.

A performance evaluation for senior executives has taken place during the year under the process disclosed.

2. Structure the board to add value

2.1 The board of a listed entity should:

(a)haveanominationcommitteewhich:

(1)hasatleastthreemembers,amajorityofwhom are independent directors; and

(2)ischairedbyanindependentdirector,

and disclose:

(3)thecharterofthecommittee;

(4)themembersofthecommittee;and

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

(b)ifitdoesnothaveanominationcommittee,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 responsibilitieseffectively.

TheBoardhasnotestablishedaNominationsCommittee.TheBoardasawholecarriesoutthefunctions of a Nominations Committee, and Pental believes this is appropriate for a Company of its size andbusiness.TheBoardseekstoensurethatithasan appropriate mix of skills necessary to fulfil its obligations.

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

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.




(a)thenamesofthedirectorsconsideredbytheboard to be independent directors;

(b)ifadirectorhasaninterest,position,associationorrelationshipofthetypedescribedinBox2.3but 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)thelengthofserviceofeachdirector

Directors of Pental are considered to be independent when they are independent of management and free from any business or other relationship that could materially interfere with the exercise of their independent judgment. The following Directors are considered to be Independent: Mr Peter Robinson, Mr John Rishworth and Mr John Etherington. Mr Mel Sutton is considered to be a non-executive director. Mr Alan Johnstone is not considered to be independent as he is a substantial shareholder of the Company.

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

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

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

2.5 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 Chief Executive Officer is not the Chairman.

2.6 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 performtheirroleasdirectorseffectively.

The Company does not have a formal induction program for new directors and will consider implementing a program during the current financial period.

The Company does not provide professional development opportunities for Directors. Given thecurrentskillsetsofeachDirectortheBoardconsiders that this is unnecessary.

3. Promote ethical and responsible decision-making


(a)haveacodeofconductforitsdirectors,seniorexecutives and employees; and

(b)disclosethatcodeorasummaryofit.

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.




4. Safeguard integrity in financial reporting


(a)haveanauditcommitteewhich:

(1)hasatleastthreemembers,allofwhomarenon-executive directors and a majority of whom are independent directors; and

(2)ischairedbyanindependentdirector,whoisnot the chair of the board,

and disclose:


(4)therelevantqualificationsandexperienceofthe members of the committee; and

(5)inrelationtoeachreportingperiod,thenumber of times the committee met throughout the period and the individual attendances of the members at those meetings; or

(b)ifitdoesnothaveanauditcommittee,disclosethat 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.

TheBoardhasestablishedanAuditCommittee.TheAudit Committee consisted of four members, the majority of whom were independent directors.

The Chair of the Committee was and is not the Chair oftheBoardduringtheperiod.

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

4.2 (a)Theboardofalistedentityshould,beforeitapproves the entity’s financial statements for a financial period, receive from its CEO and CFO a declaration that, in their opinion, the financial records of the entity have been properly maintained and that the financial statements comply with the appropriate accounting standards and give a true and fair view of the financial position and performance of the entity and that the opinion has been formed on the basis of a sound system of risk management and internalcontrolwhichisoperatingeffectively.

TheBoardhasobtainedtherelevantassurancesfrom management.

4.3 A listed entity that has an AGM should ensure that its external auditor attends its AGM and is available to answer questions from security holders relevant to the audit.

The external auditor attends its AGM and is available to answer questions from security holders relevant to the audit.



5. Make timely and balanced disclosure


(a)haveawrittenpolicyforcomplyingwithitscontinuous disclosure obligations under the Listing Rules; and

(b)disclosethatpolicyorasummaryofit

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.

6. Respect the rights of shareholders

6.1 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 on a dedicated section headed Corporate Governance.

6.2 A listed entity should design and implement an investorrelationsprogramtofacilitateeffectivetwo-way communication with investors.

The Company has in place a Shareholder CommunicationPolicy,whichpromoteseffectivecommunication with shareholders. The Policy is available on the Corporate Governance section of the Company website.

6.3 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 CommunicationPolicy,whichpromoteseffectivecommunication with shareholders. The Policy is available on the Corporate Governance section of the Company website.

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

The Company 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


(a)haveacommitteeorcommitteestooverseerisk,each of which:



and disclose:




(b)ifitdoesnothaveariskcommitteeorcommitteesthatsatisfy(a)above,disclosethatfactandtheprocesses it employs for overseeing the entity’s risk management framework.

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

TheBoardhasalsoestablishedaStrategyCommittee, the purpose of which includes overseeing the Strategic Planning function and implementation of strategy including risk mitigation.

7.2 The board or a committee of the board should:

(a)reviewtheentity’sriskmanagementframeworkat least annually to satisfy itself that it continues to be sound; and

(b)disclose,inrelationtoeachreportingperiod,whether such a review has taken place.

The Audit Committee reviews the Company’s risk management framework annually and specific risks at each meeting. Key risks is a standing item on Boardmeetingagendas,andmanagementreportsonwhetherriskisbeingeffectivelymanaged.


(a)ifithasaninternalauditfunction,howthefunction is structured and what role it performs; or

(b)ifitdoesnothaveaninternalauditfunction,thatfact and the processes it employs for evaluating andcontinuallyimprovingtheeffectivenessofitsrisk management and internal control processes.

The Company does not have an internal audit function.TheBoardconsidersthatthisisunnecessary given the size of the Company’s operations.

The Audit Committee reviews the Company’s risk management framework and risks generally. Where desirable, the Company has requested its external auditors to review particular operations to ensure internalcontrolsareeffective.

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

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



8. Remunerate fairly and responsibly


(a)havearemunerationcommitteewhich:



and disclose:




(b)ifitdoesnothavearemunerationcommittee,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.

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

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

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

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

WhenthoughtdesirabletheBoardutilisesspecialistthird parties to benchmark executive and non-executive director remuneration.

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

(a)haveapolicyonwhetherparticipantsarepermittedtoenterintotransactions(whetherthroughtheuseofderivativesorotherwise)whichlimit the economic risk of participating in the scheme; and

(b)disclosethatpolicyorasummaryofit.

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

of shareholders, and shareholders alone, to remove directors from office.



ThedirectorsofPentalLimitedsubmitherewiththeannualfinancialreportofthecompanyfortheyear(52weeks)ended 28 June 2015. 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:

Name and Qualifications Experience and Responsibilities

Mr Peter Robinson B.Eco (Mon) Non-Executive Independent Chairman

Peter has a wealth of experience in the manufacturing sector within Australia and internationally. He was the Chief Executive of ACI Packaging Group and Vice President of Owens-Illinois Inc, the parent company of ACI Packaging Group. PreviousrolesincludeChiefOperatingOfficerandDirectorofBTRNylexLimited,andGeneralManagerofBowaterScott,whereheheldsubstantialmarketingroles.

AppointedDirectoron29November2002.

AppointedChairmanon5March2009.

Member of the Audit Committee, Member of the Strategy Committee and Chairman of Remuneration Committee.

Mr Mel Sutton B.Com Non-Executive Vice-Chairman

Mel has extensive experience and a diverse background across a number of key sectors, including food-production, wholesale and retail; facility services; apparel and footwear - wholesale and retail; consumer goods - beverage; and Sporting goods - wholesale and retail. Mel was CEO and a Managing Director of Nike Pacific, Globe International, Colorado Group and a Divisional Chief Executive of George Weston Foods Limited and Spotless Group. Previous roles also include senior executive positions with Lion Nathan and Fosters. Mel, as a Director of ZABSAdvisory&ConsultingPtyLtd,currentlyprovidesadvisoryservicesacrossawide range of disciplines to clients, who operate in and across diverse sectors.

Appointed Director 2 October 2013.

Chairman of Strategy Committee, Member of Audit Committee and Member of Remuneration Committee.

Mr Alan Johnstone Non-Executive Director

Alan has extensive experience in retailing and is the founder and Chairman of the Penfold Motors Group which is one of the largest car retailers in Victoria.

Appointed Director 3 September 2003.

Member of Remuneration Committee.

Mr John Rishworth Non-Executive Independent Director

John has worked in the Fast Moving Consumer Goods sector for over 30 years. He held significant senior positions within Woolworths before founding his own successfulretailbrokeragebusinessin1987.Sincesellingthatbusinesshehastaken on a number of consultancy assignments within the retail sector.

AppointedDirector9September2004

Member of Audit Committee, Member of Remuneration Committee and Member of Strategy Committee.

DIRECTORS’ REPORT


Name and Qualifications Experience and Responsibilities

Mr John Etherington B.Ec, FCA, FAICD Non-Executive Independent Director

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

Appointed Director 2 April 2013.

Chairman of Audit Committee and Member of Remuneration Committee.

The above named directors held office during the whole of the financial year and since the end of the financial year.

Any directorships of other listed companies held by directors in the three years immediately before the end of the financial year are indicated above under “experience and responsibilities”.

DIRECTORS’ REPORT CONTINUED


DIRECTORS’ SHAREHOLDINGS

The following table sets out each director’s relevant interest in shares, debentures, and rights or options in shares or debentures of the company or a related body corporate as at the date of this report.

Directors Fully paid ordinary sharesNumber

Share optionsNumber

Peter Robinson 3,972,926 –

Alan Johnstone 29,849,050 –

John Rishworth 13,207 –

John Etherington – –

Mel Sutton – –

Share options granted to directors and senior management

During and since the end of the financial year, no share options were granted to directors or senior management, however senior management were issued Rights pursuant to the Executive Performance Rights Plan as detailed in the Remuneration Report.

COMPANY SECRETARY

Name & Qualifications Experience and Responsibilities

Mr Oliver Carton BJurisLL.B Company Secretary

Oliver is a qualified lawyer with over 28 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.

PRINCIPAL ACTIVITIES

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

Capital investment of

$5.3 million announced in February 2015 is

on schedule and will not only produce significant cost

savings but allow the business to substantially boost its manufacturing capacity


REVIEW OF OPERATIONS

Key Strategic Achievements

• StronggrowthingrossbrandedsalesinAustraliaof 5.7%, in what remains to be a highly competitive environment in both the Australian and New Zealand markets.

• WhiteKingadvertisingtelevisioncampaignduringthe first half of the financial year not only ensured the health of Pental’s core brand remained strong and front of mind in the market place, but produced a solid increase in sales of featured products.

• ThestrongpipelineofinnovativenewproductssawPental successfully range a number of new products (suchasWhiteKingReadyToUseBleach,WhiteKingAll In 1 In bowl Power Hanger and a new range of Velvet body wash products that commenced May/June 2015.

• Redesignedpackagingofwaxbasedfirelighterssaw the product ranging increase with major supermarkets, supported by solid sales growth with cube firelighters, resulting in an overall increase in dollar margin in this category.

• ArefreshoftheSheppartonmanufacturingteamhas seen an improvement of the manufacturing and warehousing facilities, reduction in the use of outside storage and acceleration in the execution of its manufacturing strategy.

• AppointmentofanAsianBusinessDevelopmentManager with strong operational experience in establishing Fast Moving Consumer Goods operations in Asia to drive Pental’s export growth strategy.

• StageoneofincreasingtheautomationofbleachproductionLineB,wassuccessfullycompletedinthe first half, leading to significant improvement in production efficiency.

• Thecapitalinvestmentof$5.3millionannouncedat the half year is on schedule and expected to be operational by the third quarter of the 2016 financial year. The committed projects include:

− Increasing automation and flexibility of bleach productionLineB(stage2)toallowforincreasedvolume and improve productivity;

− Replacement of the bleach production Line A filler (thathadbeenpreviouslyrelocatedfromthePortMelbournesite)–whichwillminimisewasteanddowntime; and

− Undertake stage 1 of the soap plant modernisation, with the installation of a one-step saponification process-“SWING”plant(oneofonlyfourofitskindintheworld),whichwillprovidesignificantcostsavings.

• ContinuedinvestmentandfocusonOccupationalHealth and Safety not only ensured a safe workforce, but has also produced a significant reduction in Work cover premiums.

• ThepersistentfocusonContinuousImprovement/Complete Lean Solutions and Profit Delivery Project initiatives mitigated many of the raw material cost increases.

• Shareconsolidationof1shareforevery15shareswas completed on 1 December 2014.

• FurtherstrengthenedBalanceSheetwitha$6.644million(netofcostsandtax)capitalraisingviaLoyaltyandPiggyBackoptionsholders.Alloptionshavenowexpired.

• Nogearingandsubstantialcapacitytoenactfuturegrowth and cost reduction strategies - Cash at bank of$11.040million.



Key Financial Outcomes

Consolidatednetprofitaftertaxfortheyear(52weeks)ended28June2015was$5.087million(2014:$5.336million).Thedecreaseinnetprofitaftertaxof$0.249millionisaresultof$0.985millionofone-offcostsin2015financialyear(2014included$0.401millioninprofitrelatingtothesaleoftheCloseUpbrand).

Underlyingnetprofitbeforetax(excludingoneoff/significantitems)of$8.020millionwas15.61%uponlastyear.

FY 15 (i)$’000

FY 14 (i)$’000

Change$’000 %

Gross Sales 111,150 109,376 1,774 +1.62%

Underlying EBITDA 10,287 9,690 597 +6.16%

EBITDA to gross sales 9.26% 8.86% +0.40%

Depreciation&Amortisation (2,113) (1,793) (320)

Underlying EBIT 8,174 7,897 277 +3.51%

EBIT to gross sales 7.35% 7.22% +0.13%

Underlying Profit before Tax 8,020 6,937 1,083 +15.61%

Reported Profit after Tax 5,087 5,336 (249) -4.67%

Working Capital (ii) 16,147 18,568 (2,421) -13.04%

NetCash/(Debt) 11,040 25 (11,015) +100%

(i)Unauditednon-IFRSfinancialtable.(ii)Receivablesplusinventorylesstradeandotherpayables.

• Grosssalesof$111.150millionwereupby1.62%onlastyear,supportbysolidAustralianBrandsalesbeing5.7%abovelastyear.ThiswasoffsetbyweakersalesinNewZealand(0.652%downonlastyear)andlower private label sales where Pental did not engage in aggressive tender pricing campaigns.

Pental’s main focus remains on maintaining/growing acceptable dollar margins and building brand sales, rather than participating in aggressive price reduction tenders just too achieve notional sales growth.

• UnderlyingEBITDAof$10.287millionwas6.16%above last year and has progressively improved since restructuring the Group, with the ongoing capital investment and continuous improvement activities throughout the business, after absorbing the impact of:

− increased labour and raw materials costs that could not be recovered through price increases, but which were recovered by other cost saving initiatives;

− oneoffoperationalcostsof$0.247millionfrom outsourcing bleach gels which are now manufactured in house following completion in the first half of stage one of automating the bleach productionLineB;and

− deterioration of the Australian dollar against the New Zealand and United States currencies, which resultedinacurrencylossof$0.226millioncomparedtotheprioryear’sgainof$0.067million.This was mainly attributable to the conversion of New Zealand profits.

ThefirsthalfEBITDAresultof$3.918millionwas$1.009millionlowerthancorrespondingpriorhalf period, as indicated at the half year, due to strategically moving forward the White King television advertising campaign. As a result, marketing costs in the second half were managed to 3.55% of branded grosssalesamountingto$3.353million-consistentwiththeprioryear(2014$3.162millionor3.50%ofbrandedgrosssales).

• UnderlyingEBITof$8.174millionincreasedby3.51%on last year and represents 7.35% of gross sales. Depreciationincreasedby$0.320millionarisingfrom the increased capital investment required to modernise manufacturing facilities and was impacted by the timing of the capital expenditure benefits being achieved between financial periods.

• Financecostsdecreased$0.806millionto$0.154million, which represents the line fee for the Group’s line of credit to support future growth needs.


• Excludingone-offcostsof$0.985millionbeforetax(or$0.690aftertax)underlyingnetprofitbeforetaxincreasedby$1.083millionto$8.020million. Theoneoff/significantcostsinclude:

- employeerestructuringcostsof$0.432million,asthe business proactively refreshed key operational positionsbeforeembarkingonits$5.3millioncapital expenditure program to execute its manufacturing strategy and from the exit of employees arising from the improved efficiency of operations; and

- animpairmentchargeof$0.553milliononplantand equipment in the process of being replaced as partofthe$5.3millioncapitalinvestmentprogram.

• Thetotaldividendforthe2015financialyearis 2.58 cents per ordinary share based on number of sharesissuedon28June2015(representing60.85%ofunderlyingnetprofitaftertax)andconsistsof:

- Interim fully franked dividend of 0.85 cents per ordinary share which was paid 27 March 2015; and

- Proposed final fully franked dividend of 1.80 cents per ordinary share, payable to shareholders on 30 September 2015, with a record date of 11 September 2015.

• Basic(continuingoperations)earningspershareof4.08centsdecreasedfrom2014(5.10cents),mainlydue to additional shares issued arising from option holdersexercisingtheirLoyaltyandPiggyBackOptionsandnon-recurringone-offcosts.

• Improvedworkingcapitalpositionof$2.421million,mainlyduetoareductionininventoryof$1.545million.

• Netcashatbankof$11.040millionarisingfromstrongcashflowsfromoperationsof$11.810million(2014:$6.991million)anda$6.644million(netofcostsandtax)capitalraisingviaLoyaltyandPiggyBackoptionsholders.


FY 15 (i)$’000

FY 14 (i) $’000

% Change

Underlying EBITDA 10,287 9,690 6.2%

Depreciation and amortisation (2,113) (1,793) 17.8%

Underlying EBIT 8,174 7,897 3.5%

Finance costs (154) (960) -84.0%

Underlying Net Profit Before Tax 8,020 6,937 15.6%

Oneoff/Significantitems:

Employee restructuring (432) –

Impairment of asset being replaced by new equipment (553) –

Profit on sale of Close Up brand name – 401

Net Profit Before Tax 7,035 7,338

(i)Unauditednon-IFRSfinancialtable.


Cash generation and capital management

Networkingcapital(receivables,inventorieslesstradeandotherpayables)of$16.147million,was$2.421millionbetter than last year predominately from a reduction ofinventoryof$1.545milliondrivenbycontinuousimprovements with systems and operational inventory management. Furthermore, a refreshed focus on debtors hasresultedindebtorsdecreasingby$0.608million.

Asolidnetprofitaftertax(withnotaxpaidduringtheyear due to carried forward tax losses, fully utilised in2015financialyear)andstrongworkingcapitalmanagement, has resulted in net cash from operating activitiesof$11.810millionbeing$4.819millionbetterthanlastyear.Thiscovered$4.138millionofcapitalexpenditure and dividend payments. Furthermore the successfulcapitalraising(netofcost)of$6.656millionviaexerciseoftheLoyaltyandPiggyBackOptionshasplacedPentalinastrongnetcashpositionof$11.040million(2014:$0.025million)readyforfurthercapitalinvestment – which will be focused on maximising growth opportunities and reducing costs. No share options remain outstanding, other than the share Rights that are attached to the long term Executive Performance Rights Plan.

Investment in core brands driving stronger market share and sales

The cornerstone of Pental’s growth strategy is to invest in its core brands through media advertising, catalogues, in-store promotions and driven by new innovative products, whilst maintaining tactical activities with a number of its heritage trading brands. This has been demonstrated through its trading performance in 2015 financial year, where the increase in brand sales, supported with an increase in trade spend, resulted in gross margin growth from more profitable brand sales and reduction in costs of goods sold.

Grosssalesgrewby1.62%or$1.774millionwith:

- AustralianBrandsalesbeing5.7%abovelastyear,includingWhiteKing(byleveragingoftheWhiteKingadvertisingcampaignthatoccurredinthefirsthalf),JiffyandLittleLuciferFirelighters,LuxFlakes,Pearssoaps.Thiswasoffsetby

- New Zealand sales that were 0.652% down on last year(expressedinAustraliandollars)duetoanaggressive pricing campaign targeted at Sunlight’s market share - in the dish wash segment. Through product innovation and refocused promotional activities, market share is progressively being

regained in the dish wash segment, whilst other brands in New Zealand such as Janola, Softly, Huggie and Little Lucifer have performed strongly; and

- by not participating in aggressive pricing tenders for private label business, private label sales have decreased. Similarly, new and other existing private label business has been retained at acceptable margins.

To maintain our market share and grow brand sales in Australia and New Zealand trading terms and promotional spend(i.e.salerebatesanddiscounts)increasedby0.78% to 27.0% of gross sales. This additional investment effectivelyincreasedbrandsalesvolume(cartonssold)by7.9%.Asaresultofstrongerbrandsales,anincreasein volume, and continued improvement in sourcing of raw materials, this has grown both dollar and percentage grossmargin.Grossmarginincreasedby$2.093millionfrom 34.34% to 35.68%.

Pressure to maintain and/or increase promotional allowances(evenwhensomeretailersareunderperforming)andtofullyfundpromotionalactivitiesfrommajor retail customers continues to be applied, and this is unlikely to subside. Management of trading terms and promotional activities is a critical element of the business and Pental will continue to invest in resources and systems to maximise its return on investment on its promotional activities.

With the business building on its brand sales and having successfully ranged a number of new innovative products that commenced May/June 2015, this would not have been as successful if it were not for the White King advertising television campaign that was strategically brought forward into the first half of the financialyear(albeitadverselyaffectingtheresultsinthefirsthalf).TheWhiteKingcampaignnotonlyensuredthe health of Pental’s core brand remained strong and front of mind in the market place, but produced a solid increase in sales of featured products.

The timing and agility of marketing activities will change year on year based on the competitive landscape, whichmayaffectthetimingoffinancialresults,butwill be strategically critical in protecting and growing future brand sales. As with the new innovative White King products launched and ranged, new product development, refreshing of packaging/brands and timing of retailer range reviews may span over two financial years. For example, the Velvet range has been extended into body wash following the refresh of the brand in FY14, and the Little Lucifer wax firelighters

Our leading brands continued to be

strengthened through product innovation and marketing investment,

such as the White King advertising television campaign


package was also refreshed, enabling these products to be ranged late in 2015 financial year. These successful activities were achieved by proactively managing marketingcoststo$3.353million(representing3.55%ofbrandedsales),whichisonlymarginallyuponlastyear’s investment of 3.50% of gross branded sales.

Through the work undertaken during the year, Pental has achieved some solid growth in a number of categories(Source:AztecData),suchas:

• 3.1%increaseinWhiteKingToiletCleaners;

• 8.0%increaseinWhiteKingHouseholdCleaners;

• 0.3%increaseinWhiteKingBleach;

• 3.0%increaseinJiffyFirelighters;

• 12.0%increaseinLittleLuciferFirelighters;and

• 4.8%increaseinSoftlyWoolWash.

A review of the strategic plan and brand positioning has reinforced that whilst private label growth is an ongoing area of focus, Pental will accelerate exploiting its core brands not only in Australia and New Zealand but also in entering new overseas markets in high demand for high-quality Australian made products. Accordingly, the marketing investment in the coming year will focus on product development, new product launches and a refresh of core brands in Australia, New Zealand and in new overseas markets. To support these launches, digital and social media will increasingly become a critical part of the overall marketing communication plan that will also continue to include print media and sponsorships.

New product development

The pressures on brands, especially from retailers actively pursuing private label strategies from low-cost alternatives, is now the normal competitive landscape in which Pental operates in. One of the major avenues that Pental has to counter this competition is through innovation and new product development, and delivering these to the market via its agile marketing and manufacturing operations. During the financial year several products were launched into Australian and New Zealand markets.

White King’s focus on leveraging the growth of Toilet and Household Cleaning categories has led to the launch of theWhiteKingReadyToUseBleach,TurboBlockandIn-bowl Mystic Orchid Power Hanger.

• WhiteKingReadyToUseBleachwaslaunchedtobring new, younger users to the bleach category, in response to a growing need for convenience.

• TheWhiteKingIn-bowlPowerHangerMysticOrchidwas introduced as a line extension to leverage the successful Aqua Fresh variant and continue White King’s substantial growth within the Toilet Category’s In-bowl segment. This product has had immediate success, taking only three weeks to outsell the Aqua Fresh variant and contribute to approximately 30% incremental sales for White King’s In-bowl portfolio.

• TheWhiteKingTurboBlockwaslaunchedMay/June2015.TheinnovativeTurboBlockhasafragrance pod which provides a continuous fragrance while the turbo cage ensures a wider surface coverage of bleach with every flush.

Furthermore, White King Oxy Fabric Stain remover was extended in a smaller 1kg size based on segment sales trends, which has been well received by the market.

VelvetGoat’sMilkBodyWashandVelvetSorboleneBodyWash were launched to extend Velvet’s presence into the growing shower gel segment and solidify the brand as a strong player in the beauty bar and wash market. The body wash range resonates with the existing brand positioningofaffordablebeauty.

The importance of innovation and continuously replenishing the new product development pipeline is evident by not only forming part of Pental’s strategic plans, but it is at the heart of its everyday operations. From this position of strength, Pental will continue to launch new products to the market in key categories behind its core brands in the coming year.



Improving manufacturing, procurement and supply chain efficiency

Pental is continuing to restructure and enhance its manufacturing capability, where commercially prudent, to build a stronger business. To accelerate the changes required to the Shepparton manufacturing operations and improve on the consistency of the manufacturing operations, the Shepparton operational team was refreshed, with the appointment of Gerard Segrave as the new Operations Manager and by the outsourcing of the project management of major capital projects. This brought significant operational cultural change tothebusinessasitundertook$5.3millionofcapitalprojects, which are now well underway. The projects are on schedule and expected to be operational by third quarter of the 2016 financial year. These projects will not only achieve significant cost savings but allow the business to substantially boost its manufacturing capacity moving forward. The committed projects include:

• Soapplantmodernisationproject(Phase1)

The installation of state-of-the art “SWING” (SoapWithInsideGlycerin)soapmakingequipment.The equipment will give Pental the flexibility to makebarsoapsfromdifferentrawmaterials;andwill result in major efficiency gains in production, resulting in significant cost savings.

Once phase 1 has been completed, the business willmoveontoconsolidatingthefivedifferentsoaplines and increasing the automation of its soap manufacturing lines.

• NewWhiteKingbleachfillingequipment

This machinery utilises the latest technology in filling equipment(toreplacetheBleachLineAfillerthathadbeen previously relocated from the Port Melbourne site)andwillhavemajorefficiencyandenvironmentaladvantages by creating less trade waste, allowing more precision in filling and increased yields.

• Upgradeofsecondproductionline(forbleachvariants)

Increased line flexibility in automation of bleach productionLineBwillenablePentaltoincreaseproduct innovation, reduce production costs and improve throughput on the line.

During the financial year the business also successfully executed a number of other capital projects included in the$4.138millioncapitalexpenditurefor2015financialyear, such as:

• completionofstageoneofincreasingtheautomationofbleachproductionLineBwithabottleunscramble,which eliminated the use of casual labour in this area and boosted the capacity of the line;

• installationofchillingequipmentinthebleachplant,which eliminated the downtime experienced in prior years due to the high temperatures over the summer period;

• replacementofthesoaproller(thathadlastedforover20year),whichhasalsohelpreducewastage;

• additionalrackingfortheSheppartonwarehousefacility which reduced third party outside storage; and

• furtherenhancementswithourERP(EnterpriseResourcePlanning)andforecastingsystems.

The next phases of the manufacturing/sourcing strategy which are currently being evaluated include a new high speed liquid line, bulk line and completing the automationofthebarsoaplines(stage2),whichwillenable Pental to compete in a number of new categories and channels for both brand and private label products. The evaluation of these projects will not only involve the appraisal of available equipment, but reviewing sale opportunities with retailers and/or potentially acquiring existing businesses to achieve Pental’s long term growth objectives.

With a refreshed operational team and continued focus on lean manufacturing/continuous improvement disciplines, the business is progressively improving its efficiency on a number of production lines. This has been slower than initially anticipated as at times it has been hampered with inconsistent machine performance/breakdowns, for examples the White KingbleachLineAfiller(whichisbeingreplaced).These bottlenecks are being proactively monitored and addressed by improving our preventive maintenance program and/or replacement of equipment, where appropriate, which forms part of the overall manufacturing and sourcing strategy. Simultaneously, with the investment in the prior year in a new forecast and trade spend system, safety stock levels were reduced and production runs were increased to improve manufacturing line efficiency without increasing stocks on hand. In fact, stock on hand decreasedby$1.545million.

White King advertising campaign produced solid growth

in the sale of featured products


With market conditions constantly changing and ongoing price increase pressure from local and overseas suppliers, and the impact of the United States dollar from an import perspective, Pental was successful in not only neutralising cost increases, but initiating a number of “Profit Delivery Projects” to reduce the cost of goods. Gross margin improved from 34.34% to 35.68%.

To continually ensure our raw materials and imported finished goods remain cost competitive, not only is the procurement team proactively tendering and seeking alternative suppliers but Pental is also benchmarking with overseas procurement experts. Furthermore, as Pental works towards expanding its exporting opportunity beyond New Zealand, the appointment of thenewAsianBusinessDevelopmentManagerwillalsosupport the procurement and marketing teams with new product development opportunities.

From a supply chain perspective, the increase in sales resulted in a 20% increase in the number of pallets handled, mainly on lower valued private label items which resulted in freight and distribution costs increasing by 0.5% to 8.54% of gross sales. At the same time, a number of Profit Delivery Projects were undertaken to mitigate the increase in freight costs. These included the Shepparton warehouse storage capacitybeingincreasedby15%(800palletlocations)by reorganising the site and the realignment of stock holdings for fast moving lines, which resulted in a lower reliance on third outside party storage and handling; a renegotiation of export container rates; and improving intermediary transport routes. Moving forward a numberofsupplycontracts(includingoutsidestorage)are due for renewal and Pental is well underway at reviewing alternative business models and suppliers to support its growth strategies.

Business strategy and operational risks

Pental’s vision is to be a leading supplier of shelf stable(non-food)productstoitschosenmarketsbuiltaround a reputation of delivering quality, innovation and sustainability to the satisfaction of customer needs whilst enhancing shareholder value.

ThemanagementteamandtheBoardreviewedthestrategy and the core direction remains unchanged other than increasing emphasis in expanding the export market. Pental’s strategy to deliver the vision focuses on:

• Investinginbrandsupportforcorebrandsandfurther developing customer channel plans;

• Continuingtobuilditsnewproductpipelinesandlaunching new products to the market;

• Growingexportandprivatelabelbusinessandexpanding into the bulk commercial/industrial business;

• Investinginitsmanufacturingcapabilitytomaintainand improve efficiency of the current products manufactured and for future growth opportunities, whereimportationoftheproductisnotcosteffectiveand/or not aligned with its Australia made, Australia-owned market positioning;

• Investinginplanningandreportingsystemsinkeyareas of trade spend, logistics and manufacturing; and

• Proactivelysearchingfornewpartnerships,distributorships and acquisitions that will complement Pental’s product range/expertise and scope to leverage the company’s infrastructure, and/or provide the ability to expand into new channels.


Strengthening our manufacturing capabilities to become a leading low-cost producer through process improvements and further capital investments, and investing to grow our power brands, are cornerstones in our strategic plans


To deliver this strategy, Pental believes a strong company culture with highly engaged employees through training and development of high achievers, and establishment of a culture of continuous improvement are critical organisational enablers, supported by its core values of:

COREVALUES

CUSTOMERThe key to

our success

FAIRNESSIntegrity andconsistency

QUALITYIs everything

we do

SAFETYMust always

come first

PEOPLEA focus on what

matters most

There are a number of operational risks, both specific to Pental and of a general nature, 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 such as tallow and/or sustainable palm noodles used in some soap products, andthepriceofresinaffectingthecostofbottles.Thespecific material business risks faced by the Group and how the Group manages these risks are set out below:

• Competition: the majority of Pental’s products are sold in supermarkets in Australia and New Zealand, which are dominated by two major participants in Australia. These retailers have been aggressively reviewing their product mix and also implementing a move towards their own or private label products. This has the potential to lead to delisting of Pental’s products by one or both of those retailers which could cause a significant drop in sales of any product

delisted. The two major participants have also been engaging in an aggressive campaign for market share, primarily through product price reductions. This has made it difficult for Pental to pass on price rises, despite rising production costs, thus impacting margins. This situation is not expected to change in the short to medium term. Pental believes it can continue to successfully operate in the Fast MovingConsumerGoods(FMCG)marketthroughstrong product innovation and managing its product sourcing and manufacturing costs;

• Product sourcing: Pental relies on a range of parties for its product sourcing strategy. Any change in existingrelationships(includingtheterminationofanykeysupplyarrangements)oranychangeinterms or conditions of overseas/local suppliers and any change in the political or economic environment may lead to material adverse changes to Pental’s operational and financial performance. Pental is continually refining its sourcing arrangements and has in many instances dual sourcing arrangements that facilitates in reducing this risk;


• Supply chain: Pental has established an extensive and reliable supply chain that allows it to procure and deliver products to customers in a timely and efficient manner. Disruption to any 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, shows that Pental is able to effectivelymanagethisrisk;

• Loss of key personnel : Pental’s future success depends to a significant extent on the retention of key personnel, in particular its management team. These individuals have extensive experience in, and knowledge of the market Pental operates in and Pental’s business. The loss of key personnel and the time taken to recruit suitable replacements oradditionalpersonnelcouldadverselyaffecttheCompany’sfuturefinancialperformance.TheBoardhas reviewed the organisational structure of the business and will continue to do so to ensure the best people are retained, whilst investing in developing other key people in the business; and

• Damage to Pental’s brands: the reputation and value associated with Pental’s brand names could be adversely impacted by a number of factors including failure to provide customers with the quality of products they expect and 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 haveanadverseeffectonPental’sfuturefinancialperformance. Pental believes that its processes and systems, and pro-active tracking and management of any disputes, minimises this risk.

Health and Safety

The Group is committed to the health and safety of all its employees. It believes that all incidents are preventable. There is a continuing commitment to identify and eliminate risks with the prime objective being to prevent injuries from occurring. The Group’s core value of “safety must always come first” has been set at the top of the organisation and is reinforced through commitment of resources at its Shepparton manufacturing and distribution site.

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 changesinthestateofaffairsoftheGroup,otherthanas referred to in this Annual Report.

FUTURE DEVELOPMENTS

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

SUBSEQUENT EVENTS

There has not been any matter or circumstance occurring subsequent to the end of financial year that hassignificantlyaffected,ormayaffect,theoperationsof the Group, the results of those operations, or the state ofaffairsoftheGroupinfuturefinancialyears.

DIVIDENDS

Inrespectoftheyear(52weeks)ended29June2014(prioryear)thecompanypaidafullyearfullyfrankeddividendof1.80centsperordinaryshare(adjustedfortheconsolidationofordinarysharesof15to1)toshareholders on 30 September 2014.

Inrespectoftheyear(52weeks)ended28June2015aninterim fully franked dividend of 0.85 cents per ordinary share was paid on 27 March 2015 and the directors have declared the payment of a final fully franked dividend of 1.80 cents per ordinary share, payable to shareholders on 30 September 2015, with a record date of 11 September 2015. The total dividend for the financialyearof2.58centspershare(basedonnumberofsharesonissueat28June2015)representsapayoutratio of 60.85% of the full year underlying earnings.



ENVIRONMENTAL REGULATIONS

The Shepparton manufacturing site is subject to various pieces of environmental legislation. Licences and Agreements relevant to the environmental performance of its operations are currently held with Goulbourn Valley.

With the consolidation of all manufacturing at the Shepparton site over the last few years and the increase in volume produced, Pental has exceeded it trade waste levelsascontractedwithGoulbournValleyWater.Bothparties are actively monitoring the amount of trade waste discharge and working together to rectify the shortcomings. As part of a number of remedial actions, thebleachproductionLineAfiller(whichisamajorcontributortotradewastedischarge)isplannedtobereplaced by December 2015, which formed part of the capital projects announced at the 28 December 2014 half year.

Environmental performance is reported to the Site ManagementgroupandtotheBoardasrequired

SHARES UNDER OPTION OR ISSUED ON EXERCISE OF OPTIONS

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

Prior to share consolidation on 1 December 2014, loyaltyoptionholdersexercised79,172,002optionstoacquire one fully paid ordinary share per option before they expired on 11 September 2014. As a result, the companyissued79,172,002ordinarysharesraising$1.584millionlessshareissuecostsof$0.023million.

Alsopriortotheshareconsolidation,PiggyBackOptionholdersexercised957,282optionstoacquireonefully paid ordinary share per option. Post the share consolidation;PiggyBackOptionholdersexercised11,279,431optionstoacquireonefullypaidordinaryshare per option before they expired on 6 June 2015. In totaltheCompanyraised$5.105millionlessissuecostsof$0.041millioninrelationtoallPiggyBackOptionsexercised during the financial year.

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(asnamedabove),thecompanysecretary,Oliver Carton, and all executive officers of the company and of any related body corporate against a liability incurred as 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.


PROCEEDINGS ON BEHALF OF THE COMPANY

No proceedings have been brought against the company.

NON-AUDIT SERVICES

Details of amounts paid or payable to the auditor for non-audit services provided during the year by the auditor are outlined in Note 31 to the financial statements.

The directors are satisfied that the provision of non-audit services during the year, by the auditor (orbyanotherpersonorfirmontheauditor’sbehalf)iscompatible 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 31 to the financial statements do not compromise the external auditor’s independence, based on advice received from the Audit Committee, for the following reasons:

• allnon-auditserviceshavebeenreviewedandapproved to ensure that they do not impact the integrity and objectivity of the auditor, and

• noneoftheservicesunderminethegeneralprinciplesrelating to auditor independence as set out in Code of Conduct APES 110 Code of Ethics for Professional Accountants issued by the Accounting Professional &EthicalStandardsBoard,includingreviewingor 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 37 of the annual report.

ROUNDING OFF OF AMOUNTS

The company is a company of the kind referred toinASICClassOrder98/0100,dated10July1998, and in accordance with that Class Order amounts in the directors’ report and the financial report are roundedofftothenearestthousanddollars,unlessotherwise indicated.

DIRECTORS’ MEETINGS

Thefollowingtablesetsoutthenumberofdirectors’meetings(includingmeetingsofcommitteesofdirectors)heldduringthefinancialyearandthenumberofmeetingsattendedbyeachdirector(whiletheywereadirectororcommitteemember).Duringthefinancialyear,12board,4auditcommittee,2remunerationcommitteeand3strategycommittee meetings were held.

Board of Directors

Audit Committee

Remuneration Committee

Strategy Committee

Directors Eligible to Attend Attended Eligible

to Attend Attended Eligible to Attend Attended Eligible

to Attend Attended

Peter Robinson 12 12 4 4 2 2 3 3

Alan Johnstone 12 9 - - 2 2 - -

John Rishworth 12 11 4 4 2 2 3 3

John Etherington 12 12 4 4 2 2 - -

Mel Sutton 12 11 4 4 2 1 3 3


A refresh of the operational team has seen an improvement in manufacturing and warehousing, and acceleration in the execution of our manufacturing strategy


REMUNERATION REPORT - AUDITED

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

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

Peter Robinson Non-executive Independent Chairman

Mel Sutton Non-executive Vice-Chairman

Alan Johnstone Non-executive Director

John Rishworth Non-executive Independent Director

John Etherington Non-executive Independent Director

Charlie McLeish Chief Executive Officer

Albert Zago Chief Financial Officer

Remuneration Policy

The remuneration policy of Pental Limited has been designed to align director and executive objectives with shareholder and business objectives by providing a fixed remunerationcomponentandofferingspecificshorttermand long-term incentives based upon key performance areasaffectingtheGroup’sfinancialresults.Theboardof Pental Limited believes the remuneration policy to be appropriateandeffectiveinitsabilitytoattractandretainthe best executives and directors to run and manage the Group, as well as create goal congruence between directors, executives and shareholders.

TheBoard’spolicyfordeterminingthenatureandamount of remuneration for board members and senior executives of the Group is as follows:

The remuneration policy, setting the terms and conditions for the executive directors and other senior executives, wasdevelopedandapprovedbytheBoard.Executivepackages 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. The performance of executives is measured regularly against agreed criteria 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 performance criteria. Executives are also entitled to participate in a performance rights plan.

The directors and executives receive a superannuation guarantee contribution required by the law, and do not receive any other retirement benefits. Some individuals, however, have chosen to sacrifice part of their salary to increase payments towards superannuation.

TheBoardpolicyistoremuneratenon-executivedirectors at market rates for comparable companies fortime,commitmentandresponsibilities.TheBoarddetermines 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 directorsasperlastapprovalis$0.750million.Feesfornon-executive directors are not linked to the performance of the Group. No shares or options have been issued to non-executive directors, under the performance rights plan or the option scheme, within the last five years.

Key terms of employment contracts

Mr Charlie McLeish is employed by the Group under a three year contract which was renewed on 1 August 2012. The period of notice required by either party to terminate the contract is nine months’ notice for termination without cause. Mr McLeish is entitled to receive a maximum yearly bonus of thirty five per cent of his base salary plus superannuation. He is also entitled to participate in the Executive Performance RightsPlan(RightsPlan)asalongtermincentive,whichis aligned to the Company’s performance.

Mr Albert Zago is employed by the Group under an ongoing contract which may be terminated on 3 months notice by either the Company or the executive. Mr Zago is entitled to receive a maximum yearly bonus of thirty per cent of his base salary plus superannuation. Mr Zago will also be entitled to participate in the executive Rights Plan.


Relationship between the remuneration policy and company performance

The remuneration policy has been tailored to increase goal congruence between shareholders, directors and executives. This has been achieved through a performance based bonus system based on key performance indicators.

The tables below set out summary information about the Group’s earnings and movements in shareholder wealth for thefiveyearstoJune2015.IthasbeenthefocusoftheBoardofDirectorstoretainmanagementpersonnelessentialto the profitable operations of the Group, and to attract suitable executives.

28 June2015 $’000

29 June2014 $’000

30 June2013 $’000

30 June2012 $’000

30 June2011 $’000

Gross sales 111,150 109,376 141,060 191,049 166,099

Netprofit/(loss)beforetaxfromcontinuing operations

7,035 7,338 739 (66,578) 9,572

Netprofit/(loss)aftertaxattributabletomembers of the parent entity

5,087 5,336 1,893 (61,386) 4,758

28 June 2015

29 June4 2014

30 June4

201330 June4

201230 June4

2011

Share price at start of year 4 $0.033 $0.020 $0.075 $0.40 $0.53

Share price at end of year $0.44 $0.033 $0.020 $0.075 $0.40

Interimdividend(cents)pershare 1, 3 0.85 - - - 1.0

Finaldividend(cents)pershare 1, 2, 3 1.80 0.12 - - 1.5

Basicearnings(cents)pershare3 4.08 0.34 0.20 (32.16) 3.99

Dilutedearnings(cents)pershare3 4.02 0.33 0.20 (32.16) 3.99

1 Franked to 100% at 30% corporate income tax rate.

2 Declared after the balance date and not reflected in the financial statements of that year.

3 On 1 December 2014, ordinary shares and options on issue were consolidated on the basis of 15 to 1.

4 Information provided is prior to the 1 December 2014 share consolidation on the basis of 15 to 1.


Since setting a new strategic direction three years ago, Pental has grown its gross sales and underlying Net Profit Before Tax year-on-year in a highly competitive market and continues to make positive inroads on delivering against our strategic objectives


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

2015

Short-term employee benefits

Post-employment

benefits

Share-based payments

Total$

Salary & Fees

$Bonus

$

Non-monetary(i)

$Superannuation

$Rights

$

Non Executive Directors

Peter Robinson 91,540 - - 8,676 - 100,216

Mel Sutton 63,942 - - 6,073 - 70,015

Alan Johnstone 54,795 - - 5,205 - 60,000

John Rishworth 54,795 - - 5,205 - 60,000

John Etherington 55,214 - - 5,205 - 60,419

Total Directors 320,286 - - 30,364 - 350,650

Executives

Charlie McLeish 376,256 40,000 4,381 35,744 - 456,381

Albert Zago 290,217 30,000 5,604 18,783 - 344,604

Total Executives 666,473 70,000 9,985 54,527 - 800,985

Total Remuneration 986,759 70,000 9,985 84,891 - 1,151,635

(i)Non-monetarybenefitsincludescarparking&motorvehicletolltags.


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

2014

Short-term employee benefits

Post-employment

benefits

Share-based payments

Total$

Salary & Fees

$Bonus

$

Non-monetary(iii)

$Superannuation

$Rights

$


Peter Robinson (iv) 91,879 - - 8,467 - 100,346

Alan Johnstone 54,930 - - 5,081 - 60,011

John Rishworth 54,930 - - 5,081 - 60,011

John Etherington (iv) 54,517 - - 5,064 - 59,581

Mel Sutton (i) 40,894 - - 3,783 - 44,677

Total Directors 297,150 - - 27,476 - 324,626

Executives

Alan Fisher (ii) 339,766 - 18,944 19,514 - 378,224

Charlie McLeish 322,541 - 2,876 38,249 - 363,666

Albert Zago 261,070 - 3,657 22,867 - 287,594

Total Executives 923,377 - 25,477 80,630 - 1,029,484

Total Remuneration 1,220,527 - 25,477 108,106 - 1,354,110

(i)MrSuttoncommencedon3October2013

(ii)MrFisherresignedastheChiefExecutiveon31December2013,butcontinuedinaconsultingcapacityuntil16April2014.

(iii)Non-monetarybenefitsincludenovatedcarlease,carparking&motorvehicletolltags.

(iv)Theprioryearcomparativehasbeenadjustedtobeconsistentwiththepresentationinthecurrentyear.

Transactions with key management personnel

From 1 December 2014 a director related entity of Mr Sutton provided consultancy services to Group. During the financial year$120,200inconsultingserviceswaspaid.

AdirectorrelatedentityofMrJohnstonewaspaidrentalof$668,199(2014:$650,000)plusGSTandoutgoings,asthelandlord of the Shepparton manufacturing and warehousing sites.

Related party transaction details are outlined in Note 26.

Share-based payments (Rights Plan)

TheCompanyhasanExecutivePerformanceRightsPlan(RightsPlan)toprovideLongTermIncentives(LTI)thatisaligned to the Group’s long term strategy. LTI will be provided as performance Rights granted at the commencement of the relevant three year performance period. The Rights Plan was introduced on 18 December 2014 and provides selected executives with a means of acquiring conditional Rights to acquire an ordinary share in Pental subject to the terms of the Plan, once milestones are met.

The Rights issued and converting Rights to ordinary shares are at no consideration.

TheBoardmayalsoofferoptionsundertheRightsPlan,wherebytheoptionwillhaveanexerciseprice,whilsttheRightdoesnot.Therewerenooptionsgrantedduringthe2015year(2014:nil).



The vesting of the Rights is conditional on:

a)theexecutivebeingemployedbythePentalGrouponthevestingdate;and

b)Pental’searningspershareforthefinancialyearpriortothevestingdate(3July2017)exceeding5.25cents;

thereafter a percentage of the Rights will vest based on achieving the following strategic targets:

• Grosssalesrevenuegrowth(40%weightingofRights)

• EarningsBeforeInterestandTax(EBIT)margin(40%weightingofRights)

• AcquiredbusinessEBITmargin(20%weightingofRights).

Under the Rights Plan the executives can achieve the following LTI:

Percentage of fixed remuneration by achieving:

Threshold Targets Strategic Targets Stretch Strategic Targets

Charlie McLeish 13% 25% 50%

Albert Zago 10% 20% 40%

Details of performance Rights over ordinary shares in the Company that were granted to key management personnel during the reporting period are set out in the following table:

Grant Date Vesting Date

Rights granted during2015No.

Fair Value per Rightat grant

date$

Fair value of rights granted

during the year

$

Charlie McLeish 18 Dec 2014 3 July 2017 740,741 0.407 301,482

Albert Zago 18 Dec 2014 3 July 2017 444,444 0.407 180,889

The Rights are forfeited upon the earliest of the following:

a)iftheemployeeceasesemploymentwiththeGroup;

b)theBoarddeterminesthevestingconditionshavenotbesatisfied;or

c)expirydate,beinguptosevenyearsafterthegrantdateoftheRights.

The following factors were used in determining the fair value of the performance rights granted during the year:


Fair value per Right

$

Exercise Price

$

Price of shares on grant date

$

Estimated volatility

%

Risk free Interest

Rate%

Dividend Yield

%

18 December 2014 3 July 2017 0.407 - 0.415 4.82 2.15 4.34

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


Balance at 29/6/2014

No.

Rights granted

No.

Rights vested

No.

Rights lapsed

forfeited No.


No.

Charlie McLeish 18/12/2014 3/7/17 - 740,741 - - 740,741

Albert Zago 18/12/2014 3/7/17 - 444,444 - - 444,444


Underthepreviousexecutiveoptionincentiveplan(thathasbeenreplacedbyanewExecutivePerformanceRightsPlanon18December2014),therewerenoshareoptionsgrantedduringthe2015year(2014:nil).

During or since the end of the financial year, no fully paid ordinary shares were issued by the Group as a result of the exercise of options under the superseded executive option incentive plan.

Key management personnel equity holdings

Fully paid ordinary shares of Pental Limited held by key management personnel:

Balance at

30/6/13

Options exercised

Net change other

Balance at

29/6/14

Share (iv)

ConsolidationOptions

exercised

Net change other

Balance at

28/6/15(v)


Peter Robinson 39,729,256 9,932,314 - 49,661,570 (46,350,798) 662,154 - 3,972,926

Alan Johnstone (i) 296,988,894 73,698,530 3,349,752 374,037,176 (349,101,362) 4,913,236 - 29,849,050

John Rishworth 132,064 33,016 - 165,080 (154,075) 2,202 - 13,207

John Etherington - - - - - - - -

Mel Sutton - - - - - - - -

Executives

Charlie McLeish (iii) - - - - - - - -

Alan Fisher (ii)(iii) 2,533,068 633,272 (3,166,340) - - - - -

Albert Zago (iii) - - - - - - - -

(i) Netchangeotherrelatestosharespurchasedandsoldduringthefinancialyear.

(ii) NetchangeotherrelatestoremovalofsharesownedbyMrFisherwhoresignedon31December2013.

(iii)MrMcLeishandMrZagohavebeenissuedrightsunderanExecutivePerformanceRightsPlan.NoequitywasissuedunderthepreviousexecutiveoptionincentiveplantoMrMcLeish, Mr Fisher or Mr Zago during the 2014 and 2015 financial years.

(iv)On27November2014,followingshareholderapproval,theCompanyconsolidateditssharecapitalona15for1basis.Thenumberdisclosedrepresentedtheadjustmenttooptions held.

(v) Therehasbeennochangeinshareholdingsfromtheendofthefinancialyeartothedateofthisreport.



Key management personnel share option holdings

Number of share options of Pental Limited held by key management personnel:

• Duringthefinancialyear,nooptionsweregrantedorexercisedbykeymanagementpersonnel,exceptassetoutbelow(2014:nil).

• MrMcLeishandMrZagohavebeenofferedrightsunderanExecutivePerformanceRightsPlan.Noequityoroptionsunder the Company performance rights plan were issued to Mr Zago or Mr McLeish during the 2014 and 2015 financial years.

Balance at

29/6/14(i)

Options Exercised(ii)

Balance at

28/6/15(iii)


Peter Robinson 9,932,314 662,154 -

Alan Johnstone 73,698,530 4,913,236 -

John Rishworth 33,016 2,202 -

Executive

Charlie McLeish - -

Albert Zago - -

(i)ThenumbersofoptionsshownarePiggyBackOptionspriortosecuritiesconsolidationon 27 November 2014 under the share capital consolidation.

(ii)Numberofoptionsexercisedaftertheconsolidationofoptions,underthesharecapitalconsolidation.

(iii)Therehavebeennochangesinoptionsfromtheendofthefinancialyeartothedateofthisreport.

Thisdirectors’reportissignedinaccordancewitharesolutionofdirectorsmadepursuanttos.298(2)oftheCorporations Act 2001.

On behalf of the Directors

Peter RobinsonChairmanMelbourne, 24 August 2015.

When only a powerful clean will do

When only a powerful clean will do


AUDITOR’S INDEPENDENCE DECLARATION

Liability limited by a scheme approved under Professional Standards Legislation Member of Deloitte Touche Tohmatsu Limited.


INDEPENDENT AUDITOR’S REPORT

Liability limited by a scheme approved under Professional Standards Legislation. Member of Deloitte Touche Tohmatsu Limited

26

Deloitte Touche Tohmatsu A.B.N. 74 490 121 060 550 Bourke Street Melbourne VIC 3000 GPO Box 78 Melbourne VIC 3001 Australia DX: 111 Tel: +61 (0) 3 9671 7000 Fax: +61 (0) 3 9671 7001 www.deloitte.com.au

Independent Auditor’s Report to the Members of Pental Limited

Report on the Financial Report We have audited the accompanying financial report of Pental Limited, which comprises the consolidated statement of financial position as at 28 June 2015, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of cash flows and the consolidated statement of changes in equity for the year ended on that date, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration of the consolidated entity, comprising the company and the entities it controlled at th e year’s end or from time to time during the financial year as set out on pages 28 to 58. Directors’ Responsibility for the Financial Report The directors of the company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In Note 2, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that the financial statements comply with International Financial Reporting Standards. Auditor’s Responsibility Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control, relevant to the company’s preparation of the financial report that gives a true and fair view, in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Liability limited by a scheme approved under Professional Standards Legislation Member of Deloitte Touche Tohmatsu Limited.

pages 40 to 82.


INDEPENDENT AUDITOR’S REPORT CONTINUED

27

Auditor’s Independence Declaration In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001. We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of Pental Limited, would be in the same terms if given to the directors as at the time of this auditor’s report. Opinion In our opinion: (a) the financial report of Pental Limited is in accordance with the Corporations Act 2001, including:

(i) giving a true and fair view of the consolidated entity’s financial position as at 28 June 2015 and of its performance for the year ended on that date; and

(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001; and (b) The consolidated financial statements also comply with International Financial Reporting Standards as disclosed in

Note 2.

Report on the Remuneration Report We have audited the Remuneration Report included on pages 20 to 24 of the directors’ report for the year ended 28 June 2015. The directors of the company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. Opinion In our opinion the Remuneration Report of Pental Limited for the year ended 28 June 2015, complies with section 300A of the Corporations Act 2001. DELOITTE TOUCHE TOHMATSU Andrew Reid Partner Chartered Accountants Melbourne, 24 August 2015

pages 29 to 35


DIRECTORS’ DECLARATION

The directors declare that:

(a)intheDirectors’opinion,therearereasonablegroundstobelievethatthecompanywillbeabletopayitsdebtsasand when they become due and payable;

(b)intheDirectors’opinion,theattachedfinancialstatementsandnotestheretoareinaccordancewiththeCorporations Act 2001, including compliance with accounting standards and giving a true and fair view of the financial position and performance of the Group;

(c)intheDirector’sopinionthefinancialstatementsandnotestheretoareinaccordancewithInternationalFinancialReportingStandardsissuedbytheInternationalAccountingStandardsBoardasstatedinnote2tothefinancialstatements; and

(d)theDirectorshavebeengiventhedeclarationsrequiredbys.295AoftheCorporationsAct2001.

Atthedateofthisdeclaration,thecompanyiswithintheclassofcompaniesaffectedbyASICClassOrder98/1418.The nature of the deed of cross guarantee is such that each company which is party to the deed guarantees to each creditor payment in full of any debt in accordance with the deed of cross guarantee.

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

Signedinaccordancewitharesolutionofthedirectorsmadepursuanttos.295(5)oftheCorporationsAct2001.

On behalf of the Directors

Peter RobinsonChairmanMelbourne, 24 August 2015.

DIRECTORS’ DECLARATION


Note 2015$’000

2014$’000

Continuing Operations

Gross sales revenue 111,150 109,376

Sales rebates and discounts (29,987) (28,654)

Sales revenue 3 81,163 80,722

Other revenue and income 3 216 336

Changes in inventory of finished goods and work in progress 1,513 1,257

Raw materials, consumables used and utilities (43,020) (44,416)

Employeebenefitsexpense(excludingterminationbenefits) 7 (11,588) (11,588)

Depreciation and amortisation expense 7 (2,113) (1,793)

Freight and distribution expense (9,487) (8,794)

Repairs and maintenance expense (1,001) (853)

Marketing expenses (3,353) (3,162)

Other expenses (4,156) (3,812)

Significant Income and Expenses:

− Profit on sale of brand 7 - 401

− Impairment of property, plant and equipment (553) -

− Employee restructuring costs (432) -

Profit before interest and tax 7,189 8,298Finance costs 5 (154) (960)

Profit before tax 7,035 7,338Income tax expense 6 (1,948) (2,002)

Net Profit for the year 5,087 5,336Profit Attributable to Members of the Parent Entity 5,087 5,336

Other comprehensive incomeItems that may be classified subsequently to profit or loss:

Gain/(loss)oncashflowhedgestakentoequity 430 (154)

Income tax relating to components of other comprehensive income (129) 46

Othercomprehensiveincomefortheyear(netoftax) 301 (108)

Total comprehensive income for the year 5,388 5,228

Profit attributable to equity holders of the parent 5,087 5,336

Total comprehensive income attributable to equity holders of the parent 5,388 5,228

Earnings per share Attributable to the Members of the Parent Entity Basic(centspershare)* 8 4.08 5.10

Diluted(centspershare)* 8 4.02 4.95

*Previouscorrespondingperiodfigureshavebeenadjustedforconsolidatednumberofissuedshares.

Notes to the financial statements are included on pages 45 to 82.

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME fortheyear(52weeks)ended28June2015


Note 28 June 2015$’000

29 June 2014$’000

Current assets

Cash and cash equivalents 27(a) 11,040 548

Trade and other receivables 9 24,118 24,726

Inventories 10 7,400 8,945

Other financial assets 11 275 -

Other 16 448 419

Total current assets 43,281 34,638

Non-current assets

Plant and equipment 13 15,252 13,745

Deferred tax assets 6 - 1,567

Goodwill 14 25,084 25,084

Other intangible assets 15 15,202 15,237

Total non-current assets 55,538 55,633

Total assets 98,819 90,271

Current liabilities

Trade and other payables 17 15,371 15,103

Borrowings 19 - 523

Other financial liabilities 18 - 154

Current tax payables 6 42 -

Provisions 20 1,274 1,364

Total current liabilities 16,687 17,144

Non-current liabilities

Deferred tax liabilities 6 287 -

Provisions 20 111 112

Total non-current liabilities 398 112

Total liabilities 17,085 17,256

Net assets 81,734 73,015

Equity

Issued capital 21 90,658 84,014

Reserves 193 (108)

Accumulated losses (9,117) (10,891)

Total equity 81,734 73,015


CONSOLIDATED STATEMENT OF FINANCIAL POSITION as at 28 June 2015


NoteIssued capital$’000

Hedging reserve$’000

Retained earnings

$’000Total $’000

Balance at 30 June 2013 78,309 - (16,227) 62,082

Profit for the year - - 5,336 5,336

Gain/(loss)oncashflowhedges - (154) - (154)

Deferred tax arising on hedges - 46 - 46

Total comprehensive income for the year - (108) 5,336 5,228

Share issue 21 5,806 - - 5,806

Share issue costs 21 (145) - - (145)

Income tax on share issue costs 21 44 - - 44

Balance at 29 June 2014 84,014 (108) (10,891) 73,015

Balanceat29June2014 84,014 (108) (10,891) 73,015

Profit for the year - - 5,087 5,087

Gain/(loss)oncashflowhedges - 430 - 430

Deferred tax arising on hedges - (129) - (129)

Total comprehensive income for the year - 301 5,087 5,388

Dividend Payment - - (3,313) (3,313)

Share issue 21 6,688 - - 6,688

Share issue costs 21 (63) - - (63)

Income tax on share issue costs 21 19 - - 19

Balance at 28 June 2015 90,658 193 (9,117) 81,734


CONSOLIDATED STATEMENT OF CHANGES IN EQUITY fortheyear(52weeks)ended28June2015


Note 2015$’000

2014$’000

Cash flows from operating activities

Receipts from customers 133,459 128,666

Payments to suppliers and employees (121,564) (120,111)

Interest received 69 52

Interest and other costs of finance paid (154) (1,616)

Net cash provided by operating activities 27(b) 11,810 6,991

Cash flows from investing activities

Payments for plant and equipment 13 (3,805) (4,628)

Payments for intangible assets 15 (333) (387)

Proceedsfromsaleofproperty,plant&equipment - 600

Net cash provided used in investing activities (4,138) (4,415)

Cash flows from financing activities

Proceeds from issue of shares 21 6,688 5,806

Payment for share issue costs 21 (32) (145)

Repayment of borrowings - (12,556)

Dividends paid 22 (3,313) -

Net cash provided by/(used in) financing activities 3,343 (6,895)

Net increase/(decrease) in cash and cash equivalents 11,015 (4,319)

Cash and cash equivalents at the beginning of the financial year 25 4,344

Cash and cash equivalents at the end of the financial year 27(a) 11,040 25

Note to the financial statements are included on pages 45 to 82.

CONSOLIDATED STATEMENT OF CASH FLOWS fortheyear(52weeks)ended28June2015


1. GENERAL INFORMATION

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

Company SecretaryMr Oliver Carton

Principal Registered officePental LimitedLevel6,390St.KildaRoadMelbourne Victoria 3004Telephone:(03)92512311Facsimile:(03)96453001www.pental.com.au

Share RegistryBoardroomPtyLimitedGrosvenor Place, Level 12, 225 George Street Sydney NSW 2000Telephone within Australia: 1300 737 760Telephone outside Australia: +61292909600Facsimile:+61292790664www.boardroomlimited.com.au

NOTES TO THEFINANCIAL STATEMENTS fortheyear(52weeks)ended28June2015

2. SIGNIFICANT ACCOUNTING POLICIES

Statement of compliance

These financial statements are general purpose financial statements which have been prepared in accordance with the Corporations Act 2001, Accounting Standards and Interpretations, and comply with other requirements of the law. The financial statements comprise consolidated financial statements of the consolidatedentity(the“Group”).Forthepurposesofpreparing the consolidated financial statements, the Company is a for-profit entity.

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

The financial statements were authorised for issue by the directors on 24 August 2015.

Basis of preparation

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

The company is a company of the kind referred to in ASICClassOrder98/0100,dated10July1998,andin accordance with that Class Order amounts in the financialreportareroundedofftothenearestthousanddollars, unless otherwise indicated.


Critical accounting judgments and key sources of estimation uncertainty

In the application of the Group’s accounting policies, management is required to make judgments, estimates and assumptions about carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that areconsideredtoberelevant.Actualresultsmaydifferfrom 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 estimateisrevisediftherevisionaffectsonlythatperiodor in the period of the revision and future periods if the revisionaffectsbothcurrentandfutureperiods.

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

Impairment of goodwill and brand names

Determining whether goodwill and brand names are impaired requires an estimation of the value in use of the cash-generating units to which goodwill and brand names have been allocated. The value in use calculation 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 goodwill at 28 June 2015 was $25.084million(29June2014:$25.084million).Detailsof the impairment testing are set out in Note 14.

The carrying amount of brand names at 28 June 2015 was$14.539million(29June2014:$14.539million).Details of movements are set out in Note 15. Details of the impairment testing are set out in Note 14.

Impairment of property, plant and equipment

Determining whether property, plant and equipment are impaired requires an estimation of the value in use of the cash-generating units to which property, plant and equipment have been allocated. The value in use calculation 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 property, plant and equipment at28June2015was$15.252million(29June2014:$13.745million).DetailsofmovementsaresetoutinNote 13.

Adoption of new and revised Accounting Standards

In the current year, the Group has adopted all of the following new and revised Standards and Interpretations issued by the Australian Accounting StandardsBoard(theAASB)thatarerelevanttoitsoperationsandeffectiveforthecurrentannualreportingperiod:

(i) AASB1031Materiality,andAASB2014-1Amendments to Australian Accounting Standards (PartC-Materiality)

(ii) AASB2012-3AmendmentstoAustralianAccountingStandards-OffsettingFinancialAssetsandFinancialLiabilities(AmendmentstoAASB132)

(iii) AASB2013-3AmendmentstoAASB136-Recoverable Amount Disclosures for Non-Financial Assets

(iv) AASB2013-4AmendmentstoAustralianAccounting Standards - Novation of Derivatives and Continuation of Hedge Accounting

(v) AASB2013-9AmendmentstoAustralianAccounting Standards - Conceptual Framework, MaterialityandFinancialInstruments(PartB)

(vi) AASB2014-1AmendmentstoAustralianAccountingStandards(PartA-AnnualImprovements2010-2012and2011-13Cycles)

NOTES TO THEFINANCIAL STATEMENTS fortheyear(52weeks)ended28June2015(Continued)


Accounting policies

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

(a) Basis of consolidation

The consolidated financial statements are prepared by combining the financial statements of all the entities that comprise the consolidated entity, being thecompany(theparententity)anditssubsidiaries(referredtoas“theGroup”inthesefinancialstatements)asdefinedinAccountingStandardAASB10‘ConsolidatedFinancialStatements’.Alistof subsidiaries appears in Note 12 to the financial statements. Consistent accounting policies are employed in the preparation and presentation of the consolidated financial statements.

On acquisition, the assets, liabilities and contingent liabilities of a subsidiary are measured at their fair values at the date of acquisition. Any excess of the cost of acquisition over the fair values of the identifiable net assets acquired is recognised as goodwill. If, after reassessment, the fair values of the identifiable net assets acquired exceed the cost of acquisition, the deficiency is credited to profit and loss in the period of acquisition.

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

(b) Business combinations

Acquisitions of subsidiaries and businesses are accounted for using the acquisition method. The consideration for each acquisition is measured as the aggregateofthefairvalues(atthedateofexchange)ofassets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree. Acquisition related costs are recognised in profit and loss as incurred.

At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognised at their fair value, except that:

• deferredtaxassetsorliabilitiesandassetsorliabilities related to employee benefit arrangements are recognised and measured in accordance with AASB112‘IncomeTaxes’andAASB119‘EmployeeBenefits’respectively;

• liabilitiesorequityinstrumentsrelatedtoshare-based payment arrangements of the acquiree or share-based payment arrangements of the Group entered into to replace share-based payment arrangements of the acquire are measured in accordancewithAASB2‘Share-basedPayment’atthe acquisition date; and

• assets(ordisposalgroups)thatareclassifiedasheldforsaleinaccordancewithAASB5‘Non-currentAssets Held for Sale and Discontinued Operations’ are measured in accordance with that Standard.

Goodwill arising on acquisition is recognised as an asset and initially measured at cost, being the excess of the consideration transferred, the amount of any non-controlling interests in the acquiree, and the fair value of acquirer’s previously held equity interest in the acquiree (ifany)overthenetoftheacquisition-dateamountsof the identifiable assets acquired and the liabilities assumed. If, after reassessment, the Group’s interest in the net fair value of the acquiree’s identifiable net assets exceeds the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree and the fair value of the acquirer’s previously held equity interest in the acquiree, the excess is recognised immediately in profit or loss as a bargain purchase gain.


(c) Foreign currency

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

Foreign currency transactions

All foreign currency transactions during the financial year are brought to account using the exchange rate in effectatthedateofthetransaction.Foreigncurrencymonetary items at reporting date are translated at the exchange rate existing at reporting date.

Exchangedifferencesarerecognisedinprofitorlossinthe period in which they arise except that:

• exchangedifferencesontransactionsenteredintoinordertohedgecertainforeigncurrencyrisks(referNote23);and

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

(d) Goods and services tax

Revenues, expenses and assets are recognised net of theamountofgoodsandservicestax(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.

(e) Revenue

Revenues are recognised at fair value of the consideration received net of the amount of goods and servicestax(GST)payabletothetaxationauthority.

Sale of goods

Revenuefromthesaleofgoodsisrecognised(netofreturns,rebates,discountsandallowances)whentheGroup has transferred to the buyer control and the significant risks and rewards of ownership of the goods.

Interest revenue

Interest revenue is recognised on a time proportionate basisthattakesintoaccounttheeffectiveyieldonthefinancial asset.

(f) Share based payment transactions

The Executive Performance Rights Plan grants shares in the Company to certain employees. The fair value of the performance rights granted under the Executive Performance Rights Plan is recognised as an employee expense with a corresponding increase in equity. The fair value is measured at grant date and is spread over the vesting period, which is the period from the grant date to the end of the plan period. The fair value of the performance rights granted is measured using Black-Scholesmodel,takingintoaccountthetermsandconditions upon which the performance rights were granted.



(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 currentandpriorperiodsisrecognisedasaliability(orasset)totheextentthatitisunpaid(orrefundable).

Deferred tax

Deferred tax is accounted for using the comprehensive balance sheet liability method in respect of temporary differencesarisingfromdifferencesbetweenthecarrying 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 alltaxabletemporarydifferences.Deferredtaxassetsare recognised to the extent that it is probable that sufficient taxable amounts will be available against whichdeductibletemporarydifferencesorunusedtaxlossesandtaxoffsetscanbeutilised.

However, deferred tax assets and liabilities are not recognisedifthetemporarydifferencesgivingriseto them arise from the initial recognition of assets andliabilities(otherthanasaresultofabusinesscombination)whichaffectsneithertaxableincomenoraccounting profit. Furthermore, a deferred tax liability is not recognised in relation to taxable temporary differencesarisingfromgoodwill.

Deferred tax liabilities are recognised for taxable temporarydifferencesarisingoninvestmentsinsubsidiaries, except where the Group is able to controlthereversalofthetemporarydifferencesanditisprobablethatthetemporarydifferenceswillnot reverse in the foreseeable future. Deferred tax assetsarisingfromdeductibletemporarydifferencesassociated 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 utilisethebenefitsofthetemporarydifferencesandthey are expected to reverse in the foreseeable future.

Deferred tax assets and liabilities are measured at the taxratesthatareexpectedtoapplytotheperiod(s)when the asset and liability giving rise to them are realisedorsettled,basedontaxrates(andtaxlaws)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.

Deferredtaxassetsandliabilitiesareoffsetwhentheyrelate 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 the statement of comprehensive income, 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 arisingfromtemporarydifferencesofthemembersof the tax consolidated group are recognised in the separate financial statements of the members of the tax-consolidatedgroupusingthe‘separatetaxpayerwithin 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 recognisedbythecompany(asheadentityinthetax-consolidatedgroup).Duetotheexistenceofataxfunding 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 periodisdifferenttotheaggregateofthecurrenttaxliability or asset and any deferred tax asset arising from unused tax losses and tax credits in respect of that period,thedifferenceisrecognisedasacontributionfrom(ordistributionto)equityparticipants.


(h) Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, cash in banks and investments in money market instruments, netofoutstandingbankoverdrafts.Bankoverdraftsare shown within borrowings in current liabilities in the statement of financial position.

(i) Financial assets

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

Loans and receivables

Trade receivables, loans, and other receivables are recorded at amortised cost less impairment..

Other financial assets

Fortheaccountingpolicyonderivatives–referNote2(s)and Note 23.

(j) Inventories

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

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

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 necessary to make the sale. Net realisable value is determined on the basis of each inventory line’s normal selling pattern.

(k) Plant and equipment

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

Depreciation is calculated on a straight line basis so as towriteoffthenetcostofeachassetoveritsexpecteduseful life to its estimated residual value. Leasehold improvements are depreciated over the period of the lease or estimated useful life, whichever is the shorter, using the straight line method. The estimated useful lives, residual values and depreciation method are reviewed at the end of each annual reporting period. Plant and equipment estimated useful life used in the calculation of depreciation is 3 to 20 years.

(l) Borrowing costs

Borrowingcostsincludeinterest,amortisationofdiscounts or premiums relating to borrowings, amortisation of ancillary costs incurred in connection with arrangement of borrowings, foreign exchange differencesnetofhedgedamountsonborrowings,including trade creditors and lease finance charges.

Ancillary costs incurred in connection with the arrangement of borrowings are capitalised and amortisedoverthelifeoftheborrowings.Borrowingcosts are expensed as incurred.

(m) Leased assets

Operating lease payments are recognised as an expense on a straight line basis over the lease term.

(n) Intangible assets

Goodwill

Goodwill is not amortised, but tested for impairment annually and whenever there is an indication that the goodwill may be impaired. Any impairment is recognised immediately in the profit or loss and is not subsequently reversed. Refer also to Note 14.

Brand names

The Pental brand names are not amortised as the Directors believe the brands have an indefinite useful life.Brandnameswithindefiniteusefullivesaretestedfor impairment annually and whenever there is an indicationthattheassetmaybeimpaired.Brandnamesare recorded at fair value at the time of acquisition, less any impairment subsequently recorded.

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 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.

(o) Impairment of assets

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 assetshavesufferedanimpairmentloss.Ifanysuchindication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairmentloss(ifany).Wheretheassetdoesnotgenerate 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 pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

Iftherecoverableamountofanasset(orcash-generatingunit)isestimatedtobelessthanitscarryingamount,thecarryingamountoftheasset(orcash-generatingunit)isreducedtoitsrecoverableamount.An impairment loss is recognised in the profit or loss immediately, unless the relevant asset is carried at fair value, in which case the impairment loss is treated as a revaluation decrease.

Where an impairment loss subsequently reverses, the carryingamountoftheasset(orcash-generatingunit)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 lossbeenrecognisedfortheasset(orcash-generatingunit)inprioryears.Areversalofanimpairmentlossis recognised in profit or loss immediately, unless the relevant asset is carried at fair value, in which case the reversal of the impairment loss is treated as a revaluation increase.

(p) 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.

Termination benefit

A liability for termination benefit is recognised at the earlier of when the Group can no longer withdraw the offeroftheterminationbenefitandwhentheGrouprecognises any related restructuring costs.

(q) Provisions

Provisions are recognised when the Group has a presentobligation(legalorconstructive)asaresultofapast 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.


(r) Financial instruments issued by the company

Debt and equity instruments

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

Transaction costs on the issue of equity instruments

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

Interest and dividends

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

(s) Derivative financial instruments

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

The Group uses derivative financial instruments, being interest rate swaps and forward foreign currency contracts to hedge the risk associated with interest rate and 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. The fair value of interest swaps are calculated by reference to current 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. All Interest rates swaps do not qualify for hedge accounting and have been taken directly to the profit and 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)andthehedgeditems,aswell 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, andwillcontinuetobe,highlyeffectiveinoffsettingchanges 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 income statement, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.

Theeffectiveportionofchangesinthefairvalueofderivatives 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 affectsprofitorloss.Thegainorlossrelatingtotheineffectiveportionisrecognisedimmediatelyintheprofitor loss. However, when the cash flow hedge relates to a forward foreign exchange contract to hedge a highly probable forecast transaction or firm commitment thatresultsinanon-financialasset(e.g.inventory)ora 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 the statement of comprehensive income and recognised in net profit or loss for the year.



(t) Financial year

AsallowedunderSection323D(2)oftheCorporationsAct 2001, the Directors have determined the financial year to be a fixed period of 52 calendar or 53 calendar weeks. For the period to 28 June 2015, the Group is reporting on the 52 week period that began 30 June 2014andended28June2015.Fortheperiodto29June 2014, the Group is reporting on the 52 week period commencing1July2013andendedon29June2014.

(u) Standards and Interpretations issued not yet effective

At the date of authorisation of the financial report, the Standards and Interpretations listed below were in issuebutnotyeteffective.

(i) AASB9FinancialInstruments,AASB2009-11Amendments to Australian Accounting Standards arisingfromAASB9,AASB2010-7AmendmentstoAustralianAccountingStandardsarisingfromAASB9(December2010),AASB2012-6Amendmentsto Australian Accounting Standards - Mandatory EffectiveDateofAASB9andTransitionDisclosures,AASB2013-9AmendmentstoAustralianAccounting Standards - Conceptual Framework, MaterialityandFinancialInstruments(PartC-FinancialInstruments),AASB2014-1AmendmentstoAustralianStandards,AASB2014-7Amendmentsto Australian Accounting Standards arising from AASB9(December2014),andAASB2014-8Amendments to Australian Accounting Standards arisingfromAASB9(December2014)(effective1January2018)

(ii) AASB15RevenuefromContractswithCustomers,andAASB2014-15AmendmentstoAustralianAccountingStandardsarisingfromAASB15(effective1January2017)

(iii) AASB2014-4AmendmentstoAustralianAccounting Standards - Clarification of Acceptable MethodsofDepreciationandAmortisation(effective1January2016)

(iv) AASB2015-1AmendmentstoAustralianAccounting Standards - Annual Improvements to Australian Accounting Standards 2012-2014 Cycle (effective1January2016)

(v) AASB2015-2AmendmentstoAustralianAccounting Standards - Disclosure Initiative: AmendmentstoAASB101(effective1January2016)

(vi) AASB2015-3AmendmentstoAustralianAccounting Standards arising from the Withdrawal ofAASB1031Materiality(effective1July2015)

At the date of authorisation of the financial statements, therehavebeennoIASBStandardsandIFRICInterpretationsthatareissuedbutnotyeteffective.

The Directors have not yet assessed the impact the adoption of these Standards and Interpretations in future periods will have on the financial statements of the Group.

These Standards and Interpretations will be first applied in the financial statements of the Group that relates to the annual reporting period beginning after the effectivedateofeachpronouncement.Inadditiontothe standards issued above, other standards have been issuedbytheAustralianAccountingStandardsBoard(theAASB),thesestandardsarenotrelevanttotheoperations of the Group.


3. REVENUE

An analysis of the Group’s revenue for the year is as follows:

2015$’000

2014$’000

Sales Revenue

Revenue from the sale of goods 81,163 80,722

81,163 80,722

Other revenue and income

Interest on bank deposits 69 52

Other revenue and income 147 284

216 336

Total Revenue from continuing operations 81,379 81,058



4. SEGMENT INFORMATION

AASB8OperatingSegmentsrequiresoperatingsegmentstobeidentifiedonthebasisofinternalreportsaboutcomponents 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 one operating segment, being the manufacture and distribution of personal care and home products.

Information on segments

Inter-segment pricing is determined on an arm’s length basis.

Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.

Segment capital expenditure is the total cost incurred during the period to acquire segment assets that are expected to be used for more than one period.

In presenting information on the basis of geographical segments, segment revenue is based on the geographical location of customers. Segment assets and liabilities are located in Australia and are unable to be allocated to individual geographical segments by location of customers on a reasonable basis. The Group’s segment revenue is geographically as follows:

Products and services within each segment

The Group comprises the following main segments, based on the Group’s management reporting system:

Geographical Location Product

Australia Soaps, detergents, fire needs and bleach

New Zealand Soaps, detergents, fire needs and bleach

Geographical information

The Group’s revenue from external customers by geographical location is detailed below.

2015$’000

2014 $’000

Geographical sales from continuing operations

Australia 67,267 66,446

New Zealand 13,896 14,276

Total geographical sales 81,163 80,722

Thetopfourcustomersaccountfor86.3%oftotalsalesrevenuefortheyear(2014:87.0%).Thesetopfourcustomersindividually represent greater than 10% of total sales revenue.

5. FINANCE COSTS

2015$’000

2014 $’000

Interest on bank overdraft and loans - 1,610

Other borrowing costs 154 160

Gainonderivativeinstruments(interestrateswap) at fair value through profit and loss - (810)

Total interest expense 154 960


6. INCOME TAXES

Income tax recognised in profit or loss

2015$’000

2014$’000

Tax expense comprises:

Currenttaxexpense/(benefit)inrespectofthecurrentyear 257 242

Deferredtaxexpense/(income)relatingtotheorigination andreversaloftemporarydifferences 1,811 1,941

Recognition of previously unrecognised tax losses (120) (181)

Total tax expense 1,948 2,002

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

2015$’000

2014$’000

Profit from operations 7,035 7,338

Income tax expense calculated at 30% 2,110 2,201

Non-assessable income (42) (18)

Recognition of previously unrecognised tax losses (120) (181)

Income tax expense recognised in profit 1,948 2,002

Comprising of:

Income tax expense 1,948 2,002

1,948 2,002

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 directly in equity

2015$’000

2014 $’000

Deferred tax

Income and expenses taken directly to equity:

Share issue costs 19 44

19 44

Income tax recognised in other comprehensive income

2015$’000

2014 $’000

Deferred tax

Arising on income and expenses recognised in other comprehensive income:

Revaluations of financial instruments treated as cash flow hedges (83) 46

(83) 46



Deferred tax balances

Deferredtaxassets/(liabilities)arisefromthefollowing:

2015

Opening balance$’000

Charged to income $’000

Recognisedin other

comprehensiveincome$’000

Charged to equity $’000

Closing balance

$’000Deferred tax assetsDoubtful debts 39 (24) - - 15Provisions 495 (35) - - 460Share issue costs 422 (193) - 19 248Foreign currency items 46 (46) (83) - (83)Stock obsolescence 43 9 - - 52Accruals 29 (2) - - 27

1,074 (291) (83) 19 719Tax losses 1,828 (1,828) - - -

2,902 (2,119) (83) 19 719Deferred tax liabilities Property, plant and equipment (1,205) 125 - - (1,080)Cash flow hedges - - - - -Foreign currency items (4) 81 - - 77Other (126) 123 - - (3)

(1,335) 329 - - (1,006)Net deferred tax asset / (liability) 1,567 (1,790) (83) 19 (287)

2014

Opening balance$’000

Charged to income $’000

Recognisedin other

comprehensiveincome$’000

Charged to equity $’000

Closing balance

$’000Deferred tax assetsDoubtful debts 53 (14) - - 39Provisions 575 (80) - - 495Share issue costs 567 (189) - 44 422Foreign currency items and interest rate swap 243 (243) 46 - 46

Stock obsolescence 24 19 - - 43Accruals 25 4 - - 29

1,487 (503) 46 44 1,074Tax losses 3,229 (1,401) - - 1,828

4,716 (1,904) 46 44 2,902Deferred tax liabilities Property, plant and equipment (1,164) (41) - - (1,205)Cash flow hedges - - - - -Foreign currency items (20) 16 - - (4)Other (114) (12) - - (126)

(1,298) (37) - - (1,335)Net deferred tax asset / (liability) 3,418 (1,941) 46 44 1,567


6. INCOME TAXES (CONTINUED)

Current tax liabilities

2015$’000

2014 $’000

Income tax payable 42 -

42 -

Tax consolidation

Relevance of tax consolidation to the Group

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

Nature of tax funding arrangements and tax sharing agreements

Entities within the tax-consolidated group have entered into a tax funding arrangement and a tax-sharing agreement with the head entity. Under the terms of the tax funding arrangement, Pental 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 theheadentitydefaultonitstaxpaymentobligationsorifanentityshouldleavethetax-consolidatedgroup.Theeffectof the tax sharing agreement is that each member’s liability for tax payable by the tax-consolidated group is limited to the amount payable to the head entity under the tax funding arrangement.

Unrecognised taxable temporary differences associated with investments and interests

InaccordancewithAASB112.81,therearenotaxabletemporarydifferencesinrelationtoinvestmentsinsubsidiariesforwhich deferred tax assets or liabilities have not been recognised.

7. PROFIT FOR THE YEAR

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

2015$’000

2014$’000

EXPENSES

Cost of sales 41,507 43,159

Depreciation: Plant and equipment 1,745 1,583

Amortisation: Software 368 210

Total depreciation and amortisation 2,666 1,793

Impairment loss recognised on trade receivables - 50

Profit on sale of brand name - 401

EMPLOYEE BENEFITS EXPENSE:

Post-employment benefits – defined contribution plans 970 1,079

Other employee benefits 10,618 10,509

11,588 11,588

Operating lease minimum payments 1,031 979



8. EARNINGS PER SHARE

2015 Cents

per share

2014 Cents

per shareBasicearningspershare* 4.08 5.10

Dilutedearningspershare* 4.02 4.95

*Previouscorrespondingperiodfigureshavebeenadjustedforconsolidatednumberofissuedsharesandoptions.

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

2015$’000

2014 $’000

Net profit 5,087 5,336

Earnings used in the calculation of basic EPS 5,087 5,336

Earnings used in the calculation of diluted EPS 5,087 5,336

2015 No.

2014 No.

Weighted average number of ordinary shares for the purposes ofbasicearningspershare*

124,613,281 104,106,677


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.

2015No.

2014 No.

Weightedaveragenumberofordinarysharesforthepurposesofbasicearningspershare* 124,613,281 104,106,677

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

-loyaltyoptions* 380,253 4,227,965

- piggy back options 845,752 -

- performance rights over ordinary shares 576,312 -

WeightedaveragenumberofordinarysharesforthepurposesofdilutedEPS* 126,415,598 108,334,642


Classification of securities as potential ordinary shares

The following securities have been classified as potential ordinary shares and included in diluted earnings per share only:(a)optionsoutstandingundertheoptionincentiveplan.(b)optionsoutstandingundertheLoyaltyOptionsissueandPiggyBackoptionissue;and(c)optionsoutstandingissuedtoDirectors.(d)performancerightsoverordinarysharesintheCompanythatweregrantedtokeymanagementpersonnel.

On 1 December 2014, ordinary shares and options on issue were consolidated on the basis of 15 to 1. The share consolidation did not result in a change in the resources to the company. For the purpose ensuring comparability in the earnings per share calculation for the current and preceding periods, the number of ordinary shares outstanding after the share consolidation has been adjusted in the earnings per share calculation as if the event had occurred at the beginning of the preceding period.



Priortoshareconsolidationon1December2014,loyaltyoptionholdersexercised79,172,002optionstoacquireone fully paid ordinary share per option before they expired on 11 September 2014. As a result, the company issued 79,172,002ordinaryshares.

Alsopriortotheshareconsolidation,PiggyBackOptionholdersexercised957,282optionstoacquireonefullypaidordinaryshareperoption.Posttheshareconsolidation;PiggyBackOptionholdersexercised11,279,431optionstoacquire one fully paid ordinary share per option before they expired on 6 June 2015.

The following potential ordinary shares are anti-dilutive and are therefore excluded from the weighted average number of ordinary shares for the purposes of diluted earnings per share.

2015 No.

2014 No.

PiggyBackOptions(exercisepriceof$0.45) - 19,155,431


9. TRADE AND OTHER RECEIVABLES

2015$’000

2014 $’000

Current

Tradereceivables(i)andOther(ii) 24,168 24,906

Allowance for doubtful debts (50) (180)

24,118 24,726

(i) Theaveragecreditperiodonsalesofgoodsis60days.Nointerestischargedontradereceivables.Anallowancehas been made for estimated irrecoverable trade receivable amounts arising from the past sale of goods, determined by reference to specific customers where receipt is in doubt. During the current financial year, any doubtfuldebtmovementswererecognisedinprofit/(loss)fortheyear.

Beforeacceptinganynewcustomers,theGroupwillperformacreditchecktoassessthepotentialcustomer’scredit quality and defines credit limits by customer. Limits are reviewed as necessary. Of the trade receivables balanceattheendoftheyear$20.382millionisduefromfourcustomers(2014:$21.615million)andthesefourcustomersaccountfor86.3%oftotalsalesrevenuefortheyear(2014:87.0%).Therearenoothercustomerswho represent more than 5% of the total balance of trade receivables or total sales revenues from continuing operations for the year. Debtors who are past due at the end of the reporting period have not been provided for on the whole, as there has not been a significant change in credit quality and the amounts are still considered recoverable. The Group does not hold any collateral over these balances.

(ii) OtherreceivablesgenerallyarisefromtransactionsoutsidetheusualoperatingactivitiesoftheGroup.Collateralis generally not obtained.

2015$’000

2014 $’000

Ageing of past due but not impaired

Overdue 31 to 60 days 745 441

Overdue61to90days 50 138

Overdue91daysandbeyond 204 281

Total 999 860

2015$’000

2014 $’000

Movement in the allowance for doubtful debts

Balanceatthebeginningoftheyear 180 178

Amountswrittenoffasuncollectible (130) -

Amount provided during the year - 2

Balance at the end of the year 50 180

In determining the recoverability of a trade receivable, the Group considers any change in the credit quality of the trade receivable from the date credit was initially granted up to the reporting date. The concentration of credit risk is limited due to the customer base being large and unrelated. Accordingly, the directors believe that there is no further credit provision required in excess of the allowance for doubtful debts.



10. INVENTORIES

2015$’000

2014 $’000

Raw materials 2,836 2,772

Work in progress 8 157

Finished goods 4,556 6,016

7,400 8,945

11. OTHER FINANCIAL ASSETS

2015$’000

2014 $’000

Current

Foreign currency forward contracts 275 -

275 -

12. SUBSIDIARIES

Name of subsidiary Country of incorporation

Ownership interest

2015 %

2014%

Parent Entity

Pental Limited (i) Australia

Controlled Entities

Pental Products Pty Ltd (ii)(iii) Australia 100% 100%

Symex Subco 2 Pty Ltd (ii)(iii)(iv) Australia - 100%

(i) PentalLimitedistheheadentitywithinthetax-consolidatedgroup.

(ii) Thesecompaniesaremembersofthetax-consolidatedgroup.

(iii) Thesewholly-ownedsubsidiarieshaveenteredintoadeedofcrossguaranteewithPentalLimited pursuanttoASICClassOrder98/1418andarerelievedfromtherequirementtoprepareandlodgeanauditedfinancialreport.

(iv) SymexSubco2PtyLtdwasderegisteredon20April2015.

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


13. PROPERTY, PLANT AND EQUIPMENT

Plant & equipment

at cost $’000

Construction in progress

at cost $’000

Total $’000

Gross carrying amount

Balanceat30June2013 13,795 2,056 15,851

Additions 3,873 756 4,629

Disposals (635) - (635)

Transfer from capital works 2,056 (2,056) -

Balance at 29 June 2014 19,089 756 19,845

Additions 1,670 2,135 3,805

Transfer from capital works 756 (756) -

Balance at 28 June 2015 21,515 2,135 23,650

Accumulated depreciation and impairment losses

Balanceat30June2013 (5,152) - (5,152)

Depreciation expense (1,583) - (1,583)

Eliminated on disposal of assets 635 - 635

Balance at 29 June 2014 (6,100) - (6,100)

Depreciation expense (1,745) - (1,745)

Impairment of plant and equipment (i) (553) - (553)

Balance at 28 June 2015 (8,398) - (8,398)

Netbookvalueasat29June2014 12,989 756 13,745

Net book value as at 28 June 2015 13,117 2,135 15,252

(i)Animpairmentchargeof$0.553millionwastakenonplantandequipmentintheprocessofbeingreplacedaspartofthe$5.3millioncapitalinvestmentprogram.



14. GOODWILL

2015$’000

2014$’000

Cost 70,416 70,416

Accumulated impairment losses (45,332) (45,332)

25,084 25,084


Balanceatbeginningoffinancialyear 70,416 70,416

Balance at end of financial year 70,416 70,416

Accumulated impairment losses

Balanceatbeginningoffinancialyear 45,332 45,332


Allocation of goodwill to cash-generating units

Goodwill has been allocated for impairment testing over the Consumer Products business Unit. The Pental brand names(referNote15)and,property,plantandequipmentareincludedintheConsumerProductsCashGeneratingUnit(CGU).TherecoverableamountoftheConsumerProductscashgeneratingunitisdeterminedbasedonavalueinusecalculation,whichusescashflowprojectionsbasedonafinancialbudgetapprovedbytheBoard,coveringafiveyearperiodandadiscountrate(pre-tax)of15.0%(2014:15.0%).Thecashflowhasbeenextrapolatedusinga3%(2014:3%)growthrateincludinganinflationrateof2.5%(2014:2.5%).Thedirectorsbelievethatanyreasonablepossiblechangein the key assumptions on which recoverable amount is based would not cause the carrying amount to exceed the recoverable amount of the cash generating unit.


15. OTHER INTANGIBLE ASSETS

Brand Names at cost $’000

Software at cost$’000

Total$’000


Balanceat30June2013 19,189 1,444 20,633

Additions - 387 387

Disposals (189) (628) (817)

Balance at 29 June 2014 19,000 1,203 20,203

Additions - 333 333

Balance at 28 June 2015 19,000 1,536 20,536

Accumulated Impairment/Amortisation

Balanceat30June2013 (4,461) (923) (5,384)

Amortisation expense - (210) (210)

Eliminated on Disposal of Assets - 628 628

Balance at 29 June 2014 (4,461) (505) (4,966)

Amortisation expense - (368) (368)

Balance at 28 June 2015 (4,461) (873) (5,334)

Netbookvalueasat29June2014 14,539 698 15,237

Net book value as at 28 June 2015 14,539 663 15,202



16. OTHER ASSETS

2015$’000

2014$’000

Prepayments 448 419

17. TRADE AND OTHER PAYABLES

2015$’000

2014$’000

Trade payables 8,151 8,853

Trade spend liabilities 4,690 4,424

Sundry payables 2,530 1,826

15,371 15,103

The average credit period on the purchases of goods ranges from 7 to 35 days. No interest is charged on the trade payables. The Group has financial risk management policies in place to ensure that, as often as possible, all payables are paid within a reasonable timeframe.

18. OTHER FINANCIAL LIABILITIES

2015$’000

2014$’000

Current

Foreign currency forward contracts - 154

- 154



www.pental.com.au

DELIVERING ON MAJOR CAPITAL PROJECTS

BEFORE

AFTER


19. BORROWINGS

2015$’000

2014$’000

Current

Multi option bank overdraft, secured - 523

Total Borrowings - 523

Summary of financing arrangements

Facilities utilised at reporting date:

Multi option loan facility

–Bankoverdraft - 523

–BankGuarantee 340 324

340 847

Facilities not utilised at reporting date:


–Bankoverdraft 15,450 15,127

–BankGuarantee 210 26

15,660 15,153


The Group has a multi option loan facility with the ANZ bank that allows the Group to choose the appropriate type of funding facility to suit its business needs under one interest rate. The multi option facility can be used as a bank overdraft, variable rate fully drawn advance, cash advance, standby letter of credit/guarantee and/or trade finance facility.

Whilst the overall banking facility with ANZ was extended to 28 February 2017, and therefore, not due to be repaid or renegotiated until the financial year ending 30 June 2017, due to the nature of the facility, amounts are continually repaid andredrawnbasedontheCompany’sworkingcapitalrequirements.Asaresultamountsdueat29June2014inrespectof this facility have been disclosed as current in these financial statements.

Themultioptionfacilityhasafacilitylimitof$16,000,000(2014:$16,000,000).Themultioptionfacilitybearsaninterestrateof2.09%plusalinefeeof0.9%(2014:3.82%plusalinefeeof0.9%)asat28June2015.Thefinancingarrangementis secured by the Group’s assets through first ranking fixed and floating charges over the Company and its subsidiaries (withcorrespondingcrossguarantee).



20. PROVISIONS

2015$’000

2014$’000

CurrentEmployee benefits 1,274 1,364

1,274 1,364Non currentEmployee benefits 111 112

111 112Total Provisions 1,385 1,476

Theprovisionforemployeebenefitsrepresentsannualleave,rostereddaysoffandvestedlongserviceleaveentitlements accrued by employees. The decrease in the carrying amount of the provision for the current year results from benefits being paid in the current year.

21. ISSUED CAPITAL

(a) Fully paid ordinary shares

2015No.

2014No.

Share CapitalOpening balance of ordinary shares, fully paid 1,794,429,155 1,504,398,685

Optionsconvertedtoshares(Preconsolidationofshares) 80,129,284 290,030,470

Consolidation of Shares (1,749,587,237) -

Optionsconvertedtoshares(Postconsolidationofshares) 11,279,431 -

Balanceatendoffinancialyear 136,250,633 1,794,429,155

2015$’000

2014$’000

Fully paid ordinary sharesBalanceatbeginningoffinancialyear 84,014 78,309

Optionsconvertedtoshares(289,523,193sharesat$0.02) - 5,791

Optionsconvertedtoshares(507,277sharesat$0.03) - 15

Optionsconvertedtoshares(79,172,002sharesat$0.02) 1,584 -

Optionsconvertedtoshares(957,282sharesat$0.03) 29 -

Optionsconvertedtoshares(11,279,431sharesat$0.45) 5,075 -

Share issue costs (63) (145)

Income tax relating to share issue costs 19 44


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 capitalfrom1July1998.Therefore,thecompanydoesnothavealimitedamountofauthorisedcapitalandissuedshares do not have a par value.



On 1 December 2014, ordinary shares and options on issue were consolidated on the basis of 15 to 1. The share consolidation did not result in a change in the resources to the company. For the purpose ensuring comparability in the earnings per share calculation for the current and preceding periods, the number of ordinary shares outstanding after the share consolidation has been adjusted in the earnings per share calculation as if the event had occurred at the beginning of the preceding period.

(b) Options

Priortoshareconsolidationon1December2014,loyaltyoptionholdersexercised79,172,002optionstoacquireone fully paid ordinary share per option before they expired on 11 September 2014. As a result, the company issued 79,172,002ordinarysharesraising$1.584millionlessshareissuecostsof$0.023million.

Alsopriortotheshareconsolidation,PiggyBackOptionholdersexercised957,282optionstoacquireonefullypaidordinaryshareperoption.Posttheshareconsolidation;PiggyBackOptionholdersexercised11,279,431optionstoacquireonefullypaidordinaryshareperoptionbeforetheyexpiredon6June2015.IntotaltheCompanyraised$5.105millionlessissuecostsof$0.041millioninrelationtoallPiggyBackOptionsexercisedduringthefinancialyear.

22. DIVIDENDS

(a) Recognised Amounts

2015 2014

Cents per share

Total$’000

Cents per share

Total$’000

Fully paid ordinary shares

Interim dividend: Fully franked at 30% tax rate 0.85 1,063 - -

Final dividend: Fully franked at 30% tax rate 1.80 2,250 - -

2.65 3,313 - -

Inrespectoftheyear(52weeks)ended29June2014theCompanypaidafullyearfullyfrankeddividendof0.12centsper ordinary share on 30 September 2014, with a record date of 12 September 2014. This dividend was paid prior to consolidation of shares and has been adjusted to 1.80 cents per share to reflect share consolidation. The company paid afullyfrankedinterimdividendof0.85centspershareduringtheyear(52weeks)ended28June2015(2014:Nil).

(b) Unrecognised Amounts

2015$’000

2014$’000

Final dividend 2,453 2,250

Inrespectoftheyear(52weeks)ended28June2015theCompanydeclaredafullyearfullyfrankeddividendof1.80centsperordinaryshare,payableon30September2015,witharecorddateof11September2015(2014:1.80centsperordinaryshare).

2015$’000

2014$’000

Adjusted franking account balance 16,045 17,465

Impact on franking account balance of dividend not recognised 1,051 964


23. FINANCIAL INSTRUMENTS

(a) Capital risk management

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

ThecapitalstructureoftheGroupconsistsofdebt,whichincludestheborrowingsdisclosedinNote19,cash,andequityattributabletoequityholdersoftheparent,comprisingissuedcapital(asdisclosedinnote21),reservesandretainedearnings/(accumulatedlosses).

Operating cash flows are used to maintain and expand the Group’s assets, as well as to make the routine outflows of payables, tax, dividends and repayment of debt.

Gearing ratio

TheBoardofDirectorsreviewsthecapitalstructureonanongoingbasis.AsapartofthisreviewtheBoardconsidersthecostofcapitalandtherisksassociatedwitheachclassofcapital.BasedonrecommendationsoftheBoard,theGroup will balance its overall capital structure through the payment of dividends, new share issues, and the issue or repayment of debt.

The gearing ratio at year end was as follows:

2015$’000

2014$’000

Financial assets

Debt(i)(ii) - 523

Cash and cash equivalents (11,040) (548)

Net debt (11,040) (25)

Equity(iii) 81,734 73,015

Net debt to equity ratio (0.0%) (0.0%)

(i)Debtisdefinedaslongandshort-termborrowings,asdetailedinNote19.

(ii)Alloutstandingdebtisconsolidatedintotheparententity.

(iii)Equityincludesallissuedcapitalandreserves.



(b) Categories of financial instruments

At the reporting date there are no significant concentrations of credit risk relating to loans and receivables at amortised cost. The carrying amount reflected in the statement of financial position represents the Group’s maximum exposure to credit risk for such loans and receivables.

2015$’000

2014$’000

Financial assets

Cash and cash equivalents 11,040 548

Tradeandotherreceivables(Loansandreceivables) 24,118 24,726

Derivative instruments in designated hedge accounting relationships 275 -

Financial liabilities

Tradeandotherpayables(amortisedcost) 15,371 15,103

Borrowings(amortisedcost) - 523

Derivative instruments in designated hedge accounting relationships - 154

(c) Financial risk management objectives

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

The Group’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and interest 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 and interest rate swaps to mitigate the risk of rising interest rates.

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 BoardofDirectors.TheChiefFinancialOfficerisresponsibleformanagingtheGroup’streasuryrequirements 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 and interest rates. The Group enters into derivative financial instruments to manage its exposure to foreign currency risk and interest rate risk, including:

• forwardforeigncurrencycontractstomanageitsexposuretoforeigncurrencyexchangeratefluctuations (refernotes23(c)and23(e));and

• Interestrateswapstomitigatetheriskofrisinginterestrates.


(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 utilisingforwardexchangecontractsorbyoffsettingimportandexportcurrencyexposures.

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

2015$’000

2014$’000

2015 $’000

2014$’000

Currency of USA - 130 273 350

Currency of New Zealand 4,601 4,317 484 545

Currency of Fiji - 6 - -

Currency of Europe - - 261 7

Forward foreign exchange contracts

The Group enters into forward foreign exchange contracts to hedge a proportion of anticipated sales and purchase commitmentsdenominatedinforeigncurrencies(principallyUSDollarsandNewZealandDollars)expectedineach 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 av. exchange rate

Foreign currency FC’000

Contract value $’000

Fair value gain/(loss) $’000

2015 2014 2015 2014 2015 2014 2015 2014

BuyUSD–lessthanoneyear 0.7861 0.9060 2,480 2,421 3,155 2,672 102 (83)

BuyEuro–lessthanoneyear 0.6834 0.6431 1,077 103 1,577 160 11 (10)

Sell NZD – less than one year 1.0670 1.0938 3,100 5,000 2,905 4,571 162 (61)

275 (154)

Asatreportingdate,theaggregateamountofunrealisedgains/(losses)underforwardforeigncurrencycontractsrelatingtoanticipatedfuturecontractsis$0.275million-taxeffected$0.193million(2014:$0.154millionloss-taxeffected$0.108millionloss).Inthecurrentyear,theseunrealisedgains/(losses)havebeendeferredinthehedgingreservetotheextentthehedgeiseffective.

Foreign currency sensitivity analysis

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

USD impact EUR impact NZD impact

2015 $’000

2014$’000

2015 $’000

2014$’000

2015 $’000

2014$’000

Profit 24 14 28 9 187 182

Equity 214 156 124 14 247 219



(f) Interest rate risk management

The Group is exposed to interest rate risk as entities in the Group borrow funds at floating interest rates. The risk is managed by the Group by the use of interest rate swap contracts. Hedging activities are evaluated regularly to align with interestrateviewsanddefinedriskappetite,ensuringthemostcost-effectivehedgingstrategiesareapplied.

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

2015

Weighted average interest

rate

Less than

1 month $’000

1-3 months $’000

3 months to

1 year $’000

1-5 years $’000

5+ years $’000

Total $’000

Financial assets

Variable interest rate instruments 2.06% 11,040 - - - - 11,040

Non-interest bearing - 12,784 11,334 - - - 24,118

23,824 11,334 - - - 35,158Financial liabilities


7,788 7,583 - - - 15,371

2014

Weighted average interest

rate

Less than

1 month $’000

1-3 months $’000

3 months to

1 year $’000

1-5 years $’000

5+ years $’000

Total $’000

Financial assets

Variable interest rate instruments 0.09% 548 - - - - 548


13,362 11,913 - - - 25,274Financial liabilities


Variable interest rate instruments 3.82% 525 - - - - 525

8,150 7,479 - - - 15,628

Interest rate sensitivity

The sensitivity analyses below have been determined based on the exposure to interest rates for both derivative and non-derivative instruments at the reporting date and the stipulated change taking place at the beginning of the financial year and held constant throughout the reporting period. A 50 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel.

At reporting date, if interest rates had been 0.5% higher or lower and all other variables held constant, there would be $1,000(2014:$36,000)effectontheGroup’sprofitfortheperiod,attributabletotheGroup’sexposuretointerestrateson its variable rate borrowings. The Group’s sensitivity to interest rates has decreased during the current year due to thereductioninborrowingsandasat28June2015totalborrowingswereNil(2014:$0.523million).


(g) Credit risk management

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

Trade accounts receivable consist of a number of customers supplying the retail sector in Australia and New Zealand. 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, Wesfarmers Ltd, Metcash Ltd and Foodstuffs(Auckland)LtdGroupswhichrepresent85.47%ofthetotaltradereceivableslessrelatedallowancesandrebates of the Consumer Products business.

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

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

(h) Liquidity risk management

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

(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:• thefairvalueoffinancialassetsandfinancialliabilitieswithstandardtermsandconditionsandtradedonactive

liquid markets are determined with reference to quoted market prices;• thefairvalueofotherfinancialassetsandliabilitiesaredeterminedinaccordancewithgenerallyacceptedpricing

models based on discounted cash flow analysis; and• thefairvalueofderivativeinstruments,includedinhedgingassetsandliabilities,arecalculatedusingquotedprices,

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.

24. SHARE-BASED PAYMENTS

On18December2014theCompanyestablishedthePentalExecutivePerformanceRightsPlan(RightsPlan)whichprovides selected executives with a means of acquiring conditional Rights, to acquire an ordinary share in Pental subject to the terms of the Plan, once milestones are met.

The Rights issued and converting Rights to ordinary shares are at no consideration.

TheBoardmayalsoofferoptionsundertheRightsPlan,wherebytheoptionwillhaveanexerciseprice,whilsttheRightdoesnot.Therewerenooptionsgrantedduringthe2015year(2014:nil).

The vesting of the Rights is conditional on:a)theexecutivebeingemployedbythePentalGrouponthevestingdate;andb)Pental’searningspershareforthefinancialyearpriortothevestingdate(3July2017)exceeding5.25cents;

thereafter a percentage of the right will vest based on achieving the following strategic targets:• Grosssalesrevenuegrowth(40%weightingofRights)• EarningsBeforeInterestandTax(EBIT)margin(40%weightingofRights)• AcquiredbusinessEBITmargin(20%weightingofRights).



Under the Rights Plan the executives can achieve the following LTI:

Percentage of fixed remuneration by achieving:

Threshold Targets Strategic Targets Stretch Strategic Targets

Charlie McLeish 13% 25% 50%

Albert Zago 10% 20% 40%

Details of performance Rights over ordinary shares in the Company that were granted to key management personnel during the reporting period are set out in the following table:


Rights granted

during 2015No.

Fair Value per Right at grant date

$

Fair value of rights granted

during the year

$

Charlie McLeish 18 Dec 2014 3 July 2017 740,741 0.407 301,482

Albert Zago 18 Dec 2014 3 July 2017 444,444 0.407 180,889

The following factors were used in determining the fair value of the performance rights granted during the year:


Fair value per Right

$

Exercise Price

$

Price of shares on grant date

$

Estimated volatility

%

Risk free Interest

Rate%

Dividend Yield

%

18 December 2014 3 July 2017 0.407 - 0.415 4.82 2.15 4.34

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



No.

Rights granted

No.

Rights vested

No.

Rights lapsed

forfeited No.


No.

Charlie McLeish 18/12/2014 3/7/17 - 740,741 - - 740,741

Albert Zago 18/12/2014 3/7/17 - 444,444 - - 444,444

The Rights are forfeited upon the earliest of the following:

a)iftheemployeeceasesemploymentwiththeGroup;

b)theBoarddeterminesthevestingconditionshavenotbesatisfied;or

c)expirydate,beinguptosevenyearsafterthegrantdateoftheRights.

Underthepreviousexecutiveoptionincentiveplan(thathasbeenreplacedbyanewPentalExecutivePerformanceRightsPlan),therewerenoshareoptionsgrantedduringthe2015year(2014:nil).

During or since the end of the financial year, no fully paid ordinary shares were issued by the Group as a result of the exercise of options under the superseded executive option incentive plan.


25. KEY MANAGEMENT PERSONNEL COMPENSATION

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

2015$

2014 $

Short-term employee benefits 1,066,744 1,210,560

Post-employment benefits 84,891 143,550

1,151,635 1,354,110

26. RELATED PARTY TRANSACTIONS

The compensation of each member of the key management personnel of the Group is set out in the Remuneration Report.

Transactions with key management personnel

On 1 December 2014 a director related entity of Mr Sutton was appointed to provide consultancy services to the Group. Duringthefinancialyear$120,200inconsultingserviceswaspaid.

AdirectorrelatedentityofMrJohnstonewaspaidrentalof$668,199(2014:$650,000)plusGSTandoutgoings,asthelandlord of the Shepparton manufacturing and warehousing sites.

There were no other services performed by key management personnel outside of normal business operations.

Onthe2November2012,theGroupenteredintoaBankingfacilitywithitsprimarybanker-ANZwhichincludedacondition that if the sale of the Shepparton properties did not eventuate in an open market by 31 May 2013, a director related entity of Mr Johnstone would exercise the option to purchase the Shepparton properties for a net amount of not lessthan$6.000million.Asanopenmarketsaledidnoteventuate,adirectorrelatedentityofMrJohnstonepurchasedtheSheppartonpropertiesfor$6.000millionon28June2013andenteredintoaleaseagreementfortheSheppartonproperties. The key terms of the lease are as follows:

(i) thebaseannualrentpayableof$0.650millionperannum(plusGSTandoutgoings)andsubjecttoannualCPIreviews;

(ii) thetermoftheleaseis10yearswithanoptionoftwofurthertermsoffiveyearseach;

(iii) theGroupprovidedabankguaranteeassecurityfortheperformanceoftheleaseintheamountof$0.163million;and

(iv) theGrouphasanoptiontobuytheSheppartonpropertiesfromthedirectorrelatedentitywhichisexercisablefrom1July2017to30June2019atapricetobedeterminedbyreferencetodirectorrelatedentitycostsofacquisitionplus the cost of any capital expenses incurred by the director related entity in respect of the Shepparton Site.

Equity interests in subsidiaries

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

The Company purchase services from, and sells services to, its controlled entity Pental Products Pty Ltd in the normal course of business and on normal terms and conditions. No interest is charged on the loans made to subsidiaries.

The aggregate amount receivable from and payable to, wholly owned group entities by the Company at balance date are as follows:

2015 $

2014 $

Non-current loans to subsidiaries 74,497,455 62,824,404



27. CASH AND CASH EQUIVALENTS

(a) Reconciliation of cash and cash equivalents

For the purposes of the cash flow statement, cash includes cash on hand and at bank and bank loans. 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:

2015$’000

2014 $’000

Cash and bank balances 11,040 548

Bankmultioptionloan/receivablefinanceloan - (523)

Net Cash and Cash Equivalents 11,040 25

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

2015$’000

2014 $’000

Profit for the year 5,087 5,336

Depreciation and amortisation expense 2,113 1,793

Impairment of plant and equipment 553 -

Fairvalue(gain)/lossonderivatives - (810)

Profit on disposal of brand - (401)

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

(Increase)/decrease in assets:Trade and other receivables 608 (2,292)

Inventories 1,545 1,319

Current and deferred tax assets 1,567 1,775

Other assets (29) (38)

Increase/(decrease) in liabilities:Trade and other payables 268 1,597

Provisions (91) (1,442)

Current and deferred tax liabilities 189 -

Other liabilities - 154

Net cash from operating activities 11,810 6,991

WASH AWAY THE CITY WITH COUNTRY LIFE SOAPS


28. OPERATING LEASE ARRANGEMENTS

2015$’000

2014$’000

Non-cancellable operating lease expenses

Not later than 1 year 998 1,031

Later than 1 year and not later than 5 years 3,554 3,715

Later than 5 years 2,385 3,139

6,937 7,885

The non-cancellable operating leases relate to leases for the:

1. Shepparton properties for a remaining term of 8 years with an option of two further terms and rental to increase annually by Consumer Price Index;

2. Melbourne support office lease is for a remaining term of 4 years, with rental increasing annually by 4%; and

3. Other leases are for forklifts, motor vehicles and photo copiers for terms between 1 and 5 years.

29. CAPITAL EXPENDITURE COMMITMENT

2015$’000

2014$’000

Plant and equipment 1,604 224

The Group entered into various contracts to purchase equipment in relation to the new SWING saponification plant, bleachproductionLineAbottlefiller,bleachproductionLineBcapperandendoflinepackingequipment.Thisequipmentformspartofthe$5.3millioncapitalproject,asdetailedintheDirectors’report.

30. CONTINGENT LIABILITIES

2015$’000

2014$’000

Bankguaranteestothirdpartiesinrespectofpropertyleaseobligations.Thebankguarantees are held by the parent entity, Pental Limited. 340 324

31. REMUNERATION OF AUDITORS

2015$

2014$

Auditor of the parent entity

Audit or review of the financial report 132,800 138,300

Non-audit services – Tax and other services 38,500 23,000

171,300 161,300

The auditor of Pental Limited is Deloitte Touche Tohmatsu.



32. 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

2015$’000

2014$’000

Assets

Current assets 1 23

Non current assets 77,454 65,762

Total assets 77,455 65,785

Liabilities

Current liabilities 103 72

Non current liabilities - -

Total liabilities 103 72

Equity

Issued capital 90,658 84,014

(Accumulatedlosses)/Retainedearnings (13,306) (18,301)

Total equity 77,352 65,713

Financial Performance

2015$’000

2014$’000

Loss for the year - -

Other comprehensive income - -

Total comprehensive income - -

35. SUBSEQUENT EVENTS

Subsequenttobalancedate,therehavebeennosignificanteventswhichhaveaffectedtheoperationsoftheGroupexcept for::

Dividends

Inrespectoftheyear(52weeks)ended28June2015theCompanywillpayfinalfullyfrankeddividendof1.80centsper ordinary share, payable to shareholders on 30 September 2015, with a record date of 11 September 2015.



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

ORDINARY SHARE CAPITAL

136,250,633fullypaidordinarysharesareheldby1,397individualshareholders.

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)everymembermayvote;(b)onashowofhandseverymemberhasonevote;(c)onapolleverymemberhas:

(i)foreachfullypaidshareheldbythemember,onevote;and(ii)foreachpartlypaidshareheldbythemember,afractionofavoteequivalenttotheproportionwhichtheamount

paid(notcredited)isofthetotalamountspaidandpayable(excludingamountscreditedto)ontheshare.”

PERFORMANCE SHARE RIGHTS

There are no voting rights attached to performance share rights.

ON-MARKET BUY-BACK

There is no current on-market buy-back.

Distribution of holders of equity securities

Fully paid ordinary shares

1 – 1,000 347

1,001 – 5,000 428

5,001 – 10,000 188

10,001 – 100,000 362

100,001 and over 72

1,397

Holding less than a marketable parcel 341

Substantial shareholders

Ordinary shareholdersFully paid ordinary shares

Number Percentage

Alan Johnstone (i) 29,849,050 21.91%

John Rostyn Homewood 17,750,000 13.03%

BNPParibasNoms(NZ)Ltd(ii) 11,116,304 8.16%

Citicorp Nominees Pty Limited (iii)(iv) 10,083,443 7.40%

HSBCCustodyNominees(Australia)Limited(iii)(iv) 8,758,324 6.43%

77,557,121 56.93%

(i)AlanJohnstonehasarelevantinterestinPentalsharesheldbyWesternParkHoldingsPtyLtdandPMSFCompanyPtyLtd<PenfoldMotorsBurwoodSuperFund>.

(ii)ElevationCapitalManagementLtd.hasarelevantinterestinsharesheldbyBNPParibasNoms(NZ)Ltd.

(iii)AllanGrayAustraliaPtyLtdhasarelevantinterestinsharesheldbyCiticorpNomineesPtyLimited(10,083,443shares),JPMorganNomineesAustraliaPtyLimited(6,438,430shares)andNationalNomineesLimited(3,475,655shares).

(iv)Asdisclosedinnote(iii),theseentitiesholdsharesforAllanGrayAustraliaPtyLtd.

ADDITIONAL STOCK EXCHANGE INFORMATION asat19August2015


Twenty largest holders of quoted equity securities

Ordinary shareholdersFully paid ordinary shares

Number Percentage

1 WESTERN PARK HOLDINGS PTY LTD 21,171,039 15.54%

2 MR JOHN ROSTYN HOMEWOOD 17,750,000 13.03%

3 CITICORP NOMINEES PTY LIMITED 10,083,443 7.40%

4 BNPPARIBASNOMS(NZ)LTD<DRP> 9,410,209 6.91%

5 HSBCCUSTODYNOMINEES(AUSTRALIA)LIMITED 8,090,275 5.94%

6 MR GARRY GEORGE JOHNSON 6,670,739 4.90%

7 J P MORGAN NOMINEES AUSTRALIA LIMITED 6,438,430 4.73%

8 WESTERNPARKHOLDINGSPTYLTD<JOHNSTONEFAMILYA/C> 6,020,580 4.42%

9 LABELMAKERSGROUPPTYLTD 5,666,668 4.16%

10 PJRSUPERANNUATIONPTYLTD<PJRSUPERANNUATIONFUNDA/C> 3,972,927 2.92%

11 NATIONAL NOMINEES LIMITED 3,082,821 2.26%

12 PMSFCOMPANYPTYLTD<PENFOLDMOTORSBWDS/FA/C> 2,511,112 1.84%

13 VANWARD INVESTMENTS LIMITED 2,063,294 1.51%

14 RATHVALE PTY LIMITED 1,832,759 1.35%

15 BNPPARIBASNOMSPTYLTD<DRP> 1,706,095 1.25%

16 DIXSON TRUST PTY LIMITED 1,206,324 0.89%

17 DALLMOUNTPTYLTD<LABELMAKERSS/FA/C> 1,204,761 0.88%

18 MRS JOY DOROTHY JOHNSTONE 834,092 0.61%

19 HSBCCUSTODYNOMINEES(AUSTRALIA)LIMITED-A/C3 668,049 0.49%

20 ALNEYPTYLTD<WAEXECUTIVESUPERFUNDA/C> 666,667 0.49%

111,050,284 81.5%

ADDITIONAL STOCK EXCHANGE INFORMATION asat19August2015

CORPORATE DIRECTORY

Directors Mr Peter Robinson, ChairmanMr Mel Sutton, Vice ChairmanMr Alan JohnstoneMr John EtheringtonMr John Rishworth

Company SecretaryMr Oliver Carton

Registered Office Level6,390StKildaRoadMelbourne VIC 3004Telephone:+61392512311

Manufacturing and Distribution18-22 Drummond Road Shepparton VIC 3630Telephone: +61 3 5820 5200

Shareholder enquiries:Share Register BoardroomPtyLimitedGrosvenor Place, Level 12, 225 George Street Sydney NSW 2000Telephone within Australia: 1300 737 760TelephoneoutsideAustralia:+61292909600Facsimile:+61292790664www.boardroomlimited.com.au

Auditors Deloitte Touche Tohmatsu550BourkeStreetMelbourne VIC 3000Telephone:+61396717000

Securities Exchange ListingPentalLimited(PTL)sharesarelistedontheAustralianSecuritiesExchange(ASX)

Websitewww.pental.com.au

ABN 29091035353



www.pental.com.au

Documents

DRIVING GROWTH TOGETHER - Pental Products€¦ · through product innovation and marketing investment, such as the White King advertising television campaign in the first half. •