1086 AnnRep-Investment S04-3 - Pumpkin Patch investor relations

The annual meeting of shareholders will beheld on Tuesday 23rd November 2004 at 1pmat the Ellerslie Convention Centre, Auckland.The Notice of Meeting is enclosed with thisAnnual Report. The Directors are pleased topresent the Annual Report of Pumpkin PatchLimited for the year ended 31st July 2004.For and on behalf of the Directors.Maurice PrendergastGreg Muir24 September 2004

performance highlights• Successful listing on the New Zealand Stock Exchange.• Group operating revenue of $220.3m; up 3% on forecast and 14% on 2003.• Group EBIT 1 of $22.9m; up 18% on forecast and 127% on 2003.• Normalised Group NPAT 1 of $15.5m; up 35% on forecast.• 16 Pumpkin Patch stores opened across New Zealand and Australia.• Acquisition and successful integration of 14 HBK Girl stores.• Sales growth across all wholesale markets.1. before costs of restructuring pre-listing employee share schemes.1

Store NumbersSales Composition120100114$220,000$200,000$180,00084$160,00080605671NZ$ Sales$140,000$120,000$100,000402740$80,000$60,0002010199211993219944199581996111997141998199920002001200220032004$40,000$20,000$02001200220032004NZHBKAustUKRetail NZRetail AustRetail UKOtherfashion created for kids3

chairman’s letterDear ShareholdersI am very pleased to report that Pumpkin Patch Limited has exceeded its prospectusforecast for the first year as a company listed on the New Zealand Exchange. I wouldalso like to extend a very warm welcome to all our new shareholders, and to reaffirm thecommitment of management and directors to maintaining our position of leadership inkid’s apparel across Australasia and developing new markets internationally.Net profit after tax (NPAT) (and before costs of restructuring pre-listing employee shareschemes) was $15.5m, compared with a prospectus forecast of $11.5m. Earnings beforeinterest and tax (EBIT) (and before costs of restructuring pre-listing employee shareschemes) at $22.9m was 17.6% ahead of forecast and 126.6% ahead of the 2003 year.The improved performance was due to better than expected sales performance in ourWholesale and United Kingdom businesses and improved margins in Australia andNew Zealand.The Company enters the new year in a very sound financial position. With borrowings ofjust $4.7m we have capacity to fund all foreseeable growth. Our store roll-outprogramme in Australia, New Zealand and the United Kingdom is on track to exceed theprospectus forecasts, and our Wholesale customer base is also performing strongly. ExtraWholesale outlets are planned in the Middle East and Ireland whilst our partners in theUnited States are now looking to introduce concept stores.Our corporate governance practices are now fully disclosed on our investor relationswebsite (www.pumpkinpatch.biz) and summarised in the corporate governance sectionof this report.We look forward to paying our first dividend in April 2005 (as forecast in the prospectus)based on the six months ending 31 January 2005.4

managing director’s reportOur yearThis has been an exciting period in the development of our company with the listingon the New Zealand Stock Exchange bringing new opportunities and responsibilities.We achieved sales and earnings growth and exceeded our prospectus forecast.Turnover grew to $220.3m, an increase of 13.8% on 2003 and 3.2% above forecast.We achieved strong results in all our markets, especially Australia and the UnitedKingdom. EBIT (before costs of restructuring pre-listing employee share schemes) was$22.9m versus forecast of $19.5m, and we achieved a very credible 10.4% EBIT toturnover. These results highlight the strength of our brand and the ability Pumpkin Patchhas to maintain strong margins.Pumpkin Patch was able to continue its expansion in New Zealand and Australia throughboth new store openings and consolidation of revenue from stores opened over the last18 months. Our refurbishment programme ensures our retail environment represents ourposition as the Australasian market leader in children’s specialty apparel.New Zealand retailActual Forecast 2003 1$000 $000 $000Turnover NZD 45,763 47,390 (3.4%) 42,333 8.1%EBIT 6,420 6,675 (3.8%)14.0% 14.1%StoresPumpkin Patch 27 25 21HBK 14 1441 39 211: Proforma 12 month period ended 31 July 2003.Sales grew 8.1% with the opening of 6 new Pumpkin Patch stores providing the backdropto a very successful year.6

During the year 14 HBK Girl stores were acquired from Hallenstein Glassons for the expansion of our Urban Angel pre-teen brand.This transaction occurred later than outlined in our Prospectus resulting in New Zealand revenue being slightly below that forecast.There was no profit effect from this delay. This acquisition has given us the ability to develop the Urban Angel brand as a standalone retail concept. During 2005 we will trial this concept, including the development of a much larger Urban Angel range, andmonitor its acceptance by a very discerning pre-teen customer.The renewed focus on the New Zealand market has resulted in opportunities in cities previously considered too small to warrant aPumpkin Patch store, for example Nelson, Rotorua, Johnsonville and New Plymouth. The response from these communities toPumpkin Patch has been outstanding.Our New Zealand team continues to deliver the excellent customer service standards that we are known for. Despite acompetitive retail environment we are confident in our position as market leader and will open at least 3 new shops during the2005 financial year.Australian retailActual Forecast 2003 1$000 $000 $000Turnover AUD 120,400 117,015 2.9% 104,760 14.9%Turnover NZD 138,449 133,911 3.4% 121,929 13.5%EBIT 15,905 13,611 16.8%11.5% 10.2%Stores 64 64 541: Proforma 12 month period ended 31 July 2003.Australian dollar sales increased 14.9% mainly as a result of the 10 new stores opened during the year and full year sales effect ofthe 9 stores opened during 2003. Our focus for 2004 was to maintain margins especially during the difficult sale periods in theapparel industry.As a result of this we were able to increase our earnings contribution from Australia to 11.5%. The lower percentage return in theAustralian market compared to New Zealand, reflects both higher rents and higher wage costs. The 10 new stores opened duringthe year had very little negative effect on existing stores, confirming management’s view that Australia still represents a largeopportunity to grow our business in the coming years. We plan to open another 10 stores in 2005, 3 more than originally forecast inthe Prospectus.fashion created for kids7

fashion created for kidsUnited Kingdom retailActual Forecast 2003 1$000 $000 $000Turnover GBP 6,999 6,351 10.2% 5,260 33.1%Turnover NZD 19,537 17,323 12.8% 14,480 34.9%EBIT (1,343) (2,472) 45.7% (2,586) 48.1%(6.9%) (14.3%) (17.9%)Stores 9 10 91: Proforma 12 month period ended 31 July 2003.The United Kingdom business showed a substantial increase in revenue per store duringthe 2004 year. We opened 1 new store in Nottingham and closed our loss making store inSwindon with very little cost to the Company. After adjusting for these changes ouraverage turnover per store increased 14.4% over the past year and it is expected toincrease further as brand recognition develops.Significantly, during the year, our increased emphasis on logistics and IT systems hasmeant we have been able to better satisfy customer needs and these changes willposition us for future growth. On the whole the United Kingdom performance wassatisfactory with our loss reducing by $1.1m on what was forecast in our Prospectus. Whilewe are still in the infancy of being a credible childrenswear offer in the United Kingdom,management is confident that the improvements made in the last year will enable us toopen at least 3 more stores in the 2005 financial year. While these will not be profitablefor the first 18 months of operation, we anticipate the United Kingdom will break even inthe 2005 financial year.Our goal for the next 12 months is to deliver the same high standards of customer servicethat Australasia now expects from the Pumpkin Patch brand. Our new team of skilledprofessionals has shown a wonderful ability to adapt to the Pumpkin Patch operatingmodel and we are confident that our team will even further enhance our offer to theUnited Kingdom customers.8

Wholesale and DirectActual Forecast 2003 1$000 $000 $000Turnover NZD 16,002 14,900 7.4% 15,295 4.6%EBIT 2,088 1,684 24.0%13.0% 11.3%1: Proforma 12 month period ended 31 July 2003.During the year we saw increased opportunities unfold in our international markets. These however were offset by revenue loss inthe Direct (Australasian mail order and internet sales) operation resulting from the continued store roll out to regional and ruralareas. Although the Direct business is declining, the catalogue remains a major driver of our retail operations.Our causesEvery year Pumpkin Patch supports a number of local kids charities. This year a majority of our support went to:• Gifted Kids• Kidz First Children’s Hospital• Books in Homes literacy programme• Mission without Borders (Ukrainian orphans appeal)In addition we support child related organisations and schools throughout New Zealand, Australia and the United Kingdom bysupplying fun fashion shows that tour each country.Our peopleOur team continues to grow and embrace the strong Pumpkin Patch culture. There has been a tremendous effort during the yearand I thank my team for pursuing our goals so fully.Pumpkin Patch ... the futureOur priority is still to provide fantastic value, great design and a retail experience that embraces the values that Pumpkin Patch isknown for.Managing Director9

directorsGreg MuirExecutive Chairman, BA, MBAGreg Muir was appointed Executive Chairman in February 2004. Prior to joining PumpkinPatch he was Chief Executive Officer of The Warehouse Group Ltd, and held seniormanagement roles with TNT Australia Pty Ltd, Enerco New Zealand Ltd and LionNathan Ltd.Maurice PrendergastManaging DirectorMaurice Prendergast has been Managing Director of Pumpkin Patch since 1993. Mauricehas held executive positions in accounting, distribution and property development inboth New Zealand and Australian companies.Chrissy ConynghamDesign and Marketing DirectorChrissy Conyngham joined Pumpkin Patch as Design Director in 1993. Chrissy leadsthe design and marketing teams and is responsible for bringing together comprehensiveranges, product sourcing and brand promotion. Chrissy has 17 years of experience inthe fashion industry.11

directorsJane FreemanIndependent Non-Executive Director, BComChairman of the Remuneration and Nomination Committee and member of the Audit,Compliance and Risk Management Committee.Jane has held senior marketing and management positions at Telecom’s esolutions,BankDirect, Clear Communications and ASB Bank Ltd. Jane is currently a director ofAir New Zealand Ltd, Sheffield Consulting Ltd, St George New Zealand Bank Ltd, andAlbert Street Dental Ltd.David JacksonIndependent Non-Executive Director, MCom (Hons), FCAChairman of the Audit, Compliance and Risk Management Committee and member of theRemuneration and Nomination CommitteeDavid was appointed as a Director of Pumpkin Patch in March 2004 and is a Senior AuditPartner with and former Chairman of Ernst & Young. David is currently a director of CanWestMediaWorks (NZ) Ltd.Sally SynnottNon-Executive DirectorMember of the Remuneration and Nomination Committee and the Audit, Compliance andRisk Management CommitteeSally Synnott founded Pumpkin Patch in 1990 and held an executive role within theCompany until 1993. Since then Sally has undertaken specialist assignments for the companyand has been a non-executive Director.12

senior managementLyn BryantGeneral Manager –OperationsLyn joined Pumpkin Patch in1994 as Customer ServiceSupervisor. Lyn wasappointed Customer ServiceManager in 1996, DistributionCentre Manager in 1999 andGeneral Manager-Operations in 2003.Marilyn CrockerGeneral Manager – HumanResourcesBA, MBA,RGON,MIHRMNZMarilyn joined Pumpkin Patch in2003 as Human ResourcesManager responsible fordeveloping procedures formanaging Pumpkin Patch’semployees worldwide.Kay GillardGeneral Manager – RetailKay joined Pumpkin Patch in1996 as Operations Managerto head the retail initiative intoAustralia. In 1997 Kay wasappointed General Manager,Australia and in 1999 wasappointed General Manager,Retail for the globalretail operation.14

Kate TattersfieldZarina ThesingBruce WalkleyMatthew WashingtonGeneral Manager – MarketingBAGeneral Manager – InformationTechnology BComGeneral Manager – BusinessDevelopment (Europe and UK)BComGeneral Manager - FinanceBCom, CAKate joined Pumpkin Patch inZarina joined Pumpkin Patch inBruce joined Pumpkin PatchMatthew joined Pumpkin1998 as Creative Director and2000 as an IT Developmentin 1993 as Finance Director.Patch in 2000 as Groupbecame Marketing ManagerManager and was appointedIn 2000 he was appointedFinancial Controller. Matthewin 2001. Kate has over 12 yearsas General Manager-IT in 2002.General Manager – Unitedhas over 16 years ofexperience in the marketingZarina had been involved andKingdom with responsibility foraccounting and commercialand graphic design industriesgained extensive experiencemanaging Pumpkin Patch’sexperience in a variety ofin both corporate andin the IT industry for 9 yearsinternational expansion in theindustry areas.freelance capacities.prior to joining Pumpkin Patch.United Kingdom and Europe.15

corporate governanceThe Board of Directors has the responsibility of ensuring the Company is properly managed to protect and enhance shareholders’interests. The Directors take this responsibility seriously and to this end, the Board has adopted what it believes to be appropriatecorporate governance policies and practices.The Board has undertaken to regularly review the corporate governance policies to ensure the Company’s responsibilities andobligations are met.CommitteesThe Board has formed an Audit, Compliance and Risk Management Committee and a Remuneration and Nomination Committee.Each committee has a charter setting out its objectives, composition and responsibilities. These charters are available on theCompany’s website.Audit, Compliance and Risk Management CommitteeThe Committee provides assistance to the Board in fulfilling their oversight responsibility to the shareholders, potential shareholders,the investment community, and others relating to the Company’s financial statements and the financial reporting process, thesystems of internal accounting and financial controls, the internal audit function, the annual independent audit of the Company’sfinancial statements, and the legal compliance and ethics programs as established by management and the Board.The Committee comprises a minimum of three non-executive Directors, the majority of which must be independent directors. Thecurrent members of the Committee are David Jackson (Chair), Jane Freeman, and Sally Synnott.Remuneration and Nomination CommitteeThe Committee provides assistance to the Board to ensure that the Company adopts remuneration policies that attract, retain andmotivate high calibre executives and directors so as to encourage enhanced performance by the Company, motivate directorsand management to pursue the long-term growth and success of the Company within an appropriate control framework, anddemonstrate a clear relationship between key executive performance and remuneration.The Committee comprises a minimum of three non-executive Directors, the majority of which must be independent directors. Thecurrent members of the Committee are Jane Freeman (Chair), David Jackson, and Sally Synnott.17

Board processesThe Board held two meetings during the period 9 June 2004 to 31 July 2004. The table below shows attendance of the Board andCommittee meetings.Board of DirectorsAudit, Compliance and Risk Management CommitteeMeetings held Meetings Attended Meetings held Meetings AttendedChrissy Conyngham 2 2Jane Freeman 2 2 1 1David Jackson 2 1 1 1Greg Muir 2 2Maurice Prendergast 2 2Sally Synnott 2 2 1 1The Remuneration and Nomination Committee did not meet in the period 9 June 2004 to 31 July 2004.Independent directorsThe Company considers that at balance date two of the current six Directors are independent Directors, namely Jane Freemanand David Jackson. The remaining four Directors, namely Chrissy Conyngham, Greg Muir, Maurice Prendergast, and Sally Synnottare deemed not to be independent.The Company notes that it has a minimum of two independent Directors as required by the NZX Listing Rules.Share trading by directors and officersThe Company has formal procedures that Directors and officers are to follow when trading in Pumpkin Patch Limited shares.Directors and officers must notify and obtain the consent of the Remuneration and Nomination Committee prior to trading.All trading must be conducted within two trading window periods. These periods commence from the date on which the annualresult and half year results are announced and run for six weeks.A copy of this policy is available on the Company’s website.Continuous disclosure policyThe Board has adopted a Market Disclosure Policy to provide a framework to assist the Company to meet its obligations under theNZX continuous disclosure rules. A copy of this policy is available on the Company’s website.Since the introduction of the Market Disclosure Policy the Company has made the following disclosure to the market:27 July 2004: Announcement of profit upgrade for the year ended 31 July 2004The Company believes it has met its obligations under the NZX continuous disclosure rules.18

External auditor independenceTo ensure the independence of the Company’s external auditor is maintained the Board has agreed the external auditor shouldnot provide any services not permitted under IFAC (International Federation of Accountants) auditor independence regulations.The Audit, Compliance and Risk Management Committee review services provided by the external auditor to ensure the companycomplies with this policy.Risk managementThe Company has a number of risk management policies that are designed to:• safeguard the assets and reputation of the Company• protect the interests of shareholders, and• enhance the Company’s performance.The Board has ultimate responsibility for internal control and compliance across the Company.19

general disclosuresDirectors remunerationDirectors remuneration and other benefits received, or due and receivable during the year was as follows:ParentSubsidiaries$000 $000Non Executive DirectorsJane Freeman 10David Jackson 25Sally Synnott 1 56Executive DirectorsChrissy Conyngham 2 487Greg Muir 2 262Maurice Prendergast 2 570Directors retiring during the period:Chris Hadley 15Reza Motani 15George Penklis 15Stephen Sher 15Bruce Walkley 2 15 GBP1101 During the period Sally Synnott received Directors fees of $36,000 and fees totalling $19,701 in her capacity as consultant to the Company. She ceased being a consultant tothe Company in February 2004.2 Executive Director remuneration may include salary, bonus payments, and provision of a motor vehicle received in their capacity as employees but excludes any benefitsresulting from the discharge of loans as part of the restructuring of pre-listing employee share schemes as detailed on page 22.During the period 1 August 2003 to 8 June 2004Chrissy Conyngham and Maurice Prendergast each received $15,000 in Directors fees. Since 9 June 2004 Executive Directors do not receive Directors fees.In addition to the above remuneration, current Executive Directors were each issued 290,000 options during the period. The valueof these options was independently assessed using a binominal option pricing model at the time of granting as $65,540 for eachExecutive Director. Refer to note 4 in the Financial Statements for full details of the option scheme.21

Pre-listing employee share scheme restructuringIn the period from 1999 to prior to listing in June 2004 the Company established a number of employee share schemes whichallowed employees (including Executive Directors) to purchase shares in the Company. Prior to listing and the allotment of sharesunder the share offer in June 2004 the Company restructured these schemes.The effect of the restructuring was:• All shares allocated under these schemes were fully paid, and the Company provided loans in the aggregate of $7,431,490 topay for any shares under the schemes not already purchased by the employee in cash.• In the case of the current Executive Directors the Company prior to listing paid grossed up bonuses to substantially dischargethe amount of the loans. In the case of other employees the Company is to pay grossed up bonuses over a three year periodto fully or substantially discharge the amount of the loans.• The total net tax cost of restructuring all of the pre-listing employee share schemes of $7,431,490 was fully provided for priorto listing.• A portion of each employee’s shares issued under the schemes are held by a trustee as security for the payment of the loansowing to the Company. In the case of Executive Directors as at 31 July 2004 the trustee holds security over shares relating toChrissy Conyngham (570,000 shares), Greg Muir (512,000 shares), and Maurice Prendergast (1,500,000 shares). These shares willbe released progressively over three years to the respective Executive Directors.• Should an Executive Director’s employment cease they are required to forfeit to the Company any remaining shares heldas security.• As part of this restructuring the Executive Directors have received a benefit resulting from the discharge of their loans. Thebenefits are received over the three year period that the shares held as security are progressively released from security. Thesebenefits over the three year period amount to in the case of Chrissy Conyngham $402,000, Greg Muir $768,000, MauricePrendergast $1,530,000 and Bruce Walkley $402,000.• As at 31 July 2004 a portion of the loans to Executive Directors remain outstanding. The outstanding balances amount to in thecase of Chrissy Conyngham $76,346, Greg Muir $68,776, and Maurice Prendergast $137,015. These loans are repayable over athree year period and are interest free.22

Directors shareholdings31 July 2003Chrissy ConynghamBeneficially owned 1,115,351Options to acquire ordinary shares 1 290,000Jane FreemanBeneficially owned 8,000David JacksonBeneficially owned 31,200Greg MuirBeneficially owned 2,311,100Options to acquire ordinary shares 1 290,000Maurice PrendergastBeneficially owned 13,400,000Options to acquire ordinary shares 1 290,000Not beneficially owned 2 5,800,847Sally SynnottBeneficially owned 11,600,000Not beneficially owned 2 5,800,8471 The Executive Directors hold options under the Employee Share Option Plan (refer note 4 of the Financial Statements). The options have an exercise period of between 9 June2007 and 9 June 2009.2 Maurice Prendergast and Sally Synnott are Directors of Pumpkin Patch Nominees Limited which acts as Trustee for the DF7 Scheme and holds shares on behalf of certainemployees who held shares in pre-listing employee share ownership schemes that were restructured prior to listing. Refer to note 4 and note 6 of the Financial Statements.Share dealings by directorsThe Board has received disclosures from the Directors named below of acquisitions of relevant interests in the Company during theperiod 9 June 2004 and 31 July 2004.Particulars of such disclosures are:Jane Freeman acquired a joint interest in 8,000 ordinary shares on 9 June 2004 at $1.25 per share.David Jackson acquired a joint interest in 31,200 ordinary shares on 9 June 2004 at $1.25 per share.23

Disclosure of Interests by directorsThe Directors named below have made a general disclosure of interest to the Board and entered the interest in the Company’sInterest Register.Chrissy Conyngham Shareholder in: Pumpkin Patch LimitedJane Freeman Director of: Air New Zealand LimitedAlbert Street Dental LimitedSheffield LimitedSt George Bank NZ LimitedJane Freeman Consulting LimitedShareholder in:Pumpkin Patch LimitedDavid Jackson Director of: Arthur Young & Co LimitedCanWest MediaWorks (NZ) LimitedEFIRM NZ LimitedErnst & Young Consultants LimitedErnst & Young Corporate Finance LimitedErnst & Young Corporate Nominees LimitedErnst & Young Group LimitedErnst & Young LimitedErnst & Young Management Services LimitedErnst & Young NomineesLateral Nominees LimitedLN UnlimitedMethodical Services NZ LimitedMIN LimitedNZ Dot Company LimitedRadecom LimitedStrategic Excellence Position LimitedShareholder in:Pumpkin Patch Limited24

Greg Muir Director of: Auckland Rugby Union IncorporatedNoel Leeming Group Limited (resigned 19 August 2004)Noel Leeming Limited (resigned 19 August 2004)Noel Leeming Holdings Limited (resigned 19 August 2004)Shareholder in:Pumpkin Patch LimitedMaurice Prendergast Director of: Bendon LimitedSports Resources LimitedDirector of andbeneficial shareholder in: Espies Shopfitters LimitedShareholder in:Pumpkin Patch LimitedSally Synnott Director of: Hearing House Services LimitedDirector of and shareholder in: Eager Beaver Toys LimitedMatangi Holdings LimitedModus Operandi Style LimitedShareholder in:Pumpkin Patch LimitedIndemnities and insuranceThe Company has granted indemnities, to the fullest extent permitted by the Companies Act 1993, in favour of each of its and itsrelated companies’ directors and certain officers. The Company also maintains insurance for its directors and officers to supportsuch indemnities to the extent permitted by the Companies Act 1993.Remuneration of employeesThe number of employees (not including Directors) whose remuneration exceeded $100,000 is as follows:$000 100–110 110–120 120–130 130–140 170–180 180–190 190–200 240–250 280–290Employees 3 3 4 2 4 2 1 1 1Australian and United Kingdom remuneration has been converted into New Zealand dollars at the exchange rate used fortranslating overseas operating results into New Zealand dollars, being $0.9076 and $0.3494 respectively.fashion created for kids25

group financial statementsPUMPKIN PATCH LIMITED & SUBSIDIARIESGROUP FINANCIAL STATEMENTSFOR THE 12 MONTHS ENDED 31 JULY 2004CONTENTSPageStatements of Financial Performance 28Statements of Movements in Equity 28Statements of Financial Position 29Statements of Cashflows 30Statement of Accounting Policies 31 - 35Notes to the Financial Statements 36 - 57Auditors’ Report 58The Board of Directors is pleased to present the financial statements of Pumpkin Patch Limited&Subsidiaries, incorporating the financial statements and auditors’ report, for the 12 months ended31 July 2004.The financial statements presented on pages 28 to 57 are signed for and on behalf of the Board, andwere authorised for issue on the date below.DirectorDirector24 September 200427

PUMPKIN PATCH LIMITED & SUBSIDIARIESSTATEMENTS OF FINANCIAL PERFORMANCEFOR THE 12 MONTHS ENDED 31 JULY 2004GroupParent12 months 7 months 12 months 7 months31 July 2004 31 July 2003 31 July 2004 31 July 2003Notes $000 $000 $000 $000Operating Revenue 2 220,292 111,750 32,266 14,502Operating Profit (Loss) Before Income Tax 2 11,321 2,639 (1,430) 2,504Income tax expense (benefit) 3 3,241 1,482 (2,074) 237Net Profit Attributable to theShareholders of the Parent Company 6 8,080 1,157 644 2,267PUMPKIN PATCH LIMITED & SUBSIDIARIESSTATEMENTS OF MOVEMENTS IN EQUITYFOR THE 12 MONTHS ENDED 31 JULY 2004GroupParent12 months 7 months 12 months 7 months31 July 2004 31 July 2003 31 July 2004 31 July 2003Notes $000 $000 $000 $000Equity at Beginning of Period 20,330 20,974 16,142 15,676Net profit for period 8,080 1,157 644 2,267Shares issued during the period 4 107,995 - 109,869 -Shares repurchased during the period 4 (61,284) - (61,284) -Dividends paid (9,627) (1,801) (9,627) (1,801)Costs of share issue (1,957) - (1,957) -Equity at End of Period 63,537 20,330 53,787 16,14228

PUMPKIN PATCH LIMITED & SUBSIDIARIESSTATEMENTS OF FINANCIAL POSITIONAS AT 31 JULY 2004GroupParent31 July 2004 31 July 2003 31 July 2004 31 July 2003Notes $000 $000 $000 $000EquityShare capital 4 55,660 10,907 57,535 10,907Retained earnings 7 7,877 9,423 (3,748) 5,235Total Equity 63,537 20,330 53,787 16,142Equity Represented by:Current AssetsCash and bank balances - - 1 -Trade debtors 1,774 1,360 - -Amounts owed from subsidiaries - - 38,355 22,388Advances to employee share schemeand employees 6 1,357 1,647 1,357 1,647Other receivables and prepayments 2,189 2,824 3,272 520Inventories 12 58,777 41,216 - -Income tax receivable 3 - 1,537 2,131 -Total Current Assets 64,097 48,584 45,116 24,555Current LiabilitiesBank overdraft 4,656 4,452 - 40Short term borrowings - 17,000 - -Trade creditors 11,238 7,910 660 831Income tax payable 2,276 - - 45Amounts owed to subsidiaries - - 2,697 16,961Accruals and provisions 11 14,011 7,418 3,964 1,341Current portion of term liabilities 9 - 1,707 - 1,705Total Current Liabilities 32,181 38,487 7,321 20,923Net Working Capital 31,916 10,097 37,795 3,632Non Current AssetsProperty plant and equipment 13 30,112 29,652 4,538 4,736Intangible assets 20 210 207 - -Advances to employee share schemeand employees 6 2,995 - 2,995 -Investments in subsidiaries 14 - - 10,188 10,188Investments 4 4 4 4Deferred taxation 15 3,635 446 1,505 167Total Non Current Assets 36,956 30,309 19,230 15,095Non Current LiabilitiesTerm liabilities 9 - 15,430 - 85Loan and advances from shareholders 10 - 2,500 - 2,500Accruals and provisions 11 5,335 2,146 3,238 -Total Non Current Liabilities 5,335 20,076 3,238 2,585Net Assets 63,537 20,330 53,787 16,14229

PUMPKIN PATCH LIMITED & SUBSIDIARIESSTATEMENTS OF CASHFLOWSFOR THE 12 MONTHS ENDED 31 JULY 2004GroupParent12 months 7 months 12 months 7 months31 July 2004 31 July 2003 31 July 2004 31 July 2003$000 $000 $000 $000Cash Flow From Operating ActivitiesCASH WAS PROVIDED FROM:Receipts from customers 220,001 110,656 26,942 12,865Interest received 153 - 112 5Net GST received - - - 145Dividends received - - 5,273 1,801CASH WAS APPLIED TO:Payment to suppliers and employees (199,791) (99,253) (54,837) (10,446)Net GST paid (13) (3,506) (95) -Income tax paid (2,617) (1,238) (1,440) (263)Interest paid (2,777) (1,871) (198) (239)Net Cash Flow from Operating Activities 14,956 4,788 (24,243) 3,868Cash Flow From Investing ActivitiesCASH WAS PROVIDED FROM:Proceeds from sale of property plant and equipment 104 41 16 20CASH WAS APPLIED TO:Purchase of property plant and equipment (7,990) (4,276) (858) (887)Purchase of trade marks (53) (37) - -Net Cash Used in Investing Activities (7,939) (4,272) (842) (867)Cash Flow From Financing ActivitiesCASH WAS PROVIDED FROM:Proceeds of short term debt issued (net) * - 5,000 - -Issue of shares prior to listing 1,000 - 1,000 -Issue of shares upon float 101,284 - 101,284 -CASH WAS APPLIED TO:Repayment of loans (term debt) (36,637) (3,082) (4,290) (1,369)Purchase of shares (61,284) - (61,284) -Costs of share issue (1,957) - (1,957) -Dividends paid (9,627) (1,801) (9,627) (1,801)Net Cash Used in Financing Activities (7,221) 117 25,126 (3,170)Net Increase / (Decrease) In Cash Held (204) 633 41 (169)Add opening cash brought forward (4,452) (5,048) (40) 129Effect of exchange rate changes on cash - (37) - -Ending Cash Carried Forward (4,656) (4,452) 1 (40)* Proceeds from short term borrowings have been netted against payments of short term borrowings. These borrowings are covered by anarranged finance facility.30

PUMPKIN PATCH LIMITED & SUBSIDIARIESSTATEMENTS OF ACCOUNTING POLICIESFOR THE 12 MONTHS ENDED 31 JULY 2004Entities ReportingThe financial statements for the “Parent” are for Pumpkin Patch Limited as a separate legal entity.The consolidated financial statements for the “Group” are for the economic entity comprising PumpkinPatch Limited and its subsidiaries.Statutory BasePumpkin Patch Limited is a company registered under the Companies Act 1993 and is an issuer in termsof the Securities Act 1978.The financial statements are those of Pumpkin Patch Limited and its subsidiaries and are prepared andpresented in accordance with the Companies Act 1993 and the Financial Reporting Act 1993.ComparativesDuring the period ended 31 July 2003 the Group changed its balance date from 31 December to31 July. Therefore the comparative numbers are for a seven month period ended 31 July 2003.Measurement BaseThe financial statements have been prepared on the historical cost basis.Accounting PoliciesThe financial statements are prepared in accordance with New Zealand generally acceptedaccounting practice. The accounting policies that materially affect the measurement of financialperformance, financial position and cash flows are set out below.Group Financial StatementsThe Group financial statements consolidate the financial statements of subsidiaries, using the purchasemethod. Subsidiaries are entities that are controlled, either directly or indirectly, by the Parent.All material transactions between subsidiaries or between the Parent and subsidiaries are eliminatedon consolidation.The results of subsidiaries acquired or disposed of during the year are included in the consolidatedstatement of financial performance from the date of acquisition or up to the date of disposal.Operating RevenuesGoods and ServicesRevenue comprises the amounts received and receivable for goods and services supplied tocustomers in the ordinary course of business.Investment IncomeDividend income is recognised in the period the dividend is declared. Interest and rental income areaccounted for as earned.31

Income TaxThe income tax expense recognised for the year is based on the accounting surplus, adjusted forpermanent differences between accounting and tax rules.The impact of all timing differences between accounting and taxable income is recognised as adeferred tax liability or asset. This is the comprehensive basis for the calculation of deferred tax underthe liability method. A deferred tax asset, or the effect of losses carried forward that exceed thedeferred tax liability, is recognised in the financial statements only where there is virtual certainty thatthe benefit of the timing differences, or losses, will be utilised.Goods and Services Tax (GST)The statement of financial performance and statement of cash flows have been prepared so that allcomponents are stated exclusive of GST. All items in the statement of financial position are stated netof GST, with the exception of receivables and payables, which include GST invoiced.Foreign CurrenciesTransactionsTransactions denominated in a foreign currency are converted to New Zealand dollars at theexchange rates in effect at the date of the transaction, except when forward currency contracts havebeen taken out to cover short-term forward currency commitments. Where short-term forward currencycontracts have been taken out, the transaction is translated at the rate contained in the contract.Monetary assets and liabilities arising from trading transactions, such as inventory, trade debtors, cashand trade creditors, or overseas borrowings are translated at the following closing rates as at thefinancial period end :31 July 31 July2004 2003Australian Dollar 0.9076 0.8929US Dollar 0.6424 0.5822British Pound 0.3494 0.3699Gains and losses due to currency fluctuations on these items are included in the statement offinancial performance.Foreign OperationsThe results of integrated foreign operations are translated in the same way as if the underlyingtransactions had been entered into by the reporting entity.Exchange differences arising from the translation of integrated foreign operations are recognised in thestatement of financial performance.32

Share Schemes and Employee Ownership PlansThe Company operates employee share ownership plans for certain employees. The initial purchaseof shares by the scheme is funded by advances from the Company, the advances being recognisedas assets in the statement of financial position. Where shares are issued in lieu of bonus, the expenseis recognised in the statement of financial performance.The Company operates share schemes for certain executive employees. No compensation expenseis recognised in the statement of financial performance.Deferred Landlord ContributionsLandlord contributions to fit-out costs are capitalised as deferred contributions and amortised to thestatement of financial performance over the lesser of the minimum period of the lease or the usefullife of the asset.Property, Plant and EquipmentThe cost of purchased property, plant and equipment is the value of the consideration given to acquirethe assets and the value of other directly attributable costs which have been incurred in bringing theassets to the location and condition necessary for their intended service.The cost of assets constructed by the Group includes the cost of all materials used in construction,direct labour on the project and financing costs that are directly attributable to the project. Costscease to be capitalised as soon as the asset is ready for productive use.DepreciationDepreciation on property, plant and equipment, other than freehold land, has been calculated onastraight line basis so as to expense the cost of the assets to their residual values over their useful livesas follows:Shop Fit OutOffice EquipmentPoint of Sale EquipmentComputer Equipment & SoftwareMotor VehiclesPlant and MachineryFurniture and fittingsLeasehold Improvements3 – 10 years3 – 10 years3 years3 – 5 years4 – 5 years2 – 14 years10 years6 – 7 years33

Leased AssetsOperating lease payments are representative of the pattern of benefits derived from the leased assetsand accordingly are charged to the statements of financial performance in the periods in which theyare incurred. Landlord contributions to fit-out costs are recognised in the statement of financialperformance over the minimum period of the lease, as a reduction in operating lease costs.InvestmentsInvestments in subsidiaries are stated at the lower of cost or net realisable value. Other investmentsare stated at the lower of cost or net realisable value.IntangiblesThe excess of cost over the fair value of the net assets of the subsidiary entities is recognised asgoodwill and is amortised to the statements of financial performance on a straight line basis overthe shorter of its estimated life or 5 years.Other intangibles comprise of the cost of registering trademarks. These are amortised over theiranticipated useful lives which range between 5 and 10 years.InventoriesRaw materials and finished goods are stated at the lower of average weighted cost and net realisablevalue. Cost is determined on a first in, first out basis.Accounts ReceivableAccounts receivable are carried at estimated realisable value after providing against debts wherecollection is doubtful.ImpairmentAnnually, the directors assess the carrying value of each asset. Where the estimated recoverableamount of the asset is less than its carrying amount, the asset is written down. The impairment loss isrecognised in the statements of financial performance.Employee EntitlementsEmployee entitlements to salaries and wages, annual leave, long service leave and other benefitsare recognised when they accrue to employees.The liability for employee entitlements is carried at the present value of the estimated futurecash outflows.Financial InstrumentsRecognisedFinancial instruments carried on the statement of financial position include cash and bank balances,investments, receivables, trade creditors and borrowings. The particular recognition methods adoptedare disclosed in the individual policy statements associated with each item.34

Forward exchange contracts entered into as hedges of foreign exchange assets and liabilities arevalued at exchange rates prevailing at period end. Any unrealised gains or losses are offset againstforeign exchange gains and losses on the related asset or liability. Premiums paid on currency optionsare amortised over the period to maturity.UnrecognisedFinancial instruments with off-balance sheet risk, have been entered into for the primary purposeof reducing exposure to fluctuations in foreign exchange rates and interest rates. While financialinstruments are subject to risk that market rates may change subsequent to acquisition, such changeswould generally be offset by opposite effects on the items hedged.Financial instruments purchased with the intention to be held for the long term or until maturityare recorded at original cost, adjusted for amortisation of premiums and discounts to maturity.Statements of CashflowsThe following are the definitions of the terms used in the Statements of Cashflows:(i)(ii)(iii)(iv)Cash is considered to be cash on hand and current accounts in the bank, net of bank overdrafts.Investing activities are those activities relating to the acquisition, holding and disposal of property,plant and equipment and of investments. Investments can include securities not falling within thedefinition of cash.Financing activities are those activities which result in changes in the size and composition of thecapital structure of the Group. This includes both equity and debt not falling within the definitionof cash. Dividends paid in relation to the capital structure are included in financing activities.Operating activities include all transactions and other events that are not investing orfinancing activities.Changes in Accounting PoliciesThere were no changes to accounting policies during the period.35

PUMPKIN PATCH LIMITED & SUBSIDIARIESNOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSFOR THE 12 MONTHS ENDED 31 JULY 20041. Segment InformationNew Zealand Retail Australia Retail United Kingdom Retail12 months 7 months 12 months 7 months 12 months 7 months31 July 2004 31 July 2003 31 July 2004 31 July 2003 31 July 2004 31 July 2003$000 $000 $000 $000 $000 $000AssetsSegment 19,836 14,507 54,578 44,501 11,825 10,330Unallocated and Other - - - - - -Consolidated 19,836 14,507 54,578 44,501 11,825 10,330RevenueSegment 45,763 24,359 138,449 70,246 19,537 8,127Unallocated and Other - - - - - -Consolidated 45,763 24,359 138,449 70,246 19,537 8,127ResultSegment 6,420 2,301 15,905 3,107 (1,343) (2,742)Interest Expense - - - - - -Unallocated and Other - - - - - -Consolidated 6,420 2,301 15,905 3,107 (1,343) (2,742)OtherTotal12 months 7 months 12 months 7 months31 July 2004 31 July 2003 31 July 2004 31 July 2003$000 $000 $000 $000AssetsSegment 4,628 3,964 90,867 73,302Unallocated and Other - - 10,186 5,591Consolidated 4,628 3,964 101,053 78,893RevenueSegment 16,002 9,018 219,751 111,750Unallocated and Other - - 541 -Consolidated 16,002 9,018 220,292 111,750ResultSegment 2,088 2,170 23,070 4,836Interest Expense - - (2,624) (1,871)Unallocated and Other - - (9,125) (326)Consolidated 2,088 2,170 11,321 2,639“Other” represents wholesale, mail order and internet sales. The result is that of the Group before income tax.The Group operates in one industry being the retailing and wholesaling of children’s clothing.Intersegment sales are on an arms length basis.36

PUMPKIN PATCH LIMITED & SUBSIDIARIESNOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSFOR THE 12 MONTHS ENDED 31 JULY 2004 (CONTINUED)2. Operating Profit before Income TaxThe operating profit before taxation is stated after charging/(crediting):GroupParent12 months 7 months 12 months 7 months31 July 2004 31 July 2003 31 July 2004 31 July 2003$000 $000 $000 $000Depreciation:- Leasehold improvements 286 28 51 -- Computer equipment 740 415 483 214- Shop fitouts 4,765 2,488 - -- POS equipment 147 48 - -- Plant and machinery 487 282 394 238- Office equipment 96 53 42 25- Motor vehicles 14 14 - 8- Furniture and fittings 893 493 70 57Total Depreciation 7,428 3,821 1,040 542Foreign currency (gains)/losses 1,849 1,413 (44) 75Rental and operating lease costs 24,343 12,256 1,792 1,041Bad debts written off 77 - - -Interest expense 2,777 1,871 198 239Gain on sale of property plant and equipment (11) (17) (15) (17)Dividends received - - (5,273) (1,801)Interest received (153) - (112) (5)Amortisation expense 51 30 - -Directors’ fees 176 118 176 118Donations 88 66 31 -Audit fees (PricewaterhouseCoopers)Statutory audit 125 103 125 30Half year audit 80 - 80 -Other auditors - 24 - -Other services:PricewaterhouseCoopers - 26 - 26Fees amounting to $246,250 were also paid to PricewaterhouseCoopers for services provided to the Group relating directly to the share issue.These costs were deducted from share capital. Refer to note 4.37

PUMPKIN PATCH LIMITED & SUBSIDIARIESNOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSFOR THE 12 MONTHS ENDED 31 JULY 2004 (CONTINUED)3. TaxationThe Income Tax Expense has been calculated as follows:GroupParent12 months 7 months 12 months 7 months31 July 2004 31 July 2003 31 July 2004 31 July 2003$000 $000 $000 $000Operating profit (loss) for the period before tax: 11,321 2,639 (1,430) 2,504Income tax on the operating profit (loss)for the period at 33% 3,736 870 (472) 827Plus/(Less):Prior period adjustment (155) 6 59 2Tax effect of permanent differences (340) 606 (1,661) (592)3,241 1,482 (2,074) 237The Income Tax Expense is represented by:Current taxation 6,588 2,237 (795) 306Prior period adjustment (155) 6 59 2Deferred taxation (3,192) (761) (1,338) (71)3,241 1,482 (2,074) 237Income Tax Payable (Receivable)Opening Balance (1,537) (2,629) 45 -Current taxation 6,588 2,237 (795) 306Withholding tax paid (722) (230) (25) -Income tax paid (2,763) (697) (21) -Income tax refunded 2,100 - 2 -Income tax transferred - - (160) -Prior period adjustment (154) 13 59 (29)Foreign investor tax credit (1,236) (231) (1,236) (232)Closing Balance 2,276 (1,537) (2,131) 45The group has estimated losses of $4,638,114 (2003: $6,240,695) available to carry forward arising from Pumpkin Patch Limited (UK), thebenefit of which has not been brought to account.38

PUMPKIN PATCH LIMITED & SUBSIDIARIESNOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSFOR THE 12 MONTHS ENDED 31 JULY 2004 (CONTINUED)4. Share CapitalGroupParent12 months 7 months 12 months 7 months31 July 2004 31 July 2003 31 July 2004 31 July 2003$000 $000 $000 $000Issued and paid up capital brought forward: 10,907 10,907 10,907 10,907Share issue pre-listing 1,000 - 1,000 -Share issue under pre-listing employee share schemes 5,710 - 5,710 -Share issue under DF7 Scheme pre-listing 1,875 - 1,875 -Share issue on listing 101,284 - 101,284 -Share repurchase on listing (61,284) - (61,284) -Share issue costs (1,957)* - (1,957)* -Shares held as treasury stock (1,875) - - -Balance at the end of the period 55,660 10,907 57,535 10,907As at 31 July 2004 there were 166,513,000 shares on issue (2003: 1,248,850). All ordinary shares are fully paid and rank equally with one voteattaching to each share.Prior to listing all B Class and C Class shares were converted to ordinary shares (formerly A Class shares) as part of the restructuring of prelistingemployee share schemes.* Fees amounting to $246,250 were paid to PricewaterhouseCoopers for services provided to the Group relating directly to the share issue.Ordinary Shares (formerly A Class shares)12 months 7 months31 July 2004 31 July 2003Opening balance 1,132,800 1,132,800Conversion of B Class shares pre-listing 70,861 -Conversion of C Class shares pre-listing 110,358 -Issue of ordinary shares prior to listing 11,111 -Ordinary shares prior to 100:1 share split 1,325,130 1,132,800Ordinary shares after 100:1 share split 132,513,000 1,132,800Issue of ordinary shares to DF7 Scheme pre-listing 2,000,000 -Issue of ordinary shares on listing 81,027,200 -Repurchase of ordinary shares on listing (49,027,200) -Closing balance 166,513,000 1,132,80039

PUMPKIN PATCH LIMITED & SUBSIDIARIESNOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSFOR THE 12 MONTHS ENDED 31 JULY 2004 (CONTINUED)B Class Shares12 months 7 months31 July 2004 31 July 2003Opening balance 68,700 68,700Issue of B Class shares under pre-listing employee ownership plans 2,161 -Conversion to ordinary shares pre- listing (70,861) -Closing balance - 68,700C Class Shares12 months 7 months31 July 2004 31 July 2003Opening balance 47,350 -Issue of C Class shares under pre-listing employee ownership plans 63,008 47,350Conversion to ordinary shares pre-listing (110,358) -- 47,35012 months 7 months31 July 2004 31 July 2003Total shares on issue 166,513,000 1,248,850Employee Share Ownership Scheme – DF7 SchemePrior to listing the Company established an employee share ownership scheme under DF7 of theIncome Tax Act 1994. Under the Scheme the Company issued 2,000,000 shares (1.2% of total ordinaryshares) to the Scheme’s trustee, Pumpkin Patch Nominees Limited, to be held on behalf of employeeswho elect to participate in the Scheme.The shares will be offered to employees at $0.94 per share, being 25% less than the final listing price of$1.25. The value of shares offered will be limited to a maximum of $2,340 per employee. The qualifyingperiod between grant and vesting dates is 3 years. Dividends paid during the qualifying period onshares allocated to employees are paid to the employees. Voting rights on shares allocated under theScheme are exercisable by the employees. Voting rights on shares not allocated under the Scheme areexercisable by the trustees.The shares are allocated under the condition that should the employee leave the Company beforethe qualifying period ends, their shares will be repurchased by the Scheme at the lesser of marketvalue and the price at which the shares were originally allocated to the employees, subject to therepayment of the original loan. Any such shares are re-allocated to other employees by the Scheme.40

PUMPKIN PATCH LIMITED & SUBSIDIARIESNOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSFOR THE 12 MONTHS ENDED 31 JULY 2004 (CONTINUED)The Company, prior to listing, gave the Trustee an interest free loan of $1,875,000 to enable it topurchase the shares issued to it for this Scheme. The Company has agreed that the Trustee is, in turn,entitled to novate a portion of that loan to individual employees to assist them to purchase sharesunder the Scheme.As at 31 July 2004 no shares were issued under the Scheme.The Company intends to implement similar schemes for its employees in the United Kingdom and inAustralia within the next 12 to 24 months. The Company believes the 2,000,000 shares issued to theTrustee and the $1,875,000 loan advanced will be sufficient to provide for the estimated number ofNew Zealand, United Kingdom and Australian employees likely to elect to join the schemes.Employee Share Option PlanPrior to listing the Company established a Share Option Plan. Under the plan the Company has offered2,274,000 options to selected senior employees, including Executive Directors, under the following terms:• One option entitles the employee to purchase one ordinary share in the Company• The exercise price of the options is the price per share paid by investors upon initial listing on 9 June2004, being $1.25.• Options can only be exercised:- in the exercise period commencing 9 June 2007 and ending 9 June 2009 or in otherextraordinary circumstances, for example if a person or group of associated persons acquire aninterest in at least 50% of the total voting rights in the Company, and- if, on the day of exercise, the market price of the ordinary shares is equal to or greater than thebenchmark price.• The benchmark price is calculated by taking the exercise price of $1.25, adjusted for the requiredweighted average cost of capital, as determined by independent advisors, and expected annualdividends over the period from 9 June 2004 to the commencement of the exercise period.• Options will lapse if not exercised within the exercise period.Under the Scheme Executive Directors were issued with the following options: Chrissy Conyngham290,000, Greg Muir 290,000, and Maurice Prendergast 290,000.The value of these options was independently assessed using a binominal option pricing modelat the time of granting as $65,540 for each Executive Director and $317,372 for all other employees.No compensation expense is recognised in the Statement of Financial Performance.41

PUMPKIN PATCH LIMITED & SUBSIDIARIESNOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSFOR THE 12 MONTHS ENDED 31 JULY 2004 (CONTINUED)5. Treasury Stock2,000,000 shares have been issued under the DF7 Scheme but at balance date have not beenallocated and paid for by employees. The shares are held in trust by Pumpkin Patch Nominees Limited.The terms of the Trust Deed between the Company and the Trustee gives the Company the right toappoint trustees and to benefit from any surplus funds held by the Trust.Therefore the Company has consolidated the DF7 Scheme as an in substance subsidiary at 31 July 2004and as such has recognised unallocated DF7 Scheme shares as Treasury Stock.The value of Treasury Stock as at 31 July 2004 is $1,875,000 (2003: nil).6. Pre-listing Employee Share Ownership SchemesIn the period from 1999 to prior to listing in June 2004 the Company established a number of employeeshare ownership schemes which allowed employees (including Executive Directors) to purchase sharesin the Company. These share purchases were funded by interest free loans from the Company.Immediately prior to listing loans totalling $1,720,740 (2003: $1,647,240) were outstanding.Prior to listing and the allotment of shares under the share offer in June 2004 the Company restructuredall pre-listing employee share ownership schemes. The effect of the restructuring was:• All shares allocated under these schemes were fully paid, and the Company provided additionalinterest free loans of $5,710,750 to employees to pay for any shares under the schemes not alreadypurchased in cash• The Company committed to pay grossed up bonuses to employees, in some cases over a threeyear period and in some cases prior to listing, to fully or substantially discharge the amount ofthe loans.• The total net tax cost of restructuring the pre-listing employee share ownership schemes of$7,431,490 was fully provided for prior to listing. This consisted $7,220,411 for the provision of bonusesto employees, including Executive Directors, to fully or substantially discharge their loans and$211,079 for the discharge of a loan outstanding from the pre-listing Pumpkin Patch Employee ShareScheme Trust.• Approximately one third of each employees shares issued under the schemes are held by a Trusteeas security for the payment of the loans owing to the Company and will be released to employeesprogressively over three years as their loans are progressively discharged.• Should an employee’s employment cease they are required to forfeit to the Company anyremaining shares held as security.• Employees retain full voting and dividend rights attached to their shares while held as security.• As at 31 July 2004 the Trustee holds 3,800,847 shares as security.42

PUMPKIN PATCH LIMITED & SUBSIDIARIESNOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSFOR THE 12 MONTHS ENDED 31 JULY 2004 (CONTINUED)GroupParent12 months 7 months 12 months 7 months31 July 2004 31 July 2003 31 July 2004 31 July 2003$000 $000 $000 $000Pre-listing Employee Share Ownership Scheme LoansOpening balance 1,647 1,647 1,647 1,647Loans relating to issue of shares under pre-listingemployee share schemes prior to restructuring 74 - 74 -Loans established upon the pre-listing restructuringof the employee share schemes 5,711 - 5,711 -Discharge of loan to pre-listing employee sharescheme trust prior to listing (211) - (211) -Loans discharged by application of net bonusespaid prior to listing (2,869) - (2,869) -Closing balance 4,352 1,647 4,352 1,647Current portion 1,357 1,647 1,357 1,647Term portion 2,995 - 2,995 -4,352 1,647 4,352 1,647Provision for Pre-listing EmployeeShare Scheme Restructuring BonusesOpening balance - - - -Provision of bonuses prior to listing 7,220 - 7,220 -Application of provision to bonuses paid prior to listing (3,150) - (3,150) -Closing balance 4,070 - 4,070 -Current portion 1,357 - 1,357 -Term portion 2,713 - 2,713 -4,070 - 4,070 -43

PUMPKIN PATCH LIMITED & SUBSIDIARIESNOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSFOR THE 12 MONTHS ENDED 31 JULY 2004 (CONTINUED)7. Retained EarningsGroupParent12 months 7 months 12 months 7 months31 July 2004 31 July 2003 31 July 2004 31 July 2003$000 $000 $000 $000Opening Balance 9,423 10,067 5,235 4,769Surplus for the period 8,081 1,157 644 2,267Dividends paid (9,627) (1,801) (9,627) (1,801)Closing Balance 7,877 9,423 (3,748) 5,235The dividends are fully imputed. Supplementary dividends of $1,236,424 (2003 : $231,829) were paid toshareholders not tax resident in New Zealand for which the Group received a foreign investor taxcredit entitlement.8. Imputation Credit AccountParentParent12 months 7 months31 July 2004 31 July 2003$000 $000Opening Balance 743 511Plus income tax paid 18 -Imputation credits attached to dividends received 2,597 887Less imputation credits attached to dividends paid to shareholders (3,505) (655)Transfer from Group companies 160 -Withholding tax credits 25 -Use of money interest 3 -Tax refund (3) -Closing Balance 38 74344

PUMPKIN PATCH LIMITED & SUBSIDIARIESNOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSFOR THE 12 MONTHS ENDED 31 JULY 2004 (CONTINUED)9. Term LiabilitiesGroupParent31 July 2004 31 July 2003 31 July 2004 31 July 2003$000 $000 $000 $000Current portion of term liabilities - 1,707 - 1,705Term loans - 15,430 - 85- 17,137 1,790Term liabilities fall due for repayment in the following periods:Bank LoansGroupParent31 July 2004 31 July 2003 31 July 2004 31 July 2003$000 $000 $000 $000One to two years - 15,430 - 85Two to three years - - - -Three to five years - - - -Beyond five years - - - -- 15,430 - 85SecurityBank Loans - The bank loans were secured by first mortgage over certain assets of the Group. Refer to note 16 – Contingent liabilities.Interest Rates - Refer to Note 21 for effective interest rates on borrowings.10. Loans and AdvancesAdvances of $2,500,000 (2003 - $2,500,000) made in prior periods to the following shareholders wererepaid in full on listing: Feruza Trust, Simdec Trust, Kezza Family Trust, Synott Trust45

PUMPKIN PATCH LIMITED & SUBSIDIARIESNOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSFOR THE 12 MONTHS ENDED 31 JULY 2004 (CONTINUED)11. Accruals and ProvisionsGroupParent31 July 2004 31 July 2003 31 July 2004 31 July 2003$000 $000 $000 $000CurrentSundry accruals 9,469 3,220 1,678 740Provision for pre-listing ESOP restructuring bonuses 1,357 - 1,357 -Employee entitlements 1,634 1,281 789 601GST payable 239 1,887 - -Deferred landlord contributions 1,312 1,030 140 -14,011 7,418 3,964 1,341Non CurrentDeferred landlord contributions 2,622 2,146 525 -Provision for pre-listing ESOP restructuring bonuses 2,713 - 2,713 -5,335 2,146 3,238 -19,346 9,564 7,202 1,34112. InventoriesGroupParent31 July 2004 31 July 2003 31 July 2004 31 July 2003$000 $000 $000 $000Inventories Comprise:Finished goods 36,663 25,070 - -Stock in transit 18,763 13,870 - -Raw materials 3,351 2,276 - -58,777 41,216 - -46

PUMPKIN PATCH LIMITED & SUBSIDIARIESNOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSFOR THE 12 MONTHS ENDED 31 JULY 2004 (CONTINUED)13. Property Plant and Equipment – Group31 July 2004 31 July 2003Cost Acc Book Cost Acc BookDepn Value Depn Value$000 $000 $000 $000 $000 $000Leasehold improvements 1,864 744 1,120 1,767 505 1,262Computer equipment 6,031 4,913 1,118 5,332 4,178 1,154Shop fit out 36,859 17,534 19,325 30,367 12,586 17,781Point of sale equipment 1,138 774 364 785 629 156Plant and machinery 4,172 2,824 1,348 4,136 2,351 1,785Office equipment 828 458 370 714 363 351Motor vehicles 110 76 34 170 118 52Furniture and fittings 7,107 2,638 4,469 6,829 1,682 5,147Land 1,964 - 1,964 1,964 - 1,964Total 60,073 29,961 30,112 52,064 22,412 29,652Property Plant and Equipment – Parent Company31 July 2004 31 July 2003Cost Acc Book Cost Acc BookDepn Value Depn Value$000 $000 $000 $000 $000 $000Computer equipment 3,869 3,002 867 3,200 2,526 674Plant and machinery 3,318 2,326 992 3,293 1,932 1,361Office equipment 401 241 160 344 199 145Motor vehicles 52 52 - 113 108 5Furniture and fittings 990 435 555 902 315 587Land 1,964 - 1,964 1,964 - 1,964Total 10,594 6,056 4,538 9,816 5,080 4,736Property ValuationThe Directors, having taken into consideration purchase offers, independent and governmentvaluations and other known factors, have assessed the fair value of freehold land to be $3.05million.47

PUMPKIN PATCH LIMITED & SUBSIDIARIESNOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSFOR THE 12 MONTHS ENDED 31 JULY 2004 (CONTINUED)14. Investments in SubsidiariesThe Group’s investments in subsidiaries is as follows:Interest held by the groupAudited By2004 2003Torquay Enterprises Limited 100% 100% PricewaterhouseCoopersPumpkin Patch Originals Limited 100% 100% PricewaterhouseCoopersPumpkin Patch (Australia) Pty Limited 100% 100% PricewaterhouseCoopersPumpkin Patch Limited (UK) 100% 100% PricewaterhouseCoopersThe Catalogue Studio Pty Limited 100% 100% PricewaterhouseCoopersAll subsidiary entities have a balance date of 31 July. Pumpkin Patch (Australia) Pty Limited and TheCatalogue Studio Pty Limited are incorporated in Australia. Pumpkin Patch Limited (UK) is incorporatedin the United Kingdom. All other subsidiary entities are incorporated in New Zealand.The principal activities of the subsidiaries are:Torquay Enterprises LimitedPumpkin Patch Originals LimitedPumpkin Patch (Australia) Pty LimitedPumpkin Patch Limited (UK)The Catalogue Studio Pty LimitedInvestment CompanyClothing RetailerHolding/Administration FunctionsClothing RetailerNon trading15. Deferred TaxationGroupParent12 months 7 months 12 months 7 months31 July 2004 31 July 2003 31 July 2004 31 July 2003$000 $000 $000 $000Deferred taxation opening 446 (402) 167 96Prior year adjustment (3) 87 - -On surplus for the period 3,192 761 1,338 71Deferred Taxation Closing 3,635 446 1,505 16748

PUMPKIN PATCH LIMITED & SUBSIDIARIESNOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSFOR THE 12 MONTHS ENDED 31 JULY 2004 (CONTINUED)16. Contingent LiabilitiesGroup and Parent CompanyThe Company has guaranteed, together with subsidiary companies, the indebtedness of PumpkinPatch Limited and subsidiaries at 31 July 2004, together with, in all cases, interest thereon under a deedof guarantee dated 18 April 1996. The deed with the ANZ National Bank Limited provides for the issue ofsecurities in respect of indebtedness from time to time of Pumpkin Patch Limited and/or anyguaranteeing subsidiary. At 31 July 2004 the total indebtedness guaranteed by the deed amounted to$8,165,004 (2003 - $32,202,508).Other guarantees held by ANZ National Bank Limited include rent guarantees to certain landlordsamounting to $1,468,352 (2003: $1,030,390), rent guarantees provided to the landlords of a subsidiary,Pumpkin Patch Limited (UK), amounting to $1,216,646 (2003: $1,250,442), and a guarantee of $75,000(2003: nil) to the NZX.The amount of outstanding liabilities under Letters of Credit at 31 July 2004 amounted to nil(2003: $34,421).17. Capital Expenditure CommitmentsThe Group has commitments for future capital expenditure at 31 July 2004 amounting to $1,830,000(2003 - $418,000).18. Operating Lease ObligationsObligations payable after balance date on non-cancellable operating leases as follows:GroupParent31 July 2004 31 July 2003 31 July 2004 31 July 2003$000 $000 $000 $000Not later than one year 25,851 19,865 1,622 1,552Later than one year and not later than two years 18,789 16,486 1,518 1,475Later than two years and not later than five years 28,916 20,509 4,555 4,424Later than five years 10,071 1,606 6,050 1,60683,627 58,466 13,745 9,05749

PUMPKIN PATCH LIMITED & SUBSIDIARIESNOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSFOR THE 12 MONTHS ENDED 31 JULY 2004 (CONTINUED)19. Related Party TransactionsThe parent company has entered into certain transactions in the form of recharging of expenses andoverheads with its subsidiaries. Details of the identity of subsidiaries are disclosed in Note 14 -Investments in subsidiaries.The parent company has paid management fees of $53,270 (2003 - $54,211) to Emery Hill Limited whichis owned by Stephen Sher, a non-Executive Director who retired during the period. These were made onnormal commercial terms and there are no outstanding balances at period end.The Group has paid rent to One Fine Day Limited of $56,296 (2003: $33,110). One Fine Day Limited wasowned equally by three shareholders (Kezza Family Trust, Simdec Trust and The Opito Family Trust) of theparent company. On 18 June 2004 the property rented from One Fine Day Limited was sold to TheDickens Street Partnership which is 66% owned by The Opito Family Trust, a shareholder in PumpkinPatch Limited. The Group paid rent of $8,042 to The Dickens Street Partnership (2003: nil). Thesepayments were made on normal commercial terms and there are no outstanding balances at periodend.The Group has made purchases of shop fixtures and fittings from Espies Shopfitters Limited of $2,984,717(2003: from 1 April 2003 $863,384). Since 1 April 2003 Espies Shopfitters Limited is 48.75% beneficiallyowned by Kezza Family Trust, a shareholder of Pumpkin Patch Limited. Kezza Family Trust is associatedwith Maurice Prendergast, a Director in Pumpkin Patch Limited. These were made on normalcommercial terms. At period end $321,626 was outstanding.20. Intangible AssetsGroupParent31 July 2004 31 July 2003 31 July 2004 31 July 2003$000 $000 $000 $000Patents and TrademarksPatents and trademarks at beginning of period 207 201 - -Acquisitions 54 36 - -Current period amortisation (51) (30) - -Patents and trademarks at end of period 210 207 - -Goodwill on ConsolidationGoodwill (gross) at beginning of the period - 1,538 - -Amortisation charge - (1,538) - -Unamortised balance at beginning of the period - - - -Goodwill at end of the period - - - -Total intangible assets 210 207 - -50

PUMPKIN PATCH LIMITED & SUBSIDIARIESNOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSFOR THE 12 MONTHS ENDED 31 JULY 2004 (CONTINUED)21. Financial Instruments(a) Currency and Interest Rate RiskNature of activities and management policies with respect to financial instruments:1. CurrencyThe Group undertakes transactions denominated in foreign currencies from time to time and resultingfrom these activities, exposures in foreign currency arise. It is the Group’s policy to hedge foreigncurrency risks as they arise except for foreign currency risks authorised by the Board. To manage theseexposures, the Group uses forward foreign exchange contracts and foreign currency options.The notional principal or contract amounts of foreign exchange instruments outstanding at balancedate are:2004 2003$000 $000Forward Foreign Exchange Contracts 89,860 22,627Forward Options 4,839 11,009Total 94,699 33,636The cash settlement requirements of the forward foreign exchange contracts and optionsapproximates the notional amount shown above.2. Interest RateThe Group utilises as required long-term fixed rate borrowings which are used to fund on-goingactivities. Management monitors the levels of interest rates on an on-going basis and periodically willlock in fixed rates on the next floating reset, when they are of the view that interest rates may increase.51

PUMPKIN PATCH LIMITED & SUBSIDIARIESNOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSFOR THE 12 MONTHS ENDED 31 JULY 2004 (CONTINUED)3. Repricing AnalysisTrade debtors, other debtors, trade creditors, other creditors and dividends payable have not beenincluded in the table below as they are not interest rate sensitive.Group Repricing Maturities 2004Effective < 6 6-12 1-2 2-5 > 5 TotalInterest Months Months Years Years YearsRates $000 $000 $000 $000 $000 $000LiabilitiesBank overdraft 8.35% 4,656 - - - - 4,656Total Liabilities 4,656 - - - - 4,656Repricing Gap 4,656 - - - - 4,656Group Repricing Maturities 2003Effective < 6 6-12 1-2 2-5 > 5 TotalInterest Months Months Years Years YearsRates $000 $000 $000 $000 $000 $000LiabilitiesBank overdraft 8.35% 4,452 - - - - 4,452Short & long termborrowings 5.99% 17,000 - 15,345 - - 32,345Term liabilities 7.50% - 1,707 85 - - 1,792Total Liabilities 21,452 1,707 15,430 - - 38,589Repricing Gap 21,452 1,707 15,430 - - 38,589Parent Company Repricing Maturities 2004Effective < 6 6-12 1-2 2-5 > 5 TotalInterest Months Months Years Years YearsRates $000 $000 $000 $000 $000 $000LiabilitiesBank overdraft - - - - - -Term liabilities - - - - - -Total Liabilities - - - - - -Repricing Gap - - - - - -52

PUMPKIN PATCH LIMITED & SUBSIDIARIESNOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSFOR THE 12 MONTHS ENDED 31 JULY 2004 (CONTINUED)Parent Company Repricing Maturities 2003Effective < 6 6-12 1-2 2-5 > 5 TotalInterest Months Months Years Years YearsRates $000 $000 $000 $000 $000 $000LiabilitiesBank overdraft 7.10% 40 - - - - 40Term liabilities 7.50% - 1,705 85 - - 1,790Total Liabilities 40 1,705 85 - - 1,830Repricing Gap 40 1,705 85 - - 1,8304. Concentration of Credit RiskIn the normal course of business, the Group incurs credit risk from trade debtors and transactions withfinancial institutions. The Group has a credit policy which is used to manage this risk.The Group has no significant concentrations of credit risk. The Group does not require any collateral orsecurity to support financial instruments due to the quality of financial institutions and trade debtorsdealt with.(b)Fair ValuesThe estimated fair values of the Group’s financial assets and liabilities which differ from the carryingvalues are noted below:31 July 2004 31 July 2003Carrying Fair Carrying FairValue Value Value Value$000 $000 $000 $000AssetsInvestments 4 4 4 4UnrecognisedForeign exchange contracts - 1,712 - (1,369)The Group anticipates that Term Liabilities will be held to maturity and that settlement at fair valueis unlikely.53

PUMPKIN PATCH LIMITED & SUBSIDIARIESNOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSFOR THE 12 MONTHS ENDED 31 JULY 2004 (CONTINUED)The following methods and assumptions were used to estimate the fair values for each class offinancial instrument.Trade Debtors, Trade Creditors and Bank OverdraftThe carrying value of these items is equivalent to their fair value and therefore they are excluded fromthe table shown above.InvestmentsThe fair value of listed investments is estimated based on quoted market prices at balance date.The fair value of unlisted investments is estimated to be the net asset backing, as there are no quotedmarket prices available.Term LiabilitiesThe fair value of the Group’s term liabilities is estimated based on current market rates available tothe Group for debt of similar maturity.Foreign Exchange ContractsThe fair value of these instruments is estimated based on the quoted market price of these instruments.Guarantees and Overdraft FacilitiesThe fair value of these instruments is estimated on the basis that management do not expectsettlement at face value to arise. The carrying value and fair value of these instruments is nil.54

PUMPKIN PATCH LIMITED & SUBSIDIARIESNOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSFOR THE 12 MONTHS ENDED 31 JULY 2004 (CONTINUED)22. Reconciliation of Net Profit after Taxation to Cashflow from Operating ActivitiesGroupParent12 months 7 months 12 months 7 months31 July 2004 31 July 2003 31 July 2004 31 July 2003Notes $000 $000 $000 $000Net Profit After Tax 8,080 1,157 644 2,267Add/(Less) Non-cash items:Depreciation expense 7,428 3,822 1,040 542(Increase)/Decrease in deferred taxation (3,190) (848) (1,337) (71)Provision for prelisting employee sharescheme restructuring 6 8,983 - 8,983 -Fit out Contributions amortised (1,333) (549) - -Amortisation expense 2 51 30 - -Add/(Less) movements in working Capital items:(Increase)/Decrease in receivables and prepayments (137) 1,392 (51) 170Increase/(Decrease) in creditors and provisions 7,855 1,763 (3,289) (77)Increase/(Decrease) in creditors re stock in transit 4,780 - - -(Increase)/Decrease in Inventories on hand (12,668) 6,262 - -(Increase)/Decrease in stock in transit (4,893) (8,241) - -(Increase)/Decrease in Related party balances - - (30,233) 1,037Net Cash Flow From Operating Activities 14,956 4,788 (24,243) 3,86823. Significant Events after Balance DateNo significant events have occurred after balance date.55

PUMPKIN PATCH LIMITED & SUBSIDIARIESNOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSFOR THE 12 MONTHS ENDED 31 JULY 2004 (CONTINUED)24. Comparison against Prospectus ForecastSummary Statement of Financial PerformanceFor the year ended 31 July 2004ActualForecast2004 2004$000 $000Operating Revenue 220,292 213,524EBIT Before Costs of Restructuring Pre-listing EmployeeShare Ownership Schemes 22,928 19,493Net Profit After Income Tax 8,080 4,036• Operating Revenue was higher than forecast due to sales growth across United Kingdom andAustralian stores, and wholesale accounts.• EBIT before costs of restructuring pre-listing employee share ownership schemes and net profitafter income tax were above forecast due primarily to the above mentioned sales performanceand improved sales margins.Summary Statement of Financial PositionAs at 31 July 2004ActualForecast2004 2004$000 $000Current assets 64,097 52,379Non-current assets 36,956 33,105Total Assets 101,053 85,484Borrowings 4,656 1,652Other current liabilities 27,525 15,294Non-current liabilities 5,335 3,959Total Liabilities 37,516 20,905Share capital 55,660 60,620Retained earnings 7,877 3,959Net Assets 63,537 64,57956

PUMPKIN PATCH LIMITED & SUBSIDIARIESNOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSFOR THE 12 MONTHS ENDED 31 JULY 2004 (CONTINUED)• Share capital is lower than forecast due to the forecasted final price on listing being $1.25compared to the forecasted $1.32, and total issue costs being higher than forecasted.• Current assets includes higher than forecasted stock levels resulting from increased purchases forfuture sales seasons and higher than expected levels of goods in transit at year end.• Higher than forecasted borrowings is primarily the result of lower than forecasted net proceeds onthe issue of shares on listing.• Other current liabilities is higher than forecast due to increased accounts payable resulting fromincreased stock purchases.Cash Flow SummaryFor the year ended 31 July 2004ActualForecast2004 2004$000 $000Net cash flow from operating activities 14,956 13,199Net cash flow from investing activities (7,939) (6,168)Net cash flow from financing activities (7,221) (4,231)Net increase (decrease) in cash held (204) 2,800Forecasted landlord fitout contributions of $747,000 which were disclosed in the Prospectus as investingcash flows have been reclassified as operating cash flows to allow comparison with the Statement ofCash Flows for the year ended 31 July 2004.• Cash flows from operating activities were higher than forecast due to the improved trading resultfor the period, partially offset by increases in other working capital items.• Higher than forecasted cash out flows from investing activities was the result of the opening oftwo stores not forecasted and capital expenditure relating to the accelerated roll out of store instore concession arrangements with wholesale customers.• Net cash flow from financing activities was lower than forecast due to the final price on listingbeing $1.25 compared to the forecasted $1.32, and total issue costs being higher thanforecasted.57

Auditors’ Report to the shareholders of Pumpkin Patch LimitedWe have audited the financial statements on pages 28 to 57. The financial statements provide information about the past financialperformance and cash flows of the Company and Group for the year ended 31 July 2004 and their financial position as at that date.This information is stated in accordance with the accounting policies set out on pages 31 to 35.Directors’ ResponsibilitiesThe Company’s Directors are responsible for the preparation and presentation of the financial statements which give a true and fairview of the financial position of the Company and Group as at 31 July 2004 and their financial performance and cash flows for theyear ended on that date.Auditors’ ResponsibilitiesWe are responsible for expressing an independent opinion on the financial statements presented by the Directors and reporting ouropinion to you.Basis of OpinionAn audit includes examining, on a test basis, evidence relevant to the amounts and disclosures in the financial statements. It alsoincludes assessing:(a)(b)the significant estimates and judgements made by the Directors in the preparation of the financial statements; andwhether the accounting policies are appropriate to the circumstances of the Company and Group, consistently applied andadequately disclosed.We conducted our audit in accordance with generally accepted auditing standards in New Zealand. We planned and performedour audit so as to obtain all the information and explanations which we considered necessary to provide us with sufficient evidenceto give reasonable assurance that the financial statements are free from material misstatements, whether caused by fraud or error.In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements. Wehave no relationship with or interests in the Company or any of its subsidiaries other than in our capacities as auditors andaccounting advisors.Unqualified OpinionWe have obtained all the information and explanations we have required.In our opinion:(a)proper accounting records have been kept by the Company as far as appears from our examination of those records; and(b) the financial statements on pages 28 to 57:(i)(ii)comply with generally accepted accounting practice in New Zealand; andgive a true and fair view of the financial position of the Company and Group as at 31 July 2004 and their financialperformance and cash flows for the year ended on that date.Our audit was completed on 24 September 2004 and our unqualified opinion is expressed as at that date.Chartered AccountantsAuckland58

shareholder informationfor the year ended 31 July 2004Size of Holdings Number of Holders % Number of Shares %1 - 1,000 527 11.50 389,262 0.231001 - 5,000 2,179 47.55 7,738,189 4.655,001 - 10,000 1,008 21.99 7,603,697 4.5710,001 - 100,000 817 17.83 19,744,829 11.86Over 100,000 52 1.13 131,037,023 78.694,583 100.00 166,513,000 100.00The details set out above were as at 31 August 2004.Principal ShareholdersThe names and holdings of the twenty largest registered shareholders as at 31 August 2004 were:Ordinary Shares %Nigel P Smith and Wynyard Wood Trustee Services Limited as Trustees for Feruza Trust 24,390,000 14.65Maurice J Prendergast, Kerry D Prendergast and Stuart G Callender as Trusteesfor Kezza Family Trust 13,400,000 8.05Perpetual Trustee Limited 12,000,000 7.21Mark J Synnott, Sally R Synnott and The Gale Trustee Company Limited as Trusteesfor The Opito Family Trust 10,400,000 6.25TEA Custodians Limited 8,493,396 5.10Nigel P Smith and Wynyard Wood Trustee Services Limited as Trustees for Simdec Trust 7,400,000 4.44Pumpkin Patch Nominees Limited 5,800,847 3.48Portfolio Custodian Limited 4,518,000 2.71Premier Nominees Limited – Armstrong Jones NZ Share Fund 4,279,905 2.57Citibank Nominees (New Zealand) Limited 3,919,505 2.35National Nominees New Zealand Limited 3,196,270 1.92Westpac Banking Corporation – Client Assets No 2 2,471,751 1.48Asteron Life Limited 2,430,958 1.46Gregory J Muir, Debra J Muir and Geoffrey A Lawrie as Trustees for Muir Trust 1,799,100 1.08TEA Custodians Limited No2 Account 1,795,500 1.08New Zealand Superannuation Fund Nominees Limited 1,775,110 1.07Custodial Services Limited 1,226,200 0.74Adam L G Ryall, Judith M Ryall and Stanley A Carwardine as Trusteesfor Punchestown Family Trust 1,200,000 0.72Superannuation Investments Limited – A/C SIL Mutual Fund 1,109,455 0.67River Capital Pty Limited 1,025,000 0.6260

Substantial Security HoldersPursuant to Section 26 of the Securities Markets Act 1988, the following shareholders have filed noticeswith the Company that they are substantial security holders in the Company:Ordinary SharesSetar A Motani (notice dated 22 June 2004) 24,390,000Maurice J Prendergast and Kerry D Prendergast (notice dated 18 June 2004) 13,400,000Perpetual Trustee Limited (notice dated 21 June 2004) 12,000,000Mark J Synnott and Sally R Synnott (notice dated 18 June 2004) 10,400,000ING NZ Limited (notice dated 2 July 2004) 9,662,535Fisher Funds Management Limited (notice dated 27 July 2004) 9,035,30661

corporate directoryRegistered Office439 East Tamaki RoadAucklandNew ZealandContact DetailsPrivate Bag 94 310PakurangaAucklandNew ZealandPhone: +64 9 274 7088Facsimile: +64 9 274 1122Website: www.pumpkinpatch.co.nzInvestor RelationsE-mail: investor@pumpkinpatch.co.nzWebsite: www.pumpkinpatch.bizShare RegistrarBK Registries LimitedPO Box 384AshburtonNew ZealandPhone: +64 3 308 8887Facsimile: +64 3 308 1311SolicitorsSimpson GriersonPrivate Bag 92 518Wellesley StreetAucklandNew ZealandWynyard WoodPO Box 6048AucklandNew ZealandAuditorsPricewaterhouseCoopersPrivate Bag 92 162AucklandNew ZealandBankersANZ National Bank Limited63