Results for announcement to the market

Full Year Ended 30 June 2005

Revenues from ordinary activities	Up	$12.7\%$ to	496,101
Profit from ordinary activities after tax attributable to members	Up	11.9% to	16,556
Net profit for the period attributable to members	Up	11.9% to	16,556

DIVIDENCE (distributions)
	Amount per security	Franked amount per security
Final dividend	18 cents	18 cents
Date the dividend is payable		23 September 2005
Record date for determining entitlements to the dividend If it is a final dividend, has it been declared?		12 September 2005 Yes
Amount of dividend per security
	Amount per security	Franked amount per security at 30% tax
—

Final dividend	current year	18 cents	18 cents
	previous year	18 cents	18 cents
Special dividend	current year	30 cents	30 cents
Interim dividend	current year	18 cents	18 cents
	previous year	16 cents	16 cents
Total dividend	current year	66 cents	66 cents
	previous year	34 cents	34 cents

Dividend reinvestment plan

The Company's DRP has been reactivated for the final dividend.

The Directors have decided to apply a 2.5% discount to the subscription price of shares to be issued under the DRP. This rate will continue to apply until the Directors determine otherwise.

To participate in the DRP for the final dividend, those shareholders who have not previously elected to participate, will be required to return an application form by 12 September 2005 - the record date for the final dividend.

For an explanation of the figures reported above see the attached commentary.

The attached financial statements and Directors' declaration have been audited.

Annual general meeting
The annual general meeting will be held as follows:
Place	The Duxton Hotel
	Duxton Room 1
	1 St Georges Terrace
	Perth WA
Date	Tuesday, 8 November 2005
Time	2.00 _pm
Approximate date the annual report will be available	Wednesday, 5 October 2005

$\label{eq:2.1} \mathcal{L}{\mathcal{A}}(\mathcal{A}) = \mathcal{L}{\mathcal{A}}(\mathcal{A}) \mathcal{L}{\mathcal{A}}(\mathcal{A}) = \mathcal{L}{\mathcal{A}}(\mathcal{A})$

$\label{eq:2.1} \frac{1}{\sqrt{2}}\int_{\mathbb{R}^3}\frac{1}{\sqrt{2}}\left(\frac{1}{\sqrt{2}}\right)^2\frac{1}{\sqrt{2}}\left(\frac{1}{\sqrt{2}}\right)^2\frac{1}{\sqrt{2}}\left(\frac{1}{\sqrt{2}}\right)^2\frac{1}{\sqrt{2}}\left(\frac{1}{\sqrt{2}}\right)^2.$

$\label{eq:2.1} \mathcal{L}(\mathcal{L}^{\text{max}}{\mathcal{L}}(\mathcal{L}^{\text{max}}{\mathcal{L}}(\mathcal{L}^{\text{max}}{\mathcal{L}}(\mathcal{L}^{\text{max}}{\mathcal{L}^{\text{max}}_{\mathcal{L}}})))))$

$\label{eq:2.1} \frac{1}{\sqrt{2}}\int_{0}^{\infty}\frac{1}{\sqrt{2\pi}}\left(\frac{1}{\sqrt{2\pi}}\right)^{2}d\mu\,d\mu\,.$

$\label{eq:2} \mathcal{L}(\mathcal{L}^{\text{max}}{\mathcal{L}^{\text{max}}{\mathcal{L}^{\text{max}}{\mathcal{L}^{\text{max}}{\mathcal{L}^{\text{max}}{\mathcal{L}^{\text{max}}{\mathcal{L}^{\text{max}}{\mathcal{L}^{\text{max}}{\mathcal{L}^{\text{max}}{\mathcal{L}^{\text{max}}{\mathcal{L}^{\text{max}}{\mathcal{L}^{\text{max}}{\mathcal{L}^{\text{max}}{\mathcal{L}^{\text{max}}{\mathcal{L}^{\text{max}}_{\mathcal{L}^{\text{max}}$

$\langle \hat{A} \rangle$

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$\label{eq:2.1} \frac{1}{\sqrt{2\pi}}\int_{\mathbb{R}^3}\frac{1}{\sqrt{2\pi}}\left(\frac{1}{\sqrt{2\pi}}\int_{\mathbb{R}^3}\frac{1}{\sqrt{2\pi}}\frac{1}{\sqrt{2\pi}}\frac{1}{\sqrt{2\pi}}\frac{1}{\sqrt{2\pi}}\frac{1}{\sqrt{2\pi}}\frac{1}{\sqrt{2\pi}}\frac{1}{\sqrt{2\pi}}\frac{1}{\sqrt{2\pi}}\frac{1}{\sqrt{2\pi}}\frac{1}{\sqrt{2\pi}}\frac{1}{\sqrt{2\pi}}\frac{1}{\sqrt{2\pi}}\frac{1}{\sqrt$

COVENTRY GROUP LTD

ABN 37 008 670 102

FINANCIAL REPORT

FOR THE YEAR ENDED

30 June 2005

Statements of Financial Performance for the Year Ended 30 June 2005

		Consolidated Entity			Parent Entity
	Note	2005 \$000	2004 \$000	2005 \$000	2004 \$000
Revenue from ordinary activities	2	496,101	440,302	425,588	384,389
Cost of goods sold Employee benefits expense Depreciation and amortisation		(295, 704) (93,530)	(273,080) (84,329)	(252, 981) (79, 402)	(238, 576) (73, 836)
expenses Borrowing costs Occupancy costs Book value of assets sold	3 3	(8, 844) (2, 189) (10, 179) (17, 571)	(7,806) (1, 819) (8,979) (2,567)	(6, 841) (1, 857) (6, 817) (17, 485)	(6,425) (1, 563) (6,071) (2,509)
Communication costs Recoverable amount write-down Other expenses from ordinary	3	(3,510)	(3,234)	(2,804) (5,823)	(2,663) (4, 139)
activities Profit from ordinary activities		(41, 628)	(36, 559)	(31,538)	(28,510)
before income tax expense		22,946	21,929	20,040	20,097
Income tax expense	4	(6,001)	(6,758)	(4,503)	(5,409)
Profit from ordinary activities after income tax expense		16,945	15,171	15,537	14,688
Net profit attributable to outside equity interest		(389)	(371)
Net profit attributable to members of Coventry Group Ltd	24(b)	16,556	14,800	15,537	14,688
Net exchange differences on translation of financial statements of foreign controlled entities	24(a)	(102)	370
Total revenues, expenses and valuation adjustments attributable to members of Coventry Group Ltd recognised directly in equity		(102)	370
Total changes in equity other than those resulting from transactions with owners as owners	26	16,454	15,170	15,537	14,688
Basic earnings per share Diluted earnings per share	8 8	46.8 cents 46.3 cents	42.5 cents 42.2 cents

The Statements of Financial Performance are to be read in conjunction with the accompanying notes to the financial statements. $\ddot{\phantom{a}}$

Statements of Financial Position for the Year Ended 30 June 2005

		Consolidated Entity		Parent Entity
	Note	2005	2004	2005	2004
		\$000	\$000	\$000	\$000
CURRENT ASSETS
Cash assets	9	25,853	12,356	14,971	.2,819
Receivables	11	70,172	65,161	87,787	71,715
Inventories	12	88,441	79,632	68,850	62,134
Other assets	18	1,697	2,035	1,304	1,263
TOTAL CURRENT ASSETS		186,163	159,184	172,912	137,931
NON-CURRENT ASSETS
Other financial assets	13			9,960	15,782
Property, plant and equipment	15	47,516	57,962	39,885	51,397
Deferred tax assets	16	6,145	5,521	5,585	5,070
Intangible assets	17	30,054	21,310	21,062	15,621
TOTAL NON-CURRENT ASSETS		83,715	84,793	76,492	87,870
TOTAL ASSETS		269,878	243,977	249,404	225,801
CURRENT LIABILITIES
Payables	19	48,458	43,289	42,519	38,270
Interest-bearing liabilities	20	1,966	2,310	1,951	2,287
Current tax liabilities	21	270	1,089		1,012
Provisions	22	13,162	2,208	12,772	1,887
TOTAL CURRENT LIABILITIES		63,856	48,896	57,242	43,456
NON-CURRENT LIABILITIES
Interest-bearing liabilities	20	37,856	22,565	33,300	18,000
Provisions	22	2,566	2,625	2,435	2,574
TOTAL NON-CURRENT LIABILITIES		40,422	25,190	35,735	20,574
TOTAL LIABILITIES		104,278	74,086	92,977	64,030
NET ASSETS		165,600	169,891	156,427	161,771

EQUITY
Contributed equity Reserves	23	96,149	93,685	96,149	93,685
Retained profits	$24$ (a)	32,778	32,880	31,939	31,939
Total parent entity interest	24 (b)	33,660	40,449	28,339	36,147
Outside equity interest	25	162,587	167,014	156,427	161,771
TOTAL EQUITY	26	3,013	2,877
		165,600	169,891	156,427	161,771

$\cdot$

$\bar{A}$

$\mathcal{A}^{\mathcal{A}}$

The Statements of Financial Position are to be read in conjunction with the accompanying notes to the financial statements.

$\bar{\mathcal{A}}$

$\mathcal{L}(\mathcal{A})$ and $\mathcal{L}(\mathcal{A})$ and $\mathcal{L}(\mathcal{A})$

$\sim 10$

÷,

$\mathcal{L}_{\mathcal{L}}$

$\bar{\mathcal{A}}$

Statements of Cash Flows for the Year Ended 30 June 2005

		Consolidated Entity		Parent Entity
	Note	2005	2004	2005	2004
		\$000	\$000	\$000	\$000
Cash Flows From Operating Activities:
Receipts from customers		519,046	476,772	438,347	412,651
Payments to suppliers and employees		(497, 305)	(447, 744)	(417, 432)	(385, 332)
Interest received		561	643	288	421
Dividend received				1,353	2,420
Interest and other costs of finance paid		(1,716)	(1,692)	(1, 383)	(1,436)
Income tax paid		(7, 555)	(7,802)	(6,017)	(6,678)

Net cash provided by operating activities	10(b)	13,031	20,177	15,156	22,046

Cash Flows From Investing Activities:
Proceeds from sale of investments			122		122
Proceeds from sale of business		3,470		3,470
Proceeds from sale of property, plant and
equipment		18,119	6,687	18,056	6,614
Payment for property, plant and equipment		(9, 184)	(7, 153)	(7,708)	(5, 872)
Advances to controlled entities				(12,200)	(11, 749)
Repayment of advances to other entities			1,050		1,050
Payments for acquisition of businesses		(16, 406)	(1, 332)	(9, 345)	(297)
Net cash used in investing activities		(4,001)	(626)	(7, 727)	(10, 132)

Cash Flows From Financing Activities:
Proceeds from borrowings		15,300		15,300
Repayment of borrowings			(9,500)		(9,500)
Dividends paid		(10, 241)	(7,808)	(10, 241)	(7,808)
Dividends paid to outside equity interests		(256)	(670)

Net cash provided by/(used in) financing
activities		4,803	(17, 978)	5,059	(17, 308)
Net increase/(decrease) in cash		13,833
Cash at the beginning of the financial year		10,069	1,573 8,496	12,488	(5, 394)
Cash at the end of the financial year	10(a)	23,902	10,069	532 13,020	5,926 532

Non-cash financing and investing activities	10 (c)

The Statements of Cash Flows are to be read in conjunction with the accompanying notes to the financial statements. $\frac{1}{2}$

$\bar{\tau}$

$\sim$

$\bar{\mathcal{A}}$

$\mathcal{A}=\mathcal{A}=\mathcal{A}$

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005

Note 1 STATEMENT OF ACCOUNTING POLICIES

The significant accounting policies which have been adopted in the preparation of this financial report are:

Basis of preparation $(a)$

The financial report is a general purpose financial report which has been prepared in accordance with Accounting Standards, Urgent Issues Group Consensus Views, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001. It has been prepared on the basis of historical costs and does not take into account changing money values or, except where stated, fair values of assets. Unless otherwise stated, the accounting policies adopted are consistent with those of the prior year.

The financial report covers the consolidated entity of Coventry Group Ltd ("the Company") and its controlled entities, and Coventry Group Ltd as an individual parent entity.

$(b)$ Principles of Consolidation

The financial statements of controlled entities are included in the consolidated financial statements from the date control is obtained or until the date control ceases.

A controlled entity is any entity controlled by Coventry Group Ltd. Control exists where Coventry Group Ltd has the ability to dominate the decision making in relation to the financial and operating policies of another entity so that the other entity operates with Coventry Group Ltd to achieve the objectives of Coventry Group Ltd. A list of controlled entities is contained within Note 14 to the financial report.

All inter-company balances and transactions between entities in the consolidated entity, including any unrealised profits or losses, are eliminated on consolidation. Outside equity interests in the results and equity of controlled entities are shown separately in the consolidated Statement of Financial Performance and Statement of Financial Position respectively.

$(c)$ Revenue Recognition

Revenues are recognised at fair value of the consideration received net of the amount of goods and services tax payable to the taxation authority.

Revenue from the sale of goods is recognised upon delivery of the goods to customers.

Interest revenue is recognised as it accrues taking into account the interest rates applicable to the financial assets.

Dividend revenue is recognised, net of any franking credits, when the right to receive a dividend has been established.

The gross proceeds of non current asset sales are recognised as revenue at the date control of the asset passes to the buyer, usually when an unconditional contract of sale is signed. The gain or loss on disposal is calculated as the difference between the carrying amount of the asset at the time of disposal and the net proceeds on disposal.

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005

Note 1 STATEMENT OF ACCOUNTING POLICIES (continued)

$(d)$ Income Tax

Coventry Group Ltd and its wholly-owned Australian controlled entities implemented the tax consolidation legislation and formed a tax consolidated group as of 1 November 2002.

As a consequence, Coventry Group Ltd, as the head entity in the tax consolidated group, recognises current and deferred tax amounts relating to transactions, events and balances of the controlled entities in this group as if those transactions, events and balances were its own, in addition to the current and deferred tax amounts arising in relation to its own transactions, events and balances. Coventry Group Ltd has not entered into tax sharing agreements with the controlled entities in the tax consolidated group. All members of the tax consolidated group are jointly and severally liable for the tax liabilities of that group.

The consolidated entity adopts the liability method of tax effect accounting whereby the income tax expense shown in the Statements of Financial Performance is based on the operating profit before income tax adjusted for any permanent differences between taxable and accounting income.

Timing differences which arise due to the different accounting periods in which items of revenue and expense are included in the determination of operating profit before income tax and taxable income are brought to account either as a provision for deferred income tax or an asset described as future income tax benefit at the rate of income tax applicable to the period in which the liability will become payable or the benefit will be received.

Future income tax benefits in respect to timing differences are not brought to account unless realisation of the asset is assured beyond any reasonable doubt. Future income tax benefits in relation to tax losses are not brought to account unless there is virtual certainty of realisation of the benefits.

The amount of benefits brought to account or which may be realised in the future is based on the assumption that no adverse change will occur in income taxation legislation, and the anticipation that the consolidated entity will derive sufficient future assessable income to enable the benefit to be realised and will comply with the conditions of deductibility imposed by the law.

Foreign Currency Transactions and Balances (e)

Foreign currency transactions during the period are converted to Australian currency at the rates of exchange applicable at the dates of the transactions. Amounts receivable and payable at balance date are converted at the rates of exchange ruling at that date. The gains or losses from conversion of amounts receivable and payable in foreign currencies at reporting date, whether realised or unrealised, are included in operating profit before income tax as they arise.

The assets and liabilities of the foreign controlled entities which are self sustaining are translated at year-end rates, and operating results are translated at a weighted average rate for the year. Exchange differences arising on translation are taken directly to the foreign currency translation reserve.

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005

Note 1 STATEMENT OF ACCOUNTING POLICIES (continued)

$(f)$ Acquisition of Assets

The purchase method of accounting is used for all acquisitions of assets regardless of whether equity instruments or other assets are acquired. Cost is measured as the fair value of the assets given up. shares issued or liabilities undertaken as at the date of acquisition plus incidental costs directly attributable to the acquisition. Where equity instruments are issued in an acquisition, the value of the instruments is their market price as at the date of acquisition. Transaction costs arising on the issue of equity instruments are recognised directly in equity.

Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value as at the date of acquisition. The discount rate used is the incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an independent financier under comparable terms and conditions.

Costs incurred on assets subsequent to initial acquisition are capitalised when it is probable that future economic benefits in excess of the originally assessed performance of the asset will flow to the consolidated entity in future years, otherwise the costs are expensed as incurred.

$(a)$ Receivables

Trade Debtors

Trade debtors are recorded at nominal amounts. Credit terms are generally 30 days. Collectibility of overdue accounts is assessed on an ongoing basis. Provision is made for all doubtful accounts.

Inventories $(h)$

Inventories are measured at the lower of cost and net realisable value. The cost of manufactured products includes direct materials, direct labour and an appropriate portion of variable and fixed overheads. Overheads are applied on the basis of normal operating capacity. Costs are assigned on the basis of weighted average costs.

Net realisable value is determined on the basis of each inventory line's normal selling pattern. Expenses of marketing, selling and distribution to customers are estimated and deducted to establish net realisable value.

$(i)$ Recoverable Amount of Non-Current Assets

The carrying amounts of non current assets are reviewed to determine whether they are in excess of their recoverable amounts at reporting date.

The recoverable amount of an asset is the net amount expected to be recovered through the cash inflows and outflows arising from its continued use and subsequent disposal.

Where the carrying amount of a non-current asset is greater than its recoverable amount, the asset is written down to its recoverable amount. Where net cash inflows are derived from a group of assets working together, the recoverable amount is determined on the basis of the relevant group of assets. The decrement in the carrying amount is recognised as an expense in the net profit or loss in the reporting period in which the recoverable amount write down occurs.

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005

Note 1 STATEMENT OF ACCOUNTING POLICIES (continued)

The expected net cash flows included in determining recoverable amounts of non-current assets are discounted to their present values.

$\bf{0}$ Depreciation of Property, Plant and Equipment

The depreciable amounts of all fixed assets, excluding freehold land, are depreciated on either a straight line or diminishing value basis over their estimated useful lives to the consolidated entity, commencing from the time the asset is held ready for use.

Buildings, excluding leasehold improvements, are depreciated on a straight line basis over 50 years. Leasehold improvements are depreciated over the shorter of either the unexpired term of the lease or the estimated useful life of the improvements.

The depreciation rates used for each class of depreciable assets are:

Class of Fixed Asset	Depreciation Rate
- Plant and Equipment - Buildings	$5\% - 40\%$ 2%

$(k)$ Leases

Leases of fixed assets where substantially all the risks and benefits incidental to ownership of the asset are transferred to entities within the consolidated entity are classified as finance leases. Finance leases are capitalised, recording an asset and a liability equal to the present value of the minimum lease payments, including any quaranteed residual values. Leased assets are amortised on a straight line basis over their estimated useful lives, where it is likely that the consolidated entity will obtain ownership of the asset, or over the term of the lease. Lease payments are allocated between the reduction of the lease liability and the lease interest expense for the period.

Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are charged as expenses in the periods in which they are incurred.

$(1)$ Intangibles

Goodwill

Where an entity or operation is acquired, the identifiable net assets are measured at fair value. The excess of the cost of acquisition over the fair value of the identifiable net assets acquired, including any liability for restructuring costs, is brought to account as goodwill and amortised on a straight line basis over 20 years, being the period during which the benefits are expected to arise.

Distribution Rights

Distribution rights are amortised on a straight line basis over the term of the relevant distribution agreement.

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005

Note 1 STATEMENT OF ACCOUNTING POLICIES (continued)

$(m)$ Pavables

These amounts represent unpaid liabilities for goods received by and services provided to the consolidated entity prior to the end of the financial year. The amounts are unsecured and are normally settled within 60 days.

$(n)$ Interest-Bearing Liabilities

Loans are carried at their principal amounts which represent the present value of future cash flows associated with the servicing of the debt. Interest is recognised over the period it becomes due and is recorded as part of other debtors or other creditors.

Derivative Financial Instruments $(0)$

Interest Rate Swaps

The net amount receivable or payable under interest rate swap agreements is progressively brought to account over the period to settlement. The amount recognised is accounted for as an adjustment to interest and finance charges during the period and included in other debtors or other creditors at each reporting date.

When an interest rate swap is terminated early and the underlying hedged transactions are still expected to occur, the gains and losses arising on the swap upon its early termination continue to be deferred and are progressively brought to account over the period during which the hedged transactions are recognised.

When an interest rate swap is terminated early and the underlying hedge transactions are no longer expected to occur, the gains or losses arising upon its early termination are recognised in the Statements of Financial Performance as at the date of the termination.

$(p)$ Employee Benefits

Provision is made for the consolidated entity's liability for employee benefits arising from services rendered by employees to balance date. These benefits include wages and salaries, annual leave and long service leave. Sick leave is non-vesting and has not been provided for. Employee benefits expected to be settled within one year have been measured at the amounts expected to be paid when the liabilities are settled including related on-costs. Other employee benefits payable later than one year have been measured at the present value of the estimated future cash outflows to be made for those benefits including related on-costs.

The contributions made to superannuation funds by entities within the consolidated entity are charged against profits when due.

A liability is recognised for short term incentive plans. The calculation is based on the achievement of annually agreed key performance indicators by eligible employees.

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005

Note 1 STATEMENT OF ACCOUNTING POLICIES (continued)

Provisions $\left( \mathbf{q}\right)$

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.

$(r)$ Cash

For the purposes of the Statements of Cash Flows, cash includes cash on hand and in banks, deposits at call and money market investments which are readily convertible into cash.

$(s)$ Rounding of Amounts

The consolidated entity and the parent entity have applied the relief available under ASIC Class Order 98/0100 and accordingly, amounts in the financial statements and directors' report have been rounded to the nearest thousand dollars.

$(t)$ Goods and Services Tax

Revenues, expenses and assets are recognised net of the amount of goods and services tax ("GST"). except where the amount of GST incurred is not recoverable from the taxation authority. In these circumstances, the GST is recognised as part of the cost of acquisition of the asset or as part of the expense.

Receivables and payables are stated with the amount of GST included.

The net amount of GST recoverable from, or payable to, the taxation authority is included as a current asset or liability in the Statements of Financial Position.

Cash flows are included in the Statements of Cash Flows on a gross basis. The GST components of cash flows arising from investing and financing activities which are recoverable from, or payable to, the taxation authority are classified as operating cash flows.

$(u)$ Use and Revision of Accounting Estimates

The preparation of the financial report requires the making of estimations and assumptions that affect the recognised amounts of assets, liabilities, revenues and expenses and the disclosure of contingent liabilities. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

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

$(v)$ Investments

Investments in controlled entities are carried in the parent entity's financial statements at the lower of cost and recoverable amount.

$\sim$ .

$\mathcal{A}_i$

. . . . . .

$\hat{\mathcal{A}}$

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2005

		Consolidated Entity		Parent Entity
			2005	2004	2005	2004
			\$000	\$000	\$000	\$000
Note		2 REVENUES FROM ORDINARY ACTIVITIES
		Revenue from operating activities:
		Sale of goods	470,788	433,911	400,261	376,649
		Other	2,422	2,374	1,929	1,972
			473,210	436,285	402,190	378,621
		Revenue from non-operating activities:
		Dividends - controlled entities			1,353	2,420
		Interest	561	643	288	421
		Proceeds on sale of non-current assets	18,278	2,881	18,216	2,808
		Proceeds on sale of business	3,470		3,470
		Rental income	582	493	71	119
			22,891	4,017	23,398	5,768
		Total revenue from ordinary activities	496,101	440,302	425,588	384,389
Note	з.	PROFIT FROM ORDINARY ACTIVITIES
		BEFORE INCOME TAX EXPENSE
		(a) Profit from ordinary activities before
		income tax has been arrived at after
		charging/(crediting) the following
		items:
		Interest paid/payable to:
		- other persons	2,189	1,819	1,857	1,563
		Depreciation of non-current assets:
		- buildings	362	461	332	431
		- plant and equipment	6,361	5,726	4,982	4,770
		Total depreciation	6,723	6,187	5,314	5,201
		Amortisation of non-current assets:
		- distribution rights	172	172	73	73
		- goodwill	1,949	1,447	1,454	1,151
		Total amortisation	2.121	1,619	1,527	1,224
		Total depreciation and amortisation	8,844	7,806	6,841	6,425
		Write-downs of non-current assets to
		recoverable amount:
		Other financial assets
		- shares in subsidiaries			5,823	4,139
					5,823	4,139

$\hat{\boldsymbol{\beta}}$

$\mathcal{A}^{\mathcal{A}}$

$\sim 10$

$\sim$

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005

		Note	Consolidated Entity 2005 2004 \$000 \$000		2005 \$000	Parent Entity 2004 \$000
Note З.	PROFIT FROM ORDINARY ACTIVITIES BEFORE INCOME TAX EXPENSE (continued)
	Movements in other provisions and allowances:
	- warranty		24	14	21	12
	- employee benefits		774	621	378	500
	- obsolete stock		(823)	1,814	(1, 193)	1,711
	Total other provisions		(25)	2,449	(794)	2,223
	Net bad and doubtful debts expense		1,036	838	1,017	790
	Rental expense on operating leases: - minimum lease payments - surplus leased space		8.540 259	7,333 253	5,474	4,641
leases	Total rental expense relating to operating		8,799	7,586	5,474	4,641
	Interest revenue from:
	- other parties		(561) (561)	(643) (643)	(288) (288)	(421) (421)
	Net gain on disposal of assets excluding individually significant items: - business - investments - property, plant and equipment		(390)	(121)	(390)	(122)
			(204) (594)	(192) (313)	(228) (618)	(177) (299)
	(b) individually significant expenses/(revenues) included in profit from ordinary activities before income tax expense. Provision for loss on investment in
	Coventry Auto Parts Pty Ltd Employee termination costs for	3(a)			5,823	4,139
	automotive segment		470		470
	Profit on sale of land and buildings		(3,583)		(3,583)
			(3, 113)		2,710	4,139

$\sim$

$\ddot{\phantom{a}}$

$\bar{z}$

$\sim$ $\cdots$

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005

			Consolidated Entity 2005 \$000	2004 \$000	Parent Entity 2005 \$000	2004 \$000
Note	4	INCOME TAX
		(a) Income tax expense
		Prima facie income tax expense on operating profit before income tax from ordinary activities calculated at 30% Tax effect of permanent differences:	6,884	6,579	6,012	6,029
		Add: - depreciation of buildings - amortisation of intangibles non-deductible loss on sale of property - assessable profit on sale of property	31 636 469	29 486 40	22 458 469	20 367 40
		- non-deductible provision for loss on investment in controlled entity - adjustment for higher tax rate applicable to foreign controlled entities - other non-deductible expenses	90 98 1,324	79 241 875	1,747 68 2,764	1,242 219 1,888
		Less: - rebateable dividends non-assessable dividends $\blacksquare$ - non-assessable profit on sale of investments - other non-assessable income		(36) (110)	(202) (204)	(530) (196) (36)
		- recovery of tax losses of tax consolidated subsidiary - overprovision of income tax in prior vear		(16)	(1, 575)	(1,215) (16)
		- timing differences not previously brought to account - tax losses not previously brought to account	(265) (1, 942) (2,207)	(534) (696)	(350) (1,942) (4.273)	(515) (2,508)
		Income tax expense on operating profit from ordinary activities	6,001	6,758	4,503	5,409

$\mathcal{L}_{\mathcal{A}}$

.
The construction of the common weakened the contract of the contract of the contract of the contract of the con

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005

			Consolidated Entity 2005 2004 \$000 \$000		Parent Entity 2005 \$000	2004 \$000
Note	4	INCOME TAX (continued)
		(b) Income tax expense attributable to operating profit from ordinary activities is made up of: Current income tax provision Future income tax benefit Over provision in prior year	6,530 (529) 6,001	7,346 (572) (16) 6,758	4.923 (420) 4,503	5,987 (562) (16) 5,409
		(c) Future income tax benefits not brought to account as assets calculated at 30%: Tax losses - revenue Tax losses - capital	4.718 394 5,112	5,184 1,871 7,055	4.718 394 5,112	5,184 1,871 7,055

The taxation benefits of tax losses not brought to account will only be obtained if: $(a)$

assessable income is derived of a nature and of an amount sufficient to enable the benefits from the deductions to be realised; conditions for deductibility imposed by the law are complied with; and

$(b)$ $(c)$

no changes in tax legislation adversely affect the realisation of the benefits from the deductions.

Note 5 DIRECTOR AND EXECUTIVE DISCLOSURES

(a) Directors

The following persons were directors of Coventry Group Ltd during the financial year:

Chairman - non-executive WG Kent, AO

Chief Executive Officer and Managing Director CJ Glenn

Non-executive directors J Boros RB Flynn CM Kyle PA Kyle, AM RM McLean, AM BF Nazer

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005

Note 5 DIRECTOR AND EXECUTIVE DISCLOSURES (continued)

(b) Executives (other than directors) with the greatest authority for strategic direction and management

The following persons were the five executives with the greatest authority for the strategic direction and management of the consolidated entity ("specified executives") during the financial year:

V Scidone, Group General Manager - Industrial DJ Fraser, Group General Manager - Automotive (ceased employment on 27 May 2005) SA Cooper, Chief Financial Officer JS Furness, Chief Information Officer

J Colli, Company Secretary

All of the above were also specified executives during the year ended 30 June 2004.

(c) Remuneration of directors and executives Principles used to determine the nature and amount of remuneration

The objective of the Company's executive reward framework is to ensure that rewards properly reflect duties and responsibilities, are competitive in retaining and motivating people of high calibre. and are appropriate for the results delivered. The framework alians executive reward with achievement of strategic objectives and the creation of value for shareholders. The framework provides a mix of fixed and variable pay, and a blend of short and long-term incentives.

Non-executive directors

Fees paid to non-executive directors reflect the demands which are made on, and the responsibilities of, the directors. Non-executive directors' fees are reviewed annually by the Remuneration Committee. The Remuneration Committee also seeks the advice of independent remuneration consultants to ensure non-executive directors' fees are appropriate and in line with the market. The Chairman's fees are determined independently to the fees of non-executive directors based on comparable roles in the external market. Non-executive directors do not receive any equity-based remuneration.

Directors' fees

Non-executive directors' fees are determined within an aggregate directors' fees pool limit, which is periodically recommended for approval by shareholders. The total pool currently stands at \$550,000 per annum, which was last approved by shareholders in November 2004 with effect from The Board determines the allocation of the maximum amount approved by 1 July 2004. shareholders amongst the respective directors, having regard to their duties and responsibilities. Directors' fees are not directly linked to Company performance nor are bonuses paid to nonexecutive directors. There is no provision for retirement allowances to be paid to non-executive directors.

For the year ended 30 June 2005 the Board determined that non-executive directors fees be allocated as follows:

Chairman	\$105,000
Non-executive Directors	\$52,000
Interstate Non-executive Director	\$62,500
Chairman of Audit & Risk Committee
(in addition to base fee)	\$10,000
Chairman of Remuneration Committee
(in addition to base fee)	\$7,500

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005

Note 5 DIRECTOR AND EXECUTIVE DISCLOSURES (continued)

Executive pay

The executive reward framework has three components:

Base pay and benefits, including superannuation ("fixed annual remuneration");
Short-term performance incentives: and
Long-term performance incentives.

The combination of these comprises the executive's total remuneration.

Fixed annual remuneration

Fixed annual remuneration is structured as a total employment cost package which is delivered as a mix of cash and prescribed non-cash benefits partly at the executive's discretion. Fixed annual remuneration for senior executives is reviewed annually to ensure the executive's pay is competitive with the market. An executive's pay is also reviewed on promotion. There are no guaranteed fixed annual remuneration increases set in any senior executive's contract.

The non-cash benefits received as part of fixed annual remuneration include the provision of a fully maintained motor vehicle and contributions to accumulation style superannuation funds.

Short-term incentives

Short-term cash incentives of up to 25% of fixed annual remuneration (for the Managing Director, 35% of base salary) are payable to the senior executives upon the achievement of various annual performance targets, which currently include return on equity, budget earnings before interest and tax, and personal goals. Such targets ensure that incentives are only paid when value has been created for shareholders and when profit is consistent with the budget.

Each year the Remuneration Committee considers the appropriate targets and maximum payouts under the short-term incentive plan for recommendation to the Board. Incentive payments may be adjusted up or down by the Board in line with the degree of achievement against target performance levels.

Long-term incentives

Long-term incentives are provided through the Company's executive long-term incentive plan ("ELTIP"), which was approved at the annual general meeting on 5 November 2003. It provides for eligible executives (currently 7, including the Managing Director) to receive fully paid ordinary shares in the Company, upon achieving performance criteria set by the Board. Under the plan, eligible executives are offered ordinary shares worth up to 25% of fixed annual remuneration as at the start of the performance period, which will only vest upon the achievement of certain performance criteria. Offers have been made in respect of the three year performance period commencing on 1 July 2003 ("the 2003 Offer") and on 1 July 2004 ("the 2004 Offer").

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005

Note 5 DIRECTOR AND EXECUTIVE DISCLOSURES (continued)

The performance criteria for both the 2003 and 2004 Offers under the ELTIP are as follows:

One half of the offered shares will vest to the participant upon the achievement of a threshold earnings per share ("EPS") growth hurdle over the relevant 3 year performance period. The offered shares will be vested in differing amounts depending on the percentage growth in EPS in excess of the threshold level over the three year period being cumulative \$1.269 EPS for the 2003 Offer, and \$1.548 EPS for the 2004 Offer, with all of the offered shares under these hurdles vested once an additional 10% growth in EPS over and above the threshold levels has been achieved: and
One half of the offered shares will vest to the participant upon the achievement of a relative total shareholder return ("TSR") hurdle over the relevant 3 year performance period. The offered shares will be vested in differing amounts depending on the Company's TSR performance over the relevant 3 year performance period compared to the TSR performance of the companies comprising the S&P/ASX Small Industrials Index at the start of the relevant performance period ("Comparator Group"). No offered shares will be vested under the 2003 and 2004 Offers unless the Company's TSR performance is at least equal to the TSR performance of the company which is at the 50^th percentile of the Comparator Group ranked by TSR. All offered shares under this hurdle in the 2003 offer will be vested if the Company's TSR over the three years is equal to or greater than the TSR performance of the company which is at the 60^th percentile of the Comparator Group ranked by TSR. All
offered shares under this hurdle in the 2004 offer will be vested if the Company's TSR over the three years is equal to or greater than the TSR performance of the company which is at the 75^th percentile of the Comparator Group ranked by TSR.

Shares vested under the ELTIP will rank equally with all other existing ordinary shares in all respects, including having full dividend and voting rights.

As the shares offered under the ELTIP relate to 3 year performance periods, one third of fair value as at grant date has been disclosed as remuneration for the year ended 30 June 2005 (see the section headed "Value of Shares" later in this Note for an explanation of "fair value").

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005

Note 5 DIRECTOR AND EXECUTIVE DISCLOSURES (continued)

Details of remuneration

The following table provides the details of the nature and amount of elements of remuneration for specified directors and specified executives for the year ended 30 June 2005.

Directors of Coventry Group Ltd

				Post
		Primary		Employment	Equity
Name	Cash salary and fees \$	Cash Bonus \$	Non- monetary benefits \$	Superannuation (iii) \$	Value of shares \$	Total \$
WG Kent	105,000			9,450		114,450
CJ Glenn	434,763	$90,590^{(i)}$	24,252	44,695	94,936	689,236
J Boros	52,000	٠		4,680		56,680
RB Flynn	66,719			1,125	-	67,844
PA Kyle	56,167			5,055	$\bullet$	61,222
CM Kyle	52,000			4,680	₩	56,680
RM McLean	59,500			5,355	-	64,855
BF Nazer	57,833	-		5,205		63,038
Total	883,982	90,590	24,252	80,245	94,936	1,174,005

Specified executives of the consolidated entity

Total	1,292,798	109,987	125,902	85,356	213,075	1,827,118
J Colli	149,863	28,844	20,383	11,585	31,659	242,334
JS Furness	173,266	25,910	32,762	17,469	37.160	286.567
SA Cooper	196,913	36,215	17,667	11,598	40,225	302,618
DJ Fraser ⁽ⁱⁱ⁾	487,544	2,285	33.127	14,282	46.212	583,450
V Scidone	285,212	16,733	21,963	30,422	57.819	412,149

Premiums in respect of the Directors' and Officers' insurance policy are not included above, as the policy does not specify the premium paid in respect of individual directors and officers.

$^{(0)}$ Includes \$42,690 in relation to the year ended 30 June 2004.

(ii) Mr Fraser ceased employment with the company on 27 May 2005 and received a payment in lieu of notice, pursuant to the terms of his employment contract, of \$278,585. This amount is included above under cash salary and fees.

(iii) Includes statutory superannuation contributions and additional voluntary contributions in some cases.

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005

Note 5 DIRECTOR AND EXECUTIVE DISCLOSURES (continued)

The following table provides the details of the nature and amount of elements of remuneration for specified directors and specified executives for the year ended 30 June 2004.

Directors of Coventry Group Ltd

				Post
		Primary		Employment	Equity
	Cash salary and fees	Cash Bonus	Non- monetary benefits	Superannuation O	Value of shares	Total
Name	\$	\$	\$	\$	\$	\$
WG Kent	84,000			7,560		91,560
CJ Glenn	434,821	9,833	147,142	36,714	25,363	653,873
J Boros (appointed on
1 March 2004)	14,000			1,260	-	15,260
RB Flynn	50,000		$\bullet$	4,500	$\qquad \qquad \blacksquare$	54,500
BA Goddard (retired on
29 February 2004)	48,000			4,320	$\blacksquare$	52,320
PA Kyle	42,000			3,780	۰	45,780
CM Kyle	42,000	٠	٠	3,780	۰	45,780
RM McLean	42,000		٠	3,780		45,780
BF Nazer (appointed on
1 September 2003)	35,000			3,150	۰	38,150
Total	791,821	9,833	147,142	68,844	25,363	1,043,003

Specified executives of the consolidated entity

Total	1,049,795	93,000	79,282	59,624	136,159	1,417,860
J Colli	147,190	6,000	12,221	11,002	19.904	196,317
on 11 August 2003)	155,024	8,000	10,921	13,080	23,389	210.414
JS Furness (commenced
SA Cooper	191,806	8,000	14,851	13,538	25,274	253,469
DJ Fraser	258,736	10,000	21,181	11,002	31,869	332,788
V Scidone	297,039	61.000	20,108	11,002	35,723	424,872

$⁽ⁱ⁾$ includes statutory superannuation contributions and additional voluntary contributions in some cases.

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005

Note 5 DIRECTOR AND EXECUTIVE DISCLOSURES (continued)

Value of Shares

The fair value of the ELTIP shares is calculated at the date of grant using a Black-Scholes model and allocated to each reporting period evenly over the period from grant date to vesting date. The value disclosed is the portion of the fair value of the shares allocated to this reporting period. In valuing the shares market conditions have been taken into account in both current and prior periods. Comparative information was not restated as market conditions were already included in the valuation.

The following factors and assumptions were used in determining the fair value of shares at grant date:

Grant date	Expiry date	Fair value per share	Exercise price	Price of shares on grant date	Estimated volatility	Risk free interest rate	Dividend vield
1 July 2003	July 2006	\$3.96	\$0.01	\$4.95	24%	5.7%	7.4%
1 July 2004	July 2007	\$4.71	\$0.01	\$5.72	24%	5.4%	6.4%

Employment contracts

Remuneration and other terms of employment for the Managing Director and the specified executives are formalised in employment contracts. Each contract deals with the provision of fixed annual remuneration, shortterm incentives, and long-term incentives. Other major provisions of the contracts relating to remuneration are set out below:

CJ Glenn, Managing Director

The contract has no fixed term.
Fixed annual remuneration to be reviewed annually by the Board. The Company also pays for home telephone expenses.
Subject to the achievement of agreed key performance indicators, an annual short-term incentive of up $\bullet$ to 35% of base salary will be paid by the Company.
For each financial year up to and including the year ending 30 June 2006, subject to the achievement of ٠ certain performance criteria over a 3 year period, a long-term incentive of a minimum of 25% of fixed annual remuneration will be paid by the Company in the form of shares.
Long service leave is payable by the Company in accordance with relevant state legislation.
Other than for an act that may have a serious detrimental effect on the Company, such as wilful disobedience, fraud or misconduct, termination of employment requires 12 months notice by the Company.

V Scidone, Group General Manager - Industrial

The contract has no fixed term.
Fixed annual remuneration to be reviewed annually by the Remuneration Committee.
Long service leave is payable by the Company in accordance with relevant state legislation. $\bullet$
Participation in short-term and long-term incentive plans is at the discretion of the Company.
Other than for serious misconduct, termination of employment requires 6 months notice by the Company. Upon termination, for each year of service in excess of 5 years continuous service, the Company must pay an additional 2 weeks pay, up to a maximum of 26 weeks pay.

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005

Note 5 DIRECTOR AND EXECUTIVE DISCLOSURES (continued)

SA Cooper, Chief Financial Officer

The contract has no fixed term.
Fixed annual remuneration to be reviewed annually by the Remuneration Committee.
Long service leave is payable by the Company in accordance with relevant state legislation. $\bullet$
Participation in short-term and long-term incentive plans is at the discretion of the Company.
Other than for serious misconduct, termination of employment requires 6 months notice by the Company. Upon termination, for each year of service in excess of 5 years continuous service, the Company must pay an additional 2 weeks pay, up to a maximum of 26 weeks pay.

JS Furness, Chief Information Officer

The contract has no fixed term.
Fixed annual remuneration to be reviewed annually by the Remuneration Committee.
Long service leave is payable by the Company in accordance with relevant state legislation. $\bullet$
Participation in short-term and long-term incentive plans is at the discretion of the Company.
Other than for serious misconduct, termination of employment requires 6 months notice by the Company. In the event of redundancy, the Company must pay an additional 4 weeks pay after 1 year of continuous service, with the redundancy payment obligation increasing progressively for each year of service up to a maximum of 52 weeks pay.

J Colli, Company Secretary

The contract has no fixed term.
Fixed annual remuneration to be reviewed annually by the Remuneration Committee. $\blacksquare$
Long service leave is payable by the Company in accordance with relevant state legislation. $\bullet$
Participation in short-term and long-term incentive plans is at the discretion of the Company.
Other than for serious misconduct, termination of employment requires 6 months notice by the Company. Upon termination, for each year of service in excess of 5 years continuous service, the Company must pay an additional 2 weeks pay, up to a maximum of 26 weeks pay.

DJ Fraser, Group General Manager -- Automotive (ceased employment on 27 May 2005)

The contract had no fixed term.
Fixed annual remuneration was to be reviewed annually by the Remuneration Committee. $\bullet$
Long service leave was payable by the Company in accordance with relevant state legislation. $\bullet$
Participation in short-term and long-term incentive plans was at the discretion of the Company.
Other than for serious misconduct, termination of employment required 6 months notice by the Company. Upon termination, for each year of service in excess of 5 years continuous service, the Company was to pay an additional 2 weeks pay, up to a maximum of 26 weeks pay.

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005

Note 5 DIRECTOR AND EXECUTIVE DISCLOSURES (continued)

(d) Equity instrument disclosures relating to directors and executives

Details of ordinary shares offered as remuneration under the ELTIP

The balance at the commencement of the reporting period, together with the movement during the reporting period, of ordinary shares offered under the ELTIP, to each specified director and specified executive, is as follows:

	Number of shares offered at 1 July 2004	Number of shares offered during the year		Number of shares vested during the year	Number of Shares offered at 30 June 2005
CJ Glenn	32,719	69,394	(i)	$\blacksquare$	102,113
V Scidone	46,084	14,815		$\overline{\phantom{a}}$	60,899
DJ Fraser	41,114	12,433		$\overline{\phantom{0}}$	53,547
SA Cooper	32,605	10,024		$\overline{\phantom{a}}$	42,629
JS Furness	30,173	9,233		$\overline{\phantom{m}}$	39,406
J Colli	25,678	7,881			33,559

$\left(\mathsf{i}\right)$ Includes an offer of 47,362 shares in relation to the 2003 Offer.

Equity holdings and transactions

The movement during the reporting period in the number of ordinary shares of Coventry Group Ltd held directly, indirectly or beneficially by each specified director and specified executive, including their personally-related entities is as follows:

	Held at 1 July		Received as		Held at 30 June
	2004	Purchases	Remuneration	Sales	2005
Specified directors
WG Kent (Chairman)	32,501	2,623			35,124
J Boros	7,500				7,500
RB Flynn	4,402	336			4,738
CJ Glenn	29,827	4,377		$20,598^{(i)}$	$13,606$ ⁽ⁱⁱ⁾
CM Kyle	2,934,124	2,582		$\overline{\phantom{a}}$	2,936,706(iii)
PA Kyle	5,664	458			6,122
RM McLean	16,189			$\overline{\phantom{a}}$	16,189
BF Nazer		2,000		$\overline{\phantom{a}}$	2,000
Specified executives
V Scidone	5,401	1,418			6,819
DJ Fraser	2,357	192			2,549
SA Cooper	3,498	284			3,782
J Colli
JS Furness	847	1,150			1,997

$\bf (i)$ These shares were sold by personally-related entities in which Mr Glenn has no relevant interest.

$(1)$ Includes 5,000 shares held by personally-related entities in which Mr Glenn has no relevant interest.

$\langle$ ili) Includes 1,371,104 shares held by personally-related entities in which Mr C Kyle has no relevant interest.

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005

Note 5 DIRECTOR AND EXECUTIVE DISCLOSURES (continued)

(e) Other transactions

$\bar{z}$

From time to time specified directors and specified executives of the Company may purchase goods from companies within the consolidated entity on the same terms and conditions as apply to any other employees of the consolidated entity.

				Consolidated Entity 2005 \$	2004 \$	Parent Entity 2005 2004 \$ \$
Note	6	REMUNERATION OF AUDITORS
		Audit Services KPMG - audit and review of financial reports		250,574	180,704	197,600 136,323
		Other Services KPMG
		- other assurance services		7,000		7,000
			Cents per Share	Total Amount \$000	Franked/ Unfranked	Date of Payment
Note	7	DIVIDENDS
		2005 Special 2005 ordinary Interim 2005 ordinary Final 2004 ordinary	30 18 18	10,641 6,384 6,320	Franked Franked Franked	5 July 2005 18 March 2005 24 September 2004
		Total		23,345
		2004 Interim 2004 ordinary Final 2003 ordinary Total	16 16	5,566 5,525 11,091	Franked Franked	31 March 2004 25 September 2003
		Franked dividends declared or paid during the year were franked at the tax rate of 30%.
		Subsequent events Since the end of the financial year, the directors have declared the following dividend:
		Final - Ordinary	18	6,419	Franked	23 September 2005

The financial effect of this dividend has not been brought to account in the financial statements for the year ended 30 June 2005 and will be recognised in subsequent financial reports.

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005

$\sim$

				Parent Entity
Note	7	DIVIDENDS (continued)	2005 \$000	2004 \$000
		Franked Dividends:
		Franking credits available to shareholders of Coventry Group Ltd for subsequent financial years:	23,100	27.892
		____

The above amounts represent the balance of the dividend franking account as at the end of the financial year, adjusted for:

franking credits that will arise from the payment of a current tax liability;
franking debits that will arise from the payment of proposed dividends:
franking credits that will arise from the receipt of dividends receivable: and
franking credits that may be prevented from being distributed in subsequent financial years.

The ability to utilise the franking credits is dependent upon there being sufficient available profits to declare dividends.

	Consolidated Entity 2005 \$000	2004 \$000
EARNINGS PER SHARE
Earnings reconciliation: Profit from ordinary activities after income tax expense Net profit attributable to outside equity interest Basic and diluted earnings	16.945 (389) 16,556	15,171 (371) 14,800
Basic earnings per share (cents) Diluted earnings per share (cents)	46.8 46.3	42.5 42.2
Weighted average number of ordinary shares outstanding during the year used in the calculation of basic earnings per share.	35,380,790	34,790,331
Weighted average number of ordinary shares and potential ordinary shares used in the calculation of diluted earnings per share.	35.728.501	35,045,360

Note 8

$24.$

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005

			Consolidated Entity 2005 - \$000	2004 \$000	Parent Entity 2005 \$000	2004 \$000
Note	9	CASH ASSETS
		Cash on hand Cash deposits with banks Short term money market deposits	119 8,756 16,978 25,853	83 8,364 3,909 12,356	94 14,877 14,971	71 2,748 2,819
Note		10 NOTES TO THE STATEMENTS OF CASH FLOWS
		(a) Reconciliation of cash Cash at the end of the financial year as shown in the Statements of Cash Flows is reconciled to the related items in the Statements of Financial Position as follows:
		Cash on hand Cash deposits with banks Short term money market deposits Bank overdraft Balance per Statements of Cash Flows	119 8,756 16,978 (1, 951) 23,902	83 8,364 3,909 (2,287) 10,069	94 14,877 (1,951) 13,020	71 2,748 (2,287) 532
		(b) Reconciliation of cash flow from operating activities with operating profit after income tax
		Operating profit after income tax	16,945	15,171	15,537	14,688
		Non-cash flows in operating profit: Amortisation of intangibles Depreciation Transfers to provisions and allowances Profits on sale of property, plant and	2,121 6,723 3,275	1,619 6,187 3,945	1,527 5,314 8,013	1,224 5,201 7,808
		equipment Profit on sale of investments Profit on sale of business	(3,788) (390)	(192) (121)	(3,810) (390)	(177) (122)
		Changes in assets and liabilities: (Increase) in trade and other debtors Decrease in prepaid interest (Increase) in inventories Increase in trade and other creditors	(6,425) 473 (8,965) 4,625	(6, 406) 127 (442) 1,318	(5,323) 473 (9,523) 4,852	(5,581) 127 (523) 671
		(Decrease) in tax payable (Increase) in future income tax benefit Cash flows from operating activities	(1,034) (529) 13,031	(457) (572) 20,177	(1,094) (420) 15,156	(708) (562) 22,046

(c) Non-cash financing and investing activities

$\bar{\mathcal{A}}$

$\bar{z}$

The only non-cash financing and investing activities for the consolidated entity for the years ended 30
June 2005 and 30 June 2004 were the issues of ordinary shares by the parent entity to satisfy dividend entitlements pursuant to the dividend reinvestment plan, as detailed at note 23(b).

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005

$\sim$ $\sim$

Note 10 NOTES TO THE STATEMENTS OF CASH FLOWS (continued)

(d) Acquisitions of operations

During the year, the consolidated entity acquired the following operations:

				Components of the Cost of Acquisition
Date of Acquisition				Employee	Goodwill	Other Assets
	\$000	\$000	\$000	\$000	\$000	\$000

1 July 2004	6,456	921	2,010	(150)	3,581	94
Independent Motor Mart 1 August 2004	8,957	479	1,740	(113)	6,781	70
31 January 2005	761	130	482	(54)	145	58
28 February 2005	388	22	188		178

1 September 2004	456	31	263	٠	162
	17,018	1,583	4,683	(317)	10,847	222
			Cost of Property, Plant		Acquisition and Equipment Inventories Entitlements

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005

	Consolidated Entity 2005 \$000	2004 \$000	Parent Entity 2005 \$000	2004 \$000
Note 11 RECEIVABLES
Current
Trade debtors Allowance for doubtful debts	71,388 (2, 810)	65,929 (2,353)	61,835 (2, 196)	57,175 (1,692)
	68,578	63,576	59,639	55,483
Other debtors	1,594	1,585	662	885
Amounts receivable from:
- wholly-owned group			27,486	15,347
	70,172	65,161	87,787	71,715
Note 12 INVENTORIES
Current
Raw materials at cost	767	684
Finished goods at cost	92,227	84,324	72,404	66,881
Allowance for obsolescence	(4, 553)	(5,376)	(3,554)	(4,747)
	87,674	78,948	68,850	62,134
	88,441	79,632	68,850	62,134

Note 13 OTHER FINANCIAL ASSETS

Non-current

$\mathcal{L}$

Investments comprise:

Shares in controlled entities

unlisted at cost

$\sim$

$\bar{z}$

allowance for writedown

$\sim$ 14

$\bar{z}$

$\sim$

$\Delta \sim 10^7$

$\mathcal{L}$

	44,769	44,769
	(34, 809)	(28,987)
	9 9RN	15,782 .

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005

Note 14 INVESTMENTS IN CONTROLLED ENTITIES

Name of entity	Country of incorporation	Class of shares	Equity Holding
			2005 %	2004 %
AA Gaskets Pty Ltd	Australia	Ordinary	73	73
Coventry Auto Parts Pty Ltd	Australia	Ordinary	100	100
Hylton Parker Fasteners Limited	New Zealand	Ordinary	100	100
NZ Gaskets Limited*	New Zealand	Ordinary	73	73

The ultimate parent entity is Coventry Group Ltd.

* This company is a controlled entity of AA Gaskets Pty Ltd and operates in New Zealand.

	Consolidated Entity 2005 \$000	2004 \$000	Parent Entity 2005 \$000	2004 \$000
Note 15 PROPERTY, PLANT AND EQUIPMENT
LAND AND BUILDINGS Freehold land
At cost	9,128	14,133	8,303	13,308
Buildings
At cost	13,932	22,113	12,457	20,638
Less accumulated depreciation	(1,624)	(2,200)	(1,440)	(2,045)
	12,308	19,913	11,017	18,593
Total Land and Buildings	21,436	34,046	19,320	31,901
PLANT AND EQUIPMENT
At cost	65,434	60,751	52,869	50,483
Less accumulated depreciation	(39,373)	(36, 853)	(32, 304)	(30, 987)
	26,061	23,898	20,565	19,496
Plant and equipment in the course of
construction	19	18
Total Plant and Equipment	26,080	23,916	20,565	19,496
Total Property, Plant and Equipment	47,516	57,962	39,885	51,397

Valuations

$\mathcal{A}$

An independent valuation of the consolidated entity's freehold land and buildings carried out as at March 2005 on the basis of open market values for continuing use resulted in a valuation of land of \$15,069,000 (the parent entity \$13,684,000) and buildings of \$13,855,000 (the parent entity: \$12,270,000) for the specific land and buildings held at 30 June 2005.

$\sim$

74 $\bar{z}$

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005

			Consolidated Entity		Parent Entity
		2005 \$000	2004 \$000	2005 \$000	2004 \$000
Note	15 PROPERTY, PLANT AND EQUIPMENT (continued)
	(a) Reconciliations Reconciliations of the carrying amounts of each class of property, plant and equipment at the beginning and end of the current and previous financial years are set out below:
	Total Land
	Carrying amount at start of year Additions	14,133 180	14,863	13,308 180	14,038
	Disposals	(5, 185)	(730)	(5, 185)	(730)
	Carrying amount at end of year	9,128	14,133	8,303	13,308
	Total Buildings
	Carrying amount at start of year	19,913	21,573	18,593	20,223
	Additions	408	27	407	27
	Disposals	(7,651)	(1,226)	(7,651)	(1,226)
	Depreciation	(362)	(461)	(332)	(431)
	Carrying amount at end of year	12,308	19,913	11,017	18,593

Total Plant and Equipment
Carrying amount at start of year	23,916	23.027	19,496	18,941
Additions	8,595	7.126	7,119	5.845
Disposals	(1,654)	(611)	(1,569)	(553)
Acquisitions through acquisitions of
operations	1,582	72	501	33
Foreign currency exchange differences	2	28
Depreciation	(6,361)	(5,726)	(4,982)	(4,770)
Carrying amount at end of year	26,080	23,916	20,565	19,496

Note 16 DEFERRED TAX ASSETS

$\bar{z}$

Non-current

$\bar{z}$

$\sim 10$

$\hat{\boldsymbol{\beta}}$

$\sim 10^7$

. Future income tax benefit - timing
differences at 30%		6,145	5,521	5.585

$\mathcal{A}$

$\mathcal{L}_{\mathcal{A}}$

$\sim$ $\sim$

$\mathcal{O}(2\pi)$ and $\mathcal{O}(2\pi)$

$\mathcal{A}$

$\mathcal{L}_{\mathrm{in}}$

5,070

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005

		Consolidated Entity 2005 \$000	2004 \$000	Parent Entity 2005 \$000	2004 \$000
Note	17 INTANGIBLE ASSETS
	Non-current
	Goodwill at cost	43,271	32,407	32,878	25,910
	Less accumulated amortisation	(14,261)	(12, 312)	(12, 258)	(10, 803)
		29,010	20,095	20,620	15,107
	Distribution rights at cost ¹	641	641	641	641
	Less accumulated amortisation	(199)	(127)	(199)	(127)
		442	514	442	514
	Distribution rights at recoverable amount ²	800	800
	Less accumulated amortisation	(198)	(99)
		602	701
		30,054	21,310	21,062	15,621

¹ Represents consideration paid for the right to distribute Ford parts and accessories in Western Australia for a ten year term ending on 14 August 2011.

$2$ Relates to the right to distribute Ford parts and accessories in New South Wales for a ten year term ending on 14 August 2011.

Note 18 OTHER ASSETS

Current

Note

Prepayments Income tax receivable	1,482 $-215$	2,035	1,221 83	1,263
	1,697	2,035	1,304	--------- 1,263
19 PAYABLES
Current Unsecured liabilities:
Trade creditors	34,765	32,174	30,492	28,589
Other creditors and accruals	13,693 48,458	11,115 43,289	12,027 42,519	9,681 38,270

$\bar{z}$

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005

		Note	Consolidated Entity 2005 2004 \$000 \$000		Parent Entity 2005 \$000	2004 \$000
Note	20 INTEREST-BEARING LIABILITIES
	Current
	Bank overdraft - secured Surplus leased space	(b)	1,951 15	2,287 23	1,951	2,287
			1,966	2,310	1,951	2,287
	Non-current
	Bill acceptance facility - secured Surplus leased space	(b)	37,839 17	22,532 33	33,300	18,000
			37,856	22,565	33,300	18,000
	(a) Total facilities available at balance date
	Bank overdraft		5,000	5,000	5,000	5,000
	Bill acceptance facility		60,000	44,208	46,953	38,770
	Guarantee facility		882	1,002	882	1,002
	Corporate credit card facility		280	250	280	250
			66,162	50,460	53,115	45,022
	(b) Facilities utilised at balance date
	Bank overdraft		1,951	2,287	1,951	2,287
	Bill acceptance facility Guarantee facility		37,839	22,532	33,300	18,000
	Corporate credit card facility		635	624	635	624
			40,425	25,443	35,886	20,911
	(c) Facilities not utilised at balance date
	Bank overdraft		3,049	2,713	3,049	2,713
	Bill acceptance facility		22,161	21,676	13,653	20,770
	Guarantee facility Corporate credit card facility		247	378	247	378
			280 25,737	250	280	250
				25,017	17,229	24, 111
	(d) Bank overdraft facility

The bank overdraft facility may be drawn at any time and is repayable on demand

(e) Bill acceptance facility

$\sim$

$\sim$ $\sim$

$\cdot$

$\sim$

The bill acceptance facility is subject to annual review.

$\mathcal{L}_{\mathcal{A}}$

$\sim$

$\sigma_{\rm{max}}$

$\ddot{\phantom{a}}$

$\ddot{\psi}$

$\bar{z}$

$\bar{\beta}$

. . . . . . . . . . . . . . . . . . . .

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005

Note 20 INTEREST-BEARING LIABILITIES (continued)

(f) Guarantee facility

Bank guarantees may be arranged from time to time under this facility, whereby the bank guarantees the performance of the consolidated entity in relation to certain contractual commitments, up to the limit specified in each individual quarantee.

(g) Corporate credit card facility

Credit cards for business use may be issued under this facility from time to time.

(h) Securities

All of the above facilities are secured by fixed and floating charges over the assets and undertakings of the parent entity and Coventry Auto Parts Pty Ltd, a general security agreement from Hylton Parker Fasteners Limited, and by a deed of cross guarantee between those companies.

(i) Surplus leased space

The liability for surplus leased space represents the future payments falling due during the period to 30 August 2007 for surplus leased space under non-cancellable operating leases, net of subleasing revenue, discounted at 5%.

	Note	Consolidated Entity 2005 \$000	2004 \$000	Parent Entity 2005 \$000	2004 \$000
Note 21 TAX LIABILITIES
Current Income tax		270	1,089		1,012
Note 22 PROVISIONS
Current Special dividend Employee benefits Warranty	$\cdot$ 7 29	10,641 2,467 54 13,162	2,177 31 2,208	10,641 2,083 48 12,772	1,860 27 1,887
Non-current Employee benefits	29	2,566	2,625	2,435	2,574

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005

Note 22 PROVISIONS (continued)

(a) Movement in provisions

Movements in each class of provision during the financial year, other than employee benefits, are set out below.

	Consolidated Entity 2005 \$000	Parent Entity 2005 \$000
Special dividend - current Carrying amount at beginning of year
Provisions made during the year Payments made during the year	10,641	10,641
Carrying amount at end of year	10,641	10,641
Warranty - current
Carrying amount at beginning of year	31	27
Provisions made during the year	28	25
Payments made during the year	(5)	(4)
Carrying amount at end of year	54	48

		Note	2005 Number of Shares	Parent Entity 2004 Number of Shares		Parent Entity 2004 \$000
Note	23 CONTRIBUTED EQUITY
	(a) Share capital Ordinary shares Fully paid	(b)	35,468,826	35,091,527	96,149	93,685
	(b) Ordinary shares Movements during the year Balance at beginning of year Shares issued		35,091,527	34,519,727	93,685	90,402
	- dividend reinvestment plan		377,299 35,468,826	571,800 35,091,527	2,464 96,149	3,283 93,685

Dividend reinvestment plan

The company has established a dividend reinvestment plan under which holders of ordinary shares may elect to have all or part of their dividend entitlements satisfied by the issue of new ordinary shares rather than by being paid in cash. During the year shares were issued under the plan in respect of the final 2004 dividend at a 2.5% discount to the market price calculated according to the plan.

Terms and conditions

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 parent entity, ordinary shareholders rank after creditors and are fully entitled to any proceeds of liquidation after the claims of creditors have been met.

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005

	Note	Consolidated Entity 2005 2004 \$000 \$000		2005 \$000	Parent Entity 2004 \$000
Note 24 RESERVES AND RETAINED PROFITS
(a) Reserves
Asset realisation reserve Asset revaluation reserve		25,217 6,873	17,264 14,826	25,208 6,731	17,255 14,684
Foreign currency translation reserve		688 32,778	790 32,880	31,939	31,939
Movements during the year :
Asset realisation reserve Opening balance Transfer from asset revaluation reserve		17,264	17,917	17,255	17,908
on disposal of non current assets		7,953	(653)	7,953	(653)
Closing balance		25,217	17,264	25,208	17,255
Asset revaluation reserve Opening balance Transfer to asset realisation reserve on		14,826	14,173	14,684	14,031
disposal of non current assets		(7,953)	653	(7,953)	653
Closing balance		6,873	14,826	6,731	14,684
Foreign currency translation reserve Opening balance		790	420
Net exchange differences on translation of foreign controlled entities
Applicable to outside equity interests		(105) з	390 (20)
Closing balance		688	790
(b) Retained Profits Retained profits at the beginning of the
financial year		40,449	36,740	36,147	32,550
Net profit attributable to members Dividends provided for or paid	7	16,556	14,800	15,537	14,688
Retained profits at end of the financial		(23, 345)	(11,091)	(23, 345)	(11,091)
year		33,660	40,449	28,339	36,147

(c) Nature and Purpose of Reserves: Asset Realisation

$\mathcal{L}$

The asset realisation reserve includes revaluation increments and decrements previously included in the asset revaluation reserve, which have been realised upon the disposal of previously revalued non-current assets.

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005

Note 24 RESERVES AND RETAINED PROFITS (continued)

Asset Revaluation

The asset revaluation reserve includes the net revaluation increments and decrements arising from the revaluation of non-current assets in accordance with AASB 1041. The balance of the reserve is not available for future asset write-downs as a result of the deemed cost election for land and buildings when adopting AASB 1041.

Foreign Currency Translation

The foreign currency translation reserve records the foreign currency differences arising from the translation of self-sustaining foreign operations.

	Consolidated Entity
	2005	2004
	\$000	\$000
Note 25 OUTSIDE EQUITY INTERESTS IN CONTROLLED ENTITIES
Outside equity interest comprises interests in:
Share capital	з	з
Reserves	183	102
Retained profits	2,827	2,772
	3,013	2,877

Consolidated Entity	Parent Entity

Note 26 EQIRTY

O EQUITY
Total equity at the beginning of the
financial year	169,891	162,808	161,771	154,891
Total changes in equity recognised in the
Statements of Financial Performance	16,454	15.170	15,537	14,688
Transactions with owners as owners:
Dividends provided for or paid	(23, 345)	(11,091)	(23, 345)	(11, 091)
Share issues	2,464	3.283	2,464	3,283
Total changes in outside equity interest	136	(279)
Total equity at the end of the financial
year	165,600	169,891	156,427	161,771

2005

\$000

2004

\$000

2005

\$000

2004

\$000

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005

Note 27 FINANCIAL INSTRUMENTS

(a) Off Balance Sheet Financial Instruments

The consolidated entity is a party to financial instruments with off balance sheet risk to hedge its exposure to fluctuations in interest rates. Derivative financial instruments are not held for speculative purposes.

Interest rate swap contracts

Commercial bills payable of the consolidated entity currently bear an average variable interest rate of 5.9% (2004: 5.8%). It is policy to protect part of the bills payable from exposure to increasing rates. Accordingly, the consolidated entity has entered into an interest rate swap contract under which it is obliged to receive interest at variable rates and to pay interest at a fixed rate. The contract is settled on a net basis every 90 days. Settlement dates coincide with the dates on which interest is payable on the majority of the underlying debt. The fixed interest rate is 5.6% (2004: two contracts with rates between 5.6% and 6.2%).

The notional principal amounts and expiry periods of the interest rate swaps are as follows:

	2005 \$000	2004 \$000
One to two years		11,000
Two to five years	15,000	15,000
	15,000	26,000

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005 Contractor

Note 27 FINANCIAL INSTRUMENTS (continued)

(b) Interest Rate Risk Exposures

$\mathcal{L}_{\mathcal{A}}$

Interest Rate Risk Exposures
The consolidated entity's exposure to interest rate risk and the effective weighted average interest rate
for each class of financial assets and financial liabilities is set out below:

$\bar{z}$

$\bar{1}$

	Note	Weighted average interest rate	Floating Interest rate \$000	1 year or less \$000	Over 1 to $5$ years \$000	More than 5 years \$000	Non- Interest bearing \$000	Total \$000
30 June 2005
Financial Assets
Cash and deposits	9	5.31%	24,725				1,128	25,853
Receivables	11,18	٠.					70,387	70,387
			24,725			ä,	71,515	96,240
Financial Liabilities
Trade and other creditors	19						48,458	48,458
Bank overdraft	20	8.75%	1,951			ш	$\blacksquare$	1,951
Bill acceptance facility	20	5.92%	37,839					37,839
Surplus leased space	20	5.00%		15	17			32
Interest rate swaps (at
notional principal amount)		5.65%	(15,000)		15,000
			24,790	15	15,017	$\sim$	48,458	88,280

30 June 2004
Financial Assets
Cash and deposits	9	4.81%	12,105				251
Receivables	11					m	65,161	12,356
			12,105			$\qquad \qquad \blacksquare$	65,412	65,161 77,517

Financial Liabilities
Trade and other creditors	19						43,289	43,289
Bank overdraft	20	8.50%	2,287					2,287
Bill acceptance facility	23	5.75%	22,532					22,532
Surplus leased space	20	5.00%		23	33			56
Interest rate swaps (at
notional principal amount)			5.96% (26,000)		26,000	÷
			(1, 181)	23	26,033	$\overline{a}$	43,289	68.164

$\mathcal{A}^{\text{max}}_{\text{max}}$

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005

Note 27 FINANCIAL INSTRUMENTS (continued)

(c) Credit Risk Exposure

Credit risk is the risk that counter parties to a financial asset will fail to discharge their obligations, causing the consolidated entity to incur a financial loss.

On balance sheet financial instruments

The credit risk exposure of the consolidated entity to financial assets which have been recognised in the Statements of Financial Position is generally the carrying amounts, net of any provisions for doubtful debts.

Off balance sheet financial instruments

The credit risk exposure of the consolidated entity to off balance sheet financial instruments, including derivatives, arises because of the risk that counter parties may not meet their obligations under their respective contracts at maturity. The consolidated entity attempts to minimise that risk by ensuring that counter parties are recognised financial intermediaries with acceptable credit ratings determined by a recognised ratings agency. Credit risk on interest rate swap contracts is limited to the net amount to be recovered from counter parties on contracts that are favourable to the consolidated entity.

(d) Net Fair Values of Financial Assets and Liabilities

The carrying amounts of financial assets and financial liabilities recognised in the financial statements approximate their net fair values.

None of the consolidated entity's financial assets and financial liabilities are readily traded on organised markets in standardised form.

The net fair value of the consolidated entity's financial assets and financial liabilities are determined in accordance with generally accepted pricing models based on discounted cash flow theory.

The net fair value of financial instruments not recognised on the Statements of Financial Position at balance date is:

					2005 \$000	2004 \$000
Interest rate swaps				--	(268) .	(109) --------------------------------------

$\sim 10$

$\bar{z}$

$\mathcal{A}^{\mathcal{A}}$

and the state of the state of the

$\mathbb{R}^2$

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2005

	Note	Consolidated Entity 2005 \$000	2004 \$000	Parent Entity 2005 \$000	2004 \$000
Note 28 CAPITAL AND LEASING COMMITMENTS
(a) Operating Lease Commitments Non-cancellable operating leases contracted for but not capitalised in the financial statements:
Not later than one year Later than one year but not later than five		9,203	6,741	6,725	3,953
vears Later than five years		14,393 2,535	9,973 1,145	10,823 2,535	5,595 1,013
Less future minimum lease payments expected to be received in relation to non-cancellable sub-leases of operating leases not recognised in the financial		26,131	17,859	20,083	10,561
statements		(214) 25,917	(421) 17,438	20,083	10,561
(b) Capital Expenditure Commitments Plant and equipment purchases:
Not later than one year Later than one year but not later than five		2,250		2,250
years Later than five years		2,250 373		2,250 373
		4,873		4,873
(c) Contractual Commitments Information technology managed services:
Not later than one year Later than one year but not later than five		1,305		1,305
years		4,017 5,322		4,017 5,322
Note 29 EMPLOYEE BENEFITS
(a) Employee benefits and related on-cost liabilities
Included in other creditors - current Provision for employee benefits - current Provision for employee benefits - non-	19 22	7,062 2,467	6,519 2,177	6,213 2,083	5,919 1,860
current Aggregate employee benefits and	22	2,566	2,625	2,435	2,574
related on-cost liability		12,095	11,321	10,731	10,353
(b) Employee numbers Number of employees at reporting date		2,037	1,979	1,656	1,646

$\bar{z}$

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005

Note 29 EMPLOYEE BENEFITS (continued)

(c) Superannuation

The consolidated entity makes contributions to an accumulation style superannuation scheme for each employee in Australia. The contributions are in accordance with the Superannuation Guarantee legislation. Employees may also make additional voluntary contributions. Benefits are based on the balance of the member accounts at the time of leaving the schemes.

(d) Incentive Plans

Details of short-term and long-term incentive plans are set out in Note 5. During the year, 14,222 shares were offered to non-specified executives under the Company's ELTIP. Total shares offered to non-specified executives as at 30 June 2005 amount to 60,879. These shares will only vest upon certain performance hurdles being achieved.

Note 30 NON-DIRECTOR RELATED PARTY TRANSACTIONS

The classes of non-director related parties are:

wholly-owned controlled entities: and
partly-owned controlled entities. $\omega$

Controlled Entities

Details of the ownership interest in controlled entities are set out in Note 14.

Transactions

All transactions with non-director related parties are on normal terms and conditions.

	Parent Entity
	2005 \$000	2004 \$000
The aggregate amounts included in the profit from ordinary activities before income tax expense that resulted from transactions with non-director related parties are:
Dividend revenue
Wholly-owned controlled entities	678	654
Partly-owned controlled entities	675	1,766
	1,353	2,420
Aggregate amount of other transactions with non-director related parties: Revenue from sale of goods
Wholly-owned controlled entities	1,229	890
Partly-owned controlled entities	19	19
	1,248	909
Purchase of inventories
Wholly-owned controlled entities	897	589
Partly-owned controlled entities	1,400	1,467
	2,297	2,056
Amounts advanced to:
Wholly-owned controlled entities	12,139	11,749

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005

Note 30 NON-DIRECTOR RELATED PARTY TRANSACTIONS (continued)

	Parent Entity
	2005 \$000	2004 SOO0
Receivables
Aggregate amounts receivable from non- director related parties:
Trade debtors
Wholly-owned controlled entities	64	145.
Partly-owned controlled entities		2
	65	147
Payables
Aggregate amounts payable to non-
director related parties: Trade Creditors
Wholly-owned controlled entities	161	123.
Partly-owned controlled entities	152	129
	313	クドク

Note 31 DEED OF CROSS GUARANTEE

Pursuant to ASIC Class Order 98/1418 (as amended) dated 13 August 1998, Coventry Auto Parts Pty Ltd is relieved from the Corporations Act 2001 requirements for preparation, audit and lodgement of financial reports and directors' reports.

It is a condition of the Class Order that the parent entity and Coventry Auto Parts Pty Ltd enter into a Deed of Cross Guarantee. The effect of the Deed is that the parent entity guarantees to each creditor payment in full of any debt in the event of the winding up of Coventry Auto Parts Pty Ltd under certain provisions of the Corporations Act 2001. If a winding up occurs under other provisions of the Corporations Act 2001, the parent entity will only be liable in the event that after six months any creditor has not been paid in full. Coventry Auto Parts Pty Ltd has also given similar guarantees in the event that the parent entity is wound up.

The above companies represent a "Closed Group" for the purposes of the Class Order, and as there are no other parties to the Deed of Cross Guarantee that are controlled by the parent entity, they also represent the "Extended Closed Group".

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005

Note 31 DEED OF CROSS GUARANTEE (continued)

$\hat{\mathcal{L}}$

÷,

$\bar{z}$

The consolidated Statement of Financial Performance, consolidated Statement of Financial
Position and summary of movements in retained profits of the Closed Group are:

(a) Statement of financial performance	2005 \$000	2004 \$000

Profit from ordinary activities before income tax expense	20,040	20,463
Income tax expense	(4,503)	(5,409)
Profit from ordinary activities after income tax expense	15,537	15,054
Net profit attributable to members of Coventry Group Ltd	15,537	15,054
Total changes in equity other than those resulting from transactions with owners as owners	15,537	15,054
(b) Statement of financial position
Current assets
Cash assets	15,137	8,663
Receivables	72,872	60,981
Inventories Other assets	80,129	72,389
Total current assets	1,504	2,008
	169,642	144,041
Non-current assets
Other financial assets	9,542	9,542
Property, plant and equipment	43,402	53,794
Tax assets	5,585	5,070
Intangible assets	25,331	16,448
Total non-current assets	83,860	84,854
Total assets	253,502	228,895
Current liabilities
Payables	46,493	41,277
Interest-bearing liabilities	1,951	2,309
Tax liabilities		1,012
Provisions	12,843	1,901
Total current fiabilities	61,287	46,499
Non-current liabilities
Interest-bearing liabilities	33,300	18,033
Provisions	2,488	2,592
Total non-current liabilities	35,788	20,625
Total liabilities	97,075	67,124
Net assets	156,427	161,771
Equity
Contributed equity
Reserves	96,149 31,939	93,685
Retained profits	28,339	31,939
Total equity	156,427	36,147 161,771

$\chi$

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005

Note 31 DEED OF CROSS GUARANTEE (continued)

(c) Retained profits

Retained profits at the beginning of the financial

vear	36.147	32.184
Net profit	15.537	15.054
Dividends provided for or paid	(23.345)	$^{\prime}$ 11,091)
Retained profits at end of financial year	28,339	36,147

$\bar{\beta}$

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2005

$\epsilon=1$

$\cdot$

SEGMENT REPORTING $\frac{1}{3}$ Note

$\ddot{\phantom{0}}$

$\bar{\bar{z}}$

$\ddot{\phantom{0}}$

$\frac{1}{\sqrt{2}}$

Industry Segments	Automotive Parts Distribution		Industrial Products Distribution		Products Bitunen		Manufacturing Gasket		Eliminations		Consolidated
	2005 \$000	2008	2005 \$000	2005	2005 \$000	2006 2008	\$000 2005	ទីខ្លី	2005 \$000	\$000 2004	\$000 2005	ដូន្ល ឯន្ល
Sales to customers outside the Intersegment sales consolidated entity Other revenue	270,248 659 2,131	239,721 1,959 $\bar{z}$	175,412 2,033	170,566 $1,174$ $1,262$	278 14,711	13,056 294	1,837 122 10,417	1,845 10,568 124	(4,529)	(3,750)	470,788	433,911
Total segment revenue	273,038	242,411	$\frac{4,888}{182,333}$	173,002	14.989	13,350	2.376	12,537	(4,529)	(3,750)	7.419 478,207	3,639 437,550
Unallocated corporate revenue Total revenue											17,894 496,101	2.752 440,302
Segment net profit before interest and tax ²	4,481	7,090	17,031	15,859	1,244	1,315	1,944	818		$\frac{86}{1}$	24,700	26,448
Operating profit before interest Unallocated net corporate expense)/revenue											(127)	(3,343)
and tax											24,573	23,105
Net interest expense Income tax expense Net profit before tax Net profit after tax											22,946 1,627 16,945 6,001	$\frac{1,176}{21,929}$ 6,758 15,171
Unallocated corporate assets Segment assets Total assets	111,269	90,002	95,826	87,587	6,501	6,160	9,518	8,998	(620)	(1,618)	222,494 269,878 47,384	191,129 52,848 243,977
Unallocated corporate liabilities Segment liabilities Total liabilities	27,833	26,482	17,543	18,023	1,550	1,100	1,111	1,025	(620)	$\frac{618}{1}$	104,278 47,417 56,861	45,012 29,074 74,086

ł,

$44.$

			2004 Consolidated 2005 2004 Eliminations 2005	\$000 \$000 \$000 \$000	6,464 18,438 435	1,199 7,663 21,510 3,072	426	6,757 7,064	1,049 7,806 1,780 8,844	2,291 130 8	$\frac{8}{2}$ $\tilde{P}$	2,399 56
	D FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005		2004 Manufacturing Gasket 2005	\$000 \$000	420 427		33 466			112 ίÞ.
COVENTRY GROUP LTD ABN 37 008 670 102			2004 Products Bitumen 2005	\$000 \$000	45		436			3
			Industrial Products 2004 Distribution 2005	\$000 \$000	2,942 $\mathbf{\underline{\omega}}$ ऽ य		3,634 3,295			844 $\overline{181}$
	NOTES TO AND		Automotive Parts 2004 Distribution 2005	\$000 \$000	2,660 15,355		2,231 2,898			436 695
		SEGMENT REPORTING (continued) 8 Note	Industry Segments	Acquisition of property, plant and equipment, intangibles and other	non-current segment assets	Total acquisition of property, plant Unallocated corporate acquisition and equipment, intangibles and other non current assets of non-current assets	Segment depreciation and amortisation expense	depreciation and amortisation Unallocated corporate expense	Total depreciation and amortisation expense	Unallocated corporate non-cash Segment other non-cash expenses	expenses	Total other non-cash expenses

$\ddot{\cdot}$

$\sim 10^{-1}$ and

$45.$

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2005

32 SEGMENT REPORTING (continued) Note

	Automotive Parts		Indus	strial Products Distribution		Gasket
	Distribution		$\Omega$
	ខ្លួ ឯ និង	200 800	2005 \$000	ಕ್ಷ ಇ	Bitumen Products 2005 2004 \$000 \$000	Manufacturing 2005 2004 \$000 \$000	Eliminations 2005 200 \$000 \$0'	2008 2008	Consolidated 2005 2004 \$000 \$000
Individually significant items
Unallocated profit on sale of land Employee termination costs	(470)								(470)
and buildings									3,583
Total significant items	(470)								3,113

$\ddot{\phantom{0}}$ $\sim$

Includes proceeds from sale of land and buildings of \$16.58 million (2004: \$1.82 million).
The automotive parts distribution segment includes trading losses (including amortisation of distribution rights) incurred by Coven

$\mathcal{L}^{\mathcal{L}}$

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005

Note 32 SEGMENT REPORTING (continued)

Products and services

The major products and services from which the above segments derive revenue are:

Industry Segment	Products/Service
Automotive Distribution	Automotive and accessories parts mining and industrial and consumables.
Industrial Products Distribution	Industrial and construction fasteners, bearings, power transmission products, lubrication products and systems, hoses and fittings and hydraulic fluid systems.
Bitumen Products	Asphalt manufacture and application, road profiling and manufacture and spraying of bituminous products.
Gasket Manufacturing	Manufacture and distribution of automotive and industrial gaskets.

Intersegment pricing is determined on an arm's length basis.

Geographical segments

The consolidated entity operates predominantly in one geographic segment, being Australia. This segment includes the assets and results of the consolidated entity's New Zealand activities.

Note 33 EVENTS SUBSEQUENT TO REPORTING DATE

Dividends

A dividend has been declared since the end of the current period as described at note 7.

Acquisitions

On 1 July 2005, the consolidated entity acquired the business of Am-Tech Fastenings and Components Limited, a New Zealand based fastener distributor, for a consideration of \$NZ 8 million. The acquisition was undertaken utilising the New Zealand based controlled entity, Hylton Parker Fasteners Ltd. Further purchase consideration of up to \$NZ 2 million will be payable to the vendor contingent upon agreed sales and profit targets being achieved by the acquired business for the year ending 30 June 2006. Any such payment will be due no later than 3 September 2006.

The financial effect of the above transactions has not been brought to account in the financial statements for the year ended 30 June 2005.

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005

Note 34 IMPACT OF ADOPTING AUSTRALIAN EQUIVALENTS TO INTERNATIONAL FINANCIAL REPORTING STANDARDS ("AIFRS")

The Board has established a formal project, monitored by the Audit and Risk Committee, to achieve transition to IFRS reporting. Management has allocated internal resources to manage the transition to AIFRS and sought external advice where required. The Chief Financial Officer reports periodically to the Audit and Risk Committee on the status of the transition. Accounting procedures, processes and systems have been reviewed to ensure that they can support AIFRS reporting obligations.

The impact of transition to AIFRS, including the transitional adjustments disclosed herein, is based on AIFRS standards that management expects to be in place when preparing the first complete AIFRS financial report (being for the half-year ending 31 December 2005). Only a complete set of financial statements and notes together with comparative balances can provide a true and fair presentation of the Company's and consolidated entity's financial position, results of operations and cash flows in accordance with AIFRS. This note provides only a summary, and further disclosure and explanations will be required in the first complete AIFRS financial report for a true and fair view to be presented under AIFRS.

There is a significant amount of judgement involved in the preparation of the reconciliations from current Australian Generally Accepted Accounting Principles ("AGAAP") to AIFRS. Consequently, the final reconciliations presented in the first financial report prepared in accordance with AIFRS may vary from the reconciliations provided in this Note.

Revisions to the selection and application of the AIFRS accounting policies may be required as a result of:

changes in financial reporting requirements that are relevant to the Company's and consolidated entity's first complete AIFRS financial report arising from new or revised accounting standards or interpretations issued by the Australian Accounting Standards Board subsequent to the preparation of the 30 June 2005 financial report;
additional guidance on the application of AIFRS in a particular industry or for a particular $\blacksquare$ transaction; and
changes to the Company's and consolidated entity's operations. $\blacksquare$

The rules for first time adoption of AIFRS are set out in AASB 1 First Time Adoption of Australian Equivalents to International Financial Reporting Standards. In general, AIFRS accounting policies must be applied retrospectively to determine the opening AIFRS balance sheet as at transition date, being 1 July 2004. The Standard allows a number of exemptions to this general principle to assist in the transition to reporting under AIFRS. The choices available have been analysed to determine the most appropriate accounting policy for the consolidated entity.

The significant changes in accounting policies expected to be adopted in preparing the AIFRS reconciliations, and the elections expected to be made under AASB 1, are set out below.

$(a)$ Property, plant and equipment

Property, plant and equipment will be measured at cost under AIFRS. However, as permitted by the election available under AASB 1, at transition date certain items of property, plant and equipment are expected to be recognised at deemed cost, being a revalued amount prior to transition date that approximates fair value as at the date of valuation.

Any asset revaluation reserve balance relating to these assets will be reclassified to retained earnings at transition date. For the consolidated entity, at 1 July 2004 an amount of \$14,826,000 (the parent entity: \$14,684,000) is expected to be reclassified from the asset revaluation reserve to retained earnings. As carrying amounts, depreciation rates and useful economic lives are not expected to change there is no effect on the income statements of the consolidated entity and the parent entity for the financial year ended 30 June 2005.

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005

Note 34 IMPACT OF ADOPTING AUSTRALIAN EQUIVALENTS TO INTERNATIONAL FINANCIAL REPORTING STANDARDS ("AIFRS") (continued)

Under AIFRS the gain or loss on the disposal of property, plant and equipment will be recognised on a net basis as a gain or loss rather than separately recognising the consideration received as revenue. For the consolidated entity, the book value of assets sold, being an amount of \$17,571,000 (the parent entity: \$17,485,000), is expected to be reclassified from other expenses and offset against revenue for the financial year ended 30 June 2005.

$(b)$ Business combinations

As permitted by the election available under AASB 1, the classification and accounting treatment of business combinations that occurred prior to transition date have not been restated in preparing the opening AIFRS balance sheet. The assets and liabilities are then subject to the other requirements of AASB 1.

Comparative period

Business combinations that occurred on or after 1 July 2004 will be restated to comply with AIFRS. All business combinations will be accounted for by applying the purchase method. It is expected that goodwill and retained profits for the consolidated entity will be reduced by \$526,000 (parent entity: \$232,000) as at 30 June 2005, and cost of sales increased by \$526,000 (parent entity: \$232,000) for the year ended 30 June 2005.

$(c)$ Intangible assets

Goodwill

Goodwill represents the difference between the cost of a business combination and the net fair value of the identifiable assets, liabilities and contingent liabilities acquired.

In respect of acquisitions prior to transition date, goodwill is expected to be included on the basis of its deemed cost, which represents the amount recorded under AGAAP.

Goodwill will be stated at cost less any accumulated impairment losses. Goodwill will be allocated to cash generating units and tested annually for impairment (refer (d) for further details on impairment $testin@$ ).

Negative goodwill arising on acquisition will be recognised directly in profit and loss unless it is deemed to be a transaction with owners. Under AGAAP negative goodwill is allocated to the nonmonetary assets acquired. As business combinations have not been restated (refer (b)) there is no impact from this change in treatment on transition.

Other intangible assets

Other intangible assets acquired will be stated at cost less accumulated amortisation and impairment losses.

On transition, other intangible assets are being reviewed to ensure they are capable of recognition under AASB 138 Intangible Assets and tested for impairment. Capitalised software costs for the consolidated entity at 1 July 2004 of \$823,000 (parent entity: \$660,000), and at 30 June 2005 of \$898,000 (parent entity: \$681,000), are expected to be reclassified from property, plant and equipment to intangible assets. No other reclassifications are expected.

Amortisation

Amortisation will be recognised on a straight-line basis over the estimated useful lives of the intangible assets, unless such lives are indefinite. Goodwill and intangible assets with an indefinite useful life will not be subject to amortisation but tested for impairment annually. Other intangible assets will be amortised from the date they are available for use. Changes in useful life on transition to AIFRS will be accounted for prospectively.

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005

Note 34 IMPACT OF ADOPTING AUSTRALIAN EQUIVALENTS TO INTERNATIONAL FINANCIAL REPORTING STANDARDS ("AIFRS") (continued)

The estimated useful lives for 1 July 2004 are expected to be as follows.

	AIFRS	AGAAP
Goodwill	Indefinite	20 years
Distribution rights	$\approx 10^5$	10 years and 10 years and 10

The impact on the profit before tax for the year ended 30 June 2005 from the reversal of goodwill amortisation is expected to be an increase for the consolidated entity of \$1,949,000 (the parent entity: \$1,454,000). In addition, profit before tax for the consolidated entity for the year ended 30 June 2005 is expected to increase by \$99,000, representing the reversal of amortisation of distribution rights that were written off on transition to AIFRS (refer (d)).

$(d)$ Impairment

Under AGAAP, the carrying amounts of non-current assets valued on a cost basis are reviewed at reporting date to determine whether they are in excess of their recoverable amount. If the carrying amount of a non-current asset exceeds its recoverable amount, the asset is written down to the lower amount, with the write-down recognised in the income statement in the period in which it occurs. Where a group of assets working together support the generation of cash inflows, recoverable amount is assessed in relation to that group of assets.

Under AIFRS, the carrying amount of the consolidated entity's non-current assets, excluding deferred tax assets and goodwill, will be reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, the asset will be tested for impairment by comparing its recoverable amount to its carrying amount.

Goodwill which is not amortised under AIFRS (refer (c)), and intangible assets not yet ready for use, are tested for impairment annually, whether or not there is any indication of impairment.

If there is any indication that an asset is impaired (or in the case of those assets subject to annual testing), the recoverable amount will be estimated for the individual asset. If it is not possible to estimate the recoverable amount for the individual asset, the recoverable amount of the cash generating unit to which the asset belongs will be determined.

The recoverable amount will be the greater of the fair value less costs to sell and the value in use. In assessing value in use, the estimated future cash flows will be discounted to their present value using a pre-tax discount rate that reflects the current market assessments of the risks specific to the asset or cash generating unit. Cash flows will be estimated for the asset or cash generating unit in its current condition and therefore will not include cash inflows and outflows from improving or enhancing the asset's performance or expected to arise from future restructuring not yet committed to at testing date.

A cash generating unit will be the smallest identifiable group of assets that generate cash inflows largely independent of the cash inflows of other assets or groups of assets, and each cash-generating unit will be no larger than a segment.

An impairment loss will be recognised whenever the carrying amount of an asset, or cash generating unit, exceeds its recoverable amount. Impairment losses will be recognised in the income statement unless they relate to a revalued asset, in which case the impairment loss will be treated in the same way as a revaluation decrease.

Impairment losses recognised in respect of a cash generating unit will be allocated first to reduce the carrying amount of any goodwill allocated to the cash generating unit, and then to reduce the carrying amount of the other assets in the unit pro rata based on their carrying amounts.

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005

Note 34 IMPACT OF ADOPTING AUSTRALIAN EQUIVALENTS TO INTERNATIONAL FINANCIAL REPORTING STANDARDS ("AIFRS") (continued)

Goodwill and distribution rights will be tested for impairment as at transition date. For the consolidated entity an impairment loss of \$701,000 allocated against distribution rights is expected to be recognised as a decrease in retained earnings, arising from the more rigorous impairment test under AIFRS. For the parent entity, at 1 July 2004 a consequential impairment loss of \$701,000 in relation to investments in controlled entities is expected to be recognised.

Reversals of impairment

Under AGAAP, impairment losses have not been reversed.

Under AIFRS, an impairment loss in respect of goodwill must not be reversed. In respect of other assets, an impairment loss will be reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss will be reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

There is no expected impact from this change in treatment on transition.

(e) Taxation

On transition to AIFRS the balance sheet method of tax effect accounting will be adopted rather than the liability method currently applied under AGAAP.

Under the balance sheet approach, income tax on the profit and loss for the year comprises current and deferred taxes. Income tax will be recognised in the income statement except to the extent that it relates to items recognised directly in equity, in which case it will be recognised in equity.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at reporting date, and any adjustment to tax payable in respect of previous years.

Deferred tax is provided using the balance sheet liability method, providing for temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The following temporary differences will not be provided for: goodwill for which amortisation is not tax deductible, the initial recognition of assets and liabilities that affect neither accounting nor taxable profit, and differences relating to investments in controlled entities to the extent that they will probably not reverse in the foreseeable future. The amount of deferred tax provided will be based on the expected manner of realisation of the asset or settlement of the liability, using tax rates enacted or substantively enacted at reporting date.

A deferred tax asset will be recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. Deferred tax assets will be reduced to the extent it is no longer probable that the related tax benefit will be realised.

The expected impact on the consolidated entity at 1 July 2004, of the change in basis and the transition adjustments on the deferred tax balances and the previously reported tax expense, is an increase in deferred tax assets of \$5,597,000 (the parent entity: \$5,326,000), an increase in deferred tax liabilities of \$5,046,000 (the parent entity: \$5,001,000), and an increase in retained earnings of \$551,000 (the parent entity: \$325,000).

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005

Note 34 IMPACT OF ADOPTING AUSTRALIAN EQUIVALENTS TO INTERNATIONAL FINANCIAL REPORTING STANDARDS ("AIFRS") (continued)

The increase in deferred tax assets for both the consolidated entity and the parent entity arises primarily from the recognition of accumulated tax losses of \$5,184,000, as a result of different recognition criteria under AIFRS. The increase in deferred tax liabilities arises primarily from the recognition of deferred tax relating to previous property revaluations (consolidated entity: \$4,527,000; parent entity: \$4,405,000).

The expected impact of the change in basis on the tax expense for the financial year ended 30 June 2005 is an increase for the consolidated entity of \$438,000 (the parent entity: \$531,000). As at 30 June 2005, deferred tax assets and deferred tax liabilities of the consolidated entity are expected to decrease by \$784,000 (the parent entity: \$867,000) and \$2,732,000 (the parent entity: \$2,722,000) respectively. Retained profits are also expected to decrease by \$2,386,000 for both the consolidated entity and parent entity, due to the reversal of a deferred tax liability that was recognised in equity on transition to AIFRS.

Under Interpretation 1052 Tax Consolidation Accounting, wholly owned subsidiaries in the tax consolidated group will be required to recognise their own tax balances directly, and the current tax liability or asset will be assumed by the head entity via an equity contribution or distribution. There will be no impact on the consolidated entity. There is also no impact expected for the parent entity, as any adjustments arising would be offset by corresponding adjustments to the allowance for write-down of investments in controlled entities.

$(f)$ Employee benefits

Share based payments

Under AGAAP no expense is recognised for shares offered under the Company's executive long term incentive plan ("ELTIP").

Under AIFRS, the fair value determined at grant date of shares offered under the ELTIP is expensed on a straight line basis over the vesting period, based on the estimated number of shares that will vest.

For the consolidated entity and parent entity at 1 July 2004, this is expected to result in a decrease to retained earnings of \$234,000 and an increase to other reserves of \$234,000.

For the financial year ended 30 June 2005, employee benefits expense and other reserves are expected to be increased by \$370,000 in the consolidated entity and parent entity.

$\left(g\right)$ Foreign currency

Financial statements of foreign operations

Under AGAAP, the assets and liabilities of self-sustaining foreign operations are translated at the rates of exchange ruling at reporting date. Equity items and goodwill on consolidation are translated at historical rates. The statements of financial performance are translated at a weighted average rate for the year. Exchange differences arising on translation are recognised directly in the foreign currency translation reserve until disposal of the operation, when it is transferred directly to retained earnings.

Under AIFRS each entity in the consolidated entity determines its functional currency, being the currency of the primary economic environment in which the entity operates reflecting the underlying transactions, events and conditions that are relevant to the entity. The entity maintains its books and records in its functional currency.

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005

Note 34 IMPACT OF ADOPTING AUSTRALIAN EQUIVALENTS TO INTERNATIONAL FINANCIAL REPORTING STANDARDS ("AIFRS") (continued)

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on consolidation, are translated from the entity's functional currency to the consolidated entity's presentation currency of Australian dollars at foreign exchange rates ruling at the reporting date. The revenues and expenses of foreign operations are translated to Australian dollars at the exchange rates approximating the exchange rates ruling at the date of the transactions. Foreign exchange differences arising on translation are recognised directly in a separate component of equity.

There are no expected changes in functional currency for the parent entity or its controlled entities.

On disposal of a foreign operation, the amount recognised in the foreign currency translation reserve attributable to the foreign operation is included in the calculation of gain or loss on disposal and recycled through the current year income statement.

The AASB 1 election to reset the existing foreign currency translation reserve balance to nil is not expected to be adopted. Foreign currency translation differences that have arisen prior to the date of transition are expected to continue to be presented as a separate component of equity.

Accordingly, there are no impacts expected on transition or for the year ended 30 June 2005 in respect of this change.

$(h)$ Financial instruments

Coventry Group Ltd expects to take advantage of the election in AASB 1 to not restate comparatives for AASB 132 Financial Instruments: Disclosure and Presentation and AASB 139 Financial Instruments: Recognition and Measurement.

The entity has followed AGAAP in accounting for financial instruments within the scope of AASB 132 and AASB 139 as described in Note 1.

Under AGAAP, not all derivatives were recognised on the balance sheet. On adoption of AASB 139, as at 1 July 2005 all derivatives will be recognised at fair value on the balance sheet. The expected effect on the consolidated entity and parent entity is to increase fair value derivative liabilities and the hedging reserve by \$268,000.

Under AASB 139, financial assets will be classified as at fair value through profit or loss, held-tomaturity, available for sale, or as loans and receivables and, depending upon classification, measured at fair value or amortised cost.

Loans and receivables and financial liability classifications will remain unchanged. Measurement of these instruments will initially be at fair value with subsequent measurement at amortised cost, using the effective interest rate method. This will result in a change to the current accounting policy, under which financial assets are carried at the lower of cost and recoverable amount.

As a result of the application of the exemption referred to above, there would have been no adjustment to classification or measurement of financial assets or liabilities from the application of AIFRS during the year ended 30 June 2005. Changes in classification and measurement will be recognised from 1 July 2005.

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2005

IMPACT OF ADOPTING AIFRS (continued) $\vec{a}$ Note

Summary of transitional adjustments

Reconcillation of Statements of Financial Position

The following tables sets out the expected adjustments to the Statements of Financial Position of the parent entity and the consolidated entity at transition to AIFRS as at 1 July 2004 and for the AIFRS comparative period balance sheet as at 30 June 2005.

		CONSOLIDATED 1 JULY 2004 ENTITY			CONSOLIDATED JUNE 2005 百万万 g			ENTITY 1 JULY 2004 PARENT			30 JUNE 2005 PARENT ENTITY
	AGAAP	Transition	AIFRS	AGAAP	ransition	AIFRS	AGAAR	Transition	AIFFES	AGAAP	Transition	AIFRS
	S-000	Impact 800.3	\$000	\$'000	Impact \$7000	\$1000	8008	Impact \$'000	STOCS	\$000	Impact \$'000	\$'000
ASSETS
Cash assets	12,356		12,356	25,853		25,853	2,819		2,819	14,971		14,971
Receivables	65,161		65,161	70,172		70,172	71,715		71,715	87,787		87,787
Inventories	79,632		79,632	88,441		88,441	62,134		62,134	68,850		68,850
Other assets	2,035		2,035	1.697		1,697	1,263		1,263	1,304		1,304
Total current assets	159,184		159,184	186,163		186,163	137,931		137,931	172,912		172.912

Non-current assets
Other financial assets							15,782	(701)	15,081	9,960	$\widehat{\Xi}$	9,259
Property, plant & equipment	57,962	(623)	57,139	47,516	(898)	46,618	51,397	(660)	50,737	39,885	(681)	39,204
Deferred tax assets	5,521	5,597	11,118	6,145	4,813	10,958	5,070	5,326	10,396	5,585	4,459	10,044
Intangible assets	21,310	چ	21,432	30,054	1,719	31,773	15,621	660	16,281	21,062	1,903	22,965
Total non-current assets	84,793	4.896	89,689	83,715	5,634	89,349	87,870	4.625	92,495	76,492	4,980	81,472
Total assets	243,977	4.896	248,873	269,878	5,834	275,512	225,801	4.625	230.426	249.404	4,980	254.384

$\frac{1}{\sqrt{2}}$

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2005

IMPACT OF ADOPTING AIFRS (continued) $\overline{3}$ Note

Reconciliation of Statements of Financial Position (continued)

		CONSOLIDATED 1 JULY 2004 AULLE			CONSOLIDATED ENTITY			PARENT ENTIFY			PARENT ENTILY
					30 JUNE 2005			TULY 2004			30 JUNE 2005
	AGAAP	Transition	AIFRS	AGAAP	Transition	AIFRS	AGAAP	Transition	AIFRS	AGAAP	Transition	AIFRS
		Impact			Impact			Impact			Impact
	4000	8000	\$1000	800.\$	\$'000	SOOS	\$'000	\$'000	\$'000	\$000	\$'000	\$'000
LIABILITIES
Current liabilities
Payables	43,289		43,289	48,458		48,458	38,270		38,270	42,519		42,519
Interest-bearing liabilities	2,310		2,310	1,966		1,966	2,287		2,287	1,951		1,951
Current tax liabilities	1,089		1,089	270		270	1,012		1,012
Provisions	2,208		208	13,162		13,162	1,887		1.887	12,772		12,772
Total current liabilities	48.896	ŧ	48,896	63,856		63,856	43,456		43,456	57,242		57,242

Non-current liabilities
Interest-bearing liabilities	22,565		22,565	37,856		37,856	18,000		18,000	33,300		33,300
Deferred tax liabilities		5,046	5,046		2,314	2,314		5,001	5,001		2,279	2,279
Provisions	2,625		2,625	2,566		2,566	2,574		2,574	2,435		2,435
Total non-current liabilities	25,190	5,046	30,236	40,422	2,314	42,736	20,574	5.001	25,575	35,735	2,279	38,014
Total liabilities	74.086	5,046	79,132	104,278	2,314	106,592	64,030	5,001	69,031	92.977	2,279	95.256
Net Assets	169,891	(150)	169,741	165,600	3,320	168,920	161,77	(376)	161,395	156,427	2.701	159,128
EQUITY
Share capital	93,685		93,685	96,149		96,149	93,685		93,685	96,149		96,149
Other reserves	32,880	(14, 592)	18,288	32,778	(14,222)	18,556	31,939	(14, 450)	17,489	31,939	(14,080)	17,859
Retained profits	40,449	14,452	54,901	33,660	17,550	51,210	36,147	14,074	50,221	28,339	16,781	45,120
Total parent entity interest	167,014	$\frac{6}{140}$	166,874	162,587	328	165,915	161,771	(376)	161,395	156,427	2,701	159,128
Outside equity interest	2,877	$\frac{6}{10}$	2,867	3,013	මු	3,005
Total Equity	169,891	(150)	169,741	165,600	3,320	168,920	161,771	(376)	161,395	156,427	2,701	159,128

$\sim$

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005

Note 34 IMPACT OF ADOPTING AIFRS (continued)

Reconciliation of profit for the financial year ended 30 June 2005

The following table sets out the expected adjustments to the Statements of Financial Performance of the parent entity and the consolidated entity for the year ended 30 June 2005.

		CONSOLIDATED ENTITY For the year ended 30 June 2005			PARENT ENTITY For the year ended 30 June 2005
	AGAAP \$'000	Transition Impact \$'000	AIFRS \$'000	AGAAP \$'000	Transition Impact \$'000	AIFRS \$'000
Revenue Cost of goods sold Employee benefits expense Depreciation and amortisation	496,101 (295,704) (93,530)	(17, 571) (526) (370)	478,530 (296, 230) (93,900)	425,588 (252, 981) (79, 402)	(17, 485) (232) (370)	408,103 (253, 213) (79, 772)
ALCOHOL: ALCOHOL:

(295,704)	(526)	(296, 230)	(252, 981)	(232)	(253, 213)
					(79, 772)

					(5,387)
					(1, 857)
					(6, 817)
					(17, 485)
					(2,804)
					(5,823)

					(14,053)
					20,892
					(5,034)
					15,858

					15,858

16,945	714	17,659	15,537	321	15,858

Summary of impact of transition of AIFRS on retained earnings

The impact of the transition to AIFRS on retained earnings as at 1 July 2004 is summarised below:

	CONSOLIDATED ENTITY \$'000	PARENT ENTITY \$'000
Retained earnings as at 1 July 2004 under AGAAP	40,449	36,147
AIFRS reconciliations:
- reclassification of asset revaluation reserve - recognition of share-based payments expense - impairment loss - impact of taxation	14,826 (234) (701) 551	14,684 (234) (701) 325
Retained earnings as at 1 July 2004 under AIFRS	54,891	50,221

DIRECTORS' DECLARATION

1. In the opinion of the directors of Coventry Group Ltd ("the Company")
$(a)$ The accompanying financial statements and notes are in accordance with the Corporations Act 2001, and:
- give a true and fair view of the financial position of the Company and consolidated $(i)$ entity as at 30 June 2005 and of their performance, as represented by the results of their operations and their cash flows, for the year ended on that date; and
- comply with Accounting Standards in Australia and the Corporations Regulations $(ii)$ 2001; and
$(b)$ There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.
$2.$ There are reasonable grounds to believe that the Company and the controlled entity identified in note 31 will be able to meet any obligations or liabilities to which they are or may become subject, by virtue of the Deed of Cross Guarantee between the Company and the controlled entity pursuant to ASIC Class Order 98/1418.
1. The directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the Chief Executive Officer and Chief Financial Officer for the financial year ended 30 June 2005.

Signed in accordance with a resolution of the directors.

W G Kent, AO Chairman

CJ Glenn

Managing Director and Chief Executive Officer

Perth 22 August 2005

Independent audit report to members of Coventry Group Ltd

Scope

The financial report and directors' responsibility

The financial report comprises the statements of financial position, statements of financial performance, statements of cash flows, accompanying notes to the financial statements, and the directors' declaration for both Coventry Group Ltd (the "Company") and the Consolidated Entity, for the year ended 30 June 2005. The Consolidated Entity comprises both the Company and the entities it controlled during that year.

The directors of the Company are responsible for the preparation and true and fair presentation of the financial report in accordance with the Corporations Act 2001. This includes responsibility for the maintenance of adequate accounting records and internal controls that are designed to prevent and detect fraud and error, and for the accounting policies and accounting estimates inherent in the financial report.

Audit approach

We conducted an independent audit in order to express an opinion to the members of the Company. Our audit was conducted in accordance with Australian Auditing Standards in order to provide reasonable assurance as to whether the financial report is free of material misstatement. The nature of an audit is influenced by factors such as the use of professional judgement, selective testing, the inherent limitations of internal control, and the availability of persuasive rather than conclusive evidence. Therefore, an audit cannot guarantee that all material misstatements have been detected.

We performed procedures to assess whether in all material respects the financial report presents fairly, in accordance with the Corporations Act 2001, Australian Accounting Standards and other mandatory financial reporting requirements in Australia, a view which is consistent with our understanding of the Company's and the Consolidated Entity's financial position, and of their performance as represented by the results of their operations and cash flows.

We formed our audit opinion on the basis of these procedures, which included:

examining, on a test basis, information to provide evidence supporting the amounts and disclosures in the financial report, and
assessing the appropriateness of the accounting policies and disclosures used and the reasonableness of significant accounting estimates made by the directors.

While we considered the effectiveness of management's internal controls over financial reporting when determining the nature and extent of our procedures, our audit was not designed to provide assurance on internal controls.

Independence

In conducting our audit, we followed applicable independence requirements of Australian professional ethical pronouncements and the Corporations Act 2001.

Audit opinion

In our opinion, the financial report of Coventry Group Ltd is in accordance with:

a) the Corporations Act 2001, including:
i. giving a true and fair view of the Company's and Consolidated Entity's financial position as at 30 June 2005 and of their performance for the financial year ended on that date; and
ii. complying with Accounting Standards in Australia and the Corporations Regulations 2001; and
b) other mandatory professional reporting requirements in Australia.

KPMG

TRHART Partner

Perth 22 August 2005

AI assistant

COVENTRY GROUP LIMITED — Annual Report 2005

64742_rns_2005-08-21_055aa221-2570-48a6-a991-fd941d538070.pdf

Results for announcement to the market

Full Year Ended 30 June 2005

Dividend reinvestment plan

COVENTRY GROUP LTD

FINANCIAL REPORT

FOR THE YEAR ENDED

Statements of Financial Performance for the Year Ended 30 June 2005

Statements of Financial Position for the Year Ended 30 June 2005

Statements of Cash Flows for the Year Ended 30 June 2005

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005

Note 1 STATEMENT OF ACCOUNTING POLICIES

Basis of preparation $(a)$

$(b)$ Principles of Consolidation

$(c)$ Revenue Recognition

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005

Note 1 STATEMENT OF ACCOUNTING POLICIES (continued)

$(d)$ Income Tax

Foreign Currency Transactions and Balances (e)

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005

Note 1 STATEMENT OF ACCOUNTING POLICIES (continued)

$(f)$ Acquisition of Assets

$(a)$ Receivables

Trade Debtors

Inventories $(h)$

$(i)$ Recoverable Amount of Non-Current Assets

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005

Note 1 STATEMENT OF ACCOUNTING POLICIES (continued)

$\bf{0}$ Depreciation of Property, Plant and Equipment

$(k)$ Leases

$(1)$ Intangibles

Goodwill

Distribution Rights

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005

Note 1 STATEMENT OF ACCOUNTING POLICIES (continued)

$(m)$ Pavables

$(n)$ Interest-Bearing Liabilities

Derivative Financial Instruments $(0)$

Interest Rate Swaps

$(p)$ Employee Benefits

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005

Note 1 STATEMENT OF ACCOUNTING POLICIES (continued)

Provisions $\left( \mathbf{q}\right)$

Dividends

$(r)$ Cash

$(s)$ Rounding of Amounts

$(t)$ Goods and Services Tax

$(u)$ Use and Revision of Accounting Estimates

$(v)$ Investments

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2005

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005

Note 5 DIRECTOR AND EXECUTIVE DISCLOSURES

(a) Directors

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005

Note 5 DIRECTOR AND EXECUTIVE DISCLOSURES (continued)

(c) Remuneration of directors and executives Principles used to determine the nature and amount of remuneration

Non-executive directors

Directors' fees

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005

Note 5 DIRECTOR AND EXECUTIVE DISCLOSURES (continued)

Executive pay

Fixed annual remuneration

Short-term incentives

Long-term incentives

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005

Note 5 DIRECTOR AND EXECUTIVE DISCLOSURES (continued)

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005

Note 5 DIRECTOR AND EXECUTIVE DISCLOSURES (continued)

Details of remuneration

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005

Note 5 DIRECTOR AND EXECUTIVE DISCLOSURES (continued)

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005

Note 5 DIRECTOR AND EXECUTIVE DISCLOSURES (continued)

Value of Shares

Employment contracts

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005

COVENTRY GROUP LIMITED Annual Report 2005

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2005

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2005