GALE PACIFIC LIMITED — Interim / Quarterly Report 2016

Feb 16, 2016

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RESULTS, APPENDIX 4D & FINANCIAL REPORT FOR THE HALF YEAR ENDED 31 DECEMBER 2015

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CONTENTS

RESULTS FOR THE HALF YEAR ENDED 31 DECEMBER 2015 ____ 3 GROUP MANAGING DIRECTOR’S REPORT ON RESULTS _______ 3 APPENDIX 4D _________ 7 FINANCIAL REPORT FOR THE HALF YEAR ENDED 31 DECEMBER 2015 ___ 9 Directors' Report ___________ 9 Auditor’s Independence Declaration _________ 11 Directors’ Declaration ____________ 12 Statement of Profit or Loss and Other Comprehensive Income For The Half Year Ended 31 December 2015 _ 13 Statement of Financial Position As At 31 December 2015 ______ 14 Statement of Changes in Equity For The Half Year Ended 31 December 2015 ____ 15 Statement of Cash Flows For The Half Year Ended 31 December 2015 _____ 16 Notes To The Financial Statements For The Half Year Ended 31 December 2015 _____ 17 Independent Auditor’s Review Report _____________ 22

GALE PACIFIC LIMITED & ITS CONTROLLED ENTITIES 2 ABN 80 082 263 778

RESULTS FOR THE HALF YEAR ENDED 31 DECEMBER 2015

GROUP MANAGING DIRECTOR’S REPORT ON RESULTS

FINANCIAL RESULTS

GALE Pacific Limited today announced a profit before tax of $3.5 million for the six months to 31 December 2015, up on the $0.7 million underlying pre-tax profit in the previous corresponding period. This exceeds the higher end of company’s guidance range of $2.75-$3.25 million provided in October 2015. After-tax profit was $3.2 million, compared to underlying after-tax profit of $1.1 million in H1 FY2015.

Directors have declared an interim dividend of 0.75 cents per share unfranked (H1 FY2015: nil), payable on 4 April 2016 to shareholders on the register at 21 March 2016.

Results summary for the 6 months ended	31 December 2015 (A$ million)	31 December 2014 (A$ million)*	Change (%)
Sales revenue	82.4	67.4	22
Underlying EBITDA	8.2	4.5	82
Underlying EBIT	4.5	1.6	179
Underlying profit before tax	3.5	0.7	383
Underlying profit after tax	3.2	1.1	194
Statutory profit/(loss) before tax	3.5	(1.8)	Loss to profit
Statutory profit/(loss) after tax	3.2	(0.6)	Loss to profit
Underlying earnings per share (cents)	1.07	0.4	194
Statutory earnings per share (cents)	1.07	(0.2)	Loss to profit
Interim dividend – unfranked (cents)	0.75	-	-
Net debt	(20.0)	(26.2)	24
Operating cash flow	1.5	(9.0)	negative to positive
* Please refer to page 5 of the Group Managing Directors report for reconciliation between underlying and statutory numbers for comparative year.

GALE Pacific Group Managing Director Nick Pritchard, said: “We are pleased with the improved profit performance which is the result of continued execution of our growth strategy. The strong sales growth reflects new business wins, increased innovation in our product categories and improvements in our service.

"Importantly, the strong sales growth has been achieved whilst simultaneously exiting non-core product categories and non-strategic and unprofitable business, and we now have a platform that will support further profitable growth.

“All regions delivered strong sales growth with the exception of Eurasia which, as announced previously, is undergoing a major transformation. Australasia was a particular highlight, driving a large part of the profit improvement, primarily as a result of higher sales and ongoing improvements in the supply chain.

"We have continued to focus on improving inventory management, reducing the number of suppliers and improving supplier terms. These initiatives contributed to positive operating cash flow compared to a significant cash outflow in the prior corresponding period.

“The much improved operating performance and robust balance sheet has provided the directors with the confidence to reinstate the interim dividend."

GALE PACIFIC LIMITED & ITS CONTROLLED ENTITIES 3 ABN 80 082 263 778

AUSTRALASIA

AUSTRALASIA
For the 6 months ended	31 December 2015 (A$ million)	31 December 2014 (A$ million)	Change (%)
Sales	57.4	48.6	18
EBITDA	4.1	(0.9)	Loss to profit

The transformation of the Australia/New Zealand region is largely complete and has resulted in strong sales growth across both retail and commercial sectors, driven primarily by new product range wins and improving service. The company continues to work collaboratively with key customers to ensure that it delivers the innovation needed in its product categories. At this time of change within the Australian home improvement sector, innovation will be crucial to GALE Pacific’s future success.

In line with the company’s strategy to simplify logistics and procedures, warehouses across Australia were consolidated and a new Victorian warehouse was established that will enable further cost reductions and improve service.

Importantly, there was also significant investment in the Coolaroo brand, with an integrated national marketing campaign that included television. This is the first significant brand investment by the business in many years and is in line with the strategy of investing more heavily in a smaller number of brands.

AMERICAS

AMERICAS
For the 6 months ended	31 December 2015 (A$ million)	31 December 2014 (A$ million)	Change (%)
Sales	14.1	10.1	40
EBITDA	(0.9)	(0.5)	(71)

Sales in the Americas region continued to grow strongly across both retail and commercial sectors and, in local currency, grew 14%; however, profit was impacted by higher end-of-season returns by major retailers.

The company secured additional ranging at major hardware retailers which will commence early in calendar year 2016, providing an impetus to retail sales in the second half.

Several investments were made to strengthen the regional supply chain management team and improve operations, including the establishment of new 3[rd] party logistics facilities to service customers better in eastern USA and in Canada.

Most sales and profit in the Americas are recorded in the northern hemisphere summer, and the region is expected to report a strong profit for the second half.

MIDDLE EAST NORTH AFRICA

For the 6 months ended	31 December 2015 (A$ million)	31 December 2014 (A$ million)	Change (%)
Sales	8.6	6.4	34
EBITDA	1.7	1.5	18

Despite more challenging market conditions, the MENA business once again performed strongly with sales in local currency up 9% on the previous corresponding period. Considerable potential exists for the company’s commercial products in this region and a number of strategies have been implemented to accelerate taking advantage of this opportunity. Further growth is expected via the addition of new, higher performing architectural shade fabrics and increased investments in people to capitalise on the opportunity.

GALE PACIFIC LIMITED & ITS CONTROLLED ENTITIES 4 ABN 80 082 263 778

EURASIA

EURASIA
For the 6 months ended	31 December 2015 (A$ million)	31 December 2014 (A$ million)	Change (%)
Sales	2.4	2.4	-

Progress with transforming the Eurasian business has been pleasing, with the appointment of an entirely new, multilingual team, now based in the region. The company has refocused on a smaller number of more strategic geographic areas and customers, and this is expected to deliver sales growth in the years ahead.

The Eurasia EBITDA contribution is included in the China Manufacturing Operations’ result.

CHINA MANUFACTURING OPERATIONS

For the 6 months ended	31 December 2015 (A$ million)	31 December 2014 (A$ million)	Change (%)
EBITDA	4.3	4.5	(3)

The transformation of the China manufacturing operations continues to progress on schedule as activities to improve cost-effectiveness, flexibility and service start to take effect. Non-core manufacturing processes are being exited in order to focus on manufacturing processes where the company has a core competency and a globally competitive manufacturing cost position.

EBITDA for China includes contributions from Eurasia and inter-company trading.

CASH GENERATION AND WORKING CAPITAL

Group working capital increased year-on-year as a result of unfavourable exchange translation and higher receivables due to considerably increased sales. Pleasingly, inventories reduced in all major markets despite the effect of foreign currency translation. The positive operating cash flow reflected improved trading terms with suppliers and better inventory management, along with the stronger profitability.

NEW GLOBAL BANKING ARRANGEMENT

The company has reached agreement with the Australia and New Zealand Banking Group (ANZ) for a new long-term, multi-currency banking facility on improved commercial terms, and with reduced overall funding costs compared to previous facilities and a three year funding term.

The new banking arrangement is in line with the company’s strategy to simplify the business and make arrangements that will support international growth.

RECONCILIATION OF UNDERLYING RESULT TO STATUTORY RESULT (DECEMBER 2014)

During the half year prior period, the company incurred non-recurring costs related to restructuring and the re-launch of the company’s pool fencing and balustrade ranges. The following table reconciles the underlying results to the statutory results.

results.
A$ million	EBITDA	EBIT	Profit before tax	Profit after tax
Statutory	2.0	(0.9)	(1.8)	(0.6)
Restructuring costs	0.3	0.3	0.3	0.2
Product re-launch costs	2.2	2.2	2.2	1.5
Underlying	4.5	1.6	0.7	1.1

Underlying profit, EBITDA and EBIT are the Statutory profit, EBITDA and EBIT adjusted for non-recurring costs related to restructuring and the re-launch of the company’s pool fencing and balustrade ranges. The Company believes that underlying profit, EBITDA and EBIT provide a better understanding of its financial performance and allows for a more relevant comparison of financial performance between financial periods.

GALE PACIFIC LIMITED & ITS CONTROLLED ENTITIES 5 ABN 80 082 263 778

OUTLOOK

The board is confident that the company’s current momentum will be maintained and that its strategy is appropriate to deliver continued earnings growth.

Based on current indications, it is anticipated that the second half results will be above the same period last year and that FY2016 profit before tax (PBT) will be in the range $12 – $14 million, considerably ahead of PBT for the prior corresponding period of $6.2 million ($8.7 million underlying).

ABOUT GALE PACIFIC

GALE Pacific is a manufacturer and marketer of commercial and DIY products that protect and enhance environments around the world. Based in Australia, the Company operates globally with approximately half of its revenue coming from other markets. GALE’s products are marketed across commercial and retail sectors, with distribution into architectural, horticultural, agricultural, mining, construction, and home improvement channels; they are stocked by many of the world’s largest retailers and also have strong online distribution.

Key products include architectural shade fabrics, exterior window shades, shade sails and an array of specialised commercial fabrics used for crop protection, irrigation, water storage and screening. Retail shade and screening products are marketed under the Coolaroo brand. Commercial products are marketed under the GALE Pacific brand.

In Australia and New Zealand, the Company also markets a range of interior window furnishings under the ZONE Interiors brand and a range of glass DIY pool fencing and balustrading, shower screens and other glass products under the EVERTON brand.

GALE Pacific is a world leader in specialised textiles and associated products and is recognised in its markets as an innovator and long-term producer of premium quality products.

The Company is focused on strengthening its global market position through product innovation and brand strength.

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Mr Nick Pritchard Group Managing Director 17 February 2016

For further information please contact: Matt Parker, Chief Financial Officer, Gale Pacific Limited, telephone (03) 9518 3333.

For media enquiries please contact: James Strong, Financial & Corporate Relations, telephone (02) 8264 1005 / 0423 338 005.

GALE PACIFIC LIMITED & ITS CONTROLLED ENTITIES 6 ABN 80 082 263 778

APPENDIX 4D

HALF YEARLY REPORT FOR THE SIX MONTHS TO 31 DECEMBER 2014

Name of Entity:	Gale Pacific Limited
ABN or Equivalent Company Reference:	80 082 263 778
Report for the Half Year Ended:	31 December 2015
Previous Full Year Period is the Financial Year Ended:	30 June 2015
Previous Corresponding Period is the Half Year Ended:	31 December 2014

RESULTS FOR ANNOUNCEMENT TO THE MARKET

	% Half Year to 31 December 2014 $’000 Half Year to 31 December 2015 $’000
Revenues from continuing operations: Profit from continuing operations after tax attributable to members: Net profit for the period attributable to members:	Up 22.0 67,434 To 82,377 Up 591.5 (647) To 3,180 Up 591.5 (647) To 3,180
Please refer to the accompanying Directors’ announcement to the Australian Securities Exchange for further commentary.

DIVIDENDS

DIVIDENDS
	Amount per security	Percentage franked
Interim dividend for the year ending 30 June 2016	0.75 cents	0%
Final dividend for the year ending 30 June 2015	1.00 cents	0%
Date dividend is payable	4 April 2016
Record date for determining entitlements to the dividend	21 March 2016
Trading ex dividend	17 March 2016
The Company’s Dividend Reinvestment Plan was suspended in September 2006 and the Directors have determined that the plan is to remain suspended.

GALE PACIFIC LIMITED & ITS CONTROLLED ENTITIES 7 ABN 80 082 263 778

Amount per security

	Amount per security	Percentage franked
Interim dividend for the year ending 30 June 2016
- In respect of 2016 financial year as at 31 December 2015	0.75 cents	0%
- In respect of 2015 financial year as at 31 December 2014	Nil	N/A
Final dividend for the year ending 30 June 2015
- In respect of 2015 financial year as at 30 June 2015	1.00 cents	0%
- In respect of 2014 financial year as at 30 June 2014	1.35 cents	80%

NET TANGIBLE ASSET PER SECURITY

NET TANGIBLE ASSET PER SECURITY
	As at 31 December 2015	As at 30 June 2015	As at 31 December 2014
Net tangible asset per ordinary security	24.6 cents	24.6 cents	20.7 cents

THE FINANCIAL INFORMATION PROVIDED IN APPENDIX 4D IS BASED ON THE HALF YEAR CONDENSED CONSOLIDATED FINANCIAL REPORT ATTACHED.

THE HALF YEAR CONDENSED CONSOLIDATED FINANCIAL REPORT HAS BEEN INDEPENDENTLY REVIEWED. THE FINANCIAL REPORT IS NOT SUBJECT TO A QUALIFIED INDEPENDENT REVIEW REPORT.

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Signed: Name: Nick Pritchard Title: Group Managing Director Date: 17 February 2016

GALE PACIFIC LIMITED & ITS CONTROLLED ENTITIES 8 ABN 80 082 263 778

FINANCIAL REPORT FOR THE HALF YEAR ENDED 31 DECEMBER 2015

Directors' Report

The Directors present their report together with the condensed financial report of the consolidated entity consisting of Gale Pacific Limited and the entities it controlled, for the half-year ended 31 December 2015 and independent auditors review report thereon.

DIRECTORS

The following persons were Directors of Gale Pacific Limited during the whole of the financial half-year and up to the date of this report, unless otherwise stated:

Name	Period of Directorship
Mr David Allman	Director since 17 November 2009
Mr Nick Pritchard	Director since 22 August 2014
Mr John Murphy	Director since 24 August 2007
Mr Peter Landos	Director since 01 May 2014
Mr George Richards	Resigned 30 October 2015

REVIEW OF OPERATIONS

The profit for the Group after providing for income tax amounted to $3,180,000 (31 December 2014: loss of $647,000).

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

There were no significant changes in the state of affairs of the Group during the financial half-year.

MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL HALF-YEAR

No matter or circumstance has arisen since 31 December 2015 that has significantly affected, or may significantly affect the Group's operations, the results of those operations, or the Group's state of affairs in future financial years.

ROUNDING OF AMOUNTS

The company is of a kind referred to in Class Order 98/100, issued by the Australian Securities and Investments Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance with that Class Order to the nearest thousand dollars, or in certain cases, the nearest dollar.

GALE PACIFIC LIMITED & ITS CONTROLLED ENTITIES 9 ABN 80 082 263 778

AUDITOR’S DECLARATION

A copy of the Auditors’ Independence Declaration in relation to the review for the half-year is provided with this report.

Signed in accordance with a resolution of the Board of Directors.

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Mr David Allman Chairman 17 February 2016

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Mr Nick Pritchard Group Managing Director 17 February 2016

GALE PACIFIC LIMITED & ITS CONTROLLED ENTITIES 10 ABN 80 082 263 778

Auditor’s Independence Declaration

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GALE PACIFIC LIMITED & ITS CONTROLLED ENTITIES 11 ABN 80 082 263 778

Directors’ Declaration

In the Directors' opinion:

• the attached financial statements and notes comply with the Corporations Act 2001, Australian Accounting Standard AASB 134 'Interim Financial Reporting', the Corporations Regulations 2001 and other mandatory professional reporting requirements;

• the attached financial statements and notes give a true and fair view of the Group's financial position as at 31 December 2015 and of its performance for the financial half-year ended on that date; and

• there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

Signed in accordance with a resolution of Directors made pursuant to section 303(5)(a) of the Corporations Act 2001.

On behalf of the Directors

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Mr David Allman Chairman 17 February 2016

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Mr Nick Pritchard Group Managing Director 17 February 2016

GALE PACIFIC LIMITED & ITS CONTROLLED ENTITIES 12 ABN 80 082 263 778

Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income For The Half Year Ended 31 December 2015

Note Revenue Sale of goods Other income Expenses Raw materials and consumables used Employee benefits expense Depreciation and amortisation expense Marketing and advertising Occupancy costs Warehouse and related costs Other expenses Finance costs Profit/(loss) before income tax (expense)/benefit Income tax (expense)/benefit Profit/(loss) after income tax expense for the half-year attributable to the owners of Gale Pacific Limited Other comprehensive income Items that may be reclassified subsequently to profit or loss Net change in the fair value of cash flow hedges taken to equity, net of tax Foreign currency translation Other comprehensive income for the half-year, net of tax Total comprehensive income for the half-year attributable to the owners of Gale Pacific Limited Basic earnings per share 6 Diluted earnings per share 6	Consolidated 31 Dec 2015 31 Dec 2014 $'000 $'000 82,377 67,434 3,536 195 (45,555) (35,440) (13,367) (11,377) (3,741) (3,216) (1,716) (3,652) (2,472) (1,808) (5,982) (5,268) (8,619) (7,790) (914) (839) 3,547 (1,761) (367) 1,114 3,180 (647) (679) 1,337 1,039 8,733 (360) 10,070 3,540 9,423 Cents Cents 1.07 (0.22) 1.06 (0.22)	Consolidated 31 Dec 2015 31 Dec 2014 $'000 $'000 82,377 67,434 3,536 195 (45,555) (35,440) (13,367) (11,377) (3,741) (3,216) (1,716) (3,652) (2,472) (1,808) (5,982) (5,268) (8,619) (7,790) (914) (839) 3,547 (1,761) (367) 1,114 3,180 (647) (679) 1,337 1,039 8,733 (360) 10,070 3,540 9,423 Cents Cents 1.07 (0.22) 1.06 (0.22)
		(1,761)
		1,114
		(647)
		1,337 8,733
		10,070
		9,423
		Cents (0.22) (0.22)

The above should be read in conjunction with the accompanying notes.

GALE PACIFIC LIMITED & ITS CONTROLLED ENTITIES 13 ABN 80 082 263 778

Condensed Consolidated Statement of Financial Position As At 31 December 2015

Assets Current assets Cash and cash equivalents Trade and other receivables Inventories Derivative financial instruments Current tax assets Other current assets Total current assets Non-current assets Property, plant and equipment Intangibles Total non-current assets Total assets Liabilities Current liabilities Trade and other payables Borrowings Current tax liabilities Provisions Total current liabilities Non-current liabilities Borrowings Deferred tax Provisions Total non-current liabilities Total liabilities Net assets Equity Issued capital Reserves Retained profits Total equity	Consolidated 31 Dec 2015 30 Jun 2015 $'000 $'000 15,841 17,769 31,507 27,081 46,334 39,229 392 1,363 1,331 3,147 1,086 819 96,491 89,408 32,573 34,872 25,288 25,311 57,861 60,183 154,352 149,591 17,554 12,887 35,450 33,641 - 2,179 2,287 1,820 55,291 50,527 425 783 97 397 96 96 618 1,276 55,909 51,803 98,443 97,788 71,485 71,485 2,048 1,598 24,910 24,705 98,443 97,788	Consolidated 31 Dec 2015 30 Jun 2015 $'000 $'000 15,841 17,769 31,507 27,081 46,334 39,229 392 1,363 1,331 3,147 1,086 819 96,491 89,408 32,573 34,872 25,288 25,311 57,861 60,183 154,352 149,591 17,554 12,887 35,450 33,641 - 2,179 2,287 1,820 55,291 50,527 425 783 97 397 96 96 618 1,276 55,909 51,803 98,443 97,788 71,485 71,485 2,048 1,598 24,910 24,705 98,443 97,788
		89,408
		34,872 25,311
		60,183
		149,591
		12,887 33,641 2,179 1,820
		50,527
		783 397 96
		1,276
		51,803
		97,788
		71,485 1,598 24,705
		97,788

The above should be read in conjunction with the accompanying notes.

GALE PACIFIC LIMITED & ITS CONTROLLED ENTITIES 14 ABN 80 082 263 778

Condensed Consolidated Statement of Changes in Equity For The Half Year Ended 31 December 2015

Consolidated Balance at 1 July 2014 Loss after income tax (expense)/benefit for the half-year Other comprehensive income for the half-year, net of tax Total comprehensive income for the half-year Transactions with owners in their capacity as owners: Share-based payments Dividends paid (note 4) Balance at 31 December 2014 Consolidated Balance at 1 July 2015 Profit after income tax (expense)/benefit for the half-year Other comprehensive income for the half-year, net of tax Total comprehensive income for the half-year Transactions with owners in their capacity as owners: Share-based payments Dividends paid (note 4) Balance at 31 December 2015	Issued Retained Total capital Reserves profits equity $'000 $'000 $'000 $'000 71,485 (11,415) 23,566 83,636 - - (647) (647) - 10,070 - 10,070
	- 10,070 (647) 9,423 - 11 - 11 - - (4,016) (4,016)
	71,485 (1,334) 18,903 89,054
	Issued Retained Total capital Reserves profits Equity $'000 $'000 $'000 $'000 71,485 1,598 24,705 97,788 - - 3,180 3,180 - 360 - 360
	- 360 3,180 3,540 - 90 - 90 - - (2,975) (2,975)
	71,485 2,048 24,910 98,443

The above should be read in conjunction with the accompanying notes.

GALE PACIFIC LIMITED & ITS CONTROLLED ENTITIES 15 ABN 80 082 263 778

Condensed Consolidated Statement of Cash Flows For The Half Year Ended 31 December 2015

Note Cash flows from operating activities Receipts from customers (inclusive of GST) Payments to suppliers and employees (inclusive of GST) Other revenue Interest and other finance costs paid Income taxes paid Net cash from/(used in) operating activities 5 Cash flows from investing activities Payments for property, plant and equipment Payments for intangibles Proceeds from disposal of property, plant and equipment Net cash used in investing activities Cash flows from financing activities Proceeds from borrowings Dividends paid 4 Repayment of borrowings Net cash from/(used in) financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the financial half-year Effects of exchange rate changes on cash and cash equivalents Cash and cash equivalents at the end of the financial half-year	Consolidated 31 Dec 2015 31 Dec 2014 $'000 $'000 81,487 73,754 (78,338) (79,654) 3,149 (5,900) - 2 (914) (823) (738) (2,327) 1,497 (9,048) (1,093) (2,484) (284) (307) (42) 4 (1,419) (2,787) 2,455 17,524 (2,975) (4,016) (1,004) - (1,524) 13,508 (1,446) 1,673 17,769 13,058 308 1,267 16,631 15,998	Consolidated 31 Dec 2015 31 Dec 2014 $'000 $'000 81,487 73,754 (78,338) (79,654) 3,149 (5,900) - 2 (914) (823) (738) (2,327) 1,497 (9,048) (1,093) (2,484) (284) (307) (42) 4 (1,419) (2,787) 2,455 17,524 (2,975) (4,016) (1,004) - (1,524) 13,508 (1,446) 1,673 17,769 13,058 308 1,267 16,631 15,998
		(5,900)
		2 (823) (2,327)
		(9,048)
		(2,484) (307) 4
		(2,787)
		17,524 (4,016) -
		13,508
		1,673 13,058 1,267
		15,998

The above should be read in conjunction with the accompanying notes.

GALE PACIFIC LIMITED & ITS CONTROLLED ENTITIES 16 ABN 80 082 263 778

Notes To The Condensed Consolidated Financial Statements For The Half Year Ended 31 December 2015

NOTE 1. GENERAL INFORMATION

The financial statements cover Gale Pacific Limited ('Company' or 'parent entity') and controlled entities (referred to as the 'Group'). The financial statements are presented in Australian dollars, which is Gale Pacific Limited's functional and presentation currency.

Gale Pacific Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its registered office is:

145 Woodlands Drive Braeside, Vic, 3195

A description of the nature of the Group's operations and its principal activities are included in the Directors' report, which is not part of the financial statements.

The financial statements were authorised for issue, in accordance with a resolution of Directors, on 29 February 2016. The Directors have the power to amend and reissue the financial statements.

NOTE 2. SIGNIFICANT ACCOUNTING POLICIES

These general purpose financial statements for the interim half-year reporting period ended 31 December 2015 have been prepared in accordance with Australian Accounting Standard AASB 134 'Interim Financial Reporting' and the Corporations Act 2001, as appropriate for for-profit oriented entities. Compliance with AASB 134 ensures compliance with International Financial Reporting Standard IAS 34 'Interim Financial Reporting'.

These general purpose financial statements do not include all the notes of the type normally included in annual financial statements. Accordingly, these financial statements are to be read in conjunction with the annual report for the year ended 30 June 2015 and any public announcements made by the company during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001.

The principal accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period, unless otherwise stated.

• (a). New, revised or amending Accounting Standards and Interpretations adopted

The Group has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period. The adoption of these Accounting Standards and Interpretations did not have any significant impact on the financial performance or position of the Group during the financial half-year ended 31 December 2015 and are not expected to have any significant impact for the full financial year ending 30 June 2016.

Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.

• (b). Comparatives

Where necessary, the comparative statement of profit or loss and other comprehensive income has been reclassified and repositioned for consistency with the current period disclosures.

GALE PACIFIC LIMITED & ITS CONTROLLED ENTITIES 17 ABN 80 082 263 778

Notes To The Condensed Consolidated Financial Statements For The Half Year Ended 31 December 2015

NOTE 3. OPERATING SEGMENTS

Identification of reportable operating segments

The Group is organised into four operating segments identified by geographic location and identity of the service line manager. These operating segments are based on the internal reports that are reviewed and used by the Chief Executive Officer (who is identified as the Chief Operating Decision Makers ('CODM')) in assessing performance and in determining the allocation of resources. There is no aggregation of operating segments.

The Group operates predominantly in one business segment, being branded shading, screening and home improvement products.

The CODM reviews revenue and segment results. The accounting policies adopted for internal reporting to the CODM are consistent with those adopted in the financial statements.

Discrete financial information about each of these segments is reported on a monthly basis.

The operating segments are as follows:

Australasia Manufacturing and distribution facilities are located in Australia, and distribution facilities are located in New Zealand. Sales offices are located in all states in Australia and in New Zealand.

China Operations and Eurasia Manufacturing facilities are located in Beilun, China which supply to the Group’s sales and marketing operations throughout the world in particular Europe and Asia.

Americas Sales offices are located in Florida and custom blind assembly and distribution facilities are located in California which service the North American region.

MENA - Middle East / North Africa A sales office and distribution facility is located in the United Arab Emirates to service this market.

GALE PACIFIC LIMITED & ITS CONTROLLED ENTITIES 18 ABN 80 082 263 778

Notes To The Condensed Consolidated Financial Statements For The Half Year Ended 31 December 2015

NOTE 3. OPERATING SEGMENTS (CONTINUED)

31 December 2015 Revenue Sales to external customers Intersegment sales Total sales revenue Total revenue Segment EBITDA Depreciation and amortisation Finance costs Profit/(loss) before income tax expense Income tax expense Profit after income tax expense Assets Segment assets Total assets Liabilities Segment liabilities Total liabilities	Australasia $'000 57,353 1,597	China Operations & Eurasia $'000 2,357 25,105	Americas $'000 14,089 -	MENA $'000 8,578 0	Corporate $'000 - -	Intersegment /Eliminations $'000 - (26,702)	Total $'000 82,377 -
	58,949	27,462	14,089	8,579	-	(26,702)	82,377
	58,949	27,462	14,089	8,579	-	(26,702)	82,377
	4,020 (418) (106)	4,381 (2,484) (546)	(922) (600) (224)	1,727 (1) (38)	(2,084) (239) -	1,081 - -	8,202 (3,741) (914)
	3,496	1,351	(1,746)	1,688	(2,323)	1,081	3,547
	63,334	42,268	25,525	10,482	13,791	(1,046)	(367)
							3,180
							154,353
	11,890	16,801	1,637	660	24,921	-	154,353
							55,909
							55,909

GALE PACIFIC LIMITED & ITS CONTROLLED ENTITIES 19 ABN 80 082 263 778

Notes To The Condensed Consolidated Financial Statements For The Half Year Ended 31 December 2015

NOTE 3. OPERATING SEGMENTS (CONTINUED)

31 December 2014 Revenue Sales to external customers Intersegment sales Total sales revenue Total revenue Segment EBITDA Depreciation and amortisation Finance costs Profit/(loss) before income tax expense Income tax expense Profit after income tax expense 30 June 2015 Assets Segment assets Total assets Liabilities Segment liabilities Total liabilities	Australasia $'000 48,577 1,355	China Operations & Eurasia $'000 2,358 19,653	Americas $'000 10,072 42	MENA $'000 6,427 (57)	Corporate $'000 - -	Intersegment /Eliminations $'000 - (20,993)	Total $'000 67,434 -
	49,932	22,011	10,114	6,370	-	(20,993)	67,434
	49,932	22,011	10,114	6,370	-	(20,993)	67,434
	(893) (407) -	4,536 (2,094) -	(538) (283) -	1,466 (1) -	(2,182) (193) -	(365) - -	2,024 (2,978) (807)
	(1,300)	2,442	(821)	1,465	(2,375)	(365)	(1,761)
	Australasia $'000 50,698	China Operations & Eurasia $'000 41,165	Americas $'000 31,721	MENA $'000 10,588	Corporate $'000 17,165	Intersegment /Eliminations $'000 (1,747)	1,114
							(647)
							Total $'000 149,591
	7,154	13,278	4,522	736	26,114	-	149,591
							51,803
							51,803

NOTE 4. EQUITY - DIVIDENDS

NOTE 4. EQUITY - DIVIDENDS
	Consolidated
	31 Dec 2015	31	Dec 2014
	$'000		$'000
Final dividend for the year ended 30 June 2015 (2014: 30 June 2014) of 1.0 cents
(2014: 1.35 cents) per ordinary share	2,975		4,016

GALE PACIFIC LIMITED & ITS CONTROLLED ENTITIES 20 ABN 80 082 263 778

Notes To The Condensed Consolidated Financial Statements For The Half Year Ended 31 December 2015

NOTE 5. RECONCILIATION OF PROFIT/(LOSS) AFTER INCOME TAX TO NET CASH FROM/(USED IN) OPERATING ACTIVITIES

FROM/(USED IN) OPERATING ACTIVITIES
	Consolidated
	31 Dec 2015	31 Dec 2014
	$'000	$'000
Profit/(loss) after income tax expense for the half-year	3,180	(647)
Adjustments for:
Depreciation and amortisation	3,741	2,982
Share-based payments	90	11
Net loss on disposal of non-current assets	-	2
Other revenue - non-cash	(3,536)	-
Finance costs - non-cash	(292)	-
Foreign currency differences	1,521	1,350
Change in operating assets and liabilities:
Increase in trade and other receivables	(890)	(803)
Increase in inventories	(7,105)	(12,140)
Decrease in income tax refund due	1,816	-
Decrease in deferred tax assets	292	-
Decrease in derivative assets	292	-
Increase in prepayments	(267)	-
Decrease in other operating assets	-	1,681
Increase in trade and other payables	4,667	1,760
Decrease in provision for income tax	(2,179)	(3,210)
Decrease in deferred tax liabilities	(300)	-
Increase in employee benefits	321	-
Increase in other provisions	146	-
Decrease in other operating liabilities	-	(34)
Net cash from/(used in) operating activities	1,497	(9,048)
NOTE 6. EARNINGS PER SHARE
	Consolidated
	31 Dec 2015	31 Dec 2014
	$'000	$'000
Profit/(loss) after income tax attributable to the owners of Gale Pacific Limited	3,180	(647)
	Number	Number
Weighted average number of ordinary shares used in calculating basic earnings per share	297,474,396	297,474,396
Adjustments for calculation of diluted earnings per share:
Performance rights	3,401,617	2,343,583
Weighted average number of ordinary shares used in calculating diluted earnings per
share	300,876,013	299,817,979
	Cents	Cents
Basic earnings per share	1.07	(0.22)
Diluted earnings per share	1.06	(0.22)

NOTE 6. EARNINGS PER SHARE

GALE PACIFIC LIMITED & ITS CONTROLLED ENTITIES 21 ABN 80 082 263 778

Independent Auditor’s Review Report

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GALE PACIFIC LIMITED & ITS CONTROLLED ENTITIES 22 ABN 80 082 263 778

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GALE PACIFIC LIMITED & ITS CONTROLLED ENTITIES 23 ABN 80 082 263 778