Page 55 - NZPM Annual Report 2020

NZPM GROUP LIMITED
Notes to the Consolidated Financial Statements for the year ended 31 March 2020

At 31 March 2020, the Group had entered into new contracts for property, vehicle and photocopier leases which had not commenced
by the year-end. As a result, a lease liability and right-of-use asset has not been recognised. The estimated aggregate future cash
outflows to which the Group is exposed in respect of these contracts is $2.0 million.

As at 31 March 2020, the Group is committed to $122,000 short-term leases.

19. Investments in associates

During and at the end of the reporting period the Group had no associates.
In the prior year, the Group held a 12.5% interest in Construction Marketing Services Limited and accounted for the investment as an
associate. On 17 December 2018, the Group sold its minority shareholding in Construction Marketing Services Limited for proceeds of
$1.6 million. This transaction resulted in the recognition of a gain in profit or loss of $474,509.

20. Trade and other payables
2020 2019
$’000 $’000
Trade payables 15,501 15,868
Government COVID-19 wage subsidy scheme 3,359 0
Accrued liabilities and other payables 8,282 8,367
Total trade and other payables 27,142 24,235

Trade payables and accruals principally comprise amounts outstanding for trade purchases and ongoing costs. The average credit
period taken for trade purchases is 30 days. For most suppliers no interest is charged on the trade payables for the first 60 days from
the date of the invoice. The Group has financial risk management policies in place to ensure that all payables are paid within the pre-
agreed credit terms. The directors consider that the carrying amount of trade payables approximates to their fair value.

21. Refund liability
2020 2019
$’000 $’000
Refund liability 1,520 1,909
Total refund liability 1,520 1,909

The refund liability relates to customers’ right to return product after purchase. At the point of sale, a refund liability and a
corresponding adjustment to revenue is recognised for those products expected to be returned. The Group uses its accumulated
historical experience to estimate the number of returns on a portfolio level using the expected value method. Refer to ‘right to returned
goods asset’ note 13.

22. Contract liabilities
2020 2019
$’000 $’000
Arising from customer loyalty programme 1,100 1,135
Total contract liabilities 1,100 1,135

A contract liability exists in respect of the Group’s ‘Max-Points’ scheme as these points provide a benefit to customers that they
would not receive without entering into a purchase contract and the promise to provide loyalty points to the customer is therefore a
separate performance obligation. A contract liability is recognised for revenue relating to the loyalty points at the time of the initial
sales transaction.

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NZPM GROUP LIMITED ANNUAL REPORT 2020