Page 60 - NZPM Annual Report 2020

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

The Group has several classes of shares. Each class has different rights attached.

Ordinary shares
Ordinary shares may be surrendered at the option of the shareholder, directors or Group according to the Constitution at the nominal
value of $1 per fully paid share. Consideration for the surrender is subject to the directors’ right to postpone payment for up to five
years. Ordinary shares carry certain rights as to voting and rebate dividends.

Redeemable preference shares
NZPM has issued various classes of redeemable preference shares. Redeemable preference shares issued at different times and with
different terms each constitute a separate class of redeemable preference shares. Redeemable preference shares are redeemable
at the option of the shareholder at the nominal value of $1 per share. Redeemable preference shares carry certain rights to receive
dividends. Redeemable preference shares carry no voting rights (except as required by section 117 of the Companies Act 1993) or rights
to rebate dividends. The directors are able to postpone repayment up to 5 years. As at 31 March 2020, the quarterly dividend rate was
5.30% (2019: 6.00%) per annum.

General
All shares carry equal rights on any winding up of NZPM to be repaid the paid up capital, in proportion to the capital paid-up on
each share. Each ordinary share also carries the further right to share equally in the distribution of any further residual assets of NZPM
following repayment of the paid-up capital. The Constitution and the Companies Act 1993 gives the directors the discretion to pay
different rates of dividend, (if any), to different classes of shares. All share capital is classified as a liability as it is redeemable on a
specific date or at the option of the shareholders.

27. Capital commitments

Significant capital expenditure contracted for at the end of the reporting period but not recognised as liabilities are as follows:

2020 2019
$’000 $’000
Upgrade to leased and owned premises 947 633
Software 77 24
Computer equipment 30 83
Motor vehicles 0 220
Total capital commitments 1,054 960

28. Contingent liabilities

The Group is subject to a small number of claims which are not considered significant. The directors believe, based on legal advice,
that any actions can be successfully defended and have therefore not recognised any provision in these financial statements.

29. Impact of COVID-19

During Alert Level 4 under the COVID-19 alert system, NZPM operations were virtually closed with supply only to essential service
customers. The change to Alert Level 3 from 28 April 2020 allowed NZPM to recommence supplying trade customers under special
trading conditions. From 14 May 2020,the alert regime was reduced to Level 2 which reduced the operating restrictions on NZPM.
NZPM has taken a number of mitigating actions to reduce operating costs including negotiating rent reductions with landlords,
reducing non-urgent expenditure, and reducing investment in marketing. The Group has also extended the MOCL loan facility by $5.0
million for a period of 12 months from 1 May 2020 to reduce liquidity risk.

Despite not being able to quantify the ultimate impact of COVID-19, management have been able to prepare updated forecasts
based on reasonably likely outcomes. Based on these updated forecasts, the Group will have adequate cash and debt funding
facilities to meet liabilities as they fall due, and accordingly the going concern assumption has continued to be applied.

The impact on earnings and increased future uncertainty meant that the company only declared an interim rebate dividend on its
ordinary shares in relation to the March 2020 financial year (refer note 30).

58
NZPM GROUP LIMITED ANNUAL REPORT 2020